USAA Test Questions with 100% Correct Answers | Verified | Updated

USAA Test Questions with 100% Correct Answers | Verified | Updated What type of reinsurance contract involves two companies automatically sharing their risk exposure? - answertreaty A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a - answerrisk retention group What is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained? - answerFair Credit Reporting Act The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called: - answerreserves A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as: - answerfraternal benefit society If a contract of adhesion contains questionable language, to whom would the interpretation be in favor of? - answerinsured What is a warranty? - answeris a statement guaranteed to be true A policy of adhesion can only be modified by whom? - answerinsurance company Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? - answerLegal Purpose (Insurable Interest) Which of these is considered a statement that is assured to be true in every respect? - answerwarranty Which of these is NOT a type of agent authority? - answerprincipal The Consideration clause of an insurance contract includes: - answerthe schedule and amount of premium payments What is the consideration given by an insurer in the Consideration clause of the life policy? - answerPromise to pay a death benefit to a named beneficiary Who makes the legally enforceable promises in a unilateral insurance policy? - answerinsurance company All of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT: - answerbilateral At what point does an informal contact become binding? - answerWhen one party makes an offer and the other party accepts that offer. Which of these arrangements allows one to bypass insurable interest laws? - answerInvestor- Originated Life Insurance Taking receipt of premiums and holding them for the insurance company is an example of - answerfiduciary responsibility Life and health insurance policies are: - answerunilateral contracts What type of life insurance gives the greatest amount of coverage for a limited period of time? - answerTerm life Which type of life policy contains a monthly mortality charge as well as self-directed investment choices? - answerVariable Universal Life T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this? - answerrenewable Which of the following policies is characterized by a flexible premium and death benefit and allows the policyowner control of the investment aspect of the plan? - answerVariable universal life D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed? - answerLevel term A policy that becomes a Modified Endowment Contract (MEC) - answerwill lose many of its tax advantages Term insurance has which of the following characteristics? - answerExpires at the end of the policy period What type of life policy covers two people and pays upon death of the last insured? - answersurvivorship A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision? - answerPayor provision G purchased a Family Income policy at age 40. The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income? - answer10 years A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct? - answer20-Pay Life accumulates cash value faster than Straight Life Which statement is TRUE regarding a Variable Whole Life Policy? - answerA minimum guaranteed Death benefit is provided N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase? - answer30 Pay Li