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Life Insurance Exam Questions & Answers/ A+
Score Solution.
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. - Answer: C: The insurer will deny J's request to add more
insurance.
Page 1 of 67
,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. - Answer:
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 - Answer: 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 - Answer: A: a life settlement
Page 2 of 67
,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 - Answer: 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 - Answer: 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. - Answer: 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
Page 3 of 67
, C: Copy of the Application
D: All of the Above - Answer: 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 - Answer: 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. - Answer: 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
Page 4 of 67
Life Insurance Exam Questions & Answers/ A+
Score Solution.
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. - Answer: C: The insurer will deny J's request to add more
insurance.
Page 1 of 67
,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. - Answer:
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 - Answer: 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 - Answer: A: a life settlement
Page 2 of 67
,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 - Answer: 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 - Answer: 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. - Answer: 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
Page 3 of 67
, C: Copy of the Application
D: All of the Above - Answer: 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 - Answer: 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. - Answer: 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
Page 4 of 67
