LIFE INSURANCE PRACTICE- EXAM GUIDE 2025
|MOST COMMON QUESTIONS WITH CORRECTLY
VERIFIED ANSWERS|ALREADY A+
GRADED|GUARANTEED PASS
If a retirement plan or annuity is "qualified," this means - It has favorable tax treatment
If an insurer makes a statement that is policies are guarantee by the existence of the Insurance
guaranty association, that would be considered... - An unfair trade practice
What type of life inusrance is most commonly used for group plans? - Annually
renewable term
An insurer wants to begin underwriting procedures for an applicant. What source will it consult
for the majority of its underwriting information> - The application
If the beneficiary wants a guarantee that police proceeds will be paid for a period of 10 years
before being exhausted, what settlement option should the beneficiary select? - Fixed
period
What annuity settlement option provides payments to an annuitant for the rest of the
annuitant's life and ceases at he annuitant's death - Pure life
Which of the following is not the consideration in an insurance policy? - The promise to
pay covered losses
An agent offers his client free tickets to a sporting event in exchange for the purchase of
aninsurance policy. The agent is guilty of - Rebating
All advertisments, regardless of their source, are the responsibility of the - Insurer
Employer contribution made to a qualified plan are... - subject to vesting requirements
When must insurable interest exist in a life insurance policy? - at the time of application
What type of policy provides permanent protection? - Whole life
A 403(b) tax-sheltered annuity is available for - Teachers and nonprofit organizations
,In a single employer group plan, what is the name of the policy issued to the group sponsor? -
Master contract
The sole beneficiary of a life insurance policy dies before the insured. If the policy owner fails to
change the beneficiary gefore the insured's death, the policy proceeds will got to - The
insureds estate
When agents are acting within the scope of their contract, their actions will be assumed to be
the acts of the - insurer
The life insurance policy clause that prevents an insurance company from denying payment of a
death claim agter a specified period of time is known as the - Incontestability clause
Which type of life insurnce policy generates immediate cash value? - Single premium
Which of the following is not a characteristic of an insurable risk? - The loss must be
chatastrophic
If an agent fails to obtain an applicant' signature on the application, the agent must... -
Return the application to the applicant for a signature
Which of the following may contribute to an HR-10 plan? - Self-employed plumber
For the purpose of insurance, risk is defined as - The chance of loss
All else being equal, which of the following will NOT be considered unfair discrimination by
insurers - Discriminating in policy benefits base onf the insureds habits and lifestyle.
Which of the following transaction in an annuity will cause immediate taxation of the intrest
earned? - Srrendering the annuity for cash
When an annuity is written, whose life expectancy is taken into account? - The annuitant
Which of the following determines the cash value of a variable life policy? - ...
Events or conditions that increase the chances of an insured loss occurring are referred to as -
Hazards
All else being equal, which of the following will NOT be considered unfair deistimination by
insureers? - Discriminating in policy benegits based on the insured's habits and lifestyle
If a life insurance policy develops cash value faster than a seven-pay whole life contract, it is -
a modified endowment contact
,An insured had paid only part of her total number of IRA premiums before she died. What effect
will this have on the insured's estate? - Only the premiums paid will be included in the
estate
Which of the following is NOT a characteristic of an insurable risk? - The loss must be
catastrophic
The form of life annuity which pays benefits throughout the liffetime of the annuitant and also
guarantees payment for a minimum number of years is called - Life income with period
certain
What is the main purpose of requireing licenses for persons involved in transacting insurance? -
To protect the general public
SIMPLE plans require all of the following except: - At least 1,000 employees
A 403(B) tax sheltered annuity is available for - Teachers and non profit organizations.
The advantage to qualified plans to employers is - Tax-deductible contributions.
Which of the following may contribute to an HR-10 plan? - Self-employed plumber
When must insurable interest exist in a life insurance policy? - At the time of application.
Upon policy delivery the agent must confirm that all of the following are received EXCEPT: -
Signed waiver of premium.
Which type of life insurance policy generates immediate cash value? - Single premium
Which of the following is true regarding taxation of accelerated benefits paid under a life
insurance policy? - They are received tax free.
What annuity settlement options provides payments to an annuitant for the rest of the
annuitant's life and ceases a the annuitant's death? - Pure life
Which of the following best describes taxation during the accumulation period of annuity? -
Taxes are deferred.
When agents are acting within the scope of their contract, their actions will be assumed to be
the acts of the - Insurer.
Wheat is the primary purpose of an 401(k) plan? - Retirement.
If an insured died during the grace period, what is the insurance company obligated to pay? -
The face amount minus any owed premium
, What type of policy provides permanent protection? - Whole life.
An insurer who deliberately makes a maliciously critical statement about another insurance
company is a guilty of an illegal trade practice is called - Defamation.
A week after an insured receives a new life policy, he decides to return it and requests a refund
of premium. What provision fives the insured the right to return the policy? - Free look
An insurer wants to begin underwriting procedures for an applicant. What source will it consult
for the majority of its underwriting information? - Application
What type of policy shorten the premium paying period but allows the coverage to continue to
age 100? - Limited Pay
Which of the following would be likely to establish a SEP? - A small empoyer
If taken as a lump sum, life insurance procedds to benficiaries are passed - A free of
federal income taxation
An annyity would normally be purchased by an individual who wants to - Secure income
for reitirement
Which of the followed is considered the nontaxable return of unused premiums -
Dividend
Which of the following is NOT the consideration in an insurance policy - The application
given to a prospective insured.
Representations are statements made ny the applicatnt for insurace that are - Considered
true to the best of the applicant's knowlege
Thje accelerated benegits provision will provide for an early payment of the death benefit when
the insured - Becomes termanilly ill
The life insurance policy clause that prevents an insurance compnay from denying payment of a
death claim after a specified period of time is known as the - incontestability clause
An annuitant has been making periodic premium payments into an annuity. The income
payments are shceduled to begin 2 years after the annuity purchase. What type of annuity is it?
- Deffered
Which of the following premium modes would result in the highest annual cost for a life
insurance policy? - Monthly
|MOST COMMON QUESTIONS WITH CORRECTLY
VERIFIED ANSWERS|ALREADY A+
GRADED|GUARANTEED PASS
If a retirement plan or annuity is "qualified," this means - It has favorable tax treatment
If an insurer makes a statement that is policies are guarantee by the existence of the Insurance
guaranty association, that would be considered... - An unfair trade practice
What type of life inusrance is most commonly used for group plans? - Annually
renewable term
An insurer wants to begin underwriting procedures for an applicant. What source will it consult
for the majority of its underwriting information> - The application
If the beneficiary wants a guarantee that police proceeds will be paid for a period of 10 years
before being exhausted, what settlement option should the beneficiary select? - Fixed
period
What annuity settlement option provides payments to an annuitant for the rest of the
annuitant's life and ceases at he annuitant's death - Pure life
Which of the following is not the consideration in an insurance policy? - The promise to
pay covered losses
An agent offers his client free tickets to a sporting event in exchange for the purchase of
aninsurance policy. The agent is guilty of - Rebating
All advertisments, regardless of their source, are the responsibility of the - Insurer
Employer contribution made to a qualified plan are... - subject to vesting requirements
When must insurable interest exist in a life insurance policy? - at the time of application
What type of policy provides permanent protection? - Whole life
A 403(b) tax-sheltered annuity is available for - Teachers and nonprofit organizations
,In a single employer group plan, what is the name of the policy issued to the group sponsor? -
Master contract
The sole beneficiary of a life insurance policy dies before the insured. If the policy owner fails to
change the beneficiary gefore the insured's death, the policy proceeds will got to - The
insureds estate
When agents are acting within the scope of their contract, their actions will be assumed to be
the acts of the - insurer
The life insurance policy clause that prevents an insurance company from denying payment of a
death claim agter a specified period of time is known as the - Incontestability clause
Which type of life insurnce policy generates immediate cash value? - Single premium
Which of the following is not a characteristic of an insurable risk? - The loss must be
chatastrophic
If an agent fails to obtain an applicant' signature on the application, the agent must... -
Return the application to the applicant for a signature
Which of the following may contribute to an HR-10 plan? - Self-employed plumber
For the purpose of insurance, risk is defined as - The chance of loss
All else being equal, which of the following will NOT be considered unfair discrimination by
insurers - Discriminating in policy benefits base onf the insureds habits and lifestyle.
Which of the following transaction in an annuity will cause immediate taxation of the intrest
earned? - Srrendering the annuity for cash
When an annuity is written, whose life expectancy is taken into account? - The annuitant
Which of the following determines the cash value of a variable life policy? - ...
Events or conditions that increase the chances of an insured loss occurring are referred to as -
Hazards
All else being equal, which of the following will NOT be considered unfair deistimination by
insureers? - Discriminating in policy benegits based on the insured's habits and lifestyle
If a life insurance policy develops cash value faster than a seven-pay whole life contract, it is -
a modified endowment contact
,An insured had paid only part of her total number of IRA premiums before she died. What effect
will this have on the insured's estate? - Only the premiums paid will be included in the
estate
Which of the following is NOT a characteristic of an insurable risk? - The loss must be
catastrophic
The form of life annuity which pays benefits throughout the liffetime of the annuitant and also
guarantees payment for a minimum number of years is called - Life income with period
certain
What is the main purpose of requireing licenses for persons involved in transacting insurance? -
To protect the general public
SIMPLE plans require all of the following except: - At least 1,000 employees
A 403(B) tax sheltered annuity is available for - Teachers and non profit organizations.
The advantage to qualified plans to employers is - Tax-deductible contributions.
Which of the following may contribute to an HR-10 plan? - Self-employed plumber
When must insurable interest exist in a life insurance policy? - At the time of application.
Upon policy delivery the agent must confirm that all of the following are received EXCEPT: -
Signed waiver of premium.
Which type of life insurance policy generates immediate cash value? - Single premium
Which of the following is true regarding taxation of accelerated benefits paid under a life
insurance policy? - They are received tax free.
What annuity settlement options provides payments to an annuitant for the rest of the
annuitant's life and ceases a the annuitant's death? - Pure life
Which of the following best describes taxation during the accumulation period of annuity? -
Taxes are deferred.
When agents are acting within the scope of their contract, their actions will be assumed to be
the acts of the - Insurer.
Wheat is the primary purpose of an 401(k) plan? - Retirement.
If an insured died during the grace period, what is the insurance company obligated to pay? -
The face amount minus any owed premium
, What type of policy provides permanent protection? - Whole life.
An insurer who deliberately makes a maliciously critical statement about another insurance
company is a guilty of an illegal trade practice is called - Defamation.
A week after an insured receives a new life policy, he decides to return it and requests a refund
of premium. What provision fives the insured the right to return the policy? - Free look
An insurer wants to begin underwriting procedures for an applicant. What source will it consult
for the majority of its underwriting information? - Application
What type of policy shorten the premium paying period but allows the coverage to continue to
age 100? - Limited Pay
Which of the following would be likely to establish a SEP? - A small empoyer
If taken as a lump sum, life insurance procedds to benficiaries are passed - A free of
federal income taxation
An annyity would normally be purchased by an individual who wants to - Secure income
for reitirement
Which of the followed is considered the nontaxable return of unused premiums -
Dividend
Which of the following is NOT the consideration in an insurance policy - The application
given to a prospective insured.
Representations are statements made ny the applicatnt for insurace that are - Considered
true to the best of the applicant's knowlege
Thje accelerated benegits provision will provide for an early payment of the death benefit when
the insured - Becomes termanilly ill
The life insurance policy clause that prevents an insurance compnay from denying payment of a
death claim after a specified period of time is known as the - incontestability clause
An annuitant has been making periodic premium payments into an annuity. The income
payments are shceduled to begin 2 years after the annuity purchase. What type of annuity is it?
- Deffered
Which of the following premium modes would result in the highest annual cost for a life
insurance policy? - Monthly
