Exam (elaborations)
214 License Exam Questions And Answers Latest Update 2024 – 2025
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Which of the following describes a participating insurance policy? –ANSWER: Policyowners are entitled to receive dividends
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214 License Exam Questions And AnswersLatest Update 2024 – 2025
Which of the following describes a participating insurance policy? –ANSWER:
Policyowners are entitled to receive dividends
At what point must a life insurance applicant be informed of their rights that fall unde
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r the Fair Credit Reporting Act? - ANSWER: Upon completion of the application
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Dividends payable to a policyowner are: - 1 1 1 1 1 1
ANSWER: Declared by the insurance company.
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At what point does an informal agreement become a binding contract? -
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ANSWER: When consideration is provided by one of the parties to the contract
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When third- 1
party ownership is involved, applicants who also happen to be the stated primary ben
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eficiary are required to have - ANSWER: Insurable interest in the proposed insured
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Which of the following arrangements allows one to bypass insurable interest laws? -
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ANSWER: (STOLI) or Investor Originated Life Insurance
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Taking receipt of premiums and holding them for the insurance company is an examp
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le of - ANSWER: Fiduciary Responsibility
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A policy of adhesion can only be modified by whom? -
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ANSWER: The Insurance Company
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The exchange of unequal values reflects: - ANSWER: Aleatory
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Life and health insurance policies are -
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ANSWER: Unilateral Contracts (one makes promise, other can only accept by perform
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ance
The consideration clause of insurance contract includes -
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ANSWER: The schedule and amount of premium payments
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A life insurance arrangement which circumvents insurable interest values is called -
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ANSWER: Investor Originated Life Insurance (IOLI)
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Who makes the legally enforceable promises in a unilateral contract? -
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ANSWER: The Insurance Company
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, A life insurance policy would be considered a wagering contract WITHOUT: -
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ANSWER: Insurable Interest
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A life insurance policy that provides a policyowner with cash value along with a level f
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ace amount is called: - ANSWER: Whole Life Policy
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Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? -
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ANSWER: the Policyowner(investor)
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K purchased a Life insurance policy in 1986 which paid 10% interest in the early year
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s of the policy. Twenty years after the purchase, she received a notice from the insure
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r stating that the policy will soon terminate unless a much-
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higher premium is paid because of falling interest rates. This type of policy is known
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as: - ANSWER: Universal Life Policy
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Which of these would be considered a Limited-Pay-Life policy? -
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ANSWER: Life Paid Up at Age 70
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K is looking to purchase Renewable Term insurance. Which of these types of Term ins
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urance may be renewable? - 1 1 1 1
ANSWER: Level Term Policy (pays same death benefit if insured dies any time during
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policy)
A universal life policy is sometimes referred to as an unbundled Life Policy because t
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he owner can see the interest earned, cost of insurance, and -
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ANSWER: Expense Charges
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What type of insurance offers permanent life coverage with premiums that are payab
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le for life? - ANSWER: Whole Life Policy
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Which provision allows the policyowner to change a term life policy to a permanent o
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ne without providing proof of good health? - ANSWER: Conversion
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When is the face amount of a Whole Life policy paid? -
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ANSWER: When the insured dies, or the policy's maturity, whichever comes first!
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Additional coverage can be added to a Whole Life policy by adding a(n) -
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ANSWER: Decreasing Term Rider
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When a life policy exceeds certain IRS table values, the result would create which of t
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he following? - ANSWER: Modified Endowment Contract (MEC)
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K pays on a $20,000 20-
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Year Endowment policy for 10 years and dies from an automobile accident. How muc
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h will the insurance company pay the beneficiary? - ANSWER: $20,000 death benefit.
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