Life Insurance Quiz

3. Which statement is true regarding policy dividends?

Loss must be catastrophic
Medical questions must be answered on individual life insurance
Insurer's expenses
A dividend option is selected by the insured at the time of policy purchase

7. When calculating life insurance premium rates, which component would an agent's commission fall under?

Non-medical
Theft
Insurer's expenses
Contract that allows the policyowner to receive a share of surplus in the form of policy dividends

9. According to the California Insurance Code, what term is used to describe a fact so important it could affect the policy premium?

Insured becomes totally disabled
Insurer's expenses
Materiality
Notice of appointment must be submitted to the Commissioner

12. Pete is a life agent who has misappropriated fiduciary funds to his own use. What is Pete guilty of?

Theft
Make a premium payment after the due date without any loss of coverage
Insurer's expenses
Dividends

15. Which of the following is NOT an element of an insurable risk?

Insured becomes totally disabled
Insurer's expenses
A dividend option is selected by the insured at the time of policy purchase
Loss must be catastrophic

16. Which of the following is NOT a common life insurance policy rider?

Statement that all values and benefits are guaranteed
Interest Option
Medical questions must be answered on individual life insurance
extended term

19. Which of the following types of life insurance combines a savings element along with a flexible premium option?

extended term
Medical questions must be answered on individual life insurance
Universal life
A dividend option is selected by the insured at the time of policy purchase

20. When a life insurance policy is surrendered, how does the cost recovery rule apply?

extended term
Medical questions must be answered on individual life insurance
Non-medical
The policy's cost basis is exempt from taxation

22. Jerry is an insured who understated his age on his life insurance application, paying $12 per $1,000 of insurance instead of $15 per $1,000. If he dies, how will the adjusted death benefit be calculated?

12/15th of the policy's face amount
$5,000
5 years
12 months

23. Who does a life settlement broker represent?

Modified premium, ordinary life, single premium
A dividend option is selected by the insured at the time of policy purchase
Individual wanting to sell their life policy to a third party
Insured becomes totally disabled

24. What does the grace period allow a life insurance policyowner to do?

Statement that all values and benefits are guaranteed
Universal life
Make a premium payment after the due date without any loss of coverage
Notice of appointment must be submitted to the Commissioner

34. What distinguishes a deferred annuity from an immediate annuity?

The time at which benefit payments start
Statement that all values and benefits are guaranteed
Dividends
Mortality rate

41. Which of the following describes the number of deaths in a year compared to the number of people in a select group?

Notice of appointment must be submitted to the Commissioner
Mortality rate
Universal life
Policy exclusion

43. What is required after a life agent sells an insurance policy to an applicant without being appointed by the insurer?

Accelerated death benefit
Make a premium payment after the due date without any loss of coverage
Notice of appointment must be submitted to the Commissioner
Policy exclusion

51. Tim was recently terminated from his employment and opted to change his existing group term life insurance to individual permanent life insurance. What is this process called?

Conversion
Contract that allows the policyowner to receive a share of surplus in the form of policy dividends
Individual wanting to sell their life policy to a third party
Loss must be catastrophic

52. Which of the following is NOT a life insurance settlement option?

Extended term option
Medical questions must be answered on individual life insurance
extended term
Theft

63. When does a life insurance policy's waiver of premium take effect?

Individual wanting to sell their life policy to a third party
Accelerated death benefit
Medical questions must be answered on individual life insurance
Insured becomes totally disabled

66. How does underwriting differ between group life and individual life insurance?

Accelerated death benefit
Dividends
Notice of appointment must be submitted to the Commissioner
Medical questions must be answered on individual life insurance

67. Which of the following does NOT have to be included on life insurance policy illustrations?

Statement that all values and benefits are guaranteed
extended term
Policy exclusion
Universal life

68. How long must life agents keep their transaction records?

20%
12/15th of the policy's face amount
2 years
5 years

69. What is the proper order of initial life insurance premiums, from lowest to highest?

Modified premium, ordinary life, single premium
Extended term option
The policy's cost basis is exempt from taxation
The time at which benefit payments start

83. What is a participating life insurance policy?

extended term
Materiality
Contract that allows the policyowner to receive a share of surplus in the form of policy dividends
Mortality rate

87. How are acts of war considered under a group life insurance policy?

Statement that all values and benefits are guaranteed
Policy exclusion
Extended term option
Loss must be catastrophic

89. Which of the following is NOT a component of determining policy premiums?

extended term
Contract that allows the policyowner to receive a share of surplus in the form of policy dividends
Non-medical
Dividends

91. Which provision will pay a portion of the death benefit prior to the insured's death due to a serious illness?

extended term
Medical questions must be answered on individual life insurance
Accelerated death benefit
Loss must be catastrophic

92. Which of the following is a life insurance policy that does NOT require a physical exam?

Interest Option
A dividend option is selected by the insured at the time of policy purchase
Non-medical
Statement that all values and benefits are guaranteed

95. What time period allows an insured's life insurance policy to remain in force even if the premium was not paid on the due date?

Modified premium, ordinary life, single premium
Individual wanting to sell their life policy to a third party
Grace period
A dividend option is selected by the insured at the time of policy purchase

97. Which of the following life insurance classifications charges the highest premium?

extended term
The time at which benefit payments start
Notice of appointment must be submitted to the Commissioner
Substandard

100. Pam is the primary beneficiary of a life insurance policy and wants to let the death benefit accumulate and receive only the monthly investment proceeds. Which settlement option should she choose?

Non-medical
Interest Option
The time at which benefit payments start
Extended term option

Life Insurance Interactive Quiz (100 Questions)