EXAMFX: LIFE INSURANCE PRACTICE EXAM.

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EXAMFX: LIFE INSURANCE PRACTICE EXAM.

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -97 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this?

Answer:

Reinstatement provision Question 2: An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit.The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement?

Answer:

$200,000

Question 3: Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?

Answer:

Size of each installment Question 4: Which of the following is another term for the accumulation period of an annuity?

Answer:

Pay-in period

Question 5: Which of the following best describes annually renewable term insurance?

Answer:

It is level term insurance.

Question 6: What is the purpose of a free-look period in insurance policies?

Answer:

It allows the insured to reject the policy with a full refund.

Question 7: Individual licenses must be renewed every

Answer:

• years.

Question 8: Which of the following best describes a misrepresentation?

Answer:

Issuing sales material with exaggerated statements about policy benefits

Question 9: Which of the following is TRUE about nonforfeiture values?

Answer:

They are required by state law to be included in the policy.Question 10: The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?

Answer:

Conditional

Question 11: Life income joint and survivor settlement option guarantees

Answer:

Income for 2 or more recipients until they die.

Question 12: An initial temporary license in this state may be issued for up to

Answer:

90 days.

Question 13: Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?

Answer:

SEPs are suitable for large companies.Question 14: A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?

Answer:

Level term Question 15: What is the minimum age for insurance license applicants in this state?

Answer:

18 Question 16: Which of the following is NOT true regarding the accumulation period of an annuity?

Answer:

It would not occur in a deferred annuity.Question 17: If the Director receives written notice demanding a hearing regarding an order, and if the order is scheduled to go into effect during the trial, then the order will be delayed. This is called

Answer:

Stay of Action.Question 18: All of the following would be different between qualified and nonqualified retirement plans EXCEPT

Answer:

Taxation on accumulation Question 19: When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

Answer:

Issue the policy anyway and pay the face value to the beneficiary.

Question 20: Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

Answer:

Insuring clause Question 21: Which of the following statements is true regarding requirements for applicants for an insurance license?

Answer:

They must provide information about their personal history and experience.Question 22: An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

Answer:

Aleatory Question 23: Which of the following is a key distinction between variable whole life and variable universal life products?

Answer:

Variable whole life has a guaranteed death benefit.Question 24: Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?

Answer:

Making comparisons between different policies

Question 25: When is the earliest a policy may go into effect?

Answer:

When the application is signed and a check is given to the agent Question 26: An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?

Answer:

If the primary beneficiary predeceased the insured