PearsonVue Life Insurance Practice Exam, Answered

PearsonVue Life Insurance Practice Exam, Answered-The PRIMARY reason for selecting a Variable Whole Life policy instead of a traditional Whole Life policy is that the Variable Whole Life policy: - 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? - They are purchased on an attained age basis. Which of the following statements is CORRECT about Group Life conversion privileges? - 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? - Pay the Death benefit If a policy contains a Guaranteed Insurability rider, the insured has the right to purchase: - additional coverage at specified ages If life insurance policy applicant is classified as a substandard risk, the insurance company will MOST likely: - 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: - 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? - Grace Period provision In life insurance, insurable interest must exist at the time the: - 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? - Assignment Which of the following statements about a Renewable Term policy is CORRECT? - 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? - 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? - Pay a reduced Death benefit based on the insured's actual age An applicant's statements on an application are considered to be legal: - representations A contract that promises to pay an income to an insured until his/her death is called: - Life Annuity An employer can deduct premium payments as an ordinary business expense for which of the following life coverages? - 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? - 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? - Term Life An applicant for life insurance may question the validity and source of any consumer information developed under the: - 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? - Nonforfeiture Option Federal income tax laws generally treat proceeds of life insurance policies as: - nontaxable