2026 | Latest Update | Graded A+
1. What type of agreement requires a corporation to purchase a shareholder's
shares upon their death?
Buy-sell agreement
Partnership agreement
Dividend agreement
Shareholder agreement
2. What is one action that the owner of a life insurance policy can take
regarding the policy?
Increase the premium
Cancel the policy
Transfer ownership to a bank
Change the beneficiary
3. If a 45-year-old individual with a chronic health condition applies for life
insurance, which risk classification are they most likely to fall into, and how
would that affect their premium?
Average risk, leading to a standard premium.
Substandard risk, leading to a higher premium.
Standard risk, leading to an average premium.
Preferred risk, leading to a lower premium.
4. Fully insured status for Social Security requires __ quarters of coverage.
, 25
50
6
40
10
5. The legal transfer of ownership of an insurance policy from one party to
another is known as:
Subrogation
Sales
Assignment
Appraisal
6. A person bought a $50,000 life insurance policy. The $50,000 amount of
coverage is called the
cash value
premium value
annuity value or deductible
death benefit or face value
7. Life insurance policies issued by mutual companies may pay dividends to
policyholders each year from surplus accumulated. Such policies are also
referred to as:
Universal life plans
Dividend reinvestment contracts
Surplus lines insurance
, Participating policies
8. Which best describes Activities of Daily Living?
~ Watching television, listening to the radio
~ Bed making, laundry, housekeeping
~ Eating, grooming, toileting
~ Charting, documenting, reporting
9. Describe how the waiver of premium rider impacts the policyowner's cash
value in a whole life insurance policy.
The waiver of premium rider allows the policyowner to maintain the
policy while the cash value continues to accumulate.
The waiver of premium rider stops the cash value from growing.
The waiver of premium rider eliminates the cash value of the policy.
The waiver of premium rider requires the policyowner to pay
premiums to maintain cash value.
10. Provides death protection plus a savings or cash value feature. Cash value
can be invested in mutual funds for greater possible return. Returns not
guaranteed and actual death benefit can vary with the return on the
investment account. Use with extreme caution!
Universal life insurance
Variable life insurance
Term life insurance
Whole life insurance
, 11. What is the maximum age limit for dependent children to be covered under
group life insurance?
Typically up to age 21
Typically up to age 30
Typically up to age 26
Typically up to age 18
12. This type of life insurance is renewable annually and provides a level face
amount?
Annual Renewable Term
Decreasing Term
Credit Life
Increasing Term
13. If a policyholder is unable to perform dressing and eating, what implications
does this have for their long-term care insurance benefits?
They will receive a cash payout instead of care.
They will automatically be denied benefits.
They may qualify for long-term care benefits.
They must pay higher premiums.
14. Who is typically responsible for filling out the life insurance application?
The applicant
The insurance agent
The insurance company