LIFE INSURANCE ILLINOIS STATE
EXAMINATION 2026 ACCURATE
SOLUTIONS PERFECT SCORE
⩥ Law of Large Numbers. Answer: The larger the number of risks
insured in the same risk pool; the more predictable losses become.
⩥ Peril. Answer: An immediate, specific event that causes a loss.
⩥ Loss. Answer: An unintended, unforeseen reduction, or destruction of
financial or economic value.
⩥ Hazard. Answer: Creates an increased possibility that a peril (a cause
of a loss) will actually occur.
⩥ Occurrence. Answer: Is any event that causes a loss.
⩥ Risk. Answer: Risk is defined as thepotential or uncertainty for loss.
⩥ Speculative risk. Answer: A situation in which either profit or loss is
possible, not insured.
,⩥ Industrial life insurance. Answer: Issues very small face amounts,
such as $1,000 or $2,000. Premiums are paid weekly and collected by
debit agents. They were designed for burial coverage.
⩥ Ordinary life insurance. Answer: Life insurance of commercial
companies not issued on the weekly premium basis. It is made up of
several types of individual life insurance, such as temporary (term),
permanent (whole).
⩥ Group life insurance. Answer: Insurance written for members of a
group, such as a place of employment, association, or a union. Coverage
is provided to the members of that group under one master contract. The
group is underwritten as a whole, not on each individual member. One of
the benefits of group life coverage is usually there is no evidence of
insurability required.
⩥ Term life insurance. Answer: Life insurance that pays a death benefit
if the policyholder dies within a specific time period but has no
remaining value at the end of this time.
⩥ Whole life insurance. Answer: Sometimes called straight life
insurance or ordinary life insurance; can provide lifetime insurance
coverage; in this case, fixed premiums are paid for life; pays interest on
the cash value portion with a guaranteed minimum interest rate during
life of the contract.
,⩥ Joint survivor or last survivor life policies. Answer: Cover the lives of
two individuals and saves on premium costs by averaging the ages of the
two insureds. Joint Life Survivor or Last Survivor policies only pay the
death benefit upon the death of the last insured person. For example, say
B and M purchase a joint life survivor policy. If B were to die first and
then M died 10 years later, no benefits would be paid out from the policy
until M died. A Joint Life and Survivor policy covers two lives but only
pays benefits after the death of the last insured.
⩥ Family maintenance policy. Answer: Pays a monthly income from the
date of death of the insured to the end of the preselected period.
⩥ Family income policy. Answer: Combines Whole Life insurance with
a Decreasing Term
Rider also written on the same person.
⩥ Adjustable life policy. Answer: Whole life insurance policy, but you
can change your policy as your needs change. You can change your
premium payments to increase or decrease coverage.
⩥ Universal life insurance policy. Answer: Incorporates flexible
premiums and an adjustable death benefit. The investment gains from a
Universal Life Policy usually go toward the cash value. The policy
owner can use the cash value to manipulate the flexible aspects of a
universal life insurance policy. A customer who wants a policy that gives
them the most options and the most control would be looking for a
Universal Life Policy. Universal policies use gains to fund the cash
, value and give the policy owner options for flexible premiums and
adjustable death benefits.
⩥ Variable Life Insurance. Answer: Life insurance in which the benefits
are a function of the returns being generated on the investments selected
by the policyholder.
⩥ Equity index universal life insurance. Answer: Combines most of the
features, benefits, and security of traditional life insurance with the
potential of earned interest based on the upward movement of an equity
index.
⩥ Cash value. Answer: The equity amount or "savings" accumulation in
a whole life policy.
⩥ Endowment policy. Answer: Is a contract providing for payment of
the face amount at the end of a fixed period, at a specified age of the
insured, or at the insured's death before the end of the stated period.
⩥ Face amount plus cash value policy. Answer: Contract that promises
to pay at the insured's death the face amount of the policy plus a sum
equal to the policy's cash value.
⩥ Juvenile Insurance. Answer: Written on the lives of children who are
within specified age limits and generally under parental control.
EXAMINATION 2026 ACCURATE
SOLUTIONS PERFECT SCORE
⩥ Law of Large Numbers. Answer: The larger the number of risks
insured in the same risk pool; the more predictable losses become.
⩥ Peril. Answer: An immediate, specific event that causes a loss.
⩥ Loss. Answer: An unintended, unforeseen reduction, or destruction of
financial or economic value.
⩥ Hazard. Answer: Creates an increased possibility that a peril (a cause
of a loss) will actually occur.
⩥ Occurrence. Answer: Is any event that causes a loss.
⩥ Risk. Answer: Risk is defined as thepotential or uncertainty for loss.
⩥ Speculative risk. Answer: A situation in which either profit or loss is
possible, not insured.
,⩥ Industrial life insurance. Answer: Issues very small face amounts,
such as $1,000 or $2,000. Premiums are paid weekly and collected by
debit agents. They were designed for burial coverage.
⩥ Ordinary life insurance. Answer: Life insurance of commercial
companies not issued on the weekly premium basis. It is made up of
several types of individual life insurance, such as temporary (term),
permanent (whole).
⩥ Group life insurance. Answer: Insurance written for members of a
group, such as a place of employment, association, or a union. Coverage
is provided to the members of that group under one master contract. The
group is underwritten as a whole, not on each individual member. One of
the benefits of group life coverage is usually there is no evidence of
insurability required.
⩥ Term life insurance. Answer: Life insurance that pays a death benefit
if the policyholder dies within a specific time period but has no
remaining value at the end of this time.
⩥ Whole life insurance. Answer: Sometimes called straight life
insurance or ordinary life insurance; can provide lifetime insurance
coverage; in this case, fixed premiums are paid for life; pays interest on
the cash value portion with a guaranteed minimum interest rate during
life of the contract.
,⩥ Joint survivor or last survivor life policies. Answer: Cover the lives of
two individuals and saves on premium costs by averaging the ages of the
two insureds. Joint Life Survivor or Last Survivor policies only pay the
death benefit upon the death of the last insured person. For example, say
B and M purchase a joint life survivor policy. If B were to die first and
then M died 10 years later, no benefits would be paid out from the policy
until M died. A Joint Life and Survivor policy covers two lives but only
pays benefits after the death of the last insured.
⩥ Family maintenance policy. Answer: Pays a monthly income from the
date of death of the insured to the end of the preselected period.
⩥ Family income policy. Answer: Combines Whole Life insurance with
a Decreasing Term
Rider also written on the same person.
⩥ Adjustable life policy. Answer: Whole life insurance policy, but you
can change your policy as your needs change. You can change your
premium payments to increase or decrease coverage.
⩥ Universal life insurance policy. Answer: Incorporates flexible
premiums and an adjustable death benefit. The investment gains from a
Universal Life Policy usually go toward the cash value. The policy
owner can use the cash value to manipulate the flexible aspects of a
universal life insurance policy. A customer who wants a policy that gives
them the most options and the most control would be looking for a
Universal Life Policy. Universal policies use gains to fund the cash
, value and give the policy owner options for flexible premiums and
adjustable death benefits.
⩥ Variable Life Insurance. Answer: Life insurance in which the benefits
are a function of the returns being generated on the investments selected
by the policyholder.
⩥ Equity index universal life insurance. Answer: Combines most of the
features, benefits, and security of traditional life insurance with the
potential of earned interest based on the upward movement of an equity
index.
⩥ Cash value. Answer: The equity amount or "savings" accumulation in
a whole life policy.
⩥ Endowment policy. Answer: Is a contract providing for payment of
the face amount at the end of a fixed period, at a specified age of the
insured, or at the insured's death before the end of the stated period.
⩥ Face amount plus cash value policy. Answer: Contract that promises
to pay at the insured's death the face amount of the policy plus a sum
equal to the policy's cash value.
⩥ Juvenile Insurance. Answer: Written on the lives of children who are
within specified age limits and generally under parental control.
