Pearson Vue Life Insurance Practice
Exam Questions With Complete
Solutions
/. The PRIMARY reason for selecting a Variable Whole Life policy instead of a
traditional Whole Life policy is that the Variable Whole Life policy: - Answer-✅has the
potential to earn a higher rate of return on the cash value
/.Which of the following statements is CORRECT about the Paid-Up Additions in a
participating Whole Life policy? - Answer-✅They are purchased on an attained age
basis.
/.Which of the following statements is CORRECT about Group Life conversion
privileges? - Answer-✅Death during the conversion period is covered even if the
departing employee chose not to convert the policy.
/.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? - Answer-✅Pay
the Death benefit
/.If a policy contains a Guaranteed Insurability rider, the insured has the right to
purchase: - Answer-✅additional coverage at specified ages
/.If life insurance policy applicant is classified as a substandard risk, the insurance
company will MOST likely: - Answer-✅charge an extra premium
/.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: - Answer-✅revocable beneficiary
/.Which of the following features allows an insurance policy to remain in force for a
specified number of days beyond the premium due date? - Answer-✅Grace Period
provision
/.In life insurance, insurable interest must exist at the time the: - Answer-✅producer
writes an application on a proposed insured
/.Which of the following terms refers to the transfer of some or all of the ownership rights
of a life insurance policy from one individual to another? - Answer-✅Assignment
, /.Which of the following statements about a Renewable Term policy is CORRECT? -
Answer-✅It is renewable at the option of the insured.
/.Two business partners own life insurance on each other. If one partner dies, which of
the following contracts will allow the other partner to buy 100 percent of the business
interest? - Answer-✅Buy and Sell Agreement
/.An insured intentionally understates her age on her application for a life policy. At
death, the insurer will take which of the following actions? - Answer-✅Pay a reduced
Death benefit based on the insured's actual age
/.An applicant's statements on an application are considered to be legal: - Answer-
✅representations
/.A contract that promises to pay an income to an insured until his/her death is called: -
Answer-✅Life Annuity
/.An employer can deduct premium payments as an ordinary business expense for
which of the following life coverages? - Answer-✅Group
/.Which of the following annuities would BEST suit the needs of a 35-year-old factory
worker who is concerned about inflation and wants to establish a retirement plan? -
Answer-✅A Flexible Premium Variable Annuity
/.A client needs a substantial amount of protection but has limited financial resources.
Which of the following insurance policies would BEST meet the client's needs? -
Answer-✅Term Life
/.An applicant for life insurance may question the validity and source of any consumer
information developed under the: - Answer-✅Fair Credit Reporting Act (Insurance
Information and Privacy Protection Act)
/.Which of the following policy provisions provides for continuation of coverage despite
nonpayment of premiums? - Answer-✅Nonforfeiture Option
/.Federal income tax laws generally treat proceeds of life insurance policies as: -
Answer-✅nontaxable
/.When a producer submits an insurance application to the company, the producer must
take all of the following actions EXCEP - Answer-✅submit a completed medical
information report
/.Which of the following policy provisions states that the application is part of the policy?
- Answer-✅Entire contract
Exam Questions With Complete
Solutions
/. The PRIMARY reason for selecting a Variable Whole Life policy instead of a
traditional Whole Life policy is that the Variable Whole Life policy: - Answer-✅has the
potential to earn a higher rate of return on the cash value
/.Which of the following statements is CORRECT about the Paid-Up Additions in a
participating Whole Life policy? - Answer-✅They are purchased on an attained age
basis.
/.Which of the following statements is CORRECT about Group Life conversion
privileges? - Answer-✅Death during the conversion period is covered even if the
departing employee chose not to convert the policy.
/.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? - Answer-✅Pay
the Death benefit
/.If a policy contains a Guaranteed Insurability rider, the insured has the right to
purchase: - Answer-✅additional coverage at specified ages
/.If life insurance policy applicant is classified as a substandard risk, the insurance
company will MOST likely: - Answer-✅charge an extra premium
/.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: - Answer-✅revocable beneficiary
/.Which of the following features allows an insurance policy to remain in force for a
specified number of days beyond the premium due date? - Answer-✅Grace Period
provision
/.In life insurance, insurable interest must exist at the time the: - Answer-✅producer
writes an application on a proposed insured
/.Which of the following terms refers to the transfer of some or all of the ownership rights
of a life insurance policy from one individual to another? - Answer-✅Assignment
, /.Which of the following statements about a Renewable Term policy is CORRECT? -
Answer-✅It is renewable at the option of the insured.
/.Two business partners own life insurance on each other. If one partner dies, which of
the following contracts will allow the other partner to buy 100 percent of the business
interest? - Answer-✅Buy and Sell Agreement
/.An insured intentionally understates her age on her application for a life policy. At
death, the insurer will take which of the following actions? - Answer-✅Pay a reduced
Death benefit based on the insured's actual age
/.An applicant's statements on an application are considered to be legal: - Answer-
✅representations
/.A contract that promises to pay an income to an insured until his/her death is called: -
Answer-✅Life Annuity
/.An employer can deduct premium payments as an ordinary business expense for
which of the following life coverages? - Answer-✅Group
/.Which of the following annuities would BEST suit the needs of a 35-year-old factory
worker who is concerned about inflation and wants to establish a retirement plan? -
Answer-✅A Flexible Premium Variable Annuity
/.A client needs a substantial amount of protection but has limited financial resources.
Which of the following insurance policies would BEST meet the client's needs? -
Answer-✅Term Life
/.An applicant for life insurance may question the validity and source of any consumer
information developed under the: - Answer-✅Fair Credit Reporting Act (Insurance
Information and Privacy Protection Act)
/.Which of the following policy provisions provides for continuation of coverage despite
nonpayment of premiums? - Answer-✅Nonforfeiture Option
/.Federal income tax laws generally treat proceeds of life insurance policies as: -
Answer-✅nontaxable
/.When a producer submits an insurance application to the company, the producer must
take all of the following actions EXCEP - Answer-✅submit a completed medical
information report
/.Which of the following policy provisions states that the application is part of the policy?
- Answer-✅Entire contract
