Free Alaska life insurance practice test.

Answer D. A mortality table

A mortality table shows expected death rates by age and is central to life underwriting and pricing. A morbidity table deals with sickness and disability, used in health insurance. An amortization schedule is a loan repayment tool. A dividend table relates to participating policy dividends, not risk selection.

Answer C. The policyowner

Ownership rights, including naming or changing the beneficiary, belong to the policyowner. In third-party ownership the owner is someone other than the insured, but the owner still controls those rights. The insured has no ownership rights unless they also own the policy. The beneficiary only has a right to receive proceeds at death. The insurer administers the policy but does not choose the beneficiary.

Answer A. Within a set time period required by regulation

Producers must report address changes to the Director within the time period fixed by rule so the Division can maintain accurate records and reach the licensee. Waiting until renewal, reporting only out-of-state moves, or never reporting all fail the notification duty. The exact day count varies, so the concept is tested.

Answer B. Annuity suitability requirement

Annuity suitability rules require the producer to collect the consumer's financial information and have reasonable grounds that a recommended annuity fits their needs. Replacement notices deal with changing existing coverage. Guaranty association coverage protects policyholders if an insurer fails. A free look extension addresses cancellation time, not the recommendation itself.

Answer B. The face amount plus the accumulated cash value

Under Option B (increasing), the beneficiary receives the specified face amount plus the accumulated cash value, so the total can grow. Option A pays only a level face amount. Subtracting cash value is not how either option works. Twice the annual premium is not a death benefit formula.

Answer B. The right to buy additional coverage at set future dates without proving insurability

The guaranteed insurability rider lets the insured purchase more insurance at specified times or ages without a new medical exam. It does not guarantee cash value or loan interest rates, and it is not the same as a cost of living rider that increases benefits for inflation.

Answer D. Have Sarah complete all questions before submitting

The producer must ensure the application is complete and accurate; unanswered questions should be filled in by the applicant before submission. Guessing or answering for the applicant risks misrepresentation. Blanks are not automatically treated as no and can create disputes at claim time.

Answer D. Income to eligible dependents after a covered worker dies

Social Security survivor benefits pay monthly income to eligible dependents such as a surviving spouse caring for children or minor children after a covered worker dies. It is ongoing income, not a single lump sum equal to a policy, so that is wrong. Retirement benefits are not available at age 40, so that is wrong. Survivor benefits supplement but do not fully replace private life insurance, so that is wrong.

Answer B. As funds held in a fiduciary capacity, kept separate from personal money

Premiums a producer collects are held in a fiduciary capacity and must be kept separate from the producer's own funds to prevent misuse. Treating them as personal income or as a loan to spend is misappropriation. Saying the producer cannot access them at all is wrong because the producer handles and forwards them but must not commingle them.

Answer A. To protect policyholders when a member insurer becomes insolvent

The guaranty association protects policyholders, within limits, when a member insurer becomes insolvent and cannot pay claims. It does not set rates, which is a rating and filing function. Licensing producers is the division's job. Investigating fraud is a regulatory and enforcement function, not the guaranty association's role.

Answer A. The performance of a stated market index, subject to caps and floors

Indexed universal life ties interest crediting to a named market index such as the S&P 500, usually with a cap limiting gains and a floor protecting against loss. A fixed rate for life describes a guaranteed rate, not indexed crediting. Dividends belong to participating whole life. The prime lending rate is not the crediting basis for indexed products.

Answer D. Policy loan provision

The policy loan provision allows borrowing against the cash value. Assignment transfers ownership rights. Reinstatement restores a lapsed policy. The entire contract provision defines what documents make up the contract.

Answer B. A conditional receipt

A conditional receipt is issued when premium is paid with the application; coverage becomes effective only if the applicant is found insurable under the insurer's rules. A binding receipt is used in property insurance, not typical life. A free look notice comes with the delivered policy, not at application. A policy summary describes the policy but does not provide any interim coverage.

Answer D. The master contract is held by the employer or group sponsor

In group life, one master contract is issued to the sponsor (usually the employer) and individual members receive certificates of coverage, not their own contracts. Group plans usually do not require individual evidence of insurability for the guaranteed amount, so that choice is wrong. Members get certificates rather than full policies, so that choice is wrong. Group life is typically annually renewable term, not permanent whole life, so that choice is wrong.

Answer C. An insurer's authorization for a producer to represent and sell its products

An appointment is the insurer formally authorizing a licensed producer to act on its behalf and sell its products. It is not a meeting, not a renewal date, and not a consumer request. Students confuse appointment with licensing, but a license lets you sell while an appointment ties you to a specific insurer.

Answer A. Commingling of funds

Commingling is mixing client or insurer funds with the producer's personal funds, which is prohibited. Twisting is using misrepresentation to get someone to replace a policy. Rebating is giving something of value not stated in the contract to induce a sale. Defamation is making false statements harming an insurer. Only commingling describes misusing the premium account.

Answer A. Stops with no further payments to anyone

A pure life (straight life) option pays the largest income while the annuitant lives and stops entirely at death, with nothing paid to survivors. Continued payments to a beneficiary describe a joint and survivor option. A refund of premiums describes a refund or period certain option. Doubling for a spouse is not a real payout option.

Answer D. Accidental death benefit rider

The accidental death benefit rider pays an additional amount if death results from an accident. Waiver of premium pays premiums during disability. Guaranteed insurability lets him buy more coverage without proof of insurability. Cost of living increases the benefit for inflation.

Answer C. When the policy is delivered and the first premium is paid

When no premium accompanies the application, coverage typically takes effect upon policy delivery and payment of the first premium, provided the insured's health is unchanged. Signing the application alone does not create coverage. Underwriting starting or the producer's appointment status does not trigger coverage.

Answer D. Tax-deferred until money is withdrawn

Qualified plan earnings grow tax-deferred, meaning no tax is due until funds are distributed, at which point they are taxed as ordinary income. They are not taxed annually while inside the plan, so that is wrong. They are not permanently tax-free; distributions are eventually taxed, so that is wrong. The growth is taxed as ordinary income at withdrawal, not as capital gains, so that is wrong.