All right, question one. All right. Which type of life insurance policy provides lifelong coverage and builds cash value? Lifelong coverage and builds cash value. That one is whole life B. Correct. What is the main benefit of purchasing term term life insurance? Um is C offers affordable premiums? Yeah. Uh which type of uh insurance policies allows the policy holder to invest sub accounts similar to mutual funds. Um keyword invest I'm going with C variable life. Great. Next. What happens if a policy holder stops paying premiums on a whole life policy? Um, B. The cash value may be used to cover premiums. Correct. Which of the following is a nonforfeature option in a permanent life insurance policy? Uh, REC, I'm going with D. All of the above. Yeah. What does the incontestability clause in a life insurance policy prevent um B the insurer from denying claims after a certain period? Yeah. What is a characteristic of a modified endowment contract? Um, let's see. Uh, B has limited premium payments. No. Is it C? Oh, yep. The answer is C. That's going to be my next one. Okay. So modified endowment contracts the when you think about the word association with a modified endowment contract is always going to have to do with taxes. Okay? Okay. All you got to remember if you ever see modified endowment contract, it's got to do with taxes. Now without without getting too deep and and thinking in two three four levels see a a universal life insurance policy is supposed to be a you know life insurance policy but a lot of agents sell it as an investment. So but if you put too much premium over and above how much you actually the cost of insurance they will make you start paying taxes. That's why it's called it changes from a regular life insurance to a modified endowment contract. You got it? Okay. So, it's related to a universal life when people are overfunding it. But without knowing without going studying the whole definition, just know if that damn question say modified endowment contract or MEC, they want you to know that when a policy reaches that point, you got to pay taxes on it. Okay? or taxes on the distributions rather. Okay. The taxes on a universal life insurance policy on the when it comes out where the money comes out is not taxable because it's considered a loan. But when it when you get to the level of MEC, you don't put too much money in now it's not a loan no more. You put too much money in there and then you get penalties for it. Okay. Right. So MEC taxes. Next. Which writer allows a policy holder to increase coverage without proof of insurability? Um C. Guarantee insurability. What is the purpose of a waiver of a premium rider? Uh C waves premium payments if the insurance becomes dis uh disabled. Yep. What is the primary advantage of a universal life policy over whole life? Um, is it D higher investment returns? No. Oh, B. The answer is B. Okay. So, when you thinking, write this down. When you if you taking notes over there, the only notes you should have on your paper right now is MEC. The word association you're looking for is taxes. With the with with this question, when you see the word universal life, the answer is always flexible premium. Flexible, flexible, flexible. Whole life is going to be fixed premium. Universal has flexible premium. That always go together. Got it? Got it. So, yeah. Don't don't don't associate high investment returns with universal life. It don't go together. Universal life always goes with flexible premium. Those two words go together every time. And y'all make that out. You need me to work on that. I can't see that one. Hold on. What up? Hold on. I fix it. All right, go ahead and answer that. Which of the follow which of the following is a benefit of a convertible term life insurance policy? Um I can't see all the answers, coach, because it's got the meeting. It's being recorded right there. But uh I think you can move that on your Oh, can I? Oh, yeah, I can. Okay. Uh let's see. Convertible. Okay. This one is a it allows the insured to cover. It allows the insurance to convert to permanent coverage without proof of insurability. Yep. All right. [Music] Okay. Next. What is the main advantage of an indexed universal life policy? Um, see cash value growth is tied to equity index. Yep. Which life insurance settlement option provides income for life? Uh, D. Life income. Yeah. Oh my goodness. Hold her on. Which um All right. Shoot. Which of the following policies allows the policy holder to skip premiums if there is sufficient cash value? Um, it is going to be either B or D, but I'm going to go with um B. Yep. B. Uh, let's talk let's talk about that because that I want that to be an easy one. Mhm. When when I when I say or when we understand that universal is always associated with what what's the what's the association go with universal life? Flexible premium. So what does flexible premium means? You can increase, decrease or skip. Okay. So if you're so when you read that question basically it's the same thing. Flexible premium and skipping premiums means the same thing. So that should have been B. Got you. Okay. Right. So flexible premium means you can increase, decrease or skip. So universal life if they ever have that or flexible, you know, it goes together. And if the cash value is falls isn't enough to cover, you know, to pay the premium policy on laps anyway. You got it. Okay. Got it. And variable. And so the association with the you know the word association that goes with variable is not flexible or skipping premiums. The association that goes with variable is mutual funds or investments. Investment. Okay. Okay. Got it. Variable goes with the stock market. When you see the word variable, you got to think stock market, mutual funds, uh not guaranteed. Got to have a securities license to go with it. That's what that's what always should jump out with you. Jump out at you when you see the word valuable. Got it. Got it. Got it. A graded premium whole life policy has uh Bc increase in premiums in early years and then level premiums. Yeah. Which factor does not affect the cost of a life insurance policy? Um, the gender. No, I'm sorry. The income, right? Income. So when you well what if you let's say if somebody's getting a policy their age how old they are that determines the premium if they healthy enough the term of the premier could be declined or rated and gender you know men rates are much higher than female male rates are much higher than female got it got it what is The primary purpose of the free look period in a life insurance policy. Uh a yep. [Music] Next, you see it? I can't see the top part. Uh, okay. Which type of life insurance policy combines a savings? Oh. You good? Oh yeah. Which type of policy um life insurance policy combines a savings element with a death benefit? B whole life. Yep. A policy loan can be taken from which type of life insurance policy? Uh B. Yep. Which of the following best describes a variable life insurance policy? Um okay. Um is it B allows investment in account set fluctuate in value? Yep. What what Yep. I was just saying that that when what did you write in your notes when I said what what's the what's the word association to go with variable investments? Bam. Mutual funds. Yeah. Yep. Easy peasy. It take you two seconds to get get it. In a joint life policy, when does the policy typically typically pay for the uh death benefit? Uh joint life, it would be the first. So, hey, I can't see that. What about now? Yes. What happens if a policy holder withdraws more than the cost basis from a universal life policy? Um what happens if [Music] um the excess amount is taxable as income right now this is a side note that's not on the test but understanding this right here as relates to helping you become a good agent and helping your clients is huge because 99% of these insurance agents that has failed whole life and universal life insurance b I don't have no pretty way to say it but basically a lot of people on this point right here have you ever seen on a Tik Tok video or YouTube where some agent is talking about universal life be your own bank tax-free withdrawals have you ever seen that or heard that before ever I don't think I've seen that one well I promise you they the competition is out here selling this like ice cream on the 4th of July and they are lying to people because it says right here on the state exam that the excess amount is taxable as income. So they selling these insurance policies all day long telling people about how much taxfree money they going to get. But in reality according to this question right here you know you see right here where it says cost basis. You see that cost basis means how much money you put in meaning your contributions. So the earnings are taxable. The excess amount or earnings is taxable. So for you to tell somebody is taxree. Well, you can't unless you tell them the only part that's taxree is you getting your own money back is taxree because if you actually made any it is taxable. That would be an accurate statement. Okay. But when you see it on the test, you just got to know that anything over the cost basis, meaning any earnings is taxable. Okay, got it. So if on your little word association chart with universal life, earnings are taxable. Excess premiums meaning money over what you put over the cost base of what much basically your contribution is taxable. All right. Next. All right. Which life insurance router provides coverage for the insured spouse and children? Um B family term matter. Family term. That's it. Yeah. You making me nervous. Don't be overthinking it. No, I heard I heard my little ones upstairs. That was my bad. What is the main purpose of the spin thrift clause in a life insurance policy? Um main purpose of spin thrift clause insurance policy. Um is it allows a policy holder to access cash value? No. A protects beneficiaries from creditors. Yep. Okay. All right. So, make a note. Yeah. Go over that one, coach. Huh? Just just review that one for me. That spin thrift clause. A spin thrift clause in a life insurance policy is a provision that protects the death benefit from being claimed by the beneficiary's creditors. Ensuring funds are managed according to the policy holders wishes and not seized or squandered. occur. So, it's just pretty much it's gonna protect the beneficiaries. Um, in the case of right, I'm reading it's got like five different things. I don't want to get all into the weeds because it's got like eight points, nine points to consider and we don't want to get into all that because then it can get confusing. So, let's just stay on the surface with this spin thrift. The word association is creditors. Okay. If it say something about a creditor, you know the answer is spin thrift. If it say something about spinthrift, the answer going to be some dealing with a creditor. Got it. Got it. See it? Yeah. Which policy provision prevents an insurer from cancelling coverage after a specific period even if an error was found in the application? Uh canceling coverage after a specific period. Is this uh incontestability? Yep. They tried to be a little tricky with that cancelling coverage meaning because normally when you see uncontestability clause that means they got to pay a claim but they using this they're saying you know over two years insurance company got to pay regardless but they change the wording a little bit and saying counseling coverage but don't let that throw you off if they change this wording around a little bit because you know grace period is 30 days to pay your premium. policy loan provision is they'll take a loan on they'll take a loan on your cash value to pay the printed coverage and a conversion option is what happened with a term policy. So the logical answer would be in contestability clause if you just using basic word association only thing close would have been contestability clause. So good job TK. All right. Next. What is the primary feature of a survivorship life insurance policy? Um, it [Music] is B pays out after both insurers have passed. Yep. Which settlement option guarantees equal payments for a specific number of years? [Music] Uh what's this fixed period? Fix. Okay. Yep. And basically once again you ain't got to overthink it. If it say specified number of years that's that's the definition of period, right? All right. See it. What happens if an applicant for life insurance submits an application without the initial premium? [Music] Um, what happens if an applicant for life [Music] insurance? Um coverage is not begin until the first premium is paid. Yep. See I don't know. All right. All right. Which of the following describes the reinstatement provision in a life insurance policy? Uh is it a I know reinstatement period is five years. What it is is it a yep it's a exactly. Yeah. Don't worry about the fiveyear part. I mean the five year they may have the question worded but just long as they kind of change the wording up a little bit and say reactivate but reactivate restate the coverage the same thing. Okay. All right.