Pearson Vue Life Insurance Exam
Questions and Answers 2025-2026 LATEST UPDATED
The PRIMARY reason for selecting a Variable Whole Life policy instead of a traditional Whole
Life policy is that the Variable Whole Life policy:
has the potential to earn a higher rate of return on the cash value
Which of the following statements is CORRECT about the Paid-Up Additions in a participating
Whole Life policy?
They are purchased on an attained age basis.
Which of the following statements is CORRECT about Group Life conversion privileges?
Death during the conversion period is covered even if the departing employee chose not to
convert the policy.
If an insured commits suicide after the Suicide clause in the insured's life insurance policy has
expired, the insurer will take which of the following actions?
Pay the Death benefit
If a policy contains a Guaranteed Insurability rider, the insured has the right to purchase:
additional coverage at specified ages
If life insurance policy applicant is classified as a substandard risk, the insurance company will
MOST likely:
charge an extra premium
P wants to name her husband as the beneficiary of her life policy. However, she wishes to retain
all of the rights of ownership. P should have her husband named as the:
revocable beneficiary
Which of the following features allows an insurance policy to remain in force for a specified
number of days beyond the premium due date?
Grace Period provision
In life insurance, insurable interest must exist at the time the:
producer writes an application on a proposed insured
Which of the following terms refers to the transfer of some or all of the ownership rights of a life
insurance policy from one individual to another?
,Assignment
Which of the following statements about a Renewable Term policy is CORRECT?
It is renewable at the option of the insured.
Two business partners own life insurance on each other. If one partner dies, which of the
following contracts will allow the other partner to buy 100 percent of the business interest?
Buy and Sell Agreement
An insured intentionally understates her age on her application for a life policy. At death, the
insurer will take which of the following actions?
Pay a reduced Death benefit based on the insured's actual age
An applicant's statements on an application are considered to be legal:
representations
A contract that promises to pay an income to an insured until his/her death is called:
Life Annuity
An employer can deduct premium payments as an ordinary business expense for which of the
following life coverages?
Group
Which of the following annuities would BEST suit the needs of a 35-year-old factory worker
who is concerned about inflation and wants to establish a retirement plan?
A Flexible Premium Variable Annuity
A client needs a substantial amount of protection but has limited financial resources. Which of
the following insurance policies would BEST meet the client's needs?
Term Life
An applicant for life insurance may question the validity and source of any consumer
information developed under the:
Fair Credit Reporting Act (Insurance Information and Privacy Protection Act)
Which of the following policy provisions provides for continuation of coverage despite
nonpayment of premiums?
Nonforfeiture Option
Federal income tax laws generally treat proceeds of life insurance policies as:
, nontaxable
When a producer submits an insurance application to the company, the producer must take all of
the following actions EXCEP
submit a completed medical information report
Which of the following policy provisions states that the application is part of the policy?
Entire contract
Under the Social Security Retirement Benefits, all of the following factors will influence how
much a retiring individual will receive as a monthly income benefit EXCEPT the individual's:
sex
Which of the following retirement plans is tax-qualified?
Defined contribution
Reinstatement of a life insurance policy requires an insured to take all of the following actions
EXCEPT:
make collateral assignment to the insurer
If an applicant for life insurance submits a completed application to a producer without paying
the first premium, coverage becomes effective when the:
policy is delivered and the premium paid
An insurance producer takes an application for a life insurance policy but does not collect the
initial premium. On delivery of the policy to the proposed insured, the producer must collect the
initial premium and which of the following?
The insured's signed statement of continued good health
Which of the following statements is NOT correct about representations?
They are true in every respect.
Which of the following group life plans requires at least 75 percent of the eligible members to
participate?
Contributory
A type of annuity in which the cash values are invested in securities is called:
Variable
Questions and Answers 2025-2026 LATEST UPDATED
The PRIMARY reason for selecting a Variable Whole Life policy instead of a traditional Whole
Life policy is that the Variable Whole Life policy:
has the potential to earn a higher rate of return on the cash value
Which of the following statements is CORRECT about the Paid-Up Additions in a participating
Whole Life policy?
They are purchased on an attained age basis.
Which of the following statements is CORRECT about Group Life conversion privileges?
Death during the conversion period is covered even if the departing employee chose not to
convert the policy.
If an insured commits suicide after the Suicide clause in the insured's life insurance policy has
expired, the insurer will take which of the following actions?
Pay the Death benefit
If a policy contains a Guaranteed Insurability rider, the insured has the right to purchase:
additional coverage at specified ages
If life insurance policy applicant is classified as a substandard risk, the insurance company will
MOST likely:
charge an extra premium
P wants to name her husband as the beneficiary of her life policy. However, she wishes to retain
all of the rights of ownership. P should have her husband named as the:
revocable beneficiary
Which of the following features allows an insurance policy to remain in force for a specified
number of days beyond the premium due date?
Grace Period provision
In life insurance, insurable interest must exist at the time the:
producer writes an application on a proposed insured
Which of the following terms refers to the transfer of some or all of the ownership rights of a life
insurance policy from one individual to another?
,Assignment
Which of the following statements about a Renewable Term policy is CORRECT?
It is renewable at the option of the insured.
Two business partners own life insurance on each other. If one partner dies, which of the
following contracts will allow the other partner to buy 100 percent of the business interest?
Buy and Sell Agreement
An insured intentionally understates her age on her application for a life policy. At death, the
insurer will take which of the following actions?
Pay a reduced Death benefit based on the insured's actual age
An applicant's statements on an application are considered to be legal:
representations
A contract that promises to pay an income to an insured until his/her death is called:
Life Annuity
An employer can deduct premium payments as an ordinary business expense for which of the
following life coverages?
Group
Which of the following annuities would BEST suit the needs of a 35-year-old factory worker
who is concerned about inflation and wants to establish a retirement plan?
A Flexible Premium Variable Annuity
A client needs a substantial amount of protection but has limited financial resources. Which of
the following insurance policies would BEST meet the client's needs?
Term Life
An applicant for life insurance may question the validity and source of any consumer
information developed under the:
Fair Credit Reporting Act (Insurance Information and Privacy Protection Act)
Which of the following policy provisions provides for continuation of coverage despite
nonpayment of premiums?
Nonforfeiture Option
Federal income tax laws generally treat proceeds of life insurance policies as:
, nontaxable
When a producer submits an insurance application to the company, the producer must take all of
the following actions EXCEP
submit a completed medical information report
Which of the following policy provisions states that the application is part of the policy?
Entire contract
Under the Social Security Retirement Benefits, all of the following factors will influence how
much a retiring individual will receive as a monthly income benefit EXCEPT the individual's:
sex
Which of the following retirement plans is tax-qualified?
Defined contribution
Reinstatement of a life insurance policy requires an insured to take all of the following actions
EXCEPT:
make collateral assignment to the insurer
If an applicant for life insurance submits a completed application to a producer without paying
the first premium, coverage becomes effective when the:
policy is delivered and the premium paid
An insurance producer takes an application for a life insurance policy but does not collect the
initial premium. On delivery of the policy to the proposed insured, the producer must collect the
initial premium and which of the following?
The insured's signed statement of continued good health
Which of the following statements is NOT correct about representations?
They are true in every respect.
Which of the following group life plans requires at least 75 percent of the eligible members to
participate?
Contributory
A type of annuity in which the cash values are invested in securities is called:
Variable
