NEW YORK LIFE AND HEALTH INSURANCE
PRACTICE EXAM QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALES 2025
1. What is the primary purpose of life insurance?
A. To create investment opportunities
B. To provide financial protection for survivors
C. To pay for long-term care
D. To reduce taxable income
Life insurance provides financial security to beneficiaries in the event of the
insured’s death.
2. A person covered under an individual life insurance policy dies. Who
receives the policy proceeds?
A. The insurer
B. The estate
C. The named beneficiary
D. The policyholder
,The beneficiary listed on the policy receives the proceeds upon the death of the
insured.
3. Which of the following is NOT a type of term insurance?
A. Level
B. Decreasing
C. Whole
D. Increasing
Whole life insurance is permanent, not a form of term insurance.
4. What is the cash value in a whole life insurance policy?
A. A guaranteed payout at death
B. A variable amount tied to the market
C. A savings component that grows over time
D. A refund of premiums
Whole life policies accumulate guaranteed cash value over time.
5. In New York, a replacement transaction requires:
A. No disclosures
B. A signed replacement notice and comparison form
C. A new policy within 90 days
D. Only oral explanation
New York law mandates disclosure forms be signed and a comparison provided
to avoid misrepresentation.
6. Which of the following is taxable?
, A. Death benefits from life insurance
B. Interest earned on death benefits
C. Cash surrender value under face amount
D. Policy dividends
The interest portion paid with death benefits is considered taxable income.
7. Which is NOT a typical use of annuities?
A. Retirement income
B. Wealth accumulation
C. Temporary health insurance
D. Estate planning
Annuities are not used for health insurance; they are for income and savings
purposes.
8. An insured commits suicide one year after purchasing a life insurance
policy. What happens?
A. Full death benefit is paid
B. Premiums are refunded only
C. No benefits are paid
D. Double indemnity applies
The suicide clause typically excludes death benefit payout within the first two
years; premiums are refunded.
9. Which type of life insurance provides coverage for a specified time?
A. Whole
B. Term
PRACTICE EXAM QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALES 2025
1. What is the primary purpose of life insurance?
A. To create investment opportunities
B. To provide financial protection for survivors
C. To pay for long-term care
D. To reduce taxable income
Life insurance provides financial security to beneficiaries in the event of the
insured’s death.
2. A person covered under an individual life insurance policy dies. Who
receives the policy proceeds?
A. The insurer
B. The estate
C. The named beneficiary
D. The policyholder
,The beneficiary listed on the policy receives the proceeds upon the death of the
insured.
3. Which of the following is NOT a type of term insurance?
A. Level
B. Decreasing
C. Whole
D. Increasing
Whole life insurance is permanent, not a form of term insurance.
4. What is the cash value in a whole life insurance policy?
A. A guaranteed payout at death
B. A variable amount tied to the market
C. A savings component that grows over time
D. A refund of premiums
Whole life policies accumulate guaranteed cash value over time.
5. In New York, a replacement transaction requires:
A. No disclosures
B. A signed replacement notice and comparison form
C. A new policy within 90 days
D. Only oral explanation
New York law mandates disclosure forms be signed and a comparison provided
to avoid misrepresentation.
6. Which of the following is taxable?
, A. Death benefits from life insurance
B. Interest earned on death benefits
C. Cash surrender value under face amount
D. Policy dividends
The interest portion paid with death benefits is considered taxable income.
7. Which is NOT a typical use of annuities?
A. Retirement income
B. Wealth accumulation
C. Temporary health insurance
D. Estate planning
Annuities are not used for health insurance; they are for income and savings
purposes.
8. An insured commits suicide one year after purchasing a life insurance
policy. What happens?
A. Full death benefit is paid
B. Premiums are refunded only
C. No benefits are paid
D. Double indemnity applies
The suicide clause typically excludes death benefit payout within the first two
years; premiums are refunded.
9. Which type of life insurance provides coverage for a specified time?
A. Whole
B. Term
