Virginia life insurance exam 2025
A corporation is the owner and beneficiary of the key person life policy. If the
corporation collects the policy benefit, then
a)The benefit is received tax free.
b)The benefit is subject to the exclusionary rule.
c)IRS has no jurisdiction.
d)The benefit is received as taxable income. - ANSWER-a)The benefit is received tax
free.
A couple owns a life insurance policy with a Children's Term rider. Their daughter is
reaching the maximum age of dependent coverage, so she will have to convert to
permanent insurance in the near future. Which of the following will she need to provide
for proof of insurability?
a)Medical exam and parents' medical history
b)Proof of insurability is not required.
c)Medical exam
d)Her parents' federal income tax receipts - ANSWER-b)Proof of insurability is not
required.
A life insurance policy does not have a war clause. If the insured is killed during a time
of war, what will the beneficiary receive from the policy?
a)Nothing, since the insured was killed as a result of a war
b)The full death benefit
c)The policy's cash value
d)A refund of premiums - ANSWER-b)The full death benefit
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide
additional protection until his children finished college. He discovered that his policy
a)Decreased death benefit at each renewal.
b)Required a premium increase each renewal.
c)Built cash values.
d)Required proof of insurability every year. - ANSWER-b)Required a premium increase
each renewal.
A producer is helping a married couple determine the financial needs of their children in
the event one or both should die prematurely. This is a personal use of life insurance
known as
a)Juvenile protection provision
b)Survivor protection
c)Life planning
d)Survivorship insurance - ANSWER-b)Survivor protection
,A rider attached to a life insurance policy that provides coverage on the insured's family
members is called the
a)Other-insured rider.
b)Change of insured rider.
c)Juvenile rider.
d)Payor rider. - ANSWER-a)Other-insured rider.
A rider attached to a life insurance policy that provides coverage on the insured's family
members is called the
a)Payor rider.
b)Other-insured rider.
c)Change of insured rider.
d)Juvenile rider. - ANSWER-b)Other-insured rider.
According to the entire contract provision, what document must be made part of the
insurance policy?
a)Copy of the original application
b)Buyer's Guide
c)Agent's report
d)Outline of coverage - ANSWER-a)Copy of the original application
According to the Virginia rules regulating the advertisement of life insurance,
advertisement does NOT include which of the following?a)Published advertisement in a
local newspaper
b)Material prepared by the insurer for training new agents
c)Descriptive literature utilized by an agent in the sales process
d)Prepared leaflet given to a prospective client - ANSWER-b)Material prepared by the
insurer for training new agents
All companies authorized and licensed to transact the business of insurance in this state
are subject to inspection, supervision and regulation by
a)The NAIC.
b)The State Bureau of Insurance Regulation.
c)The Commission.
d)The Federal Insurance Regulation Board. - ANSWER-c)The Commission.
All of the following are characteristics of group life insurance EXCEPT
a)Certificate holders may convert coverage to an individual policy without evidence of
insurability.
b)Premiums are determined by the age, sex and occupation of each individual
certificate holder.
c)Amount of coverage is determined according to nondiscriminatory rules.
d)Individuals covered under the policy receive a certificate of insurance. - ANSWER-
b)Premiums are determined by the age, sex and occupation of each individual
certificate holder.
, All of the following are required of an association in order to qualify as a group life
insurance coverage EXCEPT
a)Longevity of at least 10 years
.b)A constitution and by-laws.
c)A good faith purpose.
d)Membership of 100 or more. - ANSWER-a)Longevity of at least 10 years.
All of the following are true regarding a decreasing term policy EXCEPT
a)The contract pays only in the event of death during the term and there is no cash
value.
b)The face amount steadily declines throughout the duration of the contract.
c)The payable premium amount steadily declines throughout the duration of the
contract.
d)The death benefit is $0 at the end of the policy term. - ANSWER-c)The payable
premium amount steadily declines throughout the duration of the contract.
All of the following are true regarding rebates EXCEPT
a)Rebates are allowed if it's in the best interest of the client.
b)Rebates are only allowed if specifically stated in the policy.
c)Rebating can be anything of economic value, given as an inducement to buy
.d)Dividends are not considered to be rebates. - ANSWER-a)Rebates are allowed if it's
in the best interest of the client.
All of the following are TRUE regarding the convertibility option under a term life
insurance policy EXCEPT
a)Upon conversion, the death benefit of the permanent policy will be reduced by 50%.
b)Evidence of insurability is not required.
c)Most term policies contain a convertibility option.
d)Upon conversion, the premium for the permanent policy will be based upon attained
age. - ANSWER-a)Upon conversion, the death benefit of the permanent policy will be
reduced by 50%.
All of the following could be considered rebates if offered to an insured in the sale of
insurance EXCEPT
a)Stocks, securities, or bonds.
b)An offer to share in commissions generated by the sale
.c)Dividends from a mutual insurer.
d)An offer of employment. - ANSWER-c)Dividends from a mutual insurer.
All of the following entities regulate variable life policies EXCEPT
a)The Insurance Department.
b)The Guaranty Association.
c)Federal government.
A corporation is the owner and beneficiary of the key person life policy. If the
corporation collects the policy benefit, then
a)The benefit is received tax free.
b)The benefit is subject to the exclusionary rule.
c)IRS has no jurisdiction.
d)The benefit is received as taxable income. - ANSWER-a)The benefit is received tax
free.
A couple owns a life insurance policy with a Children's Term rider. Their daughter is
reaching the maximum age of dependent coverage, so she will have to convert to
permanent insurance in the near future. Which of the following will she need to provide
for proof of insurability?
a)Medical exam and parents' medical history
b)Proof of insurability is not required.
c)Medical exam
d)Her parents' federal income tax receipts - ANSWER-b)Proof of insurability is not
required.
A life insurance policy does not have a war clause. If the insured is killed during a time
of war, what will the beneficiary receive from the policy?
a)Nothing, since the insured was killed as a result of a war
b)The full death benefit
c)The policy's cash value
d)A refund of premiums - ANSWER-b)The full death benefit
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide
additional protection until his children finished college. He discovered that his policy
a)Decreased death benefit at each renewal.
b)Required a premium increase each renewal.
c)Built cash values.
d)Required proof of insurability every year. - ANSWER-b)Required a premium increase
each renewal.
A producer is helping a married couple determine the financial needs of their children in
the event one or both should die prematurely. This is a personal use of life insurance
known as
a)Juvenile protection provision
b)Survivor protection
c)Life planning
d)Survivorship insurance - ANSWER-b)Survivor protection
,A rider attached to a life insurance policy that provides coverage on the insured's family
members is called the
a)Other-insured rider.
b)Change of insured rider.
c)Juvenile rider.
d)Payor rider. - ANSWER-a)Other-insured rider.
A rider attached to a life insurance policy that provides coverage on the insured's family
members is called the
a)Payor rider.
b)Other-insured rider.
c)Change of insured rider.
d)Juvenile rider. - ANSWER-b)Other-insured rider.
According to the entire contract provision, what document must be made part of the
insurance policy?
a)Copy of the original application
b)Buyer's Guide
c)Agent's report
d)Outline of coverage - ANSWER-a)Copy of the original application
According to the Virginia rules regulating the advertisement of life insurance,
advertisement does NOT include which of the following?a)Published advertisement in a
local newspaper
b)Material prepared by the insurer for training new agents
c)Descriptive literature utilized by an agent in the sales process
d)Prepared leaflet given to a prospective client - ANSWER-b)Material prepared by the
insurer for training new agents
All companies authorized and licensed to transact the business of insurance in this state
are subject to inspection, supervision and regulation by
a)The NAIC.
b)The State Bureau of Insurance Regulation.
c)The Commission.
d)The Federal Insurance Regulation Board. - ANSWER-c)The Commission.
All of the following are characteristics of group life insurance EXCEPT
a)Certificate holders may convert coverage to an individual policy without evidence of
insurability.
b)Premiums are determined by the age, sex and occupation of each individual
certificate holder.
c)Amount of coverage is determined according to nondiscriminatory rules.
d)Individuals covered under the policy receive a certificate of insurance. - ANSWER-
b)Premiums are determined by the age, sex and occupation of each individual
certificate holder.
, All of the following are required of an association in order to qualify as a group life
insurance coverage EXCEPT
a)Longevity of at least 10 years
.b)A constitution and by-laws.
c)A good faith purpose.
d)Membership of 100 or more. - ANSWER-a)Longevity of at least 10 years.
All of the following are true regarding a decreasing term policy EXCEPT
a)The contract pays only in the event of death during the term and there is no cash
value.
b)The face amount steadily declines throughout the duration of the contract.
c)The payable premium amount steadily declines throughout the duration of the
contract.
d)The death benefit is $0 at the end of the policy term. - ANSWER-c)The payable
premium amount steadily declines throughout the duration of the contract.
All of the following are true regarding rebates EXCEPT
a)Rebates are allowed if it's in the best interest of the client.
b)Rebates are only allowed if specifically stated in the policy.
c)Rebating can be anything of economic value, given as an inducement to buy
.d)Dividends are not considered to be rebates. - ANSWER-a)Rebates are allowed if it's
in the best interest of the client.
All of the following are TRUE regarding the convertibility option under a term life
insurance policy EXCEPT
a)Upon conversion, the death benefit of the permanent policy will be reduced by 50%.
b)Evidence of insurability is not required.
c)Most term policies contain a convertibility option.
d)Upon conversion, the premium for the permanent policy will be based upon attained
age. - ANSWER-a)Upon conversion, the death benefit of the permanent policy will be
reduced by 50%.
All of the following could be considered rebates if offered to an insured in the sale of
insurance EXCEPT
a)Stocks, securities, or bonds.
b)An offer to share in commissions generated by the sale
.c)Dividends from a mutual insurer.
d)An offer of employment. - ANSWER-c)Dividends from a mutual insurer.
All of the following entities regulate variable life policies EXCEPT
a)The Insurance Department.
b)The Guaranty Association.
c)Federal government.
