Pearson Vue Life Insurance Complete
Exam Study Questions with Verified
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1. 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
2. An applicant's statements on an application are considered to be legal: -
ANSWER representations
3. A contract that promises to pay an income to an insured until his/her death is
called: - ANSWER Life Annuity
4. An employer can deduct premium payments as an ordinary business expense
for which of the following life coverages? - ANSWER Group
5. 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
6. Ordinary Whole life (I Types of Policies, A. Traditional whole life products)
- ANSWER - Insurance protection to age 100
- Cash value accumulation to age 100
- Fixed level premium payments
7. Limited Payment (I Types of Policies, A. Traditional whole life products) -
ANSWER Premium payments are for a specified time (20-Pay Life or 30-
, Pay Life) or to a specified age (Life Paid up at 65). The face amount (death
benefit) remains level and cash value continues to earn interest and mature at
age 100. While the annual premium is higher than Straight Life, it is paid for
a shorter period of time and will have a lower total premium outlay.
8. Single Premium (I Types of Policies, A. Traditional whole life products) -
ANSWER The entire premium is paid in a lump sum at the time of purchase
and creates immediate cash value. The face amount (death benefit) remains
level and cash value continues to earn interest and mature at age 100. This
policy has the lowest total premium outlay for the life of the policy.
9. Universal Life (I Types of Policies, B. Interest/market-sensitive/adjustable
life products) - ANSWER - insurance protection and a savings element
(cash value) that grows on a tax-deferred basis
-unbundled policy, individual elements of the policy and premium(morality
risk, policy expenses, and the cash value) are credited to the account separately
after the premium is paid
- Built in guarantees regarding the cost of insurance (morality risk) and
the interest rates applied to cash values
10.Variable Whole Life (I Types of Policies, B. Interest/market-
sensitive/adjustable life products) - ANSWER - a whole life policy with
certain benefits that will vary based on market conditions.
- characteristics include fixed premium, accounts, general account
(Guaranteed values), and separate account (non guaranteed values)
11.Which of the following policies is an interest-sensitive form of permanent
protection? - ANSWER Universal Life
12.In life insurance, the Free Look provision begins on the: - ANSWER policy
delivery date
,13.Which of the following provisions in a life policy specifies the manner in
which proceeds will be paid to a beneficiary on the death of the insured? -
ANSWER Settlement Options
14.An insured owns a $10,000 policy with a $4,000 cash value and a 6 percent
interest rate. On January 1, the insured borrows $500 and pays one year's
interest in advance. During the year, the insured does not repay any part of
the loan or interest. If the insured dies on December 31, the beneficiary will
be entitled to a MAXIMUM of: - ANSWER $9,500
15.A payor benefit rider provides which of the following benefits? - ANSWER
A temporary waiver of premium should the payor die, until the insured
reaches a predetermined age
16.In which of the following contracts is the Death benefit called the principal
sum? - ANSWER Accidental Death and Dismemberment (AD&D)
17.The PRIMARY purpose of an inspection report is to assess an applicant's: -
ANSWER personal characteristics
18.Which of the following statements about replacement of existing life
insurance is CORRECT? - ANSWER Both the applicant for insurance and
the insurance producer must sign a statement stating whether existing
insurance is to be replaced.
19.All of the following elements must be included in a policy summary given to
a purchaser of life insurance EXCEPT the: - ANSWER names and
addresses of each beneficiary
, 20.The Insurance Commissioner may examine the records of an insurance
company at which of the following times? - ANSWER At any time the
Insurance Commissioner sees fit
21.All of the following groups are considered eligible for group life insurance
EXCEPT: - ANSWER volunteer religious groups
22.Which of the following persons is authorized to enforce state insurance
laws? - ANSWER The Insurance Commissioner
23.Which of the following terms may be used in advertisements for life
insurance? - ANSWER Universal Life Plan
24.The Insurance Commissioner may revoke or suspend a producer's license if
the producer: - ANSWER has forged another person's name on an insurance
application
25.In a life policy, a special benefit that prepays a portion of the death benefit
during the lifetime of an insured in the event of a specified illness is called: -
ANSWER an acceleration of life insurance benefit
26.An insurance company doing business in this state must operate under: -
ANSWER a certificate of authority
27.Which of the following situations is considered rebating? - ANSWER A
producer returns a portion of the commission to an insured.
28.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:
Exam Study Questions with Verified
Answers | Guarantee Pass
1. 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
2. An applicant's statements on an application are considered to be legal: -
ANSWER representations
3. A contract that promises to pay an income to an insured until his/her death is
called: - ANSWER Life Annuity
4. An employer can deduct premium payments as an ordinary business expense
for which of the following life coverages? - ANSWER Group
5. 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
6. Ordinary Whole life (I Types of Policies, A. Traditional whole life products)
- ANSWER - Insurance protection to age 100
- Cash value accumulation to age 100
- Fixed level premium payments
7. Limited Payment (I Types of Policies, A. Traditional whole life products) -
ANSWER Premium payments are for a specified time (20-Pay Life or 30-
, Pay Life) or to a specified age (Life Paid up at 65). The face amount (death
benefit) remains level and cash value continues to earn interest and mature at
age 100. While the annual premium is higher than Straight Life, it is paid for
a shorter period of time and will have a lower total premium outlay.
8. Single Premium (I Types of Policies, A. Traditional whole life products) -
ANSWER The entire premium is paid in a lump sum at the time of purchase
and creates immediate cash value. The face amount (death benefit) remains
level and cash value continues to earn interest and mature at age 100. This
policy has the lowest total premium outlay for the life of the policy.
9. Universal Life (I Types of Policies, B. Interest/market-sensitive/adjustable
life products) - ANSWER - insurance protection and a savings element
(cash value) that grows on a tax-deferred basis
-unbundled policy, individual elements of the policy and premium(morality
risk, policy expenses, and the cash value) are credited to the account separately
after the premium is paid
- Built in guarantees regarding the cost of insurance (morality risk) and
the interest rates applied to cash values
10.Variable Whole Life (I Types of Policies, B. Interest/market-
sensitive/adjustable life products) - ANSWER - a whole life policy with
certain benefits that will vary based on market conditions.
- characteristics include fixed premium, accounts, general account
(Guaranteed values), and separate account (non guaranteed values)
11.Which of the following policies is an interest-sensitive form of permanent
protection? - ANSWER Universal Life
12.In life insurance, the Free Look provision begins on the: - ANSWER policy
delivery date
,13.Which of the following provisions in a life policy specifies the manner in
which proceeds will be paid to a beneficiary on the death of the insured? -
ANSWER Settlement Options
14.An insured owns a $10,000 policy with a $4,000 cash value and a 6 percent
interest rate. On January 1, the insured borrows $500 and pays one year's
interest in advance. During the year, the insured does not repay any part of
the loan or interest. If the insured dies on December 31, the beneficiary will
be entitled to a MAXIMUM of: - ANSWER $9,500
15.A payor benefit rider provides which of the following benefits? - ANSWER
A temporary waiver of premium should the payor die, until the insured
reaches a predetermined age
16.In which of the following contracts is the Death benefit called the principal
sum? - ANSWER Accidental Death and Dismemberment (AD&D)
17.The PRIMARY purpose of an inspection report is to assess an applicant's: -
ANSWER personal characteristics
18.Which of the following statements about replacement of existing life
insurance is CORRECT? - ANSWER Both the applicant for insurance and
the insurance producer must sign a statement stating whether existing
insurance is to be replaced.
19.All of the following elements must be included in a policy summary given to
a purchaser of life insurance EXCEPT the: - ANSWER names and
addresses of each beneficiary
, 20.The Insurance Commissioner may examine the records of an insurance
company at which of the following times? - ANSWER At any time the
Insurance Commissioner sees fit
21.All of the following groups are considered eligible for group life insurance
EXCEPT: - ANSWER volunteer religious groups
22.Which of the following persons is authorized to enforce state insurance
laws? - ANSWER The Insurance Commissioner
23.Which of the following terms may be used in advertisements for life
insurance? - ANSWER Universal Life Plan
24.The Insurance Commissioner may revoke or suspend a producer's license if
the producer: - ANSWER has forged another person's name on an insurance
application
25.In a life policy, a special benefit that prepays a portion of the death benefit
during the lifetime of an insured in the event of a specified illness is called: -
ANSWER an acceleration of life insurance benefit
26.An insurance company doing business in this state must operate under: -
ANSWER a certificate of authority
27.Which of the following situations is considered rebating? - ANSWER A
producer returns a portion of the commission to an insured.
28.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:
