Life Insurance 101 Exam Questions With
Complete Solutions
increasing c- cCORRECT cANS✔✔A cReturn cof cPremium cterm clife cpolicy cis cwritten cas
cwhat ctype cof cterm ccoverage?
It cinsures cthe clife cof ca cdebtor. c- cCORRECT cANS✔✔Which cof cthe cfollowing cis
ccorrect cregarding ccredit clife cinsurance?
$100,000 c- cCORRECT cANS✔✔The cinsured cunder ca c$100,000 clife cinsurance cpolicy
cwith ca ctriple cindemnity crider cfor caccidental cdeath cwas ckilled cin ca ccar caccident. cIt
cwas cdetermined cthat cthe caccident cwas chis cfault. cThe ctriple cindemnity crider cin cthe
cpolicy cspecifies cthat cthe cdeath cmust cnot cbe ccontributed cto cby cthe cinsured cin cany
cmanner. cIn cthis ccase, cwhat cwill cthe cpolicy cbeneficiary creceive?
2.5% c- cCORRECT cANS✔✔An cinsurance ccompany cforwards cfixed cannuity
cpremiums cto ctheir cgeneral caccount, cwhere cthe cmoney cis cinvested. cThe cguaranteed
cminimum cinterest cis cset cat c2.5%. cDuring can ceconomic cdownswing, cthe
cinvestments conly cdrew c2%. cWhat cinterest crate cwill cthe cinsurer cpay cto cits
cpolicyholders?
Tax cdeductible. c- cCORRECT cANS✔✔Taxation crules cfor cTraditional cIRA
ccontributions
one-year cterm c- cCORRECT cANS✔✔The cdividend coption cin cwhich cthe cpolicyowner
cuses cdividends cto cpurchase ca cterm cpolicy cfor cone cyear cis creferred cto cas cthe
Owner's cRights c- cCORRECT cANS✔✔Which cof cthe cfollowing cexplains cthe
cpolicyowner's cright cto cchange cbeneficiaries, cchoose coptions, cand creceive cproceeds
cof ca cpolicy?
$250 c- cCORRECT cANS✔✔What cis cthe cfine cfor cusing can cunapproved cassumed
cname cby ca cproducer?
The csame cface camount cas cin cthe cwhole clife cpolicy; cUnder cthis coption cthe cinsurer
cuses cthe cpolicy ccash cvalue cto cconvert cto cterm cinsurance cfor cthe csame cface
camount cas cthe cformer cpermanent cpolicy. c- cCORRECT cANS✔✔Under can cextended
cterm cnonforfeiture coption, cthe cpolicy ccash cvalue cis cconverted cto
, The crider cis cusually clevel cterm cinsurance. c(The cspouse cterm crider callows ca cspouse
cto cbe cadded cfor ccoverage. cIt cis cavailable cfor ca climited camount cof ctime, ctypically
cexpiring cat cage c65. cA cspouse cterm crider c(just clike cany cother cinsured crider) cis
cusually clevel cterm cinsurance.) c- cCORRECT cANS✔✔Which cis ctrue cabout ca cspouse
cterm crider?
Policyowner; cThe cpolicyowner cmust chave can cinsurable cinterest cin cthe cinsured
c(his/her cown clife cif cthe cpolicyowner cand cthe cinsured cis cthe csame cperson), cor cin
cthe clife cof ca cfamily cmember cor ca cbusiness cpartner. c- cCORRECT
cANS✔✔Individuals cthat cmust chave cinsurable cinterest cin cthe cinsured?
Any cform cof cLife cinsurance cmay cbe cused cto cfund ca cbuy-sell cagreement. c-
cCORRECT cANS✔✔Partners cin ca cbusiness center cinto ca cbuy-sell cagreement cto
cpurchase clife cinsurance, cwhich cstates cthat cshould cone cof cthem cdie cprematurely,
cthe cother cwould cbe cfinancially cable cto cbuy cthe cinterest cof cthe cdeceased cpartner.
cWhat ctype cof cinsurance cpolicy cmay cbe cused cto cfund cthis cagreement?
If can cinsurance ccompany cdecides cto ctransact cinsurance cillegally, cit cstill cwill cbe
cresponsible cfor cpaying cany cclaims cthat care cfiled cunder cits cfraudulent cpolicies. c-
cCORRECT cANS✔✔An cinsurer cconducts cbusiness cin cLouisiana cwithout ca
ccertificate cof cauthority. cHundreds cof cpolicies care csold, cand cclaims cstart crolling cin.
cWhich cof cthe cfollowing cis ctrue?
Apparent cauthority c(also cknown cas cperceived cauthority) cis cthe cappearance cor cthe
cassumption cof cauthority cbased con cthe cactions, cwords, cor cdeeds cof cthe cprincipal cor
cbecause cof ccircumstances cthe cprincipal ccreated. c- cCORRECT cANS✔✔Because can
cagent cis cusing cstationery cwith cthe clogo cof can cinsurance ccompany, capplicants cfor
cinsurance cassume cthat cthe cagent cis cauthorized cto ctransact con cbehalf cof cthat
cinsurer. cWhat ctype cof cagent cauthority cdoes cthis cdescribe?
Risk, cor cthe cchance cof closs coccurring, cis cthe cbasic creason cfor cbuying cinsurance. c-
cCORRECT cANS✔✔For cthe cpurpose cof cinsurance, crisk cis cdefined cas
Under cOption cB cthe cdeath cbenefit cincludes cthe cannual cincrease cin ccash cvalue cso
cthat cthe cdeath cbenefit cgradually cincreases ceach cyear cby cthe camount cthat cthe
ccash cvalue cincreases. cAt cany cpoint cin ctime, cthe ctotal cdeath cbenefit cwill calways cbe
cequal cto cthe cface camount cof cthe cpolicy cplus cthe ccurrent camount cof ccash cvalue. c-
cCORRECT cANS✔✔Which coption cfor cUniversal clife callows cthe cbeneficiary cto
ccollect cboth cthe cdeath cbenefit cand ccash cvalue cupon cthe cdeath cof cthe cinsured?
Among cother cfactors, cthe cannuity cincome camount cis cbased cupon cthe cannuitant's
cage cand cgender. cAn cannuitant cwhose clife cexpectancy cis cshorter cwill chave cthe
clargest cincome cinstallments. cIn cthis cexample, can colder cman cwill chave cthe cshortest
clife cexpectancy. c- cCORRECT cANS✔✔All cother cfactors cbeing cequal, cwhich cof cthe
cfollowing cindividuals cwould creceive cthe clargest cmonthly ccheck cfrom ca csingle
cpremium cstraight clife cimmediate cannuity?
Complete Solutions
increasing c- cCORRECT cANS✔✔A cReturn cof cPremium cterm clife cpolicy cis cwritten cas
cwhat ctype cof cterm ccoverage?
It cinsures cthe clife cof ca cdebtor. c- cCORRECT cANS✔✔Which cof cthe cfollowing cis
ccorrect cregarding ccredit clife cinsurance?
$100,000 c- cCORRECT cANS✔✔The cinsured cunder ca c$100,000 clife cinsurance cpolicy
cwith ca ctriple cindemnity crider cfor caccidental cdeath cwas ckilled cin ca ccar caccident. cIt
cwas cdetermined cthat cthe caccident cwas chis cfault. cThe ctriple cindemnity crider cin cthe
cpolicy cspecifies cthat cthe cdeath cmust cnot cbe ccontributed cto cby cthe cinsured cin cany
cmanner. cIn cthis ccase, cwhat cwill cthe cpolicy cbeneficiary creceive?
2.5% c- cCORRECT cANS✔✔An cinsurance ccompany cforwards cfixed cannuity
cpremiums cto ctheir cgeneral caccount, cwhere cthe cmoney cis cinvested. cThe cguaranteed
cminimum cinterest cis cset cat c2.5%. cDuring can ceconomic cdownswing, cthe
cinvestments conly cdrew c2%. cWhat cinterest crate cwill cthe cinsurer cpay cto cits
cpolicyholders?
Tax cdeductible. c- cCORRECT cANS✔✔Taxation crules cfor cTraditional cIRA
ccontributions
one-year cterm c- cCORRECT cANS✔✔The cdividend coption cin cwhich cthe cpolicyowner
cuses cdividends cto cpurchase ca cterm cpolicy cfor cone cyear cis creferred cto cas cthe
Owner's cRights c- cCORRECT cANS✔✔Which cof cthe cfollowing cexplains cthe
cpolicyowner's cright cto cchange cbeneficiaries, cchoose coptions, cand creceive cproceeds
cof ca cpolicy?
$250 c- cCORRECT cANS✔✔What cis cthe cfine cfor cusing can cunapproved cassumed
cname cby ca cproducer?
The csame cface camount cas cin cthe cwhole clife cpolicy; cUnder cthis coption cthe cinsurer
cuses cthe cpolicy ccash cvalue cto cconvert cto cterm cinsurance cfor cthe csame cface
camount cas cthe cformer cpermanent cpolicy. c- cCORRECT cANS✔✔Under can cextended
cterm cnonforfeiture coption, cthe cpolicy ccash cvalue cis cconverted cto
, The crider cis cusually clevel cterm cinsurance. c(The cspouse cterm crider callows ca cspouse
cto cbe cadded cfor ccoverage. cIt cis cavailable cfor ca climited camount cof ctime, ctypically
cexpiring cat cage c65. cA cspouse cterm crider c(just clike cany cother cinsured crider) cis
cusually clevel cterm cinsurance.) c- cCORRECT cANS✔✔Which cis ctrue cabout ca cspouse
cterm crider?
Policyowner; cThe cpolicyowner cmust chave can cinsurable cinterest cin cthe cinsured
c(his/her cown clife cif cthe cpolicyowner cand cthe cinsured cis cthe csame cperson), cor cin
cthe clife cof ca cfamily cmember cor ca cbusiness cpartner. c- cCORRECT
cANS✔✔Individuals cthat cmust chave cinsurable cinterest cin cthe cinsured?
Any cform cof cLife cinsurance cmay cbe cused cto cfund ca cbuy-sell cagreement. c-
cCORRECT cANS✔✔Partners cin ca cbusiness center cinto ca cbuy-sell cagreement cto
cpurchase clife cinsurance, cwhich cstates cthat cshould cone cof cthem cdie cprematurely,
cthe cother cwould cbe cfinancially cable cto cbuy cthe cinterest cof cthe cdeceased cpartner.
cWhat ctype cof cinsurance cpolicy cmay cbe cused cto cfund cthis cagreement?
If can cinsurance ccompany cdecides cto ctransact cinsurance cillegally, cit cstill cwill cbe
cresponsible cfor cpaying cany cclaims cthat care cfiled cunder cits cfraudulent cpolicies. c-
cCORRECT cANS✔✔An cinsurer cconducts cbusiness cin cLouisiana cwithout ca
ccertificate cof cauthority. cHundreds cof cpolicies care csold, cand cclaims cstart crolling cin.
cWhich cof cthe cfollowing cis ctrue?
Apparent cauthority c(also cknown cas cperceived cauthority) cis cthe cappearance cor cthe
cassumption cof cauthority cbased con cthe cactions, cwords, cor cdeeds cof cthe cprincipal cor
cbecause cof ccircumstances cthe cprincipal ccreated. c- cCORRECT cANS✔✔Because can
cagent cis cusing cstationery cwith cthe clogo cof can cinsurance ccompany, capplicants cfor
cinsurance cassume cthat cthe cagent cis cauthorized cto ctransact con cbehalf cof cthat
cinsurer. cWhat ctype cof cagent cauthority cdoes cthis cdescribe?
Risk, cor cthe cchance cof closs coccurring, cis cthe cbasic creason cfor cbuying cinsurance. c-
cCORRECT cANS✔✔For cthe cpurpose cof cinsurance, crisk cis cdefined cas
Under cOption cB cthe cdeath cbenefit cincludes cthe cannual cincrease cin ccash cvalue cso
cthat cthe cdeath cbenefit cgradually cincreases ceach cyear cby cthe camount cthat cthe
ccash cvalue cincreases. cAt cany cpoint cin ctime, cthe ctotal cdeath cbenefit cwill calways cbe
cequal cto cthe cface camount cof cthe cpolicy cplus cthe ccurrent camount cof ccash cvalue. c-
cCORRECT cANS✔✔Which coption cfor cUniversal clife callows cthe cbeneficiary cto
ccollect cboth cthe cdeath cbenefit cand ccash cvalue cupon cthe cdeath cof cthe cinsured?
Among cother cfactors, cthe cannuity cincome camount cis cbased cupon cthe cannuitant's
cage cand cgender. cAn cannuitant cwhose clife cexpectancy cis cshorter cwill chave cthe
clargest cincome cinstallments. cIn cthis cexample, can colder cman cwill chave cthe cshortest
clife cexpectancy. c- cCORRECT cANS✔✔All cother cfactors cbeing cequal, cwhich cof cthe
cfollowing cindividuals cwould creceive cthe clargest cmonthly ccheck cfrom ca csingle
cpremium cstraight clife cimmediate cannuity?
