INSR 310 Exam 2 Ferguson 2026 (180 Questions) – Life Insurance, Annuities, Policy Clauses & Disability Income Complete Q&A

This document contains approximately 180 comprehensive exam questions with verified answers for INSR 310 Exam 2 (Ferguson) 2026 . The material focuses extensively on life insurance principles, beginning with primary economic perils (premature death and premature health), the distinction between death as uncertainty rather than a peril, and the economic purposes of life insurance including individual, family, and business needs. It thoroughly explains needs analysis, terminal needs (clean-up fund expenses), mortality tables, capitalization of income approach, buy-sell agreements, and business continuation planning. The document provides detailed coverage of life insurance product types, including term insurance (level, decreasing, increasing), whole life (ordinary, straight, continuous premium, limited pay), industrial life, credit life, group life, and cash value insurance (endowment and permanent insurance). It clearly differentiates protection-only products from protection-plus-savings contracts and explains endowment contracts, package contracts, and estate creation through life insurance. Annuities are examined in depth, including the annuity principle (adverse selection), straight life annuities, period certain annuities, installment refund and cash refund annuities, temporary life annuities, settlement options (lump sum, fixed period, fixed amount, life income, interest option), and the concept of “upside-down insurance.” The mechanics of accumulation and payout structures are clearly described. A major portion addresses policy provisions and contract law concepts, including entire contract clause, incontestable clause, surrender clause, grace period, reinstatement provisions, non-forfeiture provisions, misstatement of age clause, suicide clause, delay clause, hazard restrictions, assignment of policy benefits (absolute and collateral), beneficiary designation (primary, contingent, revocable, irrevocable), per capita vs per stirpes distribution, and spendthrift trust protections. The exam also includes disability income insurance topics such as short-term DI, long-term DI, elimination period (time deductible), duration of benefits, own occupation vs any occupation definitions of disability, sick leave benefits, and types of health coverage including basic coverage, major medical, hospitalization, surgical, and regular medical coverage. This resource aligns directly with undergraduate Insurance and Risk Management coursework and is ideal for finance majors, risk management students, business administration students, and individuals preparing for INSR 310 Exam 2 or advanced life and health insurance examinations. Keywords: INSR 310 exam 2 Ferguson primary perils premature death needs analysis life insurance buy sell agreement funding term insurance level decreasing increasing whole life ordinary straight limited pay cash value endowment contract annuity principle adverse selection settlement options life income entire contract clause incontestable clause two years non forfeiture provisions misstatement of age clause beneficiary designation primary contingent per capita vs per stirpes short term disability insurance long term disability insurance own occupation definition elimination period time deductible major medical coverage