#1
Which of the following is a basic principle of life insurance?
Risk avoidance
Risk sharing
Risk retention
Risk transfer
#2
Which of the following is a characteristic of term life insurance?
Provides coverage for a specified term and has no cash value
Offers lifelong coverage with an investment component
Allows policyholders to participate in the stock market
Offers flexible premium payments
#3
What is the primary function of the beneficiary in a life insurance policy?
To pay the premiums
To receive the death benefit upon the policyholder's death
To manage the policy's cash value
To provide medical information for underwriting
#4
What does the term 'underinsured' mean in the context of life insurance?
Having insufficient coverage to meet financial needs
Exceeding the coverage needed for financial security
Paying higher premiums than necessary
Having coverage for a short period
#5
What is the primary function of the policyowner in a life insurance policy?
To receive the death benefit
To pay the premiums and manage the policy
To determine the policy's cash value
To underwrite the policy
#6
What is the primary purpose of the death benefit in a life insurance policy?
To cover medical expenses
To provide income replacement for the beneficiaries
To fund the policyholder's retirement
To pay off the policyholder's debts
#7
Which of the following is a common life insurance policy option that allows the policyholder to accumulate cash value?
Term life insurance
Whole life insurance
Variable life insurance
Universal life insurance
#8
What is the purpose of the cash value component in a life insurance policy?
To provide a death benefit to beneficiaries
To accumulate savings and investment growth
To cover medical expenses of the policyholder
To fund the policyholder's retirement
#9
What does the term 'riders' refer to in the context of life insurance?
Individuals covered by the policy
Additional policy benefits or options that can be added for an extra cost
Insurance agents who sell policies
Premium payment options
#10
What is the purpose of the suicide clause in a life insurance policy?
To exclude coverage for self-inflicted injuries
To provide additional coverage for mental health issues
To determine the policy's surrender value
To extend the policy term
#11
In life insurance, what does the term 'underwriting' refer to?
Calculating policy premiums
Assessing and evaluating risks associated with insuring a particular individual
Marketing the insurance policy
Paying out death benefits
#12
Which life insurance policy provides coverage for a specified term and does not accumulate cash value?
Whole life insurance
Universal life insurance
Term life insurance
Variable life insurance
#13
Which life insurance policy allows policyholders to invest in separate accounts with variable returns?
Whole life insurance
Universal life insurance
Variable life insurance
Term life insurance
#14
What is the purpose of the incontestability clause in a life insurance policy?
To contest the beneficiary designation
To contest the cause of death
To prevent the insurer from denying a claim after a certain period
To contest the premium payment history
#15
What is the primary factor that determines the premium amount in a life insurance policy?
Policyholder's age and health
Length of the policy term
Cash value accumulation
Insurance company's profit margin