Life and Health Insurance Final Exam
Questions and Answers Latest Version
Already Passed
What is the cash value in a whole life insurance policy?
✔✔ A savings component that grows over time and can be borrowed against
What type of life insurance offers temporary coverage for a set period?
✔✔ Term life insurance
What is the main feature of universal life insurance?
✔✔ Flexible premiums and adjustable death benefits
What does the beneficiary receive when the insured dies under a life policy?
✔✔ The death benefit
What does the incontestability clause do in a life insurance policy?
✔✔ Prevents the insurer from voiding the policy after a set period, typically two years
1
,What is insurable interest?
✔✔ A legitimate financial or emotional relationship between the policyholder and the insured
What is the purpose of a grace period in an insurance policy?
✔✔ To allow extra time to pay premiums without canceling the policy
What does an accelerated death benefit allow?
✔✔ The insured to access part of the death benefit while still alive if terminally ill
What is a rider in life or health insurance?
✔✔ An additional benefit or feature added to a base policy
What does the free look period allow?
✔✔ The policyholder to cancel a new policy for a full refund within a certain number of days
What is the main difference between term life and whole life insurance?
✔✔ Term life is temporary; whole life is permanent with cash value
2
,What is underwriting in insurance?
✔✔ The process of evaluating risk and issuing a policy
When does insurable interest need to exist in life insurance?
✔✔ At the time of policy application
What is a waiver of premium rider?
✔✔ It waives future premium payments if the insured becomes disabled
What is the purpose of a beneficiary designation?
✔✔ To name the person or entity who receives the policy’s death benefit
What is the contestability period in life insurance?
✔✔ A time frame during which the insurer can investigate and deny claims due to
misrepresentation
What is the suicide clause in life insurance?
3
, ✔✔ It denies the death benefit if the insured commits suicide within a certain time after the
policy begins
What is the purpose of medical underwriting in health insurance?
✔✔ To assess the applicant’s health risk before issuing coverage
What does major medical insurance cover?
✔✔ A broad range of medical expenses, including hospital and surgical costs
What is coinsurance in health insurance?
✔✔ A percentage of medical costs shared by the insured after the deductible is met
What is a deductible in a health policy?
✔✔ The amount the insured pays out-of-pocket before insurance starts to pay
What is the purpose of a Health Maintenance Organization (HMO)?
✔✔ To provide managed care focused on preventive services with lower costs
4
Questions and Answers Latest Version
Already Passed
What is the cash value in a whole life insurance policy?
✔✔ A savings component that grows over time and can be borrowed against
What type of life insurance offers temporary coverage for a set period?
✔✔ Term life insurance
What is the main feature of universal life insurance?
✔✔ Flexible premiums and adjustable death benefits
What does the beneficiary receive when the insured dies under a life policy?
✔✔ The death benefit
What does the incontestability clause do in a life insurance policy?
✔✔ Prevents the insurer from voiding the policy after a set period, typically two years
1
,What is insurable interest?
✔✔ A legitimate financial or emotional relationship between the policyholder and the insured
What is the purpose of a grace period in an insurance policy?
✔✔ To allow extra time to pay premiums without canceling the policy
What does an accelerated death benefit allow?
✔✔ The insured to access part of the death benefit while still alive if terminally ill
What is a rider in life or health insurance?
✔✔ An additional benefit or feature added to a base policy
What does the free look period allow?
✔✔ The policyholder to cancel a new policy for a full refund within a certain number of days
What is the main difference between term life and whole life insurance?
✔✔ Term life is temporary; whole life is permanent with cash value
2
,What is underwriting in insurance?
✔✔ The process of evaluating risk and issuing a policy
When does insurable interest need to exist in life insurance?
✔✔ At the time of policy application
What is a waiver of premium rider?
✔✔ It waives future premium payments if the insured becomes disabled
What is the purpose of a beneficiary designation?
✔✔ To name the person or entity who receives the policy’s death benefit
What is the contestability period in life insurance?
✔✔ A time frame during which the insurer can investigate and deny claims due to
misrepresentation
What is the suicide clause in life insurance?
3
, ✔✔ It denies the death benefit if the insured commits suicide within a certain time after the
policy begins
What is the purpose of medical underwriting in health insurance?
✔✔ To assess the applicant’s health risk before issuing coverage
What does major medical insurance cover?
✔✔ A broad range of medical expenses, including hospital and surgical costs
What is coinsurance in health insurance?
✔✔ A percentage of medical costs shared by the insured after the deductible is met
What is a deductible in a health policy?
✔✔ The amount the insured pays out-of-pocket before insurance starts to pay
What is the purpose of a Health Maintenance Organization (HMO)?
✔✔ To provide managed care focused on preventive services with lower costs
4
