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Life Exam Prometric Questions and
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All of the following statements about the provisions in a typical modification clause in a life insurance policy are true EXCEPT: ✔✔The authority to bind the insurance company to policy changes or modifications is limited to specified persons.
The lowest total annual premium expenditure usually results when premiums are paid: ✔✔Annually
A preferred risk classification for a whole life insurance policy means that: ✔✔The premium rate is lower than the standard rate for the identical policy
The gross annual premium for a whole life insurance policy is the net premium: ✔✔Plus Expenses
Which one of the following statements about a life insurance policy rider regarding waiver of premiums and disability income is true? ✔✔In addition to waiving premiums during periods of disability, it provides a monthly income.
A withdrawal from a deferred annuity must be authorized by ✔✔The Owner
The beneficiary of a life insurance policy originally is indicated: ✔✔On the life insurance application
Life insurance helps meet estate planning objectives because it is: ✔✔A liquid asset at death
Current interest rates provide a reasonable basis for projecting cash values in a fixed annuity when: ✔✔The current interest rate is close to historical standards
Which provision can provide for the payment of life insurance benefits to the insured while living? ✔✔An accelerated benefit provision
Which one of the following statements about the application for life insurance is true? ✔✔It becomes a permanent part of the insurance contract.
A misleading life insurance policy illustration may result from any of the following EXCEPT ✔✔Reflecting the time value of money
Which one of the following statements is true if an insured purchases a limited payment whole life insurance policy? ✔✔The insured has lifetime protection.
When life insurance is being used to conserve a large estate that consists primarily of non-liquid assets, the primary use of the policy proceeds will be to ✔✔Pay estate taxes
If an insured with an ordinary whole life insurance policy is still living at policy maturity, the insurance company will ✔✔Pay the face amount of the policy
Education funds created by life insurance death benefits are designed to cover the cost of all of the following EXCEPT ✔✔Medical care
Which statement is true about life annuities? ✔✔The insurer uses the law of large numbers to predict life expectancy.
When an annuitant under a life-only annuity dies, what is the amount of the property interest in the contract that will be includable in the annuitant's gross estate? ✔✔zero
Compared to a joint life insurance policy, separate whole life insurance policies on each of the insureds typically result in: ✔✔Higher combined premiums
One parent purchases and is the owner of a juvenile life insurance policy on a child, with the other parent named as beneficiary. If the policy contains a payor benefit, who must become disabled before premiums will be waived? ✔✔Only the parent who purchased the policy
All of the following types of life insurance policies allow the policyowner to make changes in coverage without replacing the policy EXCEPT: ✔✔Modified premium whole life insurance
The trustees of a qualified retirement plan received notice of several claims against the accrued benefits of a key employee, age 52. The trustees must refuse to pay all of the following EXCEPT: ✔✔The Internal Revenue Service presenting an order for collection
An immediate annuity contract provides for: ✔✔The systematic liquidation of the principal and interest
All of the following statements about an accidental death benefit in a life insurance policy are true EXCEPT: ✔✔It is used only in term life insurance policies.
Group life insurance plans generally require participation by: ✔✔75% of eligible employees, under a contributory plan
When a terminated employee elects the conversion option under a group life insurance plan, the new policy premium is based on the: ✔✔Insurer's current rate for other individual applicants
Which qualified plan may be established by a business corporation? ✔✔A simplified employee pension (SEP)
All of the following factors influence the benefit payment amount under a life income annuity EXCEPT: ✔✔The annuitant's age on each contract anniversary
Death benefits under a survivorship life insurance policy covering two insureds are paid: ✔✔In full at the second insured's death
Once a contract is deemed to be a modified endowment contract (MEC), how long does it remain so? ✔✔Forever
Which financial element related to a fixed annuity contract tends to remain in the 3%-5% range? ✔✔The guaranteed minimum interest rate
Deferred annuities are normally purchased by individuals who ✔✔Want tax-deferred growth for retirement funds
Which one of the following factors is considered in determining the amount payable under the interest ONLY settlement option in life insurance policies? ✔✔The amount of the policy proceeds
If a life insurance policy is transferred to another person in exchange for valuable consideration, then the death proceeds may: ✔✔Lose their income tax exempt status
All of the following statements about universal life insurance are true EXCEPT: ✔✔Premiums must be paid on a monthly basis.
The insured died two years after discontinuing annual premium payments of $200 on a $20, whole life insurance policy with a $2,000 cash value and an automatic premium loan provision. How much will the insurer pay to the insured's beneficiary? ✔✔The $20,000 face amount less any policy loans
