LIFE INSURANCE PRACTICE- EXAM GUIDE 2025
|MOST COMMON QUESTIONS WITH CORRECTLY
VERIFIED ANSWERS|ALREADY A+
GRADED|GUARANTEED PASS
Which nonforfeiture option provides coverage for the longest period of time?
A. Paid-up option
B. Accumulated at interest
C. Reduced paid-up
D. Extended term - C. Reduced paid-up
Which of the following is true about the premium on the children's rider in a life insurance
policy?
A. It remains the same no matter how many children are added to the policy.
B. It decreases when the oldest child reaches the age of 21.
C. It increases when a newborn baby is added to the policy.
D. It decreases when an adopted child is added to the policy. - A. It remains the same no
matter how many children are added to the policy.
The premium does not change on the inclusion of additional children; it is based on an average
number of children.
The validity of coverage under a life insurance policy may not be contested, except for
nonpayment of premium, after the policy has been in force for at least how many years?
A. 1 year
B. 2 years
C. 5 years
D. 7 years - B. 2 years
,An insured receives an annual life insurance dividend check. What term best describes this
arrangement?
A. Cash option
B. Reduction of Premium
C. Annual Dividend Provision
D. Accumulation at Interest - A. Cash option
A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner
notices that the face value of her life insurance policy has been raised 7% as a result. Which
policy rider caused this change?
A. Inflation Rider
B. Cost of Living Rider
C. Value Adjustment Rider
D. Return of Premium Rider - B. Cost of Living Rider
An insured purchased a 15-year level term life insurance policy with a face amount of $100,000.
The policy contained an accidental death rider, offering a double indemnity benefit. The insured
was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the
injuries. What amount would his beneficiary receive as a settlement?
A. $0
B. $100,000
C. $200,000
D. $100,000 plus the total of paid premiums - C. $200,000
The sole beneficiary of a life insurance policy dies before the insured. If the policyowner fails to
change the beneficiary before the insured's death, the proceeds of the policy will go to
A. Probate.
B. The state.
C. The beneficiary's estate.
D. The insured's estate. - D. The insured's estate.
Which of the following statements is TRUE concerning irrevocable beneficiaries?
,A. They can be changed only with the written consent of that beneficiary.
B. They may be changed at any time.
C. They can never be changed.
D. They may be changed only on the anniversary date of the policy. - A. They can be
changed only with the written consent of that beneficiary.
If a policy has an irrevocable beneficiary designation the beneficiary can only be changed with
written permission of the beneficiary.
Which of the following allows the insurer to relieve a minor insured from premium payments if
the minor's parents have died or become disabled?
A. Waiver of Premium
B. Payor Benefit
C. Jumping Juvenile
D. Juvenile Premium Provision - B. Payor Benefit
The paid-up addition option uses the dividend
A. To reduce the next year's premium.
B. To accumulate additional savings for retirement.
C. To purchase a smaller amount of the same type of insurance as the original policy.
D. To purchase a one-year term insurance in the amount of the cash value. - C. To
purchase a smaller amount of the same type of insurance as the original policy.
The dividends are used to purchase a single premium policy in addition to the face amount of
the permanent policy.
Under an extended term nonforfeiture option, the policy cash value is converted to
A. A lower face amount than the whole life policy.
B. A higher face amount than the whole life policy.
C. The same face amount as in the whole life policy.
, D. The face amount equal to the cash value. - C. The same face amount as in the whole
life policy.
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years
old. He is killed in an automobile accident and it is discovered that he is actually 45 years old,
and not 43, as stated on the application. What will the company do?
A. Pay the full death benefit and refund excess premium
B. Pay a reduced death benefit
C. Pay the full death benefit
D. Pay nothing; there was a misrepresentation on the application - B. Pay a reduced
death benefit
The incontestability clause prevents an insurer from denying a claim due to statements in an
application after the policy has been in force for 2 years. However, it does not apply to
statements relating to age, sex and identity.
Upon the death of the insured, the primary beneficiary discovers that the insured chose the
interest only settlement option. What does this mean?
A. The beneficiary must pay interest to the insurer.
B. The beneficiary will receive the lump sum, plus interest.
C. The primary beneficiary will receive the death benefit and the secondary beneficiaries will
share the interest payments.
D. The beneficiary will only receive payments of the interest earned on the death benefit. -
D. The beneficiary will only receive payments of the interest earned on the death benefit.
With the Interest Only settlement option, the insurance company retains the policy proceeds
and pays interest on the proceeds to the recipient (beneficiary) at regular intervals (monthly,
quarterly, semiannually, or annually).
An insured has a continuous premium whole life policy. She would like to use the policy
dividends to pay off her policy sooner than would have been possible otherwise. What dividend
option could she use?
A. Reduction of premium
|MOST COMMON QUESTIONS WITH CORRECTLY
VERIFIED ANSWERS|ALREADY A+
GRADED|GUARANTEED PASS
Which nonforfeiture option provides coverage for the longest period of time?
A. Paid-up option
B. Accumulated at interest
C. Reduced paid-up
D. Extended term - C. Reduced paid-up
Which of the following is true about the premium on the children's rider in a life insurance
policy?
A. It remains the same no matter how many children are added to the policy.
B. It decreases when the oldest child reaches the age of 21.
C. It increases when a newborn baby is added to the policy.
D. It decreases when an adopted child is added to the policy. - A. It remains the same no
matter how many children are added to the policy.
The premium does not change on the inclusion of additional children; it is based on an average
number of children.
The validity of coverage under a life insurance policy may not be contested, except for
nonpayment of premium, after the policy has been in force for at least how many years?
A. 1 year
B. 2 years
C. 5 years
D. 7 years - B. 2 years
,An insured receives an annual life insurance dividend check. What term best describes this
arrangement?
A. Cash option
B. Reduction of Premium
C. Annual Dividend Provision
D. Accumulation at Interest - A. Cash option
A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner
notices that the face value of her life insurance policy has been raised 7% as a result. Which
policy rider caused this change?
A. Inflation Rider
B. Cost of Living Rider
C. Value Adjustment Rider
D. Return of Premium Rider - B. Cost of Living Rider
An insured purchased a 15-year level term life insurance policy with a face amount of $100,000.
The policy contained an accidental death rider, offering a double indemnity benefit. The insured
was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the
injuries. What amount would his beneficiary receive as a settlement?
A. $0
B. $100,000
C. $200,000
D. $100,000 plus the total of paid premiums - C. $200,000
The sole beneficiary of a life insurance policy dies before the insured. If the policyowner fails to
change the beneficiary before the insured's death, the proceeds of the policy will go to
A. Probate.
B. The state.
C. The beneficiary's estate.
D. The insured's estate. - D. The insured's estate.
Which of the following statements is TRUE concerning irrevocable beneficiaries?
,A. They can be changed only with the written consent of that beneficiary.
B. They may be changed at any time.
C. They can never be changed.
D. They may be changed only on the anniversary date of the policy. - A. They can be
changed only with the written consent of that beneficiary.
If a policy has an irrevocable beneficiary designation the beneficiary can only be changed with
written permission of the beneficiary.
Which of the following allows the insurer to relieve a minor insured from premium payments if
the minor's parents have died or become disabled?
A. Waiver of Premium
B. Payor Benefit
C. Jumping Juvenile
D. Juvenile Premium Provision - B. Payor Benefit
The paid-up addition option uses the dividend
A. To reduce the next year's premium.
B. To accumulate additional savings for retirement.
C. To purchase a smaller amount of the same type of insurance as the original policy.
D. To purchase a one-year term insurance in the amount of the cash value. - C. To
purchase a smaller amount of the same type of insurance as the original policy.
The dividends are used to purchase a single premium policy in addition to the face amount of
the permanent policy.
Under an extended term nonforfeiture option, the policy cash value is converted to
A. A lower face amount than the whole life policy.
B. A higher face amount than the whole life policy.
C. The same face amount as in the whole life policy.
, D. The face amount equal to the cash value. - C. The same face amount as in the whole
life policy.
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years
old. He is killed in an automobile accident and it is discovered that he is actually 45 years old,
and not 43, as stated on the application. What will the company do?
A. Pay the full death benefit and refund excess premium
B. Pay a reduced death benefit
C. Pay the full death benefit
D. Pay nothing; there was a misrepresentation on the application - B. Pay a reduced
death benefit
The incontestability clause prevents an insurer from denying a claim due to statements in an
application after the policy has been in force for 2 years. However, it does not apply to
statements relating to age, sex and identity.
Upon the death of the insured, the primary beneficiary discovers that the insured chose the
interest only settlement option. What does this mean?
A. The beneficiary must pay interest to the insurer.
B. The beneficiary will receive the lump sum, plus interest.
C. The primary beneficiary will receive the death benefit and the secondary beneficiaries will
share the interest payments.
D. The beneficiary will only receive payments of the interest earned on the death benefit. -
D. The beneficiary will only receive payments of the interest earned on the death benefit.
With the Interest Only settlement option, the insurance company retains the policy proceeds
and pays interest on the proceeds to the recipient (beneficiary) at regular intervals (monthly,
quarterly, semiannually, or annually).
An insured has a continuous premium whole life policy. She would like to use the policy
dividends to pay off her policy sooner than would have been possible otherwise. What dividend
option could she use?
A. Reduction of premium
