INSURANCE FINAL PAPER 2026 QUESTIONS
WITH SOLUTIONS GRADED A+
◉ Which of the following insurance providers must be nonprofit and sell
insurance only to its members?
a) Reciprocal
b) Fraternal
c) Service
d) Mutual. Answer: b) Fraternal
To be characterized as a fraternal benefit society, the organization must
be nonprofit, have a lodge system that includes ritualistic work and
maintain a representative form of government with elected officers.
Insurance may only be sold to members of the society.
◉ A married couple owns a permanent policy which covers both of their
lives and pays the death benefit only upon the death of the first insured.
Which policy is that?
a)Second-to-Die
b)Family Income Policy
,c)Joint Life Policy
d)Survivorship Life Policy. Answer: c)Joint Life Policy
Joint life policies cover the lives of two insureds; rates are blended.
Upon the death of the first insured, the policy ends.
◉ The insured under a $100,000 life insurance policy with a triple
indemnity rider for accidental death was killed in a car accident. It was
determined that the accident was his fault. The triple indemnity rider in
the policy specifies that the death must not be contributed to by the
insured in any manner. In this case, what will the policy beneficiary
receive?
a)$0
b)$50,000 (50% of the policy value)
c)$100,000
d)$300,000 (triple the amount of policy value). Answer: c)$100,000
The triple indemnity accidental death rider obligates the company to pay
three times the face amount of the policy if the insured dies as a result of
an accident. The death must be accidental and not contributed to by any
other factors and must occur within 90 days of the accident. In this case,
since the insured contributed to his own death, the triple indemnity rider
is void, but the beneficiary will still receive the policy's death benefit.
,◉ In term policies, what happens to the premium throughout the term of
the policy?
a) Premium gradually increases.
b) Premium gradually decreases.
c) Premium fluctuates.
d) Premium always remains level. Answer: d) Premium always remains
level.
There are three basic types of term coverage available, based on how the
face amount (death benefit) changes during the policy term: Level,
Increasing, and Decreasing. Regardless of the type of term insurance
purchased, the premium is often level throughout the term of the policy.
◉ An insurer neglects to pay a legitimate claim that is covered under the
terms of the policy. Which of the following insurance principles has the
insurer violated?
a) Representation
b) Adhesion
c) Consideration
d) Good faith. Answer: c) Consideration
, The binding force in any contract is consideration. Consideration on the
part of the insured is the payment of premiums and the health
representations made in the application. Consideration on the part of the
insurer is the promise to pay in the event of loss.
◉ When the breadwinner that is insured by a Family Policy dies, what
rights are provided to other family members that are covered under the
policy?
a) They can convert their coverage to permanent life insurance with
evidence of insurability
.b) Family members are not provided any rights.
c) They can surrender the coverage for its cash value.
d) They can convert their coverage to permanent life insurance without
evidence of insurability. Answer: d) They can convert their coverage to
permanent life insurance without evidence of insurability.
Family members may convert their term coverage to permanent
insurance if requested within the time stated in the policy.
◉ Forcing a client to buy insurance from a particular lender as a
condition of granting a loan is defined as
a) Defamation.
b) Coercion.
WITH SOLUTIONS GRADED A+
◉ Which of the following insurance providers must be nonprofit and sell
insurance only to its members?
a) Reciprocal
b) Fraternal
c) Service
d) Mutual. Answer: b) Fraternal
To be characterized as a fraternal benefit society, the organization must
be nonprofit, have a lodge system that includes ritualistic work and
maintain a representative form of government with elected officers.
Insurance may only be sold to members of the society.
◉ A married couple owns a permanent policy which covers both of their
lives and pays the death benefit only upon the death of the first insured.
Which policy is that?
a)Second-to-Die
b)Family Income Policy
,c)Joint Life Policy
d)Survivorship Life Policy. Answer: c)Joint Life Policy
Joint life policies cover the lives of two insureds; rates are blended.
Upon the death of the first insured, the policy ends.
◉ The insured under a $100,000 life insurance policy with a triple
indemnity rider for accidental death was killed in a car accident. It was
determined that the accident was his fault. The triple indemnity rider in
the policy specifies that the death must not be contributed to by the
insured in any manner. In this case, what will the policy beneficiary
receive?
a)$0
b)$50,000 (50% of the policy value)
c)$100,000
d)$300,000 (triple the amount of policy value). Answer: c)$100,000
The triple indemnity accidental death rider obligates the company to pay
three times the face amount of the policy if the insured dies as a result of
an accident. The death must be accidental and not contributed to by any
other factors and must occur within 90 days of the accident. In this case,
since the insured contributed to his own death, the triple indemnity rider
is void, but the beneficiary will still receive the policy's death benefit.
,◉ In term policies, what happens to the premium throughout the term of
the policy?
a) Premium gradually increases.
b) Premium gradually decreases.
c) Premium fluctuates.
d) Premium always remains level. Answer: d) Premium always remains
level.
There are three basic types of term coverage available, based on how the
face amount (death benefit) changes during the policy term: Level,
Increasing, and Decreasing. Regardless of the type of term insurance
purchased, the premium is often level throughout the term of the policy.
◉ An insurer neglects to pay a legitimate claim that is covered under the
terms of the policy. Which of the following insurance principles has the
insurer violated?
a) Representation
b) Adhesion
c) Consideration
d) Good faith. Answer: c) Consideration
, The binding force in any contract is consideration. Consideration on the
part of the insured is the payment of premiums and the health
representations made in the application. Consideration on the part of the
insurer is the promise to pay in the event of loss.
◉ When the breadwinner that is insured by a Family Policy dies, what
rights are provided to other family members that are covered under the
policy?
a) They can convert their coverage to permanent life insurance with
evidence of insurability
.b) Family members are not provided any rights.
c) They can surrender the coverage for its cash value.
d) They can convert their coverage to permanent life insurance without
evidence of insurability. Answer: d) They can convert their coverage to
permanent life insurance without evidence of insurability.
Family members may convert their term coverage to permanent
insurance if requested within the time stated in the policy.
◉ Forcing a client to buy insurance from a particular lender as a
condition of granting a loan is defined as
a) Defamation.
b) Coercion.
