WV State Life Insurance Exam 2025
Questions and Answers
A group-owned insurance company that is formed to assume and spread the
liability risks of its members is known as a: - --Answer --Risk retention
group
Which of the following requires insurers to disclose when an applicant's consumer
or credit history is being investigated? - --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? - --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: - --Answer --
Reserves
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
,All of the following are considered to be typical characteristics describing the
nature of an insurance contract, EXCEPT: - --Answer --Bilateral
What year was the McCarran-Ferguson Act enacted? - --Answer --1945
Which of the following consists of an offer, acceptance, and consideration? - --
Answer --Contract
Who elects the governing body of a mutual insurance company? - --
Answer --Policyholders
Insurance policies are considered aleatory contracts because: - --Answer --
Performance is conditioned upon a future occurrence
Who makes the legally enforceable promises in a unilateral contract? - --
Answer --Insurance company
Insurance contracts are known as _____ because certain future conditions or acts
must occur before any claims can be paid. - --Answer --Conditional
A life insurance arrangement which circumvents insurable interest statutes is called:
- --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? - --Answer --Unilateral
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
, When third-party ownership is involved, applicants who also happen to be the
stated primary beneficiary are required to have: - --Answer --Insurable
interest in the proposed insured
Which of these arrangements allows one to bypass insurable interest laws? - --
Answer --Investor-Originated Life Insurance
When must insurable interest exist for a life insurance contract to be valid? - --
Answer --Inception of the contract
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of? - --Answer --Insured
Which of these is an element of a Variable Life policy? - --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? - --
Answer --Payor provision
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
- --Answer --Policyowner
Which of the following actions is NOT possible with a Universal Life policy? - --
Answer --Premiums may be applied as a credit against income tax
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 3
Questions and Answers
A group-owned insurance company that is formed to assume and spread the
liability risks of its members is known as a: - --Answer --Risk retention
group
Which of the following requires insurers to disclose when an applicant's consumer
or credit history is being investigated? - --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? - --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: - --Answer --
Reserves
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
,All of the following are considered to be typical characteristics describing the
nature of an insurance contract, EXCEPT: - --Answer --Bilateral
What year was the McCarran-Ferguson Act enacted? - --Answer --1945
Which of the following consists of an offer, acceptance, and consideration? - --
Answer --Contract
Who elects the governing body of a mutual insurance company? - --
Answer --Policyholders
Insurance policies are considered aleatory contracts because: - --Answer --
Performance is conditioned upon a future occurrence
Who makes the legally enforceable promises in a unilateral contract? - --
Answer --Insurance company
Insurance contracts are known as _____ because certain future conditions or acts
must occur before any claims can be paid. - --Answer --Conditional
A life insurance arrangement which circumvents insurable interest statutes is called:
- --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? - --Answer --Unilateral
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
, When third-party ownership is involved, applicants who also happen to be the
stated primary beneficiary are required to have: - --Answer --Insurable
interest in the proposed insured
Which of these arrangements allows one to bypass insurable interest laws? - --
Answer --Investor-Originated Life Insurance
When must insurable interest exist for a life insurance contract to be valid? - --
Answer --Inception of the contract
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of? - --Answer --Insured
Which of these is an element of a Variable Life policy? - --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? - --
Answer --Payor provision
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
- --Answer --Policyowner
Which of the following actions is NOT possible with a Universal Life policy? - --
Answer --Premiums may be applied as a credit against income tax
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 3
