HEALTH AND LIFE INSURANCE EXAM 2026
INSURANCE LICENSING ASSESSMENT
QUESTIONS SOLUTIONS GRADED A+
◉ 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.
INSURANCE LICENSING ASSESSMENT
QUESTIONS SOLUTIONS GRADED A+
◉ 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.
