Question 1

Insurers use the law of large numbers to predict how many future losses will occur for a group. The basic principle of this law is:

Accepted Answer

A) The larger the number of elderly in the group, the greater the risk of paying out policies 
B) The larger the number of people in the group, the more predictable the loss 
C) The larger the number of young adults in the group, the greater the loss for the group 
D) The larger the number of people in the group, the more room for loss 
A) The larger the number of elderly in the group, the greater the risk of paying out policies 
B) The larger the number of people in the group, the more predictable the loss 
C) The larger the number of young adults in the group, the greater the loss for the group 
D) The larger the number of people in the group, the more room for loss

Question 2

Disclosure authorization must be given to applicants:

Accepted Answer

A) When the policy is written 
B) In advance 
C) With the first billing statement 
D) Only if requested 
A) When the policy is written 
B) In advance 
C) With the first billing statement 
D) Only if requested

Question 3

Whole life insurance policies are designed to provide protection for the whole life of the insured and have a variety of common characteristics. Which of the following are some of these common characteristics?

Accepted Answer

A) Non-forfeiture value and increased premiums 
B) Level face amount and level premiums 
C) Limited payment and single premiums 
D) Continuous premiums and decreased premiums 
A) Non-forfeiture value and increased premiums 
B) Level face amount and level premiums 
C) Limited payment and single premiums 
D) Continuous premiums and decreased premiums

Question 4

Policy replacements occur when a new life insurance policy is to be purchased. Which of the following is false about a replacement policy?

Accepted Answer

A) The replacement will be reissued with a reduction in cash value 
B) The replacement is amended to produce a reduction in the benefits 
C) The replacement of life insurance is not a legal practice. 
D) The replacement policy is disadvantageous to the consumer. 
A) The replacement will be reissued with a reduction in cash value 
B) The replacement is amended to produce a reduction in the benefits 
C) The replacement of life insurance is not a legal practice. 
D) The replacement policy is disadvantageous to the consumer.

Question 5

If an individual dies before deferred annuity payments can begin, who receives the annuity payments?

Accepted Answer

A) The beneficiary 
B) The bank 
C) The insurance company 
D) No one 
A) The beneficiary 
B) The bank 
C) The insurance company 
D) No one

Question 6

What is the purpose of an annuity?

Accepted Answer

A) To protect an individual against accidental death 
B) To protect an individual against early death 
C) To protect an individual against the risk of living too long 
D) To protect an individual against accidental dismemberment 
A) To protect an individual against accidental death 
B) To protect an individual against early death 
C) To protect an individual against the risk of living too long 
D) To protect an individual against accidental dismemberment

Question 7

A binding receipt makes the company liable for risk from the date of application. What is the typical specified time limit of coverage prior to the policy being issued or denied?

Accepted Answer

A) 7- 21 days 
B) 14-28 days 
C) 30 -60 days 
D) 60-90 days 
A) 7- 21 days 
B) 14-28 days 
C) 30 -60 days 
D) 60-90 days

Question 8

Tom leaves his estate to his three daughters using a per stirpes designation. The oldest daughter and executor of the estate, dies before Tom. When Tom dies, which of the following would be true of the oldest daughter's part of the estate?

Accepted Answer

A) The proceeds will be split between the remaining two sisters. 
B) Tom must change his policy to prevent the insurance company from collecting the money. 
C) The proceeds will be split between the two remaining daughters and Tom's estate. 
D) The proceeds will be split between the two remaining daughters and the beneficiary of the deceased daughter's estate. 
A) The proceeds will be split between the remaining two sisters. 
B) Tom must change his policy to prevent the insurance company from collecting the money. 
C) The proceeds will be split between the two remaining daughters and Tom's estate. 
D) The proceeds will be split between the two remaining daughters and the beneficiary of the deceased daughter's estate.

Question 9

Which of the following scenarios would be the best display of the producer's use of time and customer service when delivering a policy to a customer?

Accepted Answer

A) Kevin delivers the policy as soon as it is received in his office, making sure to give extra business cards for friends and family of the insured. 
B) Ed takes the policy to overnight it immediately to the insured with brochures, business cards, and a welcome letter. 
C) Jimmy carries the policy knowing he will see the insured later in the week at the football game where their sons play together. 
D) Jason calls the insured to schedule a time convenient for them to have the policy delivered and to have any questions answered. 
A) Kevin delivers the policy as soon as it is received in his office, making sure to give extra business cards for friends and family of the insured. 
B) Ed takes the policy to overnight it immediately to the insured with brochures, business cards, and a welcome letter. 
C) Jimmy carries the policy knowing he will see the insured later in the week at the football game where their sons play together. 
D) Jason calls the insured to schedule a time convenient for them to have the policy delivered and to have any questions answered.

Question 10

Lee is a server in a restaurant. This type of job makes his income fluctuate and sometimes he does not make his life insurance payments on time. On the 20th of the month, Lee's payment is 15 days overdue. Lee is in a fatal car wreck on his way home from work on the 30th of the month. As the beneficiary of Lee's policy, Janet should expect what to happen?

Accepted Answer

A) Payment of the policy less the missed premium 
B) Since the premium was not paid, there is no coverage 
C) Payment of the policy less the missed premium and the remaining balance of premiums 
D) Since the premium was not paid, a judge must determine what happens 
A) Payment of the policy less the missed premium 
B) Since the premium was not paid, there is no coverage 
C) Payment of the policy less the missed premium and the remaining balance of premiums 
D) Since the premium was not paid, a judge must determine what happens

Question 11

Which of the following would not be considered a limited purchase or extra premium occupation or hobby under the hazardous occupation or hobby exclusion?

Accepted Answer

A) Scuba diving 
B) Firefighter 
C) Auto racing 
D) Sky diving 
A) Scuba diving 
B) Firefighter 
C) Auto racing 
D) Sky diving

Question 12

When known facts are not disclosed, this is referred to as

Accepted Answer

A) Concealment 
B) Fraud 
C) Impersonation 
D) Misappropriation 
A) Concealment 
B) Fraud 
C) Impersonation 
D) Misappropriation

Question 13

In terms of quality underwriting, what are the basic guidelines of company underwriting?

Accepted Answer

A) Risk-based expense ratios 
B) Earnings and dividends 
C) Loss and expense ratios 
D) Errors and omissions 
A) Risk-based expense ratios 
B) Earnings and dividends 
C) Loss and expense ratios 
D) Errors and omissions

Question 14

What is double indemnity?

Accepted Answer

A) An additional amount of insurance to be paid to the beneficiary if the death of the insured is the result of an accident 
B) An additional amount of insurance to be paid to the company in case of an accidental death 
C) If the death of the insured is the result of a riot, insurrection, war, or crime, double indemnity voids the policy 
D) The prevention of the insured from engaging in work for profit. Double indemnity voids the policy if the insured cannot work. 
A) An additional amount of insurance to be paid to the beneficiary if the death of the insured is the result of an accident 
B) An additional amount of insurance to be paid to the company in case of an accidental death 
C) If the death of the insured is the result of a riot, insurrection, war, or crime, double indemnity voids the policy 
D) The prevention of the insured from engaging in work for profit. Double indemnity voids the policy if the insured cannot work.

Question 15

Compared to a life annuity period certain, a temporary annuity certain varies to what degree?

Accepted Answer

A) Life annuity period certain pays out for a specified period of time 
B) Life annuities pay out increasing payments for the life of the survivor 
C) Temporary annuity certain pays out for a specified time 
D) Temporary annuity certain pays out increasing payments for the life of the survivor 
A) Life annuity period certain pays out for a specified period of time 
B) Life annuities pay out increasing payments for the life of the survivor 
C) Temporary annuity certain pays out for a specified time 
D) Temporary annuity certain pays out increasing payments for the life of the survivor

Question 16

What is it called when an ordinary life policy has premium obligations redistributed so that they are lower during the first 3-5 years of the policy?

Accepted Answer

A) Index-linked policies 
B) Graded premium plans 
C) Multiple protection 
D) Modified premium policy 
A) Index-linked policies 
B) Graded premium plans 
C) Multiple protection 
D) Modified premium policy

Question 17

Fred owns a 10 year Market-Value Adjusted Annuity. If Fred decides to cash in his contract after four years and the market values decreased by 4% during that time, what would the market value adjustment be for the contract?

Accepted Answer

A) The market value adjustment would be positive and help offset the surrender charge. 
B) The market value adjustment would be negative and increase the surrender charge. 
C) The market value adjustment would be unchanged and the surrender charge constant. 
D) The market value adjustment would be positive and eliminate the surrender charge. 
A) The market value adjustment would be positive and help offset the surrender charge. 
B) The market value adjustment would be negative and increase the surrender charge. 
C) The market value adjustment would be unchanged and the surrender charge constant. 
D) The market value adjustment would be positive and eliminate the surrender charge.

Question 18

What type of policy may be renewed at the end of a specified period of time for another term period without evidence of insurability?

Accepted Answer

A) Level Term 
B) Reentry Term 
C) Increasing Term 
D) Renewable Term 
A) Level Term 
B) Reentry Term 
C) Increasing Term 
D) Renewable Term

Question 19

Risks are not all equally insurable. As such, insurers prepare for losses using specific characteristics making fairly predictable rate of loss estimates. Which of the following is one of these characteristics?

Accepted Answer

A) The loss must be certain 
B) Loss must include perils of war, nuclear risks, and floods 
C) Loss must be ascertainable 
D) Any loss of paid wages 
A) The loss must be certain 
B) Loss must include perils of war, nuclear risks, and floods 
C) Loss must be ascertainable 
D) Any loss of paid wages

Question 20

Janet's husband died leaving her the sole beneficiary of his life insurance policy to be paid out over the next 20 years. Once this period has ended, all the proceeds will be paid out. What type of option has Janet's husband placed on this policy?

Accepted Answer

A) Life income option 
B) Fixed amount option 
C) Interest only option 
D) Fixed period option 
A) Life income option 
B) Fixed amount option 
C) Interest only option 
D) Fixed period option

Insurers use the law of large numbers to predict how many future losses will occur for a group. The basic principle of this law is:

Disclosure authorization must be given to applicants:

Whole life insurance policies are designed to provide protection for the whole life of the insured and have a variety of common characteristics. Which of the following are some of these common characteristics?

Policy replacements occur when a new life insurance policy is to be purchased. Which of the following is false about a replacement policy?

If an individual dies before deferred annuity payments can begin, who receives the annuity payments?

What is the purpose of an annuity?

A binding receipt makes the company liable for risk from the date of application. What is the typical specified time limit of coverage prior to the policy being issued or denied?

Tom leaves his estate to his three daughters using a per stirpes designation. The oldest daughter and executor of the estate, dies before Tom. When Tom dies, which of the following would be true of the oldest daughter's part of the estate?

Which of the following scenarios would be the best display of the producer's use of time and customer service when delivering a policy to a customer?

Which of the following would not be considered a limited purchase or extra premium occupation or hobby under the hazardous occupation or hobby exclusion?

When known facts are not disclosed, this is referred to as

In terms of quality underwriting, what are the basic guidelines of company underwriting?

What is double indemnity?

Compared to a life annuity period certain, a temporary annuity certain varies to what degree?

What is it called when an ordinary life policy has premium obligations redistributed so that they are lower during the first 3-5 years of the policy?

Fred owns a 10 year Market-Value Adjusted Annuity. If Fred decides to cash in his contract after four years and the market values decreased by 4% during that time, what would the market value adjustment be for the contract?

What type of policy may be renewed at the end of a specified period of time for another term period without evidence of insurability?

Risks are not all equally insurable. As such, insurers prepare for losses using specific characteristics making fairly predictable rate of loss estimates. Which of the following is one of these characteristics?

Janet's husband died leaving her the sole beneficiary of his life insurance policy to be paid out over the next 20 years. Once this period has ended, all the proceeds will be paid out. What type of option has Janet's husband placed on this policy?

Health: Disability

Health: Health and Dental

Health: Health Maintenance Organizations

Health: Tax Issues in Life Insurance

Health: Theory in Life Insurance

Comprehensive Examination: English and Language Usage

Comprehensive Examination: Mathematics

Comprehensive Examination: Reading

Comprehensive Examination: Science

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Exam 1: Health: Health and Life Insurance

Insurers use the law of large numbers to predict how many future losses will occur for a group. The basic principle of this law is:

Disclosure authorization must be given to applicants:

Whole life insurance policies are designed to provide protection for the whole life of the insured and have a variety of common characteristics. Which of the following are some of these common characteristics?

Policy replacements occur when a new life insurance policy is to be purchased. Which of the following is false about a replacement policy?

If an individual dies before deferred annuity payments can begin, who receives the annuity payments?

What is the purpose of an annuity?

A binding receipt makes the company liable for risk from the date of application. What is the typical specified time limit of coverage prior to the policy being issued or denied?

Tom leaves his estate to his three daughters using a per stirpes designation. The oldest daughter and executor of the estate, dies before Tom. When Tom dies, which of the following would be true of the oldest daughter's part of the estate?

Which of the following scenarios would be the best display of the producer's use of time and customer service when delivering a policy to a customer?

Which of the following would not be considered a limited purchase or extra premium occupation or hobby under the hazardous occupation or hobby exclusion?

When known facts are not disclosed, this is referred to as

In terms of quality underwriting, what are the basic guidelines of company underwriting?

What is double indemnity?

Compared to a life annuity period certain, a temporary annuity certain varies to what degree?

What is it called when an ordinary life policy has premium obligations redistributed so that they are lower during the first 3-5 years of the policy?

Fred owns a 10 year Market-Value Adjusted Annuity. If Fred decides to cash in his contract after four years and the market values decreased by 4% during that time, what would the market value adjustment be for the contract?

What type of policy may be renewed at the end of a specified period of time for another term period without evidence of insurability?

Risks are not all equally insurable. As such, insurers prepare for losses using specific characteristics making fairly predictable rate of loss estimates. Which of the following is one of these characteristics?

Janet's husband died leaving her the sole beneficiary of his life insurance policy to be paid out over the next 20 years. Once this period has ended, all the proceeds will be paid out. What type of option has Janet's husband placed on this policy?

Health: Disability

Health: Health and Dental

Health: Health Maintenance Organizations

Health: Tax Issues in Life Insurance

Health: Theory in Life Insurance

Comprehensive Examination: English and Language Usage

Comprehensive Examination: Mathematics

Comprehensive Examination: Reading

Comprehensive Examination: Science

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