Life & Health Insurance Exam Questions AND Correct Answers
A buy-sell agreement in which the business buys the
deceased owner's interest in the business is known as a(an)
_______________plan. - ✔✔Entity: Under an entity plan, the
business buys the interest or shares of a deceased partner or
shareholder using insurance to fund the buy-sell agreement.
A child of a totally disabled worker is eligible to receive a
monthly social security benefit until what age? - ✔✔18: A
child of a totally disabled worker is eligible to receive a
monthly social security benefit until age 18.
A customer has purchased over a dozen life insurance and
annuity contracts over the past year, using cashier's checks to
pay the premiums. If this action is part of a money laundering
operation, what stage does it represent? - ✔✔layering stage:
Money laundering is a process that moves illegal money
through three stages on its way to apparent legitimacy:
placement, layering, and integration. The second stage,
layering, is achieved by using cash or cash equivalents to
purchase multiple financial instruments that can
subsequently be converted into clean money.
A customer has purchased over a dozen life insurance and
annuity contracts over the past year, using cashier's checks to
pay the premiums. If this action is part of a money laundering
operation, what stage does it represent? - ✔✔layering stage:
Money laundering is a process that moves illegal money
through three stages on its way to apparent legitimacy:
,placement, layering, and integration. The second stage,
layering, is achieved by using cash or cash equivalents to
purchase multiple financial instruments that can
subsequently be converted into clean money.
A group insurance plan that is paid entirely by the group
sponsor is known as a - ✔✔non-contributory plan: A non-
contributory plan is one in which the group sponsor pays the
entire premium amount.
A group of people who agree to pro-rate and share the losses
suffered by other members is called a(an) ______________
insurer. - ✔✔Reciprocal: A group of people who agree to pro-
rate and share the losses suffered by other members is called
a reciprocal insurer.
A hurricane is an example of a(n) - ✔✔Peril: A hurricane is an
example of a peril. A peril is a condition that involves danger
or risk and is the cause of a loss. Insurance policies are
written to provide financial protection against losses from
stated perils.
A married couple is insured under a joint life policy. The first
spouse dies. What can the surviving spouse do with the
policy? - ✔✔The surviving spouse may convert the policy
without proving insurability. When the first spouse dies in a
joint life policy, the surviving spouse has a conversion right
that allows him or her to buy an individual policy with the
,same or lesser face amount. The surviving insured does not
have to prove insurability.
A policy's effective coverage date begins on - ✔✔the date of
the receipt of a first payment or the date of a medical exam,
if required. The date of the receipt of a first payment or the
date of a medical exam, if required, controls when the
insurance coverage goes into effect. A binding or conditional
receipt identifies this date when the premium is submitted
with the application. If the premium is not submitted until
the policy is delivered, the date the applicant pays the first
premium is still the effective date of coverage.
A policy's effective coverage date begins on - ✔✔the date of
the receipt of a first payment or the date of a medical exam,
if required. The date of the receipt of a first payment or the
date of a medical exam, if required, controls when the
insurance coverage goes into effect. A binding or conditional
receipt identifies this date when the premium is submitted
with the application. If the premium is not submitted until
the policy is delivered, the date the applicant pays the first
premium is still the effective date of coverage.
A policyowner can access the cash value of many life
insurance policies through withdrawals, loans, or policy
surrender. Which of the following terms describes the ability
to easily convert life insurance into cash? - ✔✔Liquidity: An
investment with liquidity is easy to convert into cash. Life
, insurance policies with cash accumulation features offer
important liquidity options such as loans or withdrawals.
A policyowner can normally borrow against a policy's cash
value after the policy has been in force for ___ years. - ✔✔3:
A policyowner can normally borrow against a policy's cash
value after the policy has been in force for 3 years.
A premium receipt that guarantees coverage for the period
after the application is signed and before the underwriter
makes a decision is called a - ✔✔binding receipt: A binding
receipt guarantees temporary coverage for the applicant for
the entire underwriting period. This holds true even if the
insured is later found to be uninsurable.
A premium receipt that guarantees coverage for the period
after the application is signed and before the underwriter
makes a decision is called a - ✔✔binding receipt: A binding
receipt guarantees temporary coverage for the applicant for
the entire underwriting period. This holds true even if the
insured is later found to be uninsurable.
A producer must be licensed by the Financial Industry
Regulatory Authority (FINRA) to sell which one of the
following types of life insurance? - ✔✔variable life insurance:
Producers who sell variable life products must hold both a life
insurance license and a NASD Series 6 or 7 securities license.
A buy-sell agreement in which the business buys the
deceased owner's interest in the business is known as a(an)
_______________plan. - ✔✔Entity: Under an entity plan, the
business buys the interest or shares of a deceased partner or
shareholder using insurance to fund the buy-sell agreement.
A child of a totally disabled worker is eligible to receive a
monthly social security benefit until what age? - ✔✔18: A
child of a totally disabled worker is eligible to receive a
monthly social security benefit until age 18.
A customer has purchased over a dozen life insurance and
annuity contracts over the past year, using cashier's checks to
pay the premiums. If this action is part of a money laundering
operation, what stage does it represent? - ✔✔layering stage:
Money laundering is a process that moves illegal money
through three stages on its way to apparent legitimacy:
placement, layering, and integration. The second stage,
layering, is achieved by using cash or cash equivalents to
purchase multiple financial instruments that can
subsequently be converted into clean money.
A customer has purchased over a dozen life insurance and
annuity contracts over the past year, using cashier's checks to
pay the premiums. If this action is part of a money laundering
operation, what stage does it represent? - ✔✔layering stage:
Money laundering is a process that moves illegal money
through three stages on its way to apparent legitimacy:
,placement, layering, and integration. The second stage,
layering, is achieved by using cash or cash equivalents to
purchase multiple financial instruments that can
subsequently be converted into clean money.
A group insurance plan that is paid entirely by the group
sponsor is known as a - ✔✔non-contributory plan: A non-
contributory plan is one in which the group sponsor pays the
entire premium amount.
A group of people who agree to pro-rate and share the losses
suffered by other members is called a(an) ______________
insurer. - ✔✔Reciprocal: A group of people who agree to pro-
rate and share the losses suffered by other members is called
a reciprocal insurer.
A hurricane is an example of a(n) - ✔✔Peril: A hurricane is an
example of a peril. A peril is a condition that involves danger
or risk and is the cause of a loss. Insurance policies are
written to provide financial protection against losses from
stated perils.
A married couple is insured under a joint life policy. The first
spouse dies. What can the surviving spouse do with the
policy? - ✔✔The surviving spouse may convert the policy
without proving insurability. When the first spouse dies in a
joint life policy, the surviving spouse has a conversion right
that allows him or her to buy an individual policy with the
,same or lesser face amount. The surviving insured does not
have to prove insurability.
A policy's effective coverage date begins on - ✔✔the date of
the receipt of a first payment or the date of a medical exam,
if required. The date of the receipt of a first payment or the
date of a medical exam, if required, controls when the
insurance coverage goes into effect. A binding or conditional
receipt identifies this date when the premium is submitted
with the application. If the premium is not submitted until
the policy is delivered, the date the applicant pays the first
premium is still the effective date of coverage.
A policy's effective coverage date begins on - ✔✔the date of
the receipt of a first payment or the date of a medical exam,
if required. The date of the receipt of a first payment or the
date of a medical exam, if required, controls when the
insurance coverage goes into effect. A binding or conditional
receipt identifies this date when the premium is submitted
with the application. If the premium is not submitted until
the policy is delivered, the date the applicant pays the first
premium is still the effective date of coverage.
A policyowner can access the cash value of many life
insurance policies through withdrawals, loans, or policy
surrender. Which of the following terms describes the ability
to easily convert life insurance into cash? - ✔✔Liquidity: An
investment with liquidity is easy to convert into cash. Life
, insurance policies with cash accumulation features offer
important liquidity options such as loans or withdrawals.
A policyowner can normally borrow against a policy's cash
value after the policy has been in force for ___ years. - ✔✔3:
A policyowner can normally borrow against a policy's cash
value after the policy has been in force for 3 years.
A premium receipt that guarantees coverage for the period
after the application is signed and before the underwriter
makes a decision is called a - ✔✔binding receipt: A binding
receipt guarantees temporary coverage for the applicant for
the entire underwriting period. This holds true even if the
insured is later found to be uninsurable.
A premium receipt that guarantees coverage for the period
after the application is signed and before the underwriter
makes a decision is called a - ✔✔binding receipt: A binding
receipt guarantees temporary coverage for the applicant for
the entire underwriting period. This holds true even if the
insured is later found to be uninsurable.
A producer must be licensed by the Financial Industry
Regulatory Authority (FINRA) to sell which one of the
following types of life insurance? - ✔✔variable life insurance:
Producers who sell variable life products must hold both a life
insurance license and a NASD Series 6 or 7 securities license.
