LIFE INSURANCE EXAM ILLINOIS
COMPLETE QUESTIONS AND ANSWERS
GRADED A+
◉ level term life insurance
Answer: premiums remain the same thoughout the life of the
policy
◉ increasing term policy
Answer: level premium, as do all policies, but the face amount
increases every year of the policy term
◉ face value
Answer: death benefit
◉ decreasing term policy
Answer: level premium and a death benefit that decreases each
year of the policy. Most commonly used with mortgage
◉ whole life insurance provides permanent protection
Answer: insurance is covered for life, as long as the policy
premiums are paid. Premiums and death benefits are both
guaranteed, and they will remain level, as long as the policy is in
force
,◉ whole life build cash value
Answer: the premium paid by the policyowner also does not
change during the life of the policy or during the premium
payment period
◉ straight life
Answer: continuous premium whole life, charges a level annual
premium for the lifetime of the insured and provides a level,
guaranteed death benefit. it build cash value. straight life has the
lowest annual premium among whole life policies.
◉ limited pay whole life
Answer: specifies a set number of years during which the
policyowner must pay premiums. After premium is paid up, the
policy remains in force for the insureds lifetime. Limited pay
policies have higher premiums than straight life policies because
the premium payment period is condensed.
◉ single premium whole life
Answer: one time lump sum premium payment to provide a level
death benefit to the maturity of the policy. Single premium
policies generate immediate cash value due to the size of the lump
sum premium payment.
◉ An insurer wants to obtain info on an applicant. What must
insurer do?
, Answer: Present the insured with a Disclosure authorization
notice
◉ When would a 20 pay whole life policy endow?
Answer: a limited pay whole life policy would endows for the face
amount at age 100. the premium is completely paid off in 20
years.
◉ An individual has been contributing to a retirement account
after taxes are taken out of his paycheck. His financial advisor told
him that he will be allowed to make contributions after 70 1/2 .
The account holder does not have to pay taxes on the growth of
his account. What type of retirement account is this?
Answer: ROTH IRA
◉ The dividend option in which the policyowner uses dividends
to purchase a term policy for one year is referred to as
Answer: one year term option
the dividend is utilized to purchase one year term insurance.
◉ The president of a manufacturing company has offered one of
the company's officers a special individual annuity plan that is
unaavailble to lower echelon employees. this plan would be
funded with before tax corporate dollars, and it does not meet
government approval standards. This annuity plan is subject to:
Answer: a nonqualified annuity plan
COMPLETE QUESTIONS AND ANSWERS
GRADED A+
◉ level term life insurance
Answer: premiums remain the same thoughout the life of the
policy
◉ increasing term policy
Answer: level premium, as do all policies, but the face amount
increases every year of the policy term
◉ face value
Answer: death benefit
◉ decreasing term policy
Answer: level premium and a death benefit that decreases each
year of the policy. Most commonly used with mortgage
◉ whole life insurance provides permanent protection
Answer: insurance is covered for life, as long as the policy
premiums are paid. Premiums and death benefits are both
guaranteed, and they will remain level, as long as the policy is in
force
,◉ whole life build cash value
Answer: the premium paid by the policyowner also does not
change during the life of the policy or during the premium
payment period
◉ straight life
Answer: continuous premium whole life, charges a level annual
premium for the lifetime of the insured and provides a level,
guaranteed death benefit. it build cash value. straight life has the
lowest annual premium among whole life policies.
◉ limited pay whole life
Answer: specifies a set number of years during which the
policyowner must pay premiums. After premium is paid up, the
policy remains in force for the insureds lifetime. Limited pay
policies have higher premiums than straight life policies because
the premium payment period is condensed.
◉ single premium whole life
Answer: one time lump sum premium payment to provide a level
death benefit to the maturity of the policy. Single premium
policies generate immediate cash value due to the size of the lump
sum premium payment.
◉ An insurer wants to obtain info on an applicant. What must
insurer do?
, Answer: Present the insured with a Disclosure authorization
notice
◉ When would a 20 pay whole life policy endow?
Answer: a limited pay whole life policy would endows for the face
amount at age 100. the premium is completely paid off in 20
years.
◉ An individual has been contributing to a retirement account
after taxes are taken out of his paycheck. His financial advisor told
him that he will be allowed to make contributions after 70 1/2 .
The account holder does not have to pay taxes on the growth of
his account. What type of retirement account is this?
Answer: ROTH IRA
◉ The dividend option in which the policyowner uses dividends
to purchase a term policy for one year is referred to as
Answer: one year term option
the dividend is utilized to purchase one year term insurance.
◉ The president of a manufacturing company has offered one of
the company's officers a special individual annuity plan that is
unaavailble to lower echelon employees. this plan would be
funded with before tax corporate dollars, and it does not meet
government approval standards. This annuity plan is subject to:
Answer: a nonqualified annuity plan
