LIFE ONLY AGENT UPDATED EVALUATION TEST
QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔All of the following would be considered benefits of insurance, EXCEPT:
> Retention of the loss exposure risk by the insured.
> Redemption of the financial uncertainty of the insured.
> The source of investment funds.
> Payment for the cost of covered losses. - ✔✔Retention of the loss exposure risk by
the insured.
✔✔Which of the following is not correct regarding disability benefits provided by Social
Security?
> Total and permanent disability must continue for benefits to continue.
> To be eligible for benefits the worker must prove total and permanent disability for a
minimum of 5 months just prior to receiving benefits.
> The earnings of a worker up to the time of disability determine the amount of benefits.
> The payments received from this program are meant to entirely replace a worker's lost
earnings. - ✔✔The payments received from this program are meant to entirely replace a
worker's lost earnings.
✔✔What is required when an applicant reveals conditions that require more
information? - ✔✔Attending physician's statement.
✔✔What does the incontestable clause of a life insurance policy do? - ✔✔It keeps the
insurer from canceling the policy if , after 2 years, there is a discovery of error.
concealment, or misstatement by the policy owner.
✔✔Which of the following statements about policy dividends are TRUE?
> All dividends are taxable
> Dividends are payable only to nonparticipating policies.
> Insureds elect a dividend option at the time of policy purchase.
Dividends can be guaranteed. - ✔✔Insureds elect a dividend option at the time of policy
purchase.
✔✔In California, an insurer organized under the state laws of Nevada is considered: -
✔✔A foreign insurer.
✔✔Certain principles apply to the business of insurance. One of them is the concept of
insurance issued as an "aleatory" contract. What does aleatory mean here? -
✔✔Performance depends on an uncertain future event.
, ✔✔While an insurer is paying the premium for a life insurance policy for a life insurance
policy under the waiver of premium rider: - ✔✔The policy remains in full force in every
respect.
✔✔Which of the following is true regarding an aleatory contract? - ✔✔If there was a
loss, the insurer would pay out considerably more compared to the insured's premium.
✔✔Which benefits are provided by key employee insurance? - ✔✔Payment to a
business when an important employee dies.
✔✔Life insurance policies are: - ✔✔There are no standard life insurance policies.
✔✔The insured, aged 65, owns a $100,000 non-participating whole life policy. The
policy is paid-up as of today. When would the cash value reach $100,000? - ✔✔Age
100
✔✔How do rights of an irrevocable beneficiary differ from those of a revocable
beneficiary? - ✔✔An irrevocable beneficiary has a vested right that neither the policy
owner nor his creditors can impair without the beneficiary's consent.
✔✔What recourse does an insurer have if a violation of a material warranty on the part
of the insured is discovered? - ✔✔Rescission of the policy.
✔✔Which policy covering two or more individuals pays the face amount only when the
first person dies? - ✔✔Joint life policy
✔✔For Social Security purposes, a person with 40 quarters of coverage is considered -
✔✔Fully insured.
✔✔All of the following an included in mortality tables, EXCEPT: - ✔✔Probability of living
at end of year.
✔✔Variable life insurance policies and variable annuities are primarily governed by
which agency? - ✔✔SEC
✔✔If the owner of an annuity makes a withdrawal from it before age 59 1/2, what will
the penalty be? - ✔✔10%
✔✔which of the following often acts as a "field underwriter"? - ✔✔The agent
✔✔A possibility of financial loss resulting from the ownership of property is known as: -
✔✔Property loss exposure
QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔All of the following would be considered benefits of insurance, EXCEPT:
> Retention of the loss exposure risk by the insured.
> Redemption of the financial uncertainty of the insured.
> The source of investment funds.
> Payment for the cost of covered losses. - ✔✔Retention of the loss exposure risk by
the insured.
✔✔Which of the following is not correct regarding disability benefits provided by Social
Security?
> Total and permanent disability must continue for benefits to continue.
> To be eligible for benefits the worker must prove total and permanent disability for a
minimum of 5 months just prior to receiving benefits.
> The earnings of a worker up to the time of disability determine the amount of benefits.
> The payments received from this program are meant to entirely replace a worker's lost
earnings. - ✔✔The payments received from this program are meant to entirely replace a
worker's lost earnings.
✔✔What is required when an applicant reveals conditions that require more
information? - ✔✔Attending physician's statement.
✔✔What does the incontestable clause of a life insurance policy do? - ✔✔It keeps the
insurer from canceling the policy if , after 2 years, there is a discovery of error.
concealment, or misstatement by the policy owner.
✔✔Which of the following statements about policy dividends are TRUE?
> All dividends are taxable
> Dividends are payable only to nonparticipating policies.
> Insureds elect a dividend option at the time of policy purchase.
Dividends can be guaranteed. - ✔✔Insureds elect a dividend option at the time of policy
purchase.
✔✔In California, an insurer organized under the state laws of Nevada is considered: -
✔✔A foreign insurer.
✔✔Certain principles apply to the business of insurance. One of them is the concept of
insurance issued as an "aleatory" contract. What does aleatory mean here? -
✔✔Performance depends on an uncertain future event.
, ✔✔While an insurer is paying the premium for a life insurance policy for a life insurance
policy under the waiver of premium rider: - ✔✔The policy remains in full force in every
respect.
✔✔Which of the following is true regarding an aleatory contract? - ✔✔If there was a
loss, the insurer would pay out considerably more compared to the insured's premium.
✔✔Which benefits are provided by key employee insurance? - ✔✔Payment to a
business when an important employee dies.
✔✔Life insurance policies are: - ✔✔There are no standard life insurance policies.
✔✔The insured, aged 65, owns a $100,000 non-participating whole life policy. The
policy is paid-up as of today. When would the cash value reach $100,000? - ✔✔Age
100
✔✔How do rights of an irrevocable beneficiary differ from those of a revocable
beneficiary? - ✔✔An irrevocable beneficiary has a vested right that neither the policy
owner nor his creditors can impair without the beneficiary's consent.
✔✔What recourse does an insurer have if a violation of a material warranty on the part
of the insured is discovered? - ✔✔Rescission of the policy.
✔✔Which policy covering two or more individuals pays the face amount only when the
first person dies? - ✔✔Joint life policy
✔✔For Social Security purposes, a person with 40 quarters of coverage is considered -
✔✔Fully insured.
✔✔All of the following an included in mortality tables, EXCEPT: - ✔✔Probability of living
at end of year.
✔✔Variable life insurance policies and variable annuities are primarily governed by
which agency? - ✔✔SEC
✔✔If the owner of an annuity makes a withdrawal from it before age 59 1/2, what will
the penalty be? - ✔✔10%
✔✔which of the following often acts as a "field underwriter"? - ✔✔The agent
✔✔A possibility of financial loss resulting from the ownership of property is known as: -
✔✔Property loss exposure
