FREE AND STUDY GAMES ABOUT LIFE INSURANCE EXAM

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FREE AND STUDY GAMES ABOUT LIFE INSURANCE EXAM

QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -46 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation Question 1: Which of the following most accurately describes the basic function of a life insurance policy's net single premium?

Answer:

The net single premium is the sum of the present values of all expected benefits under the policy.

net single premium for a traditional life insurance policy is not the cost of benefits provided by the policy, considering only the earned interest.Question 2: Wilson buys life insurance but commits suicide three years later. Wilson's beneficiary will get which of the following from the insurer?

Answer:

the full death benefit

Because Wilson's suicide occurs after the exclusion period, the insurer will pay the full death benefit. If the suicide had occurred during the exclusion period, the insurer would return the premiums paid, plus interest.

Question 3: How does a family income policy differ from a family maintenance policy?

Answer:

A family income policy combines whole life insurance with decreasing term, while a family maintenance policy combines whole life and level term insurance.

A family income policy does not combine whole life insurance with increasing term life insurance.Question 4: The typical settlement options involving life contingencies generally include all of the following, EXCEPT

Answer:

period certain option

Life income with guaranteed minimum (refund guarantee or life annuity certain) is a type of life contingency option.Question 5: Ralph,Jerry/Paula are primary & equal beneficiaries of the $600,000 insur policy on the life of their mother,Judy.Ralph dies before his mother.He leaves 2 children,Tim & Hal.Judy's life insur policy designates the death benefit per capita.How will the ins

Answer:

Jerry and Paula will each receive $300,000

If the death benefit was designated per capita, Ralph's share of his mother's per capita beneficiary designation does not go to his children but will be divided among his surviving siblings, Jerry and Paula.Question 6: To be considered insurable, a risk must meet all the following requirements

EXCEPT

Answer:

The loss must be certain to occur.

To be insurable, a loss must be definable, measurable, uncertain, and not catastrophic.Question 7: Replacement is considered to have occurred if a life insurance policy is purchased and, in conjunction with that purchase, any of the following occur with an existing policy

EXCEPT

Answer:

The existing policy's beneficiary designation is changed.

Replacement occurs when an applicant is about to buy a new life insurance policy or annuity and, as a result of the purchase, an existing life insurance policy or annuity will be surrendered.

Question 8: If Lynn accidentally misstated her age on her life insurance application, what will the insurer do if this is discovered after the end of the contestability period?

Answer:

The insurer will re-calculate the death benefit.

If the insurer finds that Lynn misstated her age or sex, the insurer re-calculates the amount of the death benefit. The insurer does this even if the misstatement occurred after the end of the contestabl Question 9: In general, life insurance death benefits paid to a beneficiary in a lump sum are not taxed. Which statement is correct if the payout option is other than a lump sum?

Answer:

Interest earnings are taxable income to the beneficiary.

In general, life insurance death benefits paid to a beneficiary in a lump sum are not taxed. If the payout option is other than a lump sum, interest earnings are taxable income to the beneficiary Question 10: All the following statements regarding the automatic premium loan are correct,

EXCEPT:

Answer:

The insurer deducts the automatic premium loan on the first day of premium payment grace period if the policyowner has not paid by that time.

The insurer can set up the policy so that automatic premium loans can pay no more than 12 monthly premiums.Question 11: Phil has selected the paid-up insurance dividend option with his participating whole life insurance policy. Which of the following best describes the purpose for this type of dividend option?

Answer:

Pay-up the whole life insurance policy early.

It is the paid-up additions option, not the paid-up insurance option, that uses the dividend to buy additional paid-up insurance of the same type as the base policy.Question 12: All of the following statements regarding the accidental death benefit rider to a life insurance policy are correct EXCEPT

Answer:

There is usually no additional premium required to buy an accidental death benefit rider.

These riders may be referred to as "double indemnity" or "triple indemnity" riders.

Question 13: What is a typical life insurance policy's grace period?

Answer:

31 days

Don't confuse with free-look period.The grace period for paying a life insurance premium is generally 31 days. Although the premium is due on its due date, the policyowner has 31 days after this date to pay the premium before the policy lapses.Question 14: What does the length of an annuity's surrender charge period depend on?

Answer:

the contract design and the insurer issuing the contract

The age of the annuitant is not an issue in determining an annuity's surrender charge period.Question 15: Al is a 60-year-old male. His $100,000 fixed annuity can provide $5.50 per $1,000 of accumulated value under a straight life payout option. How much income can Al expect and for how long?

Answer:

$550 a month for life

Fixed annuitized amounts do not change over the term of the annuitization period. Under a straight life payout option, Al's $100,000 annuity fund would generate $550 a month for as long as he lives.

Question 16: Which statement about binding receipts is NOT correct?

Answer:

binding receipt guarntes covrge from time applicant completes appl.This doesnt hold true if insured later found uninsurable.insurer issues binding receipt if premium paymt is made with application.but,if premium paid when policy delivers,insurer issues re Question 17: ABC Insurers just received an application from a customer who plans to buy a new policy to replace one issued by Heritage Insurers. Within how many days must ABC Insurers notify Heritage Insurers of the proposed replacement?

Answer:

three (3) When replacement is involved, the replacing insurer must notify any existing insurers that may be affected by the proposed replacement within three business days of receiving the application.