Utah Producer Combined Life Accident and Health 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
Life insurance death proceeds are normally includable in a deceased insured’s gross estate:
Correct Answer: B
Rationale: Life insurance death proceeds are includable in the deceased insured’s gross estate if they are paid to or on behalf of the owner-insured’s estate, as this indicates the insured had incidents of ownership, making the proceeds part of the taxable estate. Choice A is incorrect because life insurance proceeds are generally not subject to federal income tax. Choice C is incorrect because the beneficiary owning the policy typically removes the proceeds from the insured’s estate. Choice D is incorrect because the presence of cash surrender value alone does not determine estate tax inclusion.
Rationale: Life insurance death proceeds are includable in the deceased insured’s gross estate if they are paid to or on behalf of the owner-insured’s estate, as this indicates the insured had incidents of ownership, making the proceeds part of the taxable estate. Choice A is incorrect because life insurance proceeds are generally not subject to federal income tax. Choice C is incorrect because the beneficiary owning the policy typically removes the proceeds from the insured’s estate. Choice D is incorrect because the presence of cash surrender value alone does not determine estate tax inclusion.
Question 2
The preventive medical care benefit sometimes provided in a Medicare supplement policy covers:
Correct Answer: D
Rationale: The preventive medical care benefit in a Medicare supplement policy typically covers annual physical exams to promote early detection and prevention. Choice A is incorrect because home health care is a separate benefit under Medicare. Choice B is incorrect as skilled nursing care is covered under specific conditions, not preventive care. Choice C is incorrect because hospitalization is covered by Medicare Part A, not typically as a preventive benefit in supplement policies.
Rationale: The preventive medical care benefit in a Medicare supplement policy typically covers annual physical exams to promote early detection and prevention. Choice A is incorrect because home health care is a separate benefit under Medicare. Choice B is incorrect as skilled nursing care is covered under specific conditions, not preventive care. Choice C is incorrect because hospitalization is covered by Medicare Part A, not typically as a preventive benefit in supplement policies.
Question 3
The designation of a beneficiary by class in a life insurance policy means that:
Correct Answer: C
Rationale: A beneficiary designation by class means beneficiaries are identified by a group category, such as 'children,' rather than by individual names. Choice A is incorrect because class designations are not exclusive to business life insurance. Choice B is incorrect as a primary beneficiary can still be designated by class. Choice D is incorrect because class beneficiaries, like 'spouse' or 'children,' are typically related to the insured.
Rationale: A beneficiary designation by class means beneficiaries are identified by a group category, such as 'children,' rather than by individual names. Choice A is incorrect because class designations are not exclusive to business life insurance. Choice B is incorrect as a primary beneficiary can still be designated by class. Choice D is incorrect because class beneficiaries, like 'spouse' or 'children,' are typically related to the insured.
Question 4
It is unlawful for a person to provide an advertisement that:
Correct Answer: C
Rationale: It is unlawful to use a policy title to misrepresent coverage, as this is deceptive and violates insurance advertising regulations. Choice A is incorrect because highlighting coverage advantages is permissible if accurate. Choice B is incorrect as referencing an insurer’s financial rating is allowed if truthful. Choice D is incorrect because comparing policy benefits is acceptable if done fairly and accurately.
Rationale: It is unlawful to use a policy title to misrepresent coverage, as this is deceptive and violates insurance advertising regulations. Choice A is incorrect because highlighting coverage advantages is permissible if accurate. Choice B is incorrect as referencing an insurer’s financial rating is allowed if truthful. Choice D is incorrect because comparing policy benefits is acceptable if done fairly and accurately.
Question 5
Under the absolute assignment of a life insurance policy:
Correct Answer: A
Rationale: An absolute assignment transfers all incidents of ownership, such as the right to change beneficiaries or surrender the policy, to the assignee. Choice B is incorrect because the original owner loses the right to change the beneficiary after an absolute assignment. Choice C is incorrect as debts to the insurer are not automatically canceled. Choice D is incorrect because the original owner does not automatically receive the cash value upon assignment.
Rationale: An absolute assignment transfers all incidents of ownership, such as the right to change beneficiaries or surrender the policy, to the assignee. Choice B is incorrect because the original owner loses the right to change the beneficiary after an absolute assignment. Choice C is incorrect as debts to the insurer are not automatically canceled. Choice D is incorrect because the original owner does not automatically receive the cash value upon assignment.