LIFE INSURANCE EXAM 3 QUESTIONS WITH COMPLETE
SOLUTION
Which type of insurance guarantees the right to renew the policy each
year, regardless of the health, but at an increased premium?
Renewal term
Which policy is a savings instrument designed to first accumulate
funds and then systematically to liquidate the funds?
Deferred annuity
Which two insurance products are commonly used to fund buy-sell
agreement?
Life insurance and disability insurance
The payor rider on a juvenile life policy provides that if the payor dies
or becomes disabled before the insured juvenile the age specified in
the policy that the
Insurer will make the payments unit the insured juvenile reaches a
specified age- usually 21 or 25
The insured bought an annuity ten years ago. He will retire in 5 years.
To determine the value of his annuity, he must multiply the value of
the "accumulation units" he owns, times the value of the "separate
account". This type of annuity is known as a
Variable annuity
Why is the delivery of a life insurance policy important?
The free-look period begins on the policy delivery date
Life insurance policies written without a physical examination are
called
Non-medical
A policy owner has the right to change all of the following EXCEPT
the
Dividend schedule
A life insurance policy written after 1988 that fails to meet the seven-
pay test is known as
A modified endowment contract
Which of the following is a characteristics of nonqualified annuities?
Tax-deferred earnings
Individual life insurance policies sold to seniors in the state of
California must include a prominently placed statement that divulges
all of the following information EXCEPT
, Proof of surrender must be notarized at eh agent's principal office
Which policy provision protects the insurer against possible adverse
selection?
Suicide clause
People commonly purchase an annuity to protect against the risk of
Outliving their financial resources
What is used to determine the amount of an annuity distribution that
is exempt from taxation?
The exclusion ratio
When a family policy covers children, all of the following are true
EXCEPT
Evidence of insurability is required to convert coverage for children to
permanent insurance
Which of the following would an agent be guilty of for
misrepresenting the amount of dividends a policy will pay?
A misdemeanor
All of the following information is gathered during the personal
financial planning process EXCEPT
A listing of a person's civic and professional organization memberships
According to the California insurance code, governing the use of life
insurance policy illustrations, the terms illustration means
A presentation of policy features that includes non-guaranteed elements
The theory of probability is applied to life insurance through the use
of
Mortality tables
Which report of an insurance applicant's creditworthiness and
personal characteristics may influence eligibility for life and health
insurance?
Consumer report
The number of deaths during a year compared with the total number
of persons exposed in the class in known as the
Mortality rate
How much employer-provided group term life insurance is exempt
from income taxation?
$50k
Which of the following contracts provides benefits that fluctuate
automatically with investment results?
Variable life insurance
Which type of insurance coverage has both a savings element and a
flexible premium option?
SOLUTION
Which type of insurance guarantees the right to renew the policy each
year, regardless of the health, but at an increased premium?
Renewal term
Which policy is a savings instrument designed to first accumulate
funds and then systematically to liquidate the funds?
Deferred annuity
Which two insurance products are commonly used to fund buy-sell
agreement?
Life insurance and disability insurance
The payor rider on a juvenile life policy provides that if the payor dies
or becomes disabled before the insured juvenile the age specified in
the policy that the
Insurer will make the payments unit the insured juvenile reaches a
specified age- usually 21 or 25
The insured bought an annuity ten years ago. He will retire in 5 years.
To determine the value of his annuity, he must multiply the value of
the "accumulation units" he owns, times the value of the "separate
account". This type of annuity is known as a
Variable annuity
Why is the delivery of a life insurance policy important?
The free-look period begins on the policy delivery date
Life insurance policies written without a physical examination are
called
Non-medical
A policy owner has the right to change all of the following EXCEPT
the
Dividend schedule
A life insurance policy written after 1988 that fails to meet the seven-
pay test is known as
A modified endowment contract
Which of the following is a characteristics of nonqualified annuities?
Tax-deferred earnings
Individual life insurance policies sold to seniors in the state of
California must include a prominently placed statement that divulges
all of the following information EXCEPT
, Proof of surrender must be notarized at eh agent's principal office
Which policy provision protects the insurer against possible adverse
selection?
Suicide clause
People commonly purchase an annuity to protect against the risk of
Outliving their financial resources
What is used to determine the amount of an annuity distribution that
is exempt from taxation?
The exclusion ratio
When a family policy covers children, all of the following are true
EXCEPT
Evidence of insurability is required to convert coverage for children to
permanent insurance
Which of the following would an agent be guilty of for
misrepresenting the amount of dividends a policy will pay?
A misdemeanor
All of the following information is gathered during the personal
financial planning process EXCEPT
A listing of a person's civic and professional organization memberships
According to the California insurance code, governing the use of life
insurance policy illustrations, the terms illustration means
A presentation of policy features that includes non-guaranteed elements
The theory of probability is applied to life insurance through the use
of
Mortality tables
Which report of an insurance applicant's creditworthiness and
personal characteristics may influence eligibility for life and health
insurance?
Consumer report
The number of deaths during a year compared with the total number
of persons exposed in the class in known as the
Mortality rate
How much employer-provided group term life insurance is exempt
from income taxation?
$50k
Which of the following contracts provides benefits that fluctuate
automatically with investment results?
Variable life insurance
Which type of insurance coverage has both a savings element and a
flexible premium option?
