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Life Exam Prometric
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Exam of 5 pages for the course TAX 4001 at TAX 4001 (Life Exam Prometric)
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Life Exam PrometricAll of the following statements about the provisions in a typical modification clause in a
life insurance policy are true EXCEPT: - ANS-The authority to bind the insurance
company to policy changes or modifications is limited to specified persons.
The lowest total annual premium expenditure usually results when premiums are paid: -
ANS-Annually
A preferred risk classification for a whole life insurance policy means that: - ANS-The
premium rate is lower than the standard rate for the identical policy
The gross annual premium for a whole life insurance policy is the net premium: -
ANS-Plus Expenses
Which one of the following statements about a life insurance policy rider regarding
waiver of premiums and disability income is true? - ANS-In addition to waiving
premiums during periods of disability, it provides a monthly income.
A withdrawal from a deferred annuity must be authorized by - ANS-The Owner
The beneficiary of a life insurance policy originally is indicated: - ANS-On the life
insurance application
Life insurance helps meet estate planning objectives because it is: - ANS-A liquid asset
at death
Current interest rates provide a reasonable basis for projecting cash values in a fixed
annuity when: - ANS-The current interest rate is close to historical standards
Which provision can provide for the payment of life insurance benefits to the insured
while living? - ANS-An accelerated benefit provision
Which one of the following statements about the application for life insurance is true? -
ANS-It becomes a permanent part of the insurance contract.
A misleading life insurance policy illustration may result from any of the following
EXCEPT - ANS-Reflecting the time value of money
, All of the following are reasons for purchasing life insurance on a spouse who does not
work for pay outside the home EXCEPT: - ANS-To guarantee that newborn children will
be eligible for life insurance
Which statement explains why an annuitant would seek a tax-free exchange of one
contract for another within the same company? - ANS-The new contract offers more
attractive interest rates
To minimize adverse selection in group life insurance an insurer may require -
ANS-Evidence of insurability for participants who join after the eligibility period
A surviving spouse without dependent children is eligible for Social Security survivor
benefits at age: - ANS-60
Which rider is included in a policy with whole life insurance on the principal insured and
term insurance on the insured's spouse and children? - ANS-Family rider
All of the following are associated with the interest-adjusted net cost method of life
insurance policy comparison EXCEPT - ANS-Separate investment account
Which one of the following statements is true if an insured purchases a limited payment
whole life insurance policy? - ANS-The insured has lifetime protection.
When life insurance is being used to conserve a large estate that consists primarily of
non-liquid assets, the primary use of the policy proceeds will be to - ANS-Pay estate
taxes
If an insured with an ordinary whole life insurance policy is still living at policy maturity,
the insurance company will - ANS-Pay the face amount of the policy
Education funds created by life insurance death benefits are designed to cover the cost
of all of the following EXCEPT - ANS-Medical care
Which statement is true about life annuities? - ANS-The insurer uses the law of large
numbers to predict life expectancy.
When an annuitant under a life-only annuity dies, what is the amount of the property
interest in the contract that will be includable in the annuitant's gross estate? - ANS-zero
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