Questions And Answers PDF Format: For More Information – Visit link below: https://www.certsgrade.com/ Version = Product CERTSGRADE High Grade and Valuable Preparation Stuff Finance Life-Insurance Life Insurance Licensing – Core Essentials Visit us athttps://www.certsgrade.com/pdf/life-insurance/ Latest Version: 6.0 Question: 1 In a viatical settlement, the purchase offer depends upon all of the following, except the: A. Face amount B. Policy cost basis C. Cash surrender value D. Insured’s physical exam Answer: B Explanation: Viatical settlement companies buy policies on insureds with serious illnesses who need cash for living expenses, medical bills, or other emergencies. Companies often require an insured’s physical exam to understand how long the insured may live. The cash surrender value, premiums that will be required, insured’s age, and the policy face amount all play a part in how much is offered. Question: 2 To sell variable life, an agent must have: I. A life insurance license II. An appointment III. A securities license IV. Prospectus A. I, II, III, IV B. I, II, III C. I D. I, II Answer: A Explanation: Variable products require both insurance and securities licenses. All agents must have an appointment with an insurance company. Variable products require a current prospectus. Question: 3 A policyowner has a policy on himself for $300,000 and has cash surrender values totaling $50,000. He makes an assignment for $50,000. If he dies, his family receives: Visit us athttps://www.certsgrade.com/pdf/life-insurance/ A. $100,000 B. $300,000 C. Nothing D. $250,000 Answer: D Explanation: An assignment is a primary beneficiary and is paid from the death benefit first. When paid, the balance is paid to the other beneficiaries, in this case, his family. ($300,000 death benefit - $50,000 assignment = $250,000). Question: 4 An annuitant, age 60, selects the Life with 20-year Period certain payout option that pays $500 per month starting at age 65. If the annuitant dies at age 85, what is the death benefit? A. The balance of the premiums minus the income received B. The cash surrender value C. Zero D. $500 per month for 5 years Answer: C Explanation: Life with period certain guarantees that the annuitant or the annuitant’s beneficiary receives the income for the annuitant’s life or 20 years, whichever is longer. The annuitant lived 20 years and the remaining benefit is zero. Question: 5 A newly hired life insurance producer candidate announces his new career to his neighbor. The neighbor asks the candidate to explain the difference between several life insurance policy types. When the candidate explains, he: A. Violates no rules, as long as he does not mention a particular product B. Must refuse to answer until he passes his exam C. Violates insurance laws D. Cannot quote rates Answer: A Explanation: Selling, soliciting, and negotiating involve a particular company or particular product and persons must be licensed. Discussing generic insurance concepts and insurance types does not violate the rules. Visit us athttps://www.certsgrade.com/pdf/life-insurance/ Question: 6 An agent compares a prospective customer’s policy to his company’s plan. The agent points out many provisions, but not all of the existing plan’s features. The agent: A. Guides the customer professionally B. Misrepresents the policy C. Knows the customer understands his current policy D. Saves the customer time and money Answer: B Explanation: Agents may not assume that the customer understands his current policy. Failing to explain important features misrepresents the existing policy and is a violation regardless of time or money savings. Question: 7 A Universal Life policyowner withdraws $10,000 from his policy. If he is in the 30 percent tax bracket, how much will he pay in federal taxes? A. $4,000 B. Nothing C. $2,200 due to capital gains D. $3,000 Answer: D Explanation: Withdrawals from Universal Life are taxed at ordinary income tax rates. The owner pays $3,000 in ordinary income tax ($10,000 X .30 = $3,000). Capital gains are not connected to life insurance policies. Life insurance cannot be an IRA, so there is no additional tax penalty. Question: 8 A married couple each takes out a policy on themselves and makes the other primary beneficiary. Years later, the couple divorces. Which of the following is true? A. Coverage stops when the divorce is final B. Each must notify the insurer upon divorce C. Each may name their new spouse as beneficiary D. Each spouse retains collateral interest in the other’s plan Answer: C Visit us athttps://www.certsgrade.com/pdf/life-insurance/ Explanation: Every person has an insurable interest in himself or herself. The policyowner may change beneficiaries at will. The policy may continue as long as allowed by the insurance contract and spouses generally do not retain a collateral interest in life insurance policies (although divorce courts can order changes). To change beneficiaries, the policyowner must notify the insurer in writing, but divorce does not require notice. Question: 9 Just two months after issue, a policyowner submits a death certificate to his insurer because one of the people on the policy died. After two months with no communication, the insurer questions the circumstances surrounding the death. In addition, the company does not return phone calls and says they will initiate a full investigation before considering the claim. This is an example of: A. Poor customer service B. Thorough claims processing C. Misrepresentation D. Unfair settlement practices Answer: D Explanation: Insurers must respond to claims in a timely manner (often 15 days) and may not require additional forms or investigations, unless necessary. The extraordinary delay – one month – is far beyond poor customer service. While some claims, especially when submitted soon after a policy is issued, may warrant an investigation, spurious or unnecessary investigations are unfair settlement practices. Question: 10 All of the following are characteristics of non-admitted life insurance companies, except: A. They may write higher face amounts B. They may write selected risks C. They must submit their rates to the Commissioner D. The state will not help pay claims if the company is bankrupt Answer: C Explanation: Non-admitted life insurance companies are not under a state’s insurance laws and do not submit their rates to the Commissioner. As such, they might offer specialized risk policies, use alternative underwriting criteria and issue higher face amounts. However, if the company declares bankruptcy, the state will not pay any claims. Visit us athttps://www.certsgrade.com/pdf/life-insurance/ For More Information – Visit link below: http://www.certsgrade.com/ PRODUCT FEATURES Discount Coupon Code: CERTSGRADE10 100% Money Back Guarantee 90 Days Free updates Special Discounts on Bulk Orders Guaranteed Success 50,000 Satisfied Customers 100% Secure Shopping Privacy Policy Refund Policy Powered by TCPDF (www.tcpdf.org) Visit us athttps://www.certsgrade.com/pdf/life-insurance/