PEARSON VUE INSURANCE
PRACTICE EXAM
Under58the58social58security58retirement58benefits,58all58of58the58following58factors58will58
influence58how58much58a58retiring58individual58will58receive58as58a58monthly58income58b
enefit58except58the58individual's58-58answer--Sex
In58life58insurance,58insurance58interest58must58exist58at58the58time58the58-58answer--
Producer58writes58an58application58on58a58proposed58insured
Which58of58the58following58statements58is58NOT58correct58about58representations?58-
58answer--They58are58true58in58every58respect
An58insurance58producer58takes58an58application58for58a58life58insurance58policy58but58d
oes58not58collect58the58initial58premium.58On58delivery58of58the58policy58to58the58propose
d58insured,58the58producer58must58collect58the58initial58premium58and58which58of58the58fo
llowing?58-58answer--The58insured's58signed58statement58of58continued58good58health
Which58of58the58following58retirement58plans58is58tax-qualified?58-58answer--
Defined58contribution
Which58of58the58following58statements58is58correct58about58the58paid-
up58additions58in58a58participating58whole58life58policy?58-58answer--
They58are58purchased58on58an58attained58age58basis
The58right58to58change58a58beneficiary58designation58is58reserved58for58the:58-58answer--
Policyowner
Which58of58the58following58provisions58in58a58life58policy58specifies58the58manner58in58wh
ich58proceeds58will58be58paid58to58a58beneficiary58on58the58death58of58the58insured?58-
58answer--Settlement58options
Two58business58partners58own58life58insurance58on58each58other.58If58one58partner58dies
,58which58of58the58following58contracts58will58allow58the58other58partner58to58buy5810058p
ercent58of58the58business58interest?58-58answer--buy-sell58agreement
The58waiver58of58premium58provision58of58a58life58policy58allows58the58insurer58to58take58
which58of58the58following58actions?58-58answer--
waive58an58insured's58premiums58if58the58insured58becomes58totally58disabled58before58
a58certian58age
, A58life58insurance58application58is58incomplete58if58it58is58missing58the58signature58of58wh
ich58of58the58following?58-58answer--The58proposed58adult58insured
Which58of58the58following58statements58is58correct58about58group58life58conversion58privil
eges?58-58answer--
Death58during58the58conversion58period58is58covered58if58the58departing58employee58cho
se58not58to58conver58the58policy.
In58the58event58of58an58insured's58death,58which58of58the58following58provides58an58inco
me58for58the58family58during58a58designated58period58of58time58followed58by58a58lump58s
um58death58benefit?58-58answer--Family58income58rider
A58policyowner58names58his58wife58as58the58primary58beneficiary58of58his58Universal58Lif
e58policy58on58a58revocable58basis.58He58also58names58his58three58children58as58his58se
condary58beneficiaries58and58his58estate58as58his58tertiary58beneficiary.58If58the58policyo
wner's58wife58predeceases58him,58and58then58he58dies,58who58will58receive58the58policy5
8proceeds?58-58answer--children
A58contract58that58has58as58its58basic58function58the58systematic58liquidation58of58accum
ulated58assets58through58periodic58payments58is58called58an58-58answer--annuity
All58of58the58following58policies58may58be58examples58of58third58party58ownership58excep
t58-58answer--Modified58Life
Group58Life
Split-dollar58Life
Key58Employee58Life
Answer:58Modified58Life
Which58of58the58following58group58life58plan58requires58at58least587558percent58of58the58e
ligible58members58to58participate?58-58answer--Contributory
Which58of58the58following58features58allows58an58insurance58policy58to58remain58in58forc
e58for58a58specified58number58of58days58beyond58the58premium58due58date?58-
58answer--Grace58period58provision
In58which58of58the58following58contracts58is58the58death58benefit58called58the58principal58
sum?58-58answer--Accidental58Death58and58Dismemberment58(AD&D)
The58primary58reason58for58selecting58a58variable58whole58life58policy58instead58of58a58tr
aditional58whole58life58policy58is58that58the58variable58whole58life58policy58-58answer--
Has58the58potential58to58earn58a58higher58rate58of58return58on58the58cash58value
PRACTICE EXAM
Under58the58social58security58retirement58benefits,58all58of58the58following58factors58will58
influence58how58much58a58retiring58individual58will58receive58as58a58monthly58income58b
enefit58except58the58individual's58-58answer--Sex
In58life58insurance,58insurance58interest58must58exist58at58the58time58the58-58answer--
Producer58writes58an58application58on58a58proposed58insured
Which58of58the58following58statements58is58NOT58correct58about58representations?58-
58answer--They58are58true58in58every58respect
An58insurance58producer58takes58an58application58for58a58life58insurance58policy58but58d
oes58not58collect58the58initial58premium.58On58delivery58of58the58policy58to58the58propose
d58insured,58the58producer58must58collect58the58initial58premium58and58which58of58the58fo
llowing?58-58answer--The58insured's58signed58statement58of58continued58good58health
Which58of58the58following58retirement58plans58is58tax-qualified?58-58answer--
Defined58contribution
Which58of58the58following58statements58is58correct58about58the58paid-
up58additions58in58a58participating58whole58life58policy?58-58answer--
They58are58purchased58on58an58attained58age58basis
The58right58to58change58a58beneficiary58designation58is58reserved58for58the:58-58answer--
Policyowner
Which58of58the58following58provisions58in58a58life58policy58specifies58the58manner58in58wh
ich58proceeds58will58be58paid58to58a58beneficiary58on58the58death58of58the58insured?58-
58answer--Settlement58options
Two58business58partners58own58life58insurance58on58each58other.58If58one58partner58dies
,58which58of58the58following58contracts58will58allow58the58other58partner58to58buy5810058p
ercent58of58the58business58interest?58-58answer--buy-sell58agreement
The58waiver58of58premium58provision58of58a58life58policy58allows58the58insurer58to58take58
which58of58the58following58actions?58-58answer--
waive58an58insured's58premiums58if58the58insured58becomes58totally58disabled58before58
a58certian58age
, A58life58insurance58application58is58incomplete58if58it58is58missing58the58signature58of58wh
ich58of58the58following?58-58answer--The58proposed58adult58insured
Which58of58the58following58statements58is58correct58about58group58life58conversion58privil
eges?58-58answer--
Death58during58the58conversion58period58is58covered58if58the58departing58employee58cho
se58not58to58conver58the58policy.
In58the58event58of58an58insured's58death,58which58of58the58following58provides58an58inco
me58for58the58family58during58a58designated58period58of58time58followed58by58a58lump58s
um58death58benefit?58-58answer--Family58income58rider
A58policyowner58names58his58wife58as58the58primary58beneficiary58of58his58Universal58Lif
e58policy58on58a58revocable58basis.58He58also58names58his58three58children58as58his58se
condary58beneficiaries58and58his58estate58as58his58tertiary58beneficiary.58If58the58policyo
wner's58wife58predeceases58him,58and58then58he58dies,58who58will58receive58the58policy5
8proceeds?58-58answer--children
A58contract58that58has58as58its58basic58function58the58systematic58liquidation58of58accum
ulated58assets58through58periodic58payments58is58called58an58-58answer--annuity
All58of58the58following58policies58may58be58examples58of58third58party58ownership58excep
t58-58answer--Modified58Life
Group58Life
Split-dollar58Life
Key58Employee58Life
Answer:58Modified58Life
Which58of58the58following58group58life58plan58requires58at58least587558percent58of58the58e
ligible58members58to58participate?58-58answer--Contributory
Which58of58the58following58features58allows58an58insurance58policy58to58remain58in58forc
e58for58a58specified58number58of58days58beyond58the58premium58due58date?58-
58answer--Grace58period58provision
In58which58of58the58following58contracts58is58the58death58benefit58called58the58principal58
sum?58-58answer--Accidental58Death58and58Dismemberment58(AD&D)
The58primary58reason58for58selecting58a58variable58whole58life58policy58instead58of58a58tr
aditional58whole58life58policy58is58that58the58variable58whole58life58policy58-58answer--
Has58the58potential58to58earn58a58higher58rate58of58return58on58the58cash58value
