2-12 Insurance Agent Midterm Exam Questions And 100% Correct Answers.
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Course
CT 109890
Institution
CT 109890
1. All of the following are parties to a life insurance contract EXCEPT:
-Insurer
-Underwriter
-Beneficiary
-Owner
-Insured
a. Underwriter
b. Beneficiary
c. Underwriter, beneficiary, and insured
d. all are parties to a life insurance contract - Answer c. Underwriter, beneficiary, and ...
2-12 Insurance Agent Midterm Exam
Questions And 100% Correct Answers.
1. All of the following are parties to a life insurance contract EXCEPT:
-Insurer
-Underwriter
-Beneficiary
-Owner
-Insured
a. Underwriter
b. Beneficiary
c. Underwriter, beneficiary, and insured
d. all are parties to a life insurance contract - Answer c. Underwriter, beneficiary, and insured
A beneficiary and the underwriter are not parties to a life insurance contract. An insured may be, but is
not necessarily a party. A wife (owner) can take a policy out on her husband (insured), yet the husband is
not a party to the insurance contract.
2. Which of the following will have to meet an insurable interest requirement in order for a policy to
issue?
a. Beneficiary
b. Insured
c. Insured's dependents
d. All of the above
e. Both a and b only - Answer a. Beneficiary
, In addition to the information about the applicant for insurance, underwriters will also look at the
named beneficiary in the policy in order to determine whether or not there is an insurable interest. If
there is not, the application for life insurance could be rejected.
3. Jack and his wife Lyn just purchased a home with a 15-year mortgage. Wanting to make sure that Lyn
would be able to pay off the mortgage balance in the event of Jack's death, Jack had a "temporary" need
for life insurance. What type of policy should Jack purchase?
a. Whole Life Insurance
b. Term Life Insurance
c. Variable Life Insurance
d. A Viatical Settlement - Answer b. Term Life Insurance
Given Jack's temporary need for 15 years of coverage to pay off the mortgage balance, the best choice
for Jack would be a 15-year term life insurance policy as the premiums would likely be far less than a
permanent policy, and once the mortgage is paid off in 15 years, this particular need for Jack will no
longer exist.
4. Which type of life insurance is considered to be more risky based on its investment component?
a. Level Term Life Insurance
b. Whole Life Insurance
c. Decreasing Term Life Insurance
d. Variable Life Insurance - Answer d. Variable Life Insurance
Because the underlying investments are equities such as mutual funds, variable life insurance policies
are considered to be securities. As these investments move up and down with the movements of the
equities market, variable life insurance is considered to be more risky than other types of policies as
there is the probability that the value of the policy's investment component could decrease.
5. Life insurance underwriters look at a variety of factors when determining the acceptance of an
applicant. These factors can include:
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