Health and Life Insurance Exam,
Questions and Answers Latest Version
Already Passed
What is the cash value in a whole life insurance policy?
✔✔ The savings portion that grows over time and can be borrowed against
What is a beneficiary in a life insurance policy?
✔✔ The person or entity designated to receive the death benefit
What does term life insurance provide?
✔✔ Coverage for a specific period of time with no cash value
What is the face value of a life insurance policy?
✔✔ The amount paid to the beneficiary upon the insured's death
What is a premium in an insurance policy?
✔✔ The payment made to keep the policy active
1
,What is insurable interest?
✔✔ A legitimate financial or emotional relationship with the insured
What happens if a policyholder stops paying premiums on a whole life policy?
✔✔ The policy may lapse or be converted to reduced paid-up insurance
What is the grace period in a life insurance policy?
✔✔ A set time after a missed premium during which coverage continues
What is the contestability period in a life insurance policy?
✔✔ The first two years when the insurer can deny a claim due to fraud
What is a rider in insurance?
✔✔ An additional benefit or modification added to the base policy
What is the purpose of accidental death benefit?
✔✔ To pay an extra sum if the insured dies due to an accident
2
,What is underwriting in life insurance?
✔✔ The process of evaluating risk and issuing a policy
What is a waiver of premium rider?
✔✔ It waives future premiums if the insured becomes disabled
What is whole life insurance?
✔✔ Permanent insurance with fixed premiums and a cash value component
What is universal life insurance?
✔✔ Flexible premium life insurance with adjustable death benefits and cash value
What is the main difference between term and whole life insurance?
✔✔ Term provides temporary coverage; whole life provides lifetime coverage
What does a life settlement involve?
✔✔ Selling a life insurance policy to a third party for cash
3
, What is the incontestability clause?
✔✔ A clause that prevents the insurer from voiding the policy after a period
What is a reinstatement clause?
✔✔ It allows a lapsed policy to be reactivated under certain conditions
What is a health maintenance organization (HMO)?
✔✔ A managed care plan focusing on preventive services and requiring referrals
What is a preferred provider organization (PPO)?
✔✔ A health plan offering flexibility to see in- or out-of-network providers
What is coinsurance in health insurance?
✔✔ The percentage of costs the insured shares with the insurer after deductible
What is a deductible in health insurance?
✔✔ The amount paid by the insured before the insurer begins to pay
4
Questions and Answers Latest Version
Already Passed
What is the cash value in a whole life insurance policy?
✔✔ The savings portion that grows over time and can be borrowed against
What is a beneficiary in a life insurance policy?
✔✔ The person or entity designated to receive the death benefit
What does term life insurance provide?
✔✔ Coverage for a specific period of time with no cash value
What is the face value of a life insurance policy?
✔✔ The amount paid to the beneficiary upon the insured's death
What is a premium in an insurance policy?
✔✔ The payment made to keep the policy active
1
,What is insurable interest?
✔✔ A legitimate financial or emotional relationship with the insured
What happens if a policyholder stops paying premiums on a whole life policy?
✔✔ The policy may lapse or be converted to reduced paid-up insurance
What is the grace period in a life insurance policy?
✔✔ A set time after a missed premium during which coverage continues
What is the contestability period in a life insurance policy?
✔✔ The first two years when the insurer can deny a claim due to fraud
What is a rider in insurance?
✔✔ An additional benefit or modification added to the base policy
What is the purpose of accidental death benefit?
✔✔ To pay an extra sum if the insured dies due to an accident
2
,What is underwriting in life insurance?
✔✔ The process of evaluating risk and issuing a policy
What is a waiver of premium rider?
✔✔ It waives future premiums if the insured becomes disabled
What is whole life insurance?
✔✔ Permanent insurance with fixed premiums and a cash value component
What is universal life insurance?
✔✔ Flexible premium life insurance with adjustable death benefits and cash value
What is the main difference between term and whole life insurance?
✔✔ Term provides temporary coverage; whole life provides lifetime coverage
What does a life settlement involve?
✔✔ Selling a life insurance policy to a third party for cash
3
, What is the incontestability clause?
✔✔ A clause that prevents the insurer from voiding the policy after a period
What is a reinstatement clause?
✔✔ It allows a lapsed policy to be reactivated under certain conditions
What is a health maintenance organization (HMO)?
✔✔ A managed care plan focusing on preventive services and requiring referrals
What is a preferred provider organization (PPO)?
✔✔ A health plan offering flexibility to see in- or out-of-network providers
What is coinsurance in health insurance?
✔✔ The percentage of costs the insured shares with the insurer after deductible
What is a deductible in health insurance?
✔✔ The amount paid by the insured before the insurer begins to pay
4
