WFG EXAM QUESTIONS AND
ANSWERS
Recipient's life expectancy and amount of principal - ANSWER-Determines the
amount of each installment paid in a Life Income Option arrangement
At the time the insured purchases her life insurance policy, she added a rider that will
allow her to purchase additional insurance in the future without having to prove
insurability. This rider is called - ANSWER-Guaranteed insurability
What is interest only? - ANSWER-Allows the insurer to retain the face amount but
pay some income on gain not the proceeds to the beneficiary at regular intervals
An individual is purchasing a permanent life insurance policy with a face value of
$25,000. While this is all the insurance that the can afford at this time, he wants to be
sure that additional coverage will be available in the future. Which of the following
options should be included in the policy? - ANSWER-Guaranteed insurability option
Cash surrender nonforfeiture option - ANSWER-Consider funds exceeding the
premium paid are taxable as ordinary income
What is the advantage of reinstating a policy instead of applying for a new one -
ANSWER-The original age is used for premium determination
The premium on the children's rider in a life insurance policy - ANSWER-remains the
same no matter how many children are added to the policy
An insured has a continuous whole life policy. She would like to use the policy
dividends to pay off her policy sooner than would have been possible otherwise.
What dividend option could she use? - ANSWER-Paid up option
An individual borrowed money at the bank to send his daughter to college. Instead of
purchasing Credit Life insurance, he used an existing life insurance policy to secure
the debt. This would be called - ANSWER-Collateral Assignment
Bankers cannot be - ANSWER-Insurers
If an insured is not required to pay a deductible, what kind of coverage does he/she
have? - ANSWER-First dollar
What is first dollar? - ANSWER-First dollar coverages do not require the insured to
pay a deductible.
In a relative value system of determining coverage for a given procedure, what term
describes the total amount payable per point? - ANSWER-Conversion factor
How can a new physician be added to the PPO's approved list? - ANSWER-Agree to
follow the PPO standard and charge the appropriate fees.
, How does a member of an HMO see a specialist? - ANSWER-The primary care
physician refers the member
Another name for a primary care physician in an HMO? - ANSWER-Gatekeeper
Who chooses a primary care physician in HMO? - ANSWER-The individual member
What is a penalty tax for non qualified distributions from a health savings account? -
ANSWER-20%
Assuming that all of the following people are covered by a High Deductible Health
Plan and are not claimed as dependents on anyone's tax returns, which would NOT
be eligible for a Health Savings Account? - ANSWER-Amanda is 67 and is covered
by a basic medical expense policy
Jim is covered by a high deductible health plan. He makes regular contributions to
the HSA. How are those contributions treated in regards to taxation? - ANSWER-The
contributions are tax-deductible
An insured is hospitalized with a back injury. Upon checking his disability income
policy, he learns that he will not be eligible for benefits for at lest 30 days. This would
include that his policy was probably written with a 30-day? - ANSWER-Elimination
period
What required provision protects against unintentional lapse of the policy? -
ANSWER-Grace period
If an insured continually uses the automatic premium loan option to pay the policy
premium - ANSWER-The policy will terminate when the cash value is reduced to
nothing
If a policy has an automatic premium loan provision, what happens if the insured
dies before the loan is paid back? - ANSWER-The balance of the loan will be taken
out of the death benefit.
When attached to a permanent life insurance policy, allows the policy owner to
customize the policy to provide an additional amount of temporary insurance on the
insured, or allows amounts the temporary insurance to cover other family members?
- ANSWER-Term rider
Term riders - ANSWER-May be used to customize a permanent life insurance policy
to meet the needs of the policy owners
The accelerated benefits provision will provide for an early payment of the death
benefit when the insured - ANSWER-Becomes terminally ill
What is fixed period installments? - ANSWER-It is a settlement option, and not one
of the dividend options.
ANSWERS
Recipient's life expectancy and amount of principal - ANSWER-Determines the
amount of each installment paid in a Life Income Option arrangement
At the time the insured purchases her life insurance policy, she added a rider that will
allow her to purchase additional insurance in the future without having to prove
insurability. This rider is called - ANSWER-Guaranteed insurability
What is interest only? - ANSWER-Allows the insurer to retain the face amount but
pay some income on gain not the proceeds to the beneficiary at regular intervals
An individual is purchasing a permanent life insurance policy with a face value of
$25,000. While this is all the insurance that the can afford at this time, he wants to be
sure that additional coverage will be available in the future. Which of the following
options should be included in the policy? - ANSWER-Guaranteed insurability option
Cash surrender nonforfeiture option - ANSWER-Consider funds exceeding the
premium paid are taxable as ordinary income
What is the advantage of reinstating a policy instead of applying for a new one -
ANSWER-The original age is used for premium determination
The premium on the children's rider in a life insurance policy - ANSWER-remains the
same no matter how many children are added to the policy
An insured has a continuous whole life policy. She would like to use the policy
dividends to pay off her policy sooner than would have been possible otherwise.
What dividend option could she use? - ANSWER-Paid up option
An individual borrowed money at the bank to send his daughter to college. Instead of
purchasing Credit Life insurance, he used an existing life insurance policy to secure
the debt. This would be called - ANSWER-Collateral Assignment
Bankers cannot be - ANSWER-Insurers
If an insured is not required to pay a deductible, what kind of coverage does he/she
have? - ANSWER-First dollar
What is first dollar? - ANSWER-First dollar coverages do not require the insured to
pay a deductible.
In a relative value system of determining coverage for a given procedure, what term
describes the total amount payable per point? - ANSWER-Conversion factor
How can a new physician be added to the PPO's approved list? - ANSWER-Agree to
follow the PPO standard and charge the appropriate fees.
, How does a member of an HMO see a specialist? - ANSWER-The primary care
physician refers the member
Another name for a primary care physician in an HMO? - ANSWER-Gatekeeper
Who chooses a primary care physician in HMO? - ANSWER-The individual member
What is a penalty tax for non qualified distributions from a health savings account? -
ANSWER-20%
Assuming that all of the following people are covered by a High Deductible Health
Plan and are not claimed as dependents on anyone's tax returns, which would NOT
be eligible for a Health Savings Account? - ANSWER-Amanda is 67 and is covered
by a basic medical expense policy
Jim is covered by a high deductible health plan. He makes regular contributions to
the HSA. How are those contributions treated in regards to taxation? - ANSWER-The
contributions are tax-deductible
An insured is hospitalized with a back injury. Upon checking his disability income
policy, he learns that he will not be eligible for benefits for at lest 30 days. This would
include that his policy was probably written with a 30-day? - ANSWER-Elimination
period
What required provision protects against unintentional lapse of the policy? -
ANSWER-Grace period
If an insured continually uses the automatic premium loan option to pay the policy
premium - ANSWER-The policy will terminate when the cash value is reduced to
nothing
If a policy has an automatic premium loan provision, what happens if the insured
dies before the loan is paid back? - ANSWER-The balance of the loan will be taken
out of the death benefit.
When attached to a permanent life insurance policy, allows the policy owner to
customize the policy to provide an additional amount of temporary insurance on the
insured, or allows amounts the temporary insurance to cover other family members?
- ANSWER-Term rider
Term riders - ANSWER-May be used to customize a permanent life insurance policy
to meet the needs of the policy owners
The accelerated benefits provision will provide for an early payment of the death
benefit when the insured - ANSWER-Becomes terminally ill
What is fixed period installments? - ANSWER-It is a settlement option, and not one
of the dividend options.
