LIFE INSURANCE PRACTICE EXAM QUESTIONS AND ANSWERS 100% PASS

LIFE INSURANCE PRACTICE EXAM QUESTIONS AND ANSWERS 100% PASS The reciept given to a life insurance applicant when the application is completed and the initial premium is received is called a(n) Insurable Receipt Statements in the application for insurance that are believed to be true to the best of the applicants knowledge are Representations An annuity is considered fixed when it does all of the following EXCEPT Provide the annuitant with an interest rate that is lesser of the guaranteed or current rate The most common type of whole life insurance where premiums are payable over the whole life of the insured to age 100 is called. Continuous Premium (straight) life The policy and a copy of the application, along with any riders and amendments, is called the Entire contract Money borrowed from the policy's cash value is Not taxable Which of the following annuity products requires an agent to hold a securities license? All annuities (Variable, Deferreed & Equity Indexed) Which type of annuity settlement stops when the annuitant dies? Life income annuity At what age can a participant receive distributions from a qualified plan without incurring a 10% penalty 59 1/2 Two business partners own life insurance on each other. If one partner dies, which of the following contracts will allow the surviving partner to use the death benefit to purchase the deceased's business interests? Buy-Sell Agreement Which type of policy allows the insured to change the amount of the dwah benefit, the amount of premium, or the type of coverage S their needs change? Adjustable life If an annuitant dies during the accumulation period, what will the beneficiary receive? Either the cash value or the premiums paid, whichever is greater Any insurer who is NOT approved to do business in this state is considered Nonadmitted To prevent people from profiting from a loss, insurers is the certain Insurable Interest Exists If a misstatement of age is discovered during the processing of a life insurance claim what will the insurer do? Adjusts the death benefit based on the premiums that were paid Which of the following allows an insurance company to deny coverage of the insurers eewth occurs in war? Policy Exclusions Each of the following is a typical characteristic of groups life insurance EXCEPT Evidence of insurability is usually required A life settlement option that pays out the death benefit is. Incrementally, in a specified amount until all of the proceeds are exhausted, is called Fixed-Period Installments A life insurance death benefit paid in a lump sum to a beneficiary is Not subject to any taxes Which of the following is NOT a nonforfeiture option in whole life policies? Accumulation at Interest Which of the following indicates the person upon whose life the annuity income amount is determined? Annuitant An annuity that is purchased with a lump-sum payment, and that begins income payments within one year is a Single premium immediate annuity Which statement is INCORRECT concerning policy dividends Dividends are NOT taxable What is the risk classification for those who are insurable, but have a higher than average risk? Substandard At age 25, an individual purchased a decreasing term policy. What happens to the coverage and the premiums as the insured gets older? The coverage decrease but the premiums stay the samw An insurance agent represents the Insurer The transfer of a possible financial loss to another party refers to Insurance Determine the company's risk regarding a proposed insured Underwriting process An insurer mails an insurance policy to a new policyowner. When the insurer relinquishes control of the policy, the policy is considered Delivered This is the prtbirbthenapplication that provides information about an applicants dinadial condition and character, as well as the purpose of sale and how long the agent has known the applicant: Agents Report A whole life product that covers 2 lives and provides for payment or the death benefit on the death of the riser insurer is called Joint Life An agent delivers a policy to an insured, and 9 days later the insured returns the policy and wants a complete refund. What provision covers this circumstance? Free look The "pay in" phase of the annuity is known as what period? Accumulation period For an insurance contract, the principle of utmost good faith means Each party relies upon the truthfulness of the other Which of the following retirement plans is a special tax favored plan for NONPROFIT, charitable, educational or religious groups? 403(b) Tax-Sheltered Annuity (TSAs) Which of the following types of annuities would be best suited for a retired couple who are seeking income for as long as either lives? Joint and Survivor London Mutual Life is an insurer incorporated in England, and is transacting business in this state. London Muthal would be considered what type of insurer? Alien Insurer The MIB is a nonprofit trade association that maintains Medical Information on applicants for life and health insurance It's purpose in life insurance policies is to protect the policy owner against an inintentional lapse of the policy. Grace Period What type of permanent insurance allows the policy owner to pay for a policy in a specified period of time, and the policy owner does not have to make any more premium payments for the life of the policy? Limited Payment What does the payor benefit rider protect? Contestability How long does an employee have to convert group policy coverage to an individual policy without evidence of insurability? 31 days If the cash value exceeds the premiums paid in a whole life policy, what are the tax consequences if the policy is surrendered? The portion that exceeds the premiums paid IS taxable Betty is the only beneficiary named on her husband Bob's policy which has a Common Disaster provision (within 90 days death benefit will go to primary estate) They are in a car wreck, and Bob dies instantly. Betty lives for 29 days. Who will receive the death benefit? Bobs estate The legal transfer of all or part of a policyowners rights, title or interest is called an (a) Assignment What do employees covered under a group contract receive? Certificate of Insurance An annuity in which investment growth is dependent on the performance of an index such as the Standard and Poor's 500 is called a(n) Equity Indexed Annuity The premium payment mode can be best described as the Payment method of the policy premium All other factors being equal, which of the following types of policies will accumulate cash value at the fastest rate. 20-pay life