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Life Insurance Exam-Illinois Practice Questions and Answers (100% Pass)
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Life Insurance Exam-Illinois Practice Questions and Answers (100% Pass)
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©PREP4EXAMS@2024 [REAL-EXAM-DUMPS] Wednesday, July 31, 2024 9:10 AMLife Insurance Exam-Illinois Practice
Questions and Answers (100% Pass)
Pooling of Risks - ✔️✔️A large group of people contribute money to a fund out of which
their losses can be paid
Policyowner - ✔️✔️is the person or org that applies for the policy and pays the premium
Actuarial Tables - ✔️✔️Are statistical tables that are used when calculating premium
rates and mortality loss reserves
Life Insurance Policies transfer: - ✔️✔️financial risks of premature death on a defined
amount
Loss of income - ✔️✔️the face amount of life insurance is determined as a multiple of
income
Life annuity - ✔️✔️contract which is issued by a life insurance company protects an
individual against the financial risk of outliving a normal life expectancy according to the
mortality actuarial tables and running out of money in old age
Life annuity - ✔️✔️guarantees monthly income benefits to the annuitant for the rest of
his/her life no matter how long he/she lives
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,©PREP4EXAMS@2024 [REAL-EXAM-DUMPS] Wednesday, July 31, 2024 9:10 AM
Insurable interest - ✔️✔️a person must be in a position where he/she will lose money
should loss occur only at the time the policy is issued
Who must have insurable interest? - ✔️✔️the policy owner; he/she will lose money should
hte insured die prematurely
tax qualified plans - ✔️✔️contributions can be deducted
non qualified plans - ✔️✔️contributions cannot be deducted
tax deferred plans - ✔️✔️tax on the interest and/or earnings is postponed as it
compounds and accumulates until it is withdrawn
tax free - ✔️✔️no tax on benefits
cost basis - ✔️✔️total contributions made to the plan
Tax: premiums paid on individual life insurance policies... - ✔️✔️cannot be deducted
(non-qualified)
Tax: the benefits paid to the beneficiary at the insured's death... - ✔️✔️is usually not
taxed (tax free)
Participating policy - ✔️✔️pays a dividend
Tax: dividends paid to the policyowner on participating policies... - ✔️✔️are usually not
taxed (tax free)
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, ©PREP4EXAMS@2024 [REAL-EXAM-DUMPS] Wednesday, July 31, 2024 9:10 AM
Modified Endowment Contract - ✔️✔️The IRS has written rules that define when a life
insurance policy does not have a real, valid life insurance purpose and is in substance
an investment or savings plan
If a cash value life insurance policy does not have a valid life insurance purpose, the
IRS classifies it as a - ✔️✔️modified endowment contract
Underwriter - ✔️✔️is an insurance company employee who reviews applications and
additional information and decides whether the applicant is acceptable and what the
correct premium rate should be
Application includes (7 items) - ✔️✔️age, sex, occupation, dangerous recreational
activities, aviation, smoking, agent's report
Medical reports can be (3 items) - ✔️✔️health questionare, paramedic examiner's report,
and physician's report
Who completes the health questionnaire? - ✔️✔️the agent and the applicant with
questions about applicant's health history as well as the applicant's parents' health
history
Errors and changes on the application - ✔️✔️if an error on an application occurs,
underwriter may require that it be correct and changes must be approved and initialed
by the applicant
Medical Information Bureau Report (MIB) - ✔️✔️it is a CLEARINGHOUSE for medical
information for insurance companies that belong to it
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