Life and Health Insurance Agent Licensing Practice Exam

Life and Health Insurance Agent Practice Exam – Section 1 General Life Insurance Basics, Insurable Interest, Parties and Regulations 1. All of the following are parties to a life insurance contract EXCEPT: I. Insurer II. Underwriter III. Beneficiary IV. Owner V. Insured a. II only b. III only c. II, III, and V d. All are parties to a life insurance contract 2. Which of the following will have to meet an insurable interest requirement in order for a policy to issue? a. Beneficiary b. Insured c. Insured’s dependents d. All of the above e. Both a and b only 3. In many instances, the __________ and the __________ on a life insurance policy may be the same person or entity. a. Owner, insured b. Insured, beneficiary c. Insurer, insured d. Beneficiary, insured 4. The beneficiary in a life insurance policy does not have to be a person. Which of the following can be named a beneficiary, assuming the presence of an insurable interest? a. A trust b. An estate c. A business entity d. All of the above e. Both a and b only 5. Which of the following has the rights that are stipulated in the insurance contract? a. Insured b. Beneficiary c. Owner d. Annuitant 6. Life insurance is regulated only at the federal level. a. True b. False 7. Whose death will cause the insurance company to pay the benefit proceeds of the policy? a. Owner b. Beneficiary c. Insured d. Annuitant 8. Business owners often have a need for life insurance. a. True b. False 9. If a whole life insurance policy holder needed funds for long-term care expenses, which part of the policy could they access in order to do so? a. Investment benefits b. Death benefits c. Annuity benefits d. Living benefits 10. Which of the following factors does NOT have an effect on a life insurance policy’s premium calculation? a. Occupation b. Health c. Lifestyle d. None of the above 11. The requirement that a life insurance company must keep enough cash in place to pay claims as they arise is known as the __________ requirement. a. Reinsurance b. Policy riders c. Capital reserves d. A++ ratings 12. John makes a good living and got a life insurance policy for the benefit of his wife. He recently experienced a life-changing event with the birth of his son. John should: a. Cancel his life insurance policy to afford to support his new son. b. Decrease his life insurance policy death benefit to get a cheaper policy. c. Increase his life insurance policy death benefit. d. Stop paying premiums on his life insurance policy. 13. ____________ is the number one reason why people buy life insurance. a. Income replacement b. Mortgage payoff c. College funding d. Retirement planning 14. Which of the following is typically the lowest cost type of life insurance? a. Term b. Permanent c. Universal d. Variable