NY Life Insurance Exam Review (2026) COMPLETE QUESTIONS With 100%
Verified Solutions| pdf
Overview Coverage
The New York Life Insurance Exam is a required licensing test regulated by the New York
State Department of Financial Services and administered through PSI Services LLC. It evaluates
a candidate’s knowledge of life insurance fundamentals, policy types, regulations, and ethical
sales practices.
The exam covers key areas such as term and permanent life insurance, policy provisions,
underwriting, premiums, cash value, beneficiaries, and New York state insurance laws. It also
includes basic annuities concepts and suitability standards for client recommendations.
Section 1: Insurance Basics (1–15)
1. What is the main purpose of life insurance protection for families?
A. Wealth building
B. Tax reduction
C. Financial protection after insured person dies
D. Stock investment
Answer: C
Explanation: Life insurance replaces lost income for dependents after death.
2. Which type of insurance contract legally binds only one party?
A. Bilateral contract
B. Conditional contract
C. Unilateral contract
D. Aleatory contract
Answer: C
Explanation: Only insurer is legally required to perform.
,3. Insurable interest must exist at what specific point in insurance process?
A. Claim filing time
B. Policy renewal time
C. Application time
D. Policy maturity
Answer: C
Explanation: Insurable interest is required at policy inception.
4. What principle requires applicants to disclose all material insurance facts?
A. Indemnity
B. Utmost good faith
C. Subrogation
D. Contribution
Answer: B
Explanation: Both parties must act honestly and fully disclose facts.
5. Which contract type is written by insurer with no negotiation allowed?
A. Negotiated contract
B. Adhesion contract
C. Conditional contract
D. Executory contract
Answer: B
Explanation: Insured must accept or reject standard insurer terms.
6. Insurance representations are considered what type of statements legally?
A. Absolute guarantees
B. Believed-to-be-true statements
C. Binding warranties
D. Fraud statements
Answer: B
Explanation: Representations are statements believed true at application time.
,7. What is the typical grace period length for life insurance premiums?
A. 5–10 days
B. 10–15 days
C. 20–31 days
D. 60–90 days
Answer: C
Explanation: Most life insurance policies allow 30-day grace period.
8. Which life insurance policy type usually allows policy loan access?
A. Term life insurance
B. Whole life insurance
C. Group insurance
D. Credit insurance
Answer: B
Explanation: Only permanent policies build cash value for loans.
9. Which clause prevents insurer from denying claims after set time period?
A. Suicide clause
B. Incontestability clause
C. Free look clause
D. Assignment clause
Answer: B
Explanation: After 2 years, insurer cannot contest validity.
10. Which policy pays death benefit only after second insured person dies?
A. Joint life policy
B. Survivorship life policy
C. Term life policy
D. Universal life policy
Answer: B
Explanation: Pays after both insureds have died.
, 11. Who holds ownership rights in a life insurance policy contract?
A. Insured
B. Beneficiary
C. Policyowner
D. Insurer
Answer: C
Explanation: Policyowner controls all policy decisions.
12. What type of contract requires conditions to be fulfilled by both parties?
A. Unilateral
B. Conditional
C. Adhesion
D. Void
Answer: B
Explanation: Both insurer and insured must meet obligations.
13. Which feature is NOT included in a standard term life insurance policy?
A. Death benefit
B. Cash value accumulation
C. Fixed premiums
D. Temporary coverage
Answer: B
Explanation: Term insurance does not build cash value.
14. Who is responsible for making changes to policy beneficiary designation?
A. Insurer
B. Agent
C. Policyowner
D. Government
Answer: C
Explanation: Only policyowner can change beneficiaries.
Verified Solutions| pdf
Overview Coverage
The New York Life Insurance Exam is a required licensing test regulated by the New York
State Department of Financial Services and administered through PSI Services LLC. It evaluates
a candidate’s knowledge of life insurance fundamentals, policy types, regulations, and ethical
sales practices.
The exam covers key areas such as term and permanent life insurance, policy provisions,
underwriting, premiums, cash value, beneficiaries, and New York state insurance laws. It also
includes basic annuities concepts and suitability standards for client recommendations.
Section 1: Insurance Basics (1–15)
1. What is the main purpose of life insurance protection for families?
A. Wealth building
B. Tax reduction
C. Financial protection after insured person dies
D. Stock investment
Answer: C
Explanation: Life insurance replaces lost income for dependents after death.
2. Which type of insurance contract legally binds only one party?
A. Bilateral contract
B. Conditional contract
C. Unilateral contract
D. Aleatory contract
Answer: C
Explanation: Only insurer is legally required to perform.
,3. Insurable interest must exist at what specific point in insurance process?
A. Claim filing time
B. Policy renewal time
C. Application time
D. Policy maturity
Answer: C
Explanation: Insurable interest is required at policy inception.
4. What principle requires applicants to disclose all material insurance facts?
A. Indemnity
B. Utmost good faith
C. Subrogation
D. Contribution
Answer: B
Explanation: Both parties must act honestly and fully disclose facts.
5. Which contract type is written by insurer with no negotiation allowed?
A. Negotiated contract
B. Adhesion contract
C. Conditional contract
D. Executory contract
Answer: B
Explanation: Insured must accept or reject standard insurer terms.
6. Insurance representations are considered what type of statements legally?
A. Absolute guarantees
B. Believed-to-be-true statements
C. Binding warranties
D. Fraud statements
Answer: B
Explanation: Representations are statements believed true at application time.
,7. What is the typical grace period length for life insurance premiums?
A. 5–10 days
B. 10–15 days
C. 20–31 days
D. 60–90 days
Answer: C
Explanation: Most life insurance policies allow 30-day grace period.
8. Which life insurance policy type usually allows policy loan access?
A. Term life insurance
B. Whole life insurance
C. Group insurance
D. Credit insurance
Answer: B
Explanation: Only permanent policies build cash value for loans.
9. Which clause prevents insurer from denying claims after set time period?
A. Suicide clause
B. Incontestability clause
C. Free look clause
D. Assignment clause
Answer: B
Explanation: After 2 years, insurer cannot contest validity.
10. Which policy pays death benefit only after second insured person dies?
A. Joint life policy
B. Survivorship life policy
C. Term life policy
D. Universal life policy
Answer: B
Explanation: Pays after both insureds have died.
, 11. Who holds ownership rights in a life insurance policy contract?
A. Insured
B. Beneficiary
C. Policyowner
D. Insurer
Answer: C
Explanation: Policyowner controls all policy decisions.
12. What type of contract requires conditions to be fulfilled by both parties?
A. Unilateral
B. Conditional
C. Adhesion
D. Void
Answer: B
Explanation: Both insurer and insured must meet obligations.
13. Which feature is NOT included in a standard term life insurance policy?
A. Death benefit
B. Cash value accumulation
C. Fixed premiums
D. Temporary coverage
Answer: B
Explanation: Term insurance does not build cash value.
14. Who is responsible for making changes to policy beneficiary designation?
A. Insurer
B. Agent
C. Policyowner
D. Government
Answer: C
Explanation: Only policyowner can change beneficiaries.
