WV state life insurance UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Absolute Assignment - CORRECT ANSWER - Policy assignment under which the assignee
(person to whom the policy is assigned) receives full control over the policy and also full rights
to its benefits. Generally, when a policy is assigned to secure a debt, the owner retains all rights
in the policy in excess of the debt, even though the assignment is absolute in form.
Accidental Death Benefit Rider - CORRECT ANSWER - pays a multiple of the death
proceeds if the cause of death is a covered accidental event.
Accelerated Benefit Rider - CORRECT ANSWER - Allows the insured to receive a portion of
the death benefit prior to death if the insured has a terminal illness and expected to die within 1-2
years. Whatever amount is withdrawn in an accelerated death benefit will decrease the death
benefit when death occurs.
Accumulate Interest Option - CORRECT ANSWER - The "accumulate interest" dividend
option allows the policy owner to leave dividends with the insurer to accumulate interest. In turn,
the policy owner will be required to pay taxes on any interest (profit) generated by the dividend.
Assignment Clause - CORRECT ANSWER - allows the right to transfer policy rights to
another person or entity
Automatic Premium Loan Provision - CORRECT ANSWER - Authorizes insurer to
automatically pay any premium in default at the end of the grace period and charge the amount
so paid against the life insurance policy as a policy loan.
Cash option - CORRECT ANSWER - The "cash" dividend option allows the policy owner to
cash out the dividends they receive.
, Cash Surrender Option - CORRECT ANSWER - A nonforfeiture option that allows whole
life insurance policy owners to receive a payout of their policy's cash values.
Collateral Assignment - CORRECT ANSWER - Assignment of a policy to a creditor as
security for a debt. The creditor is entitled to be reimbursed out of policy proceeds for the
amount owed. The beneficiary is entitled to any excess of policy proceeds over the amount due
the creditor in the event of the insured's death.
Consideration Clause - CORRECT ANSWER - states a policyowner must pay a premium in
exchange for the insurer's promise to pay benefits. A policyowner's consideration consists of
completing the application and paying the initial premium. The amount and frequency of
premium payments are contained in the consideration clause. "Please CONSIDER me for
insurance. Here is my COMPLETED APPLICATION, INITIAL PREMIUM, and how much,
how often I agree to pay. Please consider me."
Dependent Riders (Other Insureds Rider) - CORRECT ANSWER - Dependents may be added
to as additional (other) insureds through the use of a dependent rider. Other insured riders are
typically used for spouses and children.
Dividend Options - CORRECT ANSWER - are the options a policy owner has when
receiving dividend payments from an insurance policy.
Entire Contract Provision - CORRECT ANSWER - states the insurance policy itself, any
riders and endorsements/amendments, and the application comprises the entire contract between
all parties
Prohibits the insurer (including the agent) from making any changes to the policy.
exclusions - CORRECT ANSWER - provision in an insurance policy eliminating coverage
for certain risks or limiting coverage
ACTUAL Exam Questions and CORRECT
Answers
Absolute Assignment - CORRECT ANSWER - Policy assignment under which the assignee
(person to whom the policy is assigned) receives full control over the policy and also full rights
to its benefits. Generally, when a policy is assigned to secure a debt, the owner retains all rights
in the policy in excess of the debt, even though the assignment is absolute in form.
Accidental Death Benefit Rider - CORRECT ANSWER - pays a multiple of the death
proceeds if the cause of death is a covered accidental event.
Accelerated Benefit Rider - CORRECT ANSWER - Allows the insured to receive a portion of
the death benefit prior to death if the insured has a terminal illness and expected to die within 1-2
years. Whatever amount is withdrawn in an accelerated death benefit will decrease the death
benefit when death occurs.
Accumulate Interest Option - CORRECT ANSWER - The "accumulate interest" dividend
option allows the policy owner to leave dividends with the insurer to accumulate interest. In turn,
the policy owner will be required to pay taxes on any interest (profit) generated by the dividend.
Assignment Clause - CORRECT ANSWER - allows the right to transfer policy rights to
another person or entity
Automatic Premium Loan Provision - CORRECT ANSWER - Authorizes insurer to
automatically pay any premium in default at the end of the grace period and charge the amount
so paid against the life insurance policy as a policy loan.
Cash option - CORRECT ANSWER - The "cash" dividend option allows the policy owner to
cash out the dividends they receive.
, Cash Surrender Option - CORRECT ANSWER - A nonforfeiture option that allows whole
life insurance policy owners to receive a payout of their policy's cash values.
Collateral Assignment - CORRECT ANSWER - Assignment of a policy to a creditor as
security for a debt. The creditor is entitled to be reimbursed out of policy proceeds for the
amount owed. The beneficiary is entitled to any excess of policy proceeds over the amount due
the creditor in the event of the insured's death.
Consideration Clause - CORRECT ANSWER - states a policyowner must pay a premium in
exchange for the insurer's promise to pay benefits. A policyowner's consideration consists of
completing the application and paying the initial premium. The amount and frequency of
premium payments are contained in the consideration clause. "Please CONSIDER me for
insurance. Here is my COMPLETED APPLICATION, INITIAL PREMIUM, and how much,
how often I agree to pay. Please consider me."
Dependent Riders (Other Insureds Rider) - CORRECT ANSWER - Dependents may be added
to as additional (other) insureds through the use of a dependent rider. Other insured riders are
typically used for spouses and children.
Dividend Options - CORRECT ANSWER - are the options a policy owner has when
receiving dividend payments from an insurance policy.
Entire Contract Provision - CORRECT ANSWER - states the insurance policy itself, any
riders and endorsements/amendments, and the application comprises the entire contract between
all parties
Prohibits the insurer (including the agent) from making any changes to the policy.
exclusions - CORRECT ANSWER - provision in an insurance policy eliminating coverage
for certain risks or limiting coverage
