ne
tz
sh
ne
Webce Insurance test questions and answers with complete
la
Solution GRADED A
tz
sh
Sp
ne
la
tz
sh
Sp
ne
la
tz
sh
Sp
ne
Agent Thompson received a letter from the Department of Insurance asking her to
la
provide proof of completing the continuing education requirements. Within how many
tz
days must Agent Thompson respond to the Department's inquiry?
sh
Sp
ne
20
la
30
tz
10
sh
Sp
45 - Answer- 10 days
ne
Abby lives in Ohio, where she is licensed as an insurance producer. She wants to apply
la
tz
for a nonresident license in Pennsylvania. Which of the following conditions must she
sh
satisfy?
Sp
ne
She must move to Pennsylvania.
la
tz
She must surrender her Ohio license. sh
She must be sponsored by a producer licensed in Pennsylvania.
Sp
ne
She must show her Ohio license is in good standing. - Answer- She must show her
Ohio license is in good standing
la
tz
sh
The requirement that an insurable interest must exist when life insurance is purchased
Sp
is intended to prevent people from doing which of the following?
ne
la
using life insurance to fund future cash needs
tz
sh
using life insurance as a speculative investment on another person's
Sp
life
ne
overusing life insurance
la
designating an ineligible person as the policy beneficiary - Answer- using life insurance
tz
sh
as a speculative interest on another person's life
Sp
ne
Which one of the following best describes a policy that has a relatively low face amount
la
and has premiums that are paid to an insurance agent who generally calls on the
tz
policyowner at home to collect them?
sh
Sp
ne
group life insurance
la
sh
Sp
la
Sp
, ne
tz
sh
ne
industrial life insurance la
ordinary term insurance
tz
ordinary whole life insurance - Answer- industrial life insurance
sh
Sp
ne
Sylvia's insurer guarantees a fixed death benefit for the policy she owns. Based on this,
la
which one of the following benefits is also most likely guaranteed with this policy?
tz
sh
Sp
the policy's cash value
ne
her ability to borrow an interest-free loan from the cash value
la
policy dividends
tz
payment of premiums on Sylvia's behalf in the event of emergencies - Answer- the
sh
Sp
policy's cash value
ne
Carl is a policyowner who prefers to pay premiums monthly rather than annually. How
la
tz
will Carl's insurance company adjust his premium to accommodate this request?
sh
Sp
ne
The insurer divides the annual premium by 12 and then adds a modest charge.
The insurer simply divides the annual premium by 12.
la
The insurer divides the annual premium by 12 and then reduces the premium amount
tz
sh
to reflect the fact that premiums will be paid throughout the year.
Sp
ne
The insurer divides the annual premium by 12 and then adds a modest charge in the
first policy year after which premiums equal the annual premium divided by 12. -
la
Answer- The insurer divides the annual premium by 12 and then adds a modest charge
tz
sh
Sp
All of the following statements about key person life insurance are correct, EXCEPT:
ne
la
The business applies for, owns, and is the beneficiary of the policy covering the life of a
tz
key employee.
sh
Sp
Upon the insured employee's death, the employee's surviving family receives the
ne
policy's death benefit.
la
Key person, or key employee, life insurance is an example of third-party ownership.
tz
sh
Life insurance used as key person life is normally owned by the business rather than
Sp
the insured. - Answer- XXX Upon the insured employee's death, the employee's
ne
surviving family receives the policy benefit XXX
la
tz
The activities a producer performs to support the insurance company in learning all it
sh
Sp
can about the applicant when seeking applications for insurance are generally called:
ne
la
field underwriting
tz
fiduciary process
sh
Sp
agency development
ne
due diligence - Answer- field underwriting
la
tz
How is increasing term life insurance normally sold?
sh
Sp
ne
as an endorsement
la
sh
Sp
la
Sp
, ne
tz
sh
ne
as a permanent insurance policy la
as a stand-alone term life insurance policy
tz
as a rider attached to a permanent life insurance policy - Answer- as a rider attached to
sh
Sp
a permanent insurance policy
ne
la
Andrea bought a $300,000 term-to-age-55 policy. All the following statements about her
tz
policy are correct EXCEPT:
sh
Sp
ne
The policy provides $300,000 of coverage until Andrea reaches age 55.
la
The policy will generate a cash value that is payable at age 55.
tz
It is possible that Andrea could convert the term policy to a life insurance policy that
sh
Sp
provides coverage for Andrea's entire life even if she becomes uninsurable.
ne
The premium for the policy stays the same until the policy expires. - Answer- XXX The
policy will generate a cash value that is payable at age 55 XXX
la
tz
sh
Sp
The basic purpose for the re-entry option with a renewable term life insurance policy is
ne
to let the policyowner:
la
reinstate the policy after it has lapsed for nonpayment of premiums without having to
tz
sh
provide evidence of insurability
Sp
ne
convert the term policy to a permanent life insurance policy
renew the policy with a higher face amount without having to provide evidence of
la
insurability
tz
sh
renew the policy at lower current rates rather than guaranteed renewal rates - Answer-
Sp
renew the policy at lower current rates rather than guaranteed renewal rates
ne
la
Term life insurance is well suited for all the following needs EXCEPT:
tz
sh
Sp
mortgage protection
ne
a source of emergency cash for any financial need
la
inexpensive protection until the policyowner can afford permanent life insurance
tz
sh
protection while the family children are living at home or attending college - Answer-
Sp
XXX a source of emergency cash for any financial need XXX
ne
la
Premium rates will vary unpredictably depending on the insurer's actual experience in
tz
which one of the following types of whole life insurance?
sh
Sp
ne
straight whole life
la
current assumption whole life
tz
limited pay whole life
sh
Sp
graded premium whole life - Answer- current assumption whole life
ne
la
Jessica, age 25, buys a $100,000 life insurance policy. The initial premium is lower than
tz
straight whole life rates and increases each year for the first ten years of the policy
sh
Sp
period. After that, the premium levels off and stays at that amount for the life of the
ne
policy. What type of policy does Jessica own?
la
sh
Sp
la
Sp
, ne
tz
sh
ne
10-pay whole life
la
tz
single premium whole life
sh
Sp
graded premium whole life
ne
modified premium whole life - Answer- graded premium whole life
la
tz
Which one of the following statements about variable life insurance is correct?
sh
Sp
ne
Variable life policyowners can invest all of their premiums in the insurer's general
la
account.
tz
Subaccounts are managed within the insurer's general account.
sh
Sp
Variable life policyowners can choose flexible premium payment schedules.
ne
With a variable life insurance policy, the policyowner assumes most of the investment
risk. - Answer- With a variable life insurance policy, the policyowner assumes most of
la
tz
the investment risk.
sh
Sp
ne
Which of the following statements best explains the basic level premium concept of
ordinary whole life insurance?
la
tz
sh
The steady reduction of the policy's net amount at risk offsets the cost of pure
Sp
ne
insurance that rises with age.
Funds are withdrawn from the policy's cash value in the later years to pay the rising
la
cost of pure insurance.
tz
sh
The death benefit is decreased to offset the rising cost of insurance with age.
Sp
The insurer averages the cost of pure insurance over the insured's life expectancy so
ne
that the mortality charge remains level. - Answer- the steady reduction of the policy's net
la
amount at risk offsets the cost of pure insurance that rises with age
tz
sh
Sp
All the following statements about ordinary (straight) whole life insurance are correct
ne
EXCEPT:
la
tz
sh
The insured pays premiums for his or her entire life.
Sp
Premiums remain level.
ne
The death benefit increases during the early policy years and then levels off.
la
It has a steadily increasing cash value. - Answer- XXX the death benefit increases
tz
during the early policy years and then levels off XXX
sh
Sp
ne
Barb, age 40, buys a ten-pay life policy while Jill, age 40, buys a life paid up at age 65
la
policy. All other factors being equal, which of the following statements is most correct?
tz
sh
Sp
Barb and Jill will pay approximately the same monthly premium amount every year, and
ne
their policies will mature at about the same time.
la
Barb will pay a higher monthly premium over a shorter time than Jill, and their policies
tz
will mature at about the same time.
sh
Sp
Jill will pay a higher monthly premium than Barb, and their policies will mature at about
ne
the same time.
la
sh
Sp
la
Sp
tz
sh
ne
Webce Insurance test questions and answers with complete
la
Solution GRADED A
tz
sh
Sp
ne
la
tz
sh
Sp
ne
la
tz
sh
Sp
ne
Agent Thompson received a letter from the Department of Insurance asking her to
la
provide proof of completing the continuing education requirements. Within how many
tz
days must Agent Thompson respond to the Department's inquiry?
sh
Sp
ne
20
la
30
tz
10
sh
Sp
45 - Answer- 10 days
ne
Abby lives in Ohio, where she is licensed as an insurance producer. She wants to apply
la
tz
for a nonresident license in Pennsylvania. Which of the following conditions must she
sh
satisfy?
Sp
ne
She must move to Pennsylvania.
la
tz
She must surrender her Ohio license. sh
She must be sponsored by a producer licensed in Pennsylvania.
Sp
ne
She must show her Ohio license is in good standing. - Answer- She must show her
Ohio license is in good standing
la
tz
sh
The requirement that an insurable interest must exist when life insurance is purchased
Sp
is intended to prevent people from doing which of the following?
ne
la
using life insurance to fund future cash needs
tz
sh
using life insurance as a speculative investment on another person's
Sp
life
ne
overusing life insurance
la
designating an ineligible person as the policy beneficiary - Answer- using life insurance
tz
sh
as a speculative interest on another person's life
Sp
ne
Which one of the following best describes a policy that has a relatively low face amount
la
and has premiums that are paid to an insurance agent who generally calls on the
tz
policyowner at home to collect them?
sh
Sp
ne
group life insurance
la
sh
Sp
la
Sp
, ne
tz
sh
ne
industrial life insurance la
ordinary term insurance
tz
ordinary whole life insurance - Answer- industrial life insurance
sh
Sp
ne
Sylvia's insurer guarantees a fixed death benefit for the policy she owns. Based on this,
la
which one of the following benefits is also most likely guaranteed with this policy?
tz
sh
Sp
the policy's cash value
ne
her ability to borrow an interest-free loan from the cash value
la
policy dividends
tz
payment of premiums on Sylvia's behalf in the event of emergencies - Answer- the
sh
Sp
policy's cash value
ne
Carl is a policyowner who prefers to pay premiums monthly rather than annually. How
la
tz
will Carl's insurance company adjust his premium to accommodate this request?
sh
Sp
ne
The insurer divides the annual premium by 12 and then adds a modest charge.
The insurer simply divides the annual premium by 12.
la
The insurer divides the annual premium by 12 and then reduces the premium amount
tz
sh
to reflect the fact that premiums will be paid throughout the year.
Sp
ne
The insurer divides the annual premium by 12 and then adds a modest charge in the
first policy year after which premiums equal the annual premium divided by 12. -
la
Answer- The insurer divides the annual premium by 12 and then adds a modest charge
tz
sh
Sp
All of the following statements about key person life insurance are correct, EXCEPT:
ne
la
The business applies for, owns, and is the beneficiary of the policy covering the life of a
tz
key employee.
sh
Sp
Upon the insured employee's death, the employee's surviving family receives the
ne
policy's death benefit.
la
Key person, or key employee, life insurance is an example of third-party ownership.
tz
sh
Life insurance used as key person life is normally owned by the business rather than
Sp
the insured. - Answer- XXX Upon the insured employee's death, the employee's
ne
surviving family receives the policy benefit XXX
la
tz
The activities a producer performs to support the insurance company in learning all it
sh
Sp
can about the applicant when seeking applications for insurance are generally called:
ne
la
field underwriting
tz
fiduciary process
sh
Sp
agency development
ne
due diligence - Answer- field underwriting
la
tz
How is increasing term life insurance normally sold?
sh
Sp
ne
as an endorsement
la
sh
Sp
la
Sp
, ne
tz
sh
ne
as a permanent insurance policy la
as a stand-alone term life insurance policy
tz
as a rider attached to a permanent life insurance policy - Answer- as a rider attached to
sh
Sp
a permanent insurance policy
ne
la
Andrea bought a $300,000 term-to-age-55 policy. All the following statements about her
tz
policy are correct EXCEPT:
sh
Sp
ne
The policy provides $300,000 of coverage until Andrea reaches age 55.
la
The policy will generate a cash value that is payable at age 55.
tz
It is possible that Andrea could convert the term policy to a life insurance policy that
sh
Sp
provides coverage for Andrea's entire life even if she becomes uninsurable.
ne
The premium for the policy stays the same until the policy expires. - Answer- XXX The
policy will generate a cash value that is payable at age 55 XXX
la
tz
sh
Sp
The basic purpose for the re-entry option with a renewable term life insurance policy is
ne
to let the policyowner:
la
reinstate the policy after it has lapsed for nonpayment of premiums without having to
tz
sh
provide evidence of insurability
Sp
ne
convert the term policy to a permanent life insurance policy
renew the policy with a higher face amount without having to provide evidence of
la
insurability
tz
sh
renew the policy at lower current rates rather than guaranteed renewal rates - Answer-
Sp
renew the policy at lower current rates rather than guaranteed renewal rates
ne
la
Term life insurance is well suited for all the following needs EXCEPT:
tz
sh
Sp
mortgage protection
ne
a source of emergency cash for any financial need
la
inexpensive protection until the policyowner can afford permanent life insurance
tz
sh
protection while the family children are living at home or attending college - Answer-
Sp
XXX a source of emergency cash for any financial need XXX
ne
la
Premium rates will vary unpredictably depending on the insurer's actual experience in
tz
which one of the following types of whole life insurance?
sh
Sp
ne
straight whole life
la
current assumption whole life
tz
limited pay whole life
sh
Sp
graded premium whole life - Answer- current assumption whole life
ne
la
Jessica, age 25, buys a $100,000 life insurance policy. The initial premium is lower than
tz
straight whole life rates and increases each year for the first ten years of the policy
sh
Sp
period. After that, the premium levels off and stays at that amount for the life of the
ne
policy. What type of policy does Jessica own?
la
sh
Sp
la
Sp
, ne
tz
sh
ne
10-pay whole life
la
tz
single premium whole life
sh
Sp
graded premium whole life
ne
modified premium whole life - Answer- graded premium whole life
la
tz
Which one of the following statements about variable life insurance is correct?
sh
Sp
ne
Variable life policyowners can invest all of their premiums in the insurer's general
la
account.
tz
Subaccounts are managed within the insurer's general account.
sh
Sp
Variable life policyowners can choose flexible premium payment schedules.
ne
With a variable life insurance policy, the policyowner assumes most of the investment
risk. - Answer- With a variable life insurance policy, the policyowner assumes most of
la
tz
the investment risk.
sh
Sp
ne
Which of the following statements best explains the basic level premium concept of
ordinary whole life insurance?
la
tz
sh
The steady reduction of the policy's net amount at risk offsets the cost of pure
Sp
ne
insurance that rises with age.
Funds are withdrawn from the policy's cash value in the later years to pay the rising
la
cost of pure insurance.
tz
sh
The death benefit is decreased to offset the rising cost of insurance with age.
Sp
The insurer averages the cost of pure insurance over the insured's life expectancy so
ne
that the mortality charge remains level. - Answer- the steady reduction of the policy's net
la
amount at risk offsets the cost of pure insurance that rises with age
tz
sh
Sp
All the following statements about ordinary (straight) whole life insurance are correct
ne
EXCEPT:
la
tz
sh
The insured pays premiums for his or her entire life.
Sp
Premiums remain level.
ne
The death benefit increases during the early policy years and then levels off.
la
It has a steadily increasing cash value. - Answer- XXX the death benefit increases
tz
during the early policy years and then levels off XXX
sh
Sp
ne
Barb, age 40, buys a ten-pay life policy while Jill, age 40, buys a life paid up at age 65
la
policy. All other factors being equal, which of the following statements is most correct?
tz
sh
Sp
Barb and Jill will pay approximately the same monthly premium amount every year, and
ne
their policies will mature at about the same time.
la
Barb will pay a higher monthly premium over a shorter time than Jill, and their policies
tz
will mature at about the same time.
sh
Sp
Jill will pay a higher monthly premium than Barb, and their policies will mature at about
ne
the same time.
la
sh
Sp
la
Sp
