Insurance MCQ

What is the purpose of establishing the target premium for a universal life policy? A. To pay up the policy faster B. To cover all policy expense she C. To keep the policy in force D. To accumulate cash value faster Answer: C. To keep the policy in force

Which of the following terms best describe the coverage provided by term policies, as compared to any other form of protection? A. Least B. Most comprehensive C. Longest D. Greatest Answer: D. Greatest

A domestic insurer issuing variable contracts must establish one or more A. Annuity accounts B. General accounts C. Separate accounts D. Liability accounts Answer: C. Separate accounts

Annually renewable term policies provide a level death benefit for a premium that A. Remains level B. Fluctuates C. Increases annually D. Decreases annually Answer: C. Increases annually

Which of the following is an example of a limited-pay life policy? A. Renewable Term to Age 70 B. Level Term Life C. Straight Life D. Life Paid-up at Age 65 Answer: D. Life Paid-up at Age 65

Both Universal life and Variable Universal Life have a A. Decreasing premium B. Increasing premium C. Flexible premium D. Level fixed premium Answer: C. Flexible premium

Variable Whole Life insurance is based on what type of premium? A. Increasing B. Flexible C. Graded D. Level fixed Answer: D. Level fixed

All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT A. Upon conversion, the death benefit of the permanent policy will be reduced by 50% B. Evidence of insurability is not required C. Most term polices contain a convertibility option D. Upon conversion, the premium for the permanent policy will be based upon attained age Answer: A. Upon conversion, the death benefit of the permanent policy will be reduced by 50%

The type of term insurance that provides increasing death benefits as the insured ages is called A. Flexible term B. Interest-sensitive term C. Age-sensitive term D. Increasing term Answer: D. Increasing term

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? A. Life annuity with period certain B. Increasing term C. Limited pay whole life D. Interest-sensitive whole life Answer: C. Limited pay whole life

All of the following are true regarding a decreasing term policy EXCEPT A. The contract pays only in the event of death during the term and there is no cash value B. The face amount steadily declines throughout the duration of the contract C. The payable premium amount steadily declines throughout the duration of the contract D. The death benefit is $0 at the end of the policy term Answer: C. The payable premium amount steadily declines throughout the duration of the contact

The insured is also the policyowner of a whole life policy. What age must the insured attain in order to receive the policy's face amount? A. 65 B. 70 1/2 C. 90 D. 100 Answer: D. 100

The death benefit under the Universal Life Option B A. Decreases by the amount that the cash value increases B. Increases for the first few years of the policy, and then levels off C. Remains level D. Gradually increases each year by the amount that the cash value increases Answer: D. Gradually increases each year by the amount that the cash value increases

Which of the following are generally NOT considered when underwriting group insurance? A. The size of the group B. The insured's medical history C. The nature of the group D. The group's past claim experience Answer: B. The insured's medical history

Which type of life insurance policy generates immediate cash value? A. Single premium B. Level Term C. Decreasing Term D. Continuous Premium Answer: A. Single premium

The type of policy that can be changed from one that does not accumulate cash value to the one that does is a A. Whole Life Policy B. Convertible Term Policy C. Renewable Term Policy D. Decreasing Term Policy Answer: B. Convertible Term Policy

Which of the following Life Insurance policies would be considered interest sensitive? A. Adjustable life B. Whole life C. Increasing term D. Universal life Answer: D. Universal life

Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated? A. Those who have worked in the company for at least 3 years B. Those who have dependents C. Those who have no history of claims D. Those who have been insured under the plan for at least 5 years Answer: D. Those who have been insured under the plan for at least 5 years

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit? A. Universal Life- Option A B. Universal Life- Option B C. Equity Indexed Universal Life D. Variable Universal Life Answer: A. Universal Life- Option A

If an agent wishes to sell variable life policies, what license must the agent obtain? A. Surplus lines B. Personal Lines C. Securities D. Adjuster Answer: C. Securities