PEARSON VUE LIFE + HEALTH INSURANCE PRACTICE EXAM |
QUESTIONS AND ANSWERS | VERIFIED ANSWERS | LATEST EXAM
P wants to name her husband as the beneficiary of her life policy. However, she
wishes to retain all of the rights of ownership. P should have her husband named
as the:
a: irrevocable beneficiary
b: revocable beneficiary
c: secondary beneficiary - CORRECT ANSWER - B
A contract that has as its basic function the systematic liquidation of
accumulated assets through periodic payments is called an:
A. indemnity contract
B. investment contract
C. endowment
D. annuity - CORRECT ANSWER - D
An insurance producer takes an application for a life insurance policy but does
not collect the initial premium. On delivery of the policy to the proposed
insured, the producer must collect the initial premium and which of the
following?
A. A copy of the MIB report
B. The insured's signed statement of continued good health
C. A copy of the conditional receipt
D. A copy of the temporary insurance agreement that covered the period
between the application date and the delivery date. - CORRECT ANSWER - B
An employer can deduct premium payments as an ordinary business expense for
which of the following life coverages?
A. Buy and Sell Agreements
,B. Group
C. Key Employee
D. Joint Life, if the business is named as the beneficiary - CORRECT
ANSWER - B
A producer takes applications from identical twins who want to buy the same
type of policy in the same amount. The insurer issues the policies as applied for,
but charges a 25 percent higher premium for one of the policies. The difference
in premiums is probably due to which of the following factors?
A. Incontestability
B. Insurable interest
C. Consideration
D. Risk classification - CORRECT ANSWER - D
In the event of an insured's death, which of the following provides an income
for the family during a designated period of time followed by a lump sum death
benefit?
A. Family Income rider
B. Survivorship Life policy
C. Joint Life policy
D. Modified Life policy - CORRECT ANSWER - A
Which of the following statements is CORRECT about Group Life conversion
privileges?
A. Under the COBRA law, a departing employee may elect to remain a member
of the Group Life plan for a limited period of time.
B. Death during the conversion period is covered even if the departing
employee chose not to convert the policy.
C. A departing employee must individually pay the premium if the employee
elects to be covered during the conversion period.
,D .If a departing employee elects to convert a life insurance policy, the insurer
must offer Term insurance as one of the choices. - CORRECT ANSWER - B
Which of the following policies is an interest-sensitive form of permanent
protection?
A. Universal Life
B. Limited-Pay Life
C. Graded Premium Whole Life
D. Modified Whole Life - CORRECT ANSWER - A
Reinstatement of a life insurance policy requires an insured to take all of the
following actions EXCEPT:
A. provide evidence of insurability
B. make collateral assignment to the insurer
C. pay back interest on any outstanding policy loan
D. pay all past-due premiums - CORRECT ANSWER - B
Which of the following statements about a Renewable Term policy is
CORRECT?
A. It is renewable at the option of the insurer.
B. It is renewable at the option of the insured.
C. It is renewable at the option of the insurer, with proof of insurability.
D. It is renewable at the option of the insured, with proof of insurability. -
CORRECT ANSWER - B
If an insured commits suicide after the Suicide clause in the insured's life
insurance policy has expired, the insurer will take which of the following
actions?
A. Refuse to pay the Death benefit or refund any premiums
B. Refund only the premiums paid
, C. Refund the premiums paid plus interest
D. Pay the Death benefit - CORRECT ANSWER - D
Which of the following policy provisions provides for continuation of coverage
despite nonpayment of premiums?
A. Entire Contract
B. Ownership clause
C. Nonforfeiture Option
D. Insuring clause - CORRECT ANSWER - C
An applicant for life insurance may question the validity and source of any
consumer information developed under the
A. Medical Information Bureau Disclosure Act
B. Fair Credit Reporting Act (Insurance Information and Privacy Protection
Act)
C. Equal Employment Opportunity Act
D. Medicare Act - CORRECT ANSWER - B
The PRIMARY reason for selecting a Variable Whole Life policy instead of a
traditional Whole Life policy is that the Variable Whole Life policy:
A. provides flexible premium payments
B. allows the policyowner to borrow a larger percentage of the cash value
C. has the potential to earn a higher rate of return on the cash value
D. allows the policyowner more flexibility in naming and changing
beneficiaries - CORRECT ANSWER - C
A policyowner names his wife as the primary beneficiary of his Universal Life
policy on a revocable basis. He also names his three children as his secondary
beneficiaries and his estate as his tertiary beneficiary. If the policyowner's wife
predeceases him, and then he dies, who will receive the policy proceeds?
QUESTIONS AND ANSWERS | VERIFIED ANSWERS | LATEST EXAM
P wants to name her husband as the beneficiary of her life policy. However, she
wishes to retain all of the rights of ownership. P should have her husband named
as the:
a: irrevocable beneficiary
b: revocable beneficiary
c: secondary beneficiary - CORRECT ANSWER - B
A contract that has as its basic function the systematic liquidation of
accumulated assets through periodic payments is called an:
A. indemnity contract
B. investment contract
C. endowment
D. annuity - CORRECT ANSWER - D
An insurance producer takes an application for a life insurance policy but does
not collect the initial premium. On delivery of the policy to the proposed
insured, the producer must collect the initial premium and which of the
following?
A. A copy of the MIB report
B. The insured's signed statement of continued good health
C. A copy of the conditional receipt
D. A copy of the temporary insurance agreement that covered the period
between the application date and the delivery date. - CORRECT ANSWER - B
An employer can deduct premium payments as an ordinary business expense for
which of the following life coverages?
A. Buy and Sell Agreements
,B. Group
C. Key Employee
D. Joint Life, if the business is named as the beneficiary - CORRECT
ANSWER - B
A producer takes applications from identical twins who want to buy the same
type of policy in the same amount. The insurer issues the policies as applied for,
but charges a 25 percent higher premium for one of the policies. The difference
in premiums is probably due to which of the following factors?
A. Incontestability
B. Insurable interest
C. Consideration
D. Risk classification - CORRECT ANSWER - D
In the event of an insured's death, which of the following provides an income
for the family during a designated period of time followed by a lump sum death
benefit?
A. Family Income rider
B. Survivorship Life policy
C. Joint Life policy
D. Modified Life policy - CORRECT ANSWER - A
Which of the following statements is CORRECT about Group Life conversion
privileges?
A. Under the COBRA law, a departing employee may elect to remain a member
of the Group Life plan for a limited period of time.
B. Death during the conversion period is covered even if the departing
employee chose not to convert the policy.
C. A departing employee must individually pay the premium if the employee
elects to be covered during the conversion period.
,D .If a departing employee elects to convert a life insurance policy, the insurer
must offer Term insurance as one of the choices. - CORRECT ANSWER - B
Which of the following policies is an interest-sensitive form of permanent
protection?
A. Universal Life
B. Limited-Pay Life
C. Graded Premium Whole Life
D. Modified Whole Life - CORRECT ANSWER - A
Reinstatement of a life insurance policy requires an insured to take all of the
following actions EXCEPT:
A. provide evidence of insurability
B. make collateral assignment to the insurer
C. pay back interest on any outstanding policy loan
D. pay all past-due premiums - CORRECT ANSWER - B
Which of the following statements about a Renewable Term policy is
CORRECT?
A. It is renewable at the option of the insurer.
B. It is renewable at the option of the insured.
C. It is renewable at the option of the insurer, with proof of insurability.
D. It is renewable at the option of the insured, with proof of insurability. -
CORRECT ANSWER - B
If an insured commits suicide after the Suicide clause in the insured's life
insurance policy has expired, the insurer will take which of the following
actions?
A. Refuse to pay the Death benefit or refund any premiums
B. Refund only the premiums paid
, C. Refund the premiums paid plus interest
D. Pay the Death benefit - CORRECT ANSWER - D
Which of the following policy provisions provides for continuation of coverage
despite nonpayment of premiums?
A. Entire Contract
B. Ownership clause
C. Nonforfeiture Option
D. Insuring clause - CORRECT ANSWER - C
An applicant for life insurance may question the validity and source of any
consumer information developed under the
A. Medical Information Bureau Disclosure Act
B. Fair Credit Reporting Act (Insurance Information and Privacy Protection
Act)
C. Equal Employment Opportunity Act
D. Medicare Act - CORRECT ANSWER - B
The PRIMARY reason for selecting a Variable Whole Life policy instead of a
traditional Whole Life policy is that the Variable Whole Life policy:
A. provides flexible premium payments
B. allows the policyowner to borrow a larger percentage of the cash value
C. has the potential to earn a higher rate of return on the cash value
D. allows the policyowner more flexibility in naming and changing
beneficiaries - CORRECT ANSWER - C
A policyowner names his wife as the primary beneficiary of his Universal Life
policy on a revocable basis. He also names his three children as his secondary
beneficiaries and his estate as his tertiary beneficiary. If the policyowner's wife
predeceases him, and then he dies, who will receive the policy proceeds?
