Insurance Exam Practice Exam: Questions and
Answers
1. Pure or straight life: Which of the following annuity benefit payment options would generate the
highest
monthly payments to the contract owner upon annuitization?
2. Paid-up additions
1-year term
Cash: All of the following are dividend options on a participating life insurance policy:
3. Insured: The person upon whose life an annuity is based is known as the:
4. Reduced paid-up: When a policyowner uses the cash value in their policy to buy a lesser amount of
permanent life insurance, they have exercised which nonforfeiture option:
5. Interest only: Which of the following life insurance settlement options enables the beneficiary to
conserve
the proceeds of a life insurance policy?
6. The account value: In the case of a variable annuity sold to a senior citizen in this state for which the
owner
has directed that the premium be invested in the mutual funds underlying the contract during the 30-
day cancellation
period, cancellation during that period entitles the owner to a refund of:
7. They are purchased by those who are worried about outliving their savings.
They are not suitable as short term investments.
They may be used as a life insurance settlement option.: All of the following are true
regarding annuities
8. Group (Life Insruance): Which of the following would not be considered to be ordinary life insurance?
9. They are not guaranteed
They are legally defined as a return of premium and are not taxable
They are paid out of the insurer's accumulated surplus: All of the following are true
regarding dividends paid by a mutual life insurance company
, 10. Renewable: Which type of term life insurance has a level face amount but a premium that increases
each
year as the insured gets older?
11. The amount and frequency of future losses are unknown: The transfer of risk to an
insurance company is an effective risk management technique when:
12. Change the beneficiary
Assign or transfer ownership in the policy
1/4
Insurance Exam Practice Exam: Questions and Answers
Take a loan: The owner of a life insurance policy may do all of the following
13. The employer is the policyowner and the beneficiary
Death benefits are payable to the employer tax free
The employee is the insured: All of the following are true regarding key person life insurance:
14. A buy/sell agreement: If a corporation and a shareholder enter into an agreement that requires the
corporation to buy the shareholder's shares upon his or her death, they have entered into:
15. Extended term
Cash surrender
Reduced paid-up: All of following are required nonforfeiture options or provisions on a cash value life
insurance policy:
16. Large numbers: The greater the number of similar exposure units insured, the easier it will be to
predict
future claims based upon the law of:
17. Modified, ordinary, limited pay, single premium: List in order from the lowest annual
premium to the highest:
18. Military
Aviation
War
(EXCEPT Accidents): Group life insurance policies may exclude all of the following:
Answers
1. Pure or straight life: Which of the following annuity benefit payment options would generate the
highest
monthly payments to the contract owner upon annuitization?
2. Paid-up additions
1-year term
Cash: All of the following are dividend options on a participating life insurance policy:
3. Insured: The person upon whose life an annuity is based is known as the:
4. Reduced paid-up: When a policyowner uses the cash value in their policy to buy a lesser amount of
permanent life insurance, they have exercised which nonforfeiture option:
5. Interest only: Which of the following life insurance settlement options enables the beneficiary to
conserve
the proceeds of a life insurance policy?
6. The account value: In the case of a variable annuity sold to a senior citizen in this state for which the
owner
has directed that the premium be invested in the mutual funds underlying the contract during the 30-
day cancellation
period, cancellation during that period entitles the owner to a refund of:
7. They are purchased by those who are worried about outliving their savings.
They are not suitable as short term investments.
They may be used as a life insurance settlement option.: All of the following are true
regarding annuities
8. Group (Life Insruance): Which of the following would not be considered to be ordinary life insurance?
9. They are not guaranteed
They are legally defined as a return of premium and are not taxable
They are paid out of the insurer's accumulated surplus: All of the following are true
regarding dividends paid by a mutual life insurance company
, 10. Renewable: Which type of term life insurance has a level face amount but a premium that increases
each
year as the insured gets older?
11. The amount and frequency of future losses are unknown: The transfer of risk to an
insurance company is an effective risk management technique when:
12. Change the beneficiary
Assign or transfer ownership in the policy
1/4
Insurance Exam Practice Exam: Questions and Answers
Take a loan: The owner of a life insurance policy may do all of the following
13. The employer is the policyowner and the beneficiary
Death benefits are payable to the employer tax free
The employee is the insured: All of the following are true regarding key person life insurance:
14. A buy/sell agreement: If a corporation and a shareholder enter into an agreement that requires the
corporation to buy the shareholder's shares upon his or her death, they have entered into:
15. Extended term
Cash surrender
Reduced paid-up: All of following are required nonforfeiture options or provisions on a cash value life
insurance policy:
16. Large numbers: The greater the number of similar exposure units insured, the easier it will be to
predict
future claims based upon the law of:
17. Modified, ordinary, limited pay, single premium: List in order from the lowest annual
premium to the highest:
18. Military
Aviation
War
(EXCEPT Accidents): Group life insurance policies may exclude all of the following:
