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Utah Life Practice Exam

20 exam-style questions drawn from the same bank as our full Utah Life course (Utah Insurance Producer — Life — Exam Prep). Answer all 20, then grade yourself — most state exams require 70% to pass. Explanations for every question are part of the full course.

1. Under the interest-only settlement option, what happens if the beneficiary dies before withdrawing the principal?
The principal is paid to a contingent payee or to the deceased beneficiary's estate per the option agreement.The principal escheats to the state under each state's standard abandoned-property dormancy statute and presumption rule.The principal is forfeited to the original deceased insured's probate estate, with no payment to any successor payee or party.The insurer retains the entire principal as a mortality gain under the contract's interest-only settlement provisions.
2. In an annuity contract, who is the natural person whose life expectancy is used to determine the amount and duration of benefit payments?
The ownerThe beneficiaryThe contingent payeeThe annuitant
3. A spouse term (or 'other-insured') rider differs from a separate spouse-owned life policy primarily in that the rider:
Provides level term coverage on the spouse that is administratively bundled into the primary insured's policy and usually expires at a stated age (often 65)Cannot be removed from the underlying primary insured's contract once it has been added at policy issue, even on a written request from the policyownerDoes not require any additional premium because the spouse-rider mortality charge is absorbed by the primary insured's base whole life premium under standard pricingPays the spouse-rider death benefit only after both the primary insured and the covered spouse die, similar in mechanics to a survivorship second-to-die life policy
4. The federal law requiring financial institutions to give privacy notices is the
HIPAAERISAGramm-Leach-Bliley ActFCRA
5. Replacing policies with the same insurer mainly to earn new commissions is
ChurningTwistingCoercionRebating
6. Universal life with interest credits tied to a stock market index is
Indexed universal lifeWhole lifeVariable lifeVariable universal life
7. An annuity crediting interest based on a market index with a minimum floor is an
Indexed annuityVariable annuityImmediate annuityFixed annuity
8. A plan promising a set retirement benefit based on salary and service is a
Defined benefit planCash balance accountDefined contribution planProfit-sharing plan
9. Which settlement option leaves the proceeds with the insurer and pays the beneficiary only the interest earned, with the principal payable at a later date or at the beneficiary's death?
Interest OnlyLife Income — Joint and SurvivorFixed PeriodFixed Amount
10. Under IRC §79, the cost of how much employer-paid group term life is excluded from the employee's taxable income?
$25,000$50,000$250,000$100,000
11. A 55-year-old client wants to systematically save for retirement over the next 10 years using after-tax dollars and would like to vary contribution amounts year to year. Which annuity funding type is most appropriate?
SPDAPeriod-certain immediate annuityFPDASPIA
12. A transfer to which party is an exception to the transfer for value rule?
An investorA creditorA strangerThe insured
13. A policy that pays dividends to its owners is
GuaranteedNonparticipatingVariableParticipating
14. An underwriter requests an Attending Physician's Statement (APS). The APS is:
A narrative report prepared by the applicant's treating physician describing diagnoses, treatments, and prognosisA health-history and lifestyle questionnaire completed by the applicant at the producer's office or by phoneA paramedical exam done in the applicant's home or office by a contracted paramedical examiner field representativeA coded medical and non-medical summary purchased by the underwriter from the Medical Information Bureau
15. The time after a missed premium during which coverage stays in force is the
Free lookReinstatement periodWaiting periodGrace period
16. An agent suggests a §1035 exchange in which the insured on the original life-insurance contract is the husband, but the insured on the new contract will be the wife. Is this a valid §1035 exchange?
No — §1035 requires that the obligee (the insured or annuitant) on the new contract be the same as on the old contract.Yes — IRC §1035 only requires that the policyowner remain the same person across the old and the new life-insurance contracts being exchangedYes, provided that the issuing insurance carrier is the same on both the original surrendered contract and the new contract issued in exchangeYes, provided the original surrendered contract's face amount and the new contract's face amount are equal at the date of the §1035 exchange transaction
17. On a credit life policy, who is the named beneficiary, and what limit applies to the death benefit?
The borrower's family; the death benefit may exceed the loan balanceThe creditor; the death benefit may not exceed the unpaid indebtednessThe insurer; the death benefit equals the original loan amount for the entire termThe state guaranty fund; the death benefit is set by department-of-insurance rule
18. The date an endowment pays its face amount to a living insured is the
Issue dateMaturity dateConversion dateAnniversary date
19. Which two features distinguish ordinary whole life insurance from term insurance?
Variable death benefit and equity-indexed cash-value crediting featuresLevel premium for life and a guaranteed cash value that grows tax-deferredNo medical underwriting and no cash value, as is typical of credit lifeDecreasing premium and increasing death benefit, common on amortizing loans
20. The part of the application where the agent gives impressions of the applicant is the
Agent's reportStatement of good healthDelivery receiptMedical history

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