Pearson Vue - Types of Life Insurance
Policies Review Exam Actual
Questions and Answers 2026
A Key Employee policy is taken out by Company X on its vice
president. Ten years later, this employee leaves Company X and
begins working for Company Y. If this individual were to die and the
policy is still in force and unchanged, where would the death
proceeds be directed? -
correct answer ✅Company X
Which statement regarding a Key Employee Life policy is NOT true?
-
correct answer ✅The beneficiary is named by the key employee
In a Key Employee life insurance policy, the third-party owner can
be all of the following, EXCEPT: -
correct answer ✅Insured
Two partners own equal shares in a business worth a total of
$1,000,000. If they both commit to the purchase of a life insurance
policy that will fund a Buy-Sell Agreement, which of the following is
TRUE? -
correct answer ✅Two partners own equal shares in a business
worth a total of $1,000,000. If they both commit to the purchase of
,Pearson Vue - Types of Life Insurance
Policies Review Exam Actual
Questions and Answers 2026
a life insurance policy that will fund a Buy-Sell Agreement, which of
the following is TRUE?
What is considered a valid reason for small businesses to insure the
lives of its major shareholders? -
correct answer ✅Fund a buy-sell agreement
Which of these factors does NOT influence an applicant's need for
life insurance? -
correct answer ✅Self-maintenance expenses
Which of these is NOT a reason for a business to buy key person life
insurance? -
correct answer ✅A pension deficiency if the key employee diesA
pension deficiency if the key employee dies
Which statement regarding third-party ownership of a life insurance
policy is true? -
correct answer ✅It is used extensively in estate-planning as well as
business circumstances
,Pearson Vue - Types of Life Insurance
Policies Review Exam Actual
Questions and Answers 2026
What type of life insurance incorporates flexible premiums and an
adjustable death benefit? -
correct answer ✅Universal Life
What type of insurance offers permanent life coverage with
premiums that are payable for life? -
correct answer ✅Whole Life
What type of life policy has a death benefit that adjusts periodically
and is written for a specific period of time? -
correct answer ✅Decreasing term
Which of these statements describe a Modified Endowment
Contract (MEC)? -
correct answer ✅Exceeds the maximum amount of premium that
can be paid into a policy and still have it recognized as a life
insurance contract
What type of life insurance are credit policies issued as? -
correct answer ✅Term
, Pearson Vue - Types of Life Insurance
Policies Review Exam Actual
Questions and Answers 2026
Which of these would be considered a Limited-Pay Life policy? -
correct answer ✅Life Paid-Up at Age 70
Which of the following features of a group Term Life policy enables
an individual to leave the group and continue his or her insurance
without providing evidence of insurability? -
correct answer ✅Conversion privilege
Which provision allows the policyowner to change a term life policy
to a permanent one without providing proof of good health? -
correct answer ✅Conversion
A(n) __________ term life policy is normally used when covering an
insured's mortgage balance. -
correct answer ✅decreasing
All of these insurance products require an agent to have proper
FINRA securities registration in order to sell them, EXCEPT for: -
correct answer ✅Modified Whole Life
Policies Review Exam Actual
Questions and Answers 2026
A Key Employee policy is taken out by Company X on its vice
president. Ten years later, this employee leaves Company X and
begins working for Company Y. If this individual were to die and the
policy is still in force and unchanged, where would the death
proceeds be directed? -
correct answer ✅Company X
Which statement regarding a Key Employee Life policy is NOT true?
-
correct answer ✅The beneficiary is named by the key employee
In a Key Employee life insurance policy, the third-party owner can
be all of the following, EXCEPT: -
correct answer ✅Insured
Two partners own equal shares in a business worth a total of
$1,000,000. If they both commit to the purchase of a life insurance
policy that will fund a Buy-Sell Agreement, which of the following is
TRUE? -
correct answer ✅Two partners own equal shares in a business
worth a total of $1,000,000. If they both commit to the purchase of
,Pearson Vue - Types of Life Insurance
Policies Review Exam Actual
Questions and Answers 2026
a life insurance policy that will fund a Buy-Sell Agreement, which of
the following is TRUE?
What is considered a valid reason for small businesses to insure the
lives of its major shareholders? -
correct answer ✅Fund a buy-sell agreement
Which of these factors does NOT influence an applicant's need for
life insurance? -
correct answer ✅Self-maintenance expenses
Which of these is NOT a reason for a business to buy key person life
insurance? -
correct answer ✅A pension deficiency if the key employee diesA
pension deficiency if the key employee dies
Which statement regarding third-party ownership of a life insurance
policy is true? -
correct answer ✅It is used extensively in estate-planning as well as
business circumstances
,Pearson Vue - Types of Life Insurance
Policies Review Exam Actual
Questions and Answers 2026
What type of life insurance incorporates flexible premiums and an
adjustable death benefit? -
correct answer ✅Universal Life
What type of insurance offers permanent life coverage with
premiums that are payable for life? -
correct answer ✅Whole Life
What type of life policy has a death benefit that adjusts periodically
and is written for a specific period of time? -
correct answer ✅Decreasing term
Which of these statements describe a Modified Endowment
Contract (MEC)? -
correct answer ✅Exceeds the maximum amount of premium that
can be paid into a policy and still have it recognized as a life
insurance contract
What type of life insurance are credit policies issued as? -
correct answer ✅Term
, Pearson Vue - Types of Life Insurance
Policies Review Exam Actual
Questions and Answers 2026
Which of these would be considered a Limited-Pay Life policy? -
correct answer ✅Life Paid-Up at Age 70
Which of the following features of a group Term Life policy enables
an individual to leave the group and continue his or her insurance
without providing evidence of insurability? -
correct answer ✅Conversion privilege
Which provision allows the policyowner to change a term life policy
to a permanent one without providing proof of good health? -
correct answer ✅Conversion
A(n) __________ term life policy is normally used when covering an
insured's mortgage balance. -
correct answer ✅decreasing
All of these insurance products require an agent to have proper
FINRA securities registration in order to sell them, EXCEPT for: -
correct answer ✅Modified Whole Life
