STATE EXAM LIFE INSURANCE EXAM QUESTIONS

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STATE EXAM LIFE INSURANCE EXAM QUESTIONS

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

-Format: Multiple-choice / Flashcard

Question 1: What settlement option provides a single beneficiary with income for the right of his/her life?

Answer:

Single life Question 2: If the annuitant dies before annuitization occurs, what will the beneficiary receive?

Answer:

Either the amt. paid into the plan or the cash value of the plan, whichever is the greater amt.Question 3: When it comes to the attention of the Dept. of Ins. that a producer has committed a violation or engaged in an unfair trade practice, before issuing a cease and desist order, the head of the Dept. of Ins. must?

Answer:

Hold a hearing Question 4: An insured has a $10,000 term life policy. The annual premium of $200 was due 1/1/15; however, the insured failed to pay the premium and died 2/28/15. How much would the beneficiary receive from the policy?

Answer:

$9,800. Death occurred within the grace period. Past due premiums are subtracted from face amt. of policy.

Question 5: Who oversees the implementation of the provisions related to private health insurance and works with states to establish new Health Ins. Marketplaces?

Answer:

CCIIO (Center for Consumer Information and Insurance Question 6: Based on the Human Life Value Approach, what is NOT used to calculate an individual's life value?

Answer:

Predicted needs of the family after insured's death.Question 7: Under which non-forfeiture option does the company pay the surrender value and have no further obligations to the PH?

Answer:

Cash surrender. Once the value is paid, the contract is over.Question 8: What ins. is known for having level premiums with a fixed rate of return resulting in guaranteed cash value?

Answer:

Whole life Question 9: Candace has a life policy in force for $300,000. She is terminally ill. She wants an advance from death benefit to pay medical bills. She met some people who could give her advance of $100,000 if she signed ownership over to them?

Answer:

Viatical means relating to a financial transaction where company buys life ins. policies from terminally ill at less than their face value and may sell policies to investors.

Question 10: Elements of insurable risks

Answer:

-due to chance outside the insured control -definite and measurable specific to a cause, time, place and amt.

Question 11: What is NOT a beneficiary designation?

Answer:

Specified (designations are primary, contingent, secondary and tertiary)

Question 12: What statement about group life ins. is correct?

Answer:

The cost of coverage is based on the ratio of men and women in the group.Question 13: an insured purchased an individual life ins. policy with the face amt. of $15,000. He pays a premium each month. What type of policy is that?

Answer:

Ordinary Life NOTE: The distinguishing feature of Ordinary life is that the policy is written on an individual basis with the face amt. of $1,000 or more. Premiums are paid annually, semiannually, quarterly, and monthly.

Question 14: What is NOT used in determining annuity suitability?

Answer:

Beneficiaries age Question 15: All factors being equal, the least expensive 1st year premium payment is found on?

Answer:

Annually renewable term Question 16: Death benefits payable to a beneficiary under a life ins. are generally?

Answer:

NOT subject to income taxation by the Federal government. NOTE: When premiums are paid with After-tax dollars, the benefit is NOT subject to Federal income taxation.

Question 17: What is NOT an unfair claims settlement practice?

Answer:

Suggesting negotiations in settling the claim Question 18: What is true for both equity indexed annuities and fixed annuities?

Answer:

They have a guaranteed minimum interest rate.

Question 19: What is the purpose of a conditional receipt?

Answer:

It is intended to provide coverage on a date earlier than the date of the issuance of the policy.NOTE: Coverage commences on the date of the application or the date of a medical exam, whichever is later, or the condition that the applicant is determined to be insurable at the rate applied for

Question 20: How long must insurers keep records of claims?

Answer:

• years after the claim was closed, or until the next financial exam by the dept. of ins. whichever is later.

Question 21: Are ins. company's underwriters allows to discriminate?

Answer:

Yes, but NOT unfairly.NOTE: The company will discriminate in favor of good risks and not of poor risks; HOWEVER, it can NOT discriminate unfairly by using such as race or national origin.Question 22: What is the penalty for IRA distributions that are below the required minimum for the year?

Answer:

50%

Question 23: What is NOT considered when underwriting group ins?

Answer:

The group's medical history Question 24: An individual wants to buy a life ins. policy in which he can count on guaranteed minimum benefits. What type of ins. would best suit his needs?

Answer:

Fixed life ins. that offers minimum guaranteed or fixed benefits stated in the contract.Question 25: Disregarding all other variables, rank the initial premium paid by the insured for the ins. policy from lowest to highest

Answer:

Modified whole life, traditionally/ordinary whole life, single premium whole life