Life Insurance Exam

Front 1

An insured pays premiums on an annual basis for an individual health insurance policy. What is the minimum number if days for the Grace period provision.

7

10

20

31

Back 1

31

Front 2

K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this? ○ Variable Life ○ Adjustable Life ○Graded Premium Whole Life ○ Modified Whole Life

Back 2

Modified Whole Life

Front 3

Before a life policy is issued, which of these contract elements is necessary? ○A signed application by the prospect ○ A minimum amount of coverage ○ A beneficiary's signature on an application ○A binding receipt

Back 3

A signed application by the prospect

Front 4

In Major Medical Expense policies, what is the objective of a Stop Loss provision? ○ Limits an insurers premium increases ○ Limits an insurer's liability ○ Limits an insured's out-of-pocket medical expenses ○Limits an insured's coverage for pre-existing conditions

Back 4

Limits an insureds out of pocket medical expenses

Front 5

In a Disability Income policy, which of these clauses acts as a deductible? ○ Elimination Period ○Waiver Period ○ Deductible Period ○ Probationary Period

Back 5

Elimination Period

Front 6

T applied for a Disability Income policy and has a history of back injuries. The insurer issued the policy with a statement that excludes coverage for back injuries. This statement is called a(n)

○ back exclusion ○impairment rider ○rating ○ encumbrance

Back 6

Impairment rider

Front 7

Dividends paid from a life insurance policy are

○guaranteed

○taxable

○issued by the insurer

○issued by the department of justice

Back 7

Issued by the insurer

Front 8

In Florida, agents are allowed to engage in rebating if

○ the amount rebated stays below a maximum percentage of annual premium ○ the transaction is reported to the IRS for tax purposes ○ the insured gives his/her written consent ○offered to all insureds in the same actuarial class

Back 8

Offered to all insureds in the same actuarial class

Front 9

The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs?

○ Social Security Disability Income ○ Medicare Supplements ○ Medicaid ○ COBRA

Back 9

Social security disability income

Front 10

Which settlement option pays a stated amount to an annuitant but no residual value to a beneficiary? ○ Interest Only ○Fixed Period ○ Flxed Amount ○Life Income

Which settlement option pays a stated amount to an annuitant but no residual value to a beneficiary? ○ Interest Only ○Fixed Period ○ Flxed Amount ○Life Income

Back 10

Life income

Front 11

All of these statements about Equity Indexed Life Insurance are correct, EXCEPT:

○ Cash value has a minimum rate of accumulation○ if the gain on the index goes beyond the policy's minimum rate of return, the cash value will mirror that of the index○ The premiums can be lowered or raised, based on investment performance○ Tied to an equity index such as the S&P 500

Back 11

The premiums can be lowered or raised, based on investment performance

Front 12

P is the insured on a participating life policy. Which statement is true if P's premiums are waived due toa disability?

○ P cannot borrow against the policy's cash value while disabled

○P will have to pay income taxes on the amount of premiums waived

○P will still receive declared dividends

○P cannot assign ownership of the policy while premiums are being waived

Back 12

P will still receive declared dividends

Front 13

B's policy provides coverage on an in-hospital basis only and contains a limited daily room and boardbenefit. Which of these policies does B have?

○ Comprehensive Major Medical○ Basic Hospital○ Critical illness○Basic Surgical

Back 13

Basic hospital

Front 14

Which of the following is the MOST important factor when deciding how much Disability Incomecoverage an applicant should purchase?

○ Applicant's occupation○ Applicant's monthly income○ Applicant's health○ Applicant's previous disabilities

Back 14

Applicant's monthly income

Front 15

When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may beconsidered a red flag for a(n):

○ Federal Fair Credit Act Violation○Title 18 Fraud violation○ Anti-Money Laundering violation○Unfair Trade Practice violation

Back 15

Anti money laundering violation

Front 16

Rick recently died and left behind an individual IRA account in his name. His widow was forwarded thebalance of the IRA. The widow qualifies for the:

○marital deduction○ death benefits○ Section 1035 exchange○capital gains tax rate

Back 16

Marital deduction

Front 17

Which provision is NOT a requirement in a group life policy?

○Conversion○Grace period○ Incontestable period○Accidental

Back 17

Accidental (AD&D)

Front 18

T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What willthis transaction provide?

○ Income for a fixed period stated in the contract○Income that cannot be outived by the owner○ Inflation protection○Tax-free income

Back 18

Income that cannot be outlived by the owner

Front 19

What type of rider would be added to an Accident and Health policy if the policyowner wants to ensurethe policy will continue if he/she ever becomes totally disabled?

○ Accidental Death and Dismemberment rider○ Disability Income rider○ Guaranteed Insurabillty rider○ Waiver of Premium rider

Back 19

Waiver of Premium Rider

Front 20

Powns a $25,000 Life Policy that pays the face amount to him if he lives to age 70, or to his beneficiaryif he dies before age 70. What kind of policy does P own?○Straight Life○Modified Life○ Whole Life Paid-Up at Age 70○ Endowment at Age 70

Powns a $25,000 Life Policy that pays the face amount to him if he lives to age 70, or to his beneficiaryif he dies before age 70. What kind of policy does P own?○Straight Life○Modified Life○ Whole Life Paid-Up at Age 70○ Endowment at Age 70

Back 20

Endowment at Age 70

Front 21

Which statement is true regarding a minor beneficiary?○ Normally, the death proceeds are required to be held in trust until the beneficiary reaches the age of 21○ Normaly, a guardian is required to be appointed in the Beneficlary clause of the contract○ The minor must pay the debts of the insured's estate before receiving any of the proceeds

Which statement is true regarding a minor beneficiary?○ Normally, the death proceeds are required to be held in trust until the beneficiary reaches the age of 21○ Normaly, a guardian is required to be appointed in the Beneficlary clause of the contract○ The minor must pay the debts of the insured's estate before receiving any of the proceeds○ The minor is entitled to receive the death proceeds immedlately

Which statement is true regarding a minor beneficiary?○ Normally, the death proceeds are required to be held in trust until the beneficiary reaches the age of 21○ Normaly, a guardian is required to be appointed in the Beneficlary clause of the contract○ The minor must pay the debts of the insured's estate before receiving any of the proceeds○ The minor is entitled to receive the death proceeds immedlately

Which statement is true regarding a minor beneficiary?○ Normally, the death proceeds are required to be held in trust until the beneficiary reaches the age of 21○ Normaly, a guardian is required to be appointed in the Beneficlary clause of the contract○ The minor must pay the debts of the insured's estate before receiving any of the proceeds○ The minor is entitled to receive the death proceeds immedlately

○ The minor is entitled to receive the death proceeds immedlately

Back 21

Normally a guardian is required

Front 22

What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years andthen pays a lump sum benefit at the end of that 30 years?

○ Family Lump sum Pollcy○ Family Maintenance Policy○ Family Survivor Policy○Family Income Policy

Back 22

Family maintenance policy

Front 23

B receives yearly dividends and interest from a participating life insurance policy. Which of these shouldB include as gross income for federal income tax purposes?

Interest and dividendsInterest onlyDividends onlyNeither interest nor dividends are taxable

Back 23

Interest Only

Front 24

The Insurance Guaranty Fund Association is

○an entity that assists in underwriting large insurance policies○ funded by admitted insurance companies through assessments○ funded by the state government○administered by the Federal government

Back 24

Funded by admitted insurance companies