Preview Questions Insurance Advisor | Role Specific Skill

Question 1: Which of the following is a feature unique to a variable universal life insurance policy?

Which action should you take?

Choose only one option

It provides a guaranteed death benefit

It does not require underwriting

It has no investment component

It allows for flexible premiums and death benefits

Question 2: For evaluating the credit risk of corporate bonds held within an insurer's general account, which method surpasses basic credit ratings to incorporate dynamic credit spreads, default correlations, and macroeconomic stress scenarios?

Which action should you take?

Choose only one option

Ignoring macroeconomic factors and relying solely on historical default averages

Using only static credit ratings provided by agencies

Applying a uniform probability of default across all bonds regardless of industry

Implementing a credit portfolio model (e.g., Merton structural model or CreditRisk+) with correlated default simulation and scenario testing

Question 3: In an annuity, what is the primary function of the accumulation phase?

Which action should you take?

Choose only one option

To accumulate funds for future payouts

To allow the annuity to convert to a whole life policy

To ensure pension benefits are tax-free

To provide immediate lifetime income

Question 4: What is the primary difference between an indexed universal life (IUL) insurance policy and a variable universal life (VUL) policy in terms of investment options?

Which action should you take?

Choose only one option

IUL offers a fixed interest rate, while VUL allows for investments in stocks and bonds

IUL offers stock market exposure, while VUL guarantees fixed returns

IUL offers guaranteed death benefits, while VUL offers variable death benefits

IUL offers a flexible premium structure, while VUL has fixed premiums

Question 5: What is the purpose of a "rider" in an insurance policy?

Which action should you take?

Choose only one option

To add additional benefits or coverage to a basic life insurance policy

To provide an extended grace period for premium payments

To reduce the policyholder's premium costs

To transfer ownership of the policy to a third party

Question 6: Critical illness policies are designed to cover the cost of major diseases. Which of the following is usually excluded from such coverage?

Which action should you take?

Choose only one option

Cosmetic surgeries

Heart attack

Stroke recovery

Cancer treatment