LIFE INSURANCE MASTERY EXAM EXAM QUESTIONS

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LIFE INSURANCE MASTERY EXAM EXAM QUESTIONS

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -99 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: kevin owns a whole life insurance policy, issued on a standard basis, that has lapsed for nonpayment of the premium. if Kevin has not chosen a non forfeiture option, which of the following actions will the insurer most likely take?

Answer:

automatically apply the extended term option 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 Question 3: hannah participates in her company's retirement plan, which provides for 100 percent vesting after four years with no vesting prior to that. what is the type of vesting schedule called?

Answer:

cliff vesting Question 4: which statement about corporate-owned life insurance (COLI) plans is not correct?

Answer:

the employees own the policies

Question 5: all of the following statements about the regulation of the sale of variable products

are correct, except:

Answer:

agents who only sell variable life products and do not sell fixed life products are not required to hold a life insurance license

Question 6: which of the following is an insurance risk?

Answer:

the possibility of becoming disable and unable to earn income Question 7: in which of the following relationships would and insurable interest not exist?

Answer:

two neighbors

Question 8: what is the term for voluntarily giving up a known right?

Answer:

waiver Question 9: which of the following pieces of information about a proposed life insurance policy is not contained in the policy summary given to a buyer?

Answer:

appropriate amount of insurance Question 10: elizabeth owns a universal life insurance policy with a $100,000 cash value. She pays a $1400 premium for the coverage. If she loses her job and decides not to make a premium payement, which one of the following is most likely to occus assuming Elizabeth wishes to keep the policy in force?

Answer:

The policy will stay in force as long as the cash value will cover the monthly deductions and charges Question 11: Frank intends to use his life insurance to make the down payement on a vacation home. In so doing, Frank is using which of the following?

Answer:

living benefits

Question 12: Brian is a 35-year-old who own a $200,000 whole life policy. He realizes that he may not need this same life insurance protection when he's 65. at 65, his main financial concern will be retirement income. if brian surrenders his policy then, how can he use the cash value to help fund his retirement without incurring any taxes on the transaction even if the cash value exceeds his basis in the policy?

Answer:

he can use the cash value to buy an annuity Question 13: which one of the following statements about term life insurance and permanent insurance is most correct?

Answer:

when issued, the level term policy will be less expensive than the permanent policy of the same face amount Question 14: which annuity settlement option guarantees that income is paid for the length of the annuitant's life, but no less than a specified number of years?

Answer:

life income with period certain Question 15: when comparing her insurance companys policies to those of Zenith insurance, melanie makes misleading statement to convinve an insurance prospect to terminate a policy with Zenith and buy one from Melanies company. What is melanie engaged in?

Answer:

twisting Question 16: what is the name of one of the first systems developed for determining how much life insurance is necessary, based on the economic value of human life?

Answer:

human life value apporach Question 17: all of the following statements regarding the extended term nonforfeiture option are correct except

Answer:

the extended term option is available whether the original policy was issued on a standard or sunbstandard (rated) basis

Question 18: for which of the following purposes are annuities most often used?

Answer:

retirement planning Question 19: endowment contracts issued today no longer qualify as life insurance (for tax purposes), but those issued before what date were grandfathered and still retain favorable life insurance taxation?

Answer:

1986 Question 20: to boost her insurance sales at the end of the year, trudy started offering potential clients $250 cash gift cards in exchange for purchasing a life insurance policy. Which ethical sales practice has Trudy violated?

Answer:

rebating Question 21: a life insurer is permitted to employ which of the following persons to administer funds held in the insurer's separate account

Answer:

a person convicted of moving traffic violations Question 22: before selling annuity, an agent must make reasonable efforts to obtain

information about the prospect with regard to all of the following except:

Answer:

marital status Question 23: all of the following statements about the taxation of annuities are correct except

Answer:

qualifies annuities-those used in qualified plans- are taxed according to the rules that apply to life insurance.Question 24: Which of the following best typifies the use of a structured settlement annuity?

Answer:

shirley was paralyzed in a car accident, and a jury awarded her $2 million which much be paid to her over 20 years