Life Insurance Practice Exam
Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What is the suicide clause in life insurance?
✔✔A provision that limits or denies benefits if the insured dies by suicide within the first two
years of the policy.
What is a waiver of premium rider?
✔✔A rider that waives future premiums if the insured becomes totally disabled.
What is an accidental death benefit rider?
✔✔A rider that pays an additional death benefit if the insured dies as a result of an accident.
What is a settlement option in life insurance?
✔✔The method chosen by the beneficiary to receive the death benefit, such as lump sum or
installments.
What is a policy dividend?
✔✔A return of excess premium paid to the policyowner in participating life insurance policies.
What is the purpose of a medical exam in life insurance underwriting?
✔✔To assess the health and risk profile of the applicant.
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,What is the difference between a graded death benefit and a level death benefit in life insurance?
✔✔A graded benefit pays reduced benefits initially, increasing over time; a level benefit remains
the same throughout the policy.
What is the difference between a participating and non-participating policy?
✔✔Participating policies pay dividends to policyowners; non-participating policies do not.
What is a policy loan?
✔✔A loan taken against the cash value of a permanent life insurance policy.
What is the grace period in life insurance?
✔✔A specified time after the premium due date during which the policy remains in force before
lapse.
What is the reinstatement provision in life insurance?
✔✔Allows a lapsed policy to be reinstated if premiums are paid and underwriting requirements
are met.
What is the assignment of a life insurance policy?
✔✔The transfer of ownership rights from one party to another.
What is a conversion privilege in life insurance?
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, ✔✔The right to convert a term policy to a permanent policy without proof of insurability.
What is a contingent beneficiary?
✔✔A secondary beneficiary who receives the death benefit if the primary beneficiary is
deceased.
What is the incontestability period?
✔✔The time, usually two years, after which the insurer cannot challenge the validity of the
policy due to misstatements.
What is a beneficiary in a life insurance policy?
✔✔The person or entity designated to receive the death benefit.
What is a term life insurance policy?
✔✔A policy that provides coverage for a specified period and pays a death benefit if the insured
dies during that term.
What is whole life insurance?
✔✔A permanent policy that provides lifetime coverage and builds cash value.
What is universal life insurance?
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Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What is the suicide clause in life insurance?
✔✔A provision that limits or denies benefits if the insured dies by suicide within the first two
years of the policy.
What is a waiver of premium rider?
✔✔A rider that waives future premiums if the insured becomes totally disabled.
What is an accidental death benefit rider?
✔✔A rider that pays an additional death benefit if the insured dies as a result of an accident.
What is a settlement option in life insurance?
✔✔The method chosen by the beneficiary to receive the death benefit, such as lump sum or
installments.
What is a policy dividend?
✔✔A return of excess premium paid to the policyowner in participating life insurance policies.
What is the purpose of a medical exam in life insurance underwriting?
✔✔To assess the health and risk profile of the applicant.
1
,What is the difference between a graded death benefit and a level death benefit in life insurance?
✔✔A graded benefit pays reduced benefits initially, increasing over time; a level benefit remains
the same throughout the policy.
What is the difference between a participating and non-participating policy?
✔✔Participating policies pay dividends to policyowners; non-participating policies do not.
What is a policy loan?
✔✔A loan taken against the cash value of a permanent life insurance policy.
What is the grace period in life insurance?
✔✔A specified time after the premium due date during which the policy remains in force before
lapse.
What is the reinstatement provision in life insurance?
✔✔Allows a lapsed policy to be reinstated if premiums are paid and underwriting requirements
are met.
What is the assignment of a life insurance policy?
✔✔The transfer of ownership rights from one party to another.
What is a conversion privilege in life insurance?
2
, ✔✔The right to convert a term policy to a permanent policy without proof of insurability.
What is a contingent beneficiary?
✔✔A secondary beneficiary who receives the death benefit if the primary beneficiary is
deceased.
What is the incontestability period?
✔✔The time, usually two years, after which the insurer cannot challenge the validity of the
policy due to misstatements.
What is a beneficiary in a life insurance policy?
✔✔The person or entity designated to receive the death benefit.
What is a term life insurance policy?
✔✔A policy that provides coverage for a specified period and pays a death benefit if the insured
dies during that term.
What is whole life insurance?
✔✔A permanent policy that provides lifetime coverage and builds cash value.
What is universal life insurance?
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