Life and Health Insurance Final Exam
Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What type of insurance pays a benefit only if the insured dies during a specific period?
✔✔Term life insurance
What life insurance policy combines protection with savings?
✔✔Whole life insurance
What does the face amount of a life insurance policy mean?
✔✔The amount paid to beneficiaries at death
Who owns the life insurance policy?
✔✔The policyowner
Who receives the death benefit?
✔✔The beneficiary
What is insurable interest?
✔✔A financial or emotional interest in the insured’s life
When must insurable interest exist for life insurance?
1
,✔✔At the time of application
What happens if premiums are not paid?
✔✔The policy may lapse
What is a grace period in life insurance?
✔✔Extra time allowed to pay premiums
What does a cash value represent in permanent insurance?
✔✔Accumulated savings in the policy
What is the incontestability clause?
✔✔Limits insurer’s right to contest after a set time
What does the suicide clause state?
✔✔Limits payout if suicide occurs early in policy
What is a rider in insurance?
✔✔An add-on that modifies coverage
What does a waiver of premium rider do?
✔✔Waives premiums if the insured becomes disabled
2
,What is underwriting?
✔✔The process of evaluating risk
What is the purpose of a medical exam in life insurance?
✔✔To assess health risk
What does adverse selection mean?
✔✔High-risk individuals seek more coverage
What is a beneficiary designation?
✔✔Naming who receives policy proceeds
What is a contingent beneficiary?
✔✔Backup beneficiary if primary cannot receive benefits
What does revocable beneficiary mean?
✔✔Can be changed without consent
What does irrevocable beneficiary mean?
✔✔Cannot be changed without consent
3
, What is a policy loan?
✔✔Borrowing against cash value
What happens if a policy loan is unpaid?
✔✔It reduces the death benefit
What is a paid-up policy?
✔✔No more premiums required
What does surrendering a policy mean?
✔✔Cancelling for cash value
What is life expectancy used for in insurance?
✔✔Estimating risk and pricing
What is the free-look period?
✔✔Time to review and cancel without penalty
What is health insurance primarily designed to cover?
✔✔Medical and healthcare expenses
What is a deductible in health insurance?
4
Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What type of insurance pays a benefit only if the insured dies during a specific period?
✔✔Term life insurance
What life insurance policy combines protection with savings?
✔✔Whole life insurance
What does the face amount of a life insurance policy mean?
✔✔The amount paid to beneficiaries at death
Who owns the life insurance policy?
✔✔The policyowner
Who receives the death benefit?
✔✔The beneficiary
What is insurable interest?
✔✔A financial or emotional interest in the insured’s life
When must insurable interest exist for life insurance?
1
,✔✔At the time of application
What happens if premiums are not paid?
✔✔The policy may lapse
What is a grace period in life insurance?
✔✔Extra time allowed to pay premiums
What does a cash value represent in permanent insurance?
✔✔Accumulated savings in the policy
What is the incontestability clause?
✔✔Limits insurer’s right to contest after a set time
What does the suicide clause state?
✔✔Limits payout if suicide occurs early in policy
What is a rider in insurance?
✔✔An add-on that modifies coverage
What does a waiver of premium rider do?
✔✔Waives premiums if the insured becomes disabled
2
,What is underwriting?
✔✔The process of evaluating risk
What is the purpose of a medical exam in life insurance?
✔✔To assess health risk
What does adverse selection mean?
✔✔High-risk individuals seek more coverage
What is a beneficiary designation?
✔✔Naming who receives policy proceeds
What is a contingent beneficiary?
✔✔Backup beneficiary if primary cannot receive benefits
What does revocable beneficiary mean?
✔✔Can be changed without consent
What does irrevocable beneficiary mean?
✔✔Cannot be changed without consent
3
, What is a policy loan?
✔✔Borrowing against cash value
What happens if a policy loan is unpaid?
✔✔It reduces the death benefit
What is a paid-up policy?
✔✔No more premiums required
What does surrendering a policy mean?
✔✔Cancelling for cash value
What is life expectancy used for in insurance?
✔✔Estimating risk and pricing
What is the free-look period?
✔✔Time to review and cancel without penalty
What is health insurance primarily designed to cover?
✔✔Medical and healthcare expenses
What is a deductible in health insurance?
4
