Illinois Life Producer General Exam
Questions and Answers
1. Consumer reports requested by an underwriter during the
application process of a life insurance policy can be used to
determine: probability of making timely premium payments
The purpose of these reports is to provide a picture of an
applicant's general character and reputation, mode of living,
finances, and any exposure to abnormal hazards.
2. Which statement about a whole life policy is true: Cash
value may be bor- rowed against
3. When an individual is planning to protect his family with life
insurance, one Method of doing so is called the needs
analysis. What exactly does needs analysis involve:
Establishes the needs of the individual and his dependents
4. In an insurance contract, the insurer is the only party who
makes a legally enforceable promise. What kind of contract is
this?: Unilateral
,Insurance contracts are unilateral. This means that only one party
(the insurer)
makes any kind of enforceable promise.
5. What actions can a policyowner take if an application for a
bank loan requires collateral: Assign policy ownership to the
bank
6. Which requirement must be met for an association to be
eligible for a group life plan?: Group was formed for a purpose
other than acquiring insurance
Group life insurance can be formed just as long as they are formed
for a reason other than to purchase insurance.
7. Which of the following policies is characterized by a flexible
premium and death benefit and allows the policyowner control
of the investment aspect of the plan: Variable Universal Life
"universal" indicates that the policy has a flexible or Adjustable
premium. The "variable" nature of the product indicates that the
cash value is invested in the stock market (ex: mutual funds) which
permits for a contract owner to decide where the equity (ex: cash
value) is to be invested
8. Y purchased $100,000 worth of permanent protection on
himself and
,$50,000 worth of 10-year Term coverage for his wife on the
same policy. Which of these policies didY purchase?: A Whole
Life Policy with an Other Insured Rider
9. At the age of 45, an individual withdraws $50,000 from his
qualified prof-
it-sharing plan and then deposits this amount into a personal
savings account. This action would result in: Income tax and a
10% penalty assessed upon funds withdrawn from the Qualified
Plan
The IRS says that withdrawals of funds from a profit sharing plan
may be subject
to a 10% tax penalty in addition to income taxes if they are made
before the age of
59 1/2. This same early withdrawal penalty applies to funds taken
out of 401k plans and traditional individual retirement accounts
10. What type of annuity has a cash value that is based upon
the performance of it's underlying investment funds?:
Variable
A variable annuity's cash value will depend on the results of its
investment funds.
11. Which of the following features of a group term life policy
enables an indi- vidual to leave the group and continue his or
, her insurance without providing evidence of insurability: The
conversion privilege
allows an individual to leave the group term plan and continue his
or her insurance without providing evidence of insurability.
12. When a policyowner cash surrenders a Universal Life
insurance policy in it's early years, this may be considered a
red flag for a(n): Anti-Money Laundering violation
When a policyowner cash surrenders a Universal Life insurance
policy in it's early years, this may be considered a red flag for an
Anti-Money Laundering violation.
13. P purchases a $50,000 whole life insurance policy in 2005.
One of the questions on the application asks if P engages in
scuba diving, to which P answers "No". The policy is then
issued with no scuba exclusions. In 2010, P takes up scuba
diving and dies in a scuba-related accident in 2011. What will
the insurer pay to P's beneficiary?: $50,000 minus any
outstanding policy loans.
In this situation, the beneficiary will receive $50,000 less any
outstanding loans and interest. At the time of the insured's death,
the policy is beyond the contestable period.
Questions and Answers
1. Consumer reports requested by an underwriter during the
application process of a life insurance policy can be used to
determine: probability of making timely premium payments
The purpose of these reports is to provide a picture of an
applicant's general character and reputation, mode of living,
finances, and any exposure to abnormal hazards.
2. Which statement about a whole life policy is true: Cash
value may be bor- rowed against
3. When an individual is planning to protect his family with life
insurance, one Method of doing so is called the needs
analysis. What exactly does needs analysis involve:
Establishes the needs of the individual and his dependents
4. In an insurance contract, the insurer is the only party who
makes a legally enforceable promise. What kind of contract is
this?: Unilateral
,Insurance contracts are unilateral. This means that only one party
(the insurer)
makes any kind of enforceable promise.
5. What actions can a policyowner take if an application for a
bank loan requires collateral: Assign policy ownership to the
bank
6. Which requirement must be met for an association to be
eligible for a group life plan?: Group was formed for a purpose
other than acquiring insurance
Group life insurance can be formed just as long as they are formed
for a reason other than to purchase insurance.
7. Which of the following policies is characterized by a flexible
premium and death benefit and allows the policyowner control
of the investment aspect of the plan: Variable Universal Life
"universal" indicates that the policy has a flexible or Adjustable
premium. The "variable" nature of the product indicates that the
cash value is invested in the stock market (ex: mutual funds) which
permits for a contract owner to decide where the equity (ex: cash
value) is to be invested
8. Y purchased $100,000 worth of permanent protection on
himself and
,$50,000 worth of 10-year Term coverage for his wife on the
same policy. Which of these policies didY purchase?: A Whole
Life Policy with an Other Insured Rider
9. At the age of 45, an individual withdraws $50,000 from his
qualified prof-
it-sharing plan and then deposits this amount into a personal
savings account. This action would result in: Income tax and a
10% penalty assessed upon funds withdrawn from the Qualified
Plan
The IRS says that withdrawals of funds from a profit sharing plan
may be subject
to a 10% tax penalty in addition to income taxes if they are made
before the age of
59 1/2. This same early withdrawal penalty applies to funds taken
out of 401k plans and traditional individual retirement accounts
10. What type of annuity has a cash value that is based upon
the performance of it's underlying investment funds?:
Variable
A variable annuity's cash value will depend on the results of its
investment funds.
11. Which of the following features of a group term life policy
enables an indi- vidual to leave the group and continue his or
, her insurance without providing evidence of insurability: The
conversion privilege
allows an individual to leave the group term plan and continue his
or her insurance without providing evidence of insurability.
12. When a policyowner cash surrenders a Universal Life
insurance policy in it's early years, this may be considered a
red flag for a(n): Anti-Money Laundering violation
When a policyowner cash surrenders a Universal Life insurance
policy in it's early years, this may be considered a red flag for an
Anti-Money Laundering violation.
13. P purchases a $50,000 whole life insurance policy in 2005.
One of the questions on the application asks if P engages in
scuba diving, to which P answers "No". The policy is then
issued with no scuba exclusions. In 2010, P takes up scuba
diving and dies in a scuba-related accident in 2011. What will
the insurer pay to P's beneficiary?: $50,000 minus any
outstanding policy loans.
In this situation, the beneficiary will receive $50,000 less any
outstanding loans and interest. At the time of the insured's death,
the policy is beyond the contestable period.
