Page 1 of 115
NEWEST 1135 LIFE AND HEALTH
INSURANCE ACTUAL EXAM 2025/2026
TESTBANK COMPLETE 450 ACCURATE
QUESTIONS WITH WELL ELABORATED
ANSWERS (VERIFIED ANSWERS) LATEST
UPDATED VERSION |GUARANTEED PASS
A+
1. Which of the following best describes the function
of reinsurance?
a) Transferring risk to the insured
b) Insuring high-risk individuals at lower premiums
,Page 2 of 115
c) An insurer transferring risk to another insurer
d) A government program for catastrophic losses
Answer: c) An insurer transferring risk to another insurer
Rationale: Reinsurance allows an insurer to reduce liability by
ceding risk to another insurer.
2. A producer who makes misleading statements about a
competing insurer is guilty of:
a) Twisting
b) Defamation
c) Rebating
d) Fraud
Answer: b) Defamation
Rationale: Defamation is false/malicious statements about
another insurer’s financial condition.
3. Scenario – An agent tells a client: “If you buy this policy
today, I’ll give you $100 cash back.” This is:
a) Twisting
,Page 3 of 115
b) Coercion
c) Rebating
d) Churning
Answer: c) Rebating
Rationale: Rebating is offering inducements not in the policy;
illegal in most states.
4. Which life insurance policy is best for a 70-year-old
needing 10-year temporary coverage with lowest premium?
a) Whole life
b) 10-year level term
c) Universal life
d) Endowment
Answer: b) 10-year level term
Rationale: Term insurance provides pure death protection at
lowest cost.
5. Insurable interest in life insurance must exist:
a) Only at claim time
, Page 4 of 115
b) At application and claim
c) Only at application
d) Only for minors
Answer: c) Only at application
Rationale: Insurable interest required at policy issuance, not
necessarily later.
6. Which is NOT an element of an insurance contract?
a) Legal purpose
b) Offer and acceptance
c) Profit motive
d) Consideration
Answer: c) Profit motive
Rationale: Profit is not a legal element of the contract.
7. In health insurance, the probationary period is:
a) Time between claim and payment
b) Time between application and delivery
NEWEST 1135 LIFE AND HEALTH
INSURANCE ACTUAL EXAM 2025/2026
TESTBANK COMPLETE 450 ACCURATE
QUESTIONS WITH WELL ELABORATED
ANSWERS (VERIFIED ANSWERS) LATEST
UPDATED VERSION |GUARANTEED PASS
A+
1. Which of the following best describes the function
of reinsurance?
a) Transferring risk to the insured
b) Insuring high-risk individuals at lower premiums
,Page 2 of 115
c) An insurer transferring risk to another insurer
d) A government program for catastrophic losses
Answer: c) An insurer transferring risk to another insurer
Rationale: Reinsurance allows an insurer to reduce liability by
ceding risk to another insurer.
2. A producer who makes misleading statements about a
competing insurer is guilty of:
a) Twisting
b) Defamation
c) Rebating
d) Fraud
Answer: b) Defamation
Rationale: Defamation is false/malicious statements about
another insurer’s financial condition.
3. Scenario – An agent tells a client: “If you buy this policy
today, I’ll give you $100 cash back.” This is:
a) Twisting
,Page 3 of 115
b) Coercion
c) Rebating
d) Churning
Answer: c) Rebating
Rationale: Rebating is offering inducements not in the policy;
illegal in most states.
4. Which life insurance policy is best for a 70-year-old
needing 10-year temporary coverage with lowest premium?
a) Whole life
b) 10-year level term
c) Universal life
d) Endowment
Answer: b) 10-year level term
Rationale: Term insurance provides pure death protection at
lowest cost.
5. Insurable interest in life insurance must exist:
a) Only at claim time
, Page 4 of 115
b) At application and claim
c) Only at application
d) Only for minors
Answer: c) Only at application
Rationale: Insurable interest required at policy issuance, not
necessarily later.
6. Which is NOT an element of an insurance contract?
a) Legal purpose
b) Offer and acceptance
c) Profit motive
d) Consideration
Answer: c) Profit motive
Rationale: Profit is not a legal element of the contract.
7. In health insurance, the probationary period is:
a) Time between claim and payment
b) Time between application and delivery
