FX LIFE INSURANCE UPDATED EXAMS TEST
PAPER QUESTIONS AND ANSWERS SURE A+
✔✔When must insurable interest exist in a life insurance policy? - ✔✔At the time of
application.
✔✔What are the three main instances when insurable interest exists in life insurance? -
✔✔1. insuring your own life
2. insuring the life of a family member
3. insuring the life of a business partner or someone who has a financial obligation
✔✔When planning for survivor protection in life insurance, what needs to be
considered? - ✔✔The insured's current assets, liabilities, and survivor's needs.
✔✔What is the purpose of key person insurance? - ✔✔To minimize the risk of financial
loss caused by the death of a key employee
✔✔What are illustrations in a life insurance policy? - ✔✔Presentations of
nonguaranteed elements of the policy.
✔✔What is the term that describes the frequency and the amount of the premium
payment? - ✔✔Premium mode
,✔✔How does the premium mode affect the total premium paid for insurance for the
year? - ✔✔Higher frequency of premium payments will result in higher overall premium.
✔✔What type of report provides information about the applicant's hobbies, habits and
financial status? - ✔✔Investigative consumer report
✔✔Who is responsible for the contents of insurance advertisements? - ✔✔The
insurance company.
✔✔Who is the beneficiary on a key-person life insurance policy? - ✔✔The employer
✔✔What term describes the fee a person pays an insurance company to receive
coverage? - ✔✔Premium
✔✔Mortality tables are used by insurance companies to predict what? - ✔✔Life
expectancy and the death rates for specific groups of individuals.
✔✔All other factors being equal, which premium payment mode will require an overall
higher premium: monthly or annual? - ✔✔Monthly
✔✔What are the three factors that determine the premium for a particular life insurance
policy? - ✔✔1. Mortality
2. Interest
3. Expense
✔✔If an insured changes his payment plan from monthly to annually, what happens to
the total premium? - ✔✔It will decrease.
✔✔Who must be a member of insurance guaranty associations? - ✔✔All insurers
authorized to write insurance within a state.
✔✔Life insurance may be used to pay state inheritance taxes and federal estate taxes
eliminating the need to sell assets from the state. What is this called? - ✔✔Estate
conservation.
✔✔What type of life insurance offers an applicant a cash value element? -
✔✔Permanent insurance (usually whole life).
✔✔If an applicant for a life insurance policy and the potential insured are two different
people, what would be the underwriter's main concern? - ✔✔The existence of insurable
interest between the applicant and the insured.
✔✔What is the main responsibility of a company's underwriting unit? - ✔✔Risk selection
, ✔✔What type of insurance creates an immediate estate? - ✔✔Life insurance.
✔✔A business is the owner and the beneficiary of a key-person life policy. When the
business collects the policy benefit, how is it taxed? - ✔✔The benefit is received tax
free.
✔✔When must the policy summary for a life insurance policy be delivered to the policy
owner? - ✔✔At the time of policy delivery.
✔✔What is the purpose of the agent's report during the application process? - ✔✔The
agent's report discusses the agent's personal observations abut the proposed insured
that may help the underwriting process.
✔✔What are the personal uses of life insurance? - ✔✔Survivor protection, estate
creation and conservation, cash accumulation and liquidity
✔✔What document describes the specific information about a policy? - ✔✔Policy
summary
✔✔What is the purpose of insurance guaranty associations? - ✔✔To protect policy
owners, insureds, and beneficiaries from financial losses caused by insolvent insurers.
✔✔Accumulate - ✔✔build up
✔✔Attained Age - ✔✔the insured's age at the time the policy is renewed or replaced
✔✔Cash Value - ✔✔a policy's savings element or living benefit
✔✔Deferred - ✔✔withheld or postposed until a specified time or event in the future
✔✔Endow - ✔✔to have the cash value of a whole life policy reach the contractual face
amount
✔✔Face amount - ✔✔the amount of benefit stated in the life insurance policy
✔✔Fixed Life Insurance Products - ✔✔Contracts that offer guaranteed minim or fixed
benefits
✔✔Lapse - ✔✔Policy termination due to nonpayment of premium
✔✔Level Premium - ✔✔the premium that does not change throughout the life policy
PAPER QUESTIONS AND ANSWERS SURE A+
✔✔When must insurable interest exist in a life insurance policy? - ✔✔At the time of
application.
✔✔What are the three main instances when insurable interest exists in life insurance? -
✔✔1. insuring your own life
2. insuring the life of a family member
3. insuring the life of a business partner or someone who has a financial obligation
✔✔When planning for survivor protection in life insurance, what needs to be
considered? - ✔✔The insured's current assets, liabilities, and survivor's needs.
✔✔What is the purpose of key person insurance? - ✔✔To minimize the risk of financial
loss caused by the death of a key employee
✔✔What are illustrations in a life insurance policy? - ✔✔Presentations of
nonguaranteed elements of the policy.
✔✔What is the term that describes the frequency and the amount of the premium
payment? - ✔✔Premium mode
,✔✔How does the premium mode affect the total premium paid for insurance for the
year? - ✔✔Higher frequency of premium payments will result in higher overall premium.
✔✔What type of report provides information about the applicant's hobbies, habits and
financial status? - ✔✔Investigative consumer report
✔✔Who is responsible for the contents of insurance advertisements? - ✔✔The
insurance company.
✔✔Who is the beneficiary on a key-person life insurance policy? - ✔✔The employer
✔✔What term describes the fee a person pays an insurance company to receive
coverage? - ✔✔Premium
✔✔Mortality tables are used by insurance companies to predict what? - ✔✔Life
expectancy and the death rates for specific groups of individuals.
✔✔All other factors being equal, which premium payment mode will require an overall
higher premium: monthly or annual? - ✔✔Monthly
✔✔What are the three factors that determine the premium for a particular life insurance
policy? - ✔✔1. Mortality
2. Interest
3. Expense
✔✔If an insured changes his payment plan from monthly to annually, what happens to
the total premium? - ✔✔It will decrease.
✔✔Who must be a member of insurance guaranty associations? - ✔✔All insurers
authorized to write insurance within a state.
✔✔Life insurance may be used to pay state inheritance taxes and federal estate taxes
eliminating the need to sell assets from the state. What is this called? - ✔✔Estate
conservation.
✔✔What type of life insurance offers an applicant a cash value element? -
✔✔Permanent insurance (usually whole life).
✔✔If an applicant for a life insurance policy and the potential insured are two different
people, what would be the underwriter's main concern? - ✔✔The existence of insurable
interest between the applicant and the insured.
✔✔What is the main responsibility of a company's underwriting unit? - ✔✔Risk selection
, ✔✔What type of insurance creates an immediate estate? - ✔✔Life insurance.
✔✔A business is the owner and the beneficiary of a key-person life policy. When the
business collects the policy benefit, how is it taxed? - ✔✔The benefit is received tax
free.
✔✔When must the policy summary for a life insurance policy be delivered to the policy
owner? - ✔✔At the time of policy delivery.
✔✔What is the purpose of the agent's report during the application process? - ✔✔The
agent's report discusses the agent's personal observations abut the proposed insured
that may help the underwriting process.
✔✔What are the personal uses of life insurance? - ✔✔Survivor protection, estate
creation and conservation, cash accumulation and liquidity
✔✔What document describes the specific information about a policy? - ✔✔Policy
summary
✔✔What is the purpose of insurance guaranty associations? - ✔✔To protect policy
owners, insureds, and beneficiaries from financial losses caused by insolvent insurers.
✔✔Accumulate - ✔✔build up
✔✔Attained Age - ✔✔the insured's age at the time the policy is renewed or replaced
✔✔Cash Value - ✔✔a policy's savings element or living benefit
✔✔Deferred - ✔✔withheld or postposed until a specified time or event in the future
✔✔Endow - ✔✔to have the cash value of a whole life policy reach the contractual face
amount
✔✔Face amount - ✔✔the amount of benefit stated in the life insurance policy
✔✔Fixed Life Insurance Products - ✔✔Contracts that offer guaranteed minim or fixed
benefits
✔✔Lapse - ✔✔Policy termination due to nonpayment of premium
✔✔Level Premium - ✔✔the premium that does not change throughout the life policy
