Life Underwriter Training Council FellowSM (LUTCF)
Exam
Question 1. Which historical development marked the beginning of modern life
insurance?
A) The creation of the first mutual insurance company in England
B) The development of mortality tables by actuaries in the 17th century
C) The issuance of the first life insurance policy in ancient Rome
D) The establishment of the first government-sponsored life insurance program
Answer: B
Explanation: The development of mortality tables by actuaries in the 17th century
was a pivotal step that allowed for more accurate risk assessment and pricing,
marking the beginning of modern life insurance.
Question 2. What is the primary role of life insurance in financial planning?
A) To provide immediate cash for emergencies
B) To transfer risk and provide financial security for beneficiaries
C) To serve solely as an investment vehicle
D) To avoid paying taxes on inheritance
Answer: B
Explanation: Life insurance primarily transfers the risk of premature death and
provides financial security to beneficiaries, supporting overall financial planning
objectives.
, Life Underwriter Training Council FellowSM (LUTCF)
Exam
Question 3. Which of the following is a basic concept of life insurance involving
the amount paid periodically?
A) Face value
B) Premium
C) Policy loan
D) Cash surrender value
Answer: B
Explanation: The premium is the amount paid periodically by the policyholder to
keep the life insurance policy active.
Question 4. Which type of life insurance policy is characterized by coverage that
lasts for a specified term and has no cash value component?
A) Whole life insurance
B) Universal life insurance
C) Term life insurance
D) Variable life insurance
Answer: C
Explanation: Term life insurance provides coverage for a set period and does not
accumulate cash value, making it generally more affordable and straightforward.
, Life Underwriter Training Council FellowSM (LUTCF)
Exam
Question 5. Which feature distinguishes whole life insurance from term
insurance?
A) It provides coverage for a specified period only
B) It includes a cash value component that grows over time
C) It has higher premiums with no savings component
D) It is only available for seniors
Answer: B
Explanation: Whole life insurance includes a cash value component that
accumulates over time, providing both death benefit protection and a savings
element.
Question 6. What is a key characteristic of universal life insurance?
A) Fixed premiums and flexible death benefits
B) Level premiums with no cash value
C) Investment in stock market only
D) No death benefit option
Answer: A
Explanation: Universal life insurance offers flexible premiums and death benefits,
along with a cash value component that earns interest.
, Life Underwriter Training Council FellowSM (LUTCF)
Exam
Question 7. Which type of life insurance is known for its investment component
that allows policyholders to allocate premiums among various separate accounts?
A) Whole life insurance
B) Variable life insurance
C) Term life insurance
D) Final expense insurance
Answer: B
Explanation: Variable life insurance allows policyholders to invest premiums in
various separate accounts, providing potential for higher returns but with
increased risk.
Question 8. Which rider provides an additional death benefit if the insured dies as
a result of an accident?
A) Waiver of premium rider
B) Accelerated death benefit rider
C) Accidental death rider
D) Guaranteed insurability rider
Answer: C
Explanation: The accidental death rider provides an extra benefit if the insured's
death results from an accident, often doubling or tripling the death benefit.
Exam
Question 1. Which historical development marked the beginning of modern life
insurance?
A) The creation of the first mutual insurance company in England
B) The development of mortality tables by actuaries in the 17th century
C) The issuance of the first life insurance policy in ancient Rome
D) The establishment of the first government-sponsored life insurance program
Answer: B
Explanation: The development of mortality tables by actuaries in the 17th century
was a pivotal step that allowed for more accurate risk assessment and pricing,
marking the beginning of modern life insurance.
Question 2. What is the primary role of life insurance in financial planning?
A) To provide immediate cash for emergencies
B) To transfer risk and provide financial security for beneficiaries
C) To serve solely as an investment vehicle
D) To avoid paying taxes on inheritance
Answer: B
Explanation: Life insurance primarily transfers the risk of premature death and
provides financial security to beneficiaries, supporting overall financial planning
objectives.
, Life Underwriter Training Council FellowSM (LUTCF)
Exam
Question 3. Which of the following is a basic concept of life insurance involving
the amount paid periodically?
A) Face value
B) Premium
C) Policy loan
D) Cash surrender value
Answer: B
Explanation: The premium is the amount paid periodically by the policyholder to
keep the life insurance policy active.
Question 4. Which type of life insurance policy is characterized by coverage that
lasts for a specified term and has no cash value component?
A) Whole life insurance
B) Universal life insurance
C) Term life insurance
D) Variable life insurance
Answer: C
Explanation: Term life insurance provides coverage for a set period and does not
accumulate cash value, making it generally more affordable and straightforward.
, Life Underwriter Training Council FellowSM (LUTCF)
Exam
Question 5. Which feature distinguishes whole life insurance from term
insurance?
A) It provides coverage for a specified period only
B) It includes a cash value component that grows over time
C) It has higher premiums with no savings component
D) It is only available for seniors
Answer: B
Explanation: Whole life insurance includes a cash value component that
accumulates over time, providing both death benefit protection and a savings
element.
Question 6. What is a key characteristic of universal life insurance?
A) Fixed premiums and flexible death benefits
B) Level premiums with no cash value
C) Investment in stock market only
D) No death benefit option
Answer: A
Explanation: Universal life insurance offers flexible premiums and death benefits,
along with a cash value component that earns interest.
, Life Underwriter Training Council FellowSM (LUTCF)
Exam
Question 7. Which type of life insurance is known for its investment component
that allows policyholders to allocate premiums among various separate accounts?
A) Whole life insurance
B) Variable life insurance
C) Term life insurance
D) Final expense insurance
Answer: B
Explanation: Variable life insurance allows policyholders to invest premiums in
various separate accounts, providing potential for higher returns but with
increased risk.
Question 8. Which rider provides an additional death benefit if the insured dies as
a result of an accident?
A) Waiver of premium rider
B) Accelerated death benefit rider
C) Accidental death rider
D) Guaranteed insurability rider
Answer: C
Explanation: The accidental death rider provides an extra benefit if the insured's
death results from an accident, often doubling or tripling the death benefit.
