Pearson Vue Life Insurance Practice Exam Flashcards
A contract that has as its basic function the systematic liquidation of accumulated assets through periodic payments is called an:
annuity
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:
revocable beneficiary
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?
The insured’s signed statement of continued good health
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?
Risk classification
An employer can deduct premium payments as an ordinary business expense for which of the following life coverages?
Group
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?
Family Income rider
Which of the following statements is CORRECT about Group Life conversion privileges?
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?
Universal Life
Reinstatement of a life insurance policy requires an insured to take all of the following actions EXCEPT:
make collateral assignment to the insurer
Which of the following statements about a Renewable Term policy is CORRECT?
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?
Pay the Death benefit
Which of the following policy provisions provides for continuation of coverage despite nonpayment of premiums?
Nonforfeiture Option
An applicant for life insurance may question the validity and source of any consumer information developed under the
Fair Credit Reporting Act (Insurance Information and Privacy Protection 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:
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?
The children
If a policy contains a Guaranteed Insurability rider, the insured has the right to purchase:
additional coverage at specified ages
The Waiver of Premium provision of a life policy allows the insurer to take which of the following actions?
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:
sex
The PRIMARY purpose of an inspection report is to assess an applicant’s:
personal characteristics
Which of the following statements is NOT correct about representations?
They are true in every respect.
