PEARSON VUE LIFE INSURANCE PRACTICE EXAM QUESTIONS AND CORRECT ANSWERS

PEARSON VUE LIFE INSURANCE
PRACTICE EXAM QUESTIONS AND
CORRECT ANSWERS

P wants to name her husband as the beneficiary of her life policy. However, she wishes to
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retain all of the rights of ownership. P should have her husband named as the:
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A.irrevocable beneficiary rr




B.revocable beneficiary rr




C.secondary beneficiary - ans-B rr rr rr




A contract that has as its basic function the systematic liquidation of accumulated assets t
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hrough periodic payments is called an:
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A.indemnity contract rr




B.investment contract rr




C.endowment

D.annuity - ans-D rr rr




An insurance producer takes an application for a life insurance policy but does not collect
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the initial premium. On delivery of the policy to the proposed insured, the producer must c
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ollect the initial premium and which of the following?
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A.A copy of the MIB report
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B.The insured's signed statement of continued good health
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C.A copy of the conditional receipt
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D.A copy of the temporary insurance agreement that covered the period between the appl
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ication date and the delivery date. - ans-B
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, An employer can deduct premium payments as an ordinary business expense for which o
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f the following life coverages?
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A.Buy and Sell Agreements rr rr rr


B.Group
C.Key Employee rr


D.Joint Life, if the business is named as the beneficiary - ans-B
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A producer takes applications from identical twins who want to buy the same type of polic
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y in the same amount. The insurer issues the policies as applied for, but charges a 25 per
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cent higher premium for one of the policies. The difference in premiums is probably due to
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which of the following factors?
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A.Incontestability
B.Insurable interest rr


C.Consideration
D.Risk classification - ans-D rr rr rr




In the event of an insured's death, which of the following provides an income for the family
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during a designated period of time followed by a lump sum death benefit?
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A.Family Income rider rr rr




B.Survivorship Life policy rr rr




C.Joint Life policy rr rr




D.Modified Life policy - ans-A rr rr rr rr




Which of the following statements is CORRECT about Group Life conversion privileges?
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A.Under the COBRA law, a departing employee may elect to remain a member of the Gro
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up Life plan for a limited period of time.
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B.Death during the conversion period is covered even if the departing employee chose no
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t to convert the policy.
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C.A departing employee must individually pay the premium if the employee elects to be c
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overed during the conversion period. rr rr rr rr




D.If a departing employee elects to convert a life insurance policy, the insurer must offer T
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erm insurance as one of the choices. - ans-B
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Which of the following policies is an interest-sensitive form of permanent protection?
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