Study Guide for Mass Insurance License

Topics: Life insurance, Insurance, Whole life insurance Pages: 19 (4464 words) Published: October 7, 2012
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Review Missed Questions
Take some time to review the questions you missed in the session you just completed. This list shows all of the questions that you missed in the session you just completed. The answer you selected is in bold. The correct answer is highlighted in yellow. | |

#1. | Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?| |
a)| Universal Life – Option A|
b)| Universal Life – Option B|
c)| Equity Indexed Universal Life|
d)| Variable Universal Life|
| Universal Life Option A (Level Death Benefit option) policy must maintain a specified "corridor" or gap between the cash value and the death benefit, as required by the IRS. If this corridor is not maintained, the policy is no longer defined as life insurance for tax purposes, and consequently loses most of the tax advantages that have been associated with life insurance.| |

#6. | Grace is the primary beneficiary of her grandfather's life insurance policy. Upon his death, she wants some income from the death benefit, but wants the face amount to be conserved. Which settlement option should she choose?| |

a)| Interest only option|
b)| Life income with period certain|
c)| Delayed income option|
d)| Fixed amount option|
| On the "interest only" settlement option, Grace would receive the interest earned by the face amount, but the face amount would remain.| |
#7. | Which mode of premium payment will not incur a service fee?| |
a)| Monthly|
b)| Timely payment will not result in service fees.|
c)| Annually|
d)| Quarterly|
| Annual premiums are the only modes of payment that do not result in service fees.| |
#8. | All of the following are characteristics of group life insurance, EXCEPT| |
a)| Certificate holders may convert coverage to an individual policy without evidence of insurability.| b)| Premiums are determined by the age, sex and occupation of each individual certificate holder.| c)| Amount of coverage is determined according to nondiscriminatory rules.| d)| Individuals covered under the policy receive a certificate of insurance.| |

| Premiums are determined by the age, sex and occupation of the entire group.| |
#9. | Your client is 45 years old and currently owns life insurance, but is considering purchasing a new Universal Life policy. Which of the following scenarios would NOT involve replacement?| |

a)| Placing his existing Whole Life on Extended Term|
b)| Allowing his one-year Term policy to expire|
c)| Borrowing 25% of the cash value of his existing Whole Life policy to purchase the new Universal Life| d)| Terminating the existing Term to Age 65 policy|
| Allowing a term policy to expire at the end of its term would not be considered a replacement. All the other scenarios would result in diminishing the existing policy’s value.| |
#10. | An agent wants to include an illustration written by his insurance company. Which of the following best describes the conditions under which he may use the illustration?| |
a)| Illustrations must accurately portray what would be included in a potential contract.| b)| All changes must be submitted to the insurer before approval.| c)| The illustration must stay exactly as it is.|

d)| The illustration can only be used for a month before it requires re-approval.| |
| If an agent uses the illustrations of an insurer, it must first be approved, and the agent may not alter the illustrations in any way.| |
#11. | What license(s) must a person hold in order to legally sell variable whole life insurance?| |
a)| Life insurance|
b)| Life and health insurance|
c)| Life insurance and...
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