WV State Life Insurance Exam UPDATED
ACTUAL Exam Questions and CORRECT
Answers
A group-owned insurance company that is formed to assume and spread the liability risks of its
members is known as a: - CORRECT ANSWER - Risk retention group
Which of the following requires insurers to disclose when an applicant's consumer or credit
history is being investigated? - CORRECT ANSWER - 1970-Fair Credit Reporting Act
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six
months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values
reflects which of the following insurance contract features? - CORRECT ANSWER -
Aleatory
The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy
future obligations to its policyholders is called: - CORRECT ANSWER - Reserves
All of the following are considered to be typical characteristics describing the nature of an
insurance contract, EXCEPT: - CORRECT ANSWER - Bilateral
What year was the McCarran-Ferguson Act enacted? - CORRECT ANSWER - 1945
Which of the following consists of an offer, acceptance, and consideration? - CORRECT
ANSWER - Contract
Who elects the governing body of a mutual insurance company? - CORRECT ANSWER -
Policyholders
Insurance policies are considered aleatory contracts because: - CORRECT ANSWER -
Performance is conditioned upon a future occurrence
,Who makes the legally enforceable promises in a unilateral contract? - CORRECT
ANSWER - Insurance company
Insurance contracts are known as _____ because certain future conditions or acts must occur
before any claims can be paid. - CORRECT ANSWER - Conditional
A life insurance arrangement which circumvents insurable interest statutes is called: -
CORRECT ANSWER - Investor-Originated Life Insurance
In an insurance contract, the insurer is the only party who makes a legally enforceable promise.
What kind of contract is this? - CORRECT ANSWER - Unilateral
When third-party ownership is involved, applicants who also happen to be the stated primary
beneficiary are required to have: - CORRECT ANSWER - Insurable interest in the proposed
insured
Which of these arrangements allows one to bypass insurable interest laws? - CORRECT
ANSWER - Investor-Originated Life Insurance
When must insurable interest exist for a life insurance contract to be valid? - CORRECT
ANSWER - Inception of the contract
If a contract of adhesion contains complicated language, to whom would the interpretation be in
favor of? - CORRECT ANSWER - Insured
Which of these is an element of a Variable Life policy? - CORRECT ANSWER - A fixed,
level premium
, A father who dies within 3 years after purchasing a life insurance policy on his infant daughter
can have the policy premiums waived under which provision? - CORRECT ANSWER -
Payor provision
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? - CORRECT
ANSWER - Policyowner
Which of the following actions is NOT possible with a Universal Life policy? - CORRECT
ANSWER - Premiums may be applied as a credit against income tax
Which of the following policies is characterized by a flexible premium and death benefit and
allows the policy owner control of the investment aspect of the plan? - CORRECT
ANSWER - Variable universal life
A term life insurance policy matures: - CORRECT ANSWER - upon the insured's death
during the term of the policy
What type of life policy covers two people and pays upon the death of the last insured? -
CORRECT ANSWER - Survivorship
When is the face amount paid under a Joint Life and Survivor policy? - CORRECT
ANSWER - Upon the death of the last insured
Variable Whole Life Insurance can be described as: - CORRECT ANSWER - Both an
insurance and securities product
All of these characteristics of an Adjustable Life policy, EXCEPT: - CORRECT ANSWER -
Face amount can be adjusted using policy dividends
Term insurance has which of the following characteristics? - CORRECT ANSWER - Expires
at the end of the policy period
ACTUAL Exam Questions and CORRECT
Answers
A group-owned insurance company that is formed to assume and spread the liability risks of its
members is known as a: - CORRECT ANSWER - Risk retention group
Which of the following requires insurers to disclose when an applicant's consumer or credit
history is being investigated? - CORRECT ANSWER - 1970-Fair Credit Reporting Act
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six
months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values
reflects which of the following insurance contract features? - CORRECT ANSWER -
Aleatory
The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy
future obligations to its policyholders is called: - CORRECT ANSWER - Reserves
All of the following are considered to be typical characteristics describing the nature of an
insurance contract, EXCEPT: - CORRECT ANSWER - Bilateral
What year was the McCarran-Ferguson Act enacted? - CORRECT ANSWER - 1945
Which of the following consists of an offer, acceptance, and consideration? - CORRECT
ANSWER - Contract
Who elects the governing body of a mutual insurance company? - CORRECT ANSWER -
Policyholders
Insurance policies are considered aleatory contracts because: - CORRECT ANSWER -
Performance is conditioned upon a future occurrence
,Who makes the legally enforceable promises in a unilateral contract? - CORRECT
ANSWER - Insurance company
Insurance contracts are known as _____ because certain future conditions or acts must occur
before any claims can be paid. - CORRECT ANSWER - Conditional
A life insurance arrangement which circumvents insurable interest statutes is called: -
CORRECT ANSWER - Investor-Originated Life Insurance
In an insurance contract, the insurer is the only party who makes a legally enforceable promise.
What kind of contract is this? - CORRECT ANSWER - Unilateral
When third-party ownership is involved, applicants who also happen to be the stated primary
beneficiary are required to have: - CORRECT ANSWER - Insurable interest in the proposed
insured
Which of these arrangements allows one to bypass insurable interest laws? - CORRECT
ANSWER - Investor-Originated Life Insurance
When must insurable interest exist for a life insurance contract to be valid? - CORRECT
ANSWER - Inception of the contract
If a contract of adhesion contains complicated language, to whom would the interpretation be in
favor of? - CORRECT ANSWER - Insured
Which of these is an element of a Variable Life policy? - CORRECT ANSWER - A fixed,
level premium
, A father who dies within 3 years after purchasing a life insurance policy on his infant daughter
can have the policy premiums waived under which provision? - CORRECT ANSWER -
Payor provision
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? - CORRECT
ANSWER - Policyowner
Which of the following actions is NOT possible with a Universal Life policy? - CORRECT
ANSWER - Premiums may be applied as a credit against income tax
Which of the following policies is characterized by a flexible premium and death benefit and
allows the policy owner control of the investment aspect of the plan? - CORRECT
ANSWER - Variable universal life
A term life insurance policy matures: - CORRECT ANSWER - upon the insured's death
during the term of the policy
What type of life policy covers two people and pays upon the death of the last insured? -
CORRECT ANSWER - Survivorship
When is the face amount paid under a Joint Life and Survivor policy? - CORRECT
ANSWER - Upon the death of the last insured
Variable Whole Life Insurance can be described as: - CORRECT ANSWER - Both an
insurance and securities product
All of these characteristics of an Adjustable Life policy, EXCEPT: - CORRECT ANSWER -
Face amount can be adjusted using policy dividends
Term insurance has which of the following characteristics? - CORRECT ANSWER - Expires
at the end of the policy period
