Life Insurance Basics 2023 Exam with Complete Solutions

Question 1 of 40 Mortality tables are used by insurance companies to predict what? - ANSWER-Life expectancy and the death rates for specific groups of individuals Question 2 of 40 What type of insurance would perform the function of cash accumulation? - ANSWER-Life Insurance Question 3 of 40 What type of insurance creates an immediate estate? - ANSWER-Life insurance Question 4 of 40 When must the policy summary for a life insurance policy be delivered to the policy owner? - ANSWER-At the time of policy delivery Question 5 of 40 Life insurance may be used to pay state inheritance taxes and federal estate taxes eliminating the need to sell assets from the estate. What is this called? - ANSWER-Estate conservation Question 6 of 40 What type of policy issues certificates of insurance to the insureds? - ANSWER-Group insurance Question 7 of 40 What is the main responsibility of a company's underwriting unit? - ANSWER-Risk selection Question 8 of 40 What is a blackout period for social security benefits? - ANSWER-Period when surviving spouse does not receive benefits Question 9 of 40 Who must have insurable interest in the insured? - ANSWER-The policyowner Question 10 of 40 What document describes the specific information about a policy? - ANSWER-Policy summary Question 11 of 40 Who is a replacing insurer? - ANSWER-The company that issues a new policy during policy replacement Question 12 of 40 If an applicant for a life insurance policy and the potential insured are two different people, what would be the underwriter's main concern? - ANSWER-The existence of insurable interest between the applicant and the insured Question 13 of 40 What are the three main instances when insurable interest exists in life insurance? - ANSWER-Insuring your own life, the life of a family member, or the life of a business partners or someone who has a financial obligation to the policyowner Question 14 of 40 At what point does coverage begin when an agent issues a conditional receipt for a life insurance policy? - ANSWER-Either on the date of the application or the date of the medical exam (whichever occurs last) Question 15 of 40 Who is the beneficiary on a key-person life insurance policy? - ANSWER-The employer Question 16 of 40 Who is responsible for the contents of insurance advertisements? - ANSWER-The insurance company Question 17 of 40 When must insurable interest exist in a life insurance policy? - ANSWER-At the time of application Question 18 of 40 In calculating the amount of life insurance needed, what is the needs approach based on? - ANSWER-The predicted needs of a family after the premature death of the insured Question 19 of 40 What type of life insurance offers an applicant a cash value element? - ANSWER-Permanent life ins Question 20 of 40 What document must a producer provide to the insured during policy replacement? - ANSWER-Notice regarding replacement Question 21 of 40 What is insurance underwriting? - ANSWER-The process of risk selection and classification Question 22 of 40 What are illustrations in a life insurance policy? - ANSWER-Presentations of nonguaranteed elements of the policy Question 23 of 40 What type of policy is typically issued without proof of insurability from the insured? - ANSWER-Group policy Question 24 of 40 What is included in Part 2 of a life insurance application? - ANSWER-Medical info about prospective insured Question 25 of 40 A business is the owner and beneficiary of a key-person life policy. When the business collects the policy benefit, how is it taxed? - ANSWER-The benefit is received tax free Question 26 of 40 What is the purpose of the agent's report during the application process? - ANSWER-Field underwriting about the applicants personality and information not on the application Question 27 of 40 What is the main purpose of the regulation on life insurance policy illustrations? - ANSWER-To help the public make educated decisions about buying life insurance Question 28 of 40 When planning for survivor protection in life insurance, what needs to be considered? - ANSWER-The insured's current assets, liabilities and survivor's needs Question 29 of 40 If someone wants to buy a life insurance policy that will provide lifetime protection against premature death, what type of life insurance policy should it be? - ANSWER-Permanent Question 30 of 40