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LIFE INSURANCE EXAM-ILLINOIS EXAM
2025| BRAND NEW EXAM QUESTIONS
WITH 100% CORRECT SOLUTIONS |
EXCELLENT SCORES
Pooling of Risks - Correct-answer-A large group of people contribute
money to a fund out of which their losses can be paid
Policyowner - Correct-answer-is the person or org that applies for the
policy and pays the premium
Actuarial Tables - Correct-answer-Are statistical tables that are used
when calculating premium rates and mortality loss reserves
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Life Insurance Policies transfer: - Correct-answer-financial risks of
premature death on a defined amount
Loss of income - Correct-answer-the face amount of life insurance is
determined as a multiple of income
Life annuity - Correct-answer-contract which is issued by a life
insurance company protects an individual against the financial risk of
outliving a normal life expectancy according to the mortality actuarial
tables and running out of money in old age
Life annuity - Correct-answer-guarantees monthly income benefits to
the annuitant for the rest of his/her life no matter how long he/she
lives
Insurable interest - Correct-answer-a person must be in a position
where he/she will lose money should loss occur only at the time the
policy is issued
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Who must have insurable interest? - Correct-answer-the policy owner;
he/she will lose money should hte insured die prematurely
tax qualified plans - Correct-answer-contributions can be deducted
non qualified plans - Correct-answer-contributions cannot be deducted
tax deferred plans - Correct-answer-tax on the interest and/or earnings
is postponed as it compounds and accumulates until it is withdrawn
tax free - Correct-answer-no tax on benefits
cost basis - Correct-answer-total contributions made to the plan
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Tax: premiums paid on individual life insurance policies... - Correct-
answer-cannot be deducted (non-qualified)
Tax: the benefits paid to the beneficiary at the insured's death... -
Correct-answer-is usually not taxed (tax free)
Participating policy - Correct-answer-pays a dividend
Tax: dividends paid to the policyowner on participating policies... -
Correct-answer-are usually not taxed (tax free)
Modified Endowment Contract - Correct-answer-The IRS has written
rules that define when a life insurance policy does not have a real, valid
life insurance purpose and is in substance an investment or savings plan
LIFE INSURANCE EXAM-ILLINOIS EXAM
2025| BRAND NEW EXAM QUESTIONS
WITH 100% CORRECT SOLUTIONS |
EXCELLENT SCORES
Pooling of Risks - Correct-answer-A large group of people contribute
money to a fund out of which their losses can be paid
Policyowner - Correct-answer-is the person or org that applies for the
policy and pays the premium
Actuarial Tables - Correct-answer-Are statistical tables that are used
when calculating premium rates and mortality loss reserves
,2|Page
Life Insurance Policies transfer: - Correct-answer-financial risks of
premature death on a defined amount
Loss of income - Correct-answer-the face amount of life insurance is
determined as a multiple of income
Life annuity - Correct-answer-contract which is issued by a life
insurance company protects an individual against the financial risk of
outliving a normal life expectancy according to the mortality actuarial
tables and running out of money in old age
Life annuity - Correct-answer-guarantees monthly income benefits to
the annuitant for the rest of his/her life no matter how long he/she
lives
Insurable interest - Correct-answer-a person must be in a position
where he/she will lose money should loss occur only at the time the
policy is issued
,3|Page
Who must have insurable interest? - Correct-answer-the policy owner;
he/she will lose money should hte insured die prematurely
tax qualified plans - Correct-answer-contributions can be deducted
non qualified plans - Correct-answer-contributions cannot be deducted
tax deferred plans - Correct-answer-tax on the interest and/or earnings
is postponed as it compounds and accumulates until it is withdrawn
tax free - Correct-answer-no tax on benefits
cost basis - Correct-answer-total contributions made to the plan
, 4|Page
Tax: premiums paid on individual life insurance policies... - Correct-
answer-cannot be deducted (non-qualified)
Tax: the benefits paid to the beneficiary at the insured's death... -
Correct-answer-is usually not taxed (tax free)
Participating policy - Correct-answer-pays a dividend
Tax: dividends paid to the policyowner on participating policies... -
Correct-answer-are usually not taxed (tax free)
Modified Endowment Contract - Correct-answer-The IRS has written
rules that define when a life insurance policy does not have a real, valid
life insurance purpose and is in substance an investment or savings plan
