ILLINOIS LIFE INSURANCE PRACTICE PAPER
2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◉lump sum. Answer: settlement method that pays the beneficiary
the entire proceeds of a life insurance policy in one payment rather
than installments
◉market value adjusted annuity. Answer: a single premium deferred
annuity that allows a contract owner to lock in a guaranteed interest
rate over a specified maturity period
◉maturity date. Answer: the date when the face amount of the life
insurance becomes payable
◉Medical information bureau (MIB). Answer: an information
database that stores the health histories of individuals who have
applied for insurance in the past. most insurance companies
subscribe to this database for underwriting purposes
◉misrepresentation. Answer: a false statement or lie that can
render the contract void
,◉mode of payment. Answer: the method of premium payment,
whether annually, semiannually, quarterly or monthly
◉mortality table. Answer: a table showing the probability of death
at specified ages
◉mutual companies. Answer: insurance organizations that have no
capital stock, but are owned by the policy holders
◉nonadmitted/nonauthorized. Answer: an insurance company that
has not applied for, or has applied and been denied a certificate of
authority and may not transact insurance in a particular state
◉noncancellable. Answer: an insurance contract that the insured
has a right to continue in force by payment of premiums that remain
the same for a substantial period of time
◉nonforfeiture values. Answer: those guaranteed values in a life
insurance policy that cannot be taken from the insured, even if he or
she ceases to pay premiums
◉nonmedical. Answer: a life or health insurance policy that is
underwritten based on the insureds statement of health rather than
a medical exam
, ◉nonparticipating policies. Answer: insurance that does not pay
dividends
◉nonqualified plan. Answer: a type of benefit plan that may
discriminate, is not required to be filed with the IRS, and does not
provide a current tax deduction for contributions
◉nonrenewal. Answer: a termination of a policy by an insurer on the
anniversary or renewal date
◉nonresident agent. Answer: an agent licensed in a state in which
he or she is not a resident
◉option. Answer: a choice of ways of receiving policy dividends,
nonforfeiture values, death benefits or cash values
◉overinsurance. Answer: an excessive amount of insurance that
would result in over payment to the insured in the event of a loss
◉paid up insurance. Answer: a policy on which all premiums have
been paid but which has not matured due either to death or
endowment
2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◉lump sum. Answer: settlement method that pays the beneficiary
the entire proceeds of a life insurance policy in one payment rather
than installments
◉market value adjusted annuity. Answer: a single premium deferred
annuity that allows a contract owner to lock in a guaranteed interest
rate over a specified maturity period
◉maturity date. Answer: the date when the face amount of the life
insurance becomes payable
◉Medical information bureau (MIB). Answer: an information
database that stores the health histories of individuals who have
applied for insurance in the past. most insurance companies
subscribe to this database for underwriting purposes
◉misrepresentation. Answer: a false statement or lie that can
render the contract void
,◉mode of payment. Answer: the method of premium payment,
whether annually, semiannually, quarterly or monthly
◉mortality table. Answer: a table showing the probability of death
at specified ages
◉mutual companies. Answer: insurance organizations that have no
capital stock, but are owned by the policy holders
◉nonadmitted/nonauthorized. Answer: an insurance company that
has not applied for, or has applied and been denied a certificate of
authority and may not transact insurance in a particular state
◉noncancellable. Answer: an insurance contract that the insured
has a right to continue in force by payment of premiums that remain
the same for a substantial period of time
◉nonforfeiture values. Answer: those guaranteed values in a life
insurance policy that cannot be taken from the insured, even if he or
she ceases to pay premiums
◉nonmedical. Answer: a life or health insurance policy that is
underwritten based on the insureds statement of health rather than
a medical exam
, ◉nonparticipating policies. Answer: insurance that does not pay
dividends
◉nonqualified plan. Answer: a type of benefit plan that may
discriminate, is not required to be filed with the IRS, and does not
provide a current tax deduction for contributions
◉nonrenewal. Answer: a termination of a policy by an insurer on the
anniversary or renewal date
◉nonresident agent. Answer: an agent licensed in a state in which
he or she is not a resident
◉option. Answer: a choice of ways of receiving policy dividends,
nonforfeiture values, death benefits or cash values
◉overinsurance. Answer: an excessive amount of insurance that
would result in over payment to the insured in the event of a loss
◉paid up insurance. Answer: a policy on which all premiums have
been paid but which has not matured due either to death or
endowment
