NWM Chapter 6 Exam Questions with Verified Answers Latest Version 2025 Graded A+
Which statement best describes a single premium whole life policy? - Answers Paid-up policy that offers
lifetime protection
What would be the disadvantage of naming a trust as beneficiary of a life insurance policy? - Answers
Trust administration fees would reduce policy proceeds
Where will a life insurance policy's proceeds be directed to if all the beneficiaries die before the insured?
- Answers Insured's estate
When a policy loan is requested by a policyowner and it requires the consent of the beneficiary, what
kind of beneficiary designation is this? - Answers Irrevocable beneficiary
The beneficiary of a life insurance policy is normally selected by whom? - Answers Policyowner
What kind of arrangement gives the policyowner the right to change the beneficiary? - Answers
Revocable designation
Life insurance premiums are computed on what three factors? - Answers Mortality, interest, expenses
What effect does interest income have upon insurance premiums? - Answers Decreases premium
Which of these occurrences could improve an insurer's ability to reduce premiums? - Answers Rate of
earnings on investments increase
Death benefits from a life insurance policy are normally considered to be - Answers exempt from federal
income tax
Which life insurance settlement option pays lifetime benefits to two or more people? - Answers Joint
and survivor
Who is the beneficiary in a life insurance policy? - Answers The stated person or entity who is designated
to receive the death proceeds
A policyowner fell behind on the premium payments of a whole life policy and is now in the grace
period. How much will the beneficiary receive if the insured dies during this grace period and the policy
also contains an outstanding policy loan? - Answers Face amount minus the loan balance and past-due
premium
Which statement is INCORRECT about the interest-only settlement option in a life insurance policy? -
Answers Interest on proceeds must be paid by the beneficiary
When there is a named beneficiary on a life insurance policy, the death benefits - Answers are paid
directly to the beneficiary without interference from the insured's creditors
Which statement best describes a single premium whole life policy? - Answers Paid-up policy that offers
lifetime protection
What would be the disadvantage of naming a trust as beneficiary of a life insurance policy? - Answers
Trust administration fees would reduce policy proceeds
Where will a life insurance policy's proceeds be directed to if all the beneficiaries die before the insured?
- Answers Insured's estate
When a policy loan is requested by a policyowner and it requires the consent of the beneficiary, what
kind of beneficiary designation is this? - Answers Irrevocable beneficiary
The beneficiary of a life insurance policy is normally selected by whom? - Answers Policyowner
What kind of arrangement gives the policyowner the right to change the beneficiary? - Answers
Revocable designation
Life insurance premiums are computed on what three factors? - Answers Mortality, interest, expenses
What effect does interest income have upon insurance premiums? - Answers Decreases premium
Which of these occurrences could improve an insurer's ability to reduce premiums? - Answers Rate of
earnings on investments increase
Death benefits from a life insurance policy are normally considered to be - Answers exempt from federal
income tax
Which life insurance settlement option pays lifetime benefits to two or more people? - Answers Joint
and survivor
Who is the beneficiary in a life insurance policy? - Answers The stated person or entity who is designated
to receive the death proceeds
A policyowner fell behind on the premium payments of a whole life policy and is now in the grace
period. How much will the beneficiary receive if the insured dies during this grace period and the policy
also contains an outstanding policy loan? - Answers Face amount minus the loan balance and past-due
premium
Which statement is INCORRECT about the interest-only settlement option in a life insurance policy? -
Answers Interest on proceeds must be paid by the beneficiary
When there is a named beneficiary on a life insurance policy, the death benefits - Answers are paid
directly to the beneficiary without interference from the insured's creditors
