Life Insurance Concepts and Policy Features Quiz

Test your knowledge on life insurance concepts, including policy features, beneficiaries, premiums, and more in this informative quiz.

Practice Learn Test

Which of the following is not a common type of life insurance?

Term life insurance

Whole life insurance

Property insurance

Universal life insurance

What is the primary purpose of life insurance?

To provide retirement income

To protect against financial loss from death

To accumulate wealth

To pay for medical expenses

What does the 'face value' of a life insurance policy refer to?

The amount paid to the beneficiary upon the insured's death

The total premiums paid over the life of the policy

The cash value of the policy

The amount of coverage stated in the policy

What happens to a term life insurance policy at the end of its term?

The policy is renewed automatically

The policyholder receives a refund of premiums paid

The policy terminates and coverage ends

The policy converts to whole life insurance

What is the primary difference between term life insurance and whole life insurance?

Term life insurance provides coverage for a specific period, while whole life insurance provides coverage for the insured's entire life

Term life insurance premiums are fixed, while whole life insurance premiums increase over time

Term life insurance policies have a cash value component, while whole life insurance policies do not

Term life insurance policies can be borrowed against, while whole life insurance policies cannot

Which feature distinguishes term life insurance from whole life insurance?

Premiums never increase

Builds cash value over time

Covers a specific time period

Provides coverage until death

What is a beneficiary in a life insurance policy?

The insurance agent

The person who takes out the policy

The person who receives the death benefit

The insurance company

What is underwriting in the context of life insurance?

The process of determining the premium amount

The process of selecting beneficiaries

The process of selling insurance policies

The process of filing a claim

Which of the following is a feature of universal life insurance?

Fixed premium payments

No death benefit

Guaranteed cash value growth

Ability to adjust coverage and premiums

#10

Which of the following is a reason why someone might choose term life insurance?

To build cash value over time

To provide lifelong coverage

To cover temporary financial obligations

To ensure premiums never increase

#11

Which of the following statements about cash value in life insurance is true?

It is only available in term life insurance

It can be borrowed against or withdrawn by the policyholder

It remains constant throughout the life of the policy

It is paid out as a lump sum upon the insured's death

#12

In life insurance, what is the 'grace period'?

The time during which the policyholder can reinstate a lapsed policy without penalties

The period of time during which the insured's health is evaluated before coverage begins

The time after the policyholder's death during which the death benefit is paid to the beneficiary

The period of time during which premium payments can be made after the due date without policy lapse

#13

What is the main purpose of the cash value component in whole life insurance?

To provide a source of funds for the insured's retirement

To accumulate savings over time

To cover the cost of the insurance policy

To provide a lump sum payment to the beneficiary upon the insured's death

#14

In life insurance, what does 'accelerated death benefit' refer to?

A benefit paid to the beneficiary if the insured dies due to an accident

A benefit that allows the insured to access a portion of the death benefit if diagnosed with a terminal illness

A benefit that increases the death benefit over time

A benefit that provides additional coverage for specific causes of death

#15

Which of the following is a characteristic of a participating whole life insurance policy?

It does not accumulate cash value

Policyholders do not receive dividends

Policyholders have a voice in the management of the insurance company

Premiums are lower than term life insurance