LIFE INSURANCE STUDY EXAM
QUESTIONS WITH VERIFIED
SOLUTIONS
An insurance producer selling a Variable Annuity whose cash value depends on the
performance of an underlying investment account must be registered with: - The
Financial Industry Regulatory Authority (FINRA, formerly the NASD)
A life insurance policy whose cash value will fluctuate depending upon the performance
of a separate account is: - Variable Life
John Livingston owns a 30-Pay Life policy that he purchased at the age of 30. The cash
value will equal the face amount of the policy when he reaches the age of: - 100
Which of the following types of insurance policies would provide the greatest amount of
protection for a temporary period during which an insured will have limited financial
resources? - Term
Which of the following statements about a Renewable Term policy is true? - It is
renewable at the option of the insured
An Annuity is designed to provide which of the following financial features?
I. The liquidation of principal and interest
II. Favorable tax treatment
III. The creation of an estate - I and II
A 45-year old customer who is seeking to supplement his retirement income at age 65
would not buy a: - Immediate Annuity
Which of the following is an example of a Limited-Pay Life policy? - Life Paid-Up at Age
65
You have a client that is a real estate agent. Which of the following types of permanent
protection is best for this type of client? - Adjustable life
Which of the following individual policy conversions is usually permitted without any
evidence of insurability? - Conversion from a Term policy to a Whole Life policy
, At age 30, Tom Morris wishes to purchase a Whole Life policy. His producer explains
that he can pay for the policy in several ways. One method is called 20-Pay Life, and
another, Straight Life. Tom wishes to know which plan will accumulate cash value at a
faster rate in the early years of the policy. Which of the following would be the
producer's most appropriate response? - "20-Pay Life will accumulate cash value
faster."
Sandra Timms, age 27, is advised by her producer to purchase Life insurance to cover
a 20-year-amortized $50,000 business-improvement loan. Which of the following plans
would adequately protect Ms. Timms at the minimum premium outlay? - A $50,000
Decreasing Term policy for 20 years
In order to sell variable life insurance you must be registered with which of the
following? - The NASD
Which of the following contracts requires that a series of benefit payments be made at
specified intervals? - Annuity
A life insurance policy that covers two parties, but only pays when the last party dies is
known as: - Survivorship Life
Most Term Life insurance: - Is convertible to permanent Whole Life without a physical
exam
If a person wants to invest a lump sum in an annuity that may appreciate along with
market and economic conditions, they should buy a: - Variable Annuity
If a client wants cash value life insurance with a flexible premium and an adjustable
death benefit that will allow the policy owner a choice of various cash value investment
options, he should buy: - Variable/Universal Life
Which of the following statements is true about the premium payment schedule for a
Whole Life policy? - Premiums are payable throughout the insured's lifetime, and
coverage continues until the insured's death
Which of the following policies provides the greatest amount of protection for an
insured's premium dollar as well as some cash accumulation? - Whole Life
Which of the following is NOT correct regarding Ordinary Whole Life policies? - The
cash value grows more quickly in the beginning years of the policy
A business owner with a fluctuating income who wants a life insurance policy that can
be changed to suit economic conditions should buy: - Adjustable Life
Which of the following is an example of a Limited-Pay Life policy: - 20-Pay Life
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