Life Insurance Test

Front 1

Which of the following would be the basic source of information used by the company in the risk selection process?

Back 1

Application

Front 2

A 27-year old professional has limited income and can only budget $15 per month for life insurance. Which of the following life insurance policies would provide the largest face amount for the amount of premium?

Back 2

Term insurance

Front 3

A 403(b) plan, commonly referred to as a TSA, is available to be used by

Back 3

Teachers and not-for-profit organizations

Front 4

A businessowner went to the bank to obtain a loan in order to fund the purchase of a doughnut shop, but the bank needed more in trade than she had expected. Since the businessowner has a $250,000 life insurance policy, she decided to use it to secure the loan. Which provision makes this possible?

Back 4

Collateral assignment

Front 5

A claimant, who is totally and permanently disabled, is eligible for Social Security Disability benefits after an elimination period of

Back 5

5 months

Front 6

A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then

Back 6

The amount received is tax-free

Front 7

A couple owns a life insurance policy with a Children’s Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

Back 7

Proof of insurability is not required.

Front 8

A father owns a life insurance policy on this fifteen-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

Back 8

The insured’s premiums will be waived until she is 21.

Front 9

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

Back 9

If the father is disabled for more than 6 months

Front 10

A group life insurance policy written for a Financial institution (state or federally regulated financial institution) to insure the depositors or depositor members of the financial institution for the benefit of persons other than the financial institution or its officers, must have a minimum of

Back 10

100 eligible members insured

Front 11

A key person insurance policy can pay for which of the following?

Back 11

Costs of training a replacement

Front 12

A legally acceptable attempt by an existing insurer, or its agent, to continue existing life insurance in force when a Comparative Information Form has been received from a replacing insurer is called

Back 12

Conservation

Front 13

A license may be denied, suspended, or revoked if the licensee

Back 13

All of the above

Front 14

A life insurance policy used to fund an agreement that contractually establishes the intent of someone to purchase a business upon the insured business owner's death is a

Back 14

Buy-sell agreement

Front 15

A life insurance policyowner has the flexability to increase the amount of premium and then decrease it at a later date. The person is also allowed to skip permium payments, privided that there is enough cash value in the policy to cover the premuim amount. What type of policy is this?

Back 15

Universal life

Front 16

A life insurance policyowner skips her permium payment, but the policy does not lapse. Instead, the premium amount is deducted from the cash value of the policy. What type of policy is this?

Back 16

Universal life

Front 17

A limited lines respresentative is an individual, partership, or corporation who

Back 17

Is authorized by the Commissioner to solicit contract for a particular line of insurance, which does not require the level of professional compentency demanded for an insurance license.

Front 18

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that this policy

Back 18

Required a premium increase each renewal

Front 19

A participating insurance policy may do which of the following?

Back 19

Pay dividends to the policyowner

Front 20

A partnership buy-sell agreement in which each partner purchases insurance on the life of each of the other partners is called a

Back 20

Cross-purchase plan

Front 21

A party wishing to buy an annuity that will advance with economic and market conditions should buy a

Back 21

Variable annuity

Front 22

A period of a producer's license suspension cannot exceed

Back 22

12 months

Front 23

A policy states that it will pay the face amount if the insured dies during the 20 year permium paying period and nothing if death occurs after the 20 year peroid. What type of policy is this?

Back 23

20-year level term policy

Front 24

A policyowner borrowed a portion of cash value from his whole life policy. When he died six months later, the loan had not been repaid. How will that affect the death benefit to the beneficiary?

Back 24

The death benefit will be reduced by the amount of any unpaid loans and interest

Front 25

A policyowner fails to pay the premium due on this whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?

Back 25

Automatic premium loan

Front 26

A policyowner of an Adjustable Life policy can increase premium payments and

Back 26

Have a limited pay policy

Front 27

A premature distribution from a Roth IRA made before the individual reaches age 59 1/2 is subject to a 10% penalty tax unless the distibution was for

Back 27

A first-time home purchase

Front 28

A primary beneficiary discovers upon the death of her uncle that he chose the interest only option. What does this mean?

Back 28

The beneficiary will only receive payments of the interest earned on the death benefits

Front 29

A producer in another state wants to become a producer in Washington. The other state gives the same privileges to Washington producer wanting to be licensed in that state as it does its own producer. WA therefore extends the privileges o its producers to the prosepective producer of the other state. What is this called?

Back 29

Reciprocity

Front 30

A producer is selling a client a Variable Life Insurance policy and as an inducement shows that client a projection based upon shares or dividends paid on a similar policy. This is

Back 30

Misrepresentation

Front 31

A producer who gives special favors or advantages in dividends or other benefits is guilty of

Back 31

Rebating

Front 32

A producer who omits a statement which may mislead or deceive the persons addressed has committed

Back 32

Misrepresentation

Front 33

A prospective insured receives a conditional receipt and dies before the policy is issued. The company will

Back 33

Pay the policy proceeds only if it would have issued the policy

Front 34

A rider attached to a life insurance policy that provides coverage on the insured’s family members is called the

Back 34

Other-insured rider

Front 35

A Straight Life policy changes

Back 35

A level annual premium for the life of the insured

Front 36

A tax sheltered annuity is a special tax-favored retirement plan available to

Back 36

Certain groups of employees only, such as public educators

Front 37

A teacher may defer a portion of his earned income into a(n)

Back 37

403(b) Plan (TSA)

Front 38

A temporary license in this state is valid for

Back 38

180 days

Front 39

A Universal Life Insurance policy is best described as

Back 39

An Annually Renewable Term policy with a cash value account

Front 40

A variable annuity has a payout that is

Back 40

Continent upon the profitability of the investment portfolio