USAA Module Test Questions With Verified Answers
What is a warranty?☑️Correct Ans-is a statement guaranteed to be true
A policy of adhesion can only be modified by whom?☑️Correct Ans-insurance company
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the
following contractual elements?☑️Correct Ans-Legal Purpose (Insurable Interest)
Which of these is considered a statement that is assured to be true in every respect?☑️Correct
Ans-warranty
Which of these is NOT a type of agent authority?☑️Correct Ans-principal
The Consideration clause of an insurance contract includes:☑️Correct Ans-the schedule and
amount of premium payments
What is the consideration given by an insurer in the Consideration clause of the life
policy?☑️Correct Ans-Promise to pay a death benefit to a named beneficiary
Who makes the legally enforceable promises in a unilateral insurance policy?☑️Correct Ans-
insurance company
,All of the following are considered to be typical characteristics describing the nature of an
insurance contract, EXCEPT:☑️Correct Ans-bilateral
At what point does an informal contact become binding?☑️Correct Ans-When one party makes
an offer and the other party accepts that offer.
Which of these arrangements allows one to bypass insurable interest laws?☑️Correct Ans-
Investor-Originated Life Insurance
Taking receipt of premiums and holding them for the insurance company is an example
of☑️Correct Ans-fiduciary responsibility
Life and health insurance policies are:☑️Correct Ans-unilateral contracts
What type of life insurance gives the greatest amount of coverage for a limited period of
time?☑️Correct Ans-Term life
Which type of life policy contains a monthly mortality charge as well as self-directed investment
choices?☑️Correct Ans-Variable Universal Life
T has a term policy that allows him to continue the coverage after expiration of the initial policy
period. What type of term coverage is this?☑️Correct Ans-renewable
,Which of the following policies is characterized by a flexible premium and death benefit and
allows the policyowner control of the investment aspect of the plan?☑️Correct Ans-Variable
universal life
D needs life insurance that provides coverage for only a limited amount of time while also
paying the lowest possible premium. What kind of policy is needed?☑️Correct Ans-Level term
A policy that becomes a Modified Endowment Contract (MEC)☑️Correct Ans-will lose many
of its tax advantages
Term insurance has which of the following characteristics?☑️Correct Ans-Expires at the end of
the policy period
What type of reinsurance contract involves two companies automatically sharing their risk
exposure?☑️Correct Ans-treaty
A group-owned insurance company that is formed to assume and spread the liability risks of its
members is known as a☑️Correct Ans-risk retention group
What is the name of the law that requires insurers to disclose information gathering practices and
where the information was obtained?☑️Correct Ans-Fair Credit Reporting Act
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:☑️Correct Ans-reserves
, A nonprofit incorporated society that does not have capital stock and operates for the sole benefit
of its members is known as:☑️Correct Ans-fraternal benefit society
If a contract of adhesion contains questionable language, to whom would the interpretation be in
favor of?☑️Correct Ans-insured
What type of life policy covers two people and pays upon death of the last insured?☑️Correct
Ans-survivorship
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?☑️Correct Ans-Payor provision
G purchased a Family Income policy at age 40. The policy has a 20-year rider period. If G were
to die at age 50, how long would G's family receive an income?☑️Correct Ans-10 years
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash
value at a faster rate in the early years of the policy. Which of these statements made by the
producer would be correct?☑️Correct Ans-20-Pay Life accumulates cash value faster than
Straight Life
Which statement is TRUE regarding a Variable Whole Life Policy?☑️Correct Ans-A minimum
guaranteed Death benefit is provided
What is a warranty?☑️Correct Ans-is a statement guaranteed to be true
A policy of adhesion can only be modified by whom?☑️Correct Ans-insurance company
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the
following contractual elements?☑️Correct Ans-Legal Purpose (Insurable Interest)
Which of these is considered a statement that is assured to be true in every respect?☑️Correct
Ans-warranty
Which of these is NOT a type of agent authority?☑️Correct Ans-principal
The Consideration clause of an insurance contract includes:☑️Correct Ans-the schedule and
amount of premium payments
What is the consideration given by an insurer in the Consideration clause of the life
policy?☑️Correct Ans-Promise to pay a death benefit to a named beneficiary
Who makes the legally enforceable promises in a unilateral insurance policy?☑️Correct Ans-
insurance company
,All of the following are considered to be typical characteristics describing the nature of an
insurance contract, EXCEPT:☑️Correct Ans-bilateral
At what point does an informal contact become binding?☑️Correct Ans-When one party makes
an offer and the other party accepts that offer.
Which of these arrangements allows one to bypass insurable interest laws?☑️Correct Ans-
Investor-Originated Life Insurance
Taking receipt of premiums and holding them for the insurance company is an example
of☑️Correct Ans-fiduciary responsibility
Life and health insurance policies are:☑️Correct Ans-unilateral contracts
What type of life insurance gives the greatest amount of coverage for a limited period of
time?☑️Correct Ans-Term life
Which type of life policy contains a monthly mortality charge as well as self-directed investment
choices?☑️Correct Ans-Variable Universal Life
T has a term policy that allows him to continue the coverage after expiration of the initial policy
period. What type of term coverage is this?☑️Correct Ans-renewable
,Which of the following policies is characterized by a flexible premium and death benefit and
allows the policyowner control of the investment aspect of the plan?☑️Correct Ans-Variable
universal life
D needs life insurance that provides coverage for only a limited amount of time while also
paying the lowest possible premium. What kind of policy is needed?☑️Correct Ans-Level term
A policy that becomes a Modified Endowment Contract (MEC)☑️Correct Ans-will lose many
of its tax advantages
Term insurance has which of the following characteristics?☑️Correct Ans-Expires at the end of
the policy period
What type of reinsurance contract involves two companies automatically sharing their risk
exposure?☑️Correct Ans-treaty
A group-owned insurance company that is formed to assume and spread the liability risks of its
members is known as a☑️Correct Ans-risk retention group
What is the name of the law that requires insurers to disclose information gathering practices and
where the information was obtained?☑️Correct Ans-Fair Credit Reporting Act
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:☑️Correct Ans-reserves
, A nonprofit incorporated society that does not have capital stock and operates for the sole benefit
of its members is known as:☑️Correct Ans-fraternal benefit society
If a contract of adhesion contains questionable language, to whom would the interpretation be in
favor of?☑️Correct Ans-insured
What type of life policy covers two people and pays upon death of the last insured?☑️Correct
Ans-survivorship
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?☑️Correct Ans-Payor provision
G purchased a Family Income policy at age 40. The policy has a 20-year rider period. If G were
to die at age 50, how long would G's family receive an income?☑️Correct Ans-10 years
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash
value at a faster rate in the early years of the policy. Which of these statements made by the
producer would be correct?☑️Correct Ans-20-Pay Life accumulates cash value faster than
Straight Life
Which statement is TRUE regarding a Variable Whole Life Policy?☑️Correct Ans-A minimum
guaranteed Death benefit is provided
