CT LIFE INSURANCE TEST QUESTIONS & ANSWERS
Which of the following is considered an element of a variable life policy?
-Underlying equity investment
-Little or no risk insured
-Guaranteed dividends
-Insurer assumes all the risk - Answers - Underlying equity Investment
A Universal Life policy is sometimes referred to as an unbundled Life Policy because
the owner can see the interest earned, expense charges, and the ____
-Inherent risk
-Commission rate
-Inflation Factor
-Cost of insurance - Answers - Cost of Insurance
Which of these is a legitimate form of life insurance advertisement?
-Stating that the coverage is backed by the Insurance Guaranty Association
-Using misrepresentation when explaining policy provisions
-Defaming another insurer
-Paid celebrity endorsement - Answers - Paid celebrity endorsement
A long-term care rider in a life insurance policy pays a daily benefit in the event of which
of the following?
-Critical illness
-Terminal illness
-Inability of the insured to perform more than 2 Activities of Daily Living (ADL's)
-Inability of the insured to maintain insurance premiums due to unemployment -
Answers - Inability of the insured to perform more than 2 Activities of Daily Living
(ADL's)
D was actively serving in the Marines when he was killed in an automobile accident
while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How
much will D's beneficiary receive?
-Refund of premiums paid plus interest
-Nothing, due to actively serving in the armed forces
-Double the face amount because of death was accidental
-The full face amount - Answers - The full face amount
A limited-pay life policy has:
-Graded death benefits
,-No cash value
-Premium payments limited to a specific number of years
-Premium payments that are paid to age 100 - Answers - Premium payments limited to
a specific number of years
Which of these factors do NOT play a role in the underwriting of a life insurance policy?
-Avocations
-Credit Status
-Marital Status
-Occupation - Answers - Marital Status
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's
death?
-Face amount plus the policy's cash value
-Face amount plus the policy's dividends
-The greater amount of the policy's death benefit or the cash value
-Face amount plus total premium paid throughout the life of the policy - Answers -
Face amount plus the policy's cash value
Convincing a prospective insured to buy an insurance policy based on exaggerations is
called
-Rebating
-Intimidation
-Twisting
-Misrepresentation - Answers - Misrepresentation
B is a producer who only writes insurance business on his business partners. Which of
the following is B engaged in?
-Rebating
-Controlled Business
-Unfair Discrimination
-Sliding - Answers - Controlled Business
How are surrender charges deducted in a life policy with a rear-end loaded provision?
-Deducted from the death benefit
-Deducted when the policy is discontinued
-Deducted from policy's cash value
-Deducted when assigned to another policyowner - Answers - Deducted when the
policy is discontinued
,What is considered a valid reason for small businesses to insure the lives of its major
shareholders?
-To provide an income for the surviving dependents
-Reduce the company's tax liability
-To pay for final expenses
-Fund a buy-sell agreement - Answers - Fund a buy-sell agreement
M has an insurance policy that also has an outstanding policy loan at the time of M's
death. The insurer will deduct the outstanding loan balance from the:
-cash value
-estate of insured
-policy proceeds
-nonforfeiture value - Answers - policy proceeds
Whole life insurance policies are contractually guaranteed to provide each of the
following, EXCEPT:
-cash value that will ultimately replace the death benefit
-nonforfeiture benefit options
-premiums that remain fixed for the life of the policy
-partial withdrawal features beyond a surrender charge period - Answers - partial
withdrawal features beyond a surrender charge period
When a misrepresentation on a life insurance policy application is discovered, what
action may an insurance company take?
-void the policy if found during the Contestable period
-void the policy, no matter when it is discovered
-void the policy at any time only if it is found to be material
-void the policy only if it is discovered during the Contestable period and proven to be
material - Answers - void the policy only if it is discovered during the Contestable
period and proven to be material
At what point must insurable interest exist on a life insurance policy?
-After the Contestable period
-When the policy proceeds are paid
-Upon application being taken
-When the insured dies - Answers - Upon application being taken
Which of the following actions is NOT possible with a Universal Life Policy?
-Policy's cash value may be used to pay premiums
-Premium payments may be made at unscheduled times
, -Premiums may be applied as a credit against income tax
-Face amount may be adjusted - Answers - Premiums may be applied as a credit
against income tax
Which of the following is protected under the Brokered Transactions Guaranty Fund?
-Agency
-Producer
-Insured
-Insurer - Answers - Insured
Why must an insurance applicant answer all questions on the application?
-Statements and representations on the application are part of the consideration for
issuing a policy
-The National Association of Insurance Commissioners (NAIC) requires all questions to
be answered
-Statements are representations are considered guarantees - Answers - Statements
and representations on the application are part of the consideration for issuing a policy
A life insurance policy provides a policyowner with cash value along with a level face
amount is called:
-Whole life
-Level term
-Credit life
-Ordinary life - Answers - Whole life
A policy loan is made possible by which of these life insurance policy features?
-Extended term provision
-Cash value provision
-Owner's rights provision
-Consideration clause - Answers - Cash value provision
In Connecticut, a producer cannot use his/her license for primarily writing controlled
business. In order to conform to this requirement, annual premiums collected on
controlled business cannot exceed ___ of total premiums.
-10%
-15%
-25%
-50% - Answers - 10%
How are Roth IRA distributions normally taxed?
Which of the following is considered an element of a variable life policy?
-Underlying equity investment
-Little or no risk insured
-Guaranteed dividends
-Insurer assumes all the risk - Answers - Underlying equity Investment
A Universal Life policy is sometimes referred to as an unbundled Life Policy because
the owner can see the interest earned, expense charges, and the ____
-Inherent risk
-Commission rate
-Inflation Factor
-Cost of insurance - Answers - Cost of Insurance
Which of these is a legitimate form of life insurance advertisement?
-Stating that the coverage is backed by the Insurance Guaranty Association
-Using misrepresentation when explaining policy provisions
-Defaming another insurer
-Paid celebrity endorsement - Answers - Paid celebrity endorsement
A long-term care rider in a life insurance policy pays a daily benefit in the event of which
of the following?
-Critical illness
-Terminal illness
-Inability of the insured to perform more than 2 Activities of Daily Living (ADL's)
-Inability of the insured to maintain insurance premiums due to unemployment -
Answers - Inability of the insured to perform more than 2 Activities of Daily Living
(ADL's)
D was actively serving in the Marines when he was killed in an automobile accident
while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How
much will D's beneficiary receive?
-Refund of premiums paid plus interest
-Nothing, due to actively serving in the armed forces
-Double the face amount because of death was accidental
-The full face amount - Answers - The full face amount
A limited-pay life policy has:
-Graded death benefits
,-No cash value
-Premium payments limited to a specific number of years
-Premium payments that are paid to age 100 - Answers - Premium payments limited to
a specific number of years
Which of these factors do NOT play a role in the underwriting of a life insurance policy?
-Avocations
-Credit Status
-Marital Status
-Occupation - Answers - Marital Status
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's
death?
-Face amount plus the policy's cash value
-Face amount plus the policy's dividends
-The greater amount of the policy's death benefit or the cash value
-Face amount plus total premium paid throughout the life of the policy - Answers -
Face amount plus the policy's cash value
Convincing a prospective insured to buy an insurance policy based on exaggerations is
called
-Rebating
-Intimidation
-Twisting
-Misrepresentation - Answers - Misrepresentation
B is a producer who only writes insurance business on his business partners. Which of
the following is B engaged in?
-Rebating
-Controlled Business
-Unfair Discrimination
-Sliding - Answers - Controlled Business
How are surrender charges deducted in a life policy with a rear-end loaded provision?
-Deducted from the death benefit
-Deducted when the policy is discontinued
-Deducted from policy's cash value
-Deducted when assigned to another policyowner - Answers - Deducted when the
policy is discontinued
,What is considered a valid reason for small businesses to insure the lives of its major
shareholders?
-To provide an income for the surviving dependents
-Reduce the company's tax liability
-To pay for final expenses
-Fund a buy-sell agreement - Answers - Fund a buy-sell agreement
M has an insurance policy that also has an outstanding policy loan at the time of M's
death. The insurer will deduct the outstanding loan balance from the:
-cash value
-estate of insured
-policy proceeds
-nonforfeiture value - Answers - policy proceeds
Whole life insurance policies are contractually guaranteed to provide each of the
following, EXCEPT:
-cash value that will ultimately replace the death benefit
-nonforfeiture benefit options
-premiums that remain fixed for the life of the policy
-partial withdrawal features beyond a surrender charge period - Answers - partial
withdrawal features beyond a surrender charge period
When a misrepresentation on a life insurance policy application is discovered, what
action may an insurance company take?
-void the policy if found during the Contestable period
-void the policy, no matter when it is discovered
-void the policy at any time only if it is found to be material
-void the policy only if it is discovered during the Contestable period and proven to be
material - Answers - void the policy only if it is discovered during the Contestable
period and proven to be material
At what point must insurable interest exist on a life insurance policy?
-After the Contestable period
-When the policy proceeds are paid
-Upon application being taken
-When the insured dies - Answers - Upon application being taken
Which of the following actions is NOT possible with a Universal Life Policy?
-Policy's cash value may be used to pay premiums
-Premium payments may be made at unscheduled times
, -Premiums may be applied as a credit against income tax
-Face amount may be adjusted - Answers - Premiums may be applied as a credit
against income tax
Which of the following is protected under the Brokered Transactions Guaranty Fund?
-Agency
-Producer
-Insured
-Insurer - Answers - Insured
Why must an insurance applicant answer all questions on the application?
-Statements and representations on the application are part of the consideration for
issuing a policy
-The National Association of Insurance Commissioners (NAIC) requires all questions to
be answered
-Statements are representations are considered guarantees - Answers - Statements
and representations on the application are part of the consideration for issuing a policy
A life insurance policy provides a policyowner with cash value along with a level face
amount is called:
-Whole life
-Level term
-Credit life
-Ordinary life - Answers - Whole life
A policy loan is made possible by which of these life insurance policy features?
-Extended term provision
-Cash value provision
-Owner's rights provision
-Consideration clause - Answers - Cash value provision
In Connecticut, a producer cannot use his/her license for primarily writing controlled
business. In order to conform to this requirement, annual premiums collected on
controlled business cannot exceed ___ of total premiums.
-10%
-15%
-25%
-50% - Answers - 10%
How are Roth IRA distributions normally taxed?
