Life Insurance License Exam UPDATED
ACTUAL QUESTIONS AND CORRECT
ANSWERS
Accelerated Benefits - Correct answers✔✔Riders attached to life insurance policies that allow
death benefits to be used to cover nursing or convalescent home expenses.
Accidental Death Benefits - Correct answers✔✔A policy rider that states that the cause of death
will be analyzed to determine if it complies with the policy description of accidental death.
Accidental Death Insurance - Correct answers✔✔An insurance policy that provides payment if
the insured's death is the result of an accident.
Accumulation Period - Correct answers✔✔The time before an annuitant's retirement during
which the annuitant is making payments or investments in an annuity.
Actual Cash Value (ACV) - Correct answers✔✔The required amount to pay damages or for
property loss. This amount is calculated based on the property's current replacement value minus
depreciation.
Adhesion - Correct answers✔✔A contract offered on a "take-it-or leave-it" basis by an insurer, in
which the insured's only option is to either accept or reject the contract. Any ambiguities in the
contract will be settled in favor of the insured.
Adjustable Life - Correct answers✔✔Life insurance that permits changes in the face amount,
premium amount, period of protection, and the duration of the premium payment period.
, Adjuster - Correct answers✔✔A representative of an insurance company who investigated and
acts on the behalf of the company to obtain agreements for the amount of the insurance claim.
Administrator - Correct answers✔✔An individual appointed by a court as a fiduciary to settle the
financial affairs and estate of a deceased person.
Admitted (Authorized) Insurer - Correct answers✔✔An insurance company authorized and
licensed to transact business in a particular state.
Adverse Selection - Correct answers✔✔The tendency of risks with higher probability of loss to
purchase and maintain insurance more often than the risks who present lower probability.
Agency - Correct answers✔✔An insurance sales office or company.
Agent - Correct answers✔✔An individual who is licensed to sell, negotiate, or effect insurance
contracts on behalf of the insurer.
Agent Appointment - Correct answers✔✔The authorization of an agent to act for or represent an
insurer.
Agent's Authority - Correct answers✔✔Special powers granted to an agent by his or her agency
contract.
Aleatory - Correct answers✔✔A contract in which participating parties exchange unequal
amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums is
unequal to the amount the insurer will pay in the event of a loss.
ACTUAL QUESTIONS AND CORRECT
ANSWERS
Accelerated Benefits - Correct answers✔✔Riders attached to life insurance policies that allow
death benefits to be used to cover nursing or convalescent home expenses.
Accidental Death Benefits - Correct answers✔✔A policy rider that states that the cause of death
will be analyzed to determine if it complies with the policy description of accidental death.
Accidental Death Insurance - Correct answers✔✔An insurance policy that provides payment if
the insured's death is the result of an accident.
Accumulation Period - Correct answers✔✔The time before an annuitant's retirement during
which the annuitant is making payments or investments in an annuity.
Actual Cash Value (ACV) - Correct answers✔✔The required amount to pay damages or for
property loss. This amount is calculated based on the property's current replacement value minus
depreciation.
Adhesion - Correct answers✔✔A contract offered on a "take-it-or leave-it" basis by an insurer, in
which the insured's only option is to either accept or reject the contract. Any ambiguities in the
contract will be settled in favor of the insured.
Adjustable Life - Correct answers✔✔Life insurance that permits changes in the face amount,
premium amount, period of protection, and the duration of the premium payment period.
, Adjuster - Correct answers✔✔A representative of an insurance company who investigated and
acts on the behalf of the company to obtain agreements for the amount of the insurance claim.
Administrator - Correct answers✔✔An individual appointed by a court as a fiduciary to settle the
financial affairs and estate of a deceased person.
Admitted (Authorized) Insurer - Correct answers✔✔An insurance company authorized and
licensed to transact business in a particular state.
Adverse Selection - Correct answers✔✔The tendency of risks with higher probability of loss to
purchase and maintain insurance more often than the risks who present lower probability.
Agency - Correct answers✔✔An insurance sales office or company.
Agent - Correct answers✔✔An individual who is licensed to sell, negotiate, or effect insurance
contracts on behalf of the insurer.
Agent Appointment - Correct answers✔✔The authorization of an agent to act for or represent an
insurer.
Agent's Authority - Correct answers✔✔Special powers granted to an agent by his or her agency
contract.
Aleatory - Correct answers✔✔A contract in which participating parties exchange unequal
amounts. Insurance contracts are aleatory in that the amount the insured will pay in premiums is
unequal to the amount the insurer will pay in the event of a loss.
