Life and Health Insurance Exam Questions and
Answers
Concealment - ✔✔ - The intentional failure to disclose known facts on an insurance
application is called
$94,800 - ✔✔ - Betty owns a universal life insurance policy that was issued with a
$100,000 face amount and now has total death benefit protection of $110,000. Several
months ago she borrowed $15,000 from the policy. The outstanding loan balance
(Including Interest) is $15,200. If Betty dies today, what will be the amount of the death
benefit?
6 Months - ✔✔ - Life insurance policies sold or delivered in Michigan must not contain
the provision that back dates the effective date of a policy any more than how many
months?
Nonforfeiture Provision - ✔✔ - The privilege of accessing the cash value of an insurance
policy if it is surrendered is known as the
Mortality - ✔✔ - Which of the following premium factors has the greatest effect on life
insurance premium calculations?
Who Issues Them - ✔✔ - Annuities are classified by all of the following EXCEPT
Decreasing Term - ✔✔ - Joe buys his first home after obtaining a 30 year mortgage
from his bank. He is considering the purchase of life insurance to ensure that the
mortgage will be paid in the event of his death, in which case he will leave the house to
his spouse and children. What would be the best life insurance protection for Joe?
To provide for annuities to be payable in fixed or variable amounts or for variable life
insurance - ✔✔ - For which of the following reasons would a domestic insurer set up
separate accounts?
Must have the application signed by the policyowner - ✔✔ - Which of the following
statements regarding the delivery of a life insurance policy is NOT correct?
$3.00 - ✔✔ - A producer must pay a fee of how much with each change of address?
,1 to 12 months - ✔✔ - Group life insurance policies include a probationary period
requiring new employees to wait a certain time before they can enroll in the plan. How
long is the typical range for these probationary periods?
$12,040 - ✔✔ - James died after receiving $180 per month for 6 years from a $25,000
life with refund annuity. His spouse, Lucy, as his beneficiary, will now receive t he same
monthly income until her payments total
25% of the employee's income up to a specified maximum amount - ✔✔ - Contributions
to a simplified employee pension are not included in the employee's taxable income for
the year as long as the contribution does not exceed
Apparent Authority - ✔✔ - Susan is the receptionist at an insurance agency. She is
currently studying for her life insurance license. One day at lunchtime, Carla comes in
the office to pay her auto insurance premium. Susan talks to her about the importance
of life insurance, and Carla immediately completes an application and gives Susan a
check for the premium. Carla leaves the agency believing she is covered by life
insurance. Susan has acted with
The proceed are payable to the insured's estate or the insured had any incidence of
ownership in the policy at time of death or transferred ownership within 3 years of death.
- ✔✔ - Life insurance proceeds are included in t he gross estate if
to replace an individual's economic value - ✔✔ - According to the principle of human life
value, the purpose of life insurance is
24 hours with a minimum of 3 hours in ethics - ✔✔ - How many hours of continuing
education credit does an agent need to complete every two years?
Verify the applicant's military records, if any - ✔✔ - During the underwriting process, an
insurer may do all of the following EXCEPT
The projected future earnings of the breadwinner and the number of years she expects
to work - ✔✔ - Which of the following is NOT taken into account when using the needs
approach to determine the proper amount of insurance protection?
A mutual insurance company - ✔✔ - An insurance company that is owned by its
policyowners, who share the insurer's divisible surplus in the form of participating policy
dividends, is known as
, The death benefit of $50,000 is not guaranteed. - ✔✔ - Michelle, age 31, just purchased
a $50,000 variable life insurance policy. Which of the following statements is NOT
correct?
loss must be intentional - ✔✔ - All of the following are characteristics of an insurable risk
EXCEPT
Life insurance that is owned by the insured will avoid estate tax inclusion as long as
ownership is transferred to another party at least 1 year before the insured's death. -
✔✔ - Which of the following statements regarding the estate tax treatment of life
insurance owned by the insured at the insured's death is NOT correct?
Variable Life insurance cannot be proposed in sales situation unless the proposal is
preceded or accompanied by a prespectus. - ✔✔ - Which of the following statements
pertaining to variable life insurance is CORRECT?
Accumulation Units - ✔✔ - Premiums paid into a variable annuity are used regularly to
purchase
Concealment - ✔✔ - When important and material facts are hidden by an insured on an
application, this is known as
The policyowner - ✔✔ - The party to whom the life insurance policy cash values belong
is
The same for both individual and group life insurance policies - ✔✔ - The
incontestability period is usually
The overall purpose of the USA patriot act is to - ✔✔ - deter terrorist activity
Employees' contributions to retirement plans are included in ordinary income. - ✔✔ -
Which of the following statements about the tax advantages of a qualified retirement
plan is NOT true?
Use dividends to buy paid up additions - ✔✔ - Wendy has a $100,000 whole life
participating policy. She recently married and is planning to have a family. She wants to
increase her life insurance coverage but at minimal additional costs. Which of the
following dividend options would be most suitable for her needs?
Answers
Concealment - ✔✔ - The intentional failure to disclose known facts on an insurance
application is called
$94,800 - ✔✔ - Betty owns a universal life insurance policy that was issued with a
$100,000 face amount and now has total death benefit protection of $110,000. Several
months ago she borrowed $15,000 from the policy. The outstanding loan balance
(Including Interest) is $15,200. If Betty dies today, what will be the amount of the death
benefit?
6 Months - ✔✔ - Life insurance policies sold or delivered in Michigan must not contain
the provision that back dates the effective date of a policy any more than how many
months?
Nonforfeiture Provision - ✔✔ - The privilege of accessing the cash value of an insurance
policy if it is surrendered is known as the
Mortality - ✔✔ - Which of the following premium factors has the greatest effect on life
insurance premium calculations?
Who Issues Them - ✔✔ - Annuities are classified by all of the following EXCEPT
Decreasing Term - ✔✔ - Joe buys his first home after obtaining a 30 year mortgage
from his bank. He is considering the purchase of life insurance to ensure that the
mortgage will be paid in the event of his death, in which case he will leave the house to
his spouse and children. What would be the best life insurance protection for Joe?
To provide for annuities to be payable in fixed or variable amounts or for variable life
insurance - ✔✔ - For which of the following reasons would a domestic insurer set up
separate accounts?
Must have the application signed by the policyowner - ✔✔ - Which of the following
statements regarding the delivery of a life insurance policy is NOT correct?
$3.00 - ✔✔ - A producer must pay a fee of how much with each change of address?
,1 to 12 months - ✔✔ - Group life insurance policies include a probationary period
requiring new employees to wait a certain time before they can enroll in the plan. How
long is the typical range for these probationary periods?
$12,040 - ✔✔ - James died after receiving $180 per month for 6 years from a $25,000
life with refund annuity. His spouse, Lucy, as his beneficiary, will now receive t he same
monthly income until her payments total
25% of the employee's income up to a specified maximum amount - ✔✔ - Contributions
to a simplified employee pension are not included in the employee's taxable income for
the year as long as the contribution does not exceed
Apparent Authority - ✔✔ - Susan is the receptionist at an insurance agency. She is
currently studying for her life insurance license. One day at lunchtime, Carla comes in
the office to pay her auto insurance premium. Susan talks to her about the importance
of life insurance, and Carla immediately completes an application and gives Susan a
check for the premium. Carla leaves the agency believing she is covered by life
insurance. Susan has acted with
The proceed are payable to the insured's estate or the insured had any incidence of
ownership in the policy at time of death or transferred ownership within 3 years of death.
- ✔✔ - Life insurance proceeds are included in t he gross estate if
to replace an individual's economic value - ✔✔ - According to the principle of human life
value, the purpose of life insurance is
24 hours with a minimum of 3 hours in ethics - ✔✔ - How many hours of continuing
education credit does an agent need to complete every two years?
Verify the applicant's military records, if any - ✔✔ - During the underwriting process, an
insurer may do all of the following EXCEPT
The projected future earnings of the breadwinner and the number of years she expects
to work - ✔✔ - Which of the following is NOT taken into account when using the needs
approach to determine the proper amount of insurance protection?
A mutual insurance company - ✔✔ - An insurance company that is owned by its
policyowners, who share the insurer's divisible surplus in the form of participating policy
dividends, is known as
, The death benefit of $50,000 is not guaranteed. - ✔✔ - Michelle, age 31, just purchased
a $50,000 variable life insurance policy. Which of the following statements is NOT
correct?
loss must be intentional - ✔✔ - All of the following are characteristics of an insurable risk
EXCEPT
Life insurance that is owned by the insured will avoid estate tax inclusion as long as
ownership is transferred to another party at least 1 year before the insured's death. -
✔✔ - Which of the following statements regarding the estate tax treatment of life
insurance owned by the insured at the insured's death is NOT correct?
Variable Life insurance cannot be proposed in sales situation unless the proposal is
preceded or accompanied by a prespectus. - ✔✔ - Which of the following statements
pertaining to variable life insurance is CORRECT?
Accumulation Units - ✔✔ - Premiums paid into a variable annuity are used regularly to
purchase
Concealment - ✔✔ - When important and material facts are hidden by an insured on an
application, this is known as
The policyowner - ✔✔ - The party to whom the life insurance policy cash values belong
is
The same for both individual and group life insurance policies - ✔✔ - The
incontestability period is usually
The overall purpose of the USA patriot act is to - ✔✔ - deter terrorist activity
Employees' contributions to retirement plans are included in ordinary income. - ✔✔ -
Which of the following statements about the tax advantages of a qualified retirement
plan is NOT true?
Use dividends to buy paid up additions - ✔✔ - Wendy has a $100,000 whole life
participating policy. She recently married and is planning to have a family. She wants to
increase her life insurance coverage but at minimal additional costs. Which of the
following dividend options would be most suitable for her needs?
