WV STATE LIFE INSURANCE EXAM |COMPLETE
200 QUESTIONS WITH CORRECT VERIFIED
ANSWERS |PRE-EVALUATED A+
A group-owned insurance company that is formed to assume and spread the liability risks of its
members is known as a: - ANSWER-Risk retention group
Which of the following requires insurers to disclose when an applicant's consumer or credit history is
being investigated? - ANSWER-1970-Fair Credit Reporting Act
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies
suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the
following insurance contract features? - ANSWER-Aleatory
The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future
obligations to its policyholders is called: - ANSWER-Reserves
All of the following are considered to be typical characteristics describing the nature of an insurance
contract, EXCEPT: - ANSWER-Bilateral
,What year was the McCarran-Ferguson Act enacted? - ANSWER-1945
Which of the following consists of an offer, acceptance, and consideration? - ANSWER-Contract
Who elects the governing body of a mutual insurance company? - ANSWER-Policyholders
Insurance policies are considered aleatory contracts because: - ANSWER-Performance is conditioned
upon a future occurrence
Who makes the legally enforceable promises in a unilateral contract? - ANSWER-Insurance company
Insurance contracts are known as _____ because certain future conditions or acts must occur before any
claims can be paid. - ANSWER-Conditional
A life insurance arrangement which circumvents insurable interest statutes is called: - ANSWER-Investor-
Originated Life Insurance
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What
kind of contract is this? - ANSWER-Unilateral
When third-party ownership is involved, applicants who also happen to be the stated primary
beneficiary are required to have: - ANSWER-Insurable interest in -the proposed insured
Which of these arrangements allows one to bypass insurable interest laws? - ANSWER-Investor-
Originated Life Insurance
When must insurable interest exist for a life insurance contract to be valid? - ANSWER-Inception of the
contract
If a contract of adhesion contains complicated language, to whom would the interpretation be in favor
of? - ANSWER-Insured
, Which of these is an element of a Variable Life policy? - ANSWER-A fixed, level premium
A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have
the policy premiums waived under which provision? - ANSWER-Payor provision
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? - ANSWER-Policyowner
Which of the following actions is NOT possible with a Universal Life policy? - ANSWER-Premiums may be
applied as a credit against income tax
Which of the following policies is characterized by a flexible premium and death benefit and allows the
policy owner control of the investment aspect of the plan? - ANSWER-Variable universal life
A term life insurance policy matures: - ANSWER-upon the insured's death during the term of the policy
What type of life policy covers two people and pays upon the death of the last insured? - ANSWER-
Survivorship
When is the face amount paid under a Joint Life and Survivor policy? - ANSWER-Upon the death of the
last insured
Variable Whole Life Insurance can be described as: - ANSWER-Both an insurance and securities product
All of these characteristics of an Adjustable Life policy, EXCEPT: - ANSWER-Face amount can be adjusted
using policy dividends
Term insurance has which of the following characteristics? - ANSWER-Expires at the end of the policy
period
P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries
for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of
policy should P purchase? - ANSWER-Family Maintenance policy
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