2024 Pearson Vue Life Insurance Practice Exam
GRADED A 125 QUESTIONS AND ANSWERS
Which of the following statements is CORRECT about the Paid-Up
Additions in a participating Whole Life policy? - CORRECT ANSWER
They are purchased on an attained age basis.
Which of the following statements is CORRECT about Group Life
conversion privileges? - CORRECT ANSWER Death during the
conversion period is covered even if the departing employee chose not
to convert the policy.
If an insured commits suicide after the Suicide clause in the insured's life
insurance policy has expired, the insurer will take which of the following
actions? - CORRECT ANSWER Pay the Death benefit
If a policy contains a Guaranteed Insurability rider, the insured has the
right to purchase: - CORRECT ANSWER additional coverage at specified
ages
If life insurance policy applicant is classified as a substandard risk, the
insurance company will MOST likely: - CORRECT ANSWER charge an
extra premium
P wants to name her husband as the beneficiary of her life policy.
However, she wishes to retain all of the rights of ownership. P should
,have her husband named as the: - CORRECT ANSWER revocable
beneficiary
Which of the following features allows an insurance policy to remain in
force for a specified number of days beyond the premium due date? -
CORRECT ANSWER Grace Period provision
In life insurance, insurable interest must exist at the time the: - CORRECT
ANSWER producer writes an application on a proposed insured
Which of the following terms refers to the transfer of some or all of the
ownership rights of a life insurance policy from one individual to
another? - CORRECT ANSWER Assignment
Which of the following statements about a Renewable Term policy is
CORRECT? - CORRECT ANSWER It is renewable at the option of the
insured.
Two business partners own life insurance on each other. If one partner
dies, which of the following contracts will allow the other partner to buy
100 percent of the business interest? - CORRECT ANSWER Buy and Sell
Agreement
An insured intentionally understates her age on her application for a life
policy. At death, the insurer will take which of the following actions? -
CORRECT ANSWER Pay a reduced Death benefit based on the insured's
actual age
An applicant's statements on an application are considered to be legal: -
CORRECT ANSWER representations
A contract that promises to pay an income to an insured until his/her
death is called: - CORRECT ANSWER Life Annuity
, An employer can deduct premium payments as an ordinary business
expense for which of the following life coverages? - CORRECT ANSWER
Group
Which of the following annuities would BEST suit the needs of a 35-year-
old factory worker who is concerned about inflation and wants to
establish a retirement plan? - CORRECT ANSWER A Flexible Premium
Variable Annuity
A client needs a substantial amount of protection but has limited
financial resources. Which of the following insurance policies would
BEST meet the client's needs? - CORRECT ANSWER Term Life
An applicant for life insurance may question the validity and source of
any consumer information developed under the: - CORRECT ANSWER
Fair Credit Reporting Act (Insurance Information and Privacy Protection
Act)
Which of the following policy provisions provides for continuation of
coverage despite nonpayment of premiums? - CORRECT ANSWER
Nonforfeiture Option
Federal income tax laws generally treat proceeds of life insurance
policies as: - CORRECT ANSWER nontaxable
When a producer submits an insurance application to the company, the
producer must take all of the following actions EXCEP - CORRECT
ANSWER submit a completed medical information report
Which of the following policy provisions states that the application is
part of the policy? - CORRECT ANSWER Entire contract
GRADED A 125 QUESTIONS AND ANSWERS
Which of the following statements is CORRECT about the Paid-Up
Additions in a participating Whole Life policy? - CORRECT ANSWER
They are purchased on an attained age basis.
Which of the following statements is CORRECT about Group Life
conversion privileges? - CORRECT ANSWER Death during the
conversion period is covered even if the departing employee chose not
to convert the policy.
If an insured commits suicide after the Suicide clause in the insured's life
insurance policy has expired, the insurer will take which of the following
actions? - CORRECT ANSWER Pay the Death benefit
If a policy contains a Guaranteed Insurability rider, the insured has the
right to purchase: - CORRECT ANSWER additional coverage at specified
ages
If life insurance policy applicant is classified as a substandard risk, the
insurance company will MOST likely: - CORRECT ANSWER charge an
extra premium
P wants to name her husband as the beneficiary of her life policy.
However, she wishes to retain all of the rights of ownership. P should
,have her husband named as the: - CORRECT ANSWER revocable
beneficiary
Which of the following features allows an insurance policy to remain in
force for a specified number of days beyond the premium due date? -
CORRECT ANSWER Grace Period provision
In life insurance, insurable interest must exist at the time the: - CORRECT
ANSWER producer writes an application on a proposed insured
Which of the following terms refers to the transfer of some or all of the
ownership rights of a life insurance policy from one individual to
another? - CORRECT ANSWER Assignment
Which of the following statements about a Renewable Term policy is
CORRECT? - CORRECT ANSWER It is renewable at the option of the
insured.
Two business partners own life insurance on each other. If one partner
dies, which of the following contracts will allow the other partner to buy
100 percent of the business interest? - CORRECT ANSWER Buy and Sell
Agreement
An insured intentionally understates her age on her application for a life
policy. At death, the insurer will take which of the following actions? -
CORRECT ANSWER Pay a reduced Death benefit based on the insured's
actual age
An applicant's statements on an application are considered to be legal: -
CORRECT ANSWER representations
A contract that promises to pay an income to an insured until his/her
death is called: - CORRECT ANSWER Life Annuity
, An employer can deduct premium payments as an ordinary business
expense for which of the following life coverages? - CORRECT ANSWER
Group
Which of the following annuities would BEST suit the needs of a 35-year-
old factory worker who is concerned about inflation and wants to
establish a retirement plan? - CORRECT ANSWER A Flexible Premium
Variable Annuity
A client needs a substantial amount of protection but has limited
financial resources. Which of the following insurance policies would
BEST meet the client's needs? - CORRECT ANSWER Term Life
An applicant for life insurance may question the validity and source of
any consumer information developed under the: - CORRECT ANSWER
Fair Credit Reporting Act (Insurance Information and Privacy Protection
Act)
Which of the following policy provisions provides for continuation of
coverage despite nonpayment of premiums? - CORRECT ANSWER
Nonforfeiture Option
Federal income tax laws generally treat proceeds of life insurance
policies as: - CORRECT ANSWER nontaxable
When a producer submits an insurance application to the company, the
producer must take all of the following actions EXCEP - CORRECT
ANSWER submit a completed medical information report
Which of the following policy provisions states that the application is
part of the policy? - CORRECT ANSWER Entire contract
