1
CH#2: Life Insurance Basics Q&A EXAM Questions &
Answers | 100% Verified solutions |Questions with
Correct Answers 2025 latest update!!
What is the purpose of a conditional receipt
A) It is intended to provide coverage on a date earlier than the date of the
issuance of the policy
B) It guarantees the applicant that a policy will be issued in the amount applied
for in the application
C) It serves as proof that the agent has determined the applicant to be fully
insurable for coverage by the insurance company
D) It is given by the agent only to applicants who fully prepay all scheduled
premiums in advance of policy issue - (ANSWER)It is intended to provide
coverage on a date earlier than the date of the issuance of the policy
What does "liquidity" refer to in a life insurance policy
A) The policyowner receives dividend checks each year
B) The insured is receiving payments each month is retirement
C) Cash values can be borrowed at any time
D) The death benefit replaces the assets that would have accumulated if the
insured not died - (ANSWER)Cash values can be borrowed at any time
Which of the following statements regarding HIV testing for life insurance
purposes is NOT true
, 2
A) The testing practices must meet the criteria of the U.S. Department of Health
and Human Services
B) HIV testing is regulated at the state level
C) Insurers are barred from requesting HIV testing
D) Positive test results will be forwarded to the state's Department of Health if a
physician is not selected by the applicant - (ANSWER)Insurers are barred from
requesting HIV testing
Which of the following applicants could the insurer charge a higher rate of
premium and not violate regulations regarding unfair discrimination
A) An applicant who is a smoker
B) An applicant who was born in another country
C) An applicant who is legally blind
D) An applicant who has been a victim of domestic abuse - (ANSWER)An
applicant who is a smoker
Which of the following types of insurance policies would perform the function of
cash accumulation
A) Credit life
B) Increasing term
C) Whole life
, 3
D) Term life - (ANSWER)Whole life
Which of the following statements concerning buy-sell agreements is true
A) Benefits received are considered income taxable
B) Buy-sell agreements pay in the event of a medical emergency
C) Buy-sell agreements are normally funded with a life insurance policy
D) Premiums paid are deductible as a business expense - (ANSWER)Buy-sell
agreements are normally funded with a life insurance policy
If a policy includes a free-look period of at least 10 days, the Buyer's Guide must
be delivered to the applicant
A) With the policy
B) Upon issuance of the policy
C) Prior to accepting an initial premium
D) Prior to filling out an application for insurance - (ANSWER)With the policy
Which of the following is a generic consumer publication that explains life
insurance in general terms in order to assist the applicant in the decision-making
process
A) Policy Summary
CH#2: Life Insurance Basics Q&A EXAM Questions &
Answers | 100% Verified solutions |Questions with
Correct Answers 2025 latest update!!
What is the purpose of a conditional receipt
A) It is intended to provide coverage on a date earlier than the date of the
issuance of the policy
B) It guarantees the applicant that a policy will be issued in the amount applied
for in the application
C) It serves as proof that the agent has determined the applicant to be fully
insurable for coverage by the insurance company
D) It is given by the agent only to applicants who fully prepay all scheduled
premiums in advance of policy issue - (ANSWER)It is intended to provide
coverage on a date earlier than the date of the issuance of the policy
What does "liquidity" refer to in a life insurance policy
A) The policyowner receives dividend checks each year
B) The insured is receiving payments each month is retirement
C) Cash values can be borrowed at any time
D) The death benefit replaces the assets that would have accumulated if the
insured not died - (ANSWER)Cash values can be borrowed at any time
Which of the following statements regarding HIV testing for life insurance
purposes is NOT true
, 2
A) The testing practices must meet the criteria of the U.S. Department of Health
and Human Services
B) HIV testing is regulated at the state level
C) Insurers are barred from requesting HIV testing
D) Positive test results will be forwarded to the state's Department of Health if a
physician is not selected by the applicant - (ANSWER)Insurers are barred from
requesting HIV testing
Which of the following applicants could the insurer charge a higher rate of
premium and not violate regulations regarding unfair discrimination
A) An applicant who is a smoker
B) An applicant who was born in another country
C) An applicant who is legally blind
D) An applicant who has been a victim of domestic abuse - (ANSWER)An
applicant who is a smoker
Which of the following types of insurance policies would perform the function of
cash accumulation
A) Credit life
B) Increasing term
C) Whole life
, 3
D) Term life - (ANSWER)Whole life
Which of the following statements concerning buy-sell agreements is true
A) Benefits received are considered income taxable
B) Buy-sell agreements pay in the event of a medical emergency
C) Buy-sell agreements are normally funded with a life insurance policy
D) Premiums paid are deductible as a business expense - (ANSWER)Buy-sell
agreements are normally funded with a life insurance policy
If a policy includes a free-look period of at least 10 days, the Buyer's Guide must
be delivered to the applicant
A) With the policy
B) Upon issuance of the policy
C) Prior to accepting an initial premium
D) Prior to filling out an application for insurance - (ANSWER)With the policy
Which of the following is a generic consumer publication that explains life
insurance in general terms in order to assist the applicant in the decision-making
process
A) Policy Summary
