WISCONSIN LIFE INSURANCE EXAM 2026 LIFE
INSURANCE PRODUCTS AND POLICIES
PRACTICE SET ANSWERS FULL SOLUTION
◉ Defined Contribution Plan.
Answer: A tax qualified retirement plan in which annual
contributions are determined by a formula set forth in the plan.
Benefits paid to a participant vary with the amount of contributions
made on the participants behalf and the length of service under the
plan.
◉ Human Needs Approach.
Answer: A method for determining how much insurance protection
a person should have by analyzing a family's or business's needs and
objectives should the insured die, become disabled or retire.
◉ Key Person Insurance.
Answer: Protects against the loss of a key employee or key executive
by making the business the beneficiary if a key person dies. The
business is the owner, premium payor, and beneficiary.
◉ Needs Based Selling.
,Answer: The ethical duty of a producer to sell a product that fits the
needs of the prospect rather than the needs of the producer.
◉ Split Dollar Plan.
Answer: An arrangement where an employer and an employee share
in the cost of purchasing a life insurance policy on the employee. It is
a method of buying insurance, not an insurance policy itself. Many
times it is a combination of term and whole life insurance. The
arrangement between 2 parties; 1 party names the beneficiary of
death benefit minus the cash value, and the other receives the cash
value. Both parties typically share the premiums.
◉ Adverse Selection.
Answer: The tendency of high-risk persons to benefits more from
insurance, so are more likely to purchase it. This is reduced by sound
underwriting.
◉ Age Change.
Answer: The date halfway between birthdays when the age of the
applicant changes to the next higher age. With some insurers, the
age is based upon the applicant's age at his nearest birthday. In
others, it is based upon the age of his last birthday.
◉ Applicant.
,Answer: The person completing the application, not always the
policy owner or the insured.
◉ Application.
Answer: A request for insurance filled out by the applicant that is
attached to and part of all individual contracts.
◉ Attending Physician's Statement (APS).
Answer: A statement usually obtained from the applicant's doctor
when more information on a medical condition is needed. Applicant
must sign off on the release of their personal info to the underwriter.
◉ Backdating.
Answer: The practice of making a policy effective at an earlier date
than the present; usually not allowed more than 6 months. This
process is usually used to make the issue age lower than the
applicant's real age for a lower premium. This is not allowed in
variable contracts due to the investment options.
◉ Binding Receipt (Unconditional Receipt).
Answer: Insurance becomes effective on the date of the receipt and
continues for a specified period of time (usually 30- 60 days) or until
the insurer declines the application. Primarily used in auto and
homeowner's insurance.
, ◉ Buyer's Guide.
Answer: A pamphlet that describes and compares various forms of
life and health insurance that must be provided to the potential
buyers.
◉ Conditional Receipt.
Answer: Denotes that coverage will be provided once conditions are
met. Upon the collection of the application and the premium should
the insurer accept the application coverage will be issued on the
date of the application or the date of the medical exam, whichever
comes last. Remember, there is never any coverage unless the
premium has been paid.
◉ Consumer Report.
Answer: A written and/or oral statement regarding a consumer's
credit, character, reputation, or habits collected by a reporting
agency from employment records, credit reports, and other public
sources.
◉ Credit Report.
Answer: A summary of a person's creditworthiness that includes
identifying information, credit cards, late payments, bankruptcies,
and savings balances.
◉ Declined Risk.
INSURANCE PRODUCTS AND POLICIES
PRACTICE SET ANSWERS FULL SOLUTION
◉ Defined Contribution Plan.
Answer: A tax qualified retirement plan in which annual
contributions are determined by a formula set forth in the plan.
Benefits paid to a participant vary with the amount of contributions
made on the participants behalf and the length of service under the
plan.
◉ Human Needs Approach.
Answer: A method for determining how much insurance protection
a person should have by analyzing a family's or business's needs and
objectives should the insured die, become disabled or retire.
◉ Key Person Insurance.
Answer: Protects against the loss of a key employee or key executive
by making the business the beneficiary if a key person dies. The
business is the owner, premium payor, and beneficiary.
◉ Needs Based Selling.
,Answer: The ethical duty of a producer to sell a product that fits the
needs of the prospect rather than the needs of the producer.
◉ Split Dollar Plan.
Answer: An arrangement where an employer and an employee share
in the cost of purchasing a life insurance policy on the employee. It is
a method of buying insurance, not an insurance policy itself. Many
times it is a combination of term and whole life insurance. The
arrangement between 2 parties; 1 party names the beneficiary of
death benefit minus the cash value, and the other receives the cash
value. Both parties typically share the premiums.
◉ Adverse Selection.
Answer: The tendency of high-risk persons to benefits more from
insurance, so are more likely to purchase it. This is reduced by sound
underwriting.
◉ Age Change.
Answer: The date halfway between birthdays when the age of the
applicant changes to the next higher age. With some insurers, the
age is based upon the applicant's age at his nearest birthday. In
others, it is based upon the age of his last birthday.
◉ Applicant.
,Answer: The person completing the application, not always the
policy owner or the insured.
◉ Application.
Answer: A request for insurance filled out by the applicant that is
attached to and part of all individual contracts.
◉ Attending Physician's Statement (APS).
Answer: A statement usually obtained from the applicant's doctor
when more information on a medical condition is needed. Applicant
must sign off on the release of their personal info to the underwriter.
◉ Backdating.
Answer: The practice of making a policy effective at an earlier date
than the present; usually not allowed more than 6 months. This
process is usually used to make the issue age lower than the
applicant's real age for a lower premium. This is not allowed in
variable contracts due to the investment options.
◉ Binding Receipt (Unconditional Receipt).
Answer: Insurance becomes effective on the date of the receipt and
continues for a specified period of time (usually 30- 60 days) or until
the insurer declines the application. Primarily used in auto and
homeowner's insurance.
, ◉ Buyer's Guide.
Answer: A pamphlet that describes and compares various forms of
life and health insurance that must be provided to the potential
buyers.
◉ Conditional Receipt.
Answer: Denotes that coverage will be provided once conditions are
met. Upon the collection of the application and the premium should
the insurer accept the application coverage will be issued on the
date of the application or the date of the medical exam, whichever
comes last. Remember, there is never any coverage unless the
premium has been paid.
◉ Consumer Report.
Answer: A written and/or oral statement regarding a consumer's
credit, character, reputation, or habits collected by a reporting
agency from employment records, credit reports, and other public
sources.
◉ Credit Report.
Answer: A summary of a person's creditworthiness that includes
identifying information, credit cards, late payments, bankruptcies,
and savings balances.
◉ Declined Risk.
