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PEARSON VUE PROPERTY INSURANCE EXAM 1
TEST UPDATED QUESTIONS AND 100%
CORRECT ANSWERS WITH A GUARANTEED
A+|| 2025-2026 LATEST AND COMPLETE UPDATE
WITH VERIFIED SOLUTIONS|| GUARANTEED
PASS!!
S is purchasing a Commercial Property policy to cover a commercial building with
a replacement cost of $100,000. The policy includes an 80 percent Coinsurance
clause. To avoid a coinsurance penalty in the event of a partial loss, S should
purchase a policy with minimum limits of AT LEAST which of the following
amounts?
A. $100,000
B. $90,000
C. $80,000
D. $20,000 - ANSWER: C
The MAXIMUM amount a policy will pay in the event of a loss is called the:
A. coinsurance amount
B. deductible
C. limit of liability
D. pro rata return - ANSWER: C
The National Flood Insurance Program provides coverage for losses caused by all
of the following occurrences EXCEPT:
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A. mudslides
B. runoff from heavy rain
C. overflow of tidal waters
D. water-main breakage - ANSWER: D
P wants to name her husband as the beneficiary of her life policy. However, she
wishes to retain all of the rights of ownership. P should have her husband named as
the:
A.irrevocable beneficiary
B.revocable beneficiary
C.secondary beneficiary - ANSWER: B
A contract that has as its basic function the systematic liquidation of accumulated
assets through periodic payments is called an:
A.indemnity contract
B.investment contract
C.endowment
D.annuity - ANSWER: D
An insurance producer takes an application for a life insurance policy but does not
collect the initial premium. On delivery of the policy to the proposed insured, the
producer must collect the initial premium and which of the following?
A.A copy of the MIB report
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B.The insured's signed statement of continued good health
C.A copy of the conditional receipt
D.A copy of the temporary insurance agreement that covered the period between
the application date and the delivery date. - ANSWER: B
An employer can deduct premium payments as an ordinary business expense for
which of the following life coverages?
A.Buy and Sell Agreements
B.Group
C.Key Employee
D.Joint Life, if the business is named as the beneficiary - ANSWER: B
A producer takes applications from identical twins who want to buy the same type
of policy in the same amount. The insurer issues the policies as applied for, but
charges a 25 percent higher premium for one of the policies. The difference in
premiums is probably due to which of the following factors?
A.Incontestability
B.Insurable interest
C.Consideration
D.Risk classification - ANSWER: D
In the event of an insured's death, which of the following provides an income for
the family during a designated period of time followed by a lump sum death
benefit?
A.Family Income rider
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B.Survivorship Life policy
C.Joint Life policy
D.Modified Life policy - ANSWER: A
Which of the following statements is CORRECT about Group Life conversion
privileges?
A.Under the COBRA law, a departing employee may elect to remain a member of
the Group Life plan for a limited period of time.
B.Death during the conversion period is covered even if the departing employee
chose not to convert the policy.
C.A departing employee must individually pay the premium if the employee elects
to be covered during the conversion period.
D.If a departing employee elects to convert a life insurance policy, the insurer must
offer Term insurance as one of the choices. - ANSWER: B
Which of the following policies is an interest-sensitive form of permanent
protection?
A.Universal Life
B.Limited-Pay Life
C.Graded Premium Whole Life
D.Modified Whole Life - ANSWER: A
PEARSON VUE PROPERTY INSURANCE EXAM 1
TEST UPDATED QUESTIONS AND 100%
CORRECT ANSWERS WITH A GUARANTEED
A+|| 2025-2026 LATEST AND COMPLETE UPDATE
WITH VERIFIED SOLUTIONS|| GUARANTEED
PASS!!
S is purchasing a Commercial Property policy to cover a commercial building with
a replacement cost of $100,000. The policy includes an 80 percent Coinsurance
clause. To avoid a coinsurance penalty in the event of a partial loss, S should
purchase a policy with minimum limits of AT LEAST which of the following
amounts?
A. $100,000
B. $90,000
C. $80,000
D. $20,000 - ANSWER: C
The MAXIMUM amount a policy will pay in the event of a loss is called the:
A. coinsurance amount
B. deductible
C. limit of liability
D. pro rata return - ANSWER: C
The National Flood Insurance Program provides coverage for losses caused by all
of the following occurrences EXCEPT:
,2|Page
A. mudslides
B. runoff from heavy rain
C. overflow of tidal waters
D. water-main breakage - ANSWER: D
P wants to name her husband as the beneficiary of her life policy. However, she
wishes to retain all of the rights of ownership. P should have her husband named as
the:
A.irrevocable beneficiary
B.revocable beneficiary
C.secondary beneficiary - ANSWER: B
A contract that has as its basic function the systematic liquidation of accumulated
assets through periodic payments is called an:
A.indemnity contract
B.investment contract
C.endowment
D.annuity - ANSWER: D
An insurance producer takes an application for a life insurance policy but does not
collect the initial premium. On delivery of the policy to the proposed insured, the
producer must collect the initial premium and which of the following?
A.A copy of the MIB report
,3|Page
B.The insured's signed statement of continued good health
C.A copy of the conditional receipt
D.A copy of the temporary insurance agreement that covered the period between
the application date and the delivery date. - ANSWER: B
An employer can deduct premium payments as an ordinary business expense for
which of the following life coverages?
A.Buy and Sell Agreements
B.Group
C.Key Employee
D.Joint Life, if the business is named as the beneficiary - ANSWER: B
A producer takes applications from identical twins who want to buy the same type
of policy in the same amount. The insurer issues the policies as applied for, but
charges a 25 percent higher premium for one of the policies. The difference in
premiums is probably due to which of the following factors?
A.Incontestability
B.Insurable interest
C.Consideration
D.Risk classification - ANSWER: D
In the event of an insured's death, which of the following provides an income for
the family during a designated period of time followed by a lump sum death
benefit?
A.Family Income rider
, 4|Page
B.Survivorship Life policy
C.Joint Life policy
D.Modified Life policy - ANSWER: A
Which of the following statements is CORRECT about Group Life conversion
privileges?
A.Under the COBRA law, a departing employee may elect to remain a member of
the Group Life plan for a limited period of time.
B.Death during the conversion period is covered even if the departing employee
chose not to convert the policy.
C.A departing employee must individually pay the premium if the employee elects
to be covered during the conversion period.
D.If a departing employee elects to convert a life insurance policy, the insurer must
offer Term insurance as one of the choices. - ANSWER: B
Which of the following policies is an interest-sensitive form of permanent
protection?
A.Universal Life
B.Limited-Pay Life
C.Graded Premium Whole Life
D.Modified Whole Life - ANSWER: A
