LOMA 281 MODULE 2 EXAM QUESTIONS AND
CORRECT VERIFIED ANSWERS LATEST UPLOAD
2024/2025 BEST RATED A+ FOR PASS
Carlos mendoza purchased a 250k insurance policy on his life that requires him to pay equal annual
premium payments. If Mr. Mendoza keeps the policy in force by paying the annual renewal
premiums, and if he dies anytime within 20 years after purchasing the policy, then the policy will
provide a 250k death benefit. The policy provides no coverage beyond the 20 - year period, and Mr.
Mendoza will not receive anything if he lives to the end of the policy term. This information indicates
that the type of insurance policy Mr. Mendoza owns is
a. an increasing term life insurance policy
b. a level term life insurance policy
c. a decreasing term life insurance policy
d. an attained age conversion term life insurance policy - CORRECT ANSWERS B.
Dolly Varden purchased a new home and obtained a 30-year mortgage loan from the sanguine bank.
To insure her mortgage loan. Dolly purchased from the Valiant Insurance Company a mortgage
insurance policy that named her husband, William, as the beneficiary. The following statements are
about this situation select the answer choice containing the correct statement.
a. In the event of dolly's death, William is required to use the policy proceeds of the mortgage
insurance policy to repay the mortgage loan
b. the amount of the policy benefit payable at any given time under dolly's mortgage insurance
policy generally equals the amount owed on the mortgage
c. The sanguine bank is a party to the mortgage insurance contract that dolly purchased
d. Valiant is a party to the mortgage loan contract that dolly obtained. - CORRECT ANSWERS B.
The following statements are about credit life insurance and family income coverage. Select the
answer choice containing the correct statement.
a. The proceeds of a credit life insurance policy may be paid to a beneficiary other than the lender, or
creditor, if the insured borrower dies during the policy's term.
b. The amount of the benefit payable under a credit life insurance policy usually remains level over
the duration of the loan
c. Family income coverage provides a stated monthly income benefit amount to the beneficiary if the
insured dies during the term of coverage
d. Family income coverage is a plan of increasing term life insurance - CORRECT ANSWERS C.
,LOMA 281 MODULE 2 EXAM QUESTIONS AND
CORRECT VERIFIED ANSWERS LATEST UPLOAD
2024/2025 BEST RATED A+ FOR PASS
Caitlin Miller, age 35, purchased a $ 150,000 20-year return of premium (ROP) term insurance policy
from the Karat insurance company. Ms. Miller paid annual premiums of $300. Ms. Miller paid all
required premiums and was alive at the end of the 20-year term when the policy expired. This
information indicates that
a. Ms. miller's policy expired without Karat making any payment to anyone
b. Karat paid $ 6,000 to Ms. miller
c. Karat paid $ 150,000 to <s. Miller - CORRECT ANSWERS B.
Geneva Watson purchased a $100,000 15-year renewable term insurance policy on her life. At the
end of the 15-year term, the renewal provision is Ms. Watson's policy most likely gives her the right,
within specified limits, to renew her insurance coverage.
a. for a one-year term, but not for another 15- year term
b. after first undergoing a required medical examination
c. at the same premium rate she was charged for the original 15-year term policy
d. Without having to submit evidence of her insurability - CORRECT ANSWERS D.
Convertible term life insurance policies contain features that allow the policyowner to convert the
coverage to a cash value life insurance policy. In order to convert such a term life insurance policy,
evidence of insurability (is/is not) required. due to potential antselection, insurers will typically
charge (lower/higher) premiums for convertible polices than for comparable term polices that are
not convertible.
a. is/lower
b. is/higher
c. is not/lower
d. is not/higher - CORRECT ANSWERS D.
Cash value life insurance - CORRECT ANSWERS Life insurance that provides insurance coverage
throughout the insured's lifetime and provides a savings element, known as the cash value.
Sometimes known as permanent life insurance.
policy loan - CORRECT ANSWERS A loan a policyowner receives from an insurer using the cash value
of a life insurance policy as security.
,LOMA 281 MODULE 2 EXAM QUESTIONS AND
CORRECT VERIFIED ANSWERS LATEST UPLOAD
2024/2025 BEST RATED A+ FOR PASS
cash surrender value - CORRECT ANSWERS The amount of the cash value that a policyowner is
entitled to receive upon surrender of the policy.
In the United States, a cash value policy offers certain tax advantages to the policyowner, who pays -
CORRECT ANSWERS - NO current income tax on interest or other earnings credited to the policy's
cash value
- NO income tax on funds borrowed from the cash value through a policy loan
A cash value life insurance policy provides insurance protection for the insured's entire lifetime.
a. True
b. False - CORRECT ANSWERS A
A cash value policy with a policy loan outstanding can't be surrendered.
a. true
b. false - CORRECT ANSWERS B.
Traditional Whole Life Insurance - CORRECT ANSWERS A type of cash value life insurance that
provides lifetime insurance coverage usually at a level premium rate that does not increase as the
insured ages
Single-Premium - CORRECT ANSWERS For life insurance products, a form of premium payment in
which one lump sum covers all of the financial considerations for the life of the contract; one-year
term life insurance policies are purchased with a single premium.
Limited-Payment - CORRECT ANSWERS A whole life insurance policy for which premiums are payable
only for a stated period of time or until the insured's death, whichever occurs first.
Continuous - CORRECT ANSWERS A whole life insurance policy under which premiums are payable
until the death of the insured. Also known as straight life insurance or ordinary life insurance.
Which type of whole life insurance policy will best be able to give Arabella lifetime protection
without straining her retirement income?
, LOMA 281 MODULE 2 EXAM QUESTIONS AND
CORRECT VERIFIED ANSWERS LATEST UPLOAD
2024/2025 BEST RATED A+ FOR PASS
a. Single-premium whole life policy
b. Limited-payment whole life policy
c. Continuous-premium whole life policy - CORRECT ANSWERS B.
Which type of whole life insurance policy will provide Ethan with a sizeable cash value immediately?
a. Single-premium whole life policy
b. Limited-payment whole life policy
c. Continuous-premium whole life policy - CORRECT ANSWERS A.
Which type of whole life insurance policy will provide Kimiko with the most insurance coverage for
the most affordable premium?
a. Single-premium whole life policy
b. Limited-payment whole life policy
c. Continuous-premium whole life policy - CORRECT ANSWERS C.
Carter is considering purchasing either a traditional whole life insurance policy or a modified-
premium whole life insurance policy. If the initial annual premium for both policies is $2,000, which
policy do you think will provide Carter with the most life insurance coverage?
a. The traditional whole life policy
b. The modified-premium whole life policy
c. Both policies will provide the same amount of coverage - CORRECT ANSWERS B.
Modified-premium whole life policy - CORRECT ANSWERS A whole life insurance policy for which the
annual premium amount changes after a specified initial period (typically 5 or 10 years).
How do you think the annual premium for Carter's modified coverage policy would compare to the
annual premium for a $250,000 traditional whole life policy?
a. The premium would be less for the modified coverage policy
b. The premium would be more for the modified coverage policy
c. The premium would likely be the same for both policies - CORRECT ANSWERS A.
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