Pearson Vue Life Insurance Practice EXAM 2025-2016
(VERSION A & B) WITH ACTUAL CORRECT
QUESTIONS AND VERIFIED DETAILED ANSWERS
How does a continuous premium whole life policy differ from a limited pay whole life policy?
A. The time period in which premiums will be paid
B. The availability of cash value loans
C. The availability of nonforfeiture options
D. The settlement options
A. The time period in which premiums will be paid
What type of premiums are associated with individual mortgage protection life insurance
policies?
A. Level premiums
B. Flexible premiums
C. Modified premiums
D. Decreasing premiums
A. Level premiums
Taxable income may be the result from all of these modified endowment contract (MEC)
transactions EXCEPT for
A. A cash value loan is taken out
B. Automatic premium loan provision is utilized
C. The policy is surrendered for less than what was paid into it
D. Dividend is issued
C. The policy is surrendered for less than what was paid into it
What kind of life insurance policy allows a policyowner the choice of investments along with
flexible premium payments?
A. Variable universal life
B. Modified endowment contract
C. Adjustable life
D. Graded premium whole life
,A. Variable universal life
All of these statements concerning universal life insurance are false EXCEPT
A. Death benefits are normally taxable
B. Policy loans are not permitted
C. Premiums or face amount cannot be changed
D. Policy indicates how much of the premium is used toward company expenses
D. Policy indicates how much of the premium is used toward company expenses
How does the cost for a survivorship life policy compare to the cost of combining two separate
life insurance policies?
A. Survivorship life policy is lower
B. Survivorship life policy is higher
C. Depends on the investment performance of the underlying accounts
D. Both have the same actuarial costs
A. Survivorship life policy is lower
Which statement regarding universal life insurance is correct?
A. Cash value accumulations have a guaranteed minimum interest rate
B. Policyowner can change the face amount but not the premium
C. Policyowner can change the premium but not the face amount
D. Partial withdrawals cannot be made from the policy's cash value
A. Cash value accumulations have a guaranteed minimum interest rate
Which statement regarding whole life insurance is accurate?
A. Cash value loans are not permitted
B. Insurance coverage can continue for life
C. Policy normally matures at retirement
D. No cash value accumulations
B. Insurance coverage can continue for life
All of these are considered features of whole life insurance EXCEPT
A. Cash value accumulation
B. Permanent coverage
C. Initial premium is lower than for an equivalent amount of term insurance
D. Policy loans are allowed
,C. Initial premium is lower than for an equivalent amount of term insurance
Which of these policies is considered a whole life policy?
A. Credit life
B. Single premium life
C. Renewable life
D. Convertible life
B. Single premium life
What type of life insurance policy covers two or more persons and pays the face amount upon
the death of the first insured?
A. Joint and survivorship
B. Survivorship life
C. Universal life
D. Joint life
D. Joint life
Rick owns a variable universal life policy and chooses a variable death benefit option. What will
typically happen to the death benefit as a result of this selection?
A. Remain the same
B. Decrease but never increase
C. Increase but never decrease
D. Fluctuate with changes in the cash account
D. Fluctuate with changes in the cash account
An individual who purchases a modified life insurance policy expects
A. a higher rate of return
B. coverage for two people
C. an improvement in future income
D. a flexible face amount
C. an improvement in future income
Assets that back the non-guaranteed values of variable life insurance products are held in which
account?
A. Trust account set up by the insured
B. Separate account set up by the insurer
, C. General account of the insurer
D. Money market account
B. Separate account set up by the insurer
When a ten year renewable term life insurance policy issued at age 45 is renewed, the premium
rate will be the current rate for
A. Ten year term insurance for a person aged 55
B. Ten year term insurance for a person aged 45
C. Yearly renewable term insurance for a person aged 55
D. Yearly renewable term insurance for a person aged 45
A. Ten year term insurance for a person aged 55
What kind of life policy typically offers mortgage protection?
A. Whole life
B. Decreasing term
C. Increasing term
D. Level term
B. Decreasing term
Which of these life insurance policies do NOT contain cash value provisions?
A. Modified whole life
B. Universal life
C. Decreasing term life
D. Adjustable life
C. Decreasing term life
What type of policy can group term life insurance normally be converted to?
An individual renewable policy
An individual level term policy
An individual permanent life insurance policy
A group permanent life insurance policy
An individual permanent life insurance policy
What is the term used for an insurance contract that identifies individuals by relationship to a
specific organization?
(VERSION A & B) WITH ACTUAL CORRECT
QUESTIONS AND VERIFIED DETAILED ANSWERS
How does a continuous premium whole life policy differ from a limited pay whole life policy?
A. The time period in which premiums will be paid
B. The availability of cash value loans
C. The availability of nonforfeiture options
D. The settlement options
A. The time period in which premiums will be paid
What type of premiums are associated with individual mortgage protection life insurance
policies?
A. Level premiums
B. Flexible premiums
C. Modified premiums
D. Decreasing premiums
A. Level premiums
Taxable income may be the result from all of these modified endowment contract (MEC)
transactions EXCEPT for
A. A cash value loan is taken out
B. Automatic premium loan provision is utilized
C. The policy is surrendered for less than what was paid into it
D. Dividend is issued
C. The policy is surrendered for less than what was paid into it
What kind of life insurance policy allows a policyowner the choice of investments along with
flexible premium payments?
A. Variable universal life
B. Modified endowment contract
C. Adjustable life
D. Graded premium whole life
,A. Variable universal life
All of these statements concerning universal life insurance are false EXCEPT
A. Death benefits are normally taxable
B. Policy loans are not permitted
C. Premiums or face amount cannot be changed
D. Policy indicates how much of the premium is used toward company expenses
D. Policy indicates how much of the premium is used toward company expenses
How does the cost for a survivorship life policy compare to the cost of combining two separate
life insurance policies?
A. Survivorship life policy is lower
B. Survivorship life policy is higher
C. Depends on the investment performance of the underlying accounts
D. Both have the same actuarial costs
A. Survivorship life policy is lower
Which statement regarding universal life insurance is correct?
A. Cash value accumulations have a guaranteed minimum interest rate
B. Policyowner can change the face amount but not the premium
C. Policyowner can change the premium but not the face amount
D. Partial withdrawals cannot be made from the policy's cash value
A. Cash value accumulations have a guaranteed minimum interest rate
Which statement regarding whole life insurance is accurate?
A. Cash value loans are not permitted
B. Insurance coverage can continue for life
C. Policy normally matures at retirement
D. No cash value accumulations
B. Insurance coverage can continue for life
All of these are considered features of whole life insurance EXCEPT
A. Cash value accumulation
B. Permanent coverage
C. Initial premium is lower than for an equivalent amount of term insurance
D. Policy loans are allowed
,C. Initial premium is lower than for an equivalent amount of term insurance
Which of these policies is considered a whole life policy?
A. Credit life
B. Single premium life
C. Renewable life
D. Convertible life
B. Single premium life
What type of life insurance policy covers two or more persons and pays the face amount upon
the death of the first insured?
A. Joint and survivorship
B. Survivorship life
C. Universal life
D. Joint life
D. Joint life
Rick owns a variable universal life policy and chooses a variable death benefit option. What will
typically happen to the death benefit as a result of this selection?
A. Remain the same
B. Decrease but never increase
C. Increase but never decrease
D. Fluctuate with changes in the cash account
D. Fluctuate with changes in the cash account
An individual who purchases a modified life insurance policy expects
A. a higher rate of return
B. coverage for two people
C. an improvement in future income
D. a flexible face amount
C. an improvement in future income
Assets that back the non-guaranteed values of variable life insurance products are held in which
account?
A. Trust account set up by the insured
B. Separate account set up by the insurer
, C. General account of the insurer
D. Money market account
B. Separate account set up by the insurer
When a ten year renewable term life insurance policy issued at age 45 is renewed, the premium
rate will be the current rate for
A. Ten year term insurance for a person aged 55
B. Ten year term insurance for a person aged 45
C. Yearly renewable term insurance for a person aged 55
D. Yearly renewable term insurance for a person aged 45
A. Ten year term insurance for a person aged 55
What kind of life policy typically offers mortgage protection?
A. Whole life
B. Decreasing term
C. Increasing term
D. Level term
B. Decreasing term
Which of these life insurance policies do NOT contain cash value provisions?
A. Modified whole life
B. Universal life
C. Decreasing term life
D. Adjustable life
C. Decreasing term life
What type of policy can group term life insurance normally be converted to?
An individual renewable policy
An individual level term policy
An individual permanent life insurance policy
A group permanent life insurance policy
An individual permanent life insurance policy
What is the term used for an insurance contract that identifies individuals by relationship to a
specific organization?
