Life & Health Insurance Exam With Complete
Solutions Graded A+
Concealment
The intentional failure to disclose known facts on an insurance application is called
$94,800
Betty owns a universal life insurance policy that was issued with a $100,000 face amount and now has
total death benefit protection of $110,000. Several months ago she borrowed $15,000 from the
policy. The outstanding loan balance (Including Interest) is $15,200. If Betty dies today, what will be
the amount of the death benefit?
6 Months
Life insurance policies sold or delivered in Michigan must not contain the provision that back dates
the effective date of a policy any more than how many months?
Nonforfeiture Provision
The privilege of accessing the cash value of an insurance policy if it is surrendered is known as the
Mortality
Which of the following premium factors has the greatest effect on life insurance premium
calculations?
Who Issues Them
Annuities are classified by all of the following EXCEPT
Decreasing Term
Joe buys his first home after obtaining a 30 year mortgage from his bank. He is considering the
purchase of life insurance to ensure that the mortgage will be paid in the event of his death, in which
case he will leave the house to his spouse and children. What would be the best life insurance
protection for Joe?
To provide for annuities to be payable in fixed or variable amounts or for variable life insurance
For which of the following reasons would a domestic insurer set up separate accounts?
Must have the application signed by the policyowner
Which of the following statements regarding the delivery of a life insurance policy is NOT correct?
$3.00
A producer must pay a fee of how much with each change of address?
1 to 12 months
Group life insurance policies include a probationary period requiring new employees to wait a certain
time before they can enroll in the plan. How long is the typical range for these probationary periods?
$12,040
,James died after receiving $180 per month for 6 years from a $25,000 life with refund annuity. His
spouse, Lucy, as his beneficiary, will now receive t he same monthly income until her payments total
25% of the employee's income up to a specified maximum amount
Contributions to a simplified employee pension are not included in the employee's taxable income for
the year as long as the contribution does not exceed
Apparent Authority
Susan is the receptionist at an insurance agency. She is currently studying for her life insurance
license. One day at lunchtime, Carla comes in the office to pay her auto insurance premium. Susan
talks to her about the importance of life insurance, and Carla immediately completes an application
and gives Susan a check for the premium. Carla leaves the agency believing she is covered by life
insurance. Susan has acted with
The proceed are payable to the insured's estate or the insured had any incidence of ownership in the
policy at time of death or transferred ownership within 3 years of death.
Life insurance proceeds are included in t he gross estate if
to replace an individual's economic value
According to the principle of human life value, the purpose of life insurance is
24 hours with a minimum of 3 hours in ethics
How many hours of continuing education credit does an agent need to complete every two years?
Verify the applicant's military records, if any
During the underwriting process, an insurer may do all of the following EXCEPT
The projected future earnings of the breadwinner and the number of years she expects to work
Which of the following is NOT taken into account when using the needs approach to determine the
proper amount of insurance protection?
A mutual insurance company
An insurance company that is owned by its policyowners, who share the insurer's divisible surplus in
the form of participating policy dividends, is known as
The death benefit of $50,000 is not guaranteed.
Michelle, age 31, just purchased a $50,000 variable life insurance policy. Which of the following
statements is NOT correct?
loss must be intentional
All of the following are characteristics of an insurable risk EXCEPT
Life insurance that is owned by the insured will avoid estate tax inclusion as long as ownership is
transferred to another party at least 1 year before the insured's death.
Which of the following statements regarding the estate tax treatment of life insurance owned by the
insured at the insured's death is NOT correct?
, Variable Life insurance cannot be proposed in sales situation unless the proposal is preceded or
accompanied by a prespectus.
Which of the following statements pertaining to variable life insurance is CORRECT?
Accumulation Units
Premiums paid into a variable annuity are used regularly to purchase
Concealment
When important and material facts are hidden by an insured on an application, this is known as
The policyowner
The party to whom the life insurance policy cash values belong is
The same for both individual and group life insurance policies
The incontestability period is usually
The overall purpose of the USA patriot act is to
deter terrorist activity
Employees' contributions to retirement plans are included in ordinary income.
Which of the following statements about the tax advantages of a qualified retirement plan is NOT
true?
Use dividends to buy paid up additions
Wendy has a $100,000 whole life participating policy. She recently married and is planning to have a
family. She wants to increase her life insurance coverage but at minimal additional costs. Which of the
following dividend options would be most suitable for her needs?
Provides both pure insurance protection and cash value
In contrast to traditional whole life insurance policies, term life insurance
is still required to fulfill its obligation
If an agent fails to perform an act required by a policy, the insurer
An insurable risk must involve loss that is within the insured's control.
With regard to insurable risks, which of the following statements is NOT correct?
Premiums generally may be increased or decreased at the policyowner's option.
Which of the following statements applies to universal life insurance?
continue to increase
Leland elects to surrender his whole life policy for a reduced paid-up policy. The cash value of his new
policy will
Solutions Graded A+
Concealment
The intentional failure to disclose known facts on an insurance application is called
$94,800
Betty owns a universal life insurance policy that was issued with a $100,000 face amount and now has
total death benefit protection of $110,000. Several months ago she borrowed $15,000 from the
policy. The outstanding loan balance (Including Interest) is $15,200. If Betty dies today, what will be
the amount of the death benefit?
6 Months
Life insurance policies sold or delivered in Michigan must not contain the provision that back dates
the effective date of a policy any more than how many months?
Nonforfeiture Provision
The privilege of accessing the cash value of an insurance policy if it is surrendered is known as the
Mortality
Which of the following premium factors has the greatest effect on life insurance premium
calculations?
Who Issues Them
Annuities are classified by all of the following EXCEPT
Decreasing Term
Joe buys his first home after obtaining a 30 year mortgage from his bank. He is considering the
purchase of life insurance to ensure that the mortgage will be paid in the event of his death, in which
case he will leave the house to his spouse and children. What would be the best life insurance
protection for Joe?
To provide for annuities to be payable in fixed or variable amounts or for variable life insurance
For which of the following reasons would a domestic insurer set up separate accounts?
Must have the application signed by the policyowner
Which of the following statements regarding the delivery of a life insurance policy is NOT correct?
$3.00
A producer must pay a fee of how much with each change of address?
1 to 12 months
Group life insurance policies include a probationary period requiring new employees to wait a certain
time before they can enroll in the plan. How long is the typical range for these probationary periods?
$12,040
,James died after receiving $180 per month for 6 years from a $25,000 life with refund annuity. His
spouse, Lucy, as his beneficiary, will now receive t he same monthly income until her payments total
25% of the employee's income up to a specified maximum amount
Contributions to a simplified employee pension are not included in the employee's taxable income for
the year as long as the contribution does not exceed
Apparent Authority
Susan is the receptionist at an insurance agency. She is currently studying for her life insurance
license. One day at lunchtime, Carla comes in the office to pay her auto insurance premium. Susan
talks to her about the importance of life insurance, and Carla immediately completes an application
and gives Susan a check for the premium. Carla leaves the agency believing she is covered by life
insurance. Susan has acted with
The proceed are payable to the insured's estate or the insured had any incidence of ownership in the
policy at time of death or transferred ownership within 3 years of death.
Life insurance proceeds are included in t he gross estate if
to replace an individual's economic value
According to the principle of human life value, the purpose of life insurance is
24 hours with a minimum of 3 hours in ethics
How many hours of continuing education credit does an agent need to complete every two years?
Verify the applicant's military records, if any
During the underwriting process, an insurer may do all of the following EXCEPT
The projected future earnings of the breadwinner and the number of years she expects to work
Which of the following is NOT taken into account when using the needs approach to determine the
proper amount of insurance protection?
A mutual insurance company
An insurance company that is owned by its policyowners, who share the insurer's divisible surplus in
the form of participating policy dividends, is known as
The death benefit of $50,000 is not guaranteed.
Michelle, age 31, just purchased a $50,000 variable life insurance policy. Which of the following
statements is NOT correct?
loss must be intentional
All of the following are characteristics of an insurable risk EXCEPT
Life insurance that is owned by the insured will avoid estate tax inclusion as long as ownership is
transferred to another party at least 1 year before the insured's death.
Which of the following statements regarding the estate tax treatment of life insurance owned by the
insured at the insured's death is NOT correct?
, Variable Life insurance cannot be proposed in sales situation unless the proposal is preceded or
accompanied by a prespectus.
Which of the following statements pertaining to variable life insurance is CORRECT?
Accumulation Units
Premiums paid into a variable annuity are used regularly to purchase
Concealment
When important and material facts are hidden by an insured on an application, this is known as
The policyowner
The party to whom the life insurance policy cash values belong is
The same for both individual and group life insurance policies
The incontestability period is usually
The overall purpose of the USA patriot act is to
deter terrorist activity
Employees' contributions to retirement plans are included in ordinary income.
Which of the following statements about the tax advantages of a qualified retirement plan is NOT
true?
Use dividends to buy paid up additions
Wendy has a $100,000 whole life participating policy. She recently married and is planning to have a
family. She wants to increase her life insurance coverage but at minimal additional costs. Which of the
following dividend options would be most suitable for her needs?
Provides both pure insurance protection and cash value
In contrast to traditional whole life insurance policies, term life insurance
is still required to fulfill its obligation
If an agent fails to perform an act required by a policy, the insurer
An insurable risk must involve loss that is within the insured's control.
With regard to insurable risks, which of the following statements is NOT correct?
Premiums generally may be increased or decreased at the policyowner's option.
Which of the following statements applies to universal life insurance?
continue to increase
Leland elects to surrender his whole life policy for a reduced paid-up policy. The cash value of his new
policy will
