WEBCE Practice Exam 100 Questions
With 100% Correct Answers
In general, what is the earliest age at which a person can take a distribution from a
qualified plan without a tax penalty? - Correct Answer- 59 1/2
Carol was 35 when she bought her deferred annuity. Now, at age 38, she wants to
withdraw funds from the contract to take a vacation. Carol is likely to encounter all of the
following consequences in making the withdrawal EXCEPT: - Correct Answer- statutory
minimum withholding requirements
What kind of misrepresentation on an insurance application gives the insurer reason to
terminate a policy? - Correct Answer- material fact
Which of the following riders attached to Debra's life insurance policy provides for a
monthly income to be paid if she becomes disabled? - Correct Answer- disability income
benefit rider
In calculating their life insurance premiums, which of the following statements generally
guides insurance companies in determining the "loading" factor? - Correct Answer-
Total loading from all policies should cover total operating costs, provide a safety
margin, and contribute to profits or surplus.
What is the main difference between ordinary whole life and limited payment whole life
insurance? - Correct Answer- the length of time that the insured must pay premiums
Abby lives in New Mexico, where she is licensed as an insurance agent and wants to
apply for a nonresident license in Arizona. She holds a current license in good standing
in New Mexico. When applying for a license in Arizona, Abby must prove her citizenship
by submitting: - Correct Answer- a valid driver's license
Matt takes out a life insurance policy on himself to protect his family. Matt's insurance
company may consider all of the following when underwriting his policy EXCEPT: -
Correct Answer- his race
Under which of the following do the cash values and death benefits rise and fall on the
basis of the policy's subaccount investment performance, and for which the insurer does
not guarantee a rate of return on the cash value invested? - Correct Answer- variable
life
To help determine how much life insurance a prospect needs, agent Smith uses the
human life value approach which is essentially based on an estimate of the prospect's: -
Correct Answer- net future earnings discounted to a present value
, Which one of the following statements about Multiple Employer Welfare Arrangements
(MEWAs) is most correct? - Correct Answer- They are usually created by employers in
the same industry.
Which of the following best describes income payments under the period certain payout
option? - Correct Answer- the longer the payout period, the smaller the amount of each
monthly payment
Delta Co. buys a group life insurance policy for its employees. As the plan sponsor,
what will Delta receive? - Correct Answer- a policy
Margie owns a fixed life insurance policy. What type of death benefit is Margie
guaranteed? - Correct Answer- The policy guarantees a fixed amount.
What is the minimum grace period required for payment on an annuity? - Correct
Answer- 30 days
Which one of the following has more than "an expectancy" that he or she will receive
the death benefit under a life insurance policy? - Correct Answer- an irrevocable
beneficiary
An agent for ABC Insurance Company meets with a client. The agent shows the client
ABC's sample policies, refers to the ABC rate book, and gives the client an ABC
business card. The client assumes that ABC has appointed the agent to represent it.
What kind of authority does the agent have? - Correct Answer- apparent authority
Which statement about variable annuity subaccounts is NOT correct? - Correct Answer-
The insurer selects the variable subaccounts to which the contract owner's premiums
are allocated.
Stephanie is hired by ABC Insurance Company's home office. She does not have an
insurance producer's license. Which of the following duties may she perform for ABC? -
Correct Answer- mail company correspondence for the president
The life insurance nonforfeiture option that results in the permanent continuation of cash
value life insurance with no further premiums is called the: - Correct Answer- reduced
paid-up option
A life insurance policy may accelerate payment of the death benefit for any of the
following reasons EXCEPT: - Correct Answer- partial, temporary disability
The formal name for what is commonly called a 'double indemnity' rider is: - Correct
Answer- accidental death benefit rider
With 100% Correct Answers
In general, what is the earliest age at which a person can take a distribution from a
qualified plan without a tax penalty? - Correct Answer- 59 1/2
Carol was 35 when she bought her deferred annuity. Now, at age 38, she wants to
withdraw funds from the contract to take a vacation. Carol is likely to encounter all of the
following consequences in making the withdrawal EXCEPT: - Correct Answer- statutory
minimum withholding requirements
What kind of misrepresentation on an insurance application gives the insurer reason to
terminate a policy? - Correct Answer- material fact
Which of the following riders attached to Debra's life insurance policy provides for a
monthly income to be paid if she becomes disabled? - Correct Answer- disability income
benefit rider
In calculating their life insurance premiums, which of the following statements generally
guides insurance companies in determining the "loading" factor? - Correct Answer-
Total loading from all policies should cover total operating costs, provide a safety
margin, and contribute to profits or surplus.
What is the main difference between ordinary whole life and limited payment whole life
insurance? - Correct Answer- the length of time that the insured must pay premiums
Abby lives in New Mexico, where she is licensed as an insurance agent and wants to
apply for a nonresident license in Arizona. She holds a current license in good standing
in New Mexico. When applying for a license in Arizona, Abby must prove her citizenship
by submitting: - Correct Answer- a valid driver's license
Matt takes out a life insurance policy on himself to protect his family. Matt's insurance
company may consider all of the following when underwriting his policy EXCEPT: -
Correct Answer- his race
Under which of the following do the cash values and death benefits rise and fall on the
basis of the policy's subaccount investment performance, and for which the insurer does
not guarantee a rate of return on the cash value invested? - Correct Answer- variable
life
To help determine how much life insurance a prospect needs, agent Smith uses the
human life value approach which is essentially based on an estimate of the prospect's: -
Correct Answer- net future earnings discounted to a present value
, Which one of the following statements about Multiple Employer Welfare Arrangements
(MEWAs) is most correct? - Correct Answer- They are usually created by employers in
the same industry.
Which of the following best describes income payments under the period certain payout
option? - Correct Answer- the longer the payout period, the smaller the amount of each
monthly payment
Delta Co. buys a group life insurance policy for its employees. As the plan sponsor,
what will Delta receive? - Correct Answer- a policy
Margie owns a fixed life insurance policy. What type of death benefit is Margie
guaranteed? - Correct Answer- The policy guarantees a fixed amount.
What is the minimum grace period required for payment on an annuity? - Correct
Answer- 30 days
Which one of the following has more than "an expectancy" that he or she will receive
the death benefit under a life insurance policy? - Correct Answer- an irrevocable
beneficiary
An agent for ABC Insurance Company meets with a client. The agent shows the client
ABC's sample policies, refers to the ABC rate book, and gives the client an ABC
business card. The client assumes that ABC has appointed the agent to represent it.
What kind of authority does the agent have? - Correct Answer- apparent authority
Which statement about variable annuity subaccounts is NOT correct? - Correct Answer-
The insurer selects the variable subaccounts to which the contract owner's premiums
are allocated.
Stephanie is hired by ABC Insurance Company's home office. She does not have an
insurance producer's license. Which of the following duties may she perform for ABC? -
Correct Answer- mail company correspondence for the president
The life insurance nonforfeiture option that results in the permanent continuation of cash
value life insurance with no further premiums is called the: - Correct Answer- reduced
paid-up option
A life insurance policy may accelerate payment of the death benefit for any of the
following reasons EXCEPT: - Correct Answer- partial, temporary disability
The formal name for what is commonly called a 'double indemnity' rider is: - Correct
Answer- accidental death benefit rider
