Missouri Life Insurance Exam questions
with complete solutions A+ passed
A qualified retirement plan in which the employee can set aside a portion of their income with
pre-tax dollars. - correct answer ✔✔401(k) Plan
Absolute: A permanent and irrevocable transfer of rights and/or benefits by the policyowner.
Collateral: A temporary and/or revocable transfer of benefits by the policyowner - correct
answer ✔✔Absolute Assignment v. Collateral Assignment
Policy provision that allows full or partial payment of the policy's death benefit before the
insured's death if he/she is terminally ill. - correct answer ✔✔Accelerated Death Benefit
An extra cost rider that requires the insurance company to pay an additional benefit in the
event that the insured dies within 90 days of an accident as a direct result of the accident. -
correct answer ✔✔Accidental Death Benefit
The Dividend Option where the policyowner leaves the dividends with the insurer to invest and
earn interest. - correct answer ✔✔Accumulate at Interest
Since the insurer created all the documents of the contract, any ambiguities in the contract will
be settled in favor of the insured. Since the insurer wrote the contract they are stuck with it. -
correct answer ✔✔Adhesion
The tendency for less favorable risks to seek or continue insurance to a greater extent than
more favorable risks. - correct answer ✔✔Adverse Selection
,A legal document containing the terms of the agreement between the agent and the insurance
company. It clearly defines what an agent can and cannot do, and how he/she will be
compensated. - correct answer ✔✔Agency Agreement or Agency Contract
Expressed: Power or authority specifically
granted in writing to an agent by the insurance
company in their Agency Agreement.
Apparent: Power or authority that the public reasonably assumes an agent has based upon
his/her actions.
Implied: Power or authority that is not
expressly granted by the company but that an
agent can assume or that are implied he/she has
in order to transact insurance business. - correct answer ✔✔Agent Authorities
Anyone who sells or aids in the selling of insurance. Legally represents the company. - correct
answer ✔✔Agent/Producer
A written report from the agent submitted to the insurer along with the application disclosing
what the agent knows, observed, or learned about the proposed insured's risks. - correct
answer ✔✔Agent's Report
Unequal exchange of value. One party may obtain a far greater value than the other under the
contract. - correct answer ✔✔Aleatory
A Term Life Insurance contract which gives the policyowner the option to renew the policy each
year without showing proof of insurability. Premiums increase at each renewal. - correct answer
✔✔Annual Renewable Term
, The person that buys an annuity; may or may not be an annuity's policyowner. - correct answer
✔✔Annuitant
A contract/policy that guarantees to pay income for a specified period of time or for the life of
the annuitant. Designed to prevent people from outliving their savings. - correct answer
✔✔Annuity
Authorization of an agent/producer by an insurer to represent the company. - correct answer
✔✔Appointment
The period of time between the youngest child turning 16 and the widow(er) reaching
retirement age during which no Social Security Survivor Benefits are paid to the surviving
spouse. - correct answer ✔✔Blackout Period
Business use of Life Insurance where partners in a business buy life insurance on each other.
They agree that when one of them dies the survivors have the right to purchase the deceased
partner's share of the business. The death benefit from the insurance is used to finance the
purchase. - correct answer ✔✔Buy-Sell Agreement
Policyowner receives a lump-sum payment of the current cash value of the policy upon
surrender of the policy. The policy cannot be reinstated. - correct answer ✔✔Cash
Nonforfeiture Option
Upon maturity of an insurance policy the beneficiary receives a lump-sum payment of the entire
policy proceeds due. - correct answer ✔✔Cash Settlement Option
That part of an insurance policy that is the equity amount legally available to the policyowner.
The cash value accumulates throughout the duration of the policy. Also known as living benefit
or policy savings. - correct answer ✔✔Cash Value
with complete solutions A+ passed
A qualified retirement plan in which the employee can set aside a portion of their income with
pre-tax dollars. - correct answer ✔✔401(k) Plan
Absolute: A permanent and irrevocable transfer of rights and/or benefits by the policyowner.
Collateral: A temporary and/or revocable transfer of benefits by the policyowner - correct
answer ✔✔Absolute Assignment v. Collateral Assignment
Policy provision that allows full or partial payment of the policy's death benefit before the
insured's death if he/she is terminally ill. - correct answer ✔✔Accelerated Death Benefit
An extra cost rider that requires the insurance company to pay an additional benefit in the
event that the insured dies within 90 days of an accident as a direct result of the accident. -
correct answer ✔✔Accidental Death Benefit
The Dividend Option where the policyowner leaves the dividends with the insurer to invest and
earn interest. - correct answer ✔✔Accumulate at Interest
Since the insurer created all the documents of the contract, any ambiguities in the contract will
be settled in favor of the insured. Since the insurer wrote the contract they are stuck with it. -
correct answer ✔✔Adhesion
The tendency for less favorable risks to seek or continue insurance to a greater extent than
more favorable risks. - correct answer ✔✔Adverse Selection
,A legal document containing the terms of the agreement between the agent and the insurance
company. It clearly defines what an agent can and cannot do, and how he/she will be
compensated. - correct answer ✔✔Agency Agreement or Agency Contract
Expressed: Power or authority specifically
granted in writing to an agent by the insurance
company in their Agency Agreement.
Apparent: Power or authority that the public reasonably assumes an agent has based upon
his/her actions.
Implied: Power or authority that is not
expressly granted by the company but that an
agent can assume or that are implied he/she has
in order to transact insurance business. - correct answer ✔✔Agent Authorities
Anyone who sells or aids in the selling of insurance. Legally represents the company. - correct
answer ✔✔Agent/Producer
A written report from the agent submitted to the insurer along with the application disclosing
what the agent knows, observed, or learned about the proposed insured's risks. - correct
answer ✔✔Agent's Report
Unequal exchange of value. One party may obtain a far greater value than the other under the
contract. - correct answer ✔✔Aleatory
A Term Life Insurance contract which gives the policyowner the option to renew the policy each
year without showing proof of insurability. Premiums increase at each renewal. - correct answer
✔✔Annual Renewable Term
, The person that buys an annuity; may or may not be an annuity's policyowner. - correct answer
✔✔Annuitant
A contract/policy that guarantees to pay income for a specified period of time or for the life of
the annuitant. Designed to prevent people from outliving their savings. - correct answer
✔✔Annuity
Authorization of an agent/producer by an insurer to represent the company. - correct answer
✔✔Appointment
The period of time between the youngest child turning 16 and the widow(er) reaching
retirement age during which no Social Security Survivor Benefits are paid to the surviving
spouse. - correct answer ✔✔Blackout Period
Business use of Life Insurance where partners in a business buy life insurance on each other.
They agree that when one of them dies the survivors have the right to purchase the deceased
partner's share of the business. The death benefit from the insurance is used to finance the
purchase. - correct answer ✔✔Buy-Sell Agreement
Policyowner receives a lump-sum payment of the current cash value of the policy upon
surrender of the policy. The policy cannot be reinstated. - correct answer ✔✔Cash
Nonforfeiture Option
Upon maturity of an insurance policy the beneficiary receives a lump-sum payment of the entire
policy proceeds due. - correct answer ✔✔Cash Settlement Option
That part of an insurance policy that is the equity amount legally available to the policyowner.
The cash value accumulates throughout the duration of the policy. Also known as living benefit
or policy savings. - correct answer ✔✔Cash Value
