MASS STATE LIFE INSURANCE EXAM WITH
CORRECT ACTUAL QUESTIONS AND
CORRECTLY WELL DEFINED ANSWERS
LATEST ALREADY GRADED A+ 2025 - 2026
whole life premiums - ANSWERS-As noted, whole life is designed as
if the insured will live to age 100. Accordingly, the amount of
premium for a
whole life policy is calculated, in part, on the basis of the number of
years between the insured's age at issue and age
100. The shorter the payment period, the higher the premium.This
time span represents the full premium-paying
period, with the amount of the premium spread equally over that
period. This is known as the level premium approach.
As is the case with level premium term insurance, this approach
allows whole life insurance premiums to remain level rather than
increase each year with the insured's age.
,basic forms of whole life - straight - ANSWERS-Straight whole life is
whole life insurance providing permanent level protection with
level premiums from the time the
policy is issued until the insured's death (or age 100).
basic forms of whole life - limited pay - ANSWERS-Limited pay
whole life policies have level premiums that are limited to a
specified number of years. This period can
be of any duration. For example, a 20-payment life policy is one in
which premiums are payable for 20 years from
the policy's inception, after which no more premiums are owed. A
life paid-up at 65 policy is one in which the
premiums are payable to the insured's age 65, after which no more
premiums are owed. This type of coverage
would best suit a prospective insured who desires permanent
insurance but does not want to pay premiums
indefinitely. Keep in mind that even though the premium payments
are limited to a certain period, the insurance
protection extends until the insured's death, or to age 100.
features of whole life - living benefits - ANSWERS-Another unique
feature of whole life insurance is the living benefits it can provide.
Through the cash value
accumulation build-up in the policy, a policyowner has a ready
source of funds that may be borrowed at reasonable
,rates of interest. These funds may be used for a personal or
business emergency. For example, they could be used
to help pay for a child's education or to pay off a mortgage. It is not
a requirement of the policy that the loan be
repaid. However, if a loan is outstanding at the time the insured
dies, the amount of the loan plus any interest due
will be subtracted from the death benefit before it is paid.
What is considered the accounting measurement of an insurance
company's future obligations to its policyowners? - ANSWERS-
reserves
A group-owned insurance company that is formed to assume and
spread the liability risks of its members is known as a - ANSWERS-
risk retention group
Which of the following is a syndicate established by a group of
insurers to share underwriting duties? - ANSWERS-Lloyd's
organization
An agent's authority to bind an insurer to an insurance contract
may be granted in the - ANSWERS-agent's contract and the
insurance company's appointment
, Dividends from a stock insurance company are normally sent to -
ANSWERS-shareholders
Law of Large numbers - ANSWERS--insurance is based on the
sharing of risks among a large group of people
-states that the larger the number of people, the more predictable
the actual losses will be
-companies use this data to calculate rates
Speculative risk - ANSWERS--involves opportunity for either loss or
gain
-not covered by insurance companies
pure risk - ANSWERS--a situation that can only result in a loss, there
is no opportunity for financial gain
-only type of risk that is insurable
treatment of risk through: avoidance - ANSWERS-simply avoiding as
many risks as possible
-effective but not always practical
treatment of risk through- reduction - ANSWERS-since we cannot
avoid risk entirely we often attempt to lessen the possibility of a
loss by taking acting to reduce the risk
-
CORRECT ACTUAL QUESTIONS AND
CORRECTLY WELL DEFINED ANSWERS
LATEST ALREADY GRADED A+ 2025 - 2026
whole life premiums - ANSWERS-As noted, whole life is designed as
if the insured will live to age 100. Accordingly, the amount of
premium for a
whole life policy is calculated, in part, on the basis of the number of
years between the insured's age at issue and age
100. The shorter the payment period, the higher the premium.This
time span represents the full premium-paying
period, with the amount of the premium spread equally over that
period. This is known as the level premium approach.
As is the case with level premium term insurance, this approach
allows whole life insurance premiums to remain level rather than
increase each year with the insured's age.
,basic forms of whole life - straight - ANSWERS-Straight whole life is
whole life insurance providing permanent level protection with
level premiums from the time the
policy is issued until the insured's death (or age 100).
basic forms of whole life - limited pay - ANSWERS-Limited pay
whole life policies have level premiums that are limited to a
specified number of years. This period can
be of any duration. For example, a 20-payment life policy is one in
which premiums are payable for 20 years from
the policy's inception, after which no more premiums are owed. A
life paid-up at 65 policy is one in which the
premiums are payable to the insured's age 65, after which no more
premiums are owed. This type of coverage
would best suit a prospective insured who desires permanent
insurance but does not want to pay premiums
indefinitely. Keep in mind that even though the premium payments
are limited to a certain period, the insurance
protection extends until the insured's death, or to age 100.
features of whole life - living benefits - ANSWERS-Another unique
feature of whole life insurance is the living benefits it can provide.
Through the cash value
accumulation build-up in the policy, a policyowner has a ready
source of funds that may be borrowed at reasonable
,rates of interest. These funds may be used for a personal or
business emergency. For example, they could be used
to help pay for a child's education or to pay off a mortgage. It is not
a requirement of the policy that the loan be
repaid. However, if a loan is outstanding at the time the insured
dies, the amount of the loan plus any interest due
will be subtracted from the death benefit before it is paid.
What is considered the accounting measurement of an insurance
company's future obligations to its policyowners? - ANSWERS-
reserves
A group-owned insurance company that is formed to assume and
spread the liability risks of its members is known as a - ANSWERS-
risk retention group
Which of the following is a syndicate established by a group of
insurers to share underwriting duties? - ANSWERS-Lloyd's
organization
An agent's authority to bind an insurer to an insurance contract
may be granted in the - ANSWERS-agent's contract and the
insurance company's appointment
, Dividends from a stock insurance company are normally sent to -
ANSWERS-shareholders
Law of Large numbers - ANSWERS--insurance is based on the
sharing of risks among a large group of people
-states that the larger the number of people, the more predictable
the actual losses will be
-companies use this data to calculate rates
Speculative risk - ANSWERS--involves opportunity for either loss or
gain
-not covered by insurance companies
pure risk - ANSWERS--a situation that can only result in a loss, there
is no opportunity for financial gain
-only type of risk that is insurable
treatment of risk through: avoidance - ANSWERS-simply avoiding as
many risks as possible
-effective but not always practical
treatment of risk through- reduction - ANSWERS-since we cannot
avoid risk entirely we often attempt to lessen the possibility of a
loss by taking acting to reduce the risk
-
