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Florida Life Insurance Test Questions with Solution
1. S buys $100,000 whole life policy in 2003 and pays an annual premium of
$100. S dies five years later in 2008 and the insured pays the beneficiary $10,500. What kind of writer did S include on the policy?: A Return of permium rider
2. All of these statements about the Waiver of Premium provision are correct EXCEPT: Insured
must be eligible for Social Security disability for claim to be excepted
3. Which of these provisions require proof of insurability after a policy has lapsed?:
Reinstatement
4. S would like to use dividends from her life insurance policy to purchase paid-up
additions. All of these would be factors that determine how much coverage can be purchased EXCEPT: Beneficiary's age
5. What action can a policyholder take if an application for a bank loan requires collateral?:
Assign policy ownership to the bank
6. How do life insurance companies handle cases where the insured commit suicide with
in the contract's stated Contestable period?: Claims are denied under the Suicide clause of the policy
7. P is blinded in an industrial accident. Which provision of his life insurance policy will pay
a stated benefit amount?: Accidental Death and Dismemberment provision
8. B owns a Whole Life policy with a guaranteed insurability option that allows him to
purchase, without evidence of insurability, stated amounts of: Additional
2 / Whole Life coverage at specified times
9. How are surrender charges deducted in a life policy with a rear-end loaded provision?:
Deducted when the policy is discontinued
10. What does the ownership clause in a life insurance policy state?: Who the policy
owner is and what rights the policy owner is entitled to
11. A life insurance policy which ensures that the premiums will be paid if the
insured becomes disabled has what kind of rider attached?: Waiver of premium
12. A provision in a life insurance policy that pays the policyholder an amount that
does not surpass the guaranteed cash value is called the: Policy Loan provision
13. P died five years after purchasing a life policy. While investigating the claim,
the insurer discovered material misrepresentation made by P during the application process. Which of these actions will be in sure take?: Beneficiary will be paid the death benefit
14. All of the statement options involve the systematic liquidation of the death
proceeds in the event of the insured's death EXCEPT: Interest Only
15. Which statement is true in the regards to a policy loan?: Past-due interest on a policy
loan is added to the total debt
16. K has a life insurance policy where her husband is the beneficiary and her
daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where will the death proceeds be
4 / primary beneficiary had already died before the insured and contingent beneficiary?: Proceeds will go to the contingency beneficiary
25. Which of these statements is INCORRECT regarding the federal income tax
treatment of life insurance?: Entire cash surrender value is taxable
26. All of these are considered sources of underwriting information about an
applicant EXCEPT: Rating Services
27. When does the life insurance contract become affective of the initial premi-um is
not collected during the application process?: When producer delivers policy and collects initial premium
28. Why is an applicant signature required on the life insurance application?: To attest
that the statements on the application are accurate to the best of the applicants knowledge
29. T applies for a life insurance policy and is told by the producer that the insurer
is bound to the coverage as of the date of the application or medical examination, whichever is later. Assuming that he is an acceptable risk, what item is given to T?: Binding receipt
30. M completes an application for life insurance but does not pay the initial
premium. All of these actions must occur before M's policy goes into effect EXCEPT: Free- look period has expired
31. What action should a producer take if the initial premium is NOT submitted with the
application?: Forward the application to the end sure without the initial premium
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32. What is the purpose of the U.S.A. Patriot Act?: Detect and deter terrorism
33. On January 8, an applicant filled out an application for life insurance policy but
did not include the initial premium. The insurance company approved the application on January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective?: January 26
34. K is an agent who takes an application for individual life insurance and except
the check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective?: The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured
35. Information obtained from a phone conversation to the proposed insured can be
found in which of these reports?: Inspection report
36. Consumer reports requested by an underwriter during the application process of
a life insurance policy can be used to determine: Probability of making timely premium payments
37. P is a producer who notices five questions on a life application were not answered.
What action should P take?: Set up a meeting with the applicant to answer the remaining questions
38. When an insurance application is taken by a producer, which of these
statements is true?: Any changes made on the application require the applicants initials
