PROMETRIC LIFE INSURANCE PRACTICE 1 EXAM

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PROMETRIC LIFE INSURANCE PRACTICE 1 EXAM

QUESTIONS

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -20 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Deferred annuities are normally purchased by individuals who:

Answer:

want tax-deferred growth for retirement funds

Question 2: Which statement is true about life annuities?

Answer:

the insurer uses the law of large numbers to predict life expectancy Question 3: 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 4: The trustees of a qualified retirement plan received notice of several claims against the accrued benefits of a key employee, age 52. The trustees must refuse to pay all of the

following EXCEPT:

Answer:

The Internal Revenue Service presenting on order for collection

Question 5: When life insurance is being used to conserve a large estate that consists primarily

of non-liquid assets, the primary use if the policy proceeds will be to:

Answer:

pay estate taxes Question 6: When replacement is involved, the life insurance producer or agent is required to

give the applicant:

Answer:

A copy if each sales proposal used in the presentation Question 7: All of the following are reasons for purchasing life insurance on a spouse who does

not work or pay outside the home EXCEPT:

Answer:

to guarantee that newborn children will be eligible for life insurance 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: Which statement explains why an annuitant would seek tax-free exchange of one contract for another within the same company?

Answer:

the new contract offers more attractive rates Question 10: If a life insurance policy is transferred to another person in exchange for valuable

consideration, the the death proceeds may:

Answer:

lose their income tax exempt status Question 11: An immediate annuity:

Answer:

is purchased with a single premium

Question 12: 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 13: Which life insurance policy provides ONLY pure protection?

Answer:

Term Life Question 14: A withdrawal from a deferred annuity must me authorized by:

Answer:

the owner Question 15: Education funds created by life insurance death benefits are designed to cover the

cost of all the following EXCEPT:

Answer:

Medical Care Question 16: A preferred risk classification for a whole life insurance policy means that:

Answer:

the premium rate is lower than the standard rate for the identical policy Question 17: 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 18: 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 19: 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 20: Which of the following statements is true if an insured purchases a limited payment whole life insurance policy?

Answer:

the insured has lifetime protection