Life Insurance Exam Questions Verified Solutions
J has a life insurance policy with a Guaranteed Insurability rider. After celebrating her 42nd birthday, J
wishes to utilize her rider to increase her death benefit. What will happen in this situation? - The insurer will permit J to add more insu...
Life Insurance Exam Questions Verified Solutions
J has a life insurance policy with a Guaranteed Insurability rider. After celebrating her 42nd birthday, J
wishes to utilize her rider to increase her death benefit. What will happen in this situation?
- The insurer will permit J to add more insurance without requiring proof of insurability. ✔️
- The insurer will allow J to add more insurance pending a paramedical exam.
- The insurer will deny J's request to add more insurance.
- The insurer will enable J to add more coverage pending proof of insurability and additional premium.
An insured has a policy featuring a Waiver of Premium rider and has suffered an illness preventing them
from working for two years. When will their premiums be waived?
- Immediately
- After the first nine months of disability
- After the first six months of disability ✔️
- Never; premiums cannot be waived for illness.
The clause in an insurance policy that details the coverage scope and indemnification limits is called:
- Insuring Agreement ✔️
- Incontestable Clause
- Payor Clause
- Entire Contract Clause
D has settled his mortgage and no longer finds the life insurance policy needed, which he originally
bought for mortgage coverage. If D considers selling his policy while alive, this is termed:
- a life settlement ✔️
- an annuity
- a Viatical settlement
- STOLI
Combination/Variation Plans are designed to insure:
,- Groups
- Two or More lives under one contract ✔️
- Two or more people under separate contracts
- a form of variable life insurance
Regarding cash dividend options, which tax consideration applies?
- The dividend is fully taxable as income.
- The dividend is paid tax-free. ✔️
- The dividend may be taxable depending on the insured's income bracket.
- If half of the dividend is kept by the company, it is tax-free.
Which statement is NOT accurate about the renewable option on a term policy?
- The policy must be renewed regardless of insurability.
- The rates cannot be greater than standard rates at renewal.
- Premiums are determined based on attained age rates.
- A policy can be renewed, but the insured must convert to a different policy. ✔️
Which of the following is considered part of the Entire Contract?
- Declarations Page
- Buyers Guide
- Copy of the Application ✔️
- All of the Above
Company A and Company Z have an agreement that allows Company Z to receive funds for buying out a
partnership if either CEO dies. This exemplifies:
- Buy/Sell Agreement
- Cross Purchase Plan
- Business Entity Plan ✔️
- Key Person
,All the following statements about the Guaranty Association are TRUE EXCEPT:
- A claimant may receive reduced benefits from their policy.
- The Association consists of all member insurers.
- The Association comprises all member insurers and has the right to end membership while still doing
business in Illinois. ✔️
- There is a $250,000 cap on the present value of annuity benefits.
G replaces a credit life policy with whole life insurance. The agent must:
- formally replace the coverage and include all necessary forms for the insured.
- inform the existing insurer regarding replacement through a notice form.
- sign the application, sending all signed documents to the replacing insurer for forwarding to the
existing insurer.
- None of the Above ✔️
Each of the following actions is an unfair claims practice EXCEPT:
- Ignoring critical communications about filed claims in a timely manner.
- Supplying brochures to claimants that suggest a competitor's financial instability. ✔️
- Intentionally misrepresenting essential policy coverage and provisions to all claimants.
- Failing to provide claims forms with adequate instructions on how to complete them.
Regarding temporary licenses, each statement is true EXCEPT:
- They continue following the transfer of ownership of the sponsoring insurance company. ✔️
- The fee is $50.
- The Director may impose limits to protect the public.
- A licensed sponsor may be required.
A Temporary License (valid for 180 days) permits the holder to perform all the following actions EXCEPT:
- A surviving spouse of a producer can utilize this authority to facilitate the sale of the insurance
business.
, - Ensure that insureds pay renewal premiums punctually.
- Request the Director to extend the authority if the anticipated agency sale takes longer than 180 days.
- Sell a new policy to an existing client. ✔️
After receiving the examination report, the subject of a market conduct examination for non-financial
matters may request a hearing within how many days?
- 10 days ✔️
- 15 days
- 20 days
- 30 days
Which sale is categorized as controlled business?
- A producer secures a one million dollar life policy on their employer's life. ✔️
- A producer places a one million dollar life policy on their son's life.
- A producer secures a one million dollar life policy on their niece's life.
- A producer places a one million dollar life policy on their neighbor's life.
The resident licensing fee for a Limited Lines Car Rental license is:
- $50 every year
- $180 every two years ✔️
- $50 every two years
- $250 every year.
What is the longest duration a producer license can be suspended by the Director?
- A producer license suspension lasts for a time deemed appropriate by the Director. ✔️
- 6 months
- 12 months
- 3 years
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