Pearson VUE Life Insurance Practice Exam |
Complete Q&A with Verified Answers | State
Licensing Exam Prep Guide
/. P wants to name her husband as the beneficiary of her life policy. However, she
wishes to retain all of the rights of ownership. P should have her husband named as
the:
a: irrevocable beneficiary
b: revocable beneficiary
c: secondary beneficiary - Answer-✅B
/.A contract that has as its basic function the systematic liquidation of accumulated
assets through periodic payments is called an:
A. indemnity contract
B. investment contract
C. endowment
D. annuity - Answer-✅D
/.An insurance producer takes an application for a life insurance policy but does not
collect the initial premium. On delivery of the policy to the proposed insured, the
producer must collect the initial premium and which of the following?
A. A copy of the MIB report
B. The insured's signed statement of continued good health
C. A copy of the conditional receipt
D. A copy of the temporary insurance agreement that covered the period between the
application date and the delivery date. - Answer-✅B
/.An employer can deduct premium payments as an ordinary business expense for
which of the following life coverages?
A. Buy and Sell Agreements
B. Group
C. Key Employee
D. Joint Life, if the business is named as the beneficiary - Answer-✅B
/.A producer takes applications from identical twins who want to buy the same type of
policy in the same amount. The insurer issues the policies as applied for, but charges a
25 percent higher premium for one of the policies. The difference in premiums is
probably due to which of the following factors?
,A. Incontestability
B. Insurable interest
C. Consideration
D. Risk classification - Answer-✅D
/.In the event of an insured's death, which of the following provides an income for the
family during a designated period of time followed by a lump sum death benefit?
A. Family Income rider
B. Survivorship Life policy
C. Joint Life policy
D. Modified Life policy - Answer-✅A
/.Which of the following statements is CORRECT about Group Life conversion
privileges?
A. Under the COBRA law, a departing employee may elect to remain a member of the
Group Life plan for a limited period of time.
B. Death during the conversion period is covered even if the departing employee chose
not to convert the policy.
C. A departing employee must individually pay the premium if the employee elects to be
covered during the conversion period.
D .If a departing employee elects to convert a life insurance policy, the insurer must
offer Term insurance as one of the choices. - Answer-✅B
/.Which of the following policies is an interest-sensitive form of permanent protection?
A. Universal Life
B. Limited-Pay Life
C. Graded Premium Whole Life
D. Modified Whole Life - Answer-✅A
/.Reinstatement of a life insurance policy requires an insured to take all of the following
actions EXCEPT:
A. provide evidence of insurability
B. make collateral assignment to the insurer
C. pay back interest on any outstanding policy loan
D. pay all past-due premiums - Answer-✅B
/.Which of the following statements about a Renewable Term policy is CORRECT?
A. It is renewable at the option of the insurer.
B. It is renewable at the option of the insured.
C. It is renewable at the option of the insurer, with proof of insurability.
D. It is renewable at the option of the insured, with proof of insurability. - Answer-✅B
/.If an insured commits suicide after the Suicide clause in the insured's life insurance
policy has expired, the insurer will take which of the following actions?
A. Refuse to pay the Death benefit or refund any premiums
B. Refund only the premiums paid
, C. Refund the premiums paid plus interest
D. Pay the Death benefit - Answer-✅D
/.Which of the following policy provisions provides for continuation of coverage despite
nonpayment of premiums?
A. Entire Contract
B. Ownership clause
C. Nonforfeiture Option
D. Insuring clause - Answer-✅C
/.An applicant for life insurance may question the validity and source of any consumer
information developed under the
A. Medical Information Bureau Disclosure Act
B. Fair Credit Reporting Act (Insurance Information and Privacy Protection Act)
C. Equal Employment Opportunity Act
D. Medicare Act - Answer-✅B
/.The PRIMARY reason for selecting a Variable Whole Life policy instead of a traditional
Whole Life policy is that the Variable Whole Life policy:
A. provides flexible premium payments
B. allows the policyowner to borrow a larger percentage of the cash value
C. has the potential to earn a higher rate of return on the cash value
D. allows the policyowner more flexibility in naming and changing beneficiaries -
Answer-✅C
/.A policyowner names his wife as the primary beneficiary of his Universal Life policy on
a revocable basis. He also names his three children as his secondary beneficiaries and
his estate as his tertiary beneficiary. If the policyowner's wife predeceases him, and
then he dies, who will receive the policy proceeds?
A. The children
B. The policyowner's estate
C. The primary beneficiary's estate
D. The tertiary beneficiary - Answer-✅A
/.The Waiver of Premium provision of a life policy allows the insurer to take which of the
following actions?
A. Waive an insured's premiums if the insured becomes totally disabled before a certain
age
B. Waive an insured's premiums if the insured becomes partially disabled for a minimum
time
C. Increase an insured's coverage at an attained age without imposing a premium
increase
D. Reduce an insured's premiums if the insured pays them annually instead of monthly -
Answer-✅A
Complete Q&A with Verified Answers | State
Licensing Exam Prep Guide
/. P wants to name her husband as the beneficiary of her life policy. However, she
wishes to retain all of the rights of ownership. P should have her husband named as
the:
a: irrevocable beneficiary
b: revocable beneficiary
c: secondary beneficiary - Answer-✅B
/.A contract that has as its basic function the systematic liquidation of accumulated
assets through periodic payments is called an:
A. indemnity contract
B. investment contract
C. endowment
D. annuity - Answer-✅D
/.An insurance producer takes an application for a life insurance policy but does not
collect the initial premium. On delivery of the policy to the proposed insured, the
producer must collect the initial premium and which of the following?
A. A copy of the MIB report
B. The insured's signed statement of continued good health
C. A copy of the conditional receipt
D. A copy of the temporary insurance agreement that covered the period between the
application date and the delivery date. - Answer-✅B
/.An employer can deduct premium payments as an ordinary business expense for
which of the following life coverages?
A. Buy and Sell Agreements
B. Group
C. Key Employee
D. Joint Life, if the business is named as the beneficiary - Answer-✅B
/.A producer takes applications from identical twins who want to buy the same type of
policy in the same amount. The insurer issues the policies as applied for, but charges a
25 percent higher premium for one of the policies. The difference in premiums is
probably due to which of the following factors?
,A. Incontestability
B. Insurable interest
C. Consideration
D. Risk classification - Answer-✅D
/.In the event of an insured's death, which of the following provides an income for the
family during a designated period of time followed by a lump sum death benefit?
A. Family Income rider
B. Survivorship Life policy
C. Joint Life policy
D. Modified Life policy - Answer-✅A
/.Which of the following statements is CORRECT about Group Life conversion
privileges?
A. Under the COBRA law, a departing employee may elect to remain a member of the
Group Life plan for a limited period of time.
B. Death during the conversion period is covered even if the departing employee chose
not to convert the policy.
C. A departing employee must individually pay the premium if the employee elects to be
covered during the conversion period.
D .If a departing employee elects to convert a life insurance policy, the insurer must
offer Term insurance as one of the choices. - Answer-✅B
/.Which of the following policies is an interest-sensitive form of permanent protection?
A. Universal Life
B. Limited-Pay Life
C. Graded Premium Whole Life
D. Modified Whole Life - Answer-✅A
/.Reinstatement of a life insurance policy requires an insured to take all of the following
actions EXCEPT:
A. provide evidence of insurability
B. make collateral assignment to the insurer
C. pay back interest on any outstanding policy loan
D. pay all past-due premiums - Answer-✅B
/.Which of the following statements about a Renewable Term policy is CORRECT?
A. It is renewable at the option of the insurer.
B. It is renewable at the option of the insured.
C. It is renewable at the option of the insurer, with proof of insurability.
D. It is renewable at the option of the insured, with proof of insurability. - Answer-✅B
/.If an insured commits suicide after the Suicide clause in the insured's life insurance
policy has expired, the insurer will take which of the following actions?
A. Refuse to pay the Death benefit or refund any premiums
B. Refund only the premiums paid
, C. Refund the premiums paid plus interest
D. Pay the Death benefit - Answer-✅D
/.Which of the following policy provisions provides for continuation of coverage despite
nonpayment of premiums?
A. Entire Contract
B. Ownership clause
C. Nonforfeiture Option
D. Insuring clause - Answer-✅C
/.An applicant for life insurance may question the validity and source of any consumer
information developed under the
A. Medical Information Bureau Disclosure Act
B. Fair Credit Reporting Act (Insurance Information and Privacy Protection Act)
C. Equal Employment Opportunity Act
D. Medicare Act - Answer-✅B
/.The PRIMARY reason for selecting a Variable Whole Life policy instead of a traditional
Whole Life policy is that the Variable Whole Life policy:
A. provides flexible premium payments
B. allows the policyowner to borrow a larger percentage of the cash value
C. has the potential to earn a higher rate of return on the cash value
D. allows the policyowner more flexibility in naming and changing beneficiaries -
Answer-✅C
/.A policyowner names his wife as the primary beneficiary of his Universal Life policy on
a revocable basis. He also names his three children as his secondary beneficiaries and
his estate as his tertiary beneficiary. If the policyowner's wife predeceases him, and
then he dies, who will receive the policy proceeds?
A. The children
B. The policyowner's estate
C. The primary beneficiary's estate
D. The tertiary beneficiary - Answer-✅A
/.The Waiver of Premium provision of a life policy allows the insurer to take which of the
following actions?
A. Waive an insured's premiums if the insured becomes totally disabled before a certain
age
B. Waive an insured's premiums if the insured becomes partially disabled for a minimum
time
C. Increase an insured's coverage at an attained age without imposing a premium
increase
D. Reduce an insured's premiums if the insured pays them annually instead of monthly -
Answer-✅A
