LIFE INSURANCE PRACTICE EXAM
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Insurable Receipt - The receipt given to a life insurance applicant when the application is completed and the initial
premium is received is called a(n) Representations - Statements in the application for insurance that are believed to
be true to the best of the applicants knowledge are Provide the annuitant with an interest rate that is lesser of the
guaranteed or current rate - An annuity is considered fixed when it does all of the following EXCEPT Continuous
Premium (straight) life - The most common type of whole life insurance where premiums are payable over the
whole life of the insured to age 100 is called. Entire contract - The policy and a copy of the application, along with any
riders and amendments, is called the Not taxable - Money borrowed from the policy's cash value is All annuities
(Variable, Refereed & Equity Indexed) - Which of the following annuity products requires an agent to hold a
securities license? Life income annuity - Which type of annuity settlement stops when the annuitant dies? 59 1/2 - At
what age can a participant receive distributions from a qualified plan without incurring a 10% penalty Buy-Sell
Agreement - Two business partners own life insurance on each other. If one partner dies, which of the following
contracts will allow the surviving partner to use the death benefit to purchase the deceased's business interests?
Adjustable life - Which type of policy allows the insured to change the amount of the dwah benefit, the amount of
premium, or the type of coverage S their needs change? Either the cash value or the premiums paid, whichever is
greater - If an annuitant dies during the accumulation period, what will the beneficiary receive? Non admitted - Any
insurer who is NOT approved to do business in this state is considered Insurable Interest Exists - To prevent people
from profiting from a loss, insurers is the certain Adjusts the death benefit based on the premiums that were paid -
If a misstatement of age is discovered during the processing of a life insurance claim what will the insurer do?
Policy Exclusions - Which of the following allows an insurance company to deny coverage of the insurers eewth
occurs in war? Evidence of instability is usually required - Each of the following is a typical characteristic of groups
life insurance EXCEPT Fixed-Period Installments - A life settlement option that pays out the death benefit is.
Incrementally, in a specified amount until all of the proceeds are exhausted, is called Not subject to any taxes - A life
insurance death benefit paid in a lump sum to a beneficiary is Accumulation at Interest - Which of the following is
NOT a non forfeiture option in whole life policies? Annuitant - Which of the following indicates the person upon
whose life the annuity income amount is determined? Single premium immediate annuity - An annuity that is
purchased with a lump-sum payment, and that begins income payments within one year is a Dividends are NOT
taxable - Which statement is INCORRECT concerning policy dividends Substandard - What is the risk classification
for those who are insurable, but have a higher than average risk? The coverage decrease but the premiums stay the
samw - At age 25, an individual purchased a decreasing term policy. What happens to the coverage and the
premiums as the insured gets older? Insurer - An insurance agent represents the Insurance - The transfer of a
possible financial loss to another party refers to Underwriting process - Determine the company's risk regarding a
proposed insured Delivered - An insurer mails an insurance policy to a new policyholder. When the insurer
relinquishes control of the policy, the policy is considered Agents Report - This is the prtbirbthenapplication that
provides information about an applicants diagonal condition and character, as well as the purpose of sale and how
long the agent has known the applicant: Joint Life - A whole life product that covers 2 lives and provides for payment
or the death benefit on the death of the riser insurer is called Free look - An agent delivers a policy to an insured,
and 9 days later the insured returns the policy and wants a complete refund. What provision covers this
circumstance? Accumulation period - The "pay in" phase of the annuity is known as what period? Each party relies
upon the truthfulness of the other - For an insurance contract, the principle of utmost good faith means 403(b)
Tax-Sheltered Annuity (TSAs) - Which of the following retirement plans is a special tax favored plan for NONPROFIT,
charitable, educational or religious groups? Joint and Survivor - Which of the following types of annuities would be
best suited for a retired couple who are seeking income for as long as either lives? Alien Insurer - London Mutual
Life is an insurer incorporated in England, and is transacting business in this state. London Muthal would be
considered what type of insurer? Medical Information on applicants for life and health insurance - The MIB is a
nonprofit trade association that maintains Grace Period - It's purpose in life insurance policies is to protect the
policy owner against an in intentional lapse of the policy. Limited Payment - What type of permanent insurance
allows the policy owner to pay for a policy in a specified period of time, and the policy owner does not have to make
any more premium payments for the life of the policy? Contest-ability - What does the payor benefit rider protect? 31
days - How long does an employee have to convert group policy coverage to an individual policy without evidence of
insatiability? The portion that exceeds the premiums paid IS taxable - If the cash value exceeds the premiums paid in
a whole life policy, what are the tax consequences if the policy is surrendered? Bobs estate - Betty is the only
beneficiary named on her husband Bob's policy which has a Common Disaster provision (within 90 days death
benefit will go to primary estate) They are in a car wreck, and Bob dies instantly. Betty lives for 29 days. Who will
receive the death benefit? Assignment - The legal transfer of all or part of a policy-owners rights, title or interest is
called an (a) Certificate of Insurance - What do employees covered under a group contract receive? Equity Indexed
Annuity - An annuity in which investment growth is dependent on the performance of an index such as the Standard
and Poor's 500 is called a(n) Payment method of the policy premium - The premium payment mode can be best
described as the 20-pay life - All other factors being equal, which of the following types of policies will accumulate
cash value at the fastest rate.
Save
Insurable Receipt - The receipt given to a life insurance applicant when the application is completed and the initial
premium is received is called a(n) Representations - Statements in the application for insurance that are believed to
be true to the best of the applicants knowledge are Provide the annuitant with an interest rate that is lesser of the
guaranteed or current rate - An annuity is considered fixed when it does all of the following EXCEPT Continuous
Premium (straight) life - The most common type of whole life insurance where premiums are payable over the
whole life of the insured to age 100 is called. Entire contract - The policy and a copy of the application, along with any
riders and amendments, is called the Not taxable - Money borrowed from the policy's cash value is All annuities
(Variable, Refereed & Equity Indexed) - Which of the following annuity products requires an agent to hold a
securities license? Life income annuity - Which type of annuity settlement stops when the annuitant dies? 59 1/2 - At
what age can a participant receive distributions from a qualified plan without incurring a 10% penalty Buy-Sell
Agreement - Two business partners own life insurance on each other. If one partner dies, which of the following
contracts will allow the surviving partner to use the death benefit to purchase the deceased's business interests?
Adjustable life - Which type of policy allows the insured to change the amount of the dwah benefit, the amount of
premium, or the type of coverage S their needs change? Either the cash value or the premiums paid, whichever is
greater - If an annuitant dies during the accumulation period, what will the beneficiary receive? Non admitted - Any
insurer who is NOT approved to do business in this state is considered Insurable Interest Exists - To prevent people
from profiting from a loss, insurers is the certain Adjusts the death benefit based on the premiums that were paid -
If a misstatement of age is discovered during the processing of a life insurance claim what will the insurer do?
Policy Exclusions - Which of the following allows an insurance company to deny coverage of the insurers eewth
occurs in war? Evidence of instability is usually required - Each of the following is a typical characteristic of groups
life insurance EXCEPT Fixed-Period Installments - A life settlement option that pays out the death benefit is.
Incrementally, in a specified amount until all of the proceeds are exhausted, is called Not subject to any taxes - A life
insurance death benefit paid in a lump sum to a beneficiary is Accumulation at Interest - Which of the following is
NOT a non forfeiture option in whole life policies? Annuitant - Which of the following indicates the person upon
whose life the annuity income amount is determined? Single premium immediate annuity - An annuity that is
purchased with a lump-sum payment, and that begins income payments within one year is a Dividends are NOT
taxable - Which statement is INCORRECT concerning policy dividends Substandard - What is the risk classification
for those who are insurable, but have a higher than average risk? The coverage decrease but the premiums stay the
samw - At age 25, an individual purchased a decreasing term policy. What happens to the coverage and the
premiums as the insured gets older? Insurer - An insurance agent represents the Insurance - The transfer of a
possible financial loss to another party refers to Underwriting process - Determine the company's risk regarding a
proposed insured Delivered - An insurer mails an insurance policy to a new policyholder. When the insurer
relinquishes control of the policy, the policy is considered Agents Report - This is the prtbirbthenapplication that
provides information about an applicants diagonal condition and character, as well as the purpose of sale and how
long the agent has known the applicant: Joint Life - A whole life product that covers 2 lives and provides for payment
or the death benefit on the death of the riser insurer is called Free look - An agent delivers a policy to an insured,
and 9 days later the insured returns the policy and wants a complete refund. What provision covers this
circumstance? Accumulation period - The "pay in" phase of the annuity is known as what period? Each party relies
upon the truthfulness of the other - For an insurance contract, the principle of utmost good faith means 403(b)
Tax-Sheltered Annuity (TSAs) - Which of the following retirement plans is a special tax favored plan for NONPROFIT,
charitable, educational or religious groups? Joint and Survivor - Which of the following types of annuities would be
best suited for a retired couple who are seeking income for as long as either lives? Alien Insurer - London Mutual
Life is an insurer incorporated in England, and is transacting business in this state. London Muthal would be
considered what type of insurer? Medical Information on applicants for life and health insurance - The MIB is a
nonprofit trade association that maintains Grace Period - It's purpose in life insurance policies is to protect the
policy owner against an in intentional lapse of the policy. Limited Payment - What type of permanent insurance
allows the policy owner to pay for a policy in a specified period of time, and the policy owner does not have to make
any more premium payments for the life of the policy? Contest-ability - What does the payor benefit rider protect? 31
days - How long does an employee have to convert group policy coverage to an individual policy without evidence of
insatiability? The portion that exceeds the premiums paid IS taxable - If the cash value exceeds the premiums paid in
a whole life policy, what are the tax consequences if the policy is surrendered? Bobs estate - Betty is the only
beneficiary named on her husband Bob's policy which has a Common Disaster provision (within 90 days death
benefit will go to primary estate) They are in a car wreck, and Bob dies instantly. Betty lives for 29 days. Who will
receive the death benefit? Assignment - The legal transfer of all or part of a policy-owners rights, title or interest is
called an (a) Certificate of Insurance - What do employees covered under a group contract receive? Equity Indexed
Annuity - An annuity in which investment growth is dependent on the performance of an index such as the Standard
and Poor's 500 is called a(n) Payment method of the policy premium - The premium payment mode can be best
described as the 20-pay life - All other factors being equal, which of the following types of policies will accumulate
cash value at the fastest rate.
