Life Insurance Practice Exam Questions
with Answers
The ownership provision entities the policy owner to do all of the following EXCEPT
a) Assign the policy.
b) Designate a beneficiary.
c) Set premium rates.
d) Receive a policy loan. - correct answers:c) Set premium rates.
The insurer sets premium rates based upon underwriting considerations.
Which of the following protects consumers against the circulation of inaccurate or obsolete personal or
financial information?
a) The Guaranty Association
b) Consumer Privacy Act
c) The Fair Credit Reporting Act
d) Unfair Trade Practices Law - correct answers:c) The Fair Credit Reporting Act
The purpose of the Fair Credit Reporting Act is to protect consumers against the circulation of inaccurate
or obsolete information and to insure that consumer reporting agencies are fair and equitable in their
treatment of consumers.
Why is an equity indexed annuity considered to be fixed annuity?
a) It has modest investment potential.
b) It has a fixed rate of return.
c) It is not tied to an index like the S&P 500.
,d) It has a guaranteed minimum interest rate. - correct answers:d) It has a guaranteed minimum interest
rate.
While equity indexed annuities earn higher interest rates than fixed annuities, both types of annuities
guarantee a specific minimum interest rate.
An agent who is a resident of another state may obtain an Oklahoma nonresident license without taking
a licensing examination provided
a) The agent is currently licensed in the state of domicile.
b) The agent obtained that license by passing a test suitable to the Oklahoma Department.
c) The state where the agent lives affords the same privilege to residents of Oklahoma.
d) All of these requirements are met. - correct answers:d) All of these requirements are met.
A nonresident can be licensed as an insurance agent in the Oklahoma licensing requirements are met, as
long as the agents home state gives Oklahoma residents the same privilege (reciprocity). The applicant
must hold a license in good standing in his or her resident state.
Which nonforfeiture option has the highest amount of insurance protection?
a) Decreasing Term
b) Reduced Paid-up
c) Extended Term
d) Conversion - correct answers:c) Extended Term
The Extended Term nonforfeiture option has the same face amount as the original policy, but for a
shorter period of time.
What is a material misrepresentation?
a) Any misstatement made by an applicant for insurance
, b) Any misstatement by the producer
c) Concealment
d) A statement by the applicant that, upon discovery, would affect the underwriting decision of the
insurance company - correct answers:d) A statement by the applicant that, upon discovery, would affect
the underwriting decision of the insurance company
A material misrepresentation is a statement that, if discovered, would alter the underwriting decision of
the insurance company.
Which of the following information about the applicant is NOT included in the General Information
section of the application for insurance?
a) Occupation
b) Marital status
c) Medical background
d) Gender - correct answers:c) Medical background
Part 1 - General Information of the application includes the general questions about the applicant,
including name, age, address, birth date, gender, income, marital status, and occupation. The applicant's
medical background is addressed in Part 2 - Medical Information.
The term "illustration" in a life insurance policy refers to
a) A depiction of policy benefits and guarantees
b) Pictures accompanying a policy
c) Charts and graphs
d) A presentation of non-guaranteed elements of a policy. - correct answers:d) A presentation of non-
guaranteed elements of a policy.
The term "illustration" means a presentation or depiction that includes non-guaranteed elements of a
policy of individual or group life insurance over a period of years.
with Answers
The ownership provision entities the policy owner to do all of the following EXCEPT
a) Assign the policy.
b) Designate a beneficiary.
c) Set premium rates.
d) Receive a policy loan. - correct answers:c) Set premium rates.
The insurer sets premium rates based upon underwriting considerations.
Which of the following protects consumers against the circulation of inaccurate or obsolete personal or
financial information?
a) The Guaranty Association
b) Consumer Privacy Act
c) The Fair Credit Reporting Act
d) Unfair Trade Practices Law - correct answers:c) The Fair Credit Reporting Act
The purpose of the Fair Credit Reporting Act is to protect consumers against the circulation of inaccurate
or obsolete information and to insure that consumer reporting agencies are fair and equitable in their
treatment of consumers.
Why is an equity indexed annuity considered to be fixed annuity?
a) It has modest investment potential.
b) It has a fixed rate of return.
c) It is not tied to an index like the S&P 500.
,d) It has a guaranteed minimum interest rate. - correct answers:d) It has a guaranteed minimum interest
rate.
While equity indexed annuities earn higher interest rates than fixed annuities, both types of annuities
guarantee a specific minimum interest rate.
An agent who is a resident of another state may obtain an Oklahoma nonresident license without taking
a licensing examination provided
a) The agent is currently licensed in the state of domicile.
b) The agent obtained that license by passing a test suitable to the Oklahoma Department.
c) The state where the agent lives affords the same privilege to residents of Oklahoma.
d) All of these requirements are met. - correct answers:d) All of these requirements are met.
A nonresident can be licensed as an insurance agent in the Oklahoma licensing requirements are met, as
long as the agents home state gives Oklahoma residents the same privilege (reciprocity). The applicant
must hold a license in good standing in his or her resident state.
Which nonforfeiture option has the highest amount of insurance protection?
a) Decreasing Term
b) Reduced Paid-up
c) Extended Term
d) Conversion - correct answers:c) Extended Term
The Extended Term nonforfeiture option has the same face amount as the original policy, but for a
shorter period of time.
What is a material misrepresentation?
a) Any misstatement made by an applicant for insurance
, b) Any misstatement by the producer
c) Concealment
d) A statement by the applicant that, upon discovery, would affect the underwriting decision of the
insurance company - correct answers:d) A statement by the applicant that, upon discovery, would affect
the underwriting decision of the insurance company
A material misrepresentation is a statement that, if discovered, would alter the underwriting decision of
the insurance company.
Which of the following information about the applicant is NOT included in the General Information
section of the application for insurance?
a) Occupation
b) Marital status
c) Medical background
d) Gender - correct answers:c) Medical background
Part 1 - General Information of the application includes the general questions about the applicant,
including name, age, address, birth date, gender, income, marital status, and occupation. The applicant's
medical background is addressed in Part 2 - Medical Information.
The term "illustration" in a life insurance policy refers to
a) A depiction of policy benefits and guarantees
b) Pictures accompanying a policy
c) Charts and graphs
d) A presentation of non-guaranteed elements of a policy. - correct answers:d) A presentation of non-
guaranteed elements of a policy.
The term "illustration" means a presentation or depiction that includes non-guaranteed elements of a
policy of individual or group life insurance over a period of years.
