Mississippi Life Accident and Health or Sickness Insurance Exam Version 1
Practice exam for Life Insurance Producer under Insurance Exams (Licensing Exams). 5 sample questions.
Sample Questions
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Question 1
A life insurance policy owner has paid $1,200 in premiums in six months for a $250,000 policy. The policyowner dies suddenly and the insurer pays the beneficiary $250,000. This exchange of unequal values reflects which of the following insurance contract features?
Correct Answer: A
Rationale: The policyowner paid only $1,200 but the beneficiary received $250,000, showing the insurer's obligation depends on an uncertain event (death) while the policyowner's premium is fixed and smaller; this unequal potential exchange defines an aleatory contract where gains/losses are contingent on chance, making A correct. Option B is wrong because personal relates to individual underwriting, not value exchange. Option C is incorrect as unilateral means only one party (insurer) makes an enforceable promise. Option D is mistaken since conditional refers to duties dependent on conditions like premium payment, not the unequal payout.
Rationale: The policyowner paid only $1,200 but the beneficiary received $250,000, showing the insurer's obligation depends on an uncertain event (death) while the policyowner's premium is fixed and smaller; this unequal potential exchange defines an aleatory contract where gains/losses are contingent on chance, making A correct. Option B is wrong because personal relates to individual underwriting, not value exchange. Option C is incorrect as unilateral means only one party (insurer) makes an enforceable promise. Option D is mistaken since conditional refers to duties dependent on conditions like premium payment, not the unequal payout.
Question 2
Which of the following beneficiary designations may limit a policyowner’s rights?
Correct Answer: D
Rationale: An irrevocable beneficiary cannot be changed without their consent, restricting the policyowner's control over the policy, so D is correct. Option A is wrong as primary is first in line but changeable. Option B is incorrect because contingent is secondary and doesn't limit changes. Option C is mistaken since revocable allows full policyowner control.
Rationale: An irrevocable beneficiary cannot be changed without their consent, restricting the policyowner's control over the policy, so D is correct. Option A is wrong as primary is first in line but changeable. Option B is incorrect because contingent is secondary and doesn't limit changes. Option C is mistaken since revocable allows full policyowner control.
Question 3
A producer must deliver an Outline of Coverage to a prospective insured who is eligible for Medicare at which of the following times?
Correct Answer: C
Rationale: Medigap rules require the Outline of Coverage at policy delivery to ensure the buyer understands benefits and comparisons before finalizing, making C correct. Option A is wrong as it's too early for full details. Option B is incorrect because post-signature misses informed decision. Option D is mistaken since it's mandatory, not on request.
Rationale: Medigap rules require the Outline of Coverage at policy delivery to ensure the buyer understands benefits and comparisons before finalizing, making C correct. Option A is wrong as it's too early for full details. Option B is incorrect because post-signature misses informed decision. Option D is mistaken since it's mandatory, not on request.
Question 4
Under a Disability policy, the Elimination period is:
Correct Answer: C
Rationale: The elimination period is a waiting time after disability before benefits start, functioning like a time-based deductible where the insured covers early costs, so C is correct. Option A is wrong as it's often shorter for accidents. Option B is incorrect because it's chosen by the insured. Option D is mistaken since probationary excludes pre-existing conditions.
Rationale: The elimination period is a waiting time after disability before benefits start, functioning like a time-based deductible where the insured covers early costs, so C is correct. Option A is wrong as it's often shorter for accidents. Option B is incorrect because it's chosen by the insured. Option D is mistaken since probationary excludes pre-existing conditions.
Question 5
If a life policyowner wants to take out a bank loan and the bank insists on collateral, the insured may:
Correct Answer: C
Rationale: Assignment transfers policy ownership rights to the bank as collateral, securing the loan while keeping the policy in force, making C correct. Option A is wrong as beneficiary naming doesn't collateralize. Option B is incorrect because dividends are minor. Option D is mistaken since payor is for juvenile policies.
Rationale: Assignment transfers policy ownership rights to the bank as collateral, securing the loan while keeping the policy in force, making C correct. Option A is wrong as beneficiary naming doesn't collateralize. Option B is incorrect because dividends are minor. Option D is mistaken since payor is for juvenile policies.