#1
Which of the following is a primary purpose of life insurance?
To protect against financial loss due to premature death
ExplanationFinancial protection against premature death.
#2
What is the typical duration of a term life insurance policy?
20 years
ExplanationTypically lasts for 20 years.
#3
What is a rider in a life insurance policy?
An additional provision that modifies the coverage
ExplanationAdditional provision modifying coverage.
#4
What is the key benefit of purchasing life insurance at a young age?
Lower premiums
ExplanationYounger age correlates with lower premiums.
#5
Which of the following is a factor that typically affects life insurance premiums?
Occupation
ExplanationOccupation influences premium rates.
#6
Which of the following is NOT typically considered a type of life insurance policy?
Homeowners insurance
ExplanationNot a type of life insurance policy.
#7
Which of the following best describes whole life insurance?
Builds cash value over time
ExplanationAccumulates cash value over time.
#8
What is the primary purpose of a beneficiary designation in a life insurance policy?
To specify who receives the death benefit
ExplanationSpecifies recipient of the death benefit.
#9
What is the purpose of the cash value component in permanent life insurance?
To serve as an investment that accumulates over time
ExplanationFunctions as an accumulating investment.
#10
Which of the following is true about the surrender value of a life insurance policy?
It is the amount received if the policy is surrendered before maturity
ExplanationAmount received upon early policy surrender.
#11
What is the primary function of the underwriting process in life insurance?
To assess the insured's risk and eligibility
ExplanationAssessing risk and eligibility.
#12
What is the purpose of a life insurance policy illustration?
To provide a summary of policy features
ExplanationSummary of policy features.
#13
Which of the following is a characteristic of universal life insurance?
Allows flexibility in premium payments and death benefits
ExplanationFlexible premium and death benefit options.
#14
Which of the following is a characteristic of variable universal life insurance?
Policyholder has control over investment options
ExplanationPolicyholder controls investment choices.
#15
What does the term 'insurable interest' mean in the context of life insurance?
Financial interest in the insured's life
ExplanationFinancial interest in the insured's life.
#16
Which of the following is a characteristic of term life insurance?
It provides coverage for a specific period of time
ExplanationCoverage for a specific time period.
#17
Which of the following is true about universal life insurance?
Policyholder can adjust death benefit and premium payments
ExplanationPolicyholder can adjust benefit and premium.
#18
What is the primary advantage of permanent life insurance compared to term life insurance?
Builds cash value over time
ExplanationCash value accumulation over time.