LLQP LIFE COMPREHENSIVE TEST BANK
PRACTICE QUESTIONS AND RATIONALES
●● Fair Market Value
Answer: the actual value of an asset, or the price for which it can
reasonably be expected to sell in the open market
●● Key employee Life Insurance
Answer: insurance on the life of a key employee to cover the possibility
of an income loss and/or an increase in expenses resulting from the key
employee's death
●● lagacies
Answer: money, property, or position left in a will to someone
●● life expectancy
Answer: average number of years that person within a certain group and
of a certain age can be expected to live
●● mortality rate
Answer: The probability of dying at a specific age
●● mortality table/life table
,Answer: life expectancy and probability of death statistics
●● Probability of death
Answer: A person within a certain group and of a certain age will die
before their next birthday
●● Rollover
Answer: the process of moving a retirement account balance to another
qualified account without incurring a tax penalty
●● Risk Avoidance
Answer: avoiding an act that would create a risk
●● Risk Reduction Strategies
Answer: Taking action to reduce the probability or severity of risk
●● Risk Retention strategy
Answer: Accepting the fact of exposure to risk and accepting the
consequences if risk is realized. ie extended warranty
●● Risk Transfer
Answer: buying insurance to shift the risk of financial loss to an
insurance company
, ●● Decreasing Term Insurance
Answer: a form of term insurance in which the benefits that will be paid
to the beneficiary are reduced over time and the premium remains
constant
●● incontestability provision
Answer: After an insurance policy has been in effect for 2 years,
company cannot claim that a statement in app was meant to defraud
insurer
●● Increasing Term Insurance
Answer: Term life insurance in which the death benefit increases
periodically over the policy's term. Usually purchased as a cost of living
rider to a whole life policy. (See cost of living rider)
●● Insured
Answer: a policyholder that has covered for liability
●● joint first-to-die insurance
Answer: a single coverage is placed on two or more lives insured. death
benefits is paid out upon the death of the 1st person to die
●● Joint and Last to die
PRACTICE QUESTIONS AND RATIONALES
●● Fair Market Value
Answer: the actual value of an asset, or the price for which it can
reasonably be expected to sell in the open market
●● Key employee Life Insurance
Answer: insurance on the life of a key employee to cover the possibility
of an income loss and/or an increase in expenses resulting from the key
employee's death
●● lagacies
Answer: money, property, or position left in a will to someone
●● life expectancy
Answer: average number of years that person within a certain group and
of a certain age can be expected to live
●● mortality rate
Answer: The probability of dying at a specific age
●● mortality table/life table
,Answer: life expectancy and probability of death statistics
●● Probability of death
Answer: A person within a certain group and of a certain age will die
before their next birthday
●● Rollover
Answer: the process of moving a retirement account balance to another
qualified account without incurring a tax penalty
●● Risk Avoidance
Answer: avoiding an act that would create a risk
●● Risk Reduction Strategies
Answer: Taking action to reduce the probability or severity of risk
●● Risk Retention strategy
Answer: Accepting the fact of exposure to risk and accepting the
consequences if risk is realized. ie extended warranty
●● Risk Transfer
Answer: buying insurance to shift the risk of financial loss to an
insurance company
, ●● Decreasing Term Insurance
Answer: a form of term insurance in which the benefits that will be paid
to the beneficiary are reduced over time and the premium remains
constant
●● incontestability provision
Answer: After an insurance policy has been in effect for 2 years,
company cannot claim that a statement in app was meant to defraud
insurer
●● Increasing Term Insurance
Answer: Term life insurance in which the death benefit increases
periodically over the policy's term. Usually purchased as a cost of living
rider to a whole life policy. (See cost of living rider)
●● Insured
Answer: a policyholder that has covered for liability
●● joint first-to-die insurance
Answer: a single coverage is placed on two or more lives insured. death
benefits is paid out upon the death of the 1st person to die
●● Joint and Last to die
