EXAMFX LIFE AND HEALTH EXAM | update|COMPLETE
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1. What is the maximum civil penalty for violating the Superintendent's cease and !@#$$$$$$$$$$%
desist order?
(Choose from the following options)
1. $1,000
2. $5,000
3. $10,000
4. $15,000 - (ANSWERS)3. $10,000
2. Which option is being utilized when the insurer accumulates dividends at interest and then
uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up
early?
(Choose from the following options)
1. Paid-up additions
2. Dividend Accumulation option
3. Paid-up option
4. Accumulation at Interest - (ANSWERS)1. Paid-up additions
3. An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his
policy and exercise the extended term option for the policy's cash value, which is currently
$20,000. What would be the face amount of the new term policy?
(Choose from the following options)
1. $20,000
2. $25,000
3. $50,000
4. The face amount will be determined by the insurer. - (ANSWERS)$50,000
The face of the term policy would be the same as the face amount provided under the whole
life policy.
4. After a back injury, an insured is disabled for a year. His insurance policy carries a Disability
Income Benefit rider. Which of the following benefits will he receive?
(Choose from the following options)
1. Payments for life
2. Yearly premium waiver and income
3. Monthly premium waiver and monthly income
,EXAMFX LIFE AND HEALTH EXAM | update|COMPLETE
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4. Percentage of medical costs paid by the insurer - (ANSWERS)Monthly premium waiver and
!@#$$$$$$$$$$%
monthly income
The Disability Income Benefit rider waives the policy premiums, just like the Waiver of Premium
rider. Unlike the Waiver of Premium rider, it also allows the insured to receive a weekly or
monthly income during the disability period.
5. A father owns a life insurance policy on his 15-year-old daughter. The policy contains the
optional Payor Benefit rider. If the father becomes disabled, what will happen to the life
insurance premiums?
(Choose from the following options)
1. The premiums will become tax deductible until the insured's 18th birthday.
2. Since it is the policyowner, and not the insured, who has become disabled, the life insurance
policy will not be affected.
3. The insured will have to pay premiums for 6 months. If at the end of this period the father is
still disabled, the insured will be refunded the premiums.
4. The insured's premiums will be waived until she is 21. - (ANSWERS)d) The insured's
premiums will be waived until she is 21.
If the payor (usually a parent or guardian) becomes disabled for at least 6 months or dies, the
insurer will waive the premiums until the minor reaches a certain age, such as 21.
6. Are insurance company underwriters allowed to discriminate?
(Choose from the following options)
1. Yes, but not unfairly
2. No, higher risks pay higher premium
3. No, discrimination is an unfair practice
4. Yes, but only for gender - (ANSWERS)1. Yes, but not unfairly
7. Which of the following is an example of a producer's fiduciary duty?
(Choose from the following options)
1. An obligation to state every known fact about the policy the producer is selling.
2. A duty to base all transactions upon the principle of Utmost Good Faith.
3. The obligation to tell the truth to the best of one's knowledge
,EXAMFX LIFE AND HEALTH EXAM | update|COMPLETE
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4. The trust that a client places in the producer in regard to handling premiums. - (ANSWERS)d)
!@#$$$$$$$$$$%
The trust that a client places in the producer in regard to handling premiums.
An agent acts in a fiduciary capacity, based upon trust and confidence, when handling the
financial affairs of their customers, including the handling of premiums.
8. Which of the following provisions in annuity contracts allow the owner to surrender the
annuity if interest rates drop to a specified level?
(Choose from the following options)
1. Annuitization
2. Bail-out
3. Surrender
4. Nonforfeiture - (ANSWERS)b) Bail-out
Some annuity contracts contain a bail-out provision. This provision allows the owner to
surrender the annuity without charge if interest rates drop a specified amount within a certain
timeframe.
9. An insurance policy that only requires a payment of premium at its inception, provides
insurance protection for the life of the insured, and matures at the insured's age 100 is called
(Choose from the following options)
1. Modified Endowment Contract (MEC).
2. Level term life.
3. Graded premium whole life.
4. Single premium whole life. - (ANSWERS)d) Single premium whole life.
Single premium whole life requires the entire premium to be paid in one lump sum at the
policy's inception.
10. All of the following are true regarding a decreasing term policy EXCEPT
(Choose from the following options)
1. The death benefit is $0 at the end of the policy term.
2. The contract pays only in the event of death during the term and there is no cash value.
3. The face amount steadily declines throughout the duration of the contract.
4. The payable premium amount steadily declines throughout the duration of the contract. -
(ANSWERS)d) The payable premium amount steadily declines throughout the duration of the
contract.
Premiums remain level with a decreasing term policy; only the face amount decreases.
, EXAMFX LIFE AND HEALTH EXAM | update|COMPLETE
MOST TESTED QUESTIONS AND VERIFIED ANSWERS
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!@#$$$$$$$$$$%
11. An insured purchased a 10-year level term life policy that is guaranteed renewable and
convertible. What happens at the end of the 10-year term?
(Choose from the following options)
1. The insured must provide evidence of insurability to renew the policy.
2. The insured may only convert the policy to another term policy.
3. The insured may renew the policy for another 10 years at the same premium rate.
4. The insured may renew the policy for another 10 years, but at a higher premium rate. -
(ANSWERS)d) The insured may renew the policy for another 10 years, but at a higher premium
rate.
Policies that are guaranteed renewable and convertible may be renewed, without evidence of
insurability, for another like term, or may be converted to permanent insurance, without
evidence of insurability.
12. Your client wants both protection and savings from the insurance, and is willing to pay
premiums until retirement at age 65. What would be the right policy for this client?
(Choose from the following options)
1. Interest-sensitive whole life
2. Life annuity with period certain
3. Increasing term
4. Limited pay whole life - (ANSWERS)d) Limited pay whole life
Premium payments will cease at her age 65, but coverage will continue to her death or age 100.
13. An insurance producer who by contract is bound to write insurance for only one company
is classified as a/an
(Choose from the following options)
1. Solicitor.
2. Broker.
3. Independent producer.
4. Captive agent. - (ANSWERS)d) Captive agent.
A captive/exclusive agent has agreed, by contract, to produce insurance business only for the
insurer they are contracted with.
14. Concerning Juvenile Life insurance, which of the following statements is INCORRECT?
(Choose from the following options)
MOST TESTED QUESTIONS AND VERIFIED ANSWERS
(100% Correct solutions)| GET IT RIGHT!! | ALREADY
GRADED A+
1. What is the maximum civil penalty for violating the Superintendent's cease and !@#$$$$$$$$$$%
desist order?
(Choose from the following options)
1. $1,000
2. $5,000
3. $10,000
4. $15,000 - (ANSWERS)3. $10,000
2. Which option is being utilized when the insurer accumulates dividends at interest and then
uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up
early?
(Choose from the following options)
1. Paid-up additions
2. Dividend Accumulation option
3. Paid-up option
4. Accumulation at Interest - (ANSWERS)1. Paid-up additions
3. An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his
policy and exercise the extended term option for the policy's cash value, which is currently
$20,000. What would be the face amount of the new term policy?
(Choose from the following options)
1. $20,000
2. $25,000
3. $50,000
4. The face amount will be determined by the insurer. - (ANSWERS)$50,000
The face of the term policy would be the same as the face amount provided under the whole
life policy.
4. After a back injury, an insured is disabled for a year. His insurance policy carries a Disability
Income Benefit rider. Which of the following benefits will he receive?
(Choose from the following options)
1. Payments for life
2. Yearly premium waiver and income
3. Monthly premium waiver and monthly income
,EXAMFX LIFE AND HEALTH EXAM | update|COMPLETE
MOST TESTED QUESTIONS AND VERIFIED ANSWERS
(100% Correct solutions)| GET IT RIGHT!! | ALREADY
GRADED A+
4. Percentage of medical costs paid by the insurer - (ANSWERS)Monthly premium waiver and
!@#$$$$$$$$$$%
monthly income
The Disability Income Benefit rider waives the policy premiums, just like the Waiver of Premium
rider. Unlike the Waiver of Premium rider, it also allows the insured to receive a weekly or
monthly income during the disability period.
5. A father owns a life insurance policy on his 15-year-old daughter. The policy contains the
optional Payor Benefit rider. If the father becomes disabled, what will happen to the life
insurance premiums?
(Choose from the following options)
1. The premiums will become tax deductible until the insured's 18th birthday.
2. Since it is the policyowner, and not the insured, who has become disabled, the life insurance
policy will not be affected.
3. The insured will have to pay premiums for 6 months. If at the end of this period the father is
still disabled, the insured will be refunded the premiums.
4. The insured's premiums will be waived until she is 21. - (ANSWERS)d) The insured's
premiums will be waived until she is 21.
If the payor (usually a parent or guardian) becomes disabled for at least 6 months or dies, the
insurer will waive the premiums until the minor reaches a certain age, such as 21.
6. Are insurance company underwriters allowed to discriminate?
(Choose from the following options)
1. Yes, but not unfairly
2. No, higher risks pay higher premium
3. No, discrimination is an unfair practice
4. Yes, but only for gender - (ANSWERS)1. Yes, but not unfairly
7. Which of the following is an example of a producer's fiduciary duty?
(Choose from the following options)
1. An obligation to state every known fact about the policy the producer is selling.
2. A duty to base all transactions upon the principle of Utmost Good Faith.
3. The obligation to tell the truth to the best of one's knowledge
,EXAMFX LIFE AND HEALTH EXAM | update|COMPLETE
MOST TESTED QUESTIONS AND VERIFIED ANSWERS
(100% Correct solutions)| GET IT RIGHT!! | ALREADY
GRADED A+
4. The trust that a client places in the producer in regard to handling premiums. - (ANSWERS)d)
!@#$$$$$$$$$$%
The trust that a client places in the producer in regard to handling premiums.
An agent acts in a fiduciary capacity, based upon trust and confidence, when handling the
financial affairs of their customers, including the handling of premiums.
8. Which of the following provisions in annuity contracts allow the owner to surrender the
annuity if interest rates drop to a specified level?
(Choose from the following options)
1. Annuitization
2. Bail-out
3. Surrender
4. Nonforfeiture - (ANSWERS)b) Bail-out
Some annuity contracts contain a bail-out provision. This provision allows the owner to
surrender the annuity without charge if interest rates drop a specified amount within a certain
timeframe.
9. An insurance policy that only requires a payment of premium at its inception, provides
insurance protection for the life of the insured, and matures at the insured's age 100 is called
(Choose from the following options)
1. Modified Endowment Contract (MEC).
2. Level term life.
3. Graded premium whole life.
4. Single premium whole life. - (ANSWERS)d) Single premium whole life.
Single premium whole life requires the entire premium to be paid in one lump sum at the
policy's inception.
10. All of the following are true regarding a decreasing term policy EXCEPT
(Choose from the following options)
1. The death benefit is $0 at the end of the policy term.
2. The contract pays only in the event of death during the term and there is no cash value.
3. The face amount steadily declines throughout the duration of the contract.
4. The payable premium amount steadily declines throughout the duration of the contract. -
(ANSWERS)d) The payable premium amount steadily declines throughout the duration of the
contract.
Premiums remain level with a decreasing term policy; only the face amount decreases.
, EXAMFX LIFE AND HEALTH EXAM | update|COMPLETE
MOST TESTED QUESTIONS AND VERIFIED ANSWERS
(100% Correct solutions)| GET IT RIGHT!! | ALREADY
GRADED A+
!@#$$$$$$$$$$%
11. An insured purchased a 10-year level term life policy that is guaranteed renewable and
convertible. What happens at the end of the 10-year term?
(Choose from the following options)
1. The insured must provide evidence of insurability to renew the policy.
2. The insured may only convert the policy to another term policy.
3. The insured may renew the policy for another 10 years at the same premium rate.
4. The insured may renew the policy for another 10 years, but at a higher premium rate. -
(ANSWERS)d) The insured may renew the policy for another 10 years, but at a higher premium
rate.
Policies that are guaranteed renewable and convertible may be renewed, without evidence of
insurability, for another like term, or may be converted to permanent insurance, without
evidence of insurability.
12. Your client wants both protection and savings from the insurance, and is willing to pay
premiums until retirement at age 65. What would be the right policy for this client?
(Choose from the following options)
1. Interest-sensitive whole life
2. Life annuity with period certain
3. Increasing term
4. Limited pay whole life - (ANSWERS)d) Limited pay whole life
Premium payments will cease at her age 65, but coverage will continue to her death or age 100.
13. An insurance producer who by contract is bound to write insurance for only one company
is classified as a/an
(Choose from the following options)
1. Solicitor.
2. Broker.
3. Independent producer.
4. Captive agent. - (ANSWERS)d) Captive agent.
A captive/exclusive agent has agreed, by contract, to produce insurance business only for the
insurer they are contracted with.
14. Concerning Juvenile Life insurance, which of the following statements is INCORRECT?
(Choose from the following options)
