WISCONSIN LIFE, ACCIDENT, & HEALTH EXAMS
PREP
Why are dividends from a mutual insurer not subject to taxation? - Answers :Dividends
from a mutual insurance company are considered to be a return of premium.
All of the following are examples of pure risk EXCEPT
a. Losing money at a casino
b. Injured while playing football
c. Falling at a casino and breaking a hip
d. Jewelry stolen during a home invasion - Answers :Losing money at a casino
Bob and Tom start a business. Since each partner contributes an important element to
the success of the business, they decide to take out life insurance policies on each
other, and name each other as beneficiaries. Eventually, they retire and dissolve the
business. Bob dies 12 months later. The policies continue in force with no change. Both
partners are still married at the time of Bob's death. In this situation, who will receive
Bob's policy proceeds?
a. Bob's estate
b. Bob's Spouse
c. Tom - Answers :Tom
Aleatory - Answers :The term which describes the fact that both parties of a contract
may NOT receive the same value is referred to as
The deeds and actions of a producer indicate what kind of authority?
a. Express authority
b. Apparent authority
c. Implied authority - Answers :Apparent authority
Intentional withholding of material facts that would affect an insurance policy's validity is
called a(n)
a. estoppel
b. concealment
c. adhesion
d. misrepresentation - Answers :Concealment
The authority granted to a licensed producer is provided via the
a. Producer's apparent authority
b. Written contract
c. Law of Agency
d. Principal Capacity - Answers :Law of Agency
All of the following are elements of an insurance policy EXCEPT
a. Definitions
,b. Other insurance
c. Claim forms
d. Conditions - Answers :Claim forms
Under a contract of adhesion,
a. there is the potential for an unequal exchange of value
b. the insurer's obligations are dependent upon certain acts of the insured individual
c. the terms must be accepted or rejected in full
d. only one party makes any kind of enforceable promise - Answers :the terms must be
accepted or rejected in full
Sean, Michael, and David are brothers who have a $200,000 "first to die" joint life policy
covering all three of their lives. If Michael dies first, the policy proceeds:
a. will no longer provide insurance protection
b. will go to Michael's estate
c. will be divided by probate
d. will not be paid until the last brother dies - Answers :will no longer provide insurance
protection
How do insurers predict the increase of individual risks? - Answers :Law of Large
Numbers
Insurance represents the process of risk - Answers :transference
What is known as the immediate specific event causing loss and giving rise to risk? -
Answers :Peril
Which of the following is considered to be an event or condition that increases the
probability of an insured's loss?
a. Risk
b. Hazard
c. Indemnity
d. Peril - Answers :Hazard
Insurance companies determine risk by which of the following?
a. Insurable interest
b. Insurance exchanges
c. Law of large numbers and risk pooling
d. Population table data - Answers :Law of large numbers and risk pooling
People with higher loss exposure have the tendency to purchase insurance more often
than those with average risk. This is called - Answers :Adverse selection
A Renewable Term Life Insurance policy can be renewed:
a. at a predetermined date or age, regardless of the insured's health
, b. only if the insured provides evidence of insurability
c. anytime at the policyowner's request
d. typically with no change in premium - Answers :at a predetermined date or age,
regardless of the insured's health
Which of the following are the premium payments for a Universal life policy NOT used
for?
a. Death benefits
b. Cash value
c. Loading costs
d. Separate account investments - Answers :Separate account investments
A partial surrender is allowed in which of the following life policies?
a. Adjustable whole life
b. Universal life
c. Decreasing term life
d. Limited whole life - Answers :Universal life
A spouse and child can be added to the primary insured's coverage as what kind of
rider?
a. Dependent term
b. Guaranteed insurability
c. Primary term
d. Family term - Answers :Family term
Which of these riders will pay a death benefit if the insured's spouse dies?
a. Guaranteed insurability rider
b. Family term insurance rider
c. Family whole insurance rider
d. Payor benefit rider - Answers :Family term insurance rider
What types of life insurance are normally used for key employee indemnification?
a. term, whole, and universal life insurance
b. increasing term insurance
c. joint, credit, and group life insurance
d. adjustable, permanent, and limited-pay life insurance - Answers :Term, whole, and
universal life insurance
Joe has a life insurance policy that has a face amount of $300,000. After a number of
years, the policy's cash value accumulates to $50,000 and the face amount becomes
$350,000. What kind of policy is this?
a. Increasing Term Life Policy
b. Nonparticipating Policy
c. Modified Whole Life Policy
d. Universal Life Policy - Answers :Universal Life Policy
PREP
Why are dividends from a mutual insurer not subject to taxation? - Answers :Dividends
from a mutual insurance company are considered to be a return of premium.
All of the following are examples of pure risk EXCEPT
a. Losing money at a casino
b. Injured while playing football
c. Falling at a casino and breaking a hip
d. Jewelry stolen during a home invasion - Answers :Losing money at a casino
Bob and Tom start a business. Since each partner contributes an important element to
the success of the business, they decide to take out life insurance policies on each
other, and name each other as beneficiaries. Eventually, they retire and dissolve the
business. Bob dies 12 months later. The policies continue in force with no change. Both
partners are still married at the time of Bob's death. In this situation, who will receive
Bob's policy proceeds?
a. Bob's estate
b. Bob's Spouse
c. Tom - Answers :Tom
Aleatory - Answers :The term which describes the fact that both parties of a contract
may NOT receive the same value is referred to as
The deeds and actions of a producer indicate what kind of authority?
a. Express authority
b. Apparent authority
c. Implied authority - Answers :Apparent authority
Intentional withholding of material facts that would affect an insurance policy's validity is
called a(n)
a. estoppel
b. concealment
c. adhesion
d. misrepresentation - Answers :Concealment
The authority granted to a licensed producer is provided via the
a. Producer's apparent authority
b. Written contract
c. Law of Agency
d. Principal Capacity - Answers :Law of Agency
All of the following are elements of an insurance policy EXCEPT
a. Definitions
,b. Other insurance
c. Claim forms
d. Conditions - Answers :Claim forms
Under a contract of adhesion,
a. there is the potential for an unequal exchange of value
b. the insurer's obligations are dependent upon certain acts of the insured individual
c. the terms must be accepted or rejected in full
d. only one party makes any kind of enforceable promise - Answers :the terms must be
accepted or rejected in full
Sean, Michael, and David are brothers who have a $200,000 "first to die" joint life policy
covering all three of their lives. If Michael dies first, the policy proceeds:
a. will no longer provide insurance protection
b. will go to Michael's estate
c. will be divided by probate
d. will not be paid until the last brother dies - Answers :will no longer provide insurance
protection
How do insurers predict the increase of individual risks? - Answers :Law of Large
Numbers
Insurance represents the process of risk - Answers :transference
What is known as the immediate specific event causing loss and giving rise to risk? -
Answers :Peril
Which of the following is considered to be an event or condition that increases the
probability of an insured's loss?
a. Risk
b. Hazard
c. Indemnity
d. Peril - Answers :Hazard
Insurance companies determine risk by which of the following?
a. Insurable interest
b. Insurance exchanges
c. Law of large numbers and risk pooling
d. Population table data - Answers :Law of large numbers and risk pooling
People with higher loss exposure have the tendency to purchase insurance more often
than those with average risk. This is called - Answers :Adverse selection
A Renewable Term Life Insurance policy can be renewed:
a. at a predetermined date or age, regardless of the insured's health
, b. only if the insured provides evidence of insurability
c. anytime at the policyowner's request
d. typically with no change in premium - Answers :at a predetermined date or age,
regardless of the insured's health
Which of the following are the premium payments for a Universal life policy NOT used
for?
a. Death benefits
b. Cash value
c. Loading costs
d. Separate account investments - Answers :Separate account investments
A partial surrender is allowed in which of the following life policies?
a. Adjustable whole life
b. Universal life
c. Decreasing term life
d. Limited whole life - Answers :Universal life
A spouse and child can be added to the primary insured's coverage as what kind of
rider?
a. Dependent term
b. Guaranteed insurability
c. Primary term
d. Family term - Answers :Family term
Which of these riders will pay a death benefit if the insured's spouse dies?
a. Guaranteed insurability rider
b. Family term insurance rider
c. Family whole insurance rider
d. Payor benefit rider - Answers :Family term insurance rider
What types of life insurance are normally used for key employee indemnification?
a. term, whole, and universal life insurance
b. increasing term insurance
c. joint, credit, and group life insurance
d. adjustable, permanent, and limited-pay life insurance - Answers :Term, whole, and
universal life insurance
Joe has a life insurance policy that has a face amount of $300,000. After a number of
years, the policy's cash value accumulates to $50,000 and the face amount becomes
$350,000. What kind of policy is this?
a. Increasing Term Life Policy
b. Nonparticipating Policy
c. Modified Whole Life Policy
d. Universal Life Policy - Answers :Universal Life Policy
