WV State Life Insurance Exam/ 175 Quizzes &
Correct Ans
Insurance contracts are known as _____ because certain future conditions or acts must occur
before any claims can be paid. - Answer: Conditional
A life insurance arrangement which circumvents insurable interest statutes is called: - Answer:
Investor-Originated Life Insurance
In an insurance contract, the insurer is the only party who makes a legally enforceable promise.
What kind of contract is this? - Answer: Unilateral
When third-party ownership is involved, applicants who also happen to be the stated primary
beneficiary are required to have: - Answer: Insurable interest in the proposed insured
Which of these arrangements allows one to bypass insurable interest laws? - Answer: Investor-
Originated Life Insurance
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,When must insurable interest exist for a life insurance contract to be valid? - Answer: Inception
of the contract
If a contract of adhesion contains complicated language, to whom would the interpretation be
in favor of? - Answer: Insured
Which of these is an element of a Variable Life policy? - Answer: A fixed, level premium
A father who dies within 3 years after purchasing a life insurance policy on his infant daughter
can have the policy premiums waived under which provision? - Answer: Payor provision
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? - Answer:
Policyowner
Which of the following actions is NOT possible with a Universal Life policy? - Answer: Premiums
may be applied as a credit against income tax
Which of the following policies is characterized by a flexible premium and death benefit and
allows the policy owner control of the investment aspect of the plan? - Answer: Variable
universal life
A term life insurance policy matures: - Answer: upon the insured's death during the term of the
policy
A group-owned insurance company that is formed to assume and spread the liability risks of its
members is known as a: - Answer: Risk retention group
Which of the following requires insurers to disclose when an applicant's consumer or credit
history is being investigated? - Answer: 1970-Fair Credit Reporting Act
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, Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six
months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values
reflects which of the following insurance contract features? - Answer: Aleatory
The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy
future obligations to its policyholders is called: - Answer: Reserves
All of the following are considered to be typical characteristics describing the nature of an
insurance contract, EXCEPT: - Answer: Bilateral
What year was the McCarran-Ferguson Act enacted? - Answer: 1945
Which of the following consists of an offer, acceptance, and consideration? - Answer: Contract
Who elects the governing body of a mutual insurance company? - Answer: Policyholders
Insurance policies are considered aleatory contracts because: - Answer: Performance is
conditioned upon a future occurrence
Who makes the legally enforceable promises in a unilateral contract? - Answer: Insurance
company
What type of life policy covers two people and pays upon the death of the last insured? -
Answer: Survivorship
When is the face amount paid under a Joint Life and Survivor policy? - Answer: Upon the death
of the last insured
Page 3 of 20
Correct Ans
Insurance contracts are known as _____ because certain future conditions or acts must occur
before any claims can be paid. - Answer: Conditional
A life insurance arrangement which circumvents insurable interest statutes is called: - Answer:
Investor-Originated Life Insurance
In an insurance contract, the insurer is the only party who makes a legally enforceable promise.
What kind of contract is this? - Answer: Unilateral
When third-party ownership is involved, applicants who also happen to be the stated primary
beneficiary are required to have: - Answer: Insurable interest in the proposed insured
Which of these arrangements allows one to bypass insurable interest laws? - Answer: Investor-
Originated Life Insurance
Page 1 of 20
,When must insurable interest exist for a life insurance contract to be valid? - Answer: Inception
of the contract
If a contract of adhesion contains complicated language, to whom would the interpretation be
in favor of? - Answer: Insured
Which of these is an element of a Variable Life policy? - Answer: A fixed, level premium
A father who dies within 3 years after purchasing a life insurance policy on his infant daughter
can have the policy premiums waived under which provision? - Answer: Payor provision
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? - Answer:
Policyowner
Which of the following actions is NOT possible with a Universal Life policy? - Answer: Premiums
may be applied as a credit against income tax
Which of the following policies is characterized by a flexible premium and death benefit and
allows the policy owner control of the investment aspect of the plan? - Answer: Variable
universal life
A term life insurance policy matures: - Answer: upon the insured's death during the term of the
policy
A group-owned insurance company that is formed to assume and spread the liability risks of its
members is known as a: - Answer: Risk retention group
Which of the following requires insurers to disclose when an applicant's consumer or credit
history is being investigated? - Answer: 1970-Fair Credit Reporting Act
Page 2 of 20
, Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six
months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values
reflects which of the following insurance contract features? - Answer: Aleatory
The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy
future obligations to its policyholders is called: - Answer: Reserves
All of the following are considered to be typical characteristics describing the nature of an
insurance contract, EXCEPT: - Answer: Bilateral
What year was the McCarran-Ferguson Act enacted? - Answer: 1945
Which of the following consists of an offer, acceptance, and consideration? - Answer: Contract
Who elects the governing body of a mutual insurance company? - Answer: Policyholders
Insurance policies are considered aleatory contracts because: - Answer: Performance is
conditioned upon a future occurrence
Who makes the legally enforceable promises in a unilateral contract? - Answer: Insurance
company
What type of life policy covers two people and pays upon the death of the last insured? -
Answer: Survivorship
When is the face amount paid under a Joint Life and Survivor policy? - Answer: Upon the death
of the last insured
Page 3 of 20
