6. NV - LIFE INSURANCE PRACTICE FINAL EXAMINATION

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6. NV - LIFE INSURANCE PRACTICE FINAL EXAMINATION

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -18 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Which of the following statements concerning the Fair Credit Reporting Act is

CORRECT

• It provides that credit life insurance will be available to an applicant on an attained age

basis

• It provides additional funding for the cash savings value of a whole life policy
• It requires that the applicant for insurance coverage will be informed if a consumer

report is requested.

• It offers protection against creditors if the applicant defaults on a loan

Answer:

• It requires that the applicant for insurance coverage will be informed if a consumer report is

requested.Question 2: When a firm established a contributor group term life insurance contract, what percentage test must be met for the participation

• 50%
• 60%
• 75%
• 100%

Answer:

c 75% Question 3: Under what circumstance would an insurance applicant be asked to submit a signed statement of continued good health?

• When the initial premium is not submitted with the application
• When the policy is underwritten as substandard
• In order to receive a preferred rating
• When an inspection report is ordered

Answer:

• When the initial premium is not submitted with the application

Question 4: An agreement to purchase a deceased partner's share of a business which is usually funded by life insurance best describes a

• Keogh plan
• split dollar plan
• buy and sell agreement
• key employee life insurane

Answer:

• buy and sell agreement

Question 5: To cover the contingency of a family breadwinner's death, all of the following would be appropriate applications for a decreasing term insurance policy EXCEPT to

• ensure that the family's 5 year old son will have a source of funds for his college education
• cover the family's mortgage
• cover the family's car payments
• ensure that the family's home improvement loan is covered

Answer:

• ensure that the family's 5 year old son will have a source

Question 6: The primary purpose of an annuity is to

• liquidate the separate account of an investment portfolio
• provide income for an individual's retirement
• provide income for a beneficiary
• create an estate immediately

Answer:

• liquidate the separate account of an investment portfolio

Question 7: The underwriting department of a life insurance company acquires information on an applicant for life insurance coverage from all of the following sources EXCEPT

• an agent's report
• the life insurance application
• Dept of Motor Vehicles records
• the Medical Information Bureau

Answer:

• Dept of Motor Vehicles records

Question 8: All of the following are common life insurance policy provisions EXCEPT a(n)

• entire contract clause
• insuring clause
• free look period
• premium deductibility option

Answer:

• premium deductibility option

Question 9: Jason is the insured in a $100,000, 10 year renewable term policy. Soon after taking out the policy, he develops a serious heart condition. Which of the following statement is

CORRECT?

• Since the condition manifested after the policy was issued, he will not be able to renew his

policy.

• Jason will be able to renew his policy
• It will be necessary for Jason to show evidence of insurability in order to renew the policy
• If Jason renews his policy, it will be rated for his health condition.

Answer:

• Jason will be able to renew his policy

Question 10: A retired person purchases an annuity for $90,000. One month later, he starts to receive payments. Based solely on these facts, what type of annuity does he have?

• Immediate
• Cash payment
• Life only
• Interest only

Answer:

• Immediate

Question 11: All of the following statements are true with regard to the 10 day free look provision in a life insurance policy EXCEPT

• the 10 day free look period begins when the insured receives the contract
• an insured who returns the policy within the 10 days free look period will receive a full refund

of premiums paid

• if a conditional receipt was issued, a pro rata refund will be made if the insured returns the

policy within the free look period

• to get a refund, the policy holder must return the policy within 10 days from the date the

policy was received

Answer: