INSURANCE PRACTICE EXAM QUESTIONS AND ANSWERS

Pure or straight life - Answer- Which of the following annuity benefit payment options would generate the highest monthly payments to the contract owner upon annuitization? Paid-up additions 1-year term Cash - Answer- All of the following are dividend options on a participating life insurance policy: Insured - Answer- The person upon whose life an annuity is based is known as the: Reduced paid-up - Answer- When a policyowner uses the cash value in their policy to buy a lesser amount of permanent life insurance, they have exercised which nonforfeiture option: Interest only - Answer- Which of the following life insurance settlement options enables the beneficiary to conserve the proceeds of a life insurance policy? The account value - Answer- In the case of a variable annuity sold to a senior citizen in this state for which the owner has directed that the premium be invested in the mutual funds underlying the contract during the 30-day cancellation period, cancellation during that period entitles the owner to a refund of: They are purchased by those who are worried about outliving their savings. They are not suitable as short term investments. They may be used as a life insurance settlement option. - Answer- All of the following are true regarding annuities Group (Life Insruance) - Answer- Which of the following would not be considered to be ordinary life insurance? They are not guaranteed They are legally defined as a return of premium and are not taxable They are paid out of the insurer's accumulated surplus - Answer- All of the following are true regarding dividends paid by a mutual life insurance company Renewable - Answer- Which type of term life insurance has a level face amount but a premium that increases each year as the insured gets older? The amount and frequency of future losses are unknown - Answer- The transfer of risk to an i