Life Insurance Planning and Applications Quiz
Test your knowledge on life insurance with these key questions covering terms, policies, and provisions. Understand life insurance better!
#1
Which of the following is a primary purpose of life insurance?
Building wealth
Estate planning
Income protection
Vacation funding
#2
What is the primary purpose of the beneficiary designation in a life insurance policy?
To determine the premium amount
To specify the age of the insured
To designate who will receive the death benefit
To adjust the policy's cash value
#3
What is the purpose of the 'waiver of premium' rider in a life insurance policy?
To waive the death benefit
To waive the surrender value
To waive the premium payments in case of the insured's disability
To waive the beneficiary designation
#4
What is the purpose of the 'conversion privilege' in term life insurance?
To convert the policy to a different insurance company
To convert the policy to a whole life insurance policy without a medical exam
To convert the death benefit into cash value
To convert the policy to a variable life insurance policy
#5
What is the 'incontestable clause' in a life insurance policy?
The clause that allows the insurer to contest the beneficiary designation
The clause that prevents the insurer from contesting the policy's validity after a certain period
The clause that contests the premium amount
The clause that contests the policyholder's right to surrender the policy
#6
What is the 'death benefit' in a life insurance policy?
The premium payment
The amount paid to beneficiaries upon the death of the insured
The cash value of the policy
The surrender value of the policy
#7
In the context of life insurance, what does 'underwriting' refer to?
Writing the policy document
Assessing and determining the risk of insuring a particular individual
Promoting insurance products
Canceling a policy
#8
What is the 'grace period' in a life insurance policy?
The period during which the insured is exempt from paying premiums
The period after the policy lapses but before it is canceled
The period during which the insured can surrender the policy
The period after the premium due date during which the policy remains in force
#9
What is the purpose of a life insurance rider?
To increase the policy's cash value
To add supplementary coverage or benefits to the policy
To decrease the death benefit
To modify the beneficiary designation
#10
What is the 'cash surrender value' of a life insurance policy?
The cash value of the policy at the time of surrender
The amount paid to beneficiaries upon the death of the insured
The premium payment
The policy's savings component that can be borrowed against
#11
What is the cash value of a life insurance policy?
The amount paid to beneficiaries upon the death of the insured
The surrender value of the policy
The premium payment
The policy's savings component that can be withdrawn or borrowed against
#12
Which type of life insurance provides coverage for a specified term and does not accumulate cash value?
Whole life insurance
Term life insurance
Universal life insurance
Variable life insurance
#13
What is the difference between 'term life insurance' and 'whole life insurance'?
Term life insurance has no death benefit, while whole life insurance does
Term life insurance provides coverage for a specific term, while whole life insurance provides coverage for the entire life of the insured
Term life insurance has a higher premium, while whole life insurance has a lower premium
Term life insurance cannot be canceled, while whole life insurance can
#14
What is the significance of the 'incontestability clause' in a life insurance policy?
It allows the insured to contest the premium amount
It prevents the insurer from contesting the validity of the policy after a certain period
It determines the contestable period for filing a claim
It contests the beneficiary designation in case of disputes
#15
What is the primary difference between 'term life insurance' and 'permanent life insurance'?
Term life insurance has a higher premium than permanent life insurance
Permanent life insurance provides coverage for a specific term, while term life insurance provides lifelong coverage
Permanent life insurance cannot be canceled, while term life insurance can
Term life insurance accumulates cash value, while permanent life insurance does not
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