$.$ What happens to the premiums for yearly renewable term insurance as an insured gets

older?

A$)$ They increase at an increasing rate.

B$)$ They increase at a decreasing rate.

C$)$ They decrease at a constant rate.

D$)$ They remain level.

E$)$ They increase at a constant rate.

Explanation

$2.$ Which of the following statements about a decreasing term insurance policy is true?

A$)$ The face amount of the policy decreases during the policy period, and the premium

increases.

B$)$ The face amount of the policy decreases during the policy period, but the premium

remains level.

C$)$ The premium decreases during the policy period, but the face amount remains

constant.

D$)$ Both the premium and the face amount of the policy decrease gradually over the

policy period.

E$)$ None of the above are true statements.

Explanation

$3.$ Which of the following statements about limited$-$payment life insurance is true?

A$)$ It is a form of term insurance.

B$)$ It matures at the end of the premium$-$payment period.

C$)$ The premium decreases each year during the premium$-$payment period.

D$)$ Its use may be appropriate if a person wants paid$-$up life insurance during retirement

E$)$ No cash value is available on this type of policy.

Explanation

$4.$ Which of the following statements describe a feature available to the owner of a universal

life insurance policy that is not available for traditional whole life insurance?

A$)$ Policy loans are permitted typically with very low interest rates

B$)$ Policyholders can surrender their policies and receive the policy$$s cash value if they

so choose.

C$)$ The policy provides death benefit coverage for the lifetime of the insured.

D$)$ Premium payments can be made at any time, in any amount, provided there is

sufficient cash value to keep the policy from lapsing.

E$)$ All of the above

Explanation

$5.$ Which of the following statements about second$-$to$-$die life insurance is $($are$)$ true?

I. This type of policy is often used for estate planning purposes.

II$.$ The premium is lower than the combined cost of purchasing a life insurance

policy on each insured.

A$)$ I only

B$)$ II only

C$)$ both I and II

D$)$ neither I nor II

Explanation

$6.$ Which of the following $$100,000$ whole life insurance policies, issued by the same

company to a male age $32,$ would require the highest $($level$)$ premium?

A$)$ continuous premium whole life

B$)$ whole life paid$-$up at $65$

C$)10-$payment whole life

D$)20-$payment whole life

E$)$ whole life paid$-$up at $55$

Explanation

$7.$ Bert purchased a life insurance policy $2$ years ago. He inadvertently stated that he was $1$

year younger than his actual age. If Bert dies today, how much will the insurance

company pay?

A$)$ nothing

B$)$ less than the policy face value

C$)$ the policy face value

D$)$ more than the policy face value

Explanation

$8.$ Which of the following is mandatory that the policyowner name in the application?

A$)$ Exactly one primary beneficiary

B$)$ At least one primary beneficiary

C$)$ At least one primary beneficiary and at least one contingent beneficiary

D$)$ Exactly one primary beneficiary and at least one contingent beneficiary

E$)$ At least one irrevocable beneficiary

Explanation

$9.$ Arthur is the policyowner of a whole life insurance contract. The insured is Betty. The

primary beneficiary is Carl and the contingent beneficiary is Diane. Betty and Carl die

simultaneously in a horrible airplane crash. It is impossible to determine which died first.

Which of the following is true?

A$)$ If Arthur and Diane are both alive, Diane will receive the proceeds.

B$)$ If Arthur is alive but Diane is not, Carl$$s estate will receive the proceeds

C$)$ If neither Arthur nor Diane is alive, Betty$$s estate will receive the proceeds.

D$)$ It doesn$$t matter which of Arthur or Diane is alive to determine who will receive the

proceeds.

Explanation

$10.$ Which of the following life insurance policy provisions is unique to cash value life

insurance?

A$)$ Reinstatement provision

B$)$ Policy loan provision

C$)$ Grace period provision

D$)$ Misstatement of age provision