Question 1

Which policy allows the insured to choose where the assets backing the cash value are invested?

Options :

A : Term life.

B : Variable life.

C : Universal life.

D : Endowment life.

Answer: B

Question 2

Medicare Part B pays for

Options :

A : hospice care.

B : prescription drugs.

C : physicians' services.

D : the first 60 days of hospitalization.

Answer: C

Question 3

The theory of probability is applied to life insurance through the use of

Options :

A : morbidity tables.

B : mortality tables.

C : the needs approach.

D : the human life value approach.

Answer: B

Question 4

According to the California Insurance Code, an illustration used to sell life insurance must include all of the following information EXCEPT

Options :

A : the probability that illustrated nonguaranteed scenarios will occur.

B : a label that identifies it as an illustration.

C : insurer-s policy name and form number.

D : name and address of the producer.

Answer: A

Question 5

Your client has just bought a new home which he has financed with a $150,000, 7.5% interest, 30-year bank loan. He would like to be sure that if he dies prematurely, the unpaid balance of the mortgage would be paid. He wants a policy that will cover the mortgage balance - no more, no less - anytime during the life of the mortgage. Which policy is designed to meet this need?

Options :

A : Level term policy.

B : Home service policy.

C : Increasing term policy.

D : Decreasing term policy.

Answer: D