Webce Insurance test questions|Latest Update
Graded A+
Agent Thompson received a letter from the Department of Insurance asking her to provide proof of
completing the continuing education requirements. Within how many days must Agent Thompson
respond to the Department's inquiry?
20
30
10
45
10 days
Abby lives in Ohio, where she is licensed as an insurance producer. She wants to apply for a
nonresident license in Pennsylvania. Which of the following conditions must she satisfy?
She must move to Pennsylvania.
She must surrender her Ohio license.
She must be sponsored by a producer licensed in Pennsylvania.
She must show her Ohio license is in good standing.
She must show her Ohio license is in good standing
The requirement that an insurable interest must exist when life insurance is purchased is intended to
prevent people from doing which of the following?
using life insurance to fund future cash needs
using life insurance as a speculative investment on another person's
life
overusing life insurance
designating an ineligible person as the policy beneficiary
using life insurance as a speculative interest on another person's life
Which one of the following best describes a policy that has a relatively low face amount and has
premiums that are paid to an insurance agent who generally calls on the policyowner at home to
collect them?
group life insurance
industrial life insurance
ordinary term insurance
ordinary whole life insurance
industrial life insurance
Sylvia's insurer guarantees a fixed death benefit for the policy she owns. Based on this, which one of
the following benefits is also most likely guaranteed with this policy?
the policy's cash value
her ability to borrow an interest-free loan from the cash value
policy dividends
payment of premiums on Sylvia's behalf in the event of emergencies
the policy's cash value
,Carl is a policyowner who prefers to pay premiums monthly rather than annually. How will Carl's
insurance company adjust his premium to accommodate this request?
The insurer divides the annual premium by 12 and then adds a modest charge.
The insurer simply divides the annual premium by 12.
The insurer divides the annual premium by 12 and then reduces the premium amount to reflect the
fact that premiums will be paid throughout the year.
The insurer divides the annual premium by 12 and then adds a modest charge in the first policy year
after which premiums equal the annual premium divided by 12.
The insurer divides the annual premium by 12 and then adds a modest charge
All of the following statements about key person life insurance are correct, EXCEPT:
The business applies for, owns, and is the beneficiary of the policy covering the life of a key employee.
Upon the insured employee's death, the employee's surviving family receives the policy's death
benefit.
Key person, or key employee, life insurance is an example of third-party ownership.
Life insurance used as key person life is normally owned by the business rather than the insured.
XXX Upon the insured employee's death, the employee's surviving family receives the policy benefit
XXX
The activities a producer performs to support the insurance company in learning all it can about the
applicant when seeking applications for insurance are generally called:
field underwriting
fiduciary process
agency development
due diligence
field underwriting
How is increasing term life insurance normally sold?
as an endorsement
as a permanent insurance policy
as a stand-alone term life insurance policy
as a rider attached to a permanent life insurance policy
as a rider attached to a permanent insurance policy
Andrea bought a $300,000 term-to-age-55 policy. All the following statements about her policy are
correct EXCEPT:
The policy provides $300,000 of coverage until Andrea reaches age 55.
The policy will generate a cash value that is payable at age 55.
It is possible that Andrea could convert the term policy to a life insurance policy that provides
coverage for Andrea's entire life even if she becomes uninsurable.
The premium for the policy stays the same until the policy expires.
XXX The policy will generate a cash value that is payable at age 55 XXX
The basic purpose for the re-entry option with a renewable term life insurance policy is to let the
policyowner:
,reinstate the policy after it has lapsed for nonpayment of premiums without having to provide
evidence of insurability
convert the term policy to a permanent life insurance policy
renew the policy with a higher face amount without having to provide evidence of insurability
renew the policy at lower current rates rather than guaranteed renewal rates
renew the policy at lower current rates rather than guaranteed renewal rates
Term life insurance is well suited for all the following needs EXCEPT:
mortgage protection
a source of emergency cash for any financial need
inexpensive protection until the policyowner can afford permanent life insurance
protection while the family children are living at home or attending college
XXX a source of emergency cash for any financial need XXX
Premium rates will vary unpredictably depending on the insurer's actual experience in which one of
the following types of whole life insurance?
straight whole life
current assumption whole life
limited pay whole life
graded premium whole life
current assumption whole life
Jessica, age 25, buys a $100,000 life insurance policy. The initial premium is lower than straight whole
life rates and increases each year for the first ten years of the policy period. After that, the premium
levels off and stays at that amount for the life of the policy. What type of policy does Jessica own?
10-pay whole life
single premium whole life
graded premium whole life
modified premium whole life
graded premium whole life
Which one of the following statements about variable life insurance is correct?
Variable life policyowners can invest all of their premiums in the insurer's general account.
Subaccounts are managed within the insurer's general account.
Variable life policyowners can choose flexible premium payment schedules.
With a variable life insurance policy, the policyowner assumes most of the investment risk.
With a variable life insurance policy, the policyowner assumes most of the investment risk.
Which of the following statements best explains the basic level premium concept of ordinary whole
life insurance?
The steady reduction of the policy's net amount at risk offsets the cost of pure insurance that rises
with age.
Funds are withdrawn from the policy's cash value in the later years to pay the rising cost of pure
insurance.
The death benefit is decreased to offset the rising cost of insurance with age.
The insurer averages the cost of pure insurance over the insured's life expectancy so that the
mortality charge remains level.
, the steady reduction of the policy's net amount at risk offsets the cost of pure insurance that rises
with age
All the following statements about ordinary (straight) whole life insurance are correct EXCEPT:
The insured pays premiums for his or her entire life.
Premiums remain level.
The death benefit increases during the early policy years and then levels off.
It has a steadily increasing cash value.
XXX the death benefit increases during the early policy years and then levels off XXX
Barb, age 40, buys a ten-pay life policy while Jill, age 40, buys a life paid up at age 65 policy. All other
factors being equal, which of the following statements is most correct?
Barb and Jill will pay approximately the same monthly premium amount every year, and their policies
will mature at about the same time.
Barb will pay a higher monthly premium over a shorter time than Jill, and their policies will mature at
about the same time.
Jill will pay a higher monthly premium than Barb, and their policies will mature at about the same
time.
Barb and Jill will pay approximately the same monthly premium amount every year, but Barb's policy
will mature before Jill's.
barb will pay a higher monthly premium over a shorter time than Jill, and their policies will mature at
about the same time
Unlike traditional fixed interest UL policies, many variable universal life policies offer a third death
benefit option, which provides a guaranteed minimum death benefit equal to:
he policy's net amount at risk plus its cash value
the policy's net amount at risk plus its cash value minus the sum of premiums paid
the policy's net amount at risk plus the greater of the actual cash value or the sum of premiums paid
the policy's net amount at risk plus its cash value plus the sum of premiums paid
the policy's net amount at risk plus the greater of the actual cash value or the sum of premiums paid
In a front-end loaded universal life contract, when does the insurer deduct a charge to cover the costs
of administering the policy?
from the cash value after the premium has been deposited to it
from the premium payment before it is credited to the policy's cash value
once, when the first premium is paid
at the start of each policy year
from the premium payment before it is credited to the policy's cash value
Jack bought a life insurance policy that will provide a lump-sum death benefit plus a ten-year stream
of income should he die before a specified date. Five years after purchasing the policy, before the
specified date, Jack died and the policy began paying a monthly benefit to his family for ten years.
What type of policy did Jack buy?
ten-year family maintenance policy
ten-year family income policy
survivorship life insurance policy
ten-year family protection policy
Graded A+
Agent Thompson received a letter from the Department of Insurance asking her to provide proof of
completing the continuing education requirements. Within how many days must Agent Thompson
respond to the Department's inquiry?
20
30
10
45
10 days
Abby lives in Ohio, where she is licensed as an insurance producer. She wants to apply for a
nonresident license in Pennsylvania. Which of the following conditions must she satisfy?
She must move to Pennsylvania.
She must surrender her Ohio license.
She must be sponsored by a producer licensed in Pennsylvania.
She must show her Ohio license is in good standing.
She must show her Ohio license is in good standing
The requirement that an insurable interest must exist when life insurance is purchased is intended to
prevent people from doing which of the following?
using life insurance to fund future cash needs
using life insurance as a speculative investment on another person's
life
overusing life insurance
designating an ineligible person as the policy beneficiary
using life insurance as a speculative interest on another person's life
Which one of the following best describes a policy that has a relatively low face amount and has
premiums that are paid to an insurance agent who generally calls on the policyowner at home to
collect them?
group life insurance
industrial life insurance
ordinary term insurance
ordinary whole life insurance
industrial life insurance
Sylvia's insurer guarantees a fixed death benefit for the policy she owns. Based on this, which one of
the following benefits is also most likely guaranteed with this policy?
the policy's cash value
her ability to borrow an interest-free loan from the cash value
policy dividends
payment of premiums on Sylvia's behalf in the event of emergencies
the policy's cash value
,Carl is a policyowner who prefers to pay premiums monthly rather than annually. How will Carl's
insurance company adjust his premium to accommodate this request?
The insurer divides the annual premium by 12 and then adds a modest charge.
The insurer simply divides the annual premium by 12.
The insurer divides the annual premium by 12 and then reduces the premium amount to reflect the
fact that premiums will be paid throughout the year.
The insurer divides the annual premium by 12 and then adds a modest charge in the first policy year
after which premiums equal the annual premium divided by 12.
The insurer divides the annual premium by 12 and then adds a modest charge
All of the following statements about key person life insurance are correct, EXCEPT:
The business applies for, owns, and is the beneficiary of the policy covering the life of a key employee.
Upon the insured employee's death, the employee's surviving family receives the policy's death
benefit.
Key person, or key employee, life insurance is an example of third-party ownership.
Life insurance used as key person life is normally owned by the business rather than the insured.
XXX Upon the insured employee's death, the employee's surviving family receives the policy benefit
XXX
The activities a producer performs to support the insurance company in learning all it can about the
applicant when seeking applications for insurance are generally called:
field underwriting
fiduciary process
agency development
due diligence
field underwriting
How is increasing term life insurance normally sold?
as an endorsement
as a permanent insurance policy
as a stand-alone term life insurance policy
as a rider attached to a permanent life insurance policy
as a rider attached to a permanent insurance policy
Andrea bought a $300,000 term-to-age-55 policy. All the following statements about her policy are
correct EXCEPT:
The policy provides $300,000 of coverage until Andrea reaches age 55.
The policy will generate a cash value that is payable at age 55.
It is possible that Andrea could convert the term policy to a life insurance policy that provides
coverage for Andrea's entire life even if she becomes uninsurable.
The premium for the policy stays the same until the policy expires.
XXX The policy will generate a cash value that is payable at age 55 XXX
The basic purpose for the re-entry option with a renewable term life insurance policy is to let the
policyowner:
,reinstate the policy after it has lapsed for nonpayment of premiums without having to provide
evidence of insurability
convert the term policy to a permanent life insurance policy
renew the policy with a higher face amount without having to provide evidence of insurability
renew the policy at lower current rates rather than guaranteed renewal rates
renew the policy at lower current rates rather than guaranteed renewal rates
Term life insurance is well suited for all the following needs EXCEPT:
mortgage protection
a source of emergency cash for any financial need
inexpensive protection until the policyowner can afford permanent life insurance
protection while the family children are living at home or attending college
XXX a source of emergency cash for any financial need XXX
Premium rates will vary unpredictably depending on the insurer's actual experience in which one of
the following types of whole life insurance?
straight whole life
current assumption whole life
limited pay whole life
graded premium whole life
current assumption whole life
Jessica, age 25, buys a $100,000 life insurance policy. The initial premium is lower than straight whole
life rates and increases each year for the first ten years of the policy period. After that, the premium
levels off and stays at that amount for the life of the policy. What type of policy does Jessica own?
10-pay whole life
single premium whole life
graded premium whole life
modified premium whole life
graded premium whole life
Which one of the following statements about variable life insurance is correct?
Variable life policyowners can invest all of their premiums in the insurer's general account.
Subaccounts are managed within the insurer's general account.
Variable life policyowners can choose flexible premium payment schedules.
With a variable life insurance policy, the policyowner assumes most of the investment risk.
With a variable life insurance policy, the policyowner assumes most of the investment risk.
Which of the following statements best explains the basic level premium concept of ordinary whole
life insurance?
The steady reduction of the policy's net amount at risk offsets the cost of pure insurance that rises
with age.
Funds are withdrawn from the policy's cash value in the later years to pay the rising cost of pure
insurance.
The death benefit is decreased to offset the rising cost of insurance with age.
The insurer averages the cost of pure insurance over the insured's life expectancy so that the
mortality charge remains level.
, the steady reduction of the policy's net amount at risk offsets the cost of pure insurance that rises
with age
All the following statements about ordinary (straight) whole life insurance are correct EXCEPT:
The insured pays premiums for his or her entire life.
Premiums remain level.
The death benefit increases during the early policy years and then levels off.
It has a steadily increasing cash value.
XXX the death benefit increases during the early policy years and then levels off XXX
Barb, age 40, buys a ten-pay life policy while Jill, age 40, buys a life paid up at age 65 policy. All other
factors being equal, which of the following statements is most correct?
Barb and Jill will pay approximately the same monthly premium amount every year, and their policies
will mature at about the same time.
Barb will pay a higher monthly premium over a shorter time than Jill, and their policies will mature at
about the same time.
Jill will pay a higher monthly premium than Barb, and their policies will mature at about the same
time.
Barb and Jill will pay approximately the same monthly premium amount every year, but Barb's policy
will mature before Jill's.
barb will pay a higher monthly premium over a shorter time than Jill, and their policies will mature at
about the same time
Unlike traditional fixed interest UL policies, many variable universal life policies offer a third death
benefit option, which provides a guaranteed minimum death benefit equal to:
he policy's net amount at risk plus its cash value
the policy's net amount at risk plus its cash value minus the sum of premiums paid
the policy's net amount at risk plus the greater of the actual cash value or the sum of premiums paid
the policy's net amount at risk plus its cash value plus the sum of premiums paid
the policy's net amount at risk plus the greater of the actual cash value or the sum of premiums paid
In a front-end loaded universal life contract, when does the insurer deduct a charge to cover the costs
of administering the policy?
from the cash value after the premium has been deposited to it
from the premium payment before it is credited to the policy's cash value
once, when the first premium is paid
at the start of each policy year
from the premium payment before it is credited to the policy's cash value
Jack bought a life insurance policy that will provide a lump-sum death benefit plus a ten-year stream
of income should he die before a specified date. Five years after purchasing the policy, before the
specified date, Jack died and the policy began paying a monthly benefit to his family for ten years.
What type of policy did Jack buy?
ten-year family maintenance policy
ten-year family income policy
survivorship life insurance policy
ten-year family protection policy
