WEBCE PA LIFE INSURANCE EXAM STUDY QUESTIONS WITH CORRECT ANSWERS

WEBCE PA LIFE INSURANCE EXAM STUDY |\ |\ |\ |\ |\ |\




QUESTIONS WITH CORRECT ANSWERS |\ |\ |\




What must an insurance company do to appoint a producer as its
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agent? - CORRECT ANSWERS ✔✔file a notice of appointment with
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the Department and pay the required fee
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Persons who commit crimes of dishonesty while engaged in
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interstate insurance transactions can be sentenced to all of the
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following EXCEPT - CORRECT ANSWERS ✔✔imprisonment for |\ |\ |\ |\ |\ |\ |\



up to 25 years
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ABC Insurance Company diligently maintains files of
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advertisements it uses to market its health insurance policies. How |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



long is it required to keep them before it can purge them -
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CORRECT ANSWERS ✔✔until the Commissioner's next |\ |\ |\ |\ |\ |\



examination or four years, whichever occurs last |\ |\ |\ |\ |\ |\




Harry and Connie each want to buy life insurance that will provide
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a guaranteed death benefit whenever they die, will generate a
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guaranteed cash value they can access while living, and even return|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



excess premiums to them. Which of the following would best fit this
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couple's needs? - CORRECT ANSWERS ✔✔participating whole life
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insurance

,All the following statements about the net premium for a traditional
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life insurance policy are correct EXCEPT: - CORRECT ANSWERS
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✔✔The net single premium for a traditional life insurance policy is
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the amount actually charged to the policyowner who wants to
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purchase the policy with a single premium payment.
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(The net premium basically reflects the cost of the pure insurance
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protection, to which the insurer adds its expenses, resulting in the
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gross premium.) |\




For a third-party life insurance policy to be valid, insurable interest
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must exist between the policyowner and the insured when -
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CORRECT ANSWERS ✔✔the policy is issued. |\ |\ |\ |\ |\




Replacement occurs if a life insurance policy is purchased and, in
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conjunction, any of the following happen EXCEPT: - CORRECT|\ |\ |\ |\ |\ |\ |\ |\ |\



ANSWERS ✔✔The existing policy's beneficiary designation is
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changed.


Replacement occurs when an applicant is about to buy a new life
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insurance policy or annuity and, as a result, an existing life
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insurance policy or annuity will be surrendered.
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,All the following statements regarding life insurance cost
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comparison methods are correct EXCEPT - CORRECT ANSWERS
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✔✔All cost comparison methods recognize the role of the cash
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value in projecting future costs of coverage.
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During the buying process it is common for applicants to ask
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producers to compare the cost of two or more life insurance policies,
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for which cost indexes are used.
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Which of the following statements about backdating life insurance
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applications is correct? - CORRECT ANSWERS ✔✔Only the |\ |\ |\ |\ |\ |\ |\ |\



insurance company, not the producer, can authorize the backdating
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of specific applications.
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Insurers will decline applicants with very high substandard risk
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ratings. What percentage of applicants do insurers reject -
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CORRECT ANSWERS ✔✔about 2 percent |\ |\ |\ |\




Amanda, age 45, bought a $50,000 ten-year renewable and
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convertible term life policy. Regarding this, all the following
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statements are correct EXCEPT - CORRECT ANSWERS|\ |\ |\ |\ |\ |\ |\



✔✔premiums for this policy will be more than for a $50,000 |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



permanent life insurance policy |\ |\ |\

, To renew a term life insurance policy at a lower re-entry rate than
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the guaranteed rate, what must the insured prove - CORRECT
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ANSWERS ✔✔his or her insurability |\ |\ |\ |\




Premium rates will vary unpredictably depending on the insurer's
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actual experience in which one of the following types of whole life
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insurance - CORRECT ANSWERS ✔✔current assumption whole
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life


In a current assumption whole life policy, what happens to
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premium rates if an insurer earns more on its investments than was
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factored into the premium calculation - CORRECT ANSWERS
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✔✔Premiums decrease to a new rate supported by the actual |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



investment experience. |\




Like interest-sensitive and indeterminate premium whole life,
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current assumption whole life premiums will vary according to the
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insurer's investment experience. |\ |\




All of the following statements about indexed life insurance are
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correct EXCEPT: - CORRECT ANSWERS ✔✔The insured bears all
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of the investment risk with an indexed life insurance policy
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