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WorksheetsMissed Insurance Questions
Total questions: 59
Worksheet time: 30mins
Which is TRUE about the cash surrender nonforfeiture option?
After the cash surrender, the insured is covered for a grace period of one month.
The policy remains active for some time after the policyholder opts for cash surrender.
The policyholder receives the original cash value of the policy.
Funds exceeding the premium paid are taxable as ordinary income.
An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. How much will the beneficiary receive from the policy?
$0
$100,000
$200,000
$100,000 plus the total of paid premiums
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
Term insurance only
Permanent insurance only
Universal life insurance only
Any form of life insurance
What type of premium do both Universal Life and Variable Universal Life policies have?
Decreasing
Increasing
Flexible
Level fixed
The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?
Cash option
Reduction of premium
Paid-up addition
Accumulation at interest
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid
Until the policyowner's age 100, when the policy matures.
For 20 years or until death, whichever occurs first.
Until the policyowner reaches age 65.
For at least 20 years.
The authority granted to an agent through the agent's contract is referred to as
Absolute authority.
Express authority.
Apparent authority.
Implied authority.
All other factors being equal, which of the following individuals would receive the largest monthly check from a single premium straight life immediate annuity?
A 50-year-old woman
A 60-year-old man
A 60-year-old woman
A 50-year-old man
All of the following are requirements for life insurance illustrations EXCEPT
They may only be used as approved.
They must identify nonguaranteed values.
They must differentiate between guaranteed and projected amounts.
They must be part of the contract.
An insured misstates her age at the time the life insurance application is taken. This misstatement may result in
Automatic lapse.
Recession of the policy.
Adjustment in the amount of death benefit.
No change whatsoever.
Who can make a fully deductible contribution to a traditional IRA?
Someone making contributions to an educational IRA
A person whose contributions are funded by a return on investment
An individual not covered by an employer-sponsored plan who has earned income
Anybody; all IRA contributions are fully deductible regardless of income level
Which of the following statements is TRUE concerning irrevocable beneficiaries?
They can be changed only with the written consent of that beneficiary.
They may be changed at any time.
They can never be changed.
They may be changed only on the anniversary date of the policy.
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the
Reinstatement clause.
Insuring clause.
Misstatement of Age clause.
Incontestability clause.
A key person insurance policy can pay for which of the following?
Hospital bills of the key employee
Costs of training a replacement
Loss of personal income
Workers compensation
Which of the following would not be a violation of Louisiana insurance regulations?
Producer C uses her license to write only business other than controlled.
Producer D collects premiums due on policies and deposits the funds in his own personal account.
Producer A uses her license to write only insurance for herself and her immediate family.
Producer B charges his clients, in addition to the premium, a consulting fee.
At age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs?
Single Premium Whole Life
Interest-sensitive Whole Life
Decreasing Term
Adjustable Life
What provision in an insurance policy extends coverage beyond the premium due date?
Grace period
Free look
Automatic premium loan
Waiver of premium
All of the following are true regarding the guaranteed insurability rider EXCEPT
The insured may purchase additional coverage at the attained age.
The insured may purchase additional insurance up to the amount specified in the base policy.
It allows the insured to purchase additional amounts of insurance without proving insurability only at specified dates or events.
This rider is available to all insureds with no additional premium.
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Life annuity with period certain
Increasing term
Limited pay whole life
Interest-sensitive whole life
All of the following are factors that an underwriter could use to select and classify risk EXCEPT
Occupation.
Avocation.
National origin.
Morals.
All other factors being equal, which of the following individuals would receive the largest monthly check from a single premium straight life immediate annuity?
A 60-year-old man
A 60-year-old woman
A 50-year-old man
A 50-year-old woman
Which of the following is TRUE regarding the accumulation period of an annuity?
It is a period of time during which the beneficiary receives income
It is limited to 10 years.
It is a period during which the payments into the annuity grow tax deferred.
It is also referred to as the annuity period.
Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?
Policy Summary
Illustrations
Buyer's Guide
Insurance Index
If an insured continually uses the automatic premium loan option to pay the policy premium,
The insurer will increase the premium amount.
The policy will terminate when the cash value is reduced to nothing.
The face amount of the policy will be reduced by the automatic premium loan amount.
The cash value will continue to increase.
Which of the following best describes the aleatory nature of an insurance contract?
Ambiguities are interpreted in favor of the insured
Policies are submitted to the insurer on a take-it-or-leave-it basis
Exchange of unequal values
Only one of the parties being legally bound by the contract
When must an IRA be completely distributed when a beneficiary is not named?
December 31 of the year following the year of the owner's death.
Due date of the deceased owner's final tax return including extensions
December 31 of the year that contains the fifth anniversary of the owner's death.
Due date of beneficiary's tax return including extensions.
The paid-up addition option uses the dividend
To accumulate additional savings for retirement.
To purchase a smaller amount of the same type of insurance as the original policy.
To purchase a one-year term insurance in the amount of the cash value.
To reduce the next year’s premium.
All of the following are personal uses of life insurance EXCEPT
Estate creation.
Cash accumulation.
Buy-sell agreement.
Survivor protection.
Existing and replacing life insurers are required to keep copies of all summaries, notices, and statements used in sales transactions until the conclusion of their next examination by the Insurance Department, or for a period of at least
1 year
2 years
3 years
5 years
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are
Guaranteed.
Not taxable since the IRS treats them as a return of a portion of the premium paid.
Paid at a fixed rate every year.
Taxable as ordinary income.
A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called
Payor rider.
Cost of living rider.
Accelerated benefit rider.
Living need rider.
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
Universal life
Whole life
Decreasing term
Variable life
Which of the following explains the policyowner's right to change beneficiaries, choose options, and receive proceeds of a policy?
The Entire Contract Provision
The Consideration Clause
Assignment Rights
Owner's Rights
Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT
The loss produced by the risk must be definite.
The loss may be intentional.
The loss must not be catastrophic.
There must be a sufficient number of homogeneous exposure units to make losses reasonably predictable.
When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit?
The insured's contingent beneficiary
The insurance company
The insured's estate
The primary beneficiary's estate
In life insurance policies, cash value increases
Are income taxable immediately.
Are taxed annually.
Are only taxed when the owner reaches age 65.
Grow tax deferred.
What is the advantage of reinstating a policy instead of applying for a new one?
Proof of insurability is not required.
The face amount can be increased.
The cash values have gained interest while the policy was lapsed.
The original age is used for premium determination.
In a survivorship life policy, when does the insurer pay the death benefit?
Half at the first death, and half at the second death
If the insured survives to age 100
Upon the last death
Upon the first death
Why is an equity indexed annuity considered to be a fixed annuity?
It has modest investment potential.
It has a fixed rate of return.
It is not tied to an index like the S&P 500.
It has a guaranteed minimum interest rate.
What is the minimum required number of continuing education credits in ethics every licensing period?
3
5
10
12
The Ownership provision entitles the policyowner to do all of the following EXCEPT
Set premium rates.
Receive a policy loan.
Assign the policy.
Designate a beneficiary.
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Accumulation at Interest
Cash option
Reduction of Premium
Annual Dividend Provision
With a Single Premium Deferred Annuity (SPDA), when are the benefits paid?
After the death of the owner
When the owner retires
When the owner turns 100
After more than 1 year
An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?
Nothing
$50,000
$100,000
$200,000
When J. applied for a life insurance policy, the agent informed him that a medical exam would be required. The exam may be completed by
A physician of the applicant's choice and at his expense.
A home office underwriter.
A paramedic or examining physician at the insurer's expense.
The agent.
All of the following are general requirements of a qualified plan EXCEPT
The plan must be permanent, written and legally binding.
The plan must provide an offset for social security benefits.
The plan must be communicated to all employees.
The plan must be for the exclusive benefits of the employees and their beneficiaries.
During replacement of life insurance, a replacing insurer must do which of the following?
Guarantee a replacement for each existing policy
Designate a new producer for a replaced policy
Send a copy of the Notice Regarding Replacement to the Department of Insurance
Obtain a list of all life insurance policies that will be replaced
The LEAST expensive first-year premium is found in which of the following policies?
Level Term
Annually Renewable Term
Increasing Term
Decreasing Term
Events in which a person has both the chance of winning or losing are classified as
Retained risk.
Speculative risk.
Insurable.
Pure risk.
An insurance company forwards fixed annuity premiums to their general account, where the money is invested. The guaranteed minimum interest is set at 2.5%. During an economic downswing, the investments only drew 2%. What interest rate will the insurer pay to its policyholders?
2%
2.5%
3%
Whatever interest rate the company deems appropriate
An insured purchased a life policy in 2010 and died in 2020. The insurance company discovers at that time that the insured had misstated information about her insurance history on the application. What will the insurer do?
Sue for the right to not pay the death benefit
Pay the death benefit
Refuse to pay the death benefit because of the misstatement on the application
Pay a decreased death benefit
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?
Graded Premium Life
Limited-pay Life
Variable Life
Adjustable Life
Employer contributions made to a qualified plan
May discriminate in favor of highly paid employees.
Are after-tax contributions.
Are taxed annually as salary.
Are subject to vesting requirements.
Which of the following is another term for the accumulation period of an annuity?
Pay-in period
Premium period
Liquidation period
Annuity period
When an individual purchases insurance, what risk management technique is he or she practicing?
Sharing
Retention
Transfer
Avoidance
When would a 20-pay whole life policy endow?
When the insured reaches age 100
At the insured’s age 65
After 20 payments
In 20 years
If authorized to write life and property and casualty insurance, how many hours of continuing education instruction are producers required to complete every 2 years?
10
12
14
24
Under an extended term nonforfeiture option, the policy cash value is converted to
A lower face amount than the whole life policy.
A higher face amount than the whole life policy.
The same face amount as in the whole life policy.
The face amount equal to the cash value.
What is a foreign insurer?
An insurer with licensed agents doing business in other countries
An insurer with licensed agents who are citizens in more than one country
An insurer with a home office in another state
An insurer with a home office in another country
