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In order to sell a(n) ________ Life policy, a producer is required to register with the Financial Industry Regulatory Authority (FINRA).

1.  Variable 

2.  Straight

3.  Adjustable

4.  Term

Correct. In order to sell a Variable Life policy, the producer must register with the Financial Industry Regulatory Authority (FINRA).

N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?

1.  30 Pay Life 

2.  Adjustable Life 

3.  Universal Life

4.  Term to Age 70

Incorrect. The correct answer is "30 Pay Life". Limited pay whole life policies have level premiums that are limited to a certain period.

Credit life insurance is typically issued with which of the following types of coverage?

1.  Individual Whole Life

2.  Annual Renewable Term 

3.  Decreasing Term 

4.  Group Term

Incorrect. The correct answer is "Decreasing Term". The type of insurance used for Credit life is typically decreasing term, with the term matched to the length of the loan period.

Which of the following actions is NOT possible with a Universal Life policy?

1.  Face amount may be adjusted

2.  Premium payments may be made at unscheduled times

3.  Policy's cash value may be used to pay premiums 

4.  Premiums may be applied as a credit against income tax 

Incorrect. the correct answer is "Premiums may be applied as a credit against income tax". All of these actions are possible with a Universal Life policy EXCEPT "Premiums may be applied as a credit against income tax".

Whole Life insurance policies are contractually guaranteed to provide each of the following, EXCEPT:

1.  premiums that remain fixed for the life of the policy

2.  partial withdrawal features beyond a surrender charge period 

3.  cash value that will ultimately replace the death benefit 

4.  nonforfeiture benefit options

Incorrect. The correct answer is "partial withdrawal features beyond a surrender charge period". All of these are contractually guaranteed to be provided in a whole life insurance policy EXCEPT "partial withdrawal features beyond a surrender charge period".

Term insurance has which of the following characteristics?

1.  Builds cash value

2.  Has nonforfeiture options

3.  Expires at the end of the policy period 

4.  Endows at the end of the policy period

Correct. With term insurance, the policy expires at the end of the policy period.

A 15-year mortgage is best protected by what kind of life policy?

1.  15-year decreasing term 

2.  15-year level term

3.  Modified whole life 

4.  Adjustable life

Incorrect. The correct answer is "15-year decreasing term". A 15-year mortgage is best protected by a 15-year decreasing term policy.

A term life insurance policy matures:

1.  upon the insured's death during the term of the policy 

2.  upon death of the insured

3.  upon endowment of the contract 

4.  when the cash value equals the death benefit

Incorrect. The correct answer is "upon the insured's death during the term of the policy". Term life policies can only mature (pay out the face amount) if death occurs during the term of the policy.

D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed?

1.  Limited-pay life

2.  Graded Premium

3.  Endowment 

4.  Level term 

Incorrect. The correct answer is "Level term". Life insurance written to cover a need for a specified period of time at the lowest premium is called level term insurance.

Which of these life products is NOT considered interest-sensitive?

1.  Modified Whole Life 

2.  Variable Life

3.  Variable Universal Life

4.  Interest Sensitive Whole Life 

Incorrect. The correct answer is "Modified Whole Life". All of these have an interest-sensitive investment aspect, EXCEPT Modified Whole Life.

What kind of life insurance product covers children under their parent's policy?

1.  Term rider 

2.  Family Maintenance rider 

3.  Payor benefit

4.  Family Income rider

Incorrect. The correct answer is "A Term rider". Family plan policies usually cover the family head with permanent insurance and the coverage on the spouse and children is term insurance in the form of a rider.

Which statement is correct regarding the premium payment schedule for whole life policies?

1.  Premiums are payable for a set period/ coverage expires at that point

2.  Premiums are payable until age 65/ coverage lasts a lifetime

3.  A single premium is paid at time of application/ coverage lasts until retirement 

4.  Premiums are payable throughout the insured's lifetime/ coverage lasts until death of the insured 

Incorrect. The correct answer is "Premiums are payable throughout the insured's lifetime/ coverage lasts until death of the insured". With whole life insurance, premiums are payable throughout the insured's lifetime, and coverage continues until the insured's death.

What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?

1.  Universal Life

2.  Whole Life 

3.  Credit Life

4.  Term Life

Correct. Whole life insurance is designed to mature at age 100.

S owns a life insurance policy with cash values that fluctuate according to the underlying investment performance of common stocks. Which of these policies does S own?

1.  Variable Whole Life 

2.  Endowment 

3.  Variable Term Life

4.  Joint Life

Incorrect. The correct answer is "Variable Whole Life". Variable whole life insurance is an insurance policy in which the cash values are determined by the performance of the underlying securities in the policy.

What type of life policy covers two people and pays upon the death of the last insured?

1.  Adjustable

2.  Shared

3.  Joint 

4.  Survivorship 

Incorrect. The correct answer is "Survivorship". A survivorship life policy insures two individuals and is designed to pay a benefit upon the second death.

K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?

1.  Level 

2.  Decreasing

3.  Adjustable 

4.  Increasing

Incorrect. The correct answer is "Level". A level term policy pays the same benefit amount if death occurs at any point during the term. Level term policies may be renewable.

A(n) _______ _______ Life policy combines investment choices with a form of Term coverage

1.  Straight Whole

2.  Variable Term 

3.  Adjustable Universal

4.  Variable Universal 

Incorrect. The correct answer is "Variable Universal". Variable Universal Life combines investment choices with a form of Term coverage.