Individual Life and Annuities (ILA) Track Insurance Practice Questions

1. Sarah is considering purchasing a whole life insurance policy. What is a key feature?

• AA. Requires a medical exam
• BB. Guaranteed cash value
• CC. Coverage is temporary
• DD. Premiums fluctuate annually

2. John wants to understand the tax implications of his variable universal life insurance. What should he consider?

• AA. Cash value is tax-free
• BB. Withdrawals may be taxed
• CC. Loans are not taxed
• DD. Death benefits are taxable

5. Maria considers a life insurance policy that builds cash value over time. What type is she interested in?

• AA. Universal life
• BB. Whole life
• CC. Variable life
• DD. Term life

6. What happens to Term Insurance when the policyholder reaches the end of the term?

• AA. It expires without value
• BB. It can be renewed at a lower rate
• CC. It automatically converts to whole life
• DD. It remains in force

7. In a joint life insurance policy, who receives the benefits?

• AA. Primary applicant only
• BB. Survivor of both
• CC. Beneficiary of both
• DD. Policyowner only

8. What is one benefit of a rider on a life insurance policy?

• AA. Provides additional coverage
• BB. Cancels the policy
• CC. Limits investment options
• DD. Increases premium costs