NY Life Insurance Exam Chapter 4
Questions and All Solved Solutions
2026-2027 Updated.
Provisions - Answer stipulate the rights and obligations of an insurance contract and are fairly
universal from one policy to the next.
Riders - Answer modify provisions that already exist and are used to increase or decrease
policy benefits and premiums.
Options - Answer offer insurers and insureds ways to invest or distribute a sum of money
available in a life policy.
Ownership - Answer the parties to the insurance contract are the insurer, the policy owner,
the insured and the beneficiary. Policy owner is responsible for paying the policy premiums, and
must have an insurable interest in the insured at the time of application.
Assignment - Answer the policy owner of a life insurance policy has the right to transfer partial
or complete ownership of the policy to another person with the consent of the insured; transfer
of the life insurance policy does not change the insured or the amount of coverage, it only
changes who has policy ownership rights
Absolute Assignment - Answer involves transferring all rights of ownership to another person
or entity.
Collateral Assignment - Answer involves a transfer of partial rights to another person.
Entire Contract - Answer the entire contract provision stipulates that the policy and a copy of
the application along with any riders or amendments, constitute the entire contract.
Right to Examine (Free Look) - Answer this provision allows the policy owner a specified
number of days from receipt to look over the policy and if dissatisfied for any reason, return it
for a full refund of premium. In NY it's a minimum of 10 days, mail order is 30 days.
Payment of Premiums - Answer the policy stipulates when the premiums are due, how often
to be paid and to whom; if the insured dies during a period of time for which the premium has
been paid, the insurer must refund any unearned premium along with the policy proceeds.
, Grace Period - Answer the grace period is the period of time after the premium due date that
the policy owner has to pay the premium before the policy lapses (usually 30 to 31 days),
purpose is to protect the policyholder against an unintentional lapse of the policy; death benefit
is payable if insured dies during this period; however, any unpaid premium will be deducted
from the death benefit
Reinstatement - Answer the reinstatement provision allows a lapsed policy to be put back in
force. The maximum time limit for reinstatement is 3 years after the policy lapsed. The policy
owner will have to show proof of insurability, pay all back premiums plus interest, and any
outstanding loans plus interest.
Incontestability - Answer the incontestability clause prevents an insurer from denying a claim
due to statements in the application after the policy has been in force for 2 years.
Misstatement of Age - Answer the insurer has the right to adjust the benefit to an amount
that the premium at the correct age would have otherwise purchased.
Statements of the Applicant - Answer a representation is a written response to questions or
statements on an application which the applicant indicates are correct to the best of his/her
knowledge. A warranty is a statement that is guaranteed to be true, if untrue the insurer has the
right to void the contract.
Proof of Death - Answer in many cases this will consist of a copy of the death certificate and a
form provided by the insurer to be completed by the claimant. Upon receipt the insurer must
pay the death claim immediately. If no beneficiary is named in the policy, the death proceeds
are paid to the estate of the insured.
Exclusion - Answer are types of risk the policy will not cover. Aviation, Hazardous Occupations
or Hobbies, War or Military Service (status cause excludes all causes of death when insured is on
active duty, results cause only excludes death benefit if the insured is killed as a result of a
declared or undeclared act of war), Suicide in the first 2 years, premiums will be refunded and
the claim disallowed. Suicide after 2 year period- death proceeds paid to designated beneficiary
as if insured died of natural causes
Designation Option - Answer the beneficiary is the person or interest to which the policy
proceeds will be paid upon the death of the insured.
Individuals - Answer the owner of a life insurance policy may name any individual as a
beneficiary for the policy proceeds. Benefit split by percentage when there is more than one
beneficiary. Benefits designated to a minor will either be paid to the minor's guardian or paid to
the trustee of the minor.
Questions and All Solved Solutions
2026-2027 Updated.
Provisions - Answer stipulate the rights and obligations of an insurance contract and are fairly
universal from one policy to the next.
Riders - Answer modify provisions that already exist and are used to increase or decrease
policy benefits and premiums.
Options - Answer offer insurers and insureds ways to invest or distribute a sum of money
available in a life policy.
Ownership - Answer the parties to the insurance contract are the insurer, the policy owner,
the insured and the beneficiary. Policy owner is responsible for paying the policy premiums, and
must have an insurable interest in the insured at the time of application.
Assignment - Answer the policy owner of a life insurance policy has the right to transfer partial
or complete ownership of the policy to another person with the consent of the insured; transfer
of the life insurance policy does not change the insured or the amount of coverage, it only
changes who has policy ownership rights
Absolute Assignment - Answer involves transferring all rights of ownership to another person
or entity.
Collateral Assignment - Answer involves a transfer of partial rights to another person.
Entire Contract - Answer the entire contract provision stipulates that the policy and a copy of
the application along with any riders or amendments, constitute the entire contract.
Right to Examine (Free Look) - Answer this provision allows the policy owner a specified
number of days from receipt to look over the policy and if dissatisfied for any reason, return it
for a full refund of premium. In NY it's a minimum of 10 days, mail order is 30 days.
Payment of Premiums - Answer the policy stipulates when the premiums are due, how often
to be paid and to whom; if the insured dies during a period of time for which the premium has
been paid, the insurer must refund any unearned premium along with the policy proceeds.
, Grace Period - Answer the grace period is the period of time after the premium due date that
the policy owner has to pay the premium before the policy lapses (usually 30 to 31 days),
purpose is to protect the policyholder against an unintentional lapse of the policy; death benefit
is payable if insured dies during this period; however, any unpaid premium will be deducted
from the death benefit
Reinstatement - Answer the reinstatement provision allows a lapsed policy to be put back in
force. The maximum time limit for reinstatement is 3 years after the policy lapsed. The policy
owner will have to show proof of insurability, pay all back premiums plus interest, and any
outstanding loans plus interest.
Incontestability - Answer the incontestability clause prevents an insurer from denying a claim
due to statements in the application after the policy has been in force for 2 years.
Misstatement of Age - Answer the insurer has the right to adjust the benefit to an amount
that the premium at the correct age would have otherwise purchased.
Statements of the Applicant - Answer a representation is a written response to questions or
statements on an application which the applicant indicates are correct to the best of his/her
knowledge. A warranty is a statement that is guaranteed to be true, if untrue the insurer has the
right to void the contract.
Proof of Death - Answer in many cases this will consist of a copy of the death certificate and a
form provided by the insurer to be completed by the claimant. Upon receipt the insurer must
pay the death claim immediately. If no beneficiary is named in the policy, the death proceeds
are paid to the estate of the insured.
Exclusion - Answer are types of risk the policy will not cover. Aviation, Hazardous Occupations
or Hobbies, War or Military Service (status cause excludes all causes of death when insured is on
active duty, results cause only excludes death benefit if the insured is killed as a result of a
declared or undeclared act of war), Suicide in the first 2 years, premiums will be refunded and
the claim disallowed. Suicide after 2 year period- death proceeds paid to designated beneficiary
as if insured died of natural causes
Designation Option - Answer the beneficiary is the person or interest to which the policy
proceeds will be paid upon the death of the insured.
Individuals - Answer the owner of a life insurance policy may name any individual as a
beneficiary for the policy proceeds. Benefit split by percentage when there is more than one
beneficiary. Benefits designated to a minor will either be paid to the minor's guardian or paid to
the trustee of the minor.
