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Life Insurance Exam Prep Questions and Answers (100% Pass)
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Life Insurance Exam Prep Questions and Answers (100% Pass)
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©PREP4EXAMS@2024 [REAL-EXAM-DUMPS] Wednesday, July 31, 2024 9:10 AMLife Insurance Exam Prep Questions and
Answers (100% Pass)
To determine financial strength of an insurance company - ✔️✔️Primary purpose for a
rating service company such as A.M best?
Provide death benefits - ✔️✔️Primary reason for buying life insurance?
Liquidity - ✔️✔️What is described as an insurers ability to make unpredictable payouts to
its policy owners?
Self-Funded Plan - ✔️✔️What is described as a plan in which an employer pays
insurance benefits from a fund derived from the employers current revenue?
Nonparticipating policy - ✔️✔️Which policy will not pay dividends?
Participating Life Insurance Policy - ✔️✔️What is issued by a mutual insurer and provides
a return of divisible surplus?
Mutual - ✔️✔️What is a type of insurer that is owned by its policy owners?
The reinsurer - ✔️✔️A life insurance company has transferred some of its risk to another
insurer, the insurer assuming the risk is called the what?
Stock Insurer - ✔️✔️A nonparticipating company is sometimes called what?
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,©PREP4EXAMS@2024 [REAL-EXAM-DUMPS] Wednesday, July 31, 2024 9:10 AM
Risk Pooling - ✔️✔️What is described as spreading risk by sharing the possibility of loss
over a large number of people?
Risk - ✔️✔️Described as a potential loss.
Peril - ✔️✔️Described as something that can cause a financial loss.
Loss - ✔️✔️Described as unintentional decrease in the value of an asset due to a peril.
Homogeneous Exposure Units - ✔️✔️Similar objects of insurance that are exposed to the
same group of perils.
Speculative Risk - ✔️✔️What presents the chance for both loss and gain? Ex. Gambling
Pure Risk - ✔️✔️What is the only insurable risk and presents a potential for loss only with
no possibility of gain, such as injury, illness, and death?
Physical - ✔️✔️Which type of hazard is poor health, overweight, blind, etc?
Moral - ✔️✔️Which type of hazard is dishonesty, drugs, alcohol abuse, etc.?
Morale - ✔️✔️Which type of hazard is careless and reckless?
Hazards - ✔️✔️What are events or conditions that increase the chances of an insured's
life?
Adverse Selection - ✔️✔️People who have higher loss exposure have the tendency to
purchase insurance more often, which is described as what?
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,©PREP4EXAMS@2024 [REAL-EXAM-DUMPS] Wednesday, July 31, 2024 9:10 AM
Insurance Contract - ✔️✔️What is a legally binding agreement between two or more
parties, where a promise of benefits is exchanged for a consideration?
Concealment - ✔️✔️What is intentional withholding of material facts that would affect an
insurance policy validity?
Representations - ✔️✔️What is an applicants statements concerning occupation,
hobbies, and personal health history?
Express Authority - ✔️✔️What type of authority gives an agent authority in writing?
Consideration - ✔️✔️In an insurance contract, the element that shows each party is given
something of value is called..
Errors and Omissions - ✔️✔️A professional liability for which producers can be sued for
mistakes of putting a policy into effect is called...
Apparent Authority - ✔️✔️The deeds and actions of a producer indicates what authority?
Term Life Insurance - ✔️✔️What is described as temporary life insurance provided for a
specific period of time?
Term Life Insurance - ✔️✔️Which type of insurance provides the greatest amount of
coverage for the lowest premiums?
Whole Life Insurance - ✔️✔️Which type of life insurance policy remains in effect to age
100 as long as the premium is paid?
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, ©PREP4EXAMS@2024 [REAL-EXAM-DUMPS] Wednesday, July 31, 2024 9:10 AM
Whole Life - ✔️✔️Which type of life insurance has level premiums based on the age of
the individual when originally purchased?
Whole Life - ✔️✔️In which type of insurance can the policy owner borrow against the
cash value while the policy is still in effect or when surrendered?
Straight - ✔️✔️Describes the type of policy in which the policy owner pays a fixed
premium for the time the policy is issued until they turn 100.
Limited Pay - ✔️✔️Describes the type of policy in which it is paid-up before 100.
Single Life - ✔️✔️Describes the type of policy in which a one-time lump sum payment is
made.
Absolute Assignment - ✔️✔️What is described as the permanent and total transfer of all
the policy rights?
Collateral - ✔️✔️What involves a transfer of partial rights to another person?
Survivorship Life Insurance - ✔️✔️What policy is helpful in estate planning because it
provides funds to help pay taxes?
Face amount - ✔️✔️The word "level" in level term is described as the what?
Family Term - ✔️✔️A spouse and child can be added to the primary insured's coverage
as a what?
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