1. What should a producer do if the policy applied for is issued at a higher rate than was expected?
A. Personally deliver the policy, explain the rating, and reinforce the value of the policy
B. Have the home office re-issue the policy for a reduced amount of coverage for the original premium quoted so that it will be easier to explain at time of delivery
C. Immediately return the policy to the home office because the applicant will never accept it
D. Deliver the policy to the applicant and have the home office reduce the commission payout to cover the higher premium
2. Equity Universal, Variable, and Variable Universal all have which of the following characteristics in common?
A. The overall policy performance has something to do with the stock market in general
B. A securities license is required to sell each policy
C. All have a guaranteed death benefit
D. The owner chooses the separate account(s) to invest the cash values in
3. In a viatical settlement transaction, the life insurance policyowner is referred to as the _________.
A. Provider
B. Third party
C. Viator
D. Viatee
4. A is the insured under a $100,000 10 year term life insurance policy with her spouse named as her beneficiary. If she dies in year 9, what will her spouse receive?
A. The face amount of the policy
B. A refund of all premiums paid
C. The policy's cash values
D. Nothing since this is term insurance
5. What happens to the overall policy premium when most riders on a life insurance policy expire?
A. It stays the same
B. It goes down
C. It is refunded
D. It goes up
6. Which of the following policies must be sold by prospectus?
A. Ordinary Whole Life
B. Universal Life
C. Equity Indexed Whole Life
D. Variable Whole Life
7. M purchased a traditional permanent life insurance plan many years ago. What happens when he attains age 100?
A. M gets a check for the face amount of the policy
B. M gets a dividend check from the insurer
C. M gets a refund of all premiums paid
D. M receives nothing from the insurer because the traditional permanent insurance plan expires
8. Jerry has selected a Life Income 10 year Period Certain. What happens to the income payments if he dies in year 4 after starting to receive income benefit payments?
A.The payments are increased by 60% and paid out for the balance of the time remaining on the guaranteed benefit
B. The payments are reduced by 40% then paid out to the surviving beneficiary for the remainder of their life
C. The payments end immediately with any residual values retained by the insurer
D. The payments continue for the balance of the Period Certain to a named beneficiary
9. A universal life policy has a death benefit of $125,000 and a cash accumulation value of $15,000. Generally, what will happen to the policy if there is a $5,000 partial withdrawal?
A. The policy will immediately be voided by the insurer
B. The policy will become paid up
C. The death benefit or cash accumulation will be reduced by the partial withdrawal
D. The policy will be used as collateral for a loan from the insurer for which interest will be charged
10. In order to make sure that a creditor of the insured is not paid more than the outstanding loan at time of claim, the policyowner should:
A. Indicate the percentage of the face amount the creditor will receive
B. Specify a dollar amount the creditor should receive at time of claim
C. Purchase a decreasing benefit policy that matches the loan repayment schedule
D. Name the creditor as a primary beneficiary