Tennessee Life and Health Final Exam
Questions and Correct Answers
Question 1
The benefits under a Disability Buy-Out policy are
a. normally paid in installments
taxable to the beneficiary
payable to the company or another shareholder
normally paid after a short elimination period
Correct Answer
payable to the company or another shareholder
Question 2
The sections of an insurance contract which limit coverage are called
a. waivers
b. riders
c. exclusions
d. limitations
Correct Answer
c. exclusions
Question 3
What action can a policyowner take if an application for a bank loan requires
collateral?
a. Utilize accelerated benefits provision
Borrow against policy cash value and use as a down payment
Assign policy ownership to the bank
Name bank as beneficiary
Correct Answer
Assign policy ownership to the bank
Page 1 of 23
,Question 4
N purchases an annuity by making payments in an amount no less than $100
quarterly. This describes which of the following annuities?
a. Installment Immediate
Fixed Installment Deferred
Flexible Installment Deferred
Flexible Premium Immediate
Correct Answer
Flexible Installment Deferred
Question 5
Which type of policy would pay an employee's salary if the employer was injured in a
bicycle accident and out of work for six weeks?
a. Key Employer Disability
Disability Income
Business Overhead Expense
Worker's Compensation
Correct Answer
Business Overhead Expense
Question 6
D is an architect receiving Disability Income benefits who is not able to return to work
full time, but can work on a part-time basis. Which of these features would allow D to
continue receiving benefits?
a. Residual Benefit clause
Waiver Benefit clause
Concurrent Benefit clause
Guaranteed Benefit clause
Correct Answer
a. Residual Benefit clause
Page 2 of 23
, Question 7
In a Key Employee life insurance policy, the third-party owner can be all of the
following EXCEPT
a. Applicant
Owner
Payor
Insured
Correct Answer
Insured
Question 8
Which of the following actions require a policyowner to provide proof of insurability
in an Adjustable Life policy?
a. increase face amount
b. decrease face amount
c. increase premium-paying period
d. decrease premium payment
Correct Answer
a. increase face amount
Question 9
K has a health policy that must be renewed by the insurer and the premiums can only
be increased if applied to the entire class of insureds. This type of policy is considered
a. optionally renewable
conditionally renewable
guaranteed renewable
noncancellable
Correct Answer
guaranteed renewable
Page 3 of 23
Questions and Correct Answers
Question 1
The benefits under a Disability Buy-Out policy are
a. normally paid in installments
taxable to the beneficiary
payable to the company or another shareholder
normally paid after a short elimination period
Correct Answer
payable to the company or another shareholder
Question 2
The sections of an insurance contract which limit coverage are called
a. waivers
b. riders
c. exclusions
d. limitations
Correct Answer
c. exclusions
Question 3
What action can a policyowner take if an application for a bank loan requires
collateral?
a. Utilize accelerated benefits provision
Borrow against policy cash value and use as a down payment
Assign policy ownership to the bank
Name bank as beneficiary
Correct Answer
Assign policy ownership to the bank
Page 1 of 23
,Question 4
N purchases an annuity by making payments in an amount no less than $100
quarterly. This describes which of the following annuities?
a. Installment Immediate
Fixed Installment Deferred
Flexible Installment Deferred
Flexible Premium Immediate
Correct Answer
Flexible Installment Deferred
Question 5
Which type of policy would pay an employee's salary if the employer was injured in a
bicycle accident and out of work for six weeks?
a. Key Employer Disability
Disability Income
Business Overhead Expense
Worker's Compensation
Correct Answer
Business Overhead Expense
Question 6
D is an architect receiving Disability Income benefits who is not able to return to work
full time, but can work on a part-time basis. Which of these features would allow D to
continue receiving benefits?
a. Residual Benefit clause
Waiver Benefit clause
Concurrent Benefit clause
Guaranteed Benefit clause
Correct Answer
a. Residual Benefit clause
Page 2 of 23
, Question 7
In a Key Employee life insurance policy, the third-party owner can be all of the
following EXCEPT
a. Applicant
Owner
Payor
Insured
Correct Answer
Insured
Question 8
Which of the following actions require a policyowner to provide proof of insurability
in an Adjustable Life policy?
a. increase face amount
b. decrease face amount
c. increase premium-paying period
d. decrease premium payment
Correct Answer
a. increase face amount
Question 9
K has a health policy that must be renewed by the insurer and the premiums can only
be increased if applied to the entire class of insureds. This type of policy is considered
a. optionally renewable
conditionally renewable
guaranteed renewable
noncancellable
Correct Answer
guaranteed renewable
Page 3 of 23
