Life Insurance Producer Examination

1.Nora, age 34, buys a 20-year term policy with a $250,000 face amount. She asks what is paid if she dies in year 18, and whether she can withdraw savings from the policy.

2.Malik wants coverage that stays in force for his entire life and also builds cash value he can borrow against. Which product matches that goal?

3.Elena is shown a straight whole life policy with premiums payable every year the policy remains in force. What is level under that design?

4.Owen buys a 20-pay whole life policy on his own life. He asks what happens after the 20 scheduled premiums have been paid.

5.Priya wants to vary her payments from year to year, with amounts above the policy charges credited to a cash-value account. Which policy fits?

6.Jonah owns a variable life policy and allocates the cash value among investment options inside the contract. What can happen to that cash value?

7.Luis and Andre, equal partners in a repair shop, buy one life policy that pays when the first of them dies so the survivor can buy the other's share. What policy is that?

8.Helen and George want one policy that pays after both of them have died, mainly so their children can meet estate settlement costs. Which policy does that?

9.After paying a $400,000 life claim, an insurer asks whether it can recover that sum from a driver whose negligence caused the death. What is the right conclusion?

10.Patrick's beneficiary has already received the life insurance proceeds. A contractor's negligence contributed to the death. May the life insurer sue the contractor to recover those proceeds?

11.Ivan's cousin owned a policy on Ivan's life. At issue, the cousin depended on Ivan's income. Years later they are estranged. If Ivan dies, does the missing interest at death void the claim?

12.Ruth's life policy was issued two years and three months ago. The insurer finds an innocent misstatement on the application and wants to void the policy. What is the usual result?

13.Ben dies by suicide 14 months after his life policy is issued. The policy uses the usual suicide provision. What does the insurer commonly pay?

14.Hector's premium was due on March 1. He dies on March 20 without having paid it. The policy uses a typical grace period. What is the usual claim result?

15.Adele has just received a new life policy and asks how many days she has to return it for a full refund. She heard that every policy in the country uses the same number. What should the producer say?

16.Sandra stops paying premiums on a whole life policy that has cash value. She wants the nonforfeiture choice that ends the insurance and sends her the savings in cash. Which option is that?

17.Victor cannot pay more premiums, but he wants permanent life coverage to continue for a smaller face amount with nothing more due. Which nonforfeiture option fits?

18.June stops paying premiums but wants the original face amount kept in force for as long as the cash value will carry it. Which nonforfeiture option is that?

19.Naomi is shown a participating whole life illustration with dividends in later years. She asks whether those amounts are promised in the contract. What is accurate?

20.Carlos wants each dividend on his participating policy used to buy a small amount of extra permanent insurance that is fully paid up. Which dividend option is that?

21.Leah asks the insurer to send each dividend to her bank rather than use it to buy insurance or lower the premium. Which dividend option is she using?

22.Miles wants his dividend applied so the next premium notice shows a smaller amount he must pay. Which dividend option does that?

23.Rosa leaves her dividends with the insurer, where they earn interest and remain available for later withdrawal. Which dividend option is that?

24.Evan uses this year's dividend to buy term insurance that raises his death benefit for one year only. Which dividend option is he using?

25.Paul named a friend as beneficiary and kept the right to name someone else later without asking the friend. What kind of beneficiary is the friend?

26.Ingrid is the irrevocable beneficiary of her brother's life policy. He now wants to name a charity instead. What must he obtain?

27.A credit union takes an interest in Omar's life policy while he owes $30,000. If he dies during the loan, the credit union is paid the debt and the rest goes to his beneficiary. What is that arrangement?

28.Gina signs a form giving her sister every ownership right in an existing life policy, including the right to name the beneficiary and to surrender it. What is that transfer?

29.On June 1, Kyle pays the first premium with his application and receives a conditional receipt. He was insurable on June 1 under the insurer's rules. He dies on June 10, before delivery. What can that receipt do?

30.A producer tells applicants that paying the first premium with the application binds the insurer no matter what underwriting would decide. What is wrong with that description of a conditional receipt?

31.Dana is covered by her employer's group life plan and wants a document she can show as her own evidence of coverage. What does she receive?

32.Linden Bakery sponsors a group life plan for its employees. Who holds the master contract?

33.Harbor Clinic's group life plan renews each year, and the insurer may adjust the rate at renewal. What form is employer group life often written as?

34.Raj leaves his employer and wants to keep life coverage without a medical exam. The group contract allows a move to an individual policy if he acts in time. What is that right?

35.Marta, age 67, pays one lump sum to an insurer and wants her first income check next month. Which annuity is built for that timing?

36.Colin, age 42, wants to save through an annuity now and have income start at 65. He does not want a check this year. Which contract fits?

37.Wes buys an annuity that credits interest at a rate the insurer declares. He does not pick investment subaccounts. What kind of annuity is it?

38.During payout, Amina's annuity payment rises or falls with the investment options she selected. Which product behaves that way?

39.Thea wants annuity income for as long as she lives, and she also wants payments to last at least 15 years even if she dies sooner. Which option is that?

40.Simone receives a $150,000 lump-sum death benefit from her father's individual life policy. How is that lump sum generally treated for income tax?

41.A producer urges Hal to drop an in-force whole life policy that has cash value, falsely saying it expires next month and is worth nothing, so Hal will buy a new policy. What is that practice?

42.To win a sale, a producer offers Bea half of the first-year commission in cash if she applies today. In most states, what is that offer?

43.Ned's rider says that if he becomes totally disabled as the rider defines disability, the insurer will waive premiums and keep the base policy in force. Which rider is that?

44.Lila may buy more life coverage at ages 28, 31, and 34 at standard rates, without proving good health, up to the amounts in the rider. Which rider gives that right?

45.Cory's policy pays $100,000 if he dies from a covered cause, and it pays an extra $100,000 if death is accidental as the rider defines accident. What is the extra benefit?

46.Which part of a life policy states the insurer's basic promise to pay the death benefit if the insured dies while the policy is in force?

47.Imani gives the application and the first premium. The insurer promises to pay a death benefit under the policy. What is Imani's side of that bargain called?

48.Felix's whole life policy lapsed five months ago. He can pay the overdue premiums and prove he is still insurable, within the time the policy allows. Which provision lets him restore it?

49.After death, the insurer learns the application listed the insured as younger than he was, so the premiums paid were too small for his true age. What does the misstatement of age provision usually do?

50.Yara, beneficiary of a $200,000 life policy, asks to receive income that continues for as long as she lives. Which settlement option is that?

51.Seth wants the insurer to hold the death proceeds, pay him interest, and keep the principal available for a later distribution. Which settlement option is that?

52.Una wants the death benefit paid in equal installments for exactly eight years, and then stopped, whether or not she is living. Which settlement option is that?

53.Gil wants $900 a month from death proceeds until the principal and credited interest are used up. He does not want to choose the number of months first. Which settlement option is that?

54.Lena names her spouse to take the death benefit if he survives her, and her brother to take it only if her spouse does not. What is the brother's position?

55.On her life application, Pia answers the health questions to the best of her present knowledge. In ordinary life practice, those answers are treated as what?

56.Hugo plans to surrender his current whole life policy and use the cash value toward a new life policy. The producer is taking the new application. What duty applies to this sale?

57.A producer collects a client's annual life premium in cash on Thursday and thinks about placing it in a personal account over the weekend. What is the proper handling?

58.Devon's whole life policy is marked participating. If the insurer has divisible surplus, what may Devon receive?

59.Farah's whole life policy is issued as nonparticipating. What should she expect about policy dividends?

60.Chris buys a 15-year policy with a $300,000 death benefit that stays the same each year and then ends. The policy has no cash value. What term pattern is this?

61.Nia's mortgage protection policy starts with a death benefit near her home-loan balance, and that benefit declines as the years go by. Which term design is it?

62.A rider on Hugh's life policy adds term coverage whose death benefit gets larger each year. What is that term pattern called?

63.A whole life policy has cash value, and the beneficiary is revocable. While the insured is alive, who may take a policy loan under the contract?

64.An insured dies while a whole life policy still has an unpaid policy loan. How does that loan generally affect the death claim?

65.On Keisha's universal life policy, one death-benefit pattern equals a stated face amount plus the cash value. What is that pattern called?

66.The cash value of a variable life policy is not held in the insurer's general account. Where is it held?

67.After building an annuity account for years, the owner converts that value into a series of income payments. What is that step called?

68.A client has paid into a deferred annuity for eight years and has not started income checks. Which phase is the contract in?

69.Grant's whole life policy is paid for with one premium at issue. No later premium is due, and the coverage lasts for his life. What form is that?

70.Premiums on a whole life policy are payable until the insured's death, and the premium amount does not rise as the insured ages. What is that pattern called?

71.A couple wants one life policy that pays the surviving spouse when the first spouse dies, so lost income can be replaced. Which policy fits?

72.Which person ordinarily has an insurable interest in the proposed insured when a life policy is issued?

73.An owner is naming the beneficiary of a personal life policy. Which designation is commonly permitted?

74.The beneficiary of a whole life policy is revocable, and the insured is still alive. Which rights stay with the owner?

75.Rita's life premium was due May 1. She pays it on May 25. The policy gives a 31-day grace period and has not been surrendered. What is the status of the coverage?

76.A life policy has been in force for six years when the insured dies by suicide. The contract uses the common two-year suicide limit. What is commonly paid?

77.Four years after issue, while the insured is alive, the insurer discovers a past illness was omitted from the application. The policy has a typical two-year incontestability clause. What is the usual result?

78.An owner returns a life policy ten days after delivery, still inside the free-look period printed in that policy, and asks for the premium back. What is the usual result?

79.A producer takes an application for new whole life coverage. The client will surrender an older life policy so the new policy can take its place. What is this transaction?

80.No premium was paid with the application, and no conditional receipt was issued. After approval, the producer delivers the policy and collects the first premium while the insured is in good health. When does coverage generally begin?

81.A worker who is leaving an employer elects group life conversion and applies inside the time the contract allows. What is typically true about evidence of insurability?

82.Who bears the risk that the separate-account investments in a variable life policy will lose value?

83.Who bears the investment risk on a fixed annuity that credits a stated rate?

84.Frank pays a single sum for an annuity on April 1, and the first income payment is due on May 1 of the same year. How is the contract classified?

85.Sophie has contributed to an annuity for 15 years. Income is scheduled to start at age 65, eight years from now. How is the contract described today?

86.An annuity pays income for 10 years and then stops, even if the annuitant is alive. It does not promise a lifetime income. What option is that?

87.An annuitant picks income that ends at death, with nothing payable to a survivor and no minimum number of payments. What is that option?

88.If the annuitant dies before payments equal the amount annuitized, installments continue to a beneficiary until that amount has been paid out. Which feature is this?

89.Carla buys a policy on her own life and names a close friend, who does not support her, as revocable beneficiary. Is the policy invalid because the friend has no financial stake?

90.Which life policy provision identifies the premium and the application as what the owner gives in exchange for the insurer's promise to pay?

91.During the contestable period, an insurer wants to contest a life policy because of an answer on the application. In ordinary practice, what must that answer be?

92.The owner of a whole life policy has an outstanding loan and does not pay the loan interest in cash when it comes due. What commonly happens to that interest?

93.An owner assigns a life policy but never tells the insurer. At death, the insurer pays the beneficiary shown in its records. Why can that payment stand?

94.A bank is collateral assignee of a life policy and is owed $30,000 at the insured's death. The face amount is $200,000. How are the proceeds commonly split?

95.An absolute assignment of a life policy has been recorded. Who generally holds the rights to name the beneficiary and request surrender?

96.Which of these acts is rebating?

97.Which act is misrepresentation used to induce a replacement?

98.A producer collects a $1,800 life premium in cash. Which handling of that money meets the producer's fiduciary duty?

99.Willa pays the first premium with her application and receives a conditional receipt. She was not insurable that day under the insurer's rules, and she dies four days later before a policy is issued. What result follows?

100.Northpier Design relies on its lead designer, Renee. The company insures Renee's life and names itself beneficiary. What supports that purchase at issue?

101.A lender is owed $18,000 and wants a life policy on the borrower. What limit applies to the lender's insurable interest?

102.An owner names the insured's estate as beneficiary of a life policy. At the insured's death, where are the proceeds paid?

103.The primary beneficiary dies before the insured. A contingent beneficiary is named and is living when the insured dies. Who receives the proceeds?

104.The insured is alive and the beneficiary designation is revocable. What interest does that beneficiary hold?

105.A life beneficiary was named irrevocably. The owner now wants to take a policy loan. In many policies, what else is needed?

106.An owner stops premiums. Cash value buys $40,000 of paid-up whole life, less than the original face amount, and no more premiums are due. Which nonforfeiture option was used?

107.Cash value is applied to keep a $100,000 face amount in force as term insurance for 11 years. Premiums stop, and coverage ends when that term ends. Which nonforfeiture option is this?

108.An owner turns in a whole life policy, receives its $22,000 cash surrender value, and the coverage ends. Which nonforfeiture option is this?