Life Insurance Exam Questions and Answers
() (Verified Answers)
J has a life policy with the Guaranteed Insurability rider. J has just celebrated their 42nd birthday and
realizes that she wants to use her rider and buy more death benefit. Which of the following will apply
to J's request?
A: The insurer will allow J to add more insurance without proving insurability.
B: The insurer will allow J to add more insurance pending a paramedical exam.
C: The insurer will deny J's request to add more insurance.
D: The insurer will allow J to add more coverage pending proof of insurability and extra premium.
C: The insurer will deny J's request to add more insurance.
An insured has a policy with a Waiver of Premium rider. The insured has suffered an illness that will
prevent them for working for two years. When will their premiums be waived?
A: Immediately
B: After the first nine months of disability
C: After the first six months of disability
D: Never, premiums cannot be waived because illness is not a disability.
C: After the first six months of disability
The clause that defines and describes the scope of coverage and the limits of indemnification is
known as the:
A: Insuring Agreement
B: Incontestable Clause
C: Payor Clause
D: Entire Contract Clause
A: Insuring Agreement
D has just paid off his mortgage and has decided that he no longer needs his life insurance policy
which he originally purchased to cover the house payments should he die. If D explores the possibly of
selling his policy while he is still alive, it is known as:
A: a life settlement
B: an annuity
C: a Viatical settlement
D: STOLI
A: a life settlement
Combination/Variation Plans insure:
A: Groups
B: Two or More lives under one contract
C: Two or more people under separate contracts
D: are a form of variable life insurance
B: Two or More lives under one contract
What is the tax consideration for taking a cash dividend option?
A: The dividend is fully taxable as income
B: The dividend is paid tax free
C: Depending on income bracket of the insured, the dividend may be taxable
D: If the company gets to keep half of the dividend it is take free
B: The dividend is paid tax free
,Which of the following is not true regarding a renewable option on a term policy?
A: The policy must be renewed regardless of insurability.
B: The rates cannot be more than standard rates at renewal.
C: Premiums are based off of attained age rates.
D: A policy can be renewed, however, the insured must convert to a different policy.
D: A policy can be renewed, however, the insured must convert to a different policy.
Which of the following is considered to be part of the Entire Contract?
A: Declarations Page
B: Buyers Guide
C: Copy of the Application
D: All of the Above
C: Copy of the Application
Company A has a partnership with Company Z. There is an agreement in place that if the CEO of
either company were to die, the other company would receive money to buy out the partnership. This
is an example of:
A: Buy/Sell Agreement
B: Crosse Purchase plan
C: Business Entity Plan
D: Key Person
C: Business Entity Plan
All of the following are true regarding the Guaranty Association EXCEPT:
A: A claimant may receive less benefits than what they had from a policy.
B: The Association is comprised of All member insurers
C: The Association is comprised of All member insurers and have a right to end membership while still
transacting business in IL
D: There is a $250,000 limit on the present value of annuity benefits.
C: The Association is comprised of All member insurers and have a right to end membership while still
transacting business in IL
G has a credit life policy and is replacing that with a whole life policy. The agent must:
A: formally replace coverage and include all forms to the insured
B: notify the existing insurer with a notice regarding replacement form
C: sign the application and forward all signed documents to the replacing insurer to send to the
existing insurer
D: None of the Above
D: None of the Above
Each of the following is an unfair claims practice by an insurance company, EXCEPT:
A: Failing to acknowledging important communications regarding claims filed in a timely manner.
B: Supplying brochures to claimants that indicate a competitor is in a precarious financial position.
C: Purposefully misrepresenting important policy coverage and provisions to all claimants.
D: Not supplying claims forms with proper instructions regarding their completion.
B: Supplying brochures to claimants that indicate a competitor is in a precarious financial position.
All of the following statements pertaining to a temporary license are true, EXCEPT:
A: they survive the transfer of ownership of an insurance company who sponsored the licensee.
B: the fee is $50.
C: the Director may limit them in any manner in order to protect the public.
,D: a licensed sponsor may be required.
A: they survive the transfer of ownership of an insurance company who sponsored the licensee.
A Temporary License (180 days) allows the holder to engage in all of the following activities, EXCEPT:
A: a surviving spouse of a producer can use the authority to help effect the sale of the insurance
business.
B: make certain that insureds are paying renewal premiums in a timely manner.
C: ask the Director to extend the authority if an anticipated agency sale is taking longer than 180 days.
D: sell a new policy to an existing client.
D: sell a new policy to an existing client.
The subject of a market conduct examination for non-financial matters may request a hearing within
how many days after receiving the examination report?
A: 10 days
B: 15 days
C: 20 days
D: 30 days
A: 10 days
Which of the following sales is classified as controlled business?
A: A producer places a one million dollar life policy on the life of his employer
B: A producer places a one million dollar life policy on the life of his son
C: A producer places a one million dollar life policy on the life of his niece
D: A producer places a one million dollar life policy on the life of his neighbor
A: A producer places a one million dollar life policy on the life of his employer
The resident licensing fee for a Limited Lines Car Rental license is
A: $50 every year
B: $180 every two years
C: $50 every two years
D: $250 every year.
B: $180 every two years
What is the maximum length of time a producer license can be suspended by the Director?
A: A producer license suspension is for a period of time deemed appropriate by the Director.
B: 6 months
C: 12 months
D: 3 years.
A: A producer license suspension is for a period of time deemed appropriate by the Director.
All of the following is an example of an unfair practice EXCEPT:
A: An applicant being denied based on military experience
B: An applicant being denied based off partial blindness
C: An applicant being denied for being a sky dive instructor
D: An applicant being denied solely for being disabled.
C: An applicant being denied for being a sky dive instructor
All Viatical Settlement Providers must report on or before _______ of every year.
A: January 1st
B: Depends on License Issuance
, C: March 1st
D: Birth month of the Licensee
C: March 1st
Each of the following is a requirement for a Life, Health, Property and Casualty prelicensing course,
EXCEPT:
A: The licensing candidate must spend 7.5 hours in class per line.
B: The licensing candidate must complete a 20 hour course per line.
C: An exam proctored by a course provider must be successfully passed before a prelicensing course is
successfully completed.
D: An exam that is graded by a course provider must be passed before a prelicensing course is
successfully completed.
C: An exam proctored by a course provider must be successfully passed before a prelicensing course is
F, a producer in Illinois for twenty years failed to finish his entire continuing education requirement by
his license renewal date. Which of the following will likely happen to F's producer license.
A: Nothing, there is an automatic 30 day grace period.
B: The producer license will lapse automatically.
C: A producer holding a license in Illinois for 20 years or longer automatically is licensed for the
remainder of his or her lifetime without a renewal requirement.
D: Nothing there is an automatic 12 month grace period since F has been licensed for such a long
time.
B: The producer license will lapse automatically.
Which of the following is required to be listed in an illustration?
A: Age and sex of proposed insured
B: Initial death benefit
C: Dividend option of non-guaranteed elements
D: All of the Above
D: All of the Above
Which of the following is true about a long term care rider?
A: It will decrease premiums
B: It will pay nursing benefits in addition to the death benefit.
C: The agent must write the Long Term Care Rider as a separate policy.
D: If the insured uses the LTC rider benefit, it will be deducted from the proceeds when the insured
dies.
D: If the insured uses the LTC rider benefit, it will be deducted from the proceeds when the insured
dies.
J has a policy that requires that he meet certain conditions in order for the contract to be enforceable.
J has a(an):
A: Conditional Contract
B: Unilateral Contract
C: Contract of Adhesion
D: Aleatory Contract
B: Unilateral Contract
Variable Whole Life requires a:
A: Flexible Premium
B: Fixed and Level Premium
() (Verified Answers)
J has a life policy with the Guaranteed Insurability rider. J has just celebrated their 42nd birthday and
realizes that she wants to use her rider and buy more death benefit. Which of the following will apply
to J's request?
A: The insurer will allow J to add more insurance without proving insurability.
B: The insurer will allow J to add more insurance pending a paramedical exam.
C: The insurer will deny J's request to add more insurance.
D: The insurer will allow J to add more coverage pending proof of insurability and extra premium.
C: The insurer will deny J's request to add more insurance.
An insured has a policy with a Waiver of Premium rider. The insured has suffered an illness that will
prevent them for working for two years. When will their premiums be waived?
A: Immediately
B: After the first nine months of disability
C: After the first six months of disability
D: Never, premiums cannot be waived because illness is not a disability.
C: After the first six months of disability
The clause that defines and describes the scope of coverage and the limits of indemnification is
known as the:
A: Insuring Agreement
B: Incontestable Clause
C: Payor Clause
D: Entire Contract Clause
A: Insuring Agreement
D has just paid off his mortgage and has decided that he no longer needs his life insurance policy
which he originally purchased to cover the house payments should he die. If D explores the possibly of
selling his policy while he is still alive, it is known as:
A: a life settlement
B: an annuity
C: a Viatical settlement
D: STOLI
A: a life settlement
Combination/Variation Plans insure:
A: Groups
B: Two or More lives under one contract
C: Two or more people under separate contracts
D: are a form of variable life insurance
B: Two or More lives under one contract
What is the tax consideration for taking a cash dividend option?
A: The dividend is fully taxable as income
B: The dividend is paid tax free
C: Depending on income bracket of the insured, the dividend may be taxable
D: If the company gets to keep half of the dividend it is take free
B: The dividend is paid tax free
,Which of the following is not true regarding a renewable option on a term policy?
A: The policy must be renewed regardless of insurability.
B: The rates cannot be more than standard rates at renewal.
C: Premiums are based off of attained age rates.
D: A policy can be renewed, however, the insured must convert to a different policy.
D: A policy can be renewed, however, the insured must convert to a different policy.
Which of the following is considered to be part of the Entire Contract?
A: Declarations Page
B: Buyers Guide
C: Copy of the Application
D: All of the Above
C: Copy of the Application
Company A has a partnership with Company Z. There is an agreement in place that if the CEO of
either company were to die, the other company would receive money to buy out the partnership. This
is an example of:
A: Buy/Sell Agreement
B: Crosse Purchase plan
C: Business Entity Plan
D: Key Person
C: Business Entity Plan
All of the following are true regarding the Guaranty Association EXCEPT:
A: A claimant may receive less benefits than what they had from a policy.
B: The Association is comprised of All member insurers
C: The Association is comprised of All member insurers and have a right to end membership while still
transacting business in IL
D: There is a $250,000 limit on the present value of annuity benefits.
C: The Association is comprised of All member insurers and have a right to end membership while still
transacting business in IL
G has a credit life policy and is replacing that with a whole life policy. The agent must:
A: formally replace coverage and include all forms to the insured
B: notify the existing insurer with a notice regarding replacement form
C: sign the application and forward all signed documents to the replacing insurer to send to the
existing insurer
D: None of the Above
D: None of the Above
Each of the following is an unfair claims practice by an insurance company, EXCEPT:
A: Failing to acknowledging important communications regarding claims filed in a timely manner.
B: Supplying brochures to claimants that indicate a competitor is in a precarious financial position.
C: Purposefully misrepresenting important policy coverage and provisions to all claimants.
D: Not supplying claims forms with proper instructions regarding their completion.
B: Supplying brochures to claimants that indicate a competitor is in a precarious financial position.
All of the following statements pertaining to a temporary license are true, EXCEPT:
A: they survive the transfer of ownership of an insurance company who sponsored the licensee.
B: the fee is $50.
C: the Director may limit them in any manner in order to protect the public.
,D: a licensed sponsor may be required.
A: they survive the transfer of ownership of an insurance company who sponsored the licensee.
A Temporary License (180 days) allows the holder to engage in all of the following activities, EXCEPT:
A: a surviving spouse of a producer can use the authority to help effect the sale of the insurance
business.
B: make certain that insureds are paying renewal premiums in a timely manner.
C: ask the Director to extend the authority if an anticipated agency sale is taking longer than 180 days.
D: sell a new policy to an existing client.
D: sell a new policy to an existing client.
The subject of a market conduct examination for non-financial matters may request a hearing within
how many days after receiving the examination report?
A: 10 days
B: 15 days
C: 20 days
D: 30 days
A: 10 days
Which of the following sales is classified as controlled business?
A: A producer places a one million dollar life policy on the life of his employer
B: A producer places a one million dollar life policy on the life of his son
C: A producer places a one million dollar life policy on the life of his niece
D: A producer places a one million dollar life policy on the life of his neighbor
A: A producer places a one million dollar life policy on the life of his employer
The resident licensing fee for a Limited Lines Car Rental license is
A: $50 every year
B: $180 every two years
C: $50 every two years
D: $250 every year.
B: $180 every two years
What is the maximum length of time a producer license can be suspended by the Director?
A: A producer license suspension is for a period of time deemed appropriate by the Director.
B: 6 months
C: 12 months
D: 3 years.
A: A producer license suspension is for a period of time deemed appropriate by the Director.
All of the following is an example of an unfair practice EXCEPT:
A: An applicant being denied based on military experience
B: An applicant being denied based off partial blindness
C: An applicant being denied for being a sky dive instructor
D: An applicant being denied solely for being disabled.
C: An applicant being denied for being a sky dive instructor
All Viatical Settlement Providers must report on or before _______ of every year.
A: January 1st
B: Depends on License Issuance
, C: March 1st
D: Birth month of the Licensee
C: March 1st
Each of the following is a requirement for a Life, Health, Property and Casualty prelicensing course,
EXCEPT:
A: The licensing candidate must spend 7.5 hours in class per line.
B: The licensing candidate must complete a 20 hour course per line.
C: An exam proctored by a course provider must be successfully passed before a prelicensing course is
successfully completed.
D: An exam that is graded by a course provider must be passed before a prelicensing course is
successfully completed.
C: An exam proctored by a course provider must be successfully passed before a prelicensing course is
F, a producer in Illinois for twenty years failed to finish his entire continuing education requirement by
his license renewal date. Which of the following will likely happen to F's producer license.
A: Nothing, there is an automatic 30 day grace period.
B: The producer license will lapse automatically.
C: A producer holding a license in Illinois for 20 years or longer automatically is licensed for the
remainder of his or her lifetime without a renewal requirement.
D: Nothing there is an automatic 12 month grace period since F has been licensed for such a long
time.
B: The producer license will lapse automatically.
Which of the following is required to be listed in an illustration?
A: Age and sex of proposed insured
B: Initial death benefit
C: Dividend option of non-guaranteed elements
D: All of the Above
D: All of the Above
Which of the following is true about a long term care rider?
A: It will decrease premiums
B: It will pay nursing benefits in addition to the death benefit.
C: The agent must write the Long Term Care Rider as a separate policy.
D: If the insured uses the LTC rider benefit, it will be deducted from the proceeds when the insured
dies.
D: If the insured uses the LTC rider benefit, it will be deducted from the proceeds when the insured
dies.
J has a policy that requires that he meet certain conditions in order for the contract to be enforceable.
J has a(an):
A: Conditional Contract
B: Unilateral Contract
C: Contract of Adhesion
D: Aleatory Contract
B: Unilateral Contract
Variable Whole Life requires a:
A: Flexible Premium
B: Fixed and Level Premium
