Life Insurance Practice Exam: Key
Concepts and Policies ACTUAL
QUESTIONS AND CORRECT ANSWERS
Annual renewable term - CORRECT ANSWERS✅✅A type of insurance frequently used in
group life plans.
Renewable term policy - CORRECT ANSWERS✅✅A policy that is renewable at the option
of the insured without proof of insurability.
Disability Income rider - CORRECT ANSWERS✅✅A rider that may provide a monthly
benefit to an insured.
Conditional receipt - CORRECT ANSWERS✅✅The receipt given to a life insurance
applicant when the application is completed and the initial premium is received.
Insurable interest - CORRECT ANSWERS✅✅A legal requirement that exists when a
policyholder has a stake in the insured's life.
Continuing education hours for life-only producer - CORRECT ANSWERS✅✅20 hours, 4
of the hours must be in ethics.
Jumping Juvenile policy - CORRECT ANSWERS✅✅A policy in which the face amount
increases.
Noncontributory group life insurance - CORRECT ANSWERS✅✅A group life insurance
program in which the employer pays all of the premium.
Conditional contract term - CORRECT ANSWERS✅✅A term that states both parties must
comply with certain specified circumstances in order to make the contract enforceable.
Premium determinants - CORRECT ANSWERS✅✅Factors that determine premiums
include mortality, interest, and expense.
, Exclusion ratio in annuities - CORRECT ANSWERS✅✅Used to determine the taxable
portion of distributions.
Evidence retention for replacing insurers - CORRECT ANSWERS✅✅Must retain evidence
of all signed applications and disclosures used in replacement for no less than 3 years.
Risk sharing - CORRECT ANSWERS✅✅The basis for insurance, which involves sharing
risk among a large pool of people with a similar exposure to loss.
Financial planning process information - CORRECT ANSWERS✅✅Driving record is NOT
necessary in the financial planning process for life insurance.
Variable Life policy - CORRECT ANSWERS✅✅A type of cash value policy that allows
the policy owner to select how to invest the policy's cash value in securities.
Insurable interest requirement - CORRECT ANSWERS✅✅Must exist between the
policyowner and the insured on the date of application.
Face amount in Jumping Juvenile policy - CORRECT ANSWERS✅✅The component that
increases in a Jumping Juvenile policy.
Qualified plan - CORRECT ANSWERS✅✅A group life insurance program that meets
specific IRS requirements.
Morbidity - CORRECT ANSWERS✅✅A factor that determines premiums, referring to the
incidence of disease.
Taxable portion of contributions - CORRECT ANSWERS✅✅Determined using the
exclusion ratio in annuities.
Replacement evidence retention period - CORRECT ANSWERS✅✅Insurers must retain
evidence for no less than 3 years.
Concepts and Policies ACTUAL
QUESTIONS AND CORRECT ANSWERS
Annual renewable term - CORRECT ANSWERS✅✅A type of insurance frequently used in
group life plans.
Renewable term policy - CORRECT ANSWERS✅✅A policy that is renewable at the option
of the insured without proof of insurability.
Disability Income rider - CORRECT ANSWERS✅✅A rider that may provide a monthly
benefit to an insured.
Conditional receipt - CORRECT ANSWERS✅✅The receipt given to a life insurance
applicant when the application is completed and the initial premium is received.
Insurable interest - CORRECT ANSWERS✅✅A legal requirement that exists when a
policyholder has a stake in the insured's life.
Continuing education hours for life-only producer - CORRECT ANSWERS✅✅20 hours, 4
of the hours must be in ethics.
Jumping Juvenile policy - CORRECT ANSWERS✅✅A policy in which the face amount
increases.
Noncontributory group life insurance - CORRECT ANSWERS✅✅A group life insurance
program in which the employer pays all of the premium.
Conditional contract term - CORRECT ANSWERS✅✅A term that states both parties must
comply with certain specified circumstances in order to make the contract enforceable.
Premium determinants - CORRECT ANSWERS✅✅Factors that determine premiums
include mortality, interest, and expense.
, Exclusion ratio in annuities - CORRECT ANSWERS✅✅Used to determine the taxable
portion of distributions.
Evidence retention for replacing insurers - CORRECT ANSWERS✅✅Must retain evidence
of all signed applications and disclosures used in replacement for no less than 3 years.
Risk sharing - CORRECT ANSWERS✅✅The basis for insurance, which involves sharing
risk among a large pool of people with a similar exposure to loss.
Financial planning process information - CORRECT ANSWERS✅✅Driving record is NOT
necessary in the financial planning process for life insurance.
Variable Life policy - CORRECT ANSWERS✅✅A type of cash value policy that allows
the policy owner to select how to invest the policy's cash value in securities.
Insurable interest requirement - CORRECT ANSWERS✅✅Must exist between the
policyowner and the insured on the date of application.
Face amount in Jumping Juvenile policy - CORRECT ANSWERS✅✅The component that
increases in a Jumping Juvenile policy.
Qualified plan - CORRECT ANSWERS✅✅A group life insurance program that meets
specific IRS requirements.
Morbidity - CORRECT ANSWERS✅✅A factor that determines premiums, referring to the
incidence of disease.
Taxable portion of contributions - CORRECT ANSWERS✅✅Determined using the
exclusion ratio in annuities.
Replacement evidence retention period - CORRECT ANSWERS✅✅Insurers must retain
evidence for no less than 3 years.
