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NV - Life Insurance Practice Final
Examination Latest Update Graded A+
Jason is the insured in a $100,000, 10 year renewable term policy. Soon after taking out the policy, he develops a serious heart condition. Which of the following statement is CORRECT?
a. Since the condition manifested after the policy was issued, he will not be able to renew his policy.
b. Jason will be able to renew his policy
c. It will be necessary for Jason to show evidence of insurability in order to renew the policy
d. If Jason renews his policy, it will be rated for his health condition. ✔✔b. Jason will be able to
renew his policy
Jane buys a $25,000 policy and her agent tells her that as long as she is approved, the coverage goes into effect immediately. What did Jane's agent give her?
a. Consideration
b. Conditional receipt
c. Return of premium
d. Binding receipt ✔✔b. Conditional receipt
The primary purpose of an annuity is to
a. liquidate the separate account of an investment portfolio
b. provide income for an individual's retirement
c. provide income for a beneficiary
d. create an estate immediately ✔✔a. liquidate the separate account of an investment portfolio
Under what circumstance would an insurance applicant be asked to submit a signed statement of continued good health?
a. When the initial premium is not submitted with the application
b. When the policy is underwritten as substandard
c. In order to receive a preferred rating
d. When an inspection report is ordered ✔✔a. When the initial premium is not submitted with
the application
When a firm established a contributor group term life insurance contract, what percentage test must be met for the participation
a. 50%
b. 60%
c. 75%
d. 100% ✔✔c 75%
All of the following are common life insurance policy provisions EXCEPT a(n)
a. entire contract clause
b. insuring clause
c. free look period
d. premium deductibility option ✔✔d. premium deductibility option
Which of the following statements concerning the Fair Credit Reporting Act is CORRECT
a. It provides that credit life insurance will be available to an applicant on an attained age basis
b. It provides additional funding for the cash savings value of a whole life policy
c. It requires that the applicant for insurance coverage will be informed if a consumer report is requested.
d. It offers protection against creditors if the applicant defaults on a loan ✔✔c. It requires that
the applicant for insurance coverage will be informed if a consumer report is requested.
The underwriting department of a life insurance company acquires information on an applicant for life insurance coverage from all of the following sources EXCEPT
a. an agent's report
b. the life insurance application
c. Dept of Motor Vehicles records
d. the Medical Information Bureau ✔✔c. Dept of Motor Vehicles records
To cover the contingency of a family breadwinner's death, all of the following would be appropriate applications for a decreasing term insurance policy EXCEPT to
a. ensure that the family's 5 year old son will have a source of funds for his college education
b. cover the family's mortgage
c. cover the family's car payments
d. ensure that the family's home improvement loan is covered ✔✔a. ensure that the family's 5
year old son will have a source
Pearl takes out a $100,000 permanent insurance policy on her life, naming her daughter, Juanita, as the beneficiary. Five years after the policy was issued, Pearl dies and Juanita submits a claim to the insurer for the death benefit. Upon reviewing the claim, the insurer discoverers that Pearl had made a number of misstatements on the original applications. The insurer will
a. deny the claim entirely
b. pay the full $100,000 to Juanita
c. calculate any additional costs the company incurred due to the misstatements, deduct them from the death proceeds, and pay Juanita the balance
d. require Juanita to substantiate the misstatements in order to be paid the full $100,000 ✔✔b.
pay the full $100,000 to Juanita
c. no less than $10,
d. the full death benefit after receiving the loan balance from the beneficiary ✔✔a. the face
amount minus the interest and loan amount
Which of the following is the most likely outcome if an individual who engages in a hazardous occupation applies for a life insurance policy
a. The application will be reject
b. Dividends normally paid will be withdrawn
c. The policy will be issued but rated up
d. A fixed period option must be implemented in order for the policy to be issued ✔✔c. The
policy will be issued but rated up
A retired person purchases an annuity for $90,000. One month later, he starts to receive payments. Based solely on these facts, what type of annuity does he have?
a. Immediate
b. Cash payment
c. Life only
d. Interest only ✔✔a. Immediate
An agreement to purchase a deceased partner's share of a business which is usually funded by life insurance best describes a
a. Keogh plan
b. split dollar plan
c. buy and sell agreement
d. key employee life insurane ✔✔c. buy and sell agreement
