NY Series 17-55
Life, Accident, and Health Insurance
Agent/Broker
Practice Exam | 120 Questions with Answers & Rationales
1. Which type of life insurance provides coverage for a specific period and pays
a benefit only if the insured dies during that period?
A. Whole life
B. Term life
C. Universal life
D. Variable life
Correct Answer: B. Term life
Rationale: Term life insurance covers a stated period and pays a death benefit only if
death occurs during the term. It builds no cash value.
2. What feature distinguishes whole life insurance from term life insurance?
A. Level premiums only
B. Cash value accumulation
C. Renewability
D. Convertibility
Correct Answer: B. Cash value accumulation
Rationale: Whole life insurance accumulates cash value over the policy's lifetime,
while term insurance provides pure protection with no cash value.
,3. In a universal life policy, what feature allows the policyowner to change the
death benefit and vary premium payments?
A. Guaranteed insurability
B. Flexibility
C. Nonforfeiture
D. Automatic premium loan
Correct Answer: B. Flexibility
Rationale: Universal life is known for flexible premiums and an adjustable death
benefit, letting the owner tailor the policy as needs change.
4. Which life insurance product's cash value and death benefit fluctuate based
on performance of a separate account invested in securities?
A. Universal life
B. Variable life
C. Term life
D. Whole life
Correct Answer: B. Variable life
Rationale: Variable life insurance's cash value and benefit vary with the performance
of investments held in a separate account, and it is regulated as a security.
5. An agent who sells variable life insurance in New York must, in addition to a
state insurance license, hold what?
A. A real estate license
B. A FINRA securities registration
C. A CPA license
D. A notary commission
Correct Answer: B. A FINRA securities registration
Rationale: Because variable products are securities, producers must also be
registered with FINRA (e.g., hold a Series 6 or 7) to sell them.
,6. Which nonforfeiture option keeps the original death benefit in force for a
limited period without further premium payments, using the policy's cash
value?
A. Cash surrender
B. Reduced paid-up insurance
C. Extended term insurance
D. Automatic premium loan
Correct Answer: C. Extended term insurance
Rationale: Extended term insurance uses the cash value as a net single premium to
continue the full original face amount for a limited period of time.
7. A policy that pays dividends to policyowners because it is owned by the
policyholders themselves is issued by what type of insurer?
A. Stock company
B. Mutual company
C. Fraternal benefit society
D. Risk retention group
Correct Answer: B. Mutual company
Rationale: Mutual insurers are owned by their policyholders, who may receive
dividends representing a return of excess premium.
8. Life insurance dividends are generally considered, for tax purposes, to be:
A. Taxable income
B. A return of premium
C. Capital gains
D. Tax-exempt interest
Correct Answer: B. A return of premium
Rationale: Because dividends are treated as a refund of unused premium (not profit),
they are generally not taxable unless they exceed premiums paid.
, 9. Which settlement option pays the beneficiary a guaranteed income for as
long as they live, with payments ceasing at death?
A. Interest only
B. Fixed amount
C. Fixed period
D. Life income
Correct Answer: D. Life income
Rationale: The life income settlement option pays income for the beneficiary's
lifetime, similar to an annuity, and may include period-certain guarantees.
10. Which rider allows the insured to purchase additional insurance at specified
future dates without evidence of insurability?
A. Waiver of premium
B. Guaranteed insurability rider
C. Accidental death benefit
D. Payor rider
Correct Answer: B. Guaranteed insurability rider
Rationale: The guaranteed insurability rider lets the insured buy additional coverage
at set option dates or life events without proving good health.
11. A rider that keeps a policy in force without premium payment if the insured
becomes totally disabled is called:
A. Accidental death rider
B. Waiver of premium rider
C. Cost of living rider
D. Return of premium rider
Correct Answer: B. Waiver of premium rider
Rationale: The waiver of premium rider suspends premium payments if the insured
becomes totally disabled, typically after a set waiting period.
Life, Accident, and Health Insurance
Agent/Broker
Practice Exam | 120 Questions with Answers & Rationales
1. Which type of life insurance provides coverage for a specific period and pays
a benefit only if the insured dies during that period?
A. Whole life
B. Term life
C. Universal life
D. Variable life
Correct Answer: B. Term life
Rationale: Term life insurance covers a stated period and pays a death benefit only if
death occurs during the term. It builds no cash value.
2. What feature distinguishes whole life insurance from term life insurance?
A. Level premiums only
B. Cash value accumulation
C. Renewability
D. Convertibility
Correct Answer: B. Cash value accumulation
Rationale: Whole life insurance accumulates cash value over the policy's lifetime,
while term insurance provides pure protection with no cash value.
,3. In a universal life policy, what feature allows the policyowner to change the
death benefit and vary premium payments?
A. Guaranteed insurability
B. Flexibility
C. Nonforfeiture
D. Automatic premium loan
Correct Answer: B. Flexibility
Rationale: Universal life is known for flexible premiums and an adjustable death
benefit, letting the owner tailor the policy as needs change.
4. Which life insurance product's cash value and death benefit fluctuate based
on performance of a separate account invested in securities?
A. Universal life
B. Variable life
C. Term life
D. Whole life
Correct Answer: B. Variable life
Rationale: Variable life insurance's cash value and benefit vary with the performance
of investments held in a separate account, and it is regulated as a security.
5. An agent who sells variable life insurance in New York must, in addition to a
state insurance license, hold what?
A. A real estate license
B. A FINRA securities registration
C. A CPA license
D. A notary commission
Correct Answer: B. A FINRA securities registration
Rationale: Because variable products are securities, producers must also be
registered with FINRA (e.g., hold a Series 6 or 7) to sell them.
,6. Which nonforfeiture option keeps the original death benefit in force for a
limited period without further premium payments, using the policy's cash
value?
A. Cash surrender
B. Reduced paid-up insurance
C. Extended term insurance
D. Automatic premium loan
Correct Answer: C. Extended term insurance
Rationale: Extended term insurance uses the cash value as a net single premium to
continue the full original face amount for a limited period of time.
7. A policy that pays dividends to policyowners because it is owned by the
policyholders themselves is issued by what type of insurer?
A. Stock company
B. Mutual company
C. Fraternal benefit society
D. Risk retention group
Correct Answer: B. Mutual company
Rationale: Mutual insurers are owned by their policyholders, who may receive
dividends representing a return of excess premium.
8. Life insurance dividends are generally considered, for tax purposes, to be:
A. Taxable income
B. A return of premium
C. Capital gains
D. Tax-exempt interest
Correct Answer: B. A return of premium
Rationale: Because dividends are treated as a refund of unused premium (not profit),
they are generally not taxable unless they exceed premiums paid.
, 9. Which settlement option pays the beneficiary a guaranteed income for as
long as they live, with payments ceasing at death?
A. Interest only
B. Fixed amount
C. Fixed period
D. Life income
Correct Answer: D. Life income
Rationale: The life income settlement option pays income for the beneficiary's
lifetime, similar to an annuity, and may include period-certain guarantees.
10. Which rider allows the insured to purchase additional insurance at specified
future dates without evidence of insurability?
A. Waiver of premium
B. Guaranteed insurability rider
C. Accidental death benefit
D. Payor rider
Correct Answer: B. Guaranteed insurability rider
Rationale: The guaranteed insurability rider lets the insured buy additional coverage
at set option dates or life events without proving good health.
11. A rider that keeps a policy in force without premium payment if the insured
becomes totally disabled is called:
A. Accidental death rider
B. Waiver of premium rider
C. Cost of living rider
D. Return of premium rider
Correct Answer: B. Waiver of premium rider
Rationale: The waiver of premium rider suspends premium payments if the insured
becomes totally disabled, typically after a set waiting period.
