Nevada Life Insurance Exam STUDY GUIDE
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Nevada Life Insurance Exam Study Guide – Practice Questions
Section 1: Life Insurance Basics & Policy Types
1. What is the primary purpose of life insurance?
A) To build retirement savings
B) To create an immediate estate for beneficiaries upon the insured’s death
C) To fund college education
D) To serve as a high-yield investment vehicle
2. Which life insurance policy provides lifetime coverage with a fixed premium and a
guaranteed cash value component?
A) Term Life
B) Universal Life
C) Whole Life
D) Variable Life
3. A policy that offers flexible premiums, a flexible death benefit, and separates the policy’s
elements into a mortality component, cash value, and expenses is known as:
A) Whole Life
B) Variable Universal Life
C) Universal Life
D) Modified Endowment Contract (MEC)
4. Which policy type is considered pure insurance protection for a specific period, with no
cash value?
A) Whole Life
B) Endowment
C) Term Life
D) Universal Life
,5. In a Variable Life Insurance policy, who assumes the investment risk?
A) The insurer
B) The beneficiary
C) The policyowner
D) The state insurance department
6. A policy loan secured by a Whole Life policy’s cash value will, if not repaid:
A) Increase the policy’s cash value
B) Be forgiven at age 65
C) Reduce the death benefit paid to beneficiaries
D) Cause the policy to lapse immediately
7. Which of these is a characteristic of a Level Term Life policy?
A) Premiums increase annually
B) Death benefit decreases over time
C) Premium and death benefit remain constant for the policy period
D) It accrues cash value rapidly
8. What is the "face amount" of a life insurance policy?
A) The cash surrender value
B) The premium paid
C) The amount payable upon the insured’s death
D) The accrued policy dividends
9. Which provision allows a Whole Life policy to remain in force after the premium due date?
A) Incontestability Clause
B) Grace Period
C) Reinstatement Provision
D) Consideration Clause
10. A Return of Premium (ROP) term policy typically has:
A) No cash value
B) Lower premiums than standard term
C) Higher premiums than standard term
D) A decreasing death benefit
Section 2: Policy Provisions, Riders, and Options
,11. During which period may an insurer contest a life insurance policy due to material
misrepresentation?
A) During the entire life of the policy
B) Only during the first 60 days
C) Only during the contestable period (typically 2 years)
D) Only after the policy lapses
12. The policy provision that allows a coverage extension for non-payment of premium for a
specified number of days is the:
A) Reinstatement provision
B) Grace period
C) Waiver of premium provision
D) Incontestability clause
13. Which rider pays the policy premium if the insured becomes totally disabled?
A) Accidental Death Benefit (ADB)
B) Waiver of Premium
C) Guaranteed Insurability
D) Accelerated Death Benefit
14. The Accelerated Death Benefit rider is designed to provide a portion of the death benefit:
A) To the beneficiary tax-free after death
B) To the insured while living, upon diagnosis of a terminal illness
C) To pay for policy loans automatically
D) Upon surrender of the policy
15. What does a Guaranteed Insurability rider allow the policyowner to do?
A) Purchase additional coverage at specified future dates without evidence of insurability
B) Convert a term policy without a medical exam
C) Receive a refund of all premiums at age 65
D) Waive premiums during unemployment
16. The "Entire Contract" clause states that the contract between the insurer and policyowner
consists of:
A) The application and the policy only
B) The agent’s sales materials and the policy
C) State insurance laws and the policy
D) The premium receipt and the application
, 17. If a policyowner does not select a settlement option, how will the death benefit typically
be paid?
A) As a lump sum
B) As a life annuity
C) In fixed monthly installments for 10 years
D) As interest-only payments
18. A rider that provides an additional death benefit if the insured’s death results from an
accident is called:
A) Waiver of Premium
B) Accidental Death Benefit (ADB)
C) Disability Income
D) Cost of Living Adjustment (COLA)
19. Which provision allows a lapsed policy to be put back in force?
A) Grace Period
B) Reinstatement
C) Nonforfeiture
D) Consideration
20. The "Consideration" clause in a life insurance policy refers to:
A) The application questions
B) The policyowner’s premium payment and statements in the application
C) The agent’s compensation
D) The insurer’s investment strategy
Section 3: Policyowner Rights, Beneficiaries, and Settlement Options
21. Which life insurance policy right allows the policyowner to designate who receives the
policy benefits?
A) Right to assign
B) Right to name/change beneficiaries
C) Right to dividends
D) Right to a policy loan
22. What is the primary difference between a revocable and irrevocable beneficiary
designation?
A) The revocable beneficiary can be changed without the beneficiary’s consent; the irrevocable
cannot.
2026 COMPLETE QUESTIONS WITH CORRECT
DETAILED ANSWERS || 100% GUARANTEED
PASS <RECENT VERSION>
Nevada Life Insurance Exam Study Guide – Practice Questions
Section 1: Life Insurance Basics & Policy Types
1. What is the primary purpose of life insurance?
A) To build retirement savings
B) To create an immediate estate for beneficiaries upon the insured’s death
C) To fund college education
D) To serve as a high-yield investment vehicle
2. Which life insurance policy provides lifetime coverage with a fixed premium and a
guaranteed cash value component?
A) Term Life
B) Universal Life
C) Whole Life
D) Variable Life
3. A policy that offers flexible premiums, a flexible death benefit, and separates the policy’s
elements into a mortality component, cash value, and expenses is known as:
A) Whole Life
B) Variable Universal Life
C) Universal Life
D) Modified Endowment Contract (MEC)
4. Which policy type is considered pure insurance protection for a specific period, with no
cash value?
A) Whole Life
B) Endowment
C) Term Life
D) Universal Life
,5. In a Variable Life Insurance policy, who assumes the investment risk?
A) The insurer
B) The beneficiary
C) The policyowner
D) The state insurance department
6. A policy loan secured by a Whole Life policy’s cash value will, if not repaid:
A) Increase the policy’s cash value
B) Be forgiven at age 65
C) Reduce the death benefit paid to beneficiaries
D) Cause the policy to lapse immediately
7. Which of these is a characteristic of a Level Term Life policy?
A) Premiums increase annually
B) Death benefit decreases over time
C) Premium and death benefit remain constant for the policy period
D) It accrues cash value rapidly
8. What is the "face amount" of a life insurance policy?
A) The cash surrender value
B) The premium paid
C) The amount payable upon the insured’s death
D) The accrued policy dividends
9. Which provision allows a Whole Life policy to remain in force after the premium due date?
A) Incontestability Clause
B) Grace Period
C) Reinstatement Provision
D) Consideration Clause
10. A Return of Premium (ROP) term policy typically has:
A) No cash value
B) Lower premiums than standard term
C) Higher premiums than standard term
D) A decreasing death benefit
Section 2: Policy Provisions, Riders, and Options
,11. During which period may an insurer contest a life insurance policy due to material
misrepresentation?
A) During the entire life of the policy
B) Only during the first 60 days
C) Only during the contestable period (typically 2 years)
D) Only after the policy lapses
12. The policy provision that allows a coverage extension for non-payment of premium for a
specified number of days is the:
A) Reinstatement provision
B) Grace period
C) Waiver of premium provision
D) Incontestability clause
13. Which rider pays the policy premium if the insured becomes totally disabled?
A) Accidental Death Benefit (ADB)
B) Waiver of Premium
C) Guaranteed Insurability
D) Accelerated Death Benefit
14. The Accelerated Death Benefit rider is designed to provide a portion of the death benefit:
A) To the beneficiary tax-free after death
B) To the insured while living, upon diagnosis of a terminal illness
C) To pay for policy loans automatically
D) Upon surrender of the policy
15. What does a Guaranteed Insurability rider allow the policyowner to do?
A) Purchase additional coverage at specified future dates without evidence of insurability
B) Convert a term policy without a medical exam
C) Receive a refund of all premiums at age 65
D) Waive premiums during unemployment
16. The "Entire Contract" clause states that the contract between the insurer and policyowner
consists of:
A) The application and the policy only
B) The agent’s sales materials and the policy
C) State insurance laws and the policy
D) The premium receipt and the application
, 17. If a policyowner does not select a settlement option, how will the death benefit typically
be paid?
A) As a lump sum
B) As a life annuity
C) In fixed monthly installments for 10 years
D) As interest-only payments
18. A rider that provides an additional death benefit if the insured’s death results from an
accident is called:
A) Waiver of Premium
B) Accidental Death Benefit (ADB)
C) Disability Income
D) Cost of Living Adjustment (COLA)
19. Which provision allows a lapsed policy to be put back in force?
A) Grace Period
B) Reinstatement
C) Nonforfeiture
D) Consideration
20. The "Consideration" clause in a life insurance policy refers to:
A) The application questions
B) The policyowner’s premium payment and statements in the application
C) The agent’s compensation
D) The insurer’s investment strategy
Section 3: Policyowner Rights, Beneficiaries, and Settlement Options
21. Which life insurance policy right allows the policyowner to designate who receives the
policy benefits?
A) Right to assign
B) Right to name/change beneficiaries
C) Right to dividends
D) Right to a policy loan
22. What is the primary difference between a revocable and irrevocable beneficiary
designation?
A) The revocable beneficiary can be changed without the beneficiary’s consent; the irrevocable
cannot.
