LIFE AND HEALTH INSURANCE EXAM
PREP TEST BANK VERIFIED QUESTIONS
AND CORRECT ANSWERS
●● $94,800
Answer: Betty owns a universal life insurance policy that was issued
with a $100,000 face amount and now has total death benefit protection
of $110,000. Several months ago she borrowed $15,000 from the policy.
The outstanding loan balance (Including Interest) is $15,200. If Betty
dies today, what will be the amount of the death benefit?
●● 6 Months
Answer: Life insurance policies sold or delivered in Michigan must not
contain the provision that back dates the effective date of a policy any
more than how many months?
●● Nonforfeiture Provision
Answer: The privilege of accessing the cash value of an insurance policy
if it is surrendered is known as the
●● Mortality
Answer: Which of the following premium factors has the greatest effect
on life insurance premium calculations?
,●● Who Issues Them
Answer: Annuities are classified by all of the following EXCEPT
●● Decreasing Term
Answer: Joe buys his first home after obtaining a 30 year mortgage from
his bank. He is considering the purchase of life insurance to ensure that
the mortgage will be paid in the event of his death, in which case he will
leave the house to his spouse and children. What would be the best life
insurance protection for Joe?
●● To provide for annuities to be payable in fixed or variable amounts
or for variable life insurance
Answer: For which of the following reasons would a domestic insurer
set up separate accounts?
●● Must have the application signed by the policyowner
Answer: Which of the following statements regarding the delivery of a
life insurance policy is NOT correct?
●● $3.00
Answer: A producer must pay a fee of how much with each change of
address?
●● 1 to 12 months
,Answer: Group life insurance policies include a probationary period
requiring new employees to wait a certain time before they can enroll in
the plan. How long is the typical range for these probationary periods?
●● $12,040
Answer: James died after receiving $180 per month for 6 years from a
$25,000 life with refund annuity. His spouse, Lucy, as his beneficiary,
will now receive t he same monthly income until her payments total
●● 25% of the employee's income up to a specified maximum amount
Answer: Contributions to a simplified employee pension are not
included in the employee's taxable income for the year as long as the
contribution does not exceed
●● Apparent Authority
Answer: Susan is the receptionist at an insurance agency. She is
currently studying for her life insurance license. One day at lunchtime,
Carla comes in the office to pay her auto insurance premium. Susan talks
to her about the importance of life insurance, and Carla immediately
completes an application and gives Susan a check for the premium.
Carla leaves the agency believing she is covered by life insurance. Susan
has acted with
●● The proceed are payable to the insured's estate or the insured had any
incidence of ownership in the policy at time of death or transferred
ownership within 3 years of death.
, Answer: Life insurance proceeds are included in t he gross estate if
●● to replace an individual's economic value
Answer: According to the principle of human life value, the purpose of
life insurance is
●● 24 hours with a minimum of 3 hours in ethics
Answer: How many hours of continuing education credit does an agent
need to complete every two years?
●● Verify the applicant's military records, if any
Answer: During the underwriting process, an insurer may do all of the
following EXCEPT
●● The projected future earnings of the breadwinner and the number of
years she expects to work
Answer: Which of the following is NOT taken into account when using
the needs approach to determine the proper amount of insurance
protection?
●● A mutual insurance company
Answer: An insurance company that is owned by its policyowners, who
share the insurer's divisible surplus in the form of participating policy
dividends, is known as
PREP TEST BANK VERIFIED QUESTIONS
AND CORRECT ANSWERS
●● $94,800
Answer: Betty owns a universal life insurance policy that was issued
with a $100,000 face amount and now has total death benefit protection
of $110,000. Several months ago she borrowed $15,000 from the policy.
The outstanding loan balance (Including Interest) is $15,200. If Betty
dies today, what will be the amount of the death benefit?
●● 6 Months
Answer: Life insurance policies sold or delivered in Michigan must not
contain the provision that back dates the effective date of a policy any
more than how many months?
●● Nonforfeiture Provision
Answer: The privilege of accessing the cash value of an insurance policy
if it is surrendered is known as the
●● Mortality
Answer: Which of the following premium factors has the greatest effect
on life insurance premium calculations?
,●● Who Issues Them
Answer: Annuities are classified by all of the following EXCEPT
●● Decreasing Term
Answer: Joe buys his first home after obtaining a 30 year mortgage from
his bank. He is considering the purchase of life insurance to ensure that
the mortgage will be paid in the event of his death, in which case he will
leave the house to his spouse and children. What would be the best life
insurance protection for Joe?
●● To provide for annuities to be payable in fixed or variable amounts
or for variable life insurance
Answer: For which of the following reasons would a domestic insurer
set up separate accounts?
●● Must have the application signed by the policyowner
Answer: Which of the following statements regarding the delivery of a
life insurance policy is NOT correct?
●● $3.00
Answer: A producer must pay a fee of how much with each change of
address?
●● 1 to 12 months
,Answer: Group life insurance policies include a probationary period
requiring new employees to wait a certain time before they can enroll in
the plan. How long is the typical range for these probationary periods?
●● $12,040
Answer: James died after receiving $180 per month for 6 years from a
$25,000 life with refund annuity. His spouse, Lucy, as his beneficiary,
will now receive t he same monthly income until her payments total
●● 25% of the employee's income up to a specified maximum amount
Answer: Contributions to a simplified employee pension are not
included in the employee's taxable income for the year as long as the
contribution does not exceed
●● Apparent Authority
Answer: Susan is the receptionist at an insurance agency. She is
currently studying for her life insurance license. One day at lunchtime,
Carla comes in the office to pay her auto insurance premium. Susan talks
to her about the importance of life insurance, and Carla immediately
completes an application and gives Susan a check for the premium.
Carla leaves the agency believing she is covered by life insurance. Susan
has acted with
●● The proceed are payable to the insured's estate or the insured had any
incidence of ownership in the policy at time of death or transferred
ownership within 3 years of death.
, Answer: Life insurance proceeds are included in t he gross estate if
●● to replace an individual's economic value
Answer: According to the principle of human life value, the purpose of
life insurance is
●● 24 hours with a minimum of 3 hours in ethics
Answer: How many hours of continuing education credit does an agent
need to complete every two years?
●● Verify the applicant's military records, if any
Answer: During the underwriting process, an insurer may do all of the
following EXCEPT
●● The projected future earnings of the breadwinner and the number of
years she expects to work
Answer: Which of the following is NOT taken into account when using
the needs approach to determine the proper amount of insurance
protection?
●● A mutual insurance company
Answer: An insurance company that is owned by its policyowners, who
share the insurer's divisible surplus in the form of participating policy
dividends, is known as
