Life Insurance Exam Questions and
Answers | Latest Version | 2025/2026 |
Correct & Verified
What is a policy loan?
✔✔A loan taken by the policyowner using the cash value of a permanent life insurance policy as
collateral.
What is an accelerated death benefit rider?
✔✔A provision that allows the insured to receive a portion of the death benefit if diagnosed with
a terminal illness.
What is a waiver of premium rider?
✔✔A rider that waives premiums if the insured becomes disabled and unable to work.
What is a guaranteed insurability rider?
✔✔A rider allowing the policyowner to purchase additional coverage without evidence of
insurability.
What is the underwriting process in life insurance?
✔✔The evaluation of risk factors, including age, health, lifestyle, and medical history, to
determine insurability and premium rates.
1
,What is life insurance?
✔✔A contract in which the insurer agrees to pay a designated beneficiary a sum of money upon
the insured’s death in exchange for premiums.
Who is the policyowner in a life insurance policy?
✔✔The individual or entity who owns the policy and has the right to make changes, pay
premiums, and designate beneficiaries.
Who is the insured in a life insurance policy?
✔✔The person whose life is covered by the policy.
Who is the beneficiary in a life insurance policy?
✔✔The person or entity entitled to receive the policy proceeds upon the insured’s death.
What is the purpose of life insurance?
✔✔To provide financial protection to dependents or other beneficiaries after the insured’s death.
What is a premium in life insurance?
✔✔The amount of money the policyowner pays to the insurer to maintain coverage.
What is term life insurance?
2
, ✔✔A type of life insurance that provides coverage for a specific period and pays a death benefit
only if the insured dies during that term.
What is whole life insurance?
✔✔A type of permanent life insurance that provides coverage for the insured’s entire life and
accumulates cash value.
What is universal life insurance?
✔✔A flexible permanent life insurance policy that allows adjustments to premiums and death
benefits while building cash value.
What is variable life insurance?
✔✔A permanent life insurance policy that allows the policyowner to invest the cash value in
separate accounts, with investment risk borne by the policyowner.
What is the cash value in a life insurance policy?
✔✔The portion of a permanent life insurance policy that accumulates savings and can be
borrowed against or withdrawn.
What is the difference between term and permanent life insurance?
✔✔Term provides coverage for a set period without cash value, while permanent provides
lifetime coverage with cash value accumulation.
3
Answers | Latest Version | 2025/2026 |
Correct & Verified
What is a policy loan?
✔✔A loan taken by the policyowner using the cash value of a permanent life insurance policy as
collateral.
What is an accelerated death benefit rider?
✔✔A provision that allows the insured to receive a portion of the death benefit if diagnosed with
a terminal illness.
What is a waiver of premium rider?
✔✔A rider that waives premiums if the insured becomes disabled and unable to work.
What is a guaranteed insurability rider?
✔✔A rider allowing the policyowner to purchase additional coverage without evidence of
insurability.
What is the underwriting process in life insurance?
✔✔The evaluation of risk factors, including age, health, lifestyle, and medical history, to
determine insurability and premium rates.
1
,What is life insurance?
✔✔A contract in which the insurer agrees to pay a designated beneficiary a sum of money upon
the insured’s death in exchange for premiums.
Who is the policyowner in a life insurance policy?
✔✔The individual or entity who owns the policy and has the right to make changes, pay
premiums, and designate beneficiaries.
Who is the insured in a life insurance policy?
✔✔The person whose life is covered by the policy.
Who is the beneficiary in a life insurance policy?
✔✔The person or entity entitled to receive the policy proceeds upon the insured’s death.
What is the purpose of life insurance?
✔✔To provide financial protection to dependents or other beneficiaries after the insured’s death.
What is a premium in life insurance?
✔✔The amount of money the policyowner pays to the insurer to maintain coverage.
What is term life insurance?
2
, ✔✔A type of life insurance that provides coverage for a specific period and pays a death benefit
only if the insured dies during that term.
What is whole life insurance?
✔✔A type of permanent life insurance that provides coverage for the insured’s entire life and
accumulates cash value.
What is universal life insurance?
✔✔A flexible permanent life insurance policy that allows adjustments to premiums and death
benefits while building cash value.
What is variable life insurance?
✔✔A permanent life insurance policy that allows the policyowner to invest the cash value in
separate accounts, with investment risk borne by the policyowner.
What is the cash value in a life insurance policy?
✔✔The portion of a permanent life insurance policy that accumulates savings and can be
borrowed against or withdrawn.
What is the difference between term and permanent life insurance?
✔✔Term provides coverage for a set period without cash value, while permanent provides
lifetime coverage with cash value accumulation.
3
