PA Life Insurance Examination questions &
answers @2026
Which of the following would NOT be permitted as a Section 1095 policy exchange? - ANSWERS💫✔️-
An annuity contract exchanged for a life contract
A rollover refers to which of the following? - ANSWERS💫✔️-A transfer of funds from one IRA to
another
Ed has a $50,000 policy with cash values of $10,000. Including the interest owed, there is a $2,000 policy
loan outstanding. Ed finds he can no longer make premium payments on this policy. If Ed chooses the
cash surrender value option, he will receive - ANSWERS💫✔️-$8,000
In a whole life insurance policy - ANSWERS💫✔️-the cash value is greatest at the end of the policy
period, and the insurance protection is greatest at the start of the policy
The punishment for fraud or making false statements may include - ANSWERS💫✔️-fines,
imprisonment or both
An expense load is also known as - ANSWERS💫✔️-the insurers operating costs
Susan has been classified as a standard risk by her insurance company. This means that Susan -
ANSWERS💫✔️-has an average health and a normal life expectancy
A policyowner allows a policy to lapse, and the insurance company converts the policy to the extended
term option. Which of the following from the original policy will automatically carry over into the new
policy? - ANSWERS💫✔️-Face value
The Lucrative Lozenge Company provides a $5,000 monthly bonus plan to retirees who served as senior
executives. This benefit is not available to other retirees of the company. This is an example of -
ANSWERS💫✔️-nonqualified plan
,When the entire death benefit is paid in a lump sum to a beneficiary, it is - ANSWERS💫✔️-not
taxable as income
In group insurance, the evidence of an agreement between the insurer and the employer or association
is the - ANSWERS💫✔️-contract
Which of the following statements about a modified endowment contract (MEC) is INCORRECT? -
ANSWERS💫✔️-MEC's are not life insurance but they do offer tax-free death benefits
Part 1 of the insurance application included all of the following EXCEPT - ANSWERS💫✔️-the
applicant's current medical treatments
Which statement about accelerated death benefits is CORRECT? - ANSWERS💫✔️-Benefits could be
paid up to a certain percentage of the death benefit
Which is the proper term for a company owned by its policyowners? - ANSWERS💫✔️-A mutual
insurance company
Which of the following methods of handling risk means that the individual will pay for the loss if it
occurs? - ANSWERS💫✔️-Retention
When the annuity period begins in a variable annuity contract, the accumulation units are converted to -
ANSWERS💫✔️-annuity units
The relative frequency of deaths in a specific population is known as - ANSWERS💫✔️-Mortality
Which of the following is NOT necessary for the formation of a valid contract? - ANSWERS💫✔️-
written documents
Paul dies before his annuity has paid out an amount at least equal to the purchase price of the annuity,
so Paul's beneficiary continues to receive annuity payments until that amount has been reached. This
type of annuity is a - ANSWERS💫✔️-life with refund annuity
, The suicide clause states that if an insured commits suicide: - ANSWERS💫✔️-during the first two
years after the policy is in effect, the insurance company will only pay the premium paid by the insured,
not the face amount of the policy
The type of annuity that guarantees to pay total income at least equal to the purchase price of the
contract is a - ANSWERS💫✔️-life with refund annuity
A variable life policy - ANSWERS💫✔️-has a death benefit that varies to reflect the investment results
of the underlying separate account but will not drop below a guaranteed minimum
An insurance policy is a unilateral contract because - ANSWERS💫✔️-only the insurance company is
bound to live up to its side of the agreement
All of the following are elements of a contact EXCEPT: - ANSWERS💫✔️-assignment
Alma, age 35 earns $50,000 a year and expects to retire when she is 65. What is Alma's human life
value? - ANSWERS💫✔️-$1.5 million
Warren and Wilma have a joint life policy. Warren dies, and the policy pays nothing. Later on, Wilma
dies and the policy death benefit is paid to the beneficiary. This is called a - ANSWERS💫✔️-
survivorship, or second-to-die, policy
Which of the following situations most likely calls for the purchase of term life insurance? -
ANSWERS💫✔️-George has no income and 2 years of medical school to complete. He and his wife
have 1 child
An insurance contract is an aleatory contract. This means - ANSWERS💫✔️-equal value is not given by
both parties to the contract
With life insurance, insurable interest must exist - ANSWERS💫✔️-at the time of application
answers @2026
Which of the following would NOT be permitted as a Section 1095 policy exchange? - ANSWERS💫✔️-
An annuity contract exchanged for a life contract
A rollover refers to which of the following? - ANSWERS💫✔️-A transfer of funds from one IRA to
another
Ed has a $50,000 policy with cash values of $10,000. Including the interest owed, there is a $2,000 policy
loan outstanding. Ed finds he can no longer make premium payments on this policy. If Ed chooses the
cash surrender value option, he will receive - ANSWERS💫✔️-$8,000
In a whole life insurance policy - ANSWERS💫✔️-the cash value is greatest at the end of the policy
period, and the insurance protection is greatest at the start of the policy
The punishment for fraud or making false statements may include - ANSWERS💫✔️-fines,
imprisonment or both
An expense load is also known as - ANSWERS💫✔️-the insurers operating costs
Susan has been classified as a standard risk by her insurance company. This means that Susan -
ANSWERS💫✔️-has an average health and a normal life expectancy
A policyowner allows a policy to lapse, and the insurance company converts the policy to the extended
term option. Which of the following from the original policy will automatically carry over into the new
policy? - ANSWERS💫✔️-Face value
The Lucrative Lozenge Company provides a $5,000 monthly bonus plan to retirees who served as senior
executives. This benefit is not available to other retirees of the company. This is an example of -
ANSWERS💫✔️-nonqualified plan
,When the entire death benefit is paid in a lump sum to a beneficiary, it is - ANSWERS💫✔️-not
taxable as income
In group insurance, the evidence of an agreement between the insurer and the employer or association
is the - ANSWERS💫✔️-contract
Which of the following statements about a modified endowment contract (MEC) is INCORRECT? -
ANSWERS💫✔️-MEC's are not life insurance but they do offer tax-free death benefits
Part 1 of the insurance application included all of the following EXCEPT - ANSWERS💫✔️-the
applicant's current medical treatments
Which statement about accelerated death benefits is CORRECT? - ANSWERS💫✔️-Benefits could be
paid up to a certain percentage of the death benefit
Which is the proper term for a company owned by its policyowners? - ANSWERS💫✔️-A mutual
insurance company
Which of the following methods of handling risk means that the individual will pay for the loss if it
occurs? - ANSWERS💫✔️-Retention
When the annuity period begins in a variable annuity contract, the accumulation units are converted to -
ANSWERS💫✔️-annuity units
The relative frequency of deaths in a specific population is known as - ANSWERS💫✔️-Mortality
Which of the following is NOT necessary for the formation of a valid contract? - ANSWERS💫✔️-
written documents
Paul dies before his annuity has paid out an amount at least equal to the purchase price of the annuity,
so Paul's beneficiary continues to receive annuity payments until that amount has been reached. This
type of annuity is a - ANSWERS💫✔️-life with refund annuity
, The suicide clause states that if an insured commits suicide: - ANSWERS💫✔️-during the first two
years after the policy is in effect, the insurance company will only pay the premium paid by the insured,
not the face amount of the policy
The type of annuity that guarantees to pay total income at least equal to the purchase price of the
contract is a - ANSWERS💫✔️-life with refund annuity
A variable life policy - ANSWERS💫✔️-has a death benefit that varies to reflect the investment results
of the underlying separate account but will not drop below a guaranteed minimum
An insurance policy is a unilateral contract because - ANSWERS💫✔️-only the insurance company is
bound to live up to its side of the agreement
All of the following are elements of a contact EXCEPT: - ANSWERS💫✔️-assignment
Alma, age 35 earns $50,000 a year and expects to retire when she is 65. What is Alma's human life
value? - ANSWERS💫✔️-$1.5 million
Warren and Wilma have a joint life policy. Warren dies, and the policy pays nothing. Later on, Wilma
dies and the policy death benefit is paid to the beneficiary. This is called a - ANSWERS💫✔️-
survivorship, or second-to-die, policy
Which of the following situations most likely calls for the purchase of term life insurance? -
ANSWERS💫✔️-George has no income and 2 years of medical school to complete. He and his wife
have 1 child
An insurance contract is an aleatory contract. This means - ANSWERS💫✔️-equal value is not given by
both parties to the contract
With life insurance, insurable interest must exist - ANSWERS💫✔️-at the time of application
