Wisconsin Life Insurance Exam Prep
Questions And Correct Answers.
Tom has a home health care benefit and is confined to his home. Which of these is NOT typically
covered? - Answer Full-Time Nursing Care
What is created after policy proceeds are obtained in a lump sum and then immediately
invested? - Answer Estate
When are group disability benefits considered to be tax-free to the insured? - Answer When
the recipient pays the premiums
Which of the following describes a person who is NOT acceptable by an insurer at standard
rates because of health history, occupation, or hobbies? - Answer Substandard Risk
The ________________ decides on the suitability of a disability (accident & health) policy for an
applicant. - Answer intermediary
An intermediary must hold which of the following licenses to sell variable life insurance policies?
- Answer Life, variable, and securities license
An insurer's claim settlement practices are regulated by the - Answer State insurance
departments
A type of insurer that is owned by its policyowners is called - Answer mutual
An insurer's ability to make unpredictable payouts to policyowners is called - Answer liquidity
Karen is a producer who has obtained personal information about a client without having a
legitimate reason to do so. Under the McCarren-Ferguson Act, what is the minimum penalty for
this? - Answer $10,000 or up to one year in jail
A life insurance company has transferred some of its risk to another insurer. The insurer
assuming the risk is called the - Answer reinsurer
,Why are dividends from a mutual insurer not subject to taxation? - Answer Because dividends
are considered to be a return of premium
ABC Insurance Company transfers part of their risk to XYZ Insurance Company. This situation is
called - Answer reinsurance
The Fair Credit and Reporting Act's main purpose is to - Answer protect consumers with
guidelines regarding credit reporting and distribuition
A plan in which an employer pays insurance benefits from a fund derived from the employer's
current revenues is called - Answer a self-funded plan
A non participating policy will - Answer not pay dividends
What kind of life insurance policy issued by a mutual insurer provides a return of divisible
surplus? - Answer participating life insurance policy
Fraternal Benefit Society has each of the following characteristics EXCEPT - Answer exist for
profit
A(n) _______________ company is owned by its shareholders - Answer stock
Ken is a producer who has obtained Consumer Information Reports under false pretenses.
Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed on
Ken? - Answer $5,000
What is the primary purpose of a rating service company such as A.M Best? - Answer
determine financial strength of an insurance company
What is considered to be the primary reason for buying life insurance? - Answer provide death
benefits
A nonparticipating company is sometimes called a(n) - Answer stock insurer
,Insurance companies determine risk exposure by which of the following? - Answer law of large
numbers and risk pooling
The cause of a loss is referred to as a(n) - Answer peril
People with higher loss exposure have the tendency to purchase insurance more often than
those at average risk. This is called - Answer adverse selection
Which of the following is considered to be an event or condition that increases the probability
of an insured's loss? - Answer hazard
An example of risk sharing would be - Answer Doctors pooling their money to cover
malpractice exposures
How do insurers predict the increase of individual risks? - Answer law of large numbers
All of the following are examples of pure risk EXCEPT - Answer losing money at a casino
What is known as the immediate specific event causing loss and giving rise to risk? - Answer
peril
An individual who removes the risk of losing money in the stock market by never purchasing
stocks is said to be engaging in - Answer risk avoidance
Which of the following is an example of the insured's consideration? - Answer a paid premium
What makes an insurance policy a unilateral contract? - Answer only the insurer is legally
bound
Which of the following is present when an applicant stands to lose value if the insured dies? -
Answer insurable interest
In order for a contract to be valid, it must - Answer contain an offer and acceptance
, All of the following are elements of an insurance policy EXCEPT - Answer claim forms
What is implied authority defined as? - Answer authority that is not specifically given to an
agent in the agency contract, but that an agent can reasonably assume to carry out his/her
duties
According to the principle of Utmost Good Faith, the insured will answer questions on the
application to the best of their knowledge and pay the required premium, while the insurer will
deal fairly with the insured and it's - Answer promises made
The authority granted to a licensed producer is provided via the - Answer Law of Agency
Under a contract of adhesion, - Answer the terms must be accepted or rejected in full
According to life insurance contract law, insurable interest exists - Answer at the time of
application
In an insurance contract, the element that shows each party is giving something of value is
called - Answer consideration
What are an applicant's statements concerning occupation, hobbies, and personal health
history regarded as? - Answer representation
When the principal gives the agent authority in writing, it's referred to as - Answer express
authority
The power given to an individual producer that is not specifically addressed in his/her contract
is considered what type of authority? - Answer implied authority
Bob and Tom start a business. Since each partner contributes an important element to the
success of the business, they decide to take life insurance policies out on each other, and name
each other as beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12
months later. The policies continue in force with no change. Both partners are still married at
the time of Bob's death. In this situation, who will receive Bob's policy proceeds? - Answer
Tom
Questions And Correct Answers.
Tom has a home health care benefit and is confined to his home. Which of these is NOT typically
covered? - Answer Full-Time Nursing Care
What is created after policy proceeds are obtained in a lump sum and then immediately
invested? - Answer Estate
When are group disability benefits considered to be tax-free to the insured? - Answer When
the recipient pays the premiums
Which of the following describes a person who is NOT acceptable by an insurer at standard
rates because of health history, occupation, or hobbies? - Answer Substandard Risk
The ________________ decides on the suitability of a disability (accident & health) policy for an
applicant. - Answer intermediary
An intermediary must hold which of the following licenses to sell variable life insurance policies?
- Answer Life, variable, and securities license
An insurer's claim settlement practices are regulated by the - Answer State insurance
departments
A type of insurer that is owned by its policyowners is called - Answer mutual
An insurer's ability to make unpredictable payouts to policyowners is called - Answer liquidity
Karen is a producer who has obtained personal information about a client without having a
legitimate reason to do so. Under the McCarren-Ferguson Act, what is the minimum penalty for
this? - Answer $10,000 or up to one year in jail
A life insurance company has transferred some of its risk to another insurer. The insurer
assuming the risk is called the - Answer reinsurer
,Why are dividends from a mutual insurer not subject to taxation? - Answer Because dividends
are considered to be a return of premium
ABC Insurance Company transfers part of their risk to XYZ Insurance Company. This situation is
called - Answer reinsurance
The Fair Credit and Reporting Act's main purpose is to - Answer protect consumers with
guidelines regarding credit reporting and distribuition
A plan in which an employer pays insurance benefits from a fund derived from the employer's
current revenues is called - Answer a self-funded plan
A non participating policy will - Answer not pay dividends
What kind of life insurance policy issued by a mutual insurer provides a return of divisible
surplus? - Answer participating life insurance policy
Fraternal Benefit Society has each of the following characteristics EXCEPT - Answer exist for
profit
A(n) _______________ company is owned by its shareholders - Answer stock
Ken is a producer who has obtained Consumer Information Reports under false pretenses.
Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed on
Ken? - Answer $5,000
What is the primary purpose of a rating service company such as A.M Best? - Answer
determine financial strength of an insurance company
What is considered to be the primary reason for buying life insurance? - Answer provide death
benefits
A nonparticipating company is sometimes called a(n) - Answer stock insurer
,Insurance companies determine risk exposure by which of the following? - Answer law of large
numbers and risk pooling
The cause of a loss is referred to as a(n) - Answer peril
People with higher loss exposure have the tendency to purchase insurance more often than
those at average risk. This is called - Answer adverse selection
Which of the following is considered to be an event or condition that increases the probability
of an insured's loss? - Answer hazard
An example of risk sharing would be - Answer Doctors pooling their money to cover
malpractice exposures
How do insurers predict the increase of individual risks? - Answer law of large numbers
All of the following are examples of pure risk EXCEPT - Answer losing money at a casino
What is known as the immediate specific event causing loss and giving rise to risk? - Answer
peril
An individual who removes the risk of losing money in the stock market by never purchasing
stocks is said to be engaging in - Answer risk avoidance
Which of the following is an example of the insured's consideration? - Answer a paid premium
What makes an insurance policy a unilateral contract? - Answer only the insurer is legally
bound
Which of the following is present when an applicant stands to lose value if the insured dies? -
Answer insurable interest
In order for a contract to be valid, it must - Answer contain an offer and acceptance
, All of the following are elements of an insurance policy EXCEPT - Answer claim forms
What is implied authority defined as? - Answer authority that is not specifically given to an
agent in the agency contract, but that an agent can reasonably assume to carry out his/her
duties
According to the principle of Utmost Good Faith, the insured will answer questions on the
application to the best of their knowledge and pay the required premium, while the insurer will
deal fairly with the insured and it's - Answer promises made
The authority granted to a licensed producer is provided via the - Answer Law of Agency
Under a contract of adhesion, - Answer the terms must be accepted or rejected in full
According to life insurance contract law, insurable interest exists - Answer at the time of
application
In an insurance contract, the element that shows each party is giving something of value is
called - Answer consideration
What are an applicant's statements concerning occupation, hobbies, and personal health
history regarded as? - Answer representation
When the principal gives the agent authority in writing, it's referred to as - Answer express
authority
The power given to an individual producer that is not specifically addressed in his/her contract
is considered what type of authority? - Answer implied authority
Bob and Tom start a business. Since each partner contributes an important element to the
success of the business, they decide to take life insurance policies out on each other, and name
each other as beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12
months later. The policies continue in force with no change. Both partners are still married at
the time of Bob's death. In this situation, who will receive Bob's policy proceeds? - Answer
Tom
