Life Insurance Basics (quiz)- ExamFX

Question 1

An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?

Answer 1

Variable

Question 2

All of the following information about the applicant is identified in the General Information section of a life insurance application except
A) education
B) occupation
C) gender
D) age

Answer 2

A) education

Question 3

If a change needs to be made to the application for insurance, the agent may not

Answer 3

Erase the incorrect answer and record the correct answer

Question 4

What would describe a legal document which would dictate who can buy a deceased partner’s share for a business and for what amount?

Answer 4

Buy-sell agreement

Question 5

What would least likely be considered a legitimate need that would be paid by insurance proceeds?

Answer 5

Vacation travel expenses

Question 6

When is the earliest a policy may go into effect?

Answer 6

When the application is signed and a check is given to the agent

Question 7

Whose responsibility is it to make sure that an application for insurance is filled out completely and correctly?

Answer 7

The producer

Question 8

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

Answer 8

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

Question 9

Which part of an insurance application would contain information regarding the cause of death of the applicant’s deceased relatives?

Answer 9

Medical information

Question 10

What best details the underwriting process for life insurance?

Answer 10

Selection, classification, and rating of risks

Question 11

A man wants to buy a life insurance policy in which he can count on guaranteed minimum benefits. Which type should he buy?

Answer 11

Fixed

Question 12

What is the time period called during which the surviving spouse of the insured does not receive Social Security benefits?

Answer 12

Blackout period

Question 13

What is an example of liquidity in a life insurance contract?

Answer 13

The cash value available to the policyowner

Question 14

What statement is not true concerning insurance interest as it applies to life insurance?

Answer 14

A debtor has insurable interest in the life of a lender

Question 15

What may not be included in an insurance company’s advertisement?

Answer 15

That it’s policies are covered by a state Guaranty Association

Question 16

All of the following are requirements for life insurance illustrations except
A) they must identify nonguaranteed values
B) they must be part of the contract
C) they must differentiate between guaranteed and projected amounts
D) they may only be used as approved

Answer 16

B) they must be part of the contract

Question 17

What kind of policy does not typically require proof of insurability?

Answer 17

Group insurance

Question 18

Who makes up the Medical Information Bureau?

Answer 18

Insurers

Question 19

An applicant wants to buy a policy that has a cash value element. Which type should she buy?

Answer 19

Permanent

Question 20

What would not fall into the category of costs associated with death?

Answer 20

The expense of a vacation for surviving family members