LIFE INSURANCE EXAM QUESTIONS WI EXAM QUESTIONS

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LIFE INSURANCE EXAM QUESTIONS WI EXAM QUESTIONS

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

-Format: Multiple-choice / Flashcard

Question 1: A provision in a life or health insurance policy that may assist an insurance company in determining the cause of death of an insured is called

• attending physician's report
• medical exam
• autopsy
• inspection

Answer:

c Question 2: An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called

• reduction of premiums
• paid-up additions
• one-year term purchase
• accumulation at interest

Answer:

b

Question 3: An agent and an applicant for a life insurance policy fill out and sign the application.However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will the coverage begin?

a) When the agent submits the application to the company and the company issues a

conditional receipt

• when the agent delivers the policy, collects the initial premium, and the applicant completes

an acceptable Statement of Good Health

• on the designated effective date
• on the application date

Answer:

b Question 4: Which of the following describes the taxation of an annuity when money is withdrawn during the accumulation phase?

a) Withdrawn amounts are taxed on a last in, first out basis

b) Withdrawn amounts are taxed on a first in, last out basis

• taxes are deferred on withdrawn amounts, but a flat penalty is charged
• taxes are deferred on withdrawn amounts

Answer:

a Question 5: If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

• cost of living provision
• nonforfeiture option
• guaranteed insurability rider
• paid-up additions option

Answer:

d

Question 6: Which is TRUE about the cash surrender nonforfeiture option?

a) After the cash surrender, the insured is covered for a grace period of one month

• the policy remains active for some time after the policyholder opts for cash surrender
• the policyholder receives the original cash value of the policy
• funds exceeding the premium paid are taxable as ordinary income

Answer:

d

Question 7: The interest earned on policy dividends is

• non taxable
• tax deductible
• 40% taxable, similar to a capital gain
• taxable

Answer:

d

Question 8: The two types of assignments are

• absolute and partial
• complete and partial
• complete and proportionate
• absolute and collateral

Answer:

d Question 9: When replacing a policy, an insurer must maintain a file containing copies of all statements for

• 10 years

b) As long as the insurer remains in business

• 3 years
• 5 years

Answer:

d

Question 10: According to the entire contract provision, a policy must contain

• a declarations page with a summary of insureds

b) Buyer's guide to life insurance

• listing of the insured's former insurer(s) for incontestability provisions
• a copy of the original application for insurance

Answer:

d Question 11: An individual buys a flexible premium deferred life annuity with a 20 year period certain. What would his beneficiary receive if he died 5 years after beginning the annuity phase?

• payments for 15 years
• payments for 20 years
• payments for life
• nothing

Answer:

a Question 12: The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage begin?

• as of the policy delivery date
• as of the first month after the policy issue
• as of the policy issue date
• as of the application date