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Life Insurance Exam Practice Questions and Answers | 100% Pass
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Life Insurance Exam Practice Questions and Answers | 100% Pass The tendency of a person diagnosed with a serious illness to try to buy life or health insurance is known as: - Answer️️ -adverse selection From an insurance perspective, underwriting is best defined as: - Answer️️ -the pro...

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  • September 1, 2024
  • 48
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • life insurance exam practice questions and answers

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  • Life insurance
  • Life insurance

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©SOPHIABENNETT
2024/2025 ACADEMIC YEAR




©SOPHIABENNETT 9/1/24 2024/2025

,Life Insurance Exam Practice Questions
and Answers | 100% Pass


The tendency of a person diagnosed with a serious illness to try to buy life or health

insurance is known as: - Answer✔️✔️-adverse selection


From an insurance perspective, underwriting is best defined as: - Answer✔️✔️-the

process of determining if an applicant is an insurable risk

A person who refuses to engage is risky activities like rock climbing for fear of injury or

death is demonstrating which risk management technique? - Answer✔️✔️-risk avoidance

All the following statements regarding perils and hazards are correct EXCEPT: -

Answer✔️✔️-Smoking cigarettes is an example of a peril.

The Excalibur Insurance Company, domiciled in Iowa, transacts business legally in

Nebraska. In Nebraska, Excalibur is a(n): - Answer✔️✔️-foreign insurance company

All of the following are characteristics of a stock insurance company EXCEPT: -

Answer✔️✔️-They are owned by policyowners.

The Royale Insurance Company, domiciled in Toronto, Canada, transacts business

legally in New York. In New York, Royale is classified as a(n): - Answer✔️✔️-alien

insurance company

All of the following are characteristics of a mutual insurance company EXCEPT: -

Answer✔️✔️-They are owned by stockholders.



Page 1 of 47

,In addition to the fiduciary responsibility they have with all customer premiums and

assets, producers are expected to do all the following EXCEPT: - Answer✔️✔️-seek

opportunities to replace existing policies with newer products

When first meeting prospective insurance applicants, a producer must give them a

document that explains the general features, benefits, and conditions of the type of

insurance being considered, which is called a - Answer✔️✔️-buyer's guide

Which of the following best describes an agent's responsibilities? - Answer✔️✔️-An agent

has to act in the best interests of insureds, applicants, and insurers.

A producer owes a fiduciary duty to: - Answer✔️✔️-both the insurer and the customer

In an insurance transaction, what does the applicant give as consideration? -

Answer✔️✔️-the initial premium

Deliberately withholding material facts when applying for insurance is called: -

Answer✔️✔️-concealment

Which of the following parties makes an enforceable promise in an insurance contract?

- Answer✔️✔️-only the insurance company

In order to be grounds for the insurer to void a contract, an applicant's statements on an

insurance application must involve: - Answer✔️✔️-the deliberate withholding of material

facts

What is the term for voluntarily giving up a known right? - Answer✔️✔️-waiver

Tim had paid only four premiums totaling $1000 on his health insurance policy when he

was diagnosed with cancer. The insurance company paid more than $100,000 to cover

the medical bills for his treatment during the next year. This situation demonstrates


Page 2 of 47

, which of the following characteristics of insurance contracts? - Answer✔️✔️-They are

aleatory.

Ambiguities in an insurance contract are most often interpreted in favor of the

policyowner because insurance contracts are: - Answer✔️✔️-contracts of adhesion

The fact that ownership of a health insurance contract cannot be transferred to another

party makes it what type of contract? - Answer✔️✔️-personal

Which of the following disciplinary measures is not within the powers of the Insurance

Commissioner? - Answer✔️✔️-Imprisonment

Which type of insurer is incorporated, owned by its policyholders, but does not have

capital stock? - Answer✔️✔️-Mutual insurer

Endurance Insurance Company wants to become licensed in Arkansas to sell insurance

products. Which of the following must it receive in order to transact insurance? -

Answer✔️✔️-Certificate of authority

The Arkansas Insurance Commissioner can examine the business transactions,

accounts, and records of domestic insurers as often as necessary, but must do so at

least once every how many years? - Answer✔️✔️-Five years

Toby, an insurance agent, learns that another agent is submitting fraudulent claims to

various insurers but does not report the fraud. Which statement is correct? -

Answer✔️✔️-Toby is guilty of a Class A misdemeanor.

Donna is a life insurance agent in Arkansas and wants to sell the new policies that

Acme Insurers is offering. However, Donna is not sure if Acme is licensed to transact




Page 3 of 47

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