LIFE ONLY AGENT UPDATED EXAM TEST PAPER
QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔An applicant's character and personal habits can be obtained for underwriting
purposes from which source? - ✔✔Investigative consumer report
✔✔An endorsement found in an insurance plan which modifies the provisions of the
policy is called a(n) - ✔✔rider
✔✔Viatical settlement brokers send packets of information to potential viatees. These
information packets normally include existing policy terms and which of the following? -
✔✔Viator's medical prognosis
✔✔People with higher loss exposure have the tendency to purchase insurance more
often than those at average risk. This is called - ✔✔adverse selection
✔✔A limited payment whole life policy provides - ✔✔lifetime protection
✔✔Which of these is NOT subject to income taxation under a Modified Endowment
Contract (MEC)? - ✔✔Death benefit
✔✔Which of these retirement plans do NOT qualify for a federal income tax deduction?
- ✔✔Roth IRA
✔✔In an insurance contract, the element that shows each party is giving something of
value is called - ✔✔consideration
✔✔A transaction in which a new life insurance policy is purchased and an existing life
insurance policy is surrendered is called - ✔✔Replacement
✔✔Craig purchased a life insurance policy for enabling his heirs to pay estate taxes.
What is this called? - ✔✔Estate conservation
✔✔A plan in which an employer pays insurance benefits from a fund derived from the
employer's current revenues is called - ✔✔A self-funded plan
✔✔Which of these is NOT considered to be a common life insurance nonforfeiture
option? - ✔✔Life income annuity
✔✔Which market index is normally associated with an indexed annuity's rate of return?
- ✔✔S & P 500
, ✔✔A change in an insurance application requires - ✔✔an initial made by the applicantv
✔✔A life insurance policy which contains cash values that vary according to its
investment performance of stocks is called - ✔✔Variable Whole Life
✔✔A life insurance illustration showing future premiums being paid out of
nonguaranteed values must disclose that - ✔✔The policyowner may need to resume
premium payments depending on actual results
✔✔James is the insured on a life insurance policy where his age was misstated on the
application. Which of the following is CORRECT regarding the death benefit amount? -
✔✔The death benefit paid will be what the premium would have purchased at the
correct age
✔✔Which type of multiple protection policy pays on the death of the last person? -
✔✔Survivorship life policy
✔✔An insured individual and the policy's beneficiary die from the same accident. The
common disaster provision states the insurer will continue as if - ✔✔the insured outlived
the beneficiary
✔✔Which of these is considered a major tax advantage of life insurance? - ✔✔Income
tax is typically not owed on proceeds paid directly to a beneficiary
✔✔Which of the following does a life insurance policy summary normally include? -
✔✔The policy's cash value
✔✔Insurance companies determine risk exposure by which of the following? - ✔✔Law
of large numbers and risk pooling
✔✔Which of the following is a person who negotiates an insurance contract on behalf of
an insurer? - ✔✔Producer
✔✔Kurt is an active duty serviceman who was recently killed in an accident while home
on leave. Which military service exclusion clause would pay upon his death? -
✔✔Results
✔✔How does life insurance create an immediate estate? - ✔✔After first premium is
paid, the face amount may be available to the beneficiary
✔✔A beneficiary has just received a claim payment for a life insurance policy. Which of
the following is TRUE regarding the federal income tax liability owed? - ✔✔No federal
income tax is owed on life insurance proceeds
QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔An applicant's character and personal habits can be obtained for underwriting
purposes from which source? - ✔✔Investigative consumer report
✔✔An endorsement found in an insurance plan which modifies the provisions of the
policy is called a(n) - ✔✔rider
✔✔Viatical settlement brokers send packets of information to potential viatees. These
information packets normally include existing policy terms and which of the following? -
✔✔Viator's medical prognosis
✔✔People with higher loss exposure have the tendency to purchase insurance more
often than those at average risk. This is called - ✔✔adverse selection
✔✔A limited payment whole life policy provides - ✔✔lifetime protection
✔✔Which of these is NOT subject to income taxation under a Modified Endowment
Contract (MEC)? - ✔✔Death benefit
✔✔Which of these retirement plans do NOT qualify for a federal income tax deduction?
- ✔✔Roth IRA
✔✔In an insurance contract, the element that shows each party is giving something of
value is called - ✔✔consideration
✔✔A transaction in which a new life insurance policy is purchased and an existing life
insurance policy is surrendered is called - ✔✔Replacement
✔✔Craig purchased a life insurance policy for enabling his heirs to pay estate taxes.
What is this called? - ✔✔Estate conservation
✔✔A plan in which an employer pays insurance benefits from a fund derived from the
employer's current revenues is called - ✔✔A self-funded plan
✔✔Which of these is NOT considered to be a common life insurance nonforfeiture
option? - ✔✔Life income annuity
✔✔Which market index is normally associated with an indexed annuity's rate of return?
- ✔✔S & P 500
, ✔✔A change in an insurance application requires - ✔✔an initial made by the applicantv
✔✔A life insurance policy which contains cash values that vary according to its
investment performance of stocks is called - ✔✔Variable Whole Life
✔✔A life insurance illustration showing future premiums being paid out of
nonguaranteed values must disclose that - ✔✔The policyowner may need to resume
premium payments depending on actual results
✔✔James is the insured on a life insurance policy where his age was misstated on the
application. Which of the following is CORRECT regarding the death benefit amount? -
✔✔The death benefit paid will be what the premium would have purchased at the
correct age
✔✔Which type of multiple protection policy pays on the death of the last person? -
✔✔Survivorship life policy
✔✔An insured individual and the policy's beneficiary die from the same accident. The
common disaster provision states the insurer will continue as if - ✔✔the insured outlived
the beneficiary
✔✔Which of these is considered a major tax advantage of life insurance? - ✔✔Income
tax is typically not owed on proceeds paid directly to a beneficiary
✔✔Which of the following does a life insurance policy summary normally include? -
✔✔The policy's cash value
✔✔Insurance companies determine risk exposure by which of the following? - ✔✔Law
of large numbers and risk pooling
✔✔Which of the following is a person who negotiates an insurance contract on behalf of
an insurer? - ✔✔Producer
✔✔Kurt is an active duty serviceman who was recently killed in an accident while home
on leave. Which military service exclusion clause would pay upon his death? -
✔✔Results
✔✔How does life insurance create an immediate estate? - ✔✔After first premium is
paid, the face amount may be available to the beneficiary
✔✔A beneficiary has just received a claim payment for a life insurance policy. Which of
the following is TRUE regarding the federal income tax liability owed? - ✔✔No federal
income tax is owed on life insurance proceeds
