Life Insurance Practice Exam |76
Answered Questions A+ Scores
The ownership provision entities the policy owner to do all of the following
EXCEPT
a) Assign the policy.
b) Designate a beneficiary.
c) Set premium rates.
d) Receive a policy loan. - -c) Set premium rates.
The insurer sets premium rates based upon underwriting considerations.
- Which of the following protects consumers against the circulation of
inaccurate or obsolete personal or financial information?
a) The Guaranty Association
b) Consumer Privacy Act
c) The Fair Credit Reporting Act
d) Unfair Trade Practices Law - -c) The Fair Credit Reporting Act
The purpose of the Fair Credit Reporting Act is to protect consumers against
the circulation of inaccurate or obsolete information and to insure that
consumer reporting agencies are fair and equitable in their treatment of
consumers.
- Why is an equity indexed annuity considered to be fixed annuity?
a) It has modest investment potential.
b) It has a fixed rate of return.
c) It is not tied to an index like the S&P 500.
d) It has a guaranteed minimum interest rate. - -d) It has a guaranteed
minimum interest rate.
While equity indexed annuities earn higher interest rates than fixed
annuities, both types of annuities guarantee a specific minimum interest
rate.
- An agent who is a resident of another state may obtain an Oklahoma
nonresident license without taking a licensing examination provided
a) The agent is currently licensed in the state of domicile.
b) The agent obtained that license by passing a test suitable to the
Oklahoma Department.
,c) The state where the agent lives affords the same privilege to residents of
Oklahoma.
d) All of these requirements are met. - -d) All of these requirements are met.
A nonresident can be licensed as an insurance agent in the Oklahoma
licensing requirements are met, as long as the agents home state gives
Oklahoma residents the same privilege (reciprocity). The applicant must hold
a license in good standing in his or her resident state.
- Which nonforfeiture option has the highest amount of insurance
protection?
a) Decreasing Term
b) Reduced Paid-up
c) Extended Term
d) Conversion - -c) Extended Term
The Extended Term nonforfeiture option has the same face amount as the
original policy, but for a shorter period of time.
- What is a material misrepresentation?
a) Any misstatement made by an applicant for insurance
b) Any misstatement by the producer
c) Concealment
d) A statement by the applicant that, upon discovery, would affect the
underwriting decision of the insurance company - -d) A statement by the
applicant that, upon discovery, would affect the underwriting decision of the
insurance company
A material misrepresentation is a statement that, if discovered, would alter
the underwriting decision of the insurance company.
- Which of the following information about the applicant is NOT included in
the General Information section of the application for insurance?
a) Occupation
b) Marital status
c) Medical background
d) Gender - -c) Medical background
Part 1 - General Information of the application includes the general questions
about the applicant, including name, age, address, birth date, gender,
income, marital status, and occupation. The applicant's medical background
is addressed in Part 2 - Medical Information.
, - The term "illustration" in a life insurance policy refers to
a) A depiction of policy benefits and guarantees
b) Pictures accompanying a policy
c) Charts and graphs
d) A presentation of non-guaranteed elements of a policy. - -d) A
presentation of non-guaranteed elements of a policy.
The term "illustration" means a presentation or depiction that includes non-
guaranteed elements of a policy of individual or group life insurance over a
period of years.
- If a policy has an automatic premium loan provision, what happens if the
insured dies before the loan is paid back?
a) The balance of the loan will be taken out of the death benefit. - -a) The
balance of the loan will be taken out of the death benefit.
- An employee is joining a group insurance plan. In order to avoid having to
prove insurability, what must the employee do?
a) Join during the open enrollment period
b) Provide medical records to the insurer
c) Sign a statement of continued good health
d) Nothing; proof of insurability is never required in group polices - -a) Join
during the open enrollment period
If one applies for coverage after the open enrollment period, proof of
insurability may be required in order to avoid adverse selection.
- All of the following are duties and responsibilities of producers at the time
of application EXCEPT
a) Explain the nature and type of any receipt the producer is giving to the
applicant
b) Probe beyond the stated questions if the producer feels the applicant is
misrepresenting or concealing information.
c) Check to make sure that there are no unanswered questions on the
application
d) Change any incorrect statement on the application by personally initialing
next to the corrected statement - -d) Change any incorrect statement on the
application by personally initialing next to the corrected statement
Any changes to information on an application must be initialed by the
applicant.
Answered Questions A+ Scores
The ownership provision entities the policy owner to do all of the following
EXCEPT
a) Assign the policy.
b) Designate a beneficiary.
c) Set premium rates.
d) Receive a policy loan. - -c) Set premium rates.
The insurer sets premium rates based upon underwriting considerations.
- Which of the following protects consumers against the circulation of
inaccurate or obsolete personal or financial information?
a) The Guaranty Association
b) Consumer Privacy Act
c) The Fair Credit Reporting Act
d) Unfair Trade Practices Law - -c) The Fair Credit Reporting Act
The purpose of the Fair Credit Reporting Act is to protect consumers against
the circulation of inaccurate or obsolete information and to insure that
consumer reporting agencies are fair and equitable in their treatment of
consumers.
- Why is an equity indexed annuity considered to be fixed annuity?
a) It has modest investment potential.
b) It has a fixed rate of return.
c) It is not tied to an index like the S&P 500.
d) It has a guaranteed minimum interest rate. - -d) It has a guaranteed
minimum interest rate.
While equity indexed annuities earn higher interest rates than fixed
annuities, both types of annuities guarantee a specific minimum interest
rate.
- An agent who is a resident of another state may obtain an Oklahoma
nonresident license without taking a licensing examination provided
a) The agent is currently licensed in the state of domicile.
b) The agent obtained that license by passing a test suitable to the
Oklahoma Department.
,c) The state where the agent lives affords the same privilege to residents of
Oklahoma.
d) All of these requirements are met. - -d) All of these requirements are met.
A nonresident can be licensed as an insurance agent in the Oklahoma
licensing requirements are met, as long as the agents home state gives
Oklahoma residents the same privilege (reciprocity). The applicant must hold
a license in good standing in his or her resident state.
- Which nonforfeiture option has the highest amount of insurance
protection?
a) Decreasing Term
b) Reduced Paid-up
c) Extended Term
d) Conversion - -c) Extended Term
The Extended Term nonforfeiture option has the same face amount as the
original policy, but for a shorter period of time.
- What is a material misrepresentation?
a) Any misstatement made by an applicant for insurance
b) Any misstatement by the producer
c) Concealment
d) A statement by the applicant that, upon discovery, would affect the
underwriting decision of the insurance company - -d) A statement by the
applicant that, upon discovery, would affect the underwriting decision of the
insurance company
A material misrepresentation is a statement that, if discovered, would alter
the underwriting decision of the insurance company.
- Which of the following information about the applicant is NOT included in
the General Information section of the application for insurance?
a) Occupation
b) Marital status
c) Medical background
d) Gender - -c) Medical background
Part 1 - General Information of the application includes the general questions
about the applicant, including name, age, address, birth date, gender,
income, marital status, and occupation. The applicant's medical background
is addressed in Part 2 - Medical Information.
, - The term "illustration" in a life insurance policy refers to
a) A depiction of policy benefits and guarantees
b) Pictures accompanying a policy
c) Charts and graphs
d) A presentation of non-guaranteed elements of a policy. - -d) A
presentation of non-guaranteed elements of a policy.
The term "illustration" means a presentation or depiction that includes non-
guaranteed elements of a policy of individual or group life insurance over a
period of years.
- If a policy has an automatic premium loan provision, what happens if the
insured dies before the loan is paid back?
a) The balance of the loan will be taken out of the death benefit. - -a) The
balance of the loan will be taken out of the death benefit.
- An employee is joining a group insurance plan. In order to avoid having to
prove insurability, what must the employee do?
a) Join during the open enrollment period
b) Provide medical records to the insurer
c) Sign a statement of continued good health
d) Nothing; proof of insurability is never required in group polices - -a) Join
during the open enrollment period
If one applies for coverage after the open enrollment period, proof of
insurability may be required in order to avoid adverse selection.
- All of the following are duties and responsibilities of producers at the time
of application EXCEPT
a) Explain the nature and type of any receipt the producer is giving to the
applicant
b) Probe beyond the stated questions if the producer feels the applicant is
misrepresenting or concealing information.
c) Check to make sure that there are no unanswered questions on the
application
d) Change any incorrect statement on the application by personally initialing
next to the corrected statement - -d) Change any incorrect statement on the
application by personally initialing next to the corrected statement
Any changes to information on an application must be initialed by the
applicant.
