Docsity
Docsity

Prepare for your exams
Prepare for your exams

Study with the several resources on Docsity


Earn points to download
Earn points to download

Earn points by helping other students or get them with a premium plan


Guidelines and tips
Guidelines and tips

California Life Accident and Health Exam Practice 353 Questions with Answers,100% CORRECT, Exams of Nursing

California Life Accident and Health Exam Practice 353 Questions with Answers

Typology: Exams

2023/2024

Available from 07/24/2024

paul-kamau-2
paul-kamau-2 šŸ‡ŗšŸ‡ø

2.7

(3)

3.5K documents

Partial preview of the text

Download California Life Accident and Health Exam Practice 353 Questions with Answers,100% CORRECT and more Exams Nursing in PDF only on Docsity!

California Life Accident and Health Exam Practice 353

Questions with Answers

A

ABC INSURANCE - CORRECT ANSWER JOHN IS THE AGENT FOR ABC INSURANCE

AND JANE IS THE INSURED. WHO IS THE PRINCIPAL IN THIS AGENCY

RELATIONSHIP?

A

ABC INSURANCE

B

JOHN

C

JANE

D

NONE

D

ADMITTED - CORRECT ANSWER A(N) ________ INSURER IS AUTHORIZED TO

WRITE INSURANCE POLICIES IN A PARTICULAR STATE.

A

DOMESTIC

B

NON-ADMITTED

C

FOREIGN

D

ADMITTED

B

A PERSON WHO NEGOTIATES INSURANCE CONTRACTS ON BEHALF OF AN

INSURED - CORRECT ANSWER WHICH OF THE FOLLOWING IS CLASSIFIED AS AN

INSURANCE BROKER?

A

A PERSON WHO PLACES COVERAGE FOR HIS/HER OWN INSURANCE

B

A PERSON WHO NEGOTIATES INSURANCE CONTRACTS ON BEHALF OF AN

INSURED

C

A PERSON IN THE HOME OFFICE WHO DOES NOT SOLICIT OUTSIDE OF THE OFFICE

D

AN EMPLOYEE WHO NEGOTIATES INSURANCE CONTRACTS FOR HIS/HER

EMPLOYER

C

EACH PARTY IS ENTITLED TO RELY UPON THE REPRESENTATIONS OF THE OTHER

THAT THERE IS NOTHING CONCEALED OR DISHONEST - CORRECT ANSWER THE

INSURANCE CONTRACT IS SAID TO BE A CONTRACT OF UTMOST GOOD FAITH,

BECAUSE:

A

CONCEALMENT OF KNOWN FACTS ON THE PART OF THE INSURED WILL VOID THE

CONTRACT

B

THE INSURER HAS DRAWN UP THE CONTRACT AND, THEREFORE, THERE IS NO

INTENT TO DECEIVE

C

EACH PARTY IS ENTITLED TO RELY UPON THE REPRESENTATIONS OF THE OTHER

THAT THERE IS NOTHING CONCEALED OR DISHONEST

D

THE INSURED MUST WARRANT THAT HIS/HER REPRESENTATIONS ARE TRUE

A

THE INSURED IS RESTORED TO THE SAME FINANCIAL CONDITION AS PRIOR TO

THE LOSS, WITH NO INTENT OF LOSS OR GAIN - CORRECT ANSWER WHICH OF

THE FOLLOWING BEST DESCRIBES A CONTRACT OF INDEMNITY UNDER

INSURANCE?

A

THE INSURED IS RESTORED TO THE SAME FINANCIAL CONDITION AS PRIOR TO

THE LOSS, WITH NO INTENT OF LOSS OR GAIN

B

THE INSURED INDEMNIFIES THE INSURER FOR ANY EXPENSES IN ADJUSTING THE

LOSS

C

THE INSURED SUSTAINS A LOSS AS A RESULT OF THE LOSS

D

SURPLUS - CORRECT ANSWER THE INSURED IS RESTORED TO A FINANCIAL

CONDITION AS GOOD AS, OR BETTER THAN, THE INSURED WAS BEFORE THE LOSS

___________ INSURANCE IS USED TO PROVIDE COVERAGE WHEN INSURANCE IS

NOT AVAILABLE FROM AN ADMITTED CARRIER.

A

FACULTATIVE

B

DOMESTIC

C

ALIEN

D

SURPLUS

C

PURE RISK - CORRECT ANSWER WHICH OF THE FOLLOWING RISKS IS PROTECTED

BY INSURANCE?

A

CERTAIN RISK

B

SPECULATIVE RISK

C

PURE RISK

D

INVOLUNTARY RISK

A

WHEN ONE TAKES ACTION TO MINIMIZE THE SEVERITY OF A POTENTIAL LOSS -

CORRECT ANSWER A GOOD EXAMPLE OF RISK REDUCTION MIGHT BE:

A

WHEN ONE TAKES ACTION TO MINIMIZE THE SEVERITY OF A POTENTIAL LOSS

B

THE ELIMINATION OF THE EXPOSURE TO A SPECIFIC RISK

C

THE TRANSFER OF THE RISK TO AN INSURANCE COMPANY

D

INSURING ONLY THOSE RISKS THAT THREATEN THE FINANCIAL STABILITY OF THE

INSURED

B

ADMITTED - CORRECT ANSWER AN INSURER THAT IS AUTHORIZED TO DO

BUSINESS IN A PARTICULAR STATE IS SAID TO BE:

A

NON-ADMITTED

B

ADMITTED

C

DOMESTIC

D

FOREIGN

C

STOCK - CORRECT ANSWER WHICH INSURER'S OWNER RECEIVES TAXABLE

CORPORATE DIVIDENDS AS A RETURN OF PROFIT?

A

MUTUAL

B

RECIPROCAL

C

STOCK

D

FRATERNAL

B

ACCORDING TO THE LAW OF LARGE NUMBERS - CORRECT ANSWER IN

INSURANCE, WHEN THE NUMBER OF SIMILAR UNITS INCREASE, THE

PREDICTABILITY OF THE LOSS IMPROVES:

A

BECAUSE OF THE SIMILARITY OF UNITS IN LARGE QUANTITIES

B

ACCORDING TO THE LAW OF LARGE NUMBERS

C

BECAUSE OF ACCUMULATED EXPERIENCE

D

ACCORDING TO THE LAW OF AVERAGES

A

A UNILATERAL CONTRACT - CORRECT ANSWER A CONTRACT WHEREBY ONLY ONE

PARTY IS BOUND TO FUTURE PERFORMANCE, IS SAID TO BE:

A

A UNILATERAL CONTRACT

B

A BILATERAL CONTRACT

C

A CONDITIONAL CONTRACT

D

AN ALEATORY CONTRACT

A

CAL-GLBA - CORRECT ANSWER THE CALIFORNIA FINANCIAL INFORMATION

PRIVACY ACT IS SOMETIMES KNOWN AS:

A

CAL-GLBA

B

CA-FIPA

C

CA-HIPAA

D

CA-FCRA

B

INSURER - CORRECT ANSWER IN CALIFORNIA, ANY PERSON THAT

MANUFACTURES AND SELLS INSURANCE COVERAGE BY WAY OF INSURANCE

POLICIES OR CONTRACTS MAY BE AN:

A

INSURED

B

INSURER

C

AGENCY

D

AGENT

A

A RISK - CORRECT ANSWER IN THE INSURANCE WORLD, A POTENTIAL FOR A LOSS

IS SAID TO BE:

A

A RISK

B

A PERIL

C

A HAZARD

D

AN INSURABLE INTEREST

B

GROUP LIFE INSURANCE - CORRECT ANSWER AN INSURANCE PLAN OWNED BY

AN EMPLOYER, CREDITOR OR ASSOCIATION, PROVIDING COVERAGE FOR THE

EMPLOYEES, DEBTORS, OR MEMBERS, REFERS TO WHICH OF THE FOLLOWING?

A

ORDINARY LIFE INSURANCE

B

GROUP LIFE INSURANCE

C

INDUSTRIAL LIFE INSURANCE

D

INDIVIDUAL LIFE INSURANCE

A

A POLICY SUMMARY - CORRECT ANSWER A PERSONALIZED COMPUTER-

GENERATED ILLUSTRATION DETAILING PREMIUMS, CASH VALUES, INTEREST

RATES, AND SURRENDER VALUES IS CALLED __________.

A

A POLICY SUMMARY

B

SALES LITERATURE

C

AN ADVERTISEMENT

D

A HYPOTHETICAL

A

TO PAY THE CLAIM IN FULL SINCE THE CONDITIONS OF THE RECEIPT WERE FULLY

SATISFIED - CORRECT ANSWER A PRODUCER SUBMITS A COMPLETED

APPLICATION TO THE INSURER ALONG WITH THE PREMIUM CHECK AFTER GIVING

THE APPLICANT A CONDITIONAL RECEIPT. IF THE APPLICANT COMPLETES THE

REQUIRED MEDICAL EXAM, BUT DIES PRIOR TO THE INSURER ISSUING A POLICY

AS APPLIED FOR, WHAT IS THE INSURER'S RESPONSIBILITY?

A

TO PAY THE CLAIM IN FULL SINCE THE CONDITIONS OF THE RECEIPT WERE FULLY

SATISFIED

B

TO REFUND PREMIUMS PAID LESS COSTS ASSOCIATED WITH ANY MEDICAL

EXAMS

C

TO KEEP THE PREMIUM AND REJECT THE CLAIM

D

TO REFUND ANY AND ALL PREMIUMS PAID

D

CONTACT THE CLIENT TO ASSURE THAT THEY UNDERSTAND THE TRANSACTION -

CORRECT ANSWER IN A REPLACEMENT TRANSACTION, ALL OF THE FOLLOWING

ARE INSURER DUTIES AND RESPONSIBILITIES, EXCEPT:

A

MAINTAIN COPIES OF THE INFORMATION PROVIDED BY THE PRODUCER

B

ABIDE BY THE STATE REQUIRED HOLDING PERIOD FOR ALL REPLACEMENT

DOCUMENTATION

C

NOTIFY THE EXISTING INSURER

D

CONTACT THE CLIENT TO ASSURE THAT THEY UNDERSTAND THE TRANSACTION

A

1,000 - CORRECT ANSWER THE MORTALITY RATE IS BASED ON MORTALITY

TABLES WHICH SHOW LIFE EXPECTANCY AND THE DEATH RATE PER _______

PEOPLE LIVING IN THE U.S.

A

1,

B

C

10,

D

100,

D

NAME AND OCCUPATION - CORRECT ANSWER WHICH OF THE FOLLOWING IS

INCLUDED IN PART I OF A LIFE INSURANCE APPLICATION?

A

FAMILY HEALTH HISTORY

B

HOSPITALIZATIONS AND SURGERIES

C

PRESENT HEALTH

D

NAME AND OCCUPATION

C

ESTATE CONSERVATION - CORRECT ANSWER BUYING LIFE INSURANCE SO THAT

THE DEATH BENEFIT WILL BE AVAILABLE FOR PAYING ESTATE TAXES DUE UPON

THE DEATH OF THE INSURED IS KNOWN AS:

A

SURVIVOR PROTECTION

B

ESTATE CREATION

C

ESTATE CONSERVATION

D

PRENEED PLANNING

D

THE CASH VALUE - CORRECT ANSWER MONEY ACCUMULATED IN A PERMANENT

POLICY THAT THE POLICYOWNER MAY BORROW VIA A POLICY LOAN OR RECEIVE

IF THE POLICY IS SURRENDERED, REFERS TO:

A

SAVINGS ACCOUNT

B

ACCUMULATED AT INTEREST ACCOUNT

C

DEFERRED SAVINGS ACCOUNT

D

THE CASH VALUE

C

DECREASING TERM RIDER - CORRECT ANSWER SEAN HAS A HOME WITH A

MORTGAGE. HE NEEDS LIFE INSURANCE TO PROTECT HIS FAMILY BUT ALSO

WANTS TO LEAVE THEM WITHOUT A MORTGAGE PAYMENT IF HE DIES. IDEALLY

WHICH OF THE FOLLOWING RIDERS SHOULD HE ACQUIRE?

A

FAMILY RIDER

B

INCREASING TERM RIDER

C

DECREASING TERM RIDER

D

LEVEL TERM RIDER

A

THE INSURER REFUNDS IT - CORRECT ANSWER AN INSURED OWNS A $50,

PERMANENT LIFE POLICY THAT SHE PURCHASED 4 YEARS AGO THAT HAS A

DISABILITY WAIVER OF PREMIUM. THE INSURED BECOMES DISABLED AND PAYS

PREMIUMS DURING THE WAITING PERIOD UNTIL THE WAIVER BEGINS. ONCE THE

WAIVER BEGINS, WHAT HAPPENS TO THE PREMIUMS SHE PAID DURING THE

WAITING PERIOD?

A

THE INSURER REFUNDS IT

B

IT IS ADDED TO THE POLICY'S CASH VALUES

C

IT IS HELD IN ESCROW UNTIL THE DISABILITY IS OVER THEN REFUNDED

D

IT IS KEPT BY THE INSURER AS PART OF THE COST OF PROVIDING THE BENEFIT

B

PERMANENT - CORRECT ANSWER WHOLE LIFE IS ALSO KNOWN AS ________

PROTECTION.

A

TEMPORARY

B

PERMANENT

C

ABSOLUTE

D

PERIODIC

A

JOINT SURVIVORSHIP - CORRECT ANSWER ALL OF THE FOLLOWING POLICIES END

WHEN AN INSURED DIES, EXCEPT:

A

JOINT SURVIVORSHIP

B

JOINT LIFE

C

VARIABLE UNIVERSAL LIFE

D

JUVENILE LIFE

A

$250,000 - CORRECT ANSWER A MARRIED COUPLE PURCHASES A $250,000 JOINT

LIFE POLICY. WHEN THE OLDER OF THE TWO DIES, WHAT IS THE AMOUNT

PAYABLE TO THE SURVIVOR?

A

$250,

B

ZERO

C

$500,

D

$125,

D

SEPARATE ACCOUNT - CORRECT ANSWER THE OWNER OF A VARIABLE LIFE

POLICY MAY ALLOCATE THE PREMIUM INTO A SUB-ACCOUNT WHICH IS OWNED

BY THE INSURER, THIS SUB-ACCOUNT IS A PART OF WHAT IS ALSO KNOWN AS

THE:

A

SIDE FUND

B

ACCUMULATION ACCOUNT

C

ALLOCATION ACCOUNT

D

SEPARATE ACCOUNT

C

INCREASING TERM - CORRECT ANSWER WHICH TYPE OF TERM PROTECTION HAS

AN INCREASING FACE VALUE AS THE INSURED GETS OLDER?

A

LEVEL TERM

B

RENEWABLE TERM

C

INCREASING TERM

D

CONVERTIBLE TERM

B

DEATH BENEFIT - CORRECT ANSWER LEVEL, DECREASING AND INCREASING TERM

REFER TO WHICH POLICY FEATURE?

A

CASH VALUE

B

DEATH BENEFIT

C

PREMIUM

D

RENEWABLE AND CONVERTIBLE

D

TAKE A POLICY LOAN FROM THE INSURER - CORRECT ANSWER BERT IS THE

OWNER AND INSURED OF A TRADITIONAL WHOLE LIFE INSURANCE POLICY HE

PURCHASED 20 YEARS AGO. HE HAS NEVER MISSED A PREMIUM PAYMENT. HE

WOULD LIKE TO BUY A NEW CAR BUT HIS BANK ACCOUNT IS RUNNING LOW.

HOW CAN HE OBTAIN THE NECESSARY FUNDS WHILE STILL MAINTAINING

COVERAGE?

A

REDUCE THE POLICY'S FACE AMOUNT WHICH WILL REDUCE HIS PREMIUM

PAYMENT

B

SURRENDER PART OF THE POLICY AND FOR THE BALANCE TAKE A POLICY LOAN

C

SURRENDER THE POLICY BACK TO THE INSURER

D

TAKE A POLICY LOAN FROM THE INSURER

B

IT CAN PROVIDE ADDITIONAL TEMPORARY COVERAGE ON THE INSURED OR ON

OTHER MEMBERS OF THE FAMILY - CORRECT ANSWER WHICH OF THE

FOLLOWING IS TRUE OF A TERM RIDER WHEN ATTACHED TO A PERMANENT LIFE

POLICY?

A

IT ALLOWS THE POLICY TO ACHIEVE PAID UP STATUS AT THE END OF THE TERM

B

IT CAN PROVIDE ADDITIONAL TEMPORARY COVERAGE ON THE INSURED OR ON

OTHER MEMBERS OF THE FAMILY

C

IT ONLY PAYS OUT A DEATH BENEFIT IN CASES OF ACCIDENTAL DEATH

D

IT ALWAYS IS IN THE AMOUNT OF THE BASE POLICY

D

ACCIDENTAL DEATH AND DISMEMBERMENT - CORRECT ANSWER WHICH TYPE OF

RIDER PAYS OUT A CAPITAL SUM IN CASE AN INSURED LOSES A LIMB OR THEIR

EYESIGHT?

A

ACCIDENTAL DEATH

B

RETURN OF PREMIUM

C

DISABILITY BENEFIT

D

ACCIDENTAL DEATH AND DISMEMBERMENT

A

TYPICALLY 6 MONTHS AFTER THE DISABILITY OCCURS - CORRECT ANSWER IF A

POLICYOWNER HAS A WHOLE LIFE INSURANCE POLICY WITH A DISABILITY

WAIVER OF PREMIUM RIDER, WHEN DOES THE RIDER BENEFIT START IF A

QUALIFYING DISABILITY SHOULD OCCUR?

A

TYPICALLY 6 MONTHS AFTER THE DISABILITY OCCURS

B

IMMEDIATELY

C

AFTER THE DOCTOR CERTIFIES THE DISABILITY

D

ONE YEAR AFTER THE CLAIM FORMS ARE RECEIVED BY THE INSURER

D

A SPECIFIED PERIOD OF TIME - CORRECT ANSWER TERM LIFE INSURANCE IS

DESIGNED TO PROVIDE COVERAGE FOR ___________.

A

FOR ONE YEAR

B

TO AGE 65

C

AN ENTIRE LIFETIME

D

A SPECIFIED PERIOD OF TIME

C

AS LONG AS THERE IS SUFFICIENT CASH VALUE TO COVER POLICY EXPENSES

WHEN DUE, THE INSURED IS NOT REQUIRED TO PAY THE PLANNED PREMIUM -

CORRECT ANSWER WHICH OF THE FOLLOWING IS A TRUE CHARACTERISTIC OF A

VARIABLE UNIVERSAL LIFE POLICY?

A

THE POLICY REQUIRES ONLY A LIFE LICENSE TO SELL

B

THE INSURER BEARS ALL RISKS IN ACCUMULATING CASH VALUE

C

AS LONG AS THERE IS SUFFICIENT CASH VALUE TO COVER POLICY EXPENSES

WHEN DUE, THE INSURED IS NOT REQUIRED TO PAY THE PLANNED PREMIUM

D

THE POLICY HAS A FIXED PREMIUM SCHEDULE

C

ANY REASON - CORRECT ANSWER FOR WHICH OF THE FOLLOWING REASONS

MAY AN INSURED RETURN THE POLICY FOR A FULL REFUND WITHIN THE FREE

LOOK PERIOD?

A

DEATH OF THE AGENT

B

INCREASE IN PREMIUM

C

ANY REASON

D

DECLINE IN FINANCIAL RATING OF THE INSURANCE COMPANY

A

THE SURRENDER CHARGE - CORRECT ANSWER ON A VARIABLE UNIVERSAL LIFE

POLICY WHAT IS THE DIFFERENCE BETWEEN THE CASH VALUE AND THE CASH

SURRENDER VALUES?

A

THE SURRENDER CHARGE

B

THE INVESTMENT PERFORMANCE

C

THE AMOUNT OF ANY OUTSTANDING POLICY LOAN

D

THE INTEREST EARNED

D

OWNERSHIP PROVISION - CORRECT ANSWER ___________ IN A POLICY ALLOW

THE OWNER TO NAME THE BENEFICIARY, CHOOSE A DIVIDEND OPTION OR

SETTLEMENT OPTION, OR BORROW AGAINST THE CONTRACT.

A

INSURING CLAUSE

B

CONSIDERATION CLAUSE

C

INCONTESTABLE CLAUSE

D

OWNERSHIP PROVISION

B

INSURING CLAUSE - CORRECT ANSWER WHICH OF THE FOLLOWING STATES THE

OBLIGATION OF THE INSURER AND THE RISK THAT IS CONSIDERED IN A LIFE

INSURANCE POLICY?

A

CONSIDERATION CLAUSE

B

INSURING CLAUSE

C

ENTIRE CONTRACT CLAUSE

D

EXCLUSIONS PROVISION

D

2 - CORRECT ANSWER AFTER A LIFE INSURANCE POLICY HAS BEEN IN FORCE FOR

MORE THAN _____ YEARS THE POLICY IS CONSIDERED INCONTESTABLE.

A 1 B 3 C 4 D 2 C

PURCHASE A DECREASING BENEFIT POLICY THAT MATCHES THE LOAN

REPAYMENT SCHEDULE - CORRECT ANSWER IN ORDER TO MAKE SURE THAT A

CREDITOR OF THE INSURED IS NOT PAID MORE THAN THE OUTSTANDING LOAN

AT TIME OF CLAIM, THE POLICYOWNER SHOULD:

A

INDICATE THE PERCENTAGE OF THE FACE AMOUNT THE CREDITOR WILL RECEIVE

B

SPECIFY A DOLLAR AMOUNT THE CREDITOR SHOULD RECEIVE AT TIME OF CLAIM

C

PURCHASE A DECREASING BENEFIT POLICY THAT MATCHES THE LOAN

REPAYMENT SCHEDULE

D

NAME THE CREDITOR AS A PRIMARY BENEFICIARY

A

WHOLE LIFE - CORRECT ANSWER AN INSURED FORGETS TO PAY HIS INSURANCE

PREMIUM. INSTEAD OF THE POLICY LAPSING, THE PREMIUM IS PAID BY THE

COMPANY. THIS WOULD SUGGEST THAT A __________ POLICY WAS PURCHASED.

A

WHOLE LIFE

B

DECREASING TERM

C

RENEWABLE TERM

D

LEVEL TERM

B

POLICYOWNER - CORRECT ANSWER THE ___________ DECIDES WHICH DIVIDEND

OPTION IS IN EFFECT AND CAN CHANGE THEIR ELECTION AT ANY TIME.

A

BENEFICIARY

B

POLICYOWNER

C

BOARD OF DIRECTORS

D

INSURER

B

NO CLAIM IS PAID OUT - CORRECT ANSWER AN AUNT AND UNCLE PURCHASE A

LIFE INSURANCE POLICY ON THEIR NIECE, FOR WHOM THEY ARE THE LEGAL

GUARDIANS. BOTH GUARDIANS PERISH IN AN ACCIDENT SOME TIME LATER. WHO

RECEIVES THE DEATH BENEFIT?

A

THE PRIMARY BENEFICIARY

B

NO CLAIM IS PAID OUT

C

THE CONTINGENT BENEFICIARY

D

THE NIECE'S ESTATE

B

USING A LIFE INSURANCE POLICY AS COLLATERAL FOR A LOAN - CORRECT

ANSWER ALL OF THE FOLLOWING ARE EXAMPLES OF AN ABSOLUTE

ASSIGNMENT, EXCEPT:

A

A BUSINESS PERMITS THE CHANGE OF OWNERSHIP OF A COMPANY OWNED

POLICY OVER TO A RETIRING EXECUTIVE

B

USING A LIFE INSURANCE POLICY AS COLLATERAL FOR A LOAN

C

A COURT ORDERS THE EXISTING POLICYOWNER TO CHANGE IT TO THEIR EX-

SPOUSE

D

A GRANDPARENT SIGNS OVER OWNERSHIP OF A JUVENILE POLICY TO THEIR

GRANDCHILD WHO IS NOW REACHED AGE OF MAJORITY

B

PREMIUM REDUCTION - CORRECT ANSWER A LIFE INSURANCE POLICYOWNER

RECEIVES AN ANNUAL DIVIDEND. ONE OPTION FOR THIS DIVIDEND IS TO USE IT

TO OFFSET THE ANNUAL OBLIGATION TO THE INSURER. WHAT IS THIS OPTION

CALLED?

A

CASH

B

PREMIUM REDUCTION

C

PAID UP ADDITIONS

D

CASH SURRENDER

B

IRREVOCABLE - CORRECT ANSWER WHICH OF THE FOLLOWING BENEFICIARY

DESIGNATIONS PREVENTS A POLICYOWNER FROM ASSIGNING THE POLICY,

TAKING A POLICY LOAN, OR SURRENDERING THE POLICY WITHOUT THE

BENEFICIARIES CONSENT?

A

INCONTESTABLE

B

IRREVOCABLE

C

CLASS

D

NAMED

A

COLLATERAL ASSIGNMENT - CORRECT ANSWER THE BANK MAY REQUIRE ITS

BORROWERS TO HAVE A LIFE INSURANCE POLICY TO SECURE A LOAN IN THE

EVENT OF THE BORROWER'S DEATH. WHICH PROVISION GIVES THE BANK

PROPORTIONAL PROTECTION BUT NOT CONTROL OF THE POLICY?

A

COLLATERAL ASSIGNMENT

B

CONSIDERATION CLAUSE

C

POLICY LOAN PROVISION

D

ENTIRE CONTRACT CLAUSE

B

DEATH BENEFIT WILL BE WHAT THE PREMIUM PAID WOULD HAVE PURCHASED

AT ISSUANCE AT THE CORRECT AGE - CORRECT ANSWER IF AN APPLICANT FOR

LIFE INSURANCE MISSTATES HIS AGE ON THE APPLICATION, WHAT WOULD BE

THE CONSEQUENCE IF/WHEN IT IS DISCOVERED?

A

THE POLICY WILL BE VOIDED

B

DEATH BENEFIT WILL BE WHAT THE PREMIUM PAID WOULD HAVE PURCHASED

AT ISSUANCE AT THE CORRECT AGE

C

REAL AGE DIVIDED BY ACTUAL AGE, MULTIPLIED BY DEATH BENEFIT

D

PREMIUMS REFUNDED WITH INTEREST, NO DEATH BENEFIT PAID

B

SETTLEMENT - CORRECT ANSWER __________ OPTIONS ALLOW FOR THE

DISTRIBUTION OF THE LIFE INSURANCE DEATH BENEFIT, OR ENDOWMENT

CONTRACT FACE AMOUNT AT MATURITY, TO THE NAMED BENEFICIARY OR

CONTRACT OWNER, AS THE SITUATION WARRANTS.

A

DIVIDEND

B

SETTLEMENT

C

NONFORFEITURE

D

ACCUMULATION

C

LUMP SUM - CORRECT ANSWER INSTEAD OF WAITING TO RECEIVE HER

PAYMENTS OVER TIME JEANNE DECIDES TO OBTAIN THE GREATEST AMOUNT OF

MONEY OUT OF HER ANNUITY IMMEDIATELY. WHICH OPTION DID SHE CHOOSE?

A

STRAIGHT LIFE OPTION (LIFE INCOME)

B

LIFE INCOME PERIOD CERTAIN

C

LUMP SUM

D

LIFE INCOME WITH REFUND

C

SINGLE PREMIUM DEFERRED ANNUITY - CORRECT ANSWER A LUMP SUM OF

MONEY IS PLACED INTO AN ACCOUNT FROM WHICH THE ANNUITANT WILL

DRAW PERIODIC BENEFITS BEGINNING MORE THAN A YEAR FROM THE DATE OF

PURCHASE. THIS DESCRIBES A:

A

FLEXIBLE PREMIUM DEFERRED ANNUITY

B

FLEXIBLE PREMIUM IMMEDIATE ANNUITY

C

SINGLE PREMIUM DEFERRED ANNUITY

D

SINGLE PREMIUM IMMEDIATE ANNUITY

D

VARIABLE - CORRECT ANSWER GENERALLY, WHICH OF THE FOLLOWING

ANNUITIES IS NOT DESIGNED TO GUARANTEE THE PRINCIPAL VALUE OF THE

POLICY IN STABLE INTEREST RATE ENVIRONMENTS?

A

FIXED

B

MARKET VALUE ADJUSTMENT

C

INDEXED

D

VARIABLE

B

NOTHING - CORRECT ANSWER UNDER AN ANNUITY WITH A JOINT LIFE PAYMENT

OPTION, WHAT WILL THE SURVIVOR RECEIVE UPON THE DEATH OF THE FIRST

ANNUITANT?

A

THE UNDISTRIBUTED BALANCE

B

NOTHING

C

THE SAME AMOUNT THEY WERE RECEIVING TOGETHER

D

THE REMAINING PERIOD CERTAIN

A

PERIODIC, FLEXIBLE - CORRECT ANSWER ANNUITIES MAY BE FUNDED WITH

EITHER A LUMP SUM OR ON EITHER A ______ OR A ______ BASIS.

A

PERIODIC, FLEXIBLE

B

LIFE, PERIODIC

C

PERMANENT, TEMPORARY

D

GUARANTEED, DISCRETIONARY

A

ANNUITIES - CORRECT ANSWER WHICH PRODUCT, OFFERED BY INSURERS IS

SPECIFICALLY DESIGNED TO ALLOW AN INDIVIDUAL'S SAVINGS TO BE

DISTRIBUTED TO HIM/HER PERIODICALLY OVER HIS/HER ENTIRE LIFE,

REGARDLESS OF HOW LONG HE/SHE LIVES?

A

ANNUITIES

B

PARTICIPATING WHOLE LIFE

C

UNIVERSAL LIFE INSURANCE

D

VARIABLE LIFE INSURANCE

A

CROSS PURCHASE - CORRECT ANSWER A(N)__________ PLAN IS WHEN BUSINESS

PARTNERS BUY LIFE INSURANCE POLICIES ON ONE ANOTHER.

A

CROSS PURCHASE

B

ENTITY

C

PARTNERSHIP

D

INDUSTRIAL

D

THIRD-PARTY OWNERSHIP - CORRECT ANSWER A GRANDPARENT PURCHASES A

LIFE INSURANCE POLICY ON A GRANDDAUGHTER THIS IS AN EXAMPLE OF

_________.

A

TWO PARTY OWNERSHIP

B

KEY PERSON INSURANCE

C

WEALTH TRANSFER

D

THIRD-PARTY OWNERSHIP

B

ACTUARIAL VALUE OF CONTRIBUTIONS IS RELATED TO ACTUARIAL VALUE OF

BENEFITS - CORRECT ANSWER ALL ARE TRUE REGARDING FUNDING OF SOCIAL

SECURITY, EXCEPT:

A

THE EMPLOYER WITHHOLDS THE EMPLOYEE'S TAX AND REMITS IT WITH THE

EMPLOYER'S PORTION

B

ACTUARIAL VALUE OF CONTRIBUTIONS IS RELATED TO ACTUARIAL VALUE OF

BENEFITS

C

THE FUNDS ARE KEPT IN A TRUST FUND AND INVESTED IN GOVERNMENT

SECURITIES

D

SELF-EMPLOYED INDIVIDUALS PAY BOTH THE EMPLOYER AND EMPLOYEE

AMOUNTS

A

A BUSINESS OWNER BUYING A LIFE POLICY ON HIS OWN LIFE - CORRECT ANSWER

WHICH OF THE FOLLOWING IS NOT AN EXAMPLE OF THIRD-PARTY OWNERSHIP?

A

A BUSINESS OWNER BUYING A LIFE POLICY ON HIS OWN LIFE

B

A KEY EMPLOYEE POLICY

C

A POLICY USED TO FUND A BUY-SELL AGREEMENT

D

A PARENT PURCHASING A POLICY ON THE LIFE OF HIS OR HER CHILD

C

RETIREMENT, DEATH, AND SURVIVOR - CORRECT ANSWER SOCIAL SECURITY

BENEFITS PROVIDED ARE:

A

RETIREMENT, SURVIVORS, AND FICA

B

RETIREMENT, DISABILITY, AND UNEMPLOYMENT

C

RETIREMENT, DEATH, AND SURVIVOR

D

RETIREMENT, DEATH, AND DEPENDENT CARE

A

ACCELERATED BENEFIT (LIVING NEED) - CORRECT ANSWER IF, AS THE RESULT OF

AN INJURY OR ILLNESS, THE INSURED IS DEEMED TO BE TERMINAL (I.E., EXPECTED

TO DIE WITHIN 1 OR 2 YEARS), WHAT RIDER ADDED TO A LIFE INSURANCE POLICY

WOULD ADVANCE A PORTION OF THE FACE VALUE?

A

ACCELERATED BENEFIT (LIVING NEED)

B

DISABILITY RIDER

C

RETURN OF CASH VALUE RIDER

D

VIATICAL RIDER

B

10 - CORRECT ANSWER IF FUNDS ARE PREMATURELY WITHDRAWN FROM A

MODIFIED ENDOWMENT CONTRACT (MEC) THEY ARE SUBJECT TO A _____%

PENALTY ON ANY GAINS.

A

B

C

D

D

THE AMOUNT OF THE ACCELERATED PAYMENT, THE REMAINING DEATH BENEFIT

AND CASH VALUES - CORRECT ANSWER IN THE EVENT THAT AN INSURED

RECEIVES A PERIODIC BENEFIT AS THE RESULT OF EXERCISING THE ACCELERATED

DEATH BENEFIT RIDER, WHAT INFORMATION MUST THE INSURER PROVIDE TO

THE INSURED?

A

THE AMOUNT OF TAXABLE INCOME THAT THEY WILL BE REPORTING TO THE IRS

B

THE LIFE EXPECTANCY OF THE INSURED ON A SEMI-ANNUAL BASIS

C

VERIFICATION AND UPDATE OF THE POLICY OWNERSHIP AND BENEFICIARY

DESIGNATIONS

D

THE AMOUNT OF THE ACCELERATED PAYMENT, THE REMAINING DEATH BENEFIT

AND CASH VALUES

A

TAX AND 10% PENALTY TAX ON THE WITHDRAWAL THAT REPRESENTS EARNINGS

- CORRECT ANSWER IF AN ANNUITANT WITHDRAWS FUNDS FROM THEIR

ANNUITY PRIOR TO AGE 59 1/2 WHAT IS THE TAX CONSEQUENCE?

A

TAX AND 10% PENALTY TAX ON THE WITHDRAWAL THAT REPRESENTS EARNINGS

B

TAX ON THE TAX DEFERRED PORTION OF THE WITHDRAWAL ALONG WITH A 15%

TAX PENALTY

C

TAX ON COST BASIS AND 10% TAX PENALTY ON THE TAX DEFERRED PORTION OF

THE WITHDRAWAL

D

TAX ON THE ENTIRE WITHDRAWAL PLUS A 10% TAX PENALTY

C

59 1/2 - CORRECT ANSWER DISTRIBUTIONS FROM A MODIFIED ENDOWMENT

CONTRACT (MEC) MADE ON OR AFTER AGE _____ ARE NOT SUBJECT TO ANY TAX

PENALTIES.

A

B

C