Webce Insurance Test Questions With 100% Verified Answers Latest Updated 2024 (GRADED)

Webce Insurance Test Questions With 100% Verified Answers Latest Updated 2024 (GRADED) Agent Thompson received a letter from the Department of Insurance asking her to provide proof of completing the continuing education requirements. Within how many days must Agent Thompson respond to the Department's inquiry? 20 30 10 45 - Answer- 10 days Abby lives in Ohio, where she is licensed as an insurance producer. She wants to apply for a nonresident license in Pennsylvania. Which of the following conditions must she satisfy? She must move to Pennsylvania. She must surrender her Ohio license. She must be sponsored by a producer licensed in Pennsylvania. She must show her Ohio license is in good standing. - Answer- She must show her Ohio license is in good standing The requirement that an insurable interest must exist when life insurance is purchased is intended to prevent people from doing which of the following? using life insurance to fund future cash needs using life insurance as a speculative investment on another person's life overusing life insurance designating an ineligible person as the policy beneficiary - Answer- using life insurance as a speculative interest on another person's life Which one of the following best describes a policy that has a relatively low face amount and has premiums that are paid to an insurance agent who generally calls on the policyowner at home to collect them? group life insurance industrial life insurance ordinary term insurance ordinary whole life insurance - Answer- industrial life insurance Sylvia's insurer guarantees a fixed death benefit for the policy she owns. Based on this, which one of the following benefits is also most likely guaranteed with this policy? the policy's cash value her ability to borrow an interest-free loan from the cash value policy dividends payment of premiums on Sylvia's behalf in the event of emergencies - Answer- the policy's cash value Carl is a policyowner who prefers to pay premiums monthly rather than annually. How will Carl's insurance company adjust his premium to accommodate this request? The insurer divides the annual premium by 12 and then adds a modest charge. The insurer simply divides the annual premium by 12. The insurer divides the annual premium by 12 and then reduces the premium amount to reflect the fact that premiums will be paid throughout the year. The insurer divides the annual premium by 12 and then adds a modest charge in the first policy year after which premiums equal the annual premium divided by 12. - Answer- The insurer divides the annual premium by 12 and then adds a modest charge All of the following statements about key person life insurance are correct, EXCEPT: The business applies for, owns, and is the beneficiary of the policy covering the life of a key employee. Upon the insured employee's death, the employee's surviving family receives the policy's death benefit. Key person, or key employee, life insurance is an example of third-party ownership. Life insurance used as key person life is normally owned by the business rather than the insured. - Answer- XXX Upon the insured employee's death, the employee's surviving family receives the policy benefit XXX The activities a producer performs to support the insurance company in learning all it can about the applicant when seeking applications for insurance are generally called: field underwriting fiduciary process agency development due diligence - Answer- field underwriting How is increasing term life insurance normally sold? as an endorsement as a permanent insurance policy as a stand-alone term life insurance policy as a rider attached to a permanent life insurance policy - Answer- as a rider attached to a permanent insurance policy Andrea bought a $300,000 term-to-age-55 policy. All the following statements about her policy are correct EXCEPT: The policy provides $300,000 of coverage until Andrea reaches age 55. The policy will generate a cash value that is payable at age 55. It is possible that Andrea could convert the term policy to a life insurance policy that provides coverage for Andrea's entire life even if she becomes uninsurable. The premium for the policy stays the same until the policy expires. - Answer- XXX The policy will generate a cash value that is payable at age 55 XXX The basic purpose for the re-entry option with a renewable term life insurance policy is to let the policyowner: reinstate the policy after it has lapsed for nonpayment of premiums without having to provide evidence of insurability convert the term policy to a permanent life insurance policy renew the policy with a higher face amount without having to provide evidence of insurability renew the policy at lower current rates rather than guaranteed renewal rates - Answerrenew the policy at lower current rates rather than guaranteed renewal rates Term life insurance is well suited for all the following needs EXCEPT: mortgage protection a source of emergency cash for any financial need inexpensive protection until the policyowner can afford permanent life insurance protection while the family children are living at home or attending college - AnswerXXX a source of emergency cash for any financial need XXX Premium rates will vary unpredictably depending on the insurer's actual experience in which one of the following types of whole life insurance? straight whole life current assumption whole life limited pay whole life graded premium whole life - Answer- current assumption whole life Jessica, age 25, buys a $100,000 life insurance policy. The initial premium is lower than straight whole life rates and increases each year for the first ten years of the policy period. After that, the premium levels off and stays at that amount for the life of the policy. What type of policy does Jessica own? 10-pay whole life single premium whole life graded premium whole life modified premium whole life - Answer- graded premium whole life Which one of the following statements about variable life insurance is correct? Variable life policyowners can invest all of their premiums in the insurer's general account. Subaccounts are managed within the insurer's general account. Variable life policyowners can choose flexible premium payment schedules. With a variable life insurance policy, the policyowner assumes most of the investment risk. - Answer- With a variable life insurance policy, the policyowner assumes most of the investment risk. Which of the following statements best explains the basic level premium concept of ordinary whole life insurance? The steady reduction of the policy's net amount at risk offsets the cost of pure insurance that rises with age. Funds are withdrawn from the policy's cash value in the later years to pay the rising cost of pure insurance. The death benefit is decreased to offset the rising cost of insurance with age. The insurer averages the cost of pure insurance over the insured's life expectancy so that the mortality charge remains level. - Answer- the steady reduction of the policy's net amount at risk offsets the cost of pure insurance that rises with age All the following statements about ordinary (straight) whole life insurance are correct EXCEPT: The insured pays premiums for his or her entire life. Premiums remain level. The death benefit increases during the early policy years and then levels off. It has a steadily increasing cash value. - Answer- XXX the death benefit increases during the early policy years and then levels off XXX Barb, age 40, buys a ten-pay life policy while Jill, age 40, buys a life paid up at age 65 policy. All other factors being equal, which of the following statements is most correct? Barb and Jill will pay approximately the same monthly premium amount every year, and their policies will mature at about the same time. Barb will pay a higher monthly premium over a shorter time than Jill, and their policies will mature at about the same time. Jill will pay a higher monthly premium than Barb, and their policies will mature at about the same time. Barb and Jill will pay approximately the same monthly premium amount every year, but Barb's policy will mature before Jill's. - Answer- barb will pay a higher monthly premium over a shorter time than Jill, and their policies will mature at about the same time Unlike traditional fixed interest UL policies, many variable universal life policies offer a third death benefit option, which provides a guaranteed minimum death benefit equal to: he policy's net amount at risk plus its cash value the policy's net amount at risk plus its cash value minus the sum of premiums paid the policy's net amount at risk plus the greater of the actual cash value or the sum of premiums paid the policy's net amount at risk plus its cash value plus the sum of premiums paid - Answer- the policy's net amount at risk plus the greater of the actual cash value or the sum of premiums paid In a front-end loaded universal life contract, when does the insurer deduct a charge to cover the costs of administering the policy? from the cash value after the premium has been deposited to it from the premium payment before it is credited to the policy's cash value once, when the first premium is paid at the start of each policy year - Answer- from the premium payment before it is credited to the policy's cash value Jack bought a life insurance policy that will provide a lump-sum death benefit plus a tenyear stream of income should he die before a specified date. Five years after purchasing the policy, before the specified date, Jack died and the policy began paying a monthly benefit to his family for ten years. What type of policy did Jack buy? ten-year family maintenance policy ten-year family income policy survivorship life insurance policy ten-year family protection policy - Answer- ten-year family maintenance policy All of the following statements regarding joint life insurance and survivorship life insurance are correct EXCEPT: Joint life insurance lets the surviving insured purchase an individual policy without having to prove insurability upon the first insured's death. Both joint life and survivorship life have a lower premium than two comparable individual policies covering the two insureds. Joint life insurance is especially popular in the estate planning market. Survivorship life insurance pays the death benefit upon the death of the second insured. - Answer- XXX joint life insurance is especially popular in the estate planning market XXX How does a family income policy differ from a family maintenance policy? A family income policy combines whole life insurance with decreasing term insurance, while a family maintenance policy combines whole life and level term insurance. A family income policy combines whole life insurance with increasing term insurance, while a family maintenance policy combines whole life and decreasing term. A family income policy combines whole life insurance with increasing term insurance, while a family maintenance policy combines whole life and level term insurance. A family income policy combines whole life insurance with level term insurance, while a family maintenance policy combines whole life and decreasing term. - Answer- A family income policy combines whole life with decreasing term insurance, while a family maintenance policy combines whole life and level term insurance Endowment contracts are NOT considered life insurance (for tax purposes) because: They never mature. They endow before age 120. They do not pay a death benefit if the insured dies before the contract matures. They do not build cash values. - Answer- they endow before age 120 Which statement is correct if a group offers noncontributory group life insurance? The employer must pay most of the premiums. The employees must pay part of the premiums. The plan must cover at least 75 percent of eligible group members. The plan must cover 100 percent of eligible group members. - Answer- the plan must cover 100% of eligible group members All the following statements about standard policy exclusions are correct EXCEPT: Standard exclusions found in most policies last for the life of the policy, even after the contestability period ends. The war exclusion usually excludes paying the death benefit only if the death directly resulted from war. The war and commission of a felony exclusions are required by law. If a policy excludes a risk from coverage, the insurer will not pay the policy's benefit if death results from that risk. - Answer- XXX the war and commission of a felony exclusions are required by law XXX Which of the following most accurately describes who can be a life insurance policy beneficiary? The beneficiary must have an insurable interest in the insured. The beneficiary can be anyone as long as it is a natural person. The beneficiary must be a blood relative of the insured. It can be virtually any person or entity the policyowner chooses. - Answer- it can be virtually any person or entity the policyowner chooses Reggie owns a whole life policy in which his wife Mary is the primary beneficiary. The couple has no children in common, so the contingent beneficiary is Carl, Reggie's son from a previous marriage. Mary's daughter from a previous marriage, Sue, is not a beneficiary. Reggie and Mary are in a car accident in which Reggie dies instantly and Mary survives for three days before dying from accident-related injuries. Under the policy's common disaster clause, to whom will the policy's death benefit be paid? Sue Reggie's estate Mary Carl - Answer- Carl Which of the following most correctly describes the option(s) available with a universal life insurance policy the owner no longer wishes to maintain? surrender the policy for its cash value or let the policy continue without premiums until the cash value can no longer cover monthly deductions surrender the policy for its cash value, convert it to extended term insurance, or convert it to paid-up whole life insurance surrender the policy for its cash value or convert it to extended term insurance surrender the policy for its cash value or convert it to paid-up whole life insurance - Answer- surrender the policy for its cash value or let the policy continue without premiums until the cash value can no longer cover monthly deductions If a permanent life insurance policy lapses and the owner does NOT select a nonforfeiture option, the insurer will automatically: suspend coverage until the policyowner either reinstates or surrenders the policy apply the extended term insurance option surrender the policy and pay out the cash value apply the reduced paid-up option - Answer- apply the extended term insurance option All of the following statements regarding the reduced paid-up life insurance nonforfeiture option are correct EXCEPT: