Life Insurance Exam Questions and
Answers Graded A+
A name for this policy is:
When an individual is performing important and unique functions for an employer,
loss to the business can be significant - Correct answer-Buy/sell, or keyman policy
A person's human life value is a sum of money that... - Correct answer-Present
value of the beadwinner's future earnings
most common types of life insurance are (3): - Correct answer-Term, Whole and
Universal
what does term life insurance mean (3 things). - Correct answer-1. Set amount of
time for whatever the term is
2. If the insured dies within a certain timeframe, they get the benefits
3. You Want to protect a certain amount of debt
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, Level term (2). - Correct answer-the majority of policies; provides a fixed death
benefit and premium for a specific period of time.
Decreasing term - Correct answer-Usually purchased for a specific purpose: e.g.
mortgage/other loan payoff
Increasing term - Correct answer-Some needs increase as income/assets increase
Straight life - Correct answer-Arranged premiums are payable as long as the
insured lives
Limited-pay life policy (2): - Correct answer-1. Premiums are paid only for a
specified time, such as 20 years (called twenty-pay life) or until age 65
2. Coverage remains in effect until the insured's death
Single premium - Correct answer-One-time payment for a paid-up life insurance
policy
Cash Value Option - Correct answer-Guaranteed minimums stated in policy
Paid-Up Insurance Option - Correct answer-Insurer uses cash value to buy paid up
whole life
Extended Term (2): - Correct answer-1. Buys a paid-up term for as many months as
it buys
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
Answers Graded A+
A name for this policy is:
When an individual is performing important and unique functions for an employer,
loss to the business can be significant - Correct answer-Buy/sell, or keyman policy
A person's human life value is a sum of money that... - Correct answer-Present
value of the beadwinner's future earnings
most common types of life insurance are (3): - Correct answer-Term, Whole and
Universal
what does term life insurance mean (3 things). - Correct answer-1. Set amount of
time for whatever the term is
2. If the insured dies within a certain timeframe, they get the benefits
3. You Want to protect a certain amount of debt
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, Level term (2). - Correct answer-the majority of policies; provides a fixed death
benefit and premium for a specific period of time.
Decreasing term - Correct answer-Usually purchased for a specific purpose: e.g.
mortgage/other loan payoff
Increasing term - Correct answer-Some needs increase as income/assets increase
Straight life - Correct answer-Arranged premiums are payable as long as the
insured lives
Limited-pay life policy (2): - Correct answer-1. Premiums are paid only for a
specified time, such as 20 years (called twenty-pay life) or until age 65
2. Coverage remains in effect until the insured's death
Single premium - Correct answer-One-time payment for a paid-up life insurance
policy
Cash Value Option - Correct answer-Guaranteed minimums stated in policy
Paid-Up Insurance Option - Correct answer-Insurer uses cash value to buy paid up
whole life
Extended Term (2): - Correct answer-1. Buys a paid-up term for as many months as
it buys
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
