#1
What is the primary purpose of a life insurance policy?
To provide financial protection to beneficiaries upon the death of the insured
ExplanationFinancial protection for beneficiaries upon insured's death
#2
Which of the following is NOT a type of life insurance policy?
Refundable life insurance
ExplanationRefundable life insurance is not a valid type
#3
What happens if the insured individual in a life insurance policy stops paying premiums?
The policy lapses and coverage ends
ExplanationLapse and termination of coverage
#4
What is the 'grace period' in a life insurance policy?
The period during which the insured can reinstate the policy without penalty after missing a premium payment
ExplanationReinstatement period after missed premium
#5
What is the cash value component of a permanent life insurance policy?
The savings component that accumulates over time
ExplanationAccumulating savings in permanent life insurance
#6
Which of the following is a characteristic of term life insurance?
It provides coverage for a specified period of time
ExplanationCoverage for a specified period
#7
What does the term 'underwriting' refer to in the context of life insurance?
The process of assessing the risk of insuring an individual
ExplanationAssessing the risk of insuring an individual
#8
Which of the following is a feature of universal life insurance?
The ability to adjust the premium and death benefit
ExplanationFlexibility in adjusting premium and death benefit
#9
What is the purpose of the rider in a life insurance policy?
To provide coverage for specific additional risks or circumstances
ExplanationAdditional coverage for specific risks
#10
What does the term 'policy dividend' refer to in a life insurance policy?
A portion of the insurer's surplus distributed to policyholders
ExplanationDistribution of insurer's surplus to policyholders
#11
What is the purpose of the incontestability clause in a life insurance policy?
To prevent the insurer from denying a claim due to misrepresentation after a certain period
ExplanationPrevention of claim denial due to misrepresentation after a specific period
#12
What is the purpose of the beneficiary designation in a life insurance policy?
To specify who will receive the death benefit upon the insured's death
ExplanationSpecification of death benefit recipient in beneficiary designation