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Pearson Vue Life Insurance Practice Exam | 51
Questions with 100% Correct Answers | Updated
& Verified | 2024
P wants to name her husband as the beneficiary of her life policy. However, she wishes to retain all of the rights of ownership. P should have her husband named as the: A.irrevocable beneficiary B.revocable beneficiary C.secondary beneficiary โโB A contract that has as its basic function the systematic liquidation of accumulated assets through periodic payments is called an: A.indemnity contract B.investment contract C.endowment D.annuity โโD
An insurance producer takes an application for a life insurance policy but does not collect the initial premium. On delivery of the policy to the proposed insured, the producer must collect the initial premium and which of the following? A.A copy of the MIB report B.The insured's signed statement of continued good health C.A copy of the conditional receipt D.A copy of the temporary insurance agreement that covered the period between the application date and the delivery date. โโB An employer can deduct premium payments as an ordinary business expense for which of the following life coverages? A.Buy and Sell Agreements B.Group C.Key Employee D.Joint Life, if the business is named as the beneficiary โโB A producer takes applications from identical twins who want to buy the same type of policy in the same amount. The insurer issues the policies as applied for, but charges a 25 percent higher premium for one of the policies. The difference in premiums is probably due to which of the following factors?
C.A departing employee must individually pay the premium if the employee elects to be covered during the conversion period. D.If a departing employee elects to convert a life insurance policy, the insurer must offer Term insurance as one of the choices. โโB Which of the following policies is an interest-sensitive form of permanent protection? A.Universal Life B.Limited-Pay Life C.Graded Premium Whole Life D.Modified Whole Life โโA Reinstatement of a life insurance policy requires an insured to take all of the following actions EXCEPT: A.provide evidence of insurability B.make collateral assignment to the insurer C.pay back interest on any outstanding policy loan
D.pay all past-due premiums โโB Which of the following statements about a Renewable Term policy is CORRECT? A.It is renewable at the option of the insurer. B.It is renewable at the option of the insured. C.It is renewable at the option of the insurer, with proof of insurability. D. It is renewable at the option of the insured, with proof of insurability. โโB If an insured commits suicide after the Suicide clause in the insured's life insurance policy has expired, the insurer will take which of the following actions? A.Refuse to pay the Death benefit or refund any premiums B.Refund only the premiums paid C.Refund the premiums paid plus interest
The PRIMARY reason for selecting a Variable Whole Life policy instead of a traditional Whole Life policy is that the Variable Whole Life policy: A.provides flexible premium payments B.allows the policyowner to borrow a larger percentage of the cash value C.has the potential to earn a higher rate of return on the cash value D.allows the policyowner more flexibility in naming and changing beneficiaries โโC A policyowner names his wife as the primary beneficiary of his Universal Life policy on a revocable basis. He also names his three children as his secondary beneficiaries and his estate as his tertiary beneficiary. If the policyowner's wife predeceases him, and then he dies, who will receive the policy proceeds? A.The children B.The policyowner's estate C.The primary beneficiary's estate D.The tertiary beneficiary โโA
The Waiver of Premium provision of a life policy allows the insurer to take which of the following actions? A.Waive an insured's premiums if the insured becomes totally disabled before a certain age B.Waive an insured's premiums if the insured becomes partially disabled for a minimum time C.Increase an insured's coverage at an attained age without imposing a premium increase D.Reduce an insured's premiums if the insured pays them annually instead of monthly โโA Under the Social Security Retirement Benefits, all of the following factors will influence how much a retiring individual will receive as a monthly income benefit EXCEPT the individual's: A.age B."primary insurance amount" C."fully insured" or "currently insured" status D.sex โโD The PRIMARY purpose of an inspection report is to assess an applicant's:
C.They are assumed to be accurate. D.They influence the insurer's acceptance of the risk. โโB If an Adjustable Life policyowner makes an additional premium payment, the policy may be affected in all of the following ways EXCEPT the: A.premium paying period may decrease B.value of the Nonforfeiture Options may decrease C.face amount may increase D.length of coverage may increase โโB An insured owns a $10,000 policy with a $4,000 cash value and a 6 percent interest rate. On January 1, the insured borrows $500 and pays one year's interest in advance. During the year, the insured does not repay any part of the loan or interest. If the insured dies on December 31, the beneficiary will be entitled to a MAXIMUM of: A.$3, B.$6,
C.$9,
D.$9,500 โโD
Which of the following retirement plans is tax-qualified? A.Key-person B.Defined contribution C.Section 457 deferred compensation D.Split dollar life insurance โโB A life insurance application is incomplete if it is missing the signature of which of the following? A.A revocable beneficiary B.The president of the insurer C.The proposed insured's primary care physician
A.producer delivers a policy B.proposed insured has a medical examination C.producer writes an application on a proposed insured D.beneficiary files a claim โโC A payor benefit rider provides which of the following benefits A.A disability income benefit payable to the payor if the payor becomes disabled B.A permanent waiver of premium should the payor die C.A temporary waiver of premium should the payor die, until the insured reaches a predetermined age D.A double indemnity Death benefit payable to the beneficiary upon the death of the payor โโC Two business partners own life insurance on each other. If one partner dies, which of the following contracts will allow the other partner to buy 100 percent of the business interest? A.Buy and Sell Agreement
B.Key Employee Life policy C.Survivorship Life D.Joint and Several Annuity โโA If life insurance policy applicant is classified as a substandard risk, the insurance company will MOST likely: A.issue the policy with riders B.charge an extra premium C.require an annual medical examination D.lower the rate per thousand charged โโB When a producer submits an insurance application to the company, the producer must take all of the following actions EXCEPT: A.submit the initial premium, if it was collected
C.Whole Life D.Limited-Pay Life โโA A life policy is usually contestable due to material misrepresentation on the application for a period of: A.30 days B.6 months C.2 years D.5 years โโC Which of the following statements is CORRECT about the Paid-Up Additions in a participating Whole Life policy? A.They are subject to underwriting approval. B.They do not generate dividends. C.They are considered Term policies.
D.They are purchased on an attained age basis. โโD In which of the following contracts is the Death benefit called the principal sum? A.Survivorship Annuity B.Accidental Death and Dismemberment (AD&D) C.Decreasing Term D.Joint Life โโB At which of the following times MUST a life insurance applicant be informed of their rights under the Fair Credit Reporting Act? A.During the initial appointment B.When the insured's application is completed C.When the policy is delivery D.Upon initial premium receipt โโC
A.Entire contract B.Ownership clause C.Nonforfeiture option C D.Assignment clause โโA A type of annuity in which the cash values are invested in securities is called: A.Variable B.Deferred C.Fixed D.Joint and survivorship โโA If an applicant for life insurance submits a completed application to a producer without paying the first premium, coverage becomes effective when the: A.producer accepts the application
B.applicant successfully completes the medical examination C.insurer approves the application โโD Which of the following features allows an insurance policy to remain in force for a specified number of days beyond the premium due date? A.Reinstatement provision B.Nonforfeiture Option C.Grace Period provision D.Consideration clause โโC Which of the following provisions in a life policy specifies the manner in which proceeds will be paid to a beneficiary on the death of the insured? A.Nonforfeiture Options B.Settlement Options C.Conditions
