LIFE INSURANCE TEST
QUESTIONS AND CORRECT
K
C
VERIFIED ANSWERS 100%
LO
GUARANTEED PASS A+
GRADED
YC
D
U
ST
,J has a life policy with the Guaranteed Insurability rider. J has just celebrated their 42nd
birthday and realizes that she wants to use her rider and buy more death benefit. Which
of the following will apply to J's request?
A: The insurer will allow J to add more insurance without proving insurability.
B: The insurer will allow J to add more insurance pending a paramedical exam.
C: The insurer will deny J's request to add more insurance.
D: The insurer will allow J to add more coverage pending proof of insurability and extra
premium. - ANS C: The insurer will deny J's request to add more insurance.
An insured has a policy with a Waiver of Premium rider. The insured has suffered an
K
illness that will prevent them for working for two years. When will their premiums be
waived?
C
A: Immediately
B: After the first nine months of disability
C: After the first six months of disability
LO
D: Never, premiums cannot be waived because illness is not a disability. - ANS C:
After the first six months of disability
The clause that defines and describes the scope of coverage and the limits of
indemnification is known as the:
YC
A: Insuring Agreement
B: Incontestable Clause
C: Payor Clause
D: Entire Contract Clause - ANS A: Insuring Agreement
D
D has just paid off his mortgage and has decided that he no longer needs his life
insurance policy which he originally purchased to cover the house payments should he
U
die. If D explores the possibly of selling his policy while he is still alive, it is known as:
A: a life settlement
B: an annuity
ST
C: a Viatical settlement
D: STOLI - ANS A: a life settlement
Combination/Variation Plans insure:
A: Groups
B: Two or More lives under one contract
C: Two or more people under separate contracts
D: are a form of variable life insurance - ANS B: Two or More lives under one contract
What is the tax consideration for taking a cash dividend option?
,A: The dividend is fully taxable as income
B: The dividend is paid tax free
C: Depending on income bracket of the insured, the dividend may be taxable
D: If the company gets to keep half of the dividend it is take free - ANS B: The
dividend is paid tax free
Which of the following is not true regarding a renewable option on a term policy?
A: The policy must be renewed regardless of insurability.
B: The rates cannot be more than standard rates at renewal.
C: Premiums are based off of attained age rates.
K
D: A policy can be renewed, however, the insured must convert to a different policy. -
ANS D: A policy can be renewed, however, the insured must convert to a different
C
policy.
Which of the following is considered to be part of the Entire Contract?
LO
A: Declarations Page
B: Buyers Guide
C: Copy of the Application
D: All of the Above - ANS C: Copy of the Application
YC
Company A has a partnership with Company Z. There is an agreement in place that if
the CEO of either company were to die, the other company would receive money to buy
out the partnership. This is an example of:
A: Buy/Sell Agreement
B: Crosse Purchase plan
D
C: Business Entity Plan
D: Key Person - ANS C: Business Entity Plan
U
All of the following are true regarding the Guaranty Association EXCEPT:
A: A claimant may receive less benefits than what they had from a policy.
ST
B: The Association is comprised of All member insurers
C: The Association is comprised of All member insurers and have a right to end
membership while still transacting business in IL
D: There is a $250,000 limit on the present value of annuity benefits. - ANS C: The
Association is comprised of All member insurers and have a right to end membership
while still transacting business in IL
G has a credit life policy and is replacing that with a whole life policy. The agent must:
A: formally replace coverage and include all forms to the insured
B: notify the existing insurer with a notice regarding replacement form
, C: sign the application and forward all signed documents to the replacing insurer to
send to the existing insurer
D: None of the Above - ANS D: None of the Above
Each of the following is an unfair claims practice by an insurance company, EXCEPT:
A: Failing to acknowledging important communications regarding claims filed in a timely
manner.
B: Supplying brochures to claimants that indicate a competitor is in a precarious
financial position.
C: Purposefully misrepresenting important policy coverage and provisions to all
K
claimants.
D: Not supplying claims forms with proper instructions regarding their completion. -
C
ANS B: Supplying brochures to claimants that indicate a competitor is in a precarious
financial position.
LO
All of the following statements pertaining to a temporary license are true, EXCEPT:
A: they survive the transfer of ownership of an insurance company who sponsored the
licensee.
B: the fee is $50.
C: the Director may limit them in any manner in order to protect the public.
YC
D: a licensed sponsor may be required. - ANS A: they survive the transfer of
ownership of an insurance company who sponsored the licensee.
A Temporary License (180 days) allows the holder to engage in all of the following
activities, EXCEPT:
D
A: a surviving spouse of a producer can use the authority to help effect the sale of the
insurance business.
U
B: make certain that insureds are paying renewal premiums in a timely manner.
C: ask the Director to extend the authority if an anticipated agency sale is taking longer
than 180 days.
ST
D: sell a new policy to an existing client. - ANS D: sell a new policy to an existing
client.
The subject of a market conduct examination for non-financial matters may request a
hearing within how many days after receiving the examination report?
A: 10 days
B: 15 days
C: 20 days
D: 30 days - ANS A: 10 days
QUESTIONS AND CORRECT
K
C
VERIFIED ANSWERS 100%
LO
GUARANTEED PASS A+
GRADED
YC
D
U
ST
,J has a life policy with the Guaranteed Insurability rider. J has just celebrated their 42nd
birthday and realizes that she wants to use her rider and buy more death benefit. Which
of the following will apply to J's request?
A: The insurer will allow J to add more insurance without proving insurability.
B: The insurer will allow J to add more insurance pending a paramedical exam.
C: The insurer will deny J's request to add more insurance.
D: The insurer will allow J to add more coverage pending proof of insurability and extra
premium. - ANS C: The insurer will deny J's request to add more insurance.
An insured has a policy with a Waiver of Premium rider. The insured has suffered an
K
illness that will prevent them for working for two years. When will their premiums be
waived?
C
A: Immediately
B: After the first nine months of disability
C: After the first six months of disability
LO
D: Never, premiums cannot be waived because illness is not a disability. - ANS C:
After the first six months of disability
The clause that defines and describes the scope of coverage and the limits of
indemnification is known as the:
YC
A: Insuring Agreement
B: Incontestable Clause
C: Payor Clause
D: Entire Contract Clause - ANS A: Insuring Agreement
D
D has just paid off his mortgage and has decided that he no longer needs his life
insurance policy which he originally purchased to cover the house payments should he
U
die. If D explores the possibly of selling his policy while he is still alive, it is known as:
A: a life settlement
B: an annuity
ST
C: a Viatical settlement
D: STOLI - ANS A: a life settlement
Combination/Variation Plans insure:
A: Groups
B: Two or More lives under one contract
C: Two or more people under separate contracts
D: are a form of variable life insurance - ANS B: Two or More lives under one contract
What is the tax consideration for taking a cash dividend option?
,A: The dividend is fully taxable as income
B: The dividend is paid tax free
C: Depending on income bracket of the insured, the dividend may be taxable
D: If the company gets to keep half of the dividend it is take free - ANS B: The
dividend is paid tax free
Which of the following is not true regarding a renewable option on a term policy?
A: The policy must be renewed regardless of insurability.
B: The rates cannot be more than standard rates at renewal.
C: Premiums are based off of attained age rates.
K
D: A policy can be renewed, however, the insured must convert to a different policy. -
ANS D: A policy can be renewed, however, the insured must convert to a different
C
policy.
Which of the following is considered to be part of the Entire Contract?
LO
A: Declarations Page
B: Buyers Guide
C: Copy of the Application
D: All of the Above - ANS C: Copy of the Application
YC
Company A has a partnership with Company Z. There is an agreement in place that if
the CEO of either company were to die, the other company would receive money to buy
out the partnership. This is an example of:
A: Buy/Sell Agreement
B: Crosse Purchase plan
D
C: Business Entity Plan
D: Key Person - ANS C: Business Entity Plan
U
All of the following are true regarding the Guaranty Association EXCEPT:
A: A claimant may receive less benefits than what they had from a policy.
ST
B: The Association is comprised of All member insurers
C: The Association is comprised of All member insurers and have a right to end
membership while still transacting business in IL
D: There is a $250,000 limit on the present value of annuity benefits. - ANS C: The
Association is comprised of All member insurers and have a right to end membership
while still transacting business in IL
G has a credit life policy and is replacing that with a whole life policy. The agent must:
A: formally replace coverage and include all forms to the insured
B: notify the existing insurer with a notice regarding replacement form
, C: sign the application and forward all signed documents to the replacing insurer to
send to the existing insurer
D: None of the Above - ANS D: None of the Above
Each of the following is an unfair claims practice by an insurance company, EXCEPT:
A: Failing to acknowledging important communications regarding claims filed in a timely
manner.
B: Supplying brochures to claimants that indicate a competitor is in a precarious
financial position.
C: Purposefully misrepresenting important policy coverage and provisions to all
K
claimants.
D: Not supplying claims forms with proper instructions regarding their completion. -
C
ANS B: Supplying brochures to claimants that indicate a competitor is in a precarious
financial position.
LO
All of the following statements pertaining to a temporary license are true, EXCEPT:
A: they survive the transfer of ownership of an insurance company who sponsored the
licensee.
B: the fee is $50.
C: the Director may limit them in any manner in order to protect the public.
YC
D: a licensed sponsor may be required. - ANS A: they survive the transfer of
ownership of an insurance company who sponsored the licensee.
A Temporary License (180 days) allows the holder to engage in all of the following
activities, EXCEPT:
D
A: a surviving spouse of a producer can use the authority to help effect the sale of the
insurance business.
U
B: make certain that insureds are paying renewal premiums in a timely manner.
C: ask the Director to extend the authority if an anticipated agency sale is taking longer
than 180 days.
ST
D: sell a new policy to an existing client. - ANS D: sell a new policy to an existing
client.
The subject of a market conduct examination for non-financial matters may request a
hearing within how many days after receiving the examination report?
A: 10 days
B: 15 days
C: 20 days
D: 30 days - ANS A: 10 days
