LIFE INSURANCE EXAM-ILLINOIS

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LIFE INSURANCE EXAM-ILLINOIS

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -100 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Participating policy

Answer:

pays a dividend

Question 2: tax free

Answer:

no tax on benefits

Question 3: Key employee purpose is

Answer:

to keep the business going at the death of the key employee

Question 4: USA patriot act

Answer:

federal law to protect US from terrorists and to prevent money-laundry of funds; requires financial institutions including insurance companies to clearly identify owners of financial institution accounts; reported to US department of treasury

Question 5: Jumping Juvenile provision

Answer:

coverage terminates and is convertible to up to 5 times face amount usually at the primary insured's age 65 or the child's age 25

Question 6: Decreasing Term Life Insurance

Answer:

it provides a decreasing amount of life insurance protection for a specified period of time

Question 7: Underwriter

Answer:

is an insurance company employee who reviews applications and additional information and decides whether the applicant is acceptable and what the correct premium rate should be

Question 8: Guaranteed Insurability Rider

Answer:

if added for extra premium charge, guarantees the insured the right to purchase additional insurance at the premium rate for the insured's attained age without evidence of insurability

Question 9: Accidental Death Insurance

Answer:

it pays benefits for death caused by injuries sustained by accidental means

Question 10: If the primary insured dies prior to his/her age 65...

Answer:

the term life rider covering the spouse is paid up at the primary insured's death until the primary insured would have been age 65

Question 11: Ten day free look provision

Answer:

required by law, 10 days from date of receiving the policy and allows policyowner to read the policy over and return it to the insurance company for a full premium refund without giving a reason

Question 12: Limited-Pay Whole Life also known as

Answer:

single premium life, 20 pay life, life paid-up at age 55

Question 13: To sell universal life requires

Answer:

a life insurance producer license

Question 14: Split dollar life insurance at the insured employee's death...

Answer:

the employer is paid either the premiums the employer has paid or the cash value, whichever is greater.The insured employee's beneficiary is paid the difference between face amount and the payment to the employer

Question 15: Business Life Insurance-Key Employee

Answer:

It is life insurance purchased on the life of a key business employee; the business is both the policyowner and the beneficiary

Question 16: Fair Credit Reporting Act (4 items)

Answer:

• applicant has a right to be advised that there may be information collected from outside sources

• the applicant has a right to the name and address of the inspecting firm if rated or rejected

• the applicant has a right to see the inspection report

• the applicant has the right to have medical information sent to his or her physician

Question 17: Policyowner

Answer:

is the person or org that applies for the policy and pays the premium

Question 18: Annuitie plans (3 classifications)

Answer:

single, level, and flexible

Question 19: Graded premiums are also called

Answer:

modified premiums

Question 20: Actuarial Tables

Answer:

Are statistical tables that are used when calculating premium rates and mortality loss reserves

Question 21: No premium paid, no receipt issued. When does policy go into effect?

Answer:

• when the policy has been personally delivered

• insured signs Statement of Continuing Good Health

• Premium is paid

Question 22: Errors and changes on the application

Answer:

if an error on an application occurs, underwriter may require that it be correct and changes must be approved and initialed by the applicant

Question 23: Warranties

Answer:

guaranteed statements in an application attachment regarding extra risk upon which the insurance company can contest the policy within the first 2 years of the policy if the statement is in anyway concealed or false

Question 24: Buy-sell agreement

Answer:

it is an agreement entered into by partners of a partnership or stockholders of a closely held corporation Question 25: Tax: Key employee premiums

Answer:

cannot be tax deducted (tax free) Question 26: Life Insurance Policies transfer:

Answer:

financial risks of premature death on a defined amount

Question 27: tax deferred plans

Answer:

tax on the interest and/or earnings is postponed as it compounds and accumulates until it is withdrawn