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ExamFX: Life Insurance Practice Exam| 326 Questions | With Complete Solutions CA$21.27   Add to cart
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ExamFX: Life Insurance Practice Exam| 326 Questions | With Complete Solutions
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An insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy, stock performance declined and the cash value fell to $10,000. If the insured dies, how much will be paid out? correct answer: $50,000 Which of the following documents must be provi...

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  • September 20, 2023
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  • 2023/2024
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ExamFX: Life Insurance Practice Exam| 326
Questions | With Complete Solutions
An insured purchased a variable life insurance policy with a face
amount of $50,000. Over the life of the policy, stock performance declined and the cash value fell to $10,000. If the insured dies, how much will be paid out? correct answer: $50,000
Which of the following documents must be provided to the policyowner or applicant during policy replacement? correct answer: Notice Regarding Replacement.
The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower-echelon employees. This plan would be funded with before-tax corporate dollars, and it does not meet government approval standards. This annuity plan is correct answer: A nonqualified annuity plan.
During replacement of life insurance, a replacing insurer must do which of the following? correct answer: Obtain a list of all life insurance policies that will be replaced
An individual has just borrowed $10,000 from his bank on a 5-
year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation? correct answer: Decreasing term. An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called correct answer: Single premium whole life.
Which of the following statements is TRUE concerning the Accidental Death Rider? correct answer: It will pay double or triple the face amount.
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT? correct answer: SEPs are suitable for large companies.
In insurance, an offer is usually made when correct answer: An applicant submits an application to the insurer.
An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy? correct answer: Guaranteed insurability option
Who can make a fully deductible contribution to a traditional IRA? correct answer: An individual not covered by an employer-sponsored plan who has earned income
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as correct answer: Survivor protection. When is the earliest a policy may go into effect? correct answer: When the application is signed and a check is given to the agent
Which of the following is a key distinction between variable whole life and variable universal life products? correct answer: Variable whole life has a guaranteed death benefit.
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following? correct answer: Consideration
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this? correct answer: Level term
A Return of Premium term life policy is written as what type of term coverage? correct answer: Increasing
All of the following are duties and responsibilities of producers at the time of application EXCEPT correct answer: Change any incorrect statement on the application by personally initialing next to the corrected statement.
The policyowner pays for her life insurance annually. Until now,
she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this? correct answer: Reduction of premium An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe? correct answer: Aleatory
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract? correct answer: Conditional
What does "level" refer to in level term insurance? correct answer: Face amount
What is the purpose of a free-look period in insurance policies? correct answer: It allows the insured to reject the policy with a full refund.
Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid? correct answer: Insuring clause
Which of the following best describes annually renewable term insurance? correct answer: It is level term insurance.
All of the following are examples of third-party ownership of a life insurance policy EXCEPT correct answer: An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan.

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