INSURANCE PRACTICE EXAM 2026
QUESTIONS WITH ANSWERS GRADED A+
◉ A life insurance policy whose cash value will fluctuate depending
upon the performance of a separate account is: Answer: Variable Life
◉ John Livingston owns a 30-Pay Life policy that he purchased at the
age of 30. The cash value will equal the face amount of the policy when
he reaches the age of: Answer: 100
◉ Which of the following types of insurance policies would provide the
greatest amount of protection for a temporary period during which an
insured will have limited financial resources? Answer: Term
◉ Which of the following statements about a Renewable Term policy is
true? Answer: It is renewable at the option of the insured
◉ An Annuity is designed to provide which of the following financial
features?
I. The liquidation of principal and interest
II. Favorable tax treatment
III. The creation of an estate. Answer: I and II
,◉ A 45-year old customer who is seeking to supplement his retirement
income at age 65 would not buy a: Answer: Immediate Annuity
◉ Which of the following is an example of a Limited-Pay Life policy?
Answer: Life Paid-Up at Age 65
◉ You have a client that is a real estate agent. Which of the following
types of permanent protection is best for this type of client? Answer:
Adjustable life
◉ Which of the following individual policy conversions is usually
permitted without any evidence of insurability? Answer: Conversion
from a Term policy to a Whole Life policy
◉ At age 30, Tom Morris wishes to purchase a Whole Life policy. His
producer explains that he can pay for the policy in several ways. One
method is called 20-Pay Life, and another, Straight Life. Tom wishes to
know which plan will accumulate cash value at a faster rate in the early
years of the policy. Which of the following would be the producer's most
appropriate response? Answer: "20-Pay Life will accumulate cash value
faster."
◉ Sandra Timms, age 27, is advised by her producer to purchase Life
insurance to cover a 20-year-amortized $50,000 business-improvement
loan. Which of the following plans would adequately protect Ms. Timms
, at the minimum premium outlay? Answer: A $50,000 Decreasing Term
policy for 20 years
◉ In order to sell variable life insurance you must be registered with
which of the following? Answer: The NASD
◉ Which of the following contracts requires that a series of benefit
payments be made at specified intervals? Answer: Annuity
◉ A life insurance policy that covers two parties, but only pays when the
last party dies is known as: Answer: Survivorship Life
◉ Most Term Life insurance: Answer: Is convertible to permanent
Whole Life without a physical exam
◉ If a person wants to invest a lump sum in an annuity that may
appreciate along with market and economic conditions, they should buy
a: Answer: Variable Annuity
◉ If a client wants cash value life insurance with a flexible premium and
an adjustable death benefit that will allow the policy owner a choice of
various cash value investment options, he should buy: Answer:
Variable/Universal Life
QUESTIONS WITH ANSWERS GRADED A+
◉ A life insurance policy whose cash value will fluctuate depending
upon the performance of a separate account is: Answer: Variable Life
◉ John Livingston owns a 30-Pay Life policy that he purchased at the
age of 30. The cash value will equal the face amount of the policy when
he reaches the age of: Answer: 100
◉ Which of the following types of insurance policies would provide the
greatest amount of protection for a temporary period during which an
insured will have limited financial resources? Answer: Term
◉ Which of the following statements about a Renewable Term policy is
true? Answer: It is renewable at the option of the insured
◉ An Annuity is designed to provide which of the following financial
features?
I. The liquidation of principal and interest
II. Favorable tax treatment
III. The creation of an estate. Answer: I and II
,◉ A 45-year old customer who is seeking to supplement his retirement
income at age 65 would not buy a: Answer: Immediate Annuity
◉ Which of the following is an example of a Limited-Pay Life policy?
Answer: Life Paid-Up at Age 65
◉ You have a client that is a real estate agent. Which of the following
types of permanent protection is best for this type of client? Answer:
Adjustable life
◉ Which of the following individual policy conversions is usually
permitted without any evidence of insurability? Answer: Conversion
from a Term policy to a Whole Life policy
◉ At age 30, Tom Morris wishes to purchase a Whole Life policy. His
producer explains that he can pay for the policy in several ways. One
method is called 20-Pay Life, and another, Straight Life. Tom wishes to
know which plan will accumulate cash value at a faster rate in the early
years of the policy. Which of the following would be the producer's most
appropriate response? Answer: "20-Pay Life will accumulate cash value
faster."
◉ Sandra Timms, age 27, is advised by her producer to purchase Life
insurance to cover a 20-year-amortized $50,000 business-improvement
loan. Which of the following plans would adequately protect Ms. Timms
, at the minimum premium outlay? Answer: A $50,000 Decreasing Term
policy for 20 years
◉ In order to sell variable life insurance you must be registered with
which of the following? Answer: The NASD
◉ Which of the following contracts requires that a series of benefit
payments be made at specified intervals? Answer: Annuity
◉ A life insurance policy that covers two parties, but only pays when the
last party dies is known as: Answer: Survivorship Life
◉ Most Term Life insurance: Answer: Is convertible to permanent
Whole Life without a physical exam
◉ If a person wants to invest a lump sum in an annuity that may
appreciate along with market and economic conditions, they should buy
a: Answer: Variable Annuity
◉ If a client wants cash value life insurance with a flexible premium and
an adjustable death benefit that will allow the policy owner a choice of
various cash value investment options, he should buy: Answer:
Variable/Universal Life
