Pearson Vue Life Insurance Practice Exam Flashcards
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
Revocable Beneficiary
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
Annuity
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.
The insured’s signed statement of continued good health
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
Group
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?
A.Incontestability
B.Insurable interest
C.Consideration
D.Risk classification
Risk classification
In the event of an insured’s death, which of the following provides an income for the family during a designated period of time followed by a lump sum death benefit?
A.Family Income rider
B.Survivorship Life policy
C.Joint Life policy
D.Modified Life policy
Family Income rider
Which of the following statements is CORRECT about Group Life conversion privileges?
A.Under the COBRA law, a departing employee may elect to remain a member of the Group Life plan for a limited period of time.
B.Death during the conversion period is covered even if the departing employee chose not to convert the policy.
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.
Death during the conversion period is covered even if the departing employee chose not to convert the policy.
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
Universal Life
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
Make collateral assignment to the insurer
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.
It is renewable at the option of the insured.
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
D.Pay the Death benefit
Pay the Death benefit
Which of the following policy provisions provides for continuation of coverage despite nonpayment of premiums?
A.Entire Contract
B.Ownership clause
C.Nonforfeiture Option
D.Insuring clause
Nonforfeiture Option
An applicant for life insurance may question the validity and source of any consumer information developed under the:
A.Medical Information Bureau Disclosure Act
B.Fair Credit Reporting Act (Insurance Information and Privacy Protection Act)
C.Equal Employment Opportunity Act
D.Medicare Act
Fair Credit Reporting Act
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
Has the potential to earn a higher rate of return on the cash value
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
The children
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
Waive an insured’s premiums if the insured becomes totally disabled before a certain age
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
Sex
The PRIMARY purpose of an inspection report is to assess an applicant’s:
A.credit rating
B.personal characteristics
C.job performance
D.health profile
Personal Characteristics
If a policy contains a Guaranteed Insurability rider, the insured has the right to purchase:
A.additional coverage when the insured reaches retirement age
B.additional coverage whenever the insured changes jobs
C.additional coverage at specified ages
D.coverage on the insured’s children within thirty-one days after they are born
Additional coverage at specified ages
Which of the following statements is NOT correct about representations?
A.They can be a part of the contract.
B.They are true in every respect.
C.They are assumed to be accurate.
D.They influence the insurer’s acceptance of the risk.
They are true in every respect.
