PA LIFE INSURANCE LICENSE |INSURANCE
LICENSING AND POLICIES| UPDATED 2025 |
160 QUESTIONS WITH 100% ACCURATE
SOLUTIONS
1. Jane doe wants to make sure that life insurance proceeds are available
to pay her outstanding mortgage loan balance if she dies prematurely (that
is, dying while the loan is still outstanding). As a means to manage this risk,
she purchased a type of life insurance in which the amount of coverage
gradually declines in sync with her outstanding mortgage balance. This type
of life insurance is called _______
decreasing term insurance
re-entry life insurance
universal life insurance
ordinary whole life
2. Describe why an applicant's automobile is not relevant in determining their
life insurance needs.
An automobile is considered a luxury and does not affect life
insurance calculations.
The type of automobile influences the applicant's health status and
risk assessment.
Automobiles are only relevant for auto insurance, not life insurance.
An applicant's automobile does not directly impact their financial
responsibilities or dependents' needs in the event of their death.
,3. If an individual withdraws funds from a qualified retirement plan to purchase
stock before the age of 59½, what tax implications should they expect?
They will incur a 20% tax penalty for early withdrawal.
, They should expect to incur a 10% tax penalty on the withdrawal.
They will receive a tax credit for the withdrawal.
They will not incur any penalties if the funds are used for investment
purposes.
4. What is the name of the dividend option that allows a policy owner to use
dividends to pay premiums?
Accumulation Dividend Option
Cash Dividend Option
Paid-Up Additions Option
Reduction of Premium Dividend Option
5. If a policyholder fails to pay their premium by the due date but pays it
within the grace period, what will be the outcome regarding their
coverage?
The coverage will remain in effect without interruption.
The policyholder will incur a penalty fee.
The coverage will be canceled immediately.
The policy will enter a probation period.
6. Of the following, which is the most important factor in determining whether
or not you need life insurance?
Your current income
Whether or not you have a spouse or children who depend on you
financially
Your age
, Whether or not you expect to die any time soon
7. What are the three primary actions that a licensed insurance producer in
Pennsylvania is authorized to perform?
Negotiate premiums, issue policies, and settle disputes
Conduct audits, assess risks, and provide financial advice
Solicit, receive, and forward applications to insurers
Underwrite policies, manage claims, and provide legal advice
8. Describe the role of state insurance departments in regulating insurance
practices.
State insurance departments manage the financial investments of
insurance companies.
State insurance departments are responsible for setting insurance
premiums.
State insurance departments only issue licenses for insurance
producers.
State insurance departments oversee and regulate insurers
to ensure fair claim settlement practices.
9. Describe the significance of the 30-day notification requirement for insurers
regarding producer application terminations in Pennsylvania.
The 30-day notification requirement ensures timely
communication and regulatory oversight of insurance producers.
The requirement allows insurers to delay reporting until they have
more information.
The requirement is only applicable to large insurance companies.
LICENSING AND POLICIES| UPDATED 2025 |
160 QUESTIONS WITH 100% ACCURATE
SOLUTIONS
1. Jane doe wants to make sure that life insurance proceeds are available
to pay her outstanding mortgage loan balance if she dies prematurely (that
is, dying while the loan is still outstanding). As a means to manage this risk,
she purchased a type of life insurance in which the amount of coverage
gradually declines in sync with her outstanding mortgage balance. This type
of life insurance is called _______
decreasing term insurance
re-entry life insurance
universal life insurance
ordinary whole life
2. Describe why an applicant's automobile is not relevant in determining their
life insurance needs.
An automobile is considered a luxury and does not affect life
insurance calculations.
The type of automobile influences the applicant's health status and
risk assessment.
Automobiles are only relevant for auto insurance, not life insurance.
An applicant's automobile does not directly impact their financial
responsibilities or dependents' needs in the event of their death.
,3. If an individual withdraws funds from a qualified retirement plan to purchase
stock before the age of 59½, what tax implications should they expect?
They will incur a 20% tax penalty for early withdrawal.
, They should expect to incur a 10% tax penalty on the withdrawal.
They will receive a tax credit for the withdrawal.
They will not incur any penalties if the funds are used for investment
purposes.
4. What is the name of the dividend option that allows a policy owner to use
dividends to pay premiums?
Accumulation Dividend Option
Cash Dividend Option
Paid-Up Additions Option
Reduction of Premium Dividend Option
5. If a policyholder fails to pay their premium by the due date but pays it
within the grace period, what will be the outcome regarding their
coverage?
The coverage will remain in effect without interruption.
The policyholder will incur a penalty fee.
The coverage will be canceled immediately.
The policy will enter a probation period.
6. Of the following, which is the most important factor in determining whether
or not you need life insurance?
Your current income
Whether or not you have a spouse or children who depend on you
financially
Your age
, Whether or not you expect to die any time soon
7. What are the three primary actions that a licensed insurance producer in
Pennsylvania is authorized to perform?
Negotiate premiums, issue policies, and settle disputes
Conduct audits, assess risks, and provide financial advice
Solicit, receive, and forward applications to insurers
Underwrite policies, manage claims, and provide legal advice
8. Describe the role of state insurance departments in regulating insurance
practices.
State insurance departments manage the financial investments of
insurance companies.
State insurance departments are responsible for setting insurance
premiums.
State insurance departments only issue licenses for insurance
producers.
State insurance departments oversee and regulate insurers
to ensure fair claim settlement practices.
9. Describe the significance of the 30-day notification requirement for insurers
regarding producer application terminations in Pennsylvania.
The 30-day notification requirement ensures timely
communication and regulatory oversight of insurance producers.
The requirement allows insurers to delay reporting until they have
more information.
The requirement is only applicable to large insurance companies.
