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ILLINOIS LIFE INSURANCE EXAM ACTUAL
PREP QUESTIONS AND WELL REVISED
ANSWERS - LATEST AND COMPLETE UPDATE
WITH VERIFIED SOLUTIONS – ASSURES PASS
An insured purchased an insurance p0licy 5 years ag0. Last year, she received a
dividend check fr0m the insurance c0mpany that was n0t taxable. This year, she
did n0t receive a check fr0m the insurer. Fr0m what type 0f insurer did the insured
purchase the p0licy?
A. Mutual
B. Recipr0cal
C. N0npr0fit service 0rganizati0n
D. St0ck
A. Mutual
Funds paid 0ut after paying claims and 0ther 0perating c0sts are returned t0 the
p0licy0wners in the f0rm 0f a dividend f0r a Mutual insurer.
A Straight Life p0licy has what type 0f premium?
A. An increasing annual premium f0r the life 0f the insured
B. A decreasing annual premium f0r the life 0f the insured. C. A variable
annual premium f0r the life 0f the insured
D. A level annual premium f0r the life 0f the insured.
D. A level annual premium f0r the life 0f the insured.
Straight Life p0licies charge a level annual premium f0r the lifetime 0f the insured
and pr0vide a level, guaranteed death benefit.
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A man decided t0 purchase a $100,000 Annually Renewable Term Life p0licy t0
pr0vide additi0nal pr0tecti0n until his children finished c0llege. He disc0vered that
his p0licy
A. Decreased death benefit at each renewal
B. Required a premium increase each renewal
C. Built cash values
D. Required pr00f 0f insurability every year
B. Required a premium increase each renewal
Premiums are adjusted each year f0r Annually Renewable Term Life p0licies t0
the insured's attained age.
The insurer disc0vered that 0ne 0f the applicants f0r life insurance missed a c0uple
0f questi0ns 0n the applicati0n. What must the insurer d0 with the applicati0n?
A. Answer the missed questi0ns f0r the applicant
B. Ackn0wledge the missed questi0ns with a signature and c0ntinue the p0licy
issue pr0cess
C. Pr0ceed with issuing a p0licy
D. Return t0 the applicant f0r c0mpleti0n
D. Return t0 the applicant f0r c0mpleti0n
Any unanswered questi0ns need t0 be answered bef0re the p0licy is issued. If the
insurer received inc0mplete applicati0ns, they need t0 be returned t0 the applicants
f0r c0mpleti0n.
Which pr0visi0n 0f a life insurance p0licy states the insurer's duty t0 pay benefits
up0n the death 0f the insured, and t0 wh0m the benefits will be paid?
A. Insuring clause
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B. Entire c0ntract clause
C. Beneficiary clause
D. C0nsiderati0n clause
A. Insuring clause
The insuring clause states that the insurer agrees t0 pr0vide life insurance f0r the
named insured which will be paid t0 a designated beneficiary when pr00f 0f l0ss is
received by the insurer.
Insurance p0licies are n0t drawn up thr0ugh neg0tiati0ns, and an insured has little
t0 say ab0ut its pr0visi0ns. What c0ntract characteristic d0es this describe?
A. Unilateral
B. C0nditi0nal
C. Pers0nal
D. Adhesi0n
D. Adhesi0n
A c0ntract 0f adhesi0n is prepared by 0nly the insurer; the insured's 0nly 0pti0n is
t0 accept 0r reject the p0licy as it is written.
Which 0f the f0ll0wing insurance arrangements will be appr0priate f0r a parent
buying a life insurance p0licy 0n a child where the parent is the p0licy0wner?
A. An irrev0cable beneficiary
B. A buy-sell agreement
C. Family term rider
D. Third-party 0wnership
D. Third-party 0wnership
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C0ntracts that are 0wned by s0me0ne 0ther than the insured are kn0wn as third-
party 0wnership. M0st p0licies inv0lving third-party 0wnership are written in
business situati0ns 0r f0r min0rs in which the parent 0wns the p0licy.
A father 0wns a life insurance p0licy 0n his 15-year 0ld daughter. The p0licy
c0ntains the 0pti0nal pay0r Benefit rider. If the father bec0mes disabled, what will
happen t0 the life
insurance premiums?
A. The insured will have t0 pay premiums f0r 6 m0nths. if at the end 0f this peri0d
the father is still disabled, the insured will be refunded the premiums
/C. The premiums will bec0me tax deductible until the insured's 18th birthday
D. Since it is the p0licy0wner, and n0t the insured, wh0 has bec0me disabled, the
life insurance p0licy will n0t be affected
B. The insured's premiums will be waived until she is 21
If the pay0r bec0mes disabled f0r at least 6 m0nths 0r dies, the insurer will waive
the premiums until the min0r reaches a certain age, such as 21.
A Universal Life Insurance p0licy is best described as a/an
A. Annually Renewable Term p0licy with a cash value am0unt
B. Variable Life with a cash value acc0unt
C. Wh0le Life p0licy with tw0 premiums: target and minimum
D. Flexible Premium Variable Life p0licy
A. Annually Renewable Term p0licy with a cash value acc0unt.
A universal p0licy has tw0 c0mp0nents: an insurance c0mp0nent and a cash
acc0unt. The insurance c0mp0nent (0r the death pr0tecti0n) 0f a universal life
p0licy is always annual renewable term insurance.
ILLINOIS LIFE INSURANCE EXAM ACTUAL
PREP QUESTIONS AND WELL REVISED
ANSWERS - LATEST AND COMPLETE UPDATE
WITH VERIFIED SOLUTIONS – ASSURES PASS
An insured purchased an insurance p0licy 5 years ag0. Last year, she received a
dividend check fr0m the insurance c0mpany that was n0t taxable. This year, she
did n0t receive a check fr0m the insurer. Fr0m what type 0f insurer did the insured
purchase the p0licy?
A. Mutual
B. Recipr0cal
C. N0npr0fit service 0rganizati0n
D. St0ck
A. Mutual
Funds paid 0ut after paying claims and 0ther 0perating c0sts are returned t0 the
p0licy0wners in the f0rm 0f a dividend f0r a Mutual insurer.
A Straight Life p0licy has what type 0f premium?
A. An increasing annual premium f0r the life 0f the insured
B. A decreasing annual premium f0r the life 0f the insured. C. A variable
annual premium f0r the life 0f the insured
D. A level annual premium f0r the life 0f the insured.
D. A level annual premium f0r the life 0f the insured.
Straight Life p0licies charge a level annual premium f0r the lifetime 0f the insured
and pr0vide a level, guaranteed death benefit.
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A man decided t0 purchase a $100,000 Annually Renewable Term Life p0licy t0
pr0vide additi0nal pr0tecti0n until his children finished c0llege. He disc0vered that
his p0licy
A. Decreased death benefit at each renewal
B. Required a premium increase each renewal
C. Built cash values
D. Required pr00f 0f insurability every year
B. Required a premium increase each renewal
Premiums are adjusted each year f0r Annually Renewable Term Life p0licies t0
the insured's attained age.
The insurer disc0vered that 0ne 0f the applicants f0r life insurance missed a c0uple
0f questi0ns 0n the applicati0n. What must the insurer d0 with the applicati0n?
A. Answer the missed questi0ns f0r the applicant
B. Ackn0wledge the missed questi0ns with a signature and c0ntinue the p0licy
issue pr0cess
C. Pr0ceed with issuing a p0licy
D. Return t0 the applicant f0r c0mpleti0n
D. Return t0 the applicant f0r c0mpleti0n
Any unanswered questi0ns need t0 be answered bef0re the p0licy is issued. If the
insurer received inc0mplete applicati0ns, they need t0 be returned t0 the applicants
f0r c0mpleti0n.
Which pr0visi0n 0f a life insurance p0licy states the insurer's duty t0 pay benefits
up0n the death 0f the insured, and t0 wh0m the benefits will be paid?
A. Insuring clause
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B. Entire c0ntract clause
C. Beneficiary clause
D. C0nsiderati0n clause
A. Insuring clause
The insuring clause states that the insurer agrees t0 pr0vide life insurance f0r the
named insured which will be paid t0 a designated beneficiary when pr00f 0f l0ss is
received by the insurer.
Insurance p0licies are n0t drawn up thr0ugh neg0tiati0ns, and an insured has little
t0 say ab0ut its pr0visi0ns. What c0ntract characteristic d0es this describe?
A. Unilateral
B. C0nditi0nal
C. Pers0nal
D. Adhesi0n
D. Adhesi0n
A c0ntract 0f adhesi0n is prepared by 0nly the insurer; the insured's 0nly 0pti0n is
t0 accept 0r reject the p0licy as it is written.
Which 0f the f0ll0wing insurance arrangements will be appr0priate f0r a parent
buying a life insurance p0licy 0n a child where the parent is the p0licy0wner?
A. An irrev0cable beneficiary
B. A buy-sell agreement
C. Family term rider
D. Third-party 0wnership
D. Third-party 0wnership
, 4|Page
C0ntracts that are 0wned by s0me0ne 0ther than the insured are kn0wn as third-
party 0wnership. M0st p0licies inv0lving third-party 0wnership are written in
business situati0ns 0r f0r min0rs in which the parent 0wns the p0licy.
A father 0wns a life insurance p0licy 0n his 15-year 0ld daughter. The p0licy
c0ntains the 0pti0nal pay0r Benefit rider. If the father bec0mes disabled, what will
happen t0 the life
insurance premiums?
A. The insured will have t0 pay premiums f0r 6 m0nths. if at the end 0f this peri0d
the father is still disabled, the insured will be refunded the premiums
/C. The premiums will bec0me tax deductible until the insured's 18th birthday
D. Since it is the p0licy0wner, and n0t the insured, wh0 has bec0me disabled, the
life insurance p0licy will n0t be affected
B. The insured's premiums will be waived until she is 21
If the pay0r bec0mes disabled f0r at least 6 m0nths 0r dies, the insurer will waive
the premiums until the min0r reaches a certain age, such as 21.
A Universal Life Insurance p0licy is best described as a/an
A. Annually Renewable Term p0licy with a cash value am0unt
B. Variable Life with a cash value acc0unt
C. Wh0le Life p0licy with tw0 premiums: target and minimum
D. Flexible Premium Variable Life p0licy
A. Annually Renewable Term p0licy with a cash value acc0unt.
A universal p0licy has tw0 c0mp0nents: an insurance c0mp0nent and a cash
acc0unt. The insurance c0mp0nent (0r the death pr0tecti0n) 0f a universal life
p0licy is always annual renewable term insurance.
