New York State Life Insurance Series 17-
51 Test Questions and Answers 2026
Updated.
What is the difference between pure and speculative risk? - Answer Pure risk refers to
situations that can only result in a loss or no charge. There is no opportunity for financial gain.
Pure risk is the only type of risk that insurance companies are willing to accept.
What is the definition of a peril? - Answer A peril is the cause of a possible loss.
What is adverse selection? - Answer the tendency of persons with a higher-than-average
probability of loss to purchase and maintain more insurance than risks who present lower
probability.
Name 5 Methods of handling risks? - Answer The 5 methods of handling risk are avoidance,
retention, sharing, reduction and transfer.
What is considered in determining the amount of personal insurance using the human life value
approach? - Answer The human life value approach gives the insured an estimate of what
would be owed to the family in the event of the premature death of the insured. It calculates an
individuals life value by looking at the insured's wages, inflation, the number of years to
retirement, and the time value of money.
Define Aleatory contract. - Answer An Aleatory contract is a contract in which participating
parties exchange unequal amounts. Insurance contracts are aleatory in that the amount the
insured will pay in premiums is is unequal to the amount the insurer will pay in the event of a
loss.
Identify the difference between the domestic, foreign and alien insurers? - Answer A domestic
insurer is an insurance company that is incorporated in the state.
A foreign insurer is an insurance company that is incorporated in another state.
An alien insurer is an insurance company that has incorporated outside of the United State.
Who owns stock companies? - Answer Stock companies are companies that are owned by
stockholders whose investment provide the capital necessary to establish and operate the
insurance company.
, When an insurance agent acts with authority not expressed in writing it is called: - Answer
Implied Authority
When does an insurance agent provide the client with a conditional receipt? - Answer A
conditional receipt gives an insurance company a window of time in which they can ultimately
issue or refuse to approve the policy. If, during this time, the applicant for a life insurance
contract dies, the company will pay a death benefit if the policy would have been issued.
Define warranty: - Answer A material stipulation in the policy that if breached may void
coverage.
Term life insurance is considered a permanent policy. True or False - Answer False
What life insurance policy, also used by businesses, is a legal contract which forces one partner
To buy and the other to sell their share of the business in case one owner dies or becomes
disabled? - Answer A Buy-Sell Agreement life insurance policy.
Life insurance is based on a morbidity table. True or False - Answer True. Mortality tables are
one of the main tools for the life insurance industry. Mortality tables are mathematically
complex grids of numbers that show the probability of mortality, or death, for members of a
certain population within a defined period of time.
Name four types of whole life policies: - Answer Four types of whole life policies are level
premiums, death benefit, Cash value, and living benefit.
If a primary beneficiary dies before the insured, who receives the death benefit? - Answer If
the primary beneficiary dies before the insured, then no one is paid. The death benefit is only
paid when the insured passes away. The insured, in most cases, is also the owner.
Name and describe the 3 nonforfeiture options. - Answer 1)Cash Surrender Value . Under this
option, the insured returns the policy to the insurance company and the life insurance company
pays out the current value of the policy. At this point, the insured no longer has life insurance
protection. The minimum value of the policy is determined by a table established by law. 2)
Reduced Paid-Up Life. With this option, the insured uses the cash value of the policy to
purchase fully paid for life insurance of the same type as the original policy, but with a smaller
face amount. 3) Extended Term Life Insurance . In this option, the insured uses the cash value of
the policy to purchase fully paid for term life insurance for the same face amount as the original
policy'The cash value, the face amount of the policy and the age of the insured will limit the
duration of the coverage available.
Name 5 dividend options. - Answer Paid in cash The insurance company will send you a check
in the amount of your dividend. You can cash that check and do whatever you want with it.
51 Test Questions and Answers 2026
Updated.
What is the difference between pure and speculative risk? - Answer Pure risk refers to
situations that can only result in a loss or no charge. There is no opportunity for financial gain.
Pure risk is the only type of risk that insurance companies are willing to accept.
What is the definition of a peril? - Answer A peril is the cause of a possible loss.
What is adverse selection? - Answer the tendency of persons with a higher-than-average
probability of loss to purchase and maintain more insurance than risks who present lower
probability.
Name 5 Methods of handling risks? - Answer The 5 methods of handling risk are avoidance,
retention, sharing, reduction and transfer.
What is considered in determining the amount of personal insurance using the human life value
approach? - Answer The human life value approach gives the insured an estimate of what
would be owed to the family in the event of the premature death of the insured. It calculates an
individuals life value by looking at the insured's wages, inflation, the number of years to
retirement, and the time value of money.
Define Aleatory contract. - Answer An Aleatory contract is a contract in which participating
parties exchange unequal amounts. Insurance contracts are aleatory in that the amount the
insured will pay in premiums is is unequal to the amount the insurer will pay in the event of a
loss.
Identify the difference between the domestic, foreign and alien insurers? - Answer A domestic
insurer is an insurance company that is incorporated in the state.
A foreign insurer is an insurance company that is incorporated in another state.
An alien insurer is an insurance company that has incorporated outside of the United State.
Who owns stock companies? - Answer Stock companies are companies that are owned by
stockholders whose investment provide the capital necessary to establish and operate the
insurance company.
, When an insurance agent acts with authority not expressed in writing it is called: - Answer
Implied Authority
When does an insurance agent provide the client with a conditional receipt? - Answer A
conditional receipt gives an insurance company a window of time in which they can ultimately
issue or refuse to approve the policy. If, during this time, the applicant for a life insurance
contract dies, the company will pay a death benefit if the policy would have been issued.
Define warranty: - Answer A material stipulation in the policy that if breached may void
coverage.
Term life insurance is considered a permanent policy. True or False - Answer False
What life insurance policy, also used by businesses, is a legal contract which forces one partner
To buy and the other to sell their share of the business in case one owner dies or becomes
disabled? - Answer A Buy-Sell Agreement life insurance policy.
Life insurance is based on a morbidity table. True or False - Answer True. Mortality tables are
one of the main tools for the life insurance industry. Mortality tables are mathematically
complex grids of numbers that show the probability of mortality, or death, for members of a
certain population within a defined period of time.
Name four types of whole life policies: - Answer Four types of whole life policies are level
premiums, death benefit, Cash value, and living benefit.
If a primary beneficiary dies before the insured, who receives the death benefit? - Answer If
the primary beneficiary dies before the insured, then no one is paid. The death benefit is only
paid when the insured passes away. The insured, in most cases, is also the owner.
Name and describe the 3 nonforfeiture options. - Answer 1)Cash Surrender Value . Under this
option, the insured returns the policy to the insurance company and the life insurance company
pays out the current value of the policy. At this point, the insured no longer has life insurance
protection. The minimum value of the policy is determined by a table established by law. 2)
Reduced Paid-Up Life. With this option, the insured uses the cash value of the policy to
purchase fully paid for life insurance of the same type as the original policy, but with a smaller
face amount. 3) Extended Term Life Insurance . In this option, the insured uses the cash value of
the policy to purchase fully paid for term life insurance for the same face amount as the original
policy'The cash value, the face amount of the policy and the age of the insured will limit the
duration of the coverage available.
Name 5 dividend options. - Answer Paid in cash The insurance company will send you a check
in the amount of your dividend. You can cash that check and do whatever you want with it.
