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Life Insurance Questions & 100% Correct Answers- Latest Test | Graded A+ | Passed
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Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company? a) Adhesion b) Subrogation c) Warranty d) Aleatory -:- Aleatory An insurance contract is an aleatory contract in that it requi...

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  • September 6, 2024
  • 43
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • life insurance questions 100 correct answers
  • which of the following best describes the concept

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  • Life Insurance
  • Life Insurance

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Life Insurance Questions & 100% Correct
Answers- Latest Test | Graded A+ | Passed
Which of the following best describes the concept that the insured pays a small amount of

premium for a large amount of risk on the part of the insurance company?


a) Adhesion


b) Subrogation


c) Warranty


d) Aleatory


✓ -:- Aleatory




An insurance contract is an aleatory contract in that it requires a relatively small amount of

premium for a large risk.




What is the waiting period on a Waiver of Premium rider in life insurance policies?


a) 30 days


b) 3 months


c) 5 months


d) 6 months




1|Page | Grade A+| 2024/2025

,2024 /2025 | © copyright | This work may not be copied for profit gain | Excel!

✓ -:- 6 months.




Most insurers impose a 6-month waiting period from the time of disability until the first

premium is waived.




All of the following are true of key person insurance EXCEPT


a) The plan is funded by permanent insurance only.


b) There is no limitation on the number of key employee plans in force at any one time.


c) The employer is the owner, payor and beneficiary of the policy.


d) The key employee is the insured.


✓ -:- The plan is funded by permanent insurance only.




Key Person coverage may be funded by any type of life insurance.




A key person insurance policy can pay for which of the following?


a) Hospital bills of the key employee


b) Costs of training a replacement


c) Loss of personal income


d) Workers compensation

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,2024 /2025 | © copyright | This work may not be copied for profit gain | Excel!

✓ -:- Costs of training a replacement.




A key person insurance policy will pay for costs of running the business and replacing the

employee.




Which of the following riders would NOT cause the Death Benefit to increase?


a) Guaranteed Insurability Rider


b) Cost of Living Rider


c) Accidental Death Rider


d) Payor Benefit Rider


✓ -:- Payor Benefit Rider.




Payor Benefit Rider does not increase the Death Benefit; it only pays the premium if the

payor is disabled or dies. With Guaranteed Insurability Rider, the policyowner can increase

DB at specified ages or events, i.e. marriage or birth of a child; Cost of Living Rider

increases DB to keep pace with inflation; in Accidental Death Rider, if the insured dies from

an accident, DB is a multiple of the Face Amount.




Which of the following statements is TRUE concerning the Accidental Death Rider?


a) This rider is only available to insureds over the age of 65.

3|Page | Grade A+| 2024/2025

, 2024 /2025 | © copyright | This work may not be copied for profit gain | Excel!

b) It is only available in group insurance.


c) It will pay double or triple the face amount.


d) It is also known as a triple indemnity rider.


✓ -:- It will pay double or triple the face amount.




The Accidental Death Rider pays 2 or 3 times the face amount if death is the result of an

accident as defined in the policy and occurs within 90 days of such an accident.




The life insurance policy clause that prevents an insurance company from denying payment

of a death claim after a specified period of time is known as the


a) Reinstatement clause.


b) Insuring clause.


c) Misstatement of Age clause.


d) Incontestability clause.


✓ -:- Incontestability Clause.




If an insurer wishes to contest any statements on an application, they must do so within the

first two years.




4|Page | Grade A+| 2024/2025

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