MONTANA LIFE REVIEW 2 EXAM
QUESTIONS WITH CORRECT ANSWERS
Which of the following riders would NOT cause the Death Benefit to increase? - Correct
Answers -Payor Benefit Rider
An insured and his wife are both involved in a head-on collision. The husband dies
instantly, and the wife dies 15 days later. The company pays the death benefit to the
estate of the insured. This indicates that the life insurance policy had what provision? -
Correct Answers -Common Disaster
A producer is helping a married couple determine the financial needs of their children in
the event one or both should die prematurely. This is a personal use of life insurance
known as - Correct Answers -Survivor Protection
Which of the following is correct concerning the taxation of premiums in a key-person
life insurance policy? - Correct Answers -Premiums are not tax deductible as a business
expense.
Which of the following would help prevent a universal life policy from lapsing? - Correct
Answers -target premium
Which of the following is a key distinction between variable whole life and variable
universal life products? - Correct Answers -Variable whole life has a guaranteed death
benefit.
All of the following are requirements for life insurance illustrations EXCEPT - Correct
Answers -they must be part of the contract
Methods used to pay the death benefits to a beneficiary upon the insured's death are
called - Correct Answers -settlement options
When is the earliest a policy may go into effect? - Correct Answers -When the
application is signed and a check is given to the agent
Life income joint and survivor settlement option guarantees - Correct Answers -Income
of 2 or more recipients until they die
Which policy component decreases in decreasing term insurance? - Correct Answers -
Face amount
, Which of the following, when attached to a permanent life insurance policy, allows the
policyowner to customize the policy to provide an additional amount of temporary
insurance on the insured, or allows amounts of temporary insurance to cover other
family members? - Correct Answers -Term Rider
Which of the following statements about the reinstatement provision is true? - Correct
Answers -It requires the policyowner to pay all overdue premiums with interest before
the policy is reinstated.
Fair Credit Reporting Act - Correct Answers -regulates consumer reports
An insured purchased a variable life insurance policy with a face amount of $50,000.
Over the life of the policy, stock performance declined and the cash value fell to
$10,000. If the insured dies, how much will be paid out? - Correct Answers -$50,000
An insured receives an annual life insurance dividend check. What term best describes
this arrangement? - Correct Answers -cash option
Who bears all of the investment risk in a fixed annuity? - Correct Answers -the
insurance company
Which of the following is TRUE regarding the annuity period? - Correct Answers -it may
last the lifetime of the annuitant
An employee quits his job on May 15 and doesn't convert his Group Life policy to an
individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the
following statements best describes what will happen? - Correct Answers -The insurer
will pay the full death benefit to the beneficiary.
Which of the following is NOT true of life settlements? - Correct Answers -the seller
must be terminally ill
All of the following are true regarding a decreasing term policy EXCEPT - Correct
Answers -The payable premium amount steadily declines throughout the duration of the
contract.
All of the following statements concerning dividends are true EXCEPT - Correct
Answers -Dividend amounts are guaranteed in the policy.
Which of the following information will be stated in the consideration clause of a life
insurance policy? - Correct Answers -amount of premium payment
Which of the following determines the length of time that benefits will be received under
the Fixed-Amount settlement option? - Correct Answers -size of each installment
QUESTIONS WITH CORRECT ANSWERS
Which of the following riders would NOT cause the Death Benefit to increase? - Correct
Answers -Payor Benefit Rider
An insured and his wife are both involved in a head-on collision. The husband dies
instantly, and the wife dies 15 days later. The company pays the death benefit to the
estate of the insured. This indicates that the life insurance policy had what provision? -
Correct Answers -Common Disaster
A producer is helping a married couple determine the financial needs of their children in
the event one or both should die prematurely. This is a personal use of life insurance
known as - Correct Answers -Survivor Protection
Which of the following is correct concerning the taxation of premiums in a key-person
life insurance policy? - Correct Answers -Premiums are not tax deductible as a business
expense.
Which of the following would help prevent a universal life policy from lapsing? - Correct
Answers -target premium
Which of the following is a key distinction between variable whole life and variable
universal life products? - Correct Answers -Variable whole life has a guaranteed death
benefit.
All of the following are requirements for life insurance illustrations EXCEPT - Correct
Answers -they must be part of the contract
Methods used to pay the death benefits to a beneficiary upon the insured's death are
called - Correct Answers -settlement options
When is the earliest a policy may go into effect? - Correct Answers -When the
application is signed and a check is given to the agent
Life income joint and survivor settlement option guarantees - Correct Answers -Income
of 2 or more recipients until they die
Which policy component decreases in decreasing term insurance? - Correct Answers -
Face amount
, Which of the following, when attached to a permanent life insurance policy, allows the
policyowner to customize the policy to provide an additional amount of temporary
insurance on the insured, or allows amounts of temporary insurance to cover other
family members? - Correct Answers -Term Rider
Which of the following statements about the reinstatement provision is true? - Correct
Answers -It requires the policyowner to pay all overdue premiums with interest before
the policy is reinstated.
Fair Credit Reporting Act - Correct Answers -regulates consumer reports
An insured purchased a variable life insurance policy with a face amount of $50,000.
Over the life of the policy, stock performance declined and the cash value fell to
$10,000. If the insured dies, how much will be paid out? - Correct Answers -$50,000
An insured receives an annual life insurance dividend check. What term best describes
this arrangement? - Correct Answers -cash option
Who bears all of the investment risk in a fixed annuity? - Correct Answers -the
insurance company
Which of the following is TRUE regarding the annuity period? - Correct Answers -it may
last the lifetime of the annuitant
An employee quits his job on May 15 and doesn't convert his Group Life policy to an
individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the
following statements best describes what will happen? - Correct Answers -The insurer
will pay the full death benefit to the beneficiary.
Which of the following is NOT true of life settlements? - Correct Answers -the seller
must be terminally ill
All of the following are true regarding a decreasing term policy EXCEPT - Correct
Answers -The payable premium amount steadily declines throughout the duration of the
contract.
All of the following statements concerning dividends are true EXCEPT - Correct
Answers -Dividend amounts are guaranteed in the policy.
Which of the following information will be stated in the consideration clause of a life
insurance policy? - Correct Answers -amount of premium payment
Which of the following determines the length of time that benefits will be received under
the Fixed-Amount settlement option? - Correct Answers -size of each installment
