LIFE PROVISIONS EXCLUSIONS EXAM PEARSON VUE

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Question 1: Which statement regarding the Misstatement of Age provision is considered to be true?

Answer:

Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered

Question 2: Dividends paid from a life insurance policy are

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issued by the insurer Question 3: K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Dividend Option should she chose?

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Paid-Up Additional Insurance Question 4: In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefit from the policy?

Answer:

Owner's Rights

Question 5: Which type of life insurance beneficiary requires his/her consent when a change of beneficiary is attempted by the policyowner?

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Irrevocable beneficiary Question 6: The Accelerated Death Benefit provision in a life insurance policy is also known as a(n)

Answer:

"Living Benefit". The Accelerated Death Benefit provision in a life insurance policy is also known as a "Living Benefit".Question 7: P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process.Which of these actions will the insurer take?

Answer:

Beneficiary will be paid the Death Benefit Question 8: J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?

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Reinstatement provision Question 9: In a life insurance policy, which feature states that the policy will not cover certain risks

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exclusion Question 10: When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?

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Void the policy only if it is discovered during the Contestable period and proven to be material Question 11: Which of these provisions required proof of insurability after a policy has lapsed?

Answer:

Reinstatement

Question 12: When is the face amount of a Whole Life policy paid?

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When the insured dies or at the policy's maturity date, whichever happens first Question 13: All of these statements about the Waiver of Premium provision are correct

EXCEPT

Answer:

Insured must be eligible for Social Security disability for claim to be accepted Question 14: Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?

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Variable Universal Life Question 15: K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?

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Proceeds will be payable to K's estate if P dies within a specified time Question 16: Which premium schedule results in the lowest cost to the policyowner?

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annual Question 17: The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called

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Accidental Death and Dismemberment rider (AD&D)

Question 18: A term life writer offers the insured

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additional life coverage

Question 19: Which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to life insurance policy's

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All proceeds are income tax free in the year they are received

Question 20: When can a policyowner change a revocable beneficiary?

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anytime Question 21: A policyowner may generate taxable income from which of the following Dividend Options?

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Accumulation at interest Question 22: M purchased an accidental death and dismemberment policy and named his son as beneficiary. M has the right to change the beneficiary designation at any time. What type of beneficiary is his son?

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Revocable Question 23: P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability?

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P will still receive declared dividends Question 24: Which of the following Nonforfeiture options offers the highest death benefit?

Answer:

Extended term

Question 25: Which statement is true regarding a minor beneficiary?

Answer:

Normally, a guardian is required to be appointed in the Beneficiary clause of the contract