LOMA 281 COMPLETE EXAM QUESTIONS
AND DETAILED ANSWERS
COMPREHENSIVE REVIEW RESOURCE
●● Five years ago, Sheeka Lawrence purchased a convertible twenty-
year term life insurance policy with a $750,000 face amount. Ms.
Lawrence has decided to convert her policy, and the insurer will base the
premium rate for the converted policy on Ms. Lawrence's ages when the
policy is converted. Assume that Ms. Lawrence's policy conversion is
typical. Select the answer choice that correctly identifies whether this
conversion is an original age or an attained age conversion and the type
of coverage Ms. Lawrence will receive under the converted policy
A. original age, twenty-year term life insurance
B. original age, cash value life insurance
C. attained age, twenty-year term life insurance
D. attained age, cash value life insurance
Answer: D
●● The most common type of medical expense coverage - major
medical coverage - generally pays benefits for
A. Basic surgical expenses
B. Intentionally self-inflicted injuries
C. Routine eye exams and corrective lenses
,D. Physicians' expenses
A. A, C, and D only
B. B, C, and D only
C. A and D only
D. A only
Answer: C
●● Contract owners of registered index-linked annuities (RILAs) can
lose money based on decreases in the value of the stick market index,
but they can limit their losses by using floors and buffers. For a given
RILA, suppose that, at the end of the term, the index dropped 25% in
value, but the RILA's accumulated value decreased by 10%. With regard
to floors and buffers, this RILA has a
A. floor of 5%
B. Floor of 15%
C. buffer of 5%
D. buffer of 15%
Answer:
●● Deferred income annuities (DIAs) generally are purchased in the
years leading up to retirement to provide part of a retiree's income. One
characteristic of a DIA is that
, A. this type of annuity is categorized as a deferred annuity
B. selecting a death benefit option for the annuity has no effect on the
amount of the annuity payment that annuity provides
C. the contract does not specify the date on which future annuity
payments will begin
D. this type of annuity has neither an accumulation period nor an
accumulates value
Answer: D
●● One type of term life insurance pays a monthly income benefit to the
insured's surviving family members for a specified period if the insured
dies during the term of coverage. Under this type of insurance, the
longer the insured lives after the policy is purchased, the shorter the
monthly benefit period. By definition, this type of term life insurance is
a form of
A. level term life insurance known as family income coverage
B. decreasing term life insurance known as family income coverage
C. level term life insurance known as credit life insurance
D. decreasing term life insurance known as credit life insurance
Answer: D
AND DETAILED ANSWERS
COMPREHENSIVE REVIEW RESOURCE
●● Five years ago, Sheeka Lawrence purchased a convertible twenty-
year term life insurance policy with a $750,000 face amount. Ms.
Lawrence has decided to convert her policy, and the insurer will base the
premium rate for the converted policy on Ms. Lawrence's ages when the
policy is converted. Assume that Ms. Lawrence's policy conversion is
typical. Select the answer choice that correctly identifies whether this
conversion is an original age or an attained age conversion and the type
of coverage Ms. Lawrence will receive under the converted policy
A. original age, twenty-year term life insurance
B. original age, cash value life insurance
C. attained age, twenty-year term life insurance
D. attained age, cash value life insurance
Answer: D
●● The most common type of medical expense coverage - major
medical coverage - generally pays benefits for
A. Basic surgical expenses
B. Intentionally self-inflicted injuries
C. Routine eye exams and corrective lenses
,D. Physicians' expenses
A. A, C, and D only
B. B, C, and D only
C. A and D only
D. A only
Answer: C
●● Contract owners of registered index-linked annuities (RILAs) can
lose money based on decreases in the value of the stick market index,
but they can limit their losses by using floors and buffers. For a given
RILA, suppose that, at the end of the term, the index dropped 25% in
value, but the RILA's accumulated value decreased by 10%. With regard
to floors and buffers, this RILA has a
A. floor of 5%
B. Floor of 15%
C. buffer of 5%
D. buffer of 15%
Answer:
●● Deferred income annuities (DIAs) generally are purchased in the
years leading up to retirement to provide part of a retiree's income. One
characteristic of a DIA is that
, A. this type of annuity is categorized as a deferred annuity
B. selecting a death benefit option for the annuity has no effect on the
amount of the annuity payment that annuity provides
C. the contract does not specify the date on which future annuity
payments will begin
D. this type of annuity has neither an accumulation period nor an
accumulates value
Answer: D
●● One type of term life insurance pays a monthly income benefit to the
insured's surviving family members for a specified period if the insured
dies during the term of coverage. Under this type of insurance, the
longer the insured lives after the policy is purchased, the shorter the
monthly benefit period. By definition, this type of term life insurance is
a form of
A. level term life insurance known as family income coverage
B. decreasing term life insurance known as family income coverage
C. level term life insurance known as credit life insurance
D. decreasing term life insurance known as credit life insurance
Answer: D
