NY LIFE INSURANCE EXAM REVIEW
QUESTIONS AND ANSWERS 2026
ACTUAL!!!
1. Based on the Human Life Value Approach, which of the following is NOT used to calculate an
individual's life value?
A. Insured's annual expenses
B. Effect of inflation on income over time
C. Predicted needs of the family after the insured's death
D. Insured's current and future income
ANSWER: C. Predicted needs of the family after the insured's death.
Rationale:
A. Insured's annual expenses: This is a key component. To determine the net contribution to the family,
you must subtract the insured's personal expenses from their income. This is used in the Human Life
Value approach.
B. Effect of inflation on income over time: Inflation is a critical factor in projecting future earnings. The
Human Life Value approach requires discounting future income to its present value, which involves
considering inflation.
C. Predicted needs of the family after the insured's death: This is the foundation of the Needs Approach,
not the Human Life Value Approach. The Human Life Value approach focuses on the economic loss of
the deceased's future earnings.
,D. Insured's current and future income: This is the primary basis of the Human Life Value approach,
which calculates the present value of this stream of income.
2. The Human Life Value Approach determines the value of a life by calculating the probable future
earnings of the insured. Which of the following is NOT a factor in this calculation?
A. Amount of time until retirement
B. The time value of money
C. The family's current standard of living
D. The insured's estimated wages
ANSWER: C. The family's current standard of living.
Rationale:
A. Amount of time until retirement: This directly impacts the number of years of potential earnings, a
core component of the Human Life Value calculation.
B. The time value of money: This is essential for discounting future earnings to their present value, a
fundamental step in this approach.
C. The family's current standard of living: While important for determining the amount of insurance
needed to maintain a lifestyle, this is a primary consideration of the Needs Approach, not the Human
Life Value approach.
D. The insured's estimated wages: This is the starting point for the calculation of future earnings in the
Human Life Value approach.
3. According to the Insurance Fraud Prevention Act, what is the extent of the Superintendent's power to
investigate fraudulent claims?
A. Limited to investigating only claims that occur within the state.
B. The Superintendent must request the FBI to investigate if the claim is out of state.
C. The Superintendent has the power to investigate within and outside the state.
,D. The Superintendent is prohibited from investigating if the act took place outside the state.
ANSWER: C. The Superintendent has the power to investigate within and outside the state.
Rationale:
A. Limited to investigating only claims that occur within the state: This is incorrect. The act grants the
Superintendent broader authority.
B. The Superintendent must request the FBI to investigate if the claim is out of state: The
Superintendent has their own authority to investigate out-of-state matters without necessarily
escalating to a federal agency for the investigation itself.
C. The Superintendent has the power to investigate within and outside the state: This is the correct and
expansive power granted to the Superintendent under the Insurance Fraud Prevention Act to combat
fraud effectively.
D. The Superintendent is prohibited from investigating if the act took place outside the state: This is
false, as the act specifically allows for out-of-state investigations.
4. Which type of insurer is owned by its policyholders?
A. Stock Insurance Company
B. Mutual Insurance Company
C. Fraternal Benefit Society
D. Lloyds of London
ANSWER: B. Mutual Insurance Company.
Rationale:
A. Stock Insurance Company: This is owned by its shareholders, who may or may not be policyholders.
, B. Mutual Insurance Company: This is the correct definition. It is a corporation owned by its
policyholders, who may receive dividends.
C. Fraternal Benefit Society: This is a social organization that provides insurance to its members, but it is
not defined primarily by ownership structure in the same way.
D. Lloyds of London: This is not an insurer but a marketplace where members underwrite insurance.
5. Which of the following is an example of a non-forfeiture option?
A. Waiver of Premium
B. Accidental Death Benefit
C. Reduced Paid-Up Insurance
D. Guaranteed Insurability Option
ANSWER: C. Reduced Paid-Up Insurance.
Rationale:
A. Waiver of Premium: This is a rider that waives premium payments if the insured becomes disabled.
B. Accidental Death Benefit: This is a rider that pays an additional benefit if death is caused by an
accident.
C. Reduced Paid-Up Insurance: This is a non-forfeiture option that allows the policyholder to use the
cash value to purchase a fully paid-up policy for a reduced face amount.
D. Guaranteed Insurability Option: This is a rider that allows the policyholder to purchase additional
coverage at specified times without proving insurability.
QUESTIONS AND ANSWERS 2026
ACTUAL!!!
1. Based on the Human Life Value Approach, which of the following is NOT used to calculate an
individual's life value?
A. Insured's annual expenses
B. Effect of inflation on income over time
C. Predicted needs of the family after the insured's death
D. Insured's current and future income
ANSWER: C. Predicted needs of the family after the insured's death.
Rationale:
A. Insured's annual expenses: This is a key component. To determine the net contribution to the family,
you must subtract the insured's personal expenses from their income. This is used in the Human Life
Value approach.
B. Effect of inflation on income over time: Inflation is a critical factor in projecting future earnings. The
Human Life Value approach requires discounting future income to its present value, which involves
considering inflation.
C. Predicted needs of the family after the insured's death: This is the foundation of the Needs Approach,
not the Human Life Value Approach. The Human Life Value approach focuses on the economic loss of
the deceased's future earnings.
,D. Insured's current and future income: This is the primary basis of the Human Life Value approach,
which calculates the present value of this stream of income.
2. The Human Life Value Approach determines the value of a life by calculating the probable future
earnings of the insured. Which of the following is NOT a factor in this calculation?
A. Amount of time until retirement
B. The time value of money
C. The family's current standard of living
D. The insured's estimated wages
ANSWER: C. The family's current standard of living.
Rationale:
A. Amount of time until retirement: This directly impacts the number of years of potential earnings, a
core component of the Human Life Value calculation.
B. The time value of money: This is essential for discounting future earnings to their present value, a
fundamental step in this approach.
C. The family's current standard of living: While important for determining the amount of insurance
needed to maintain a lifestyle, this is a primary consideration of the Needs Approach, not the Human
Life Value approach.
D. The insured's estimated wages: This is the starting point for the calculation of future earnings in the
Human Life Value approach.
3. According to the Insurance Fraud Prevention Act, what is the extent of the Superintendent's power to
investigate fraudulent claims?
A. Limited to investigating only claims that occur within the state.
B. The Superintendent must request the FBI to investigate if the claim is out of state.
C. The Superintendent has the power to investigate within and outside the state.
,D. The Superintendent is prohibited from investigating if the act took place outside the state.
ANSWER: C. The Superintendent has the power to investigate within and outside the state.
Rationale:
A. Limited to investigating only claims that occur within the state: This is incorrect. The act grants the
Superintendent broader authority.
B. The Superintendent must request the FBI to investigate if the claim is out of state: The
Superintendent has their own authority to investigate out-of-state matters without necessarily
escalating to a federal agency for the investigation itself.
C. The Superintendent has the power to investigate within and outside the state: This is the correct and
expansive power granted to the Superintendent under the Insurance Fraud Prevention Act to combat
fraud effectively.
D. The Superintendent is prohibited from investigating if the act took place outside the state: This is
false, as the act specifically allows for out-of-state investigations.
4. Which type of insurer is owned by its policyholders?
A. Stock Insurance Company
B. Mutual Insurance Company
C. Fraternal Benefit Society
D. Lloyds of London
ANSWER: B. Mutual Insurance Company.
Rationale:
A. Stock Insurance Company: This is owned by its shareholders, who may or may not be policyholders.
, B. Mutual Insurance Company: This is the correct definition. It is a corporation owned by its
policyholders, who may receive dividends.
C. Fraternal Benefit Society: This is a social organization that provides insurance to its members, but it is
not defined primarily by ownership structure in the same way.
D. Lloyds of London: This is not an insurer but a marketplace where members underwrite insurance.
5. Which of the following is an example of a non-forfeiture option?
A. Waiver of Premium
B. Accidental Death Benefit
C. Reduced Paid-Up Insurance
D. Guaranteed Insurability Option
ANSWER: C. Reduced Paid-Up Insurance.
Rationale:
A. Waiver of Premium: This is a rider that waives premium payments if the insured becomes disabled.
B. Accidental Death Benefit: This is a rider that pays an additional benefit if death is caused by an
accident.
C. Reduced Paid-Up Insurance: This is a non-forfeiture option that allows the policyholder to use the
cash value to purchase a fully paid-up policy for a reduced face amount.
D. Guaranteed Insurability Option: This is a rider that allows the policyholder to purchase additional
coverage at specified times without proving insurability.
