Life & Health Insurance License Exam

1. Question 1 · Types of Life Policies

   Which type of life insurance provides coverage for a specific period and pays a death benefit only if the insured dies during that term?
   • A.Whole life insurance
   • B.Universal life insurance
   • C.Term life insurance
   • D.Variable life insurance
   Show answer and explanation

   Answer: C. Term life insurance

   Term life insurance provides coverage for a specified term, such as 10, 20, or 30 years. If the insured dies during the term, the policy pays the death benefit. No cash value is accumulated.

2. Question 2 · Life Policy Riders, Provisions, Options, AND Exclusions

   A misstatement of age provision results in which outcome?
   • A.Policy cancellation
   • B.Premium refund only
   • C.Adjustment of benefits to reflect correct age
   • D.Automatic conversion to term insurance
   Show answer and explanation

   Answer: C. Adjustment of benefits to reflect correct age

   If the insured’s age was misstated, the misstatement of age provision adjusts benefits to what the premium would have purchased at the correct age.

3. Question 3 · Types of Life Policies

   Which type of annuity places investment risk on the annuity owner?
   • A.Fixed annuity
   • B.Indexed annuity
   • C.Immediate annuity
   • D.Variable annuity
   Show answer and explanation

   Answer: D. Variable annuity

   Variable annuities invest in separate accounts, and the owner bears the investment risk.

4. Question 4 · Health Policy Provisions, Clauses, AND Riders

   Which provision requires the insured to submit written notice of loss within a specified time?
   • A.Proof of loss
   • B.Notice of claim
   • C.Payment of claims
   • D.Legal actions
   Show answer and explanation

   Answer: B. Notice of claim

   The notice of claim provision requires timely notification to the insurer after a loss occurs.

5. Question 5 · Types of Health Policies

   Health savings accounts (HSAs) are available to individuals enrolled in which type of health plan?
   • A.HMO
   • B.PPO
   • C.Indemnity plan
   • D.High-deductible health plan
   Show answer and explanation

   Answer: D. High-deductible health plan

   HSAs are paired with high-deductible health plans and allow tax-advantaged savings for medical expenses.

6. Question 6 · Types of Life Policies

   Which life insurance policy is designed to provide permanent coverage with a premium that remains level for a limited number of years?
   • A.Term life insurance
   • B.Single premium whole life
   • C.Limited pay whole life
   • D.Universal life insurance
   Show answer and explanation

   Answer: C. Limited pay whole life

   Limited pay whole life policies require premium payments for a specified number of years, but coverage lasts for the insured’s lifetime.

7. Question 7 · Life Policy Riders, Provisions, Options, AND Exclusions

   Which settlement option pays equal payments until the proceeds are exhausted?
   • A.Life income
   • B.Fixed period
   • C.Interest-only
   • D.Joint life income
   Show answer and explanation

   Answer: B. Fixed period

   A fixed period settlement option pays the proceeds over a specified time, regardless of beneficiary survival.

8. Question 8 · Taxes, Retirement, AND Other Life Insurance Concepts

   Which tax applies when ownership of a life insurance policy is transferred for value?
   • A.Income tax
   • B.Capital gains tax
   • C.Transfer-for-value rule
   • D.Estate tax
   Show answer and explanation

   Answer: C. Transfer-for-value rule

   The transfer-for-value rule may make death benefits taxable if ownership is transferred for consideration.

9. Question 9 · Types of Health Policies

   A noncancellable health policy guarantees:
   • A.Coverage only
   • B.Benefits only
   • C.Premiums only
   • D.Premiums and benefits
   Show answer and explanation

   Answer: D. Premiums and benefits

   Noncancellable policies guarantee that premiums and benefits remain unchanged as long as premiums are paid.

10. Question 10 · Types of Health Policies

    Which type of insurance typically covers eyeglasses, contact lenses, and routine eye exams?
    • A.Major medical insurance
    • B.Dental insurance
    • C.Vision insurance
    • D.Accident-only insurance
    Show answer and explanation

    Answer: C. Vision insurance

    Vision insurance is designed to cover routine eye care and corrective lenses.

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