Insurance Test Cheat Sheet
________ insurance is often the default nonforfeiture option in the event of nonpayment of
premiums - ANS - Extended term
\A ______ day notice to the policyholder is required for any health insurer that wishes to cancel
a health insurance policy - ANS - 45
\A ________ contract allows a policyowner to sell a life insurance policy for more than its cash
value - ANS - Life Settlement
\A ________ provision will keep a Whole Life policy in force if a required premium payment is
not made and there is a sufficient cash value - ANS - Automatic Policy Loan
\A _________ is authorized to assign a Life Insurance policy for as collateral for a loan: - ANS -
Policyowner
\A __________ option is a method of distributing a Life Insurance policy's death benefit OTHER
than a lump sum payment. - ANS - Settlement
\A _____________ life insurance policy is whole life insurance with a death benefit rider of
increasing term insurance equal to the amount of premiums paid - ANS - Return of Premium
\A "term" rider may be used to include coverage for: - ANS - Children under their parents' life
insurance policy.
\a 10 year Convertible Term contains what feature? - ANS - Renewability
\A 401(k) plan normally provides participants: - ANS - Salary Deferral Contributions
\A Basic Hospital Policy pays: - ANS - Hospital room and board
\A conditional receipt indicates that certain conditions must be in order for: - ANS - The
insurance coverage to go into effect
\A Disability Buy-Sell Contract permits: - ANS - The remaining partners to buy-out the interest of
a disabled business partner
\A Fixed Deferred Annuity pays out: - ANS - A fixed amount for life STARTING at a future date
\A fixed level premium is an element of what Life policy? - ANS - Variable
\A guaranteed insurability rider guarantees the insured the option of: - ANS - Purchasing
additional amounts of disability income coverage at predetermined times without requiring the
insured to provide evidence of insurability.
\A Health Reimbursement Arrangement MUST be established by: - ANS - The employer
\A level premium indicates: - ANS - The premium is fixed for the entire duration of the contract
\A Life Insurance policy's grace period entitles the insured a period of No LESS than: - ANS - 30
days, to make premium payment
\A life policy with a death benefit and cash value that can fluctuate according to the performance
of its underlying investment portfolio is referred to as: - ANS - Variable Life
\A LIMITED pay life policy has premium payments limited to: - ANS - A specified number of
years
\A Limited-Pay Life policy has: - ANS - premium payments limited to a specified number of years
\A major medical policy typically: - ANS - provides benefits for reasonable and necessary
medical expenses, subject to policy limits
, \A Medicare Supplement policy would provide the subscriber the best coverage for: - ANS -
Excess Charges (and hospital stays)
\A mutual insurance company is owned by: - ANS - Its policyholders
\A pension deficiency if the key employee dies is NOT a reason for a business to buy: - ANS -
Key Person Life Insurance
\A policy that promises to pay the face amount on the death of first of two lives covered by the
policy is called a: - ANS - Joint Life Policy
\A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash
value at a faster rate than in the early years of the policy. Whaat statement made by the
producer would be CORRECT? - ANS - 20-Pay Life accumulates cash value faster than Straight
Life
\A sole proprietor may use a _______ plan ONLY if the employees of this business are included.
- ANS - Keogh Pension Plan
\A sole proprietor may use what plan ONLY if the employees of this business are included? -
ANS - Keogh Pension Plan
\A stock insurance company is owned exclusively by: - ANS - Its shareholders
\A term coverage that allows the continuation of coverage after expiration of the initial policy
period is a: - ANS - Renewable (term coverage)
\A TRUE statement regarding a Variable Whole Life policy is: - ANS - A minimum guaranteed
Death benefit is provided
\A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid a: -
ANS - Mandatory income tax withholding on the transfer amount
\A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid: -
ANS - A mandatory income tax on the transfer amount
\A unilateral contract means: - ANS - Only one party (the insurer) makes any kind of enforceable
promise
\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: - ANS - Cost of Insurance
\A variable life insurance agent must be licensed and appointed as a life and variable contract
agent as well as a(n): - ANS - Broker Dealer
\A Whole Life Insurance policyowner does NOT have the right to: - ANS - Change the grace
period
\A(n) ______ of benefits of a Health Policy transfers payments to someone other than the
policyowner - ANS - Asssignment
\According to Florida law, a Group Life insurance policy requires a minimum of how many
insureds? - ANS - No minimum
\According to Florida Law, when must an agent deliver the Outline of Coverage to a Medicare
Supplement Applicant? - ANS - At the time of application
\According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time
after the premium due date during which the policy remains in force even though the premium
has not been paid? - ANS - 31 Days
\Additional coverage can be added to a Whole Life policy by adding a(n): - ANS - Decreasing
Term Rider (coverage decreases over time)
________ insurance is often the default nonforfeiture option in the event of nonpayment of
premiums - ANS - Extended term
\A ______ day notice to the policyholder is required for any health insurer that wishes to cancel
a health insurance policy - ANS - 45
\A ________ contract allows a policyowner to sell a life insurance policy for more than its cash
value - ANS - Life Settlement
\A ________ provision will keep a Whole Life policy in force if a required premium payment is
not made and there is a sufficient cash value - ANS - Automatic Policy Loan
\A _________ is authorized to assign a Life Insurance policy for as collateral for a loan: - ANS -
Policyowner
\A __________ option is a method of distributing a Life Insurance policy's death benefit OTHER
than a lump sum payment. - ANS - Settlement
\A _____________ life insurance policy is whole life insurance with a death benefit rider of
increasing term insurance equal to the amount of premiums paid - ANS - Return of Premium
\A "term" rider may be used to include coverage for: - ANS - Children under their parents' life
insurance policy.
\a 10 year Convertible Term contains what feature? - ANS - Renewability
\A 401(k) plan normally provides participants: - ANS - Salary Deferral Contributions
\A Basic Hospital Policy pays: - ANS - Hospital room and board
\A conditional receipt indicates that certain conditions must be in order for: - ANS - The
insurance coverage to go into effect
\A Disability Buy-Sell Contract permits: - ANS - The remaining partners to buy-out the interest of
a disabled business partner
\A Fixed Deferred Annuity pays out: - ANS - A fixed amount for life STARTING at a future date
\A fixed level premium is an element of what Life policy? - ANS - Variable
\A guaranteed insurability rider guarantees the insured the option of: - ANS - Purchasing
additional amounts of disability income coverage at predetermined times without requiring the
insured to provide evidence of insurability.
\A Health Reimbursement Arrangement MUST be established by: - ANS - The employer
\A level premium indicates: - ANS - The premium is fixed for the entire duration of the contract
\A Life Insurance policy's grace period entitles the insured a period of No LESS than: - ANS - 30
days, to make premium payment
\A life policy with a death benefit and cash value that can fluctuate according to the performance
of its underlying investment portfolio is referred to as: - ANS - Variable Life
\A LIMITED pay life policy has premium payments limited to: - ANS - A specified number of
years
\A Limited-Pay Life policy has: - ANS - premium payments limited to a specified number of years
\A major medical policy typically: - ANS - provides benefits for reasonable and necessary
medical expenses, subject to policy limits
, \A Medicare Supplement policy would provide the subscriber the best coverage for: - ANS -
Excess Charges (and hospital stays)
\A mutual insurance company is owned by: - ANS - Its policyholders
\A pension deficiency if the key employee dies is NOT a reason for a business to buy: - ANS -
Key Person Life Insurance
\A policy that promises to pay the face amount on the death of first of two lives covered by the
policy is called a: - ANS - Joint Life Policy
\A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash
value at a faster rate than in the early years of the policy. Whaat statement made by the
producer would be CORRECT? - ANS - 20-Pay Life accumulates cash value faster than Straight
Life
\A sole proprietor may use a _______ plan ONLY if the employees of this business are included.
- ANS - Keogh Pension Plan
\A sole proprietor may use what plan ONLY if the employees of this business are included? -
ANS - Keogh Pension Plan
\A stock insurance company is owned exclusively by: - ANS - Its shareholders
\A term coverage that allows the continuation of coverage after expiration of the initial policy
period is a: - ANS - Renewable (term coverage)
\A TRUE statement regarding a Variable Whole Life policy is: - ANS - A minimum guaranteed
Death benefit is provided
\A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid a: -
ANS - Mandatory income tax withholding on the transfer amount
\A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid: -
ANS - A mandatory income tax on the transfer amount
\A unilateral contract means: - ANS - Only one party (the insurer) makes any kind of enforceable
promise
\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: - ANS - Cost of Insurance
\A variable life insurance agent must be licensed and appointed as a life and variable contract
agent as well as a(n): - ANS - Broker Dealer
\A Whole Life Insurance policyowner does NOT have the right to: - ANS - Change the grace
period
\A(n) ______ of benefits of a Health Policy transfers payments to someone other than the
policyowner - ANS - Asssignment
\According to Florida law, a Group Life insurance policy requires a minimum of how many
insureds? - ANS - No minimum
\According to Florida Law, when must an agent deliver the Outline of Coverage to a Medicare
Supplement Applicant? - ANS - At the time of application
\According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time
after the premium due date during which the policy remains in force even though the premium
has not been paid? - ANS - 31 Days
\Additional coverage can be added to a Whole Life policy by adding a(n): - ANS - Decreasing
Term Rider (coverage decreases over time)
