Life Insurance Policies and Products Quiz
Test your knowledge of life insurance with questions on term, permanent, and universal policies, beneficiaries, premiums, and more!
#1
Which of the following is a type of life insurance that covers a specific period of time?
Whole life insurance
Term life insurance
Universal life insurance
Variable life insurance
#2
Which of the following is a characteristic of term life insurance?
It provides coverage for the insured's entire life.
It accumulates cash value over time.
It offers flexible premium payments.
It provides coverage for a specific period of time.
#3
Which of the following statements about whole life insurance is true?
Premiums may fluctuate over time.
It offers flexibility in premium payments.
It provides coverage for a specific period of time.
The policy builds cash value over time and offers a guaranteed death benefit.
#4
What is the purpose of a life insurance policy's beneficiary designation?
To determine the premium amount
To allocate the cash value
To designate who will receive the death benefit upon the insured's death
To select the policy's investment options
#5
In the context of life insurance, what does the term 'premium' refer to?
The amount of money paid by the policyholder to purchase the policy
The cash value accumulated within the policy over time
The amount of coverage provided by the policy
The investment returns earned on the policy's cash value
#6
What is the cash value component of a permanent life insurance policy?
The amount paid to beneficiaries upon the policyholder's death
The portion of premiums that are invested and accumulate over time
The premium amount required to keep the policy active
The total amount of coverage provided by the policy
#7
What is the primary advantage of universal life insurance over whole life insurance?
Guaranteed death benefit
Fixed premium payments
Flexibility in premium payments and death benefits
Accumulation of cash value
#8
Which of the following riders provides additional coverage for specific events such as accidental death or dismemberment?
Accelerated death benefit rider
Waiver of premium rider
Accidental death benefit rider
Long-term care rider
#9
What is the purpose of the accelerated death benefit rider?
To provide additional coverage for accidental death
To waive premium payments in case of disability
To provide a portion of the death benefit to the insured if diagnosed with a terminal illness
To provide coverage for long-term care expenses
#10
What is the primary difference between term life insurance and permanent life insurance?
Term life insurance has a cash value component, while permanent life insurance does not.
Term life insurance provides coverage for a specific period, while permanent life insurance provides coverage for the insured's entire life.
Permanent life insurance has fixed premiums, while term life insurance has flexible premiums.
Permanent life insurance offers higher death benefits than term life insurance.
#11
Which of the following statements about variable life insurance is true?
The cash value is invested in a fixed-interest account.
The policyholder bears no investment risk.
The death benefit remains constant throughout the policy.
The cash value fluctuates based on the performance of underlying investment options.
#12
Which of the following types of life insurance allows the policyholder to allocate cash value among different investment options?
Whole life insurance
Term life insurance
Universal life insurance
Variable universal life insurance
#13
Which of the following statements about viatical settlements is true?
Viatical settlements involve the purchase of a life insurance policy from a terminally ill individual for less than the face value.
Viatical settlements are available only to healthy individuals.
Viatical settlements are regulated at the federal level in the United States.
Viatical settlements are tax-free transactions for both the seller and the buyer.
#14
What is the purpose of a life insurance policy's incontestability clause?
To contest the beneficiary designation
To contest the cause of death of the insured
To contest the terms of the policy
To prevent the insurer from contesting the validity of the policy after a certain period of time has passed
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