CA LIFE INSURANCE EXAM
K
C
QUESTIONS AND CORRECT
LO
VERIFIED ANSWERS 100%
GUARANTEED PASS A+
YC
GRADED
D
U
ST
,A key person is typically all of the following, except: - ANS -Not directly involved in sales,
production, or service
Key persons are employees whose contributions have a significant impact on the revenue and
profitability of the company, especially in small businesses. They are typically: part of the
management team, more highly paid, respected by customers, creditors, suppliers, and
vendors, and have direct responsibilities for sales, production, or service.
Which one of the following is not a reason why premium for the individual policy issued to an
insured exercising a group conversion right is higher than the group life rate previously
K
charged? - ANS -The conversion policy has a higher death benefit
C
The premium of an individual policy issued due to a group life insurance plan conversion will be
at a higher than normal rate to include the insurer's guaranteed convertible surcharge because
the majority of all conversions involve persons that would otherwise be uninsurable, because
LO
the conversion policy will be issued at the attained (current) age of the insured, and the policy
will build cash values.
The type of life insurance used to provide funds for a Buy-Sell Agreement is: - ANS -Any type
of life insurance
YC
Any type of life insurance may be used to provide funds for a Buy-Sell Agreement.
Lorraine's position has been terminated, and she is interested in converting her group life
coverage to an individual policy. In the process, she will find all of the following to be TRUE,
D
except: - ANS -She will be converting her group term benefit to an individual term benefit
U
She will be converting her group term life to an individual permanent policy.
To help protect against experiencing immediate claims, group plans have a(n) _______ period
ST
set up by the group sponsor. - ANS -Probationary
A probationary period is set up to help reduce the chance of facing immediate claims.
How is the funding for Social Security provided? - ANS -Through FICA taxes that are paid by
both employers and employees
Both the employer and employee fund Social Security through paying FICA taxes.
Self-employed persons pay the entire amount.
, The premium for optional dependent group insurance can be payable by: - ANS The employer,
the employee or both
Optional dependent coverage may be paid for by the employer, the employee, or both.
When an insurer wishes to implement changes to a group life policy, whom must it notify? -
ANS The group sponsor
K
Just as in individual contracts, the owner controls the policy. In this case, only the plan sponsor
has a policy (i.e. the Master Policy). As such, the insurer must notify the group sponsor of the
C
changes.
There is a conversion period of how many days in which the employee may, upon termination of
LO
eligibility and without evidence of insurability, convert his/her group life insurance benefit to an
individual permanent policy? - ANS 31
There is a conversion period of 31 days in which the employee may, upon termination of
YC
eligibility and without evidence of insurability, convert his/her group life insurance benefit to an
individual permanent policy.
The proceeds from a _________ plan provide the necessary funds to recruit, hire, and train a
replacement employee. - ANS Key employee
D
Key employee life insurance plans provide the funds to recruit, hire, and train a replacement
employee.
U
Which of the following is a disadvantage of being covered under a group insurance plan? - ANS
The group sponsor can elect to discontinue the plan, and the insurance company can increase
ST
the rates it charges
The advantage of an insurance funded buy-sell agreement is: - ANS It is a legally enforceable
agreement, which pre-establishes the value of the business, and provides the funds for an
efficient method of transferring the deceased's business interest
Some of the advantages of having such an agreement: it is legally enforceable, the value of the
business is previously agreed upon, it is an immediate and automatic method of transferring the
deceased's interest due to readily available funds.
K
C
QUESTIONS AND CORRECT
LO
VERIFIED ANSWERS 100%
GUARANTEED PASS A+
YC
GRADED
D
U
ST
,A key person is typically all of the following, except: - ANS -Not directly involved in sales,
production, or service
Key persons are employees whose contributions have a significant impact on the revenue and
profitability of the company, especially in small businesses. They are typically: part of the
management team, more highly paid, respected by customers, creditors, suppliers, and
vendors, and have direct responsibilities for sales, production, or service.
Which one of the following is not a reason why premium for the individual policy issued to an
insured exercising a group conversion right is higher than the group life rate previously
K
charged? - ANS -The conversion policy has a higher death benefit
C
The premium of an individual policy issued due to a group life insurance plan conversion will be
at a higher than normal rate to include the insurer's guaranteed convertible surcharge because
the majority of all conversions involve persons that would otherwise be uninsurable, because
LO
the conversion policy will be issued at the attained (current) age of the insured, and the policy
will build cash values.
The type of life insurance used to provide funds for a Buy-Sell Agreement is: - ANS -Any type
of life insurance
YC
Any type of life insurance may be used to provide funds for a Buy-Sell Agreement.
Lorraine's position has been terminated, and she is interested in converting her group life
coverage to an individual policy. In the process, she will find all of the following to be TRUE,
D
except: - ANS -She will be converting her group term benefit to an individual term benefit
U
She will be converting her group term life to an individual permanent policy.
To help protect against experiencing immediate claims, group plans have a(n) _______ period
ST
set up by the group sponsor. - ANS -Probationary
A probationary period is set up to help reduce the chance of facing immediate claims.
How is the funding for Social Security provided? - ANS -Through FICA taxes that are paid by
both employers and employees
Both the employer and employee fund Social Security through paying FICA taxes.
Self-employed persons pay the entire amount.
, The premium for optional dependent group insurance can be payable by: - ANS The employer,
the employee or both
Optional dependent coverage may be paid for by the employer, the employee, or both.
When an insurer wishes to implement changes to a group life policy, whom must it notify? -
ANS The group sponsor
K
Just as in individual contracts, the owner controls the policy. In this case, only the plan sponsor
has a policy (i.e. the Master Policy). As such, the insurer must notify the group sponsor of the
C
changes.
There is a conversion period of how many days in which the employee may, upon termination of
LO
eligibility and without evidence of insurability, convert his/her group life insurance benefit to an
individual permanent policy? - ANS 31
There is a conversion period of 31 days in which the employee may, upon termination of
YC
eligibility and without evidence of insurability, convert his/her group life insurance benefit to an
individual permanent policy.
The proceeds from a _________ plan provide the necessary funds to recruit, hire, and train a
replacement employee. - ANS Key employee
D
Key employee life insurance plans provide the funds to recruit, hire, and train a replacement
employee.
U
Which of the following is a disadvantage of being covered under a group insurance plan? - ANS
The group sponsor can elect to discontinue the plan, and the insurance company can increase
ST
the rates it charges
The advantage of an insurance funded buy-sell agreement is: - ANS It is a legally enforceable
agreement, which pre-establishes the value of the business, and provides the funds for an
efficient method of transferring the deceased's business interest
Some of the advantages of having such an agreement: it is legally enforceable, the value of the
business is previously agreed upon, it is an immediate and automatic method of transferring the
deceased's interest due to readily available funds.
