Prepare for the Life Insurance agent license exam with these practice questions and answers. This guide covers policy types, riders, underwriting, and state insurance regulations.
Q: Pure or straight life
Answer: Which of the following annuity benefit payment options would generate the highest monthly payments to the contract owner upon annuitization?
Q: Paid-up additions1-year termCash
Answer: All of the following are dividend options on a participating life insurance policy:
Q: Insured
Answer: The person upon whose life an annuity is based is known as the:
Q: Reduced paid-up
Answer: When a policyowner uses the cash value in their policy to buy a lesser amount of permanent life insurance, they have exercised which nonforfeiture option:
Q: Interest only
Answer: Which of the following life insurance settlement options enables the beneficiary to conserve the proceeds of a life insurance policy?
Q: The account value
Answer: In the case of a variable annuity sold to a senior citizen in this state for which the owner has directed that the premium be invested in the mutual funds underlying the contract during the 30-day cancellation period, cancellation during that period entitles the owner to a refund of:
Q: They are purchased by those who are worried about outliving their savings.They are not suitable as short term investments.They may be used as a life insurance settlement option.
Answer: All of the following are true regarding annuities
Q: Group (Life Insruance)
Answer: Which of the following would not be considered to be ordinary life insurance?
Q: They are not guaranteedThey are legally defined as a return of premium and are not taxableThey are paid out of the insurer’s accumulated surplus
Answer: All of the following are true regarding dividends paid by a mutual life insurance company
Q: Renewable
Answer: Which type of term life insurance has a level face amount but a premium that increases each year as the insured gets older?
Q: The amount and frequency of future losses are unknown
Answer: The transfer of risk to an insurance company is an effective risk management technique when:
Q: Change the beneficiaryAssign or transfer ownership in the policyTake a loan
Answer: The owner of a life insurance policy may do all of the following
Q: The employer is the policyowner and the beneficiaryDeath benefits are payable to the employer tax freeThe employee is the insured
Answer: All of the following are true regarding key person life insurance:
Q: A buy/sell agreement
Answer: If a corporation and a shareholder enter into an agreement that requires the corporation to buy the shareholder’s shares upon his or her death, they have entered into:
Q: Extended termCash surrenderReduced paid-up
Answer: All of following are required nonforfeiture options or provisions on a cash value life insurance policy:
Q: Large numbers
Answer: The greater the number of similar exposure units insured, the easier it will be to predict future claims based upon the law of:
Q: Modified, ordinary, limited pay, single premium
Answer: List in order from the lowest annual premium to the highest:
Q: MilitaryAviationWar(EXCEPT Accidents)
Answer: Group life insurance policies may exclude all of the following:
Q: Non-standard
Answer: Which risk classification will have the highest premium?
Q: Insured
Answer: The person upon whose life a life insurance policy is based is known as the:
Q: Variable life
Answer: A client who wants life insurance protection and cash values that fluctuate in value based upon the performance of a separate account should purchase:
Q: Absolute assignment
Answer: When making a life settlement, a policyowner will permanently transfer all rights of ownership in the policy to another party by making a(n):
Q: Applicant
Answer: Which of the following completes the application for life insurance?
Q: Fixed amount
Answer: If the beneficiary of a life insurance policy wants $1,000 per month for as long as the money lasts, they should choose the ________ settlement option.
Q: Proof of insurability is not requiredThe employee may convert to any policy issued by the group insurer, except termDeath during the conversion period is covered by the group policy__________________________The employer will pay the entire cost of the new policy (Except)
Answer: All of the following are true regarding group life conversion:
Q: After the policy has been in effect for a specified period of time
Answer: The incontestability clause in a life insurance policy protects the insured by preventing an insurer from denying a claim:
Q: 40
Answer: Under social security, being fully insured entitles a worker and family to full benefits. To achieve fully insured status, an individual must attain at least ____ quarters of coverage.
Q: 3
Answer: Where replacement is involved, every life insurer that uses an agent in a life insurance or annuity sale shall send to the existing life insurer a written communication advising of the replacement within ____ working days of the date the application was received.
Q: They are not meant to replace the full value of a person’s earnings.Individuals must have fully insured status.The disability must be expected to last at least 12 months or to result in death.___________________(Except) Individuals must meet the own job definition of total disability.
Answer: All of the following are true regarding social security disability income benefits EXCEPT:
Q: Taxable as income to the employee
Answer: The premium that an employer pays for group life insurance coverage for an employee that exceeds $50,000 in coverage is:
Q: They may pay dividends out of their accumulated surplusThey are known as mutual insurersThe IRS has ruled that any dividends paid are a tax free return of premium__________________EXCEPT: They are owned by their stock holders
Answer: All of the following are true regarding participating life insurers:
Q: 26
Answer: On group life insurance, dependent children may be covered up to age:
Q: It allows the policyholder to purchase more insurance coverage without a physical examOption dates that are not exercised are lost, but future option dates may be availableCoverage may be increased on specified future option datesEXCEPT:The premiums charged for the additional coverage is based upon the insured’s original age
Answer: All of the following are true about the guaranteed insurability rider :
Q: It will accumulate in the usual manner
Answer: If a whole life policy is being kept in force by use of the waiver of premium rider, what happens to the policyowner’s cash value?
Q: Nursing home and home based care
Answer: Adding a comprehensive long-term care rider to a life insurance policy will provide the insured with which of the following coverages:
Q: Dressing and eating
Answer: Under a long-term care rider, which of the following are considered to be activities of daily living?
Q: Absolute assignment
Answer: When making a life settlement, a policyowner will permanently transfer all rights of ownership in the policy to another party by making a(n):