Alaska Life Insurance Practice Exam

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• What characteristic of an insurance contract describes that it must be accepted as is by the insured?
• Who assumes the investment risk in a fixed annuity?
• An annuity that guarantees income for a specific length of time is called what?
• For a retirement plan to be qualified, it must be designed for whose benefit?
• If there is no named beneficiary for the annuity benefits, to which entity will the benefits be paid?
• If the sole beneficiary of a life insurance policy dies before the insured, what happens to the policy's death benefit?
• What type of life insurance policy provides permanent protection?
• Which type of retirement account is specifically designed for self-employed individuals?
• What type of life insurance policy is best suited for someone with a $10,000 bank note due in 5 years?
• What is the name for an overfunded life insurance policy?
• Can a business or a corporation be an annuitant?
• What does the term double indemnity mean in life insurance?
• Are employer contributions to qualified plans considered taxable income for employees?
• Which type of policy assignment requires transfer of all ownership rights in the policy to a third party?
• What does the term "level" refer to in level term insurance?
• For which of the following would a variable annuity be least suitable?
• What is the main advantage of reinstating a life insurance policy instead of applying for a new one?
• Which type of life insurance policy often experiences increases in premium costs on renewal?
• During which stage in the insurance process do insurers evaluate information that identifies adverse selection risks?
• What do individuals primarily use to transfer their risk of loss?
• What type of beneficiary can be changed at any point by the policy owner?
• What life insurance policy provision states that both the policy and a copy of the application form the contract between the policyholder and the insurer?
• If an applicant for a life insurance policy and the potential insured are two different people, what would be the underwriter's main concern?
• What primarily distinguishes a Modified Endowment Contract from other policies?
• If a life insurance policy application contains a misrepresentation about the insured's age, what will typically happen to the death benefit?
• Which provision allows for changes to the policy without requiring a new policy to be issued?
• What are the most common exclusions in life insurance policies?
• How is the information obtained for an investigative consumer report?
• When planning for survivor protection in life insurance, which factor should be considered?
• What is the purpose of the Automatic Premium Loan provision?
• In a fixed-period settlement option, how is the amount of each installment determined?
• What is the primary purpose of a 401(k) plan?
• What is considered a core principle that allows policyholders to benefit from life insurance?
• A whole life policy that requires the policy owner to pay premiums for a specified number of years is known as what kind of policy?
• What is the main reason behind adverse selection in insurance?
• Which of the following plans is typically used to set aside funds for retirement while allowing for higher annual contribution limits?
• What type of annuity requires an agent to have a securities license?
• In insurance contracts, what does the term unilateral mean?
• What law protects consumers against the circulation of inaccurate or obsolete information?
• Which term refers to an existing policy being terminated or reissued while a new policy is created?
• What type of report is used to evaluate an applicant's lifestyle and character?
• Under what nonforfeiture option does the company pay the policy surrender value and have no further obligations to the policyowner?
• What penalty is incurred for withdrawing funds from a traditional IRA before the age of 59 ½?
• What portion of the death benefit will be paid to the beneficiary if the owner of a whole life policy dies at age 80 without outstanding loans?
• What is insurance underwriting?
• What does it mean for insurance contracts to be unilateral?
• Which type of annuity is best for someone seeking the largest benefit amount for the duration of the annuitant's life?
• When will a contingent beneficiary receive death benefits from a life insurance policy?
• Which type of insurance is designed to accumulate cash value over time?
• What are the death benefit options in universal life policies?
• Who owns a group life insurance contract?
• Which are the two classifications of annuities based on when payments begin?
• What is the primary purpose of purchasing an annuity?
• Which type of life insurance policy accumulates cash value over time?
• What required provision protects against unintentional lapses in policy coverage?
• What is the name of the process that insurance companies use to determine whether or not an applicant is insurable?
• Which insurance policy typically has no cash value accumulation?
• What kind of insurance provides coverage primarily for specific risks such as accidental death?
• If a policyowner chooses to forgo the insurance benefit, which option could they select instead?
• What type of report provides information about the applicant's hobbies, habits, and financial status?
• What is the purpose of a free-look period?
• What type of retirement plan is known for allowing employees to contribute through payroll deductions?
• How does the insurance company decide to adjust a death benefit due to age misstatement?
• Which factor is crucial for designing a group life insurance policy?
• What is a warranty in an insurance contract?
• Whose responsibility is it to ensure that all questions on an insurance application are answered?
• In which of the following instances does insurable interest exist in life insurance?
• Which party is primarily responsible for drafting the insurance contract?
• What is the primary purpose of a life insurance policy?
• Which term refers to the total amount the insurance company will pay to the beneficiary upon the insured's death?
• With the reduction of premium dividend option, how is the dividend used?
• What type of annuity can be purchased with a single premium?
• What is required to qualify an individual to contribute to a traditional IRA?
• At what age can a policy typically become fully paid in a whole life insurance plan?
• What effect does the longer selected period have on payments in a fixed-period settlement?
• When is a misrepresentation in an insurance application considered material?
• What is the purpose of settlement options in life insurance policies?
• What is the primary function of underwriting in the insurance process?
• What is the name for a life insurance policy rider that provides coverage on the insured's family members?
• Who is considered a field underwriter in life insurance?
• What action can be taken if a policyholder wants to change the beneficiary designation?
• What is a characteristic of immediate annuities?
• Which of the following are the three types of risk rating classifications in life insurance?
• If the annuitant dies before the annuitization period starts, what will the beneficiary receive?
• Which document provides specific information about a life insurance policy?
• What type of premium is charged on a straight life policy?
• What is considered a standard classification in risk rating for life insurance?
• If an applicant does not receive a copy of the new insurance policy, who would be held responsible?
• Insurance is a contract that primarily protects the insured from what?
• What term refers to the fee a person pays to an insurance company for coverage?
• Upon surrendering a life insurance policy, which portion of the cash value is taxed?
• What factors do underwriters consider when evaluating a group for life insurance?
• Is the beneficiary required to have insurable interest in the insured?
• What are the three types of Social Security benefits?
• If the annuitant dies during the accumulation period of an annuity, who receives the annuity benefits?
• What dividend option is automatically selected by the insurance company if the policyowner does not choose one?
• Who receives income payments from an annuity?
• When does acceptance typically occur in forming an insurance contract?
• What term describes methods of payment for the death benefit to the beneficiary after the insured's death?
• What option allows a policyowner to receive a death benefit in fixed installments over a specified period?
• What are the two phases of an annuity?
• What does the term "competent parties" refer to in an insurance contract?
• What can a policyholder do with accumulated dividends in a life insurance policy?
• If a retirement plan is considered qualified, what does this indicate about its tax treatment?
• What are the personal uses of life insurance?
• When converting from group to individual life insurance policies, what documentation is often unnecessary?
• Which document is essential to fulfill the entire contract policy provision in an insurance policy?
• What is the main purpose of the 7-pay Test?
• During what phase is the accumulated money in an annuity converted into a stream of income?
• What is the main responsibility of a company's underwriting unit?
• What is the purpose of establishing the target premium for a universal life policy?
• What settlement option allows the beneficiary to receive the death benefit as a lump sum?
• In the context of annuity payments, what is the main difference between the annuitant and the beneficiary?
• In which type of life insurance policy can the policy owner skip premium payments without the policy lapsing?
• If the policyowner chooses a cash surrender option, what happens to the coverage?
• In insurance, when is the offer usually made on a contract?
• What element of an insurance contract stipulates the exchange of value?
• What is a key characteristic of universal life insurance?
• What is typically the result of paying premiums that exceed the cost of an adjustable life policy?
• What is an example of a life insurance policy settlement option that provides regular payments for a specified time?
• What happens to the taxable status of funds when they are withdrawn from a qualified retirement plan?
• If a beneficiary receives death benefits that include principal and interest, which part is taxable?
• How soon can income payments begin in an immediate annuity?
• Who holds the rights to the cash value of a life insurance policy?
• What type of life insurance policy is known as Life Paid-up at age 65?
• Which document would detail the benefits and features of a life insurance policy?
• Which nonforfeiture option is automatically selected by the insurer if the policyowner does not specify one?
• What elements of an adjustable life policy can be changed by policy owners?
• What two elements are necessary for a life insurance contract to have a legal purpose?
• If a policyowner borrows a portion of cash value from his whole life policy and does not repay the loan, how will it affect the death benefit to the beneficiary?
• Why do self-employed individuals typically choose HR-10 or Keogh plans?
• When is the death benefit paid in a joint life policy?
• Why are policy loans not available on term insurance?
• What is the primary purpose of a life insurance policy’s dividends?
• Which type of life insurance is most suitable for covering a mortgage?
• What is the benefit of using life insurance to pay state inheritance and federal estate taxes?
• A life annuity with a 15-year period certain will pay for how long?
• When does an insurance policy typically go into effect?
• What is one primary purpose of settlement options in life insurance?
• What life insurance policy provision prevents an insurer from disputing or denying a claim due to misstatements on the application after a certain period of time?
• What will an insurer do if a representation on a life insurance policy application regarding the insured's age is discovered to be inaccurate, with the insured being 10 years older than stated?
• Who must have insurable interest in the insured?
• How many employees can participate in SIMPLE plans?
• What is the main benefit of the accelerated death benefit rider?
• When should the policy summary for a life insurance policy be delivered to the policyowner?
• Which of the following is an example of a qualified retirement plan?
• What policy component must decrease in decreasing term insurance?
• In the context of a life insurance policy, what does liquidity refer to?
• What happens to the proceeds of a life insurance policy if there is no named beneficiary?
• What is the main purpose of life insurance in estate planning?
• What might trigger an insurer to request an investigative consumer report?
• Who is considered a third-party owner in a life insurance policy?
• Why are dividends received from life insurance policies not subject to taxation?
• Who qualifies for tax-sheltered annuities, or 403(b) plans?
• An individual has a contract that will provide him with a certain amount of income for the rest of his life. What type of contract does this person have?
• What is the best method for correcting an application for insurance when a change needs to be made?
• Who is entitled to the cash values in a life insurance policy?
• If an insured terminates membership in group life insurance, to what type of insurance can the insured convert the coverage?
• What is considered a standard risk classification?
• What is the penalty for excessive contributions to a traditional IRA?
• Which contract element requires all parties to have legal capacity to enter the agreement?
• Which of the following is NOT a common form of life insurance?
• With a single premium deferred annuity, when will the annuity payments become available?
• What are the four essential elements of an insurance contract?
• Which of the following is a dividend option available in life insurance policies?
• What dividend option can increase the death benefit of the existing life policy?
• What type of policy issues certificates of insurance to the insureds?
• What qualified plan is suitable for the self-employed?
• Is the death benefit of a life insurance policy taxed to the beneficiary if it's received as a lump sum?
• When an applicant misstates her age on a life insurance application, what impact does it have on the death benefit?
• What provision in a life insurance policy extends coverage beyond the premium due date?
• What happens to a policy's cash value when an extended term nonforfeiture option is utilized?
• What type of life insurance includes a cash value component?
• Which risk classification would typically qualify for lower premiums?
• At what point does coverage begin when an agent issues a conditional receipt for a life insurance policy?
• What is a potential financial implication of converting group insurance to an individual policy?
• Which option in life insurance policies allows for a portion of the death benefit to be paid out initially and the rest later?
• Who is eligible to contribute to an HR-10 plan?
• What life policy rider allows the company to forgo collecting the premium if the insured becomes disabled?
• How are cash value increases in life insurance policies treated for taxation purposes?
• If neither the policyowner nor the beneficiary chooses a settlement option, what will the insurer default to?
• Which nonforfeiture option typically provides coverage for the longest time period?
• Group life insurance policies are typically written as which type of insurance?
• Which type of policy is typically issued without proof of insurability from the insured?
• Who controls changes in premium payments, cash values, and loans in a life insurance policy?
• What are policy dividends?
• What is the difference between a single premium and a flexible premium payment option in a deferred annuity?
• What can be a consequence of adverse selection for insurance companies?
• Which situation does NOT constitute a breach of the insurance policy's terms?
• In what scenario would a decreasing term life insurance policy be most appropriate?
• In what form must contributions to a traditional IRA be made?
• In a whole life insurance policy, what happens to premiums paid after the insured's death?
• What are the three nonforfeiture options in life insurance policies?
• What type of annuity provides a set amount of income for two or more persons, ceasing upon the first death?
• What financial benefit do employees receive from participating in a qualified retirement plan?
• Which retirement account is commonly associated with employers matching employee contributions?
• Which beneficiary designation is next in line after the primary beneficiary?
• Under Option B in a universal life policy, what happens to the death benefit?
• In variable universal life insurance, what does the term "variable" refer to?
• What is the best approach to handling incomplete insurance applications?
• What is the purpose of the agent's report in the insurance application process?
• What is typically the feature that distinguishes whole life insurance from term life insurance?
• When can an insurance company use suicide as a defense against paying a death claim?
• Whose life expectancy is taken into consideration in an annuity contract?
• How may insurance policies be delivered to insureds?
• How is the premium determined in a joint life insurance policy?
• What type of life insurance policy offers pure death protection?
• What provision allows the policyowner to reactivate a lapsed life insurance policy with proof of insurability?
• What document verifies an applicant's consent in obtaining insurance?
• What universal life option includes a gradually increasing cash value with a level death benefit?
• What is meant by policy replacement in life insurance?
• Who are the entities that make up the Medical Information Bureau?
• What is a common use of life insurance as a financial tool?
• Who benefits from the investment growth in a whole life insurance policy?
• What does a beneficiary designation determine in a life insurance policy?
• With the interest only settlement option, what happens to the policy's death benefit?
• Under a 20-pay whole life policy, for the policy to pay the death benefit to a beneficiary, the premiums must be paid for how long?
• What are the most common types of business life insurance?
• If an agent fails to obtain the applicant's signature on the application, what must the insurer do?
• What is the primary purpose of an annuity's beneficiary?
• What generally happens to the premium in an annually renewable term life policy?
• If an insurer needs to obtain information about the applicant from investigators, what is required?
• When must insurable interest exist in a life insurance policy?
• Which of the following is NOT a common instance of insurable interest?
• When does an adjustable life policy begin to accumulate cash value?
• When would a misrepresentation on an insurance application be considered fraud?
• What type of assignment is used to secure the payment of a debt with an existing life insurance policy?
• Which retirement plan allows contributions pretax, reducing taxable income?
• Which policy is likely to provide a payout only if the insured dies before a set term?
• Which life insurance policy is designed primarily for lifelong protection and includes a savings component?
• Whole life policies provide protection until the insured reaches what age?
• What happens to the cash value when a whole life insurance policy matures?
• What defines "earned income" for IRA contribution eligibility?
• In annually renewable term policies, the annual premium is based on what?
• What is the general rule regarding the taxation of death benefits payable to the beneficiary of a life insurance policy?
• In flexible premium payment annuities, what does the term 'flexible' refer to?
• What type of beneficiary has the first claim to the death proceeds of a life insurance policy?
• What type of licenses are required to sell variable annuities?