LIFE INSURANCE PRACTICE- EXAM GUIDE 2025
|MOST COMMON QUESTIONS WITH CORRECTLY
VERIFIED ANSWERS|ALREADY A+
GRADED|GUARANTEED PASS
Life insurance replacement regulation is designed to protect the interests of the _____ -
policy owner
Which product would best serve a retired individual looking to invest a lump-sum of money
through an insurance compant? - Annuity
Characteristics of an Adjustable Life policy - Adjustable premiums, adjustable premium
payment period, and combination of term and whole life insurance
The Consideration clause in a life insurance policy indicates that a policyowner's consideration
consists of a completed application and ____ - the initial premium
A producer who fails to renew a license may reapply for a license w/o examination within____
year with____ - 1 year/ no renewal with $50 late fee
What action can a policyowner take if an application for a bank loan requires collateral? -
assign policy ownership to the bank
an insured's inability to perform two or more activities of daily living may trigger which type of
policy rider? - Long term care
What is the consideration given by an insurer in th Consideration clause of a life policy? -
Promise to pay a death benefit to a named beneficiary
A person who is insured within a group contract will be given a: - certificate
A term life insurance policy matures: - upon the insured's death during the term of the
policy
A _____ Life policy offers the owner investment in products such as money-market funds, long
term bonds and equities - Variable
,At what point does the Life and Health Insurance Guaranty Association become involved with an
insurer's affairs? - When the insurer becomes insolvent (unable to pay debt)
An annuity that pays out a fixed amount for life starting at a future date - Fixed Deferred
What kind of receipt indicates that certain conditions must be met in order for the insurance
coverage to go into effect? - Conditional
The Life and Health Insurance Guaranty Association is funded by - insurance companies
through assessments
A plan is considered "top heavy " if more than ___ of plan assets are attributable - 60%
When can a policyowner change a revocable beneficiary? - anytime
What does the insuring agreement in a Life insurance contract establish? - an insurer's
basic promise
A policy that provides an income for a specific period starting at the death of the insured -
Family Maintenance Policy
What is the purpose of the U.S.A Patriot Act - detect and deter terrorism
Which type of life policy contains a monthly mortality charge as well as self-directed investment
choices? - Universal Life
Which policy is characterized by a guaranteed minimum death benefit? - variable life
A producer is attempting to replace an existing life insurance policy with a new one. What must
this producer submit as part of the application? - a signed statement by the applicant
regarding the replacement
Characteristic of a variable annuity - underlying equity investments
ANy policy that includes "universal" indicates____ - the policy has flexible or adjustable
premiums
Any policy that includes "variable" indicates___ - cash savings value being invested
When was the USA Patriot Act enacted - 2001
Which policy requires an agent to register with the National Association of Securities Dealers
before selling? - Variable Life
,Which type of policy is considered to be overfunded, as stated by IRS guidelines -
Modified-Endowment Contract
What enables a policyowner to sell a policy for more than its cash value? - Life settlement
contract
What Life Insurance rider allows an applicant to have excess life insurance coverage? -
Term rider
The automatic premium loan provision is designed to__ - avoid a policy lapse
Life insurance that covers an insured's whole life with level premiums paid over a limited time is
called: - Limited Pay Life
Which combination plan is designed to protect an insured from an unpaid mortgage balance
upon premature death? - Joint life
A producer has returned part of his commission to the insured as an inducement to purchase
the insurance. This illegal action is called___ - rebating
The Commission of Insurance MUST give ___ days notice before holding a hearing regarding a
producer's unfair practice - 10
Prior to a hearing for a suspended producer's license, the Commissioner of Insurance is required
to___ - give written notice to the producer
The annuity that represents the largest possible monthly payment to an individual annuitant
is___ - Straight Life annuity
What is being delivered during a policy delivery? - Insurance contract to the proposed
insured
What is the income tax withholding requirement for a profit-sharing plan? - 20% is
withheld for income taxes
A Return of Premium life insurance policy is: - Whole life and increasing term
A term life insurance policy matures: - upon the insured's death during the term of the
policy
Life insurance replacement regulation is designed to protect the interests of the: -
policyowner
, If its employees share in the cost of insurance, what type of group life insurance plan would a
corporation have? - Contributory
Statements made on an insurance application that are believed to be true to the best of the
applicant's knowledge are called: - Representations
What type of insurance offers permanent life coverage with premiums that are payable for life?
- Whole Life
aleatory - an agreement whereby the parties involved do not have to perform a
particular action until a specific, triggering event occurs.
contract of adhesion - a contract (also known as a contract of adhesion) between two
parties, where the terms and conditions are drafted by the party with superior bargaining
power (typically a business) and the other party
What kind of life insurance starts out as temporary coverage but can be later modified to
permanent coverage without evidence of insurability? - Convertible Term
Credit life insurance is typically issued with which of the following types of coverage? -
Decreasing Term
Which policy requires an agent to register with the National Association of Securities Dealer
before selling? - Variable Life
What kind of premium does a Whole Life policy have? - Level
Who makes the legally enforceable promises in a unliateral insurance policy? - Insurance
company
What kind of policy is a Return of Premuim Life? - Whole life and increasing term
How long is the Suicide clause period? - 1-2 years
A producer must notify the Commissioner of Insurance within___days of an address change. -
30
What provision keeps a Whole Life policy in force if a required premium payment is not made
and there is sufficient cash value? - Automatic policy loan
Traditional individual retirement annuity (IRA) distributions must start by: - April 1st of
the year follwing the year the participant attains age 70 1/2
|MOST COMMON QUESTIONS WITH CORRECTLY
VERIFIED ANSWERS|ALREADY A+
GRADED|GUARANTEED PASS
Life insurance replacement regulation is designed to protect the interests of the _____ -
policy owner
Which product would best serve a retired individual looking to invest a lump-sum of money
through an insurance compant? - Annuity
Characteristics of an Adjustable Life policy - Adjustable premiums, adjustable premium
payment period, and combination of term and whole life insurance
The Consideration clause in a life insurance policy indicates that a policyowner's consideration
consists of a completed application and ____ - the initial premium
A producer who fails to renew a license may reapply for a license w/o examination within____
year with____ - 1 year/ no renewal with $50 late fee
What action can a policyowner take if an application for a bank loan requires collateral? -
assign policy ownership to the bank
an insured's inability to perform two or more activities of daily living may trigger which type of
policy rider? - Long term care
What is the consideration given by an insurer in th Consideration clause of a life policy? -
Promise to pay a death benefit to a named beneficiary
A person who is insured within a group contract will be given a: - certificate
A term life insurance policy matures: - upon the insured's death during the term of the
policy
A _____ Life policy offers the owner investment in products such as money-market funds, long
term bonds and equities - Variable
,At what point does the Life and Health Insurance Guaranty Association become involved with an
insurer's affairs? - When the insurer becomes insolvent (unable to pay debt)
An annuity that pays out a fixed amount for life starting at a future date - Fixed Deferred
What kind of receipt indicates that certain conditions must be met in order for the insurance
coverage to go into effect? - Conditional
The Life and Health Insurance Guaranty Association is funded by - insurance companies
through assessments
A plan is considered "top heavy " if more than ___ of plan assets are attributable - 60%
When can a policyowner change a revocable beneficiary? - anytime
What does the insuring agreement in a Life insurance contract establish? - an insurer's
basic promise
A policy that provides an income for a specific period starting at the death of the insured -
Family Maintenance Policy
What is the purpose of the U.S.A Patriot Act - detect and deter terrorism
Which type of life policy contains a monthly mortality charge as well as self-directed investment
choices? - Universal Life
Which policy is characterized by a guaranteed minimum death benefit? - variable life
A producer is attempting to replace an existing life insurance policy with a new one. What must
this producer submit as part of the application? - a signed statement by the applicant
regarding the replacement
Characteristic of a variable annuity - underlying equity investments
ANy policy that includes "universal" indicates____ - the policy has flexible or adjustable
premiums
Any policy that includes "variable" indicates___ - cash savings value being invested
When was the USA Patriot Act enacted - 2001
Which policy requires an agent to register with the National Association of Securities Dealers
before selling? - Variable Life
,Which type of policy is considered to be overfunded, as stated by IRS guidelines -
Modified-Endowment Contract
What enables a policyowner to sell a policy for more than its cash value? - Life settlement
contract
What Life Insurance rider allows an applicant to have excess life insurance coverage? -
Term rider
The automatic premium loan provision is designed to__ - avoid a policy lapse
Life insurance that covers an insured's whole life with level premiums paid over a limited time is
called: - Limited Pay Life
Which combination plan is designed to protect an insured from an unpaid mortgage balance
upon premature death? - Joint life
A producer has returned part of his commission to the insured as an inducement to purchase
the insurance. This illegal action is called___ - rebating
The Commission of Insurance MUST give ___ days notice before holding a hearing regarding a
producer's unfair practice - 10
Prior to a hearing for a suspended producer's license, the Commissioner of Insurance is required
to___ - give written notice to the producer
The annuity that represents the largest possible monthly payment to an individual annuitant
is___ - Straight Life annuity
What is being delivered during a policy delivery? - Insurance contract to the proposed
insured
What is the income tax withholding requirement for a profit-sharing plan? - 20% is
withheld for income taxes
A Return of Premium life insurance policy is: - Whole life and increasing term
A term life insurance policy matures: - upon the insured's death during the term of the
policy
Life insurance replacement regulation is designed to protect the interests of the: -
policyowner
, If its employees share in the cost of insurance, what type of group life insurance plan would a
corporation have? - Contributory
Statements made on an insurance application that are believed to be true to the best of the
applicant's knowledge are called: - Representations
What type of insurance offers permanent life coverage with premiums that are payable for life?
- Whole Life
aleatory - an agreement whereby the parties involved do not have to perform a
particular action until a specific, triggering event occurs.
contract of adhesion - a contract (also known as a contract of adhesion) between two
parties, where the terms and conditions are drafted by the party with superior bargaining
power (typically a business) and the other party
What kind of life insurance starts out as temporary coverage but can be later modified to
permanent coverage without evidence of insurability? - Convertible Term
Credit life insurance is typically issued with which of the following types of coverage? -
Decreasing Term
Which policy requires an agent to register with the National Association of Securities Dealer
before selling? - Variable Life
What kind of premium does a Whole Life policy have? - Level
Who makes the legally enforceable promises in a unliateral insurance policy? - Insurance
company
What kind of policy is a Return of Premuim Life? - Whole life and increasing term
How long is the Suicide clause period? - 1-2 years
A producer must notify the Commissioner of Insurance within___days of an address change. -
30
What provision keeps a Whole Life policy in force if a required premium payment is not made
and there is sufficient cash value? - Automatic policy loan
Traditional individual retirement annuity (IRA) distributions must start by: - April 1st of
the year follwing the year the participant attains age 70 1/2
