Life & Health Insurance Exam Prep
Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What does the policyowner control in a life insurance contract?
✔✔Ownership rights such as naming beneficiaries and changing coverage
Who receives the death benefit from a life insurance policy?
✔✔The beneficiary
What is an insurable interest?
✔✔A financial or emotional stake in another person’s life
When must insurable interest exist in life insurance?
✔✔At the time of policy application
What is the face amount of a life insurance policy?
✔✔The stated death benefit
What does premium mean in insurance terms?
✔✔The amount paid to keep the policy in force
What happens if a life insurance premium is not paid after the grace period?
1
,✔✔The policy may lapse
What is a grace period?
✔✔A short time after the due date to pay premiums without penalty
What does cash value refer to in permanent life insurance?
✔✔The savings component that accumulates over time
Which type of life insurance provides coverage for a specific period?
✔✔Term life insurance
What happens at the end of a term life policy?
✔✔Coverage ends unless renewed or converted
What is whole life insurance designed to provide?
✔✔Lifetime coverage with guaranteed cash value
What does universal life insurance allow the policyowner to adjust?
✔✔Premiums and death benefits
What is the purpose of a life insurance rider?
✔✔To add or modify policy benefits
2
,What is a beneficiary designation?
✔✔Naming who will receive policy proceeds
What is a contingent beneficiary?
✔✔A backup beneficiary
What does accidental death benefit pay?
✔✔An extra amount if death is accidental
What is the contestability period?
✔✔The time when the insurer can contest claims for misrepresentation
How long is the typical contestability period?
✔✔Two years
What is the suicide clause in life insurance?
✔✔A provision limiting payment if death is by suicide early in the policy
What is the purpose of health insurance?
✔✔To cover medical expenses
3
, What is a deductible?
✔✔The amount the insured pays before coverage begins
What does copayment mean?
✔✔A fixed amount paid for a covered service
What is coinsurance?
✔✔A percentage of costs shared by the insured
What does out-of-pocket maximum represent?
✔✔The most the insured pays in a year
What is a policy limit?
✔✔The maximum benefit payable by the insurer
What is a pre-existing condition?
✔✔A health condition that existed before coverage
What does underwriting evaluate in health insurance?
✔✔Risk and eligibility
What is a waiting period?
4
Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What does the policyowner control in a life insurance contract?
✔✔Ownership rights such as naming beneficiaries and changing coverage
Who receives the death benefit from a life insurance policy?
✔✔The beneficiary
What is an insurable interest?
✔✔A financial or emotional stake in another person’s life
When must insurable interest exist in life insurance?
✔✔At the time of policy application
What is the face amount of a life insurance policy?
✔✔The stated death benefit
What does premium mean in insurance terms?
✔✔The amount paid to keep the policy in force
What happens if a life insurance premium is not paid after the grace period?
1
,✔✔The policy may lapse
What is a grace period?
✔✔A short time after the due date to pay premiums without penalty
What does cash value refer to in permanent life insurance?
✔✔The savings component that accumulates over time
Which type of life insurance provides coverage for a specific period?
✔✔Term life insurance
What happens at the end of a term life policy?
✔✔Coverage ends unless renewed or converted
What is whole life insurance designed to provide?
✔✔Lifetime coverage with guaranteed cash value
What does universal life insurance allow the policyowner to adjust?
✔✔Premiums and death benefits
What is the purpose of a life insurance rider?
✔✔To add or modify policy benefits
2
,What is a beneficiary designation?
✔✔Naming who will receive policy proceeds
What is a contingent beneficiary?
✔✔A backup beneficiary
What does accidental death benefit pay?
✔✔An extra amount if death is accidental
What is the contestability period?
✔✔The time when the insurer can contest claims for misrepresentation
How long is the typical contestability period?
✔✔Two years
What is the suicide clause in life insurance?
✔✔A provision limiting payment if death is by suicide early in the policy
What is the purpose of health insurance?
✔✔To cover medical expenses
3
, What is a deductible?
✔✔The amount the insured pays before coverage begins
What does copayment mean?
✔✔A fixed amount paid for a covered service
What is coinsurance?
✔✔A percentage of costs shared by the insured
What does out-of-pocket maximum represent?
✔✔The most the insured pays in a year
What is a policy limit?
✔✔The maximum benefit payable by the insurer
What is a pre-existing condition?
✔✔A health condition that existed before coverage
What does underwriting evaluate in health insurance?
✔✔Risk and eligibility
What is a waiting period?
4
