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LIFE EXAM PROMETRIC
Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -50 Questions and Answers
-Format: Multiple-choice / Flashcard
Question 1: Which statement is true about life annuities?
Answer:
The insurer uses the law of large numbers to predict life expectancy.Question 2: The authority to select a settlement option under an individual annuity contract
resides with:
Answer:
The owner Question 3: One parent purchases and is the owner of a juvenile life insurance policy on a child, with the other parent named as beneficiary. If the policy contains a payor benefit, who must become disabled before premiums will be waived?
Answer:
Only the parent who purchased the policy Question 4: An immediate annuity contract provides for:
Answer:
The systematic liquidation of the principal and interest
Question 5: The insured died two years after discontinuing annual premium payments of $200 on a $20,000 whole life insurance policy with a $2,000 cash value and an automatic premium loan provision. How much will the insurer pay to the insured's beneficiary?
Answer:
The $20,000 face amount less any policy loans Question 6: When an annuitant under a life-only annuity dies, what is the amount of the property interest in the contract that will be includable in the annuitant's gross estate?
Answer:
zero Question 7: The beneficiary of a life insurance policy originally is indicated:
Answer:
On the life insurance application Question 8: All of the following statements about universal life insurance are true EXCEPT:
Answer:
Premiums must be paid on a monthly basis.Question 9: Group term life insurance can be provided at low rates for all of the following
reasons EXCEPT:
Answer:
It accumulates cash values in an efficient manner.Question 10: All of the following statements about an accidental death benefit in a life insurance
policy are true EXCEPT:
Answer:
It is used only in term life insurance policies.Question 11: When life insurance is being used to conserve a large estate that consists primarily of non-liquid assets, the primary use of the policy proceeds will be to
Answer:
Pay estate taxes
Question 12: Current interest rates provide a reasonable basis for projecting cash values in a
fixed annuity when:
Answer:
The current interest rate is close to historical standards Question 13: The lowest total annual premium expenditure usually results when premiums are
paid:
Answer:
Annually Question 14: Which provision can provide for the payment of life insurance benefits to the insured while living?
Answer:
An accelerated benefit provision Question 15: Which financial element related to a fixed annuity contract tends to remain in the 3%-5% range?
Answer:
The guaranteed minimum interest rate Question 16: All of the following statements about a life insurance policy loan are true EXCEPT
Answer:
Failure to repay the loan when due terminates the policy.Question 17: All of the following are reasons for purchasing life insurance on a spouse who
does not work for pay outside the home EXCEPT:
Answer:
To guarantee that newborn children will be eligible for life insurance Question 18: All of the following types of life insurance policies allow the policyowner to make
changes in coverage without replacing the policy EXCEPT:
Answer:
Modified premium whole life insurance
Question 19: When replacement is involved, the life insurance producer or agent is required to give the applicant
Answer:
A copy of each sales proposal used in the presentation Question 20: Education funds created by life insurance death benefits are designed to cover the cost of all of the following EXCEPT
Answer:
Medical care
Question 21: An immediate annuity
Answer:
Is purchased with a single premium Question 22: Which one of the following statements about the application for life insurance is true?
Answer:
It becomes a permanent part of the insurance contract.Question 23: Which rider is included in a policy with whole life insurance on the principal insured and term insurance on the insured's spouse and children?
Answer:
Family rider Question 24: Group life insurance plans generally require participation by:
Answer:
75% of eligible employees, under a contributory plan Question 25: All of the following statements about the provisions in a typical modification
clause in a life insurance policy are true EXCEPT:
Answer:
The authority to bind the insurance company to policy changes or modifications is limited to specified persons.
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