LIFE INSURANCE EXAM: QUESTIONS WITH VERIFIED ANSWERS
| LATEST UPDATE 2026
LIFE INSURANCE - CORRECT ANSWER -Insurance that pays out a sum of money either on the
death of the insured person or after a set period.
TERM LIFE INSURANCE - CORRECT ANSWER -Life insurance that pays a benefit in the event of
the death of the insured during a specified term.
*PURE
*ONLY DEATH BENEFIT NO CASH VALUE
WHOLE LIFE INSURANCE - CORRECT ANSWER -Life insurance that pays a benefit on the death
of the insured and also accumulates a
*PERMANENT
*DEATH BENEFIT & CASH VALUE.
UNIVERSAL LIFE INSURANCE - CORRECT ANSWER -Flexible permanent life insurance offering
the low-cost protection of term life insurance as well as a savings element (like whole life
insurance), which is invested to provide a cash value buildup.
LOW PREMIUM & CASH VALUE
VARIABLE LIFE INSURANCE - CORRECT ANSWER -Permanent life insurance policy with an
investment component.
LEVEL TERM LIFE INSURANCE - CORRECT ANSWER -Provides the same amount of coverage for
a specific length of time, over which you pay the same premium.
,DECREASING TERM LIFE INSURANCE - CORRECT ANSWER -Annual renewable term life
insurance that provides a death benefit that decreases at a predetermined rate over the life of the
policy.
ANNUITY - CORRECT ANSWER -*Insurance product that pays out income, and can be used as
part of a retirement strategy.
*Fixed sum of money paid to someone each year, typically for the rest of their life.
DEFFERED ANNUITY - CORRECT ANSWER -Annuity that commences only after a lapse of some
specified time after the final purchase premium has been paid.
SINGLE PREMIUM DEFERED ANNUITY (S.P.D.A) - CORRECT ANSWER -Annuity contract that is
established with a single lump-sum payment by the owner.
*ANNUTIY GROWS ON A TAX DEFERRED BASIS UNTIL ANNUITIZATION.
PRINCIPLE OF INDEMNIFICATION - CORRECT ANSWER -LIFE INSURANCE IS DESIGNED TO
MAKE SOMEONE WHOLE AGAIN (INDEMNIFY) NOT TO ENRICH.
BENEFICIARY - CORRECT ANSWER -PERSON, ORGANIZATION, BUSINESS, OR THE ESTATE OF
THE INSURED TO RECEIVE TO BENEFITS.
-PRIMARY BENEFICIARY - 1ST
-CONTINGENT/SECONDARY BENEFICIARY - 2ND
-TERTIARY BENEFICIARY - 3RD
LIFE INSURANCE PURPOSE - CORRECT ANSWER -PROTECTION AGAINST LOSS OF INCOME.
, PRODUCER - CORRECT ANSWER -AGENT, BROKER, OR SOLICITOR
AGENT - CORRECT ANSWER -REPRESENTS COMPANIES TO CLIENTS
BROKER - CORRECT ANSWER -REPRESENTS CLIENTS TO COMPANIES
ADMITTED INSURER - CORRECT ANSWER -INSURANCE COMPANY LICENSED TO TRANSACT
INSURANCE IN CALIFORNIA
DOMESTIC INSURER - CORRECT ANSWER -INSURER (INSURANCE COMPANY) THAT IS
WITHIN THE STATE
FOREIGN INSURER - CORRECT ANSWER -INSURER (INSURANCE COMPANY) THAT IS FROM
ANOTHER STATE
ALIEN INSURER - CORRECT ANSWER -INSURER (INSURANCE COMPANY) FROM ANOTHER
COUNTRY
UNDERWRITER - CORRECT ANSWER -A person who evaluates and classifies risks to accept or
reject them on behalf of the insurer.
LIFE INSURANCE CONTRACT - CORRECT ANSWER -GUARANTEES THAT A SPECIFIC AMOUNT
OF MONEY WILL BE PAID TO A DESIGNATED BENEFICIARY WHEN THE INSURED INDIVIDUAL
DIES.
FIDUCIARY CAPACITY - CORRECT ANSWER -HAVING THE RESPONSIBILITY OF SOMEONE
ELSES ASSETS AND MONEY.
| LATEST UPDATE 2026
LIFE INSURANCE - CORRECT ANSWER -Insurance that pays out a sum of money either on the
death of the insured person or after a set period.
TERM LIFE INSURANCE - CORRECT ANSWER -Life insurance that pays a benefit in the event of
the death of the insured during a specified term.
*PURE
*ONLY DEATH BENEFIT NO CASH VALUE
WHOLE LIFE INSURANCE - CORRECT ANSWER -Life insurance that pays a benefit on the death
of the insured and also accumulates a
*PERMANENT
*DEATH BENEFIT & CASH VALUE.
UNIVERSAL LIFE INSURANCE - CORRECT ANSWER -Flexible permanent life insurance offering
the low-cost protection of term life insurance as well as a savings element (like whole life
insurance), which is invested to provide a cash value buildup.
LOW PREMIUM & CASH VALUE
VARIABLE LIFE INSURANCE - CORRECT ANSWER -Permanent life insurance policy with an
investment component.
LEVEL TERM LIFE INSURANCE - CORRECT ANSWER -Provides the same amount of coverage for
a specific length of time, over which you pay the same premium.
,DECREASING TERM LIFE INSURANCE - CORRECT ANSWER -Annual renewable term life
insurance that provides a death benefit that decreases at a predetermined rate over the life of the
policy.
ANNUITY - CORRECT ANSWER -*Insurance product that pays out income, and can be used as
part of a retirement strategy.
*Fixed sum of money paid to someone each year, typically for the rest of their life.
DEFFERED ANNUITY - CORRECT ANSWER -Annuity that commences only after a lapse of some
specified time after the final purchase premium has been paid.
SINGLE PREMIUM DEFERED ANNUITY (S.P.D.A) - CORRECT ANSWER -Annuity contract that is
established with a single lump-sum payment by the owner.
*ANNUTIY GROWS ON A TAX DEFERRED BASIS UNTIL ANNUITIZATION.
PRINCIPLE OF INDEMNIFICATION - CORRECT ANSWER -LIFE INSURANCE IS DESIGNED TO
MAKE SOMEONE WHOLE AGAIN (INDEMNIFY) NOT TO ENRICH.
BENEFICIARY - CORRECT ANSWER -PERSON, ORGANIZATION, BUSINESS, OR THE ESTATE OF
THE INSURED TO RECEIVE TO BENEFITS.
-PRIMARY BENEFICIARY - 1ST
-CONTINGENT/SECONDARY BENEFICIARY - 2ND
-TERTIARY BENEFICIARY - 3RD
LIFE INSURANCE PURPOSE - CORRECT ANSWER -PROTECTION AGAINST LOSS OF INCOME.
, PRODUCER - CORRECT ANSWER -AGENT, BROKER, OR SOLICITOR
AGENT - CORRECT ANSWER -REPRESENTS COMPANIES TO CLIENTS
BROKER - CORRECT ANSWER -REPRESENTS CLIENTS TO COMPANIES
ADMITTED INSURER - CORRECT ANSWER -INSURANCE COMPANY LICENSED TO TRANSACT
INSURANCE IN CALIFORNIA
DOMESTIC INSURER - CORRECT ANSWER -INSURER (INSURANCE COMPANY) THAT IS
WITHIN THE STATE
FOREIGN INSURER - CORRECT ANSWER -INSURER (INSURANCE COMPANY) THAT IS FROM
ANOTHER STATE
ALIEN INSURER - CORRECT ANSWER -INSURER (INSURANCE COMPANY) FROM ANOTHER
COUNTRY
UNDERWRITER - CORRECT ANSWER -A person who evaluates and classifies risks to accept or
reject them on behalf of the insurer.
LIFE INSURANCE CONTRACT - CORRECT ANSWER -GUARANTEES THAT A SPECIFIC AMOUNT
OF MONEY WILL BE PAID TO A DESIGNATED BENEFICIARY WHEN THE INSURED INDIVIDUAL
DIES.
FIDUCIARY CAPACITY - CORRECT ANSWER -HAVING THE RESPONSIBILITY OF SOMEONE
ELSES ASSETS AND MONEY.
