Principles of Life Insurance and Annuities Quiz
Test your knowledge on life insurance principles, annuity features, and tax advantages. Learn about policies, benefits, and key terms.
#1
Which of the following is NOT a basic principle of life insurance?
Utmost good faith
Insurable interest
Indemnity
Subrogation
#2
What is the primary purpose of life insurance?
To provide investment returns
To protect against financial loss due to premature death
To provide retirement income
To cover medical expenses
#3
What is the purpose of the death benefit in a life insurance policy?
To provide retirement income
To provide a lump sum payment to the beneficiary upon the insured's death
To provide cash value accumulation
To provide coverage for a specified term
#4
Which of the following is a characteristic of whole life insurance?
Flexible premiums
Coverage for a specified term
Cash value accumulation
No death benefit
#5
What is an annuity?
A life insurance policy
A contract between an individual and an insurance company
A type of investment
A retirement savings plan
#6
What is the key feature of a term life insurance policy?
Premiums that remain constant for life
Coverage for a specified term
Cash value accumulation
Flexible death benefit
#7
What is the purpose of the grace period in a life insurance policy?
To allow the policyholder to cancel the policy
To provide a period of time after the premium due date to pay the premium without penalty
To provide additional coverage in case of accidental death
To allow the policyholder to change beneficiaries
#8
What is the primary purpose of an annuity's accumulation phase?
To receive regular payments from the annuity
To build up the annuity's value through contributions and investment returns
To convert the annuity into a life income
To provide death benefit protection
#9
Which of the following is a benefit of a fixed annuity?
Guaranteed minimum interest rate
Variable returns based on market performance
No risk of loss
Flexibility to change payment amounts
#10
Which of the following is true about the cash value of a permanent life insurance policy?
It remains constant throughout the policy's term
It can be borrowed against or withdrawn by the policyholder
It is paid out as a lump sum at the end of the term
It is not available until the insured's death
#11
Which of the following is a tax advantage of life insurance?
Tax-free death benefit to beneficiaries
Tax-deductible premiums
Tax-free withdrawals of cash value
Tax-free loans against the policy
#12
Which of the following is a characteristic of a variable life insurance policy?
Fixed premiums
Guaranteed minimum death benefit
Policyholder's ability to choose investment options
Cash value guaranteed to increase
#13
What is the purpose of the surrender period in an annuity?
To allow the annuitant to cancel the annuity without penalty
To provide a period of time after the annuity is purchased to make additional contributions
To allow the annuity to accumulate value before payments begin
To provide a period of time after the annuity is purchased during which withdrawals may be subject to a surrender charge
Sign In to view more questions.
Quiz Questions with Answers
Forget wasting time on incorrect answers. We deliver the straight-up correct options, along with clear explanations that solidify your understanding.
Popular Quizzes in Insurance
Popular Quizzes in Finance
Report