Free Life Insurance Basics Practice Questions
South Carolina Life exam — 144 practice questions.
Subtopics: Insurable interest timing, Insurable interest relationship, Pure risk, Adverse selection, Law of large numbers, Underwriting, Agency representation, Premium factors, Creditor protection, Group life creditor protection, Charity insurable interest, Living organ donors, Female rates, Replacement defined, Replacement statement, Replacement notice, Replacement sales material, Replacing insurer duties, Replacement right to return, Replacement exemptions, Replacement violations, Existing insurer duties, Replacement records, Financed purchase, Buyer's Guide, Buyer's Guide request, Insurable interest, Insurable interest parties, Personal uses, Liquidity, Human life value, Needs approach, Buy-sell funding, Key person, Term vs permanent, Participating policies, Separate account, Variable products licensing, Mortality, Interest assumption, Premium mode, Advertising, Field underwriting, Application accuracy, Sources of underwriting, Risk classification, Substandard risk, Effective date, Statement of good health, Backdating, MIB, Unfair discrimination underwriting, Group vs individual, Warranties vs representations, Disclosure statement, Estate conservation, Executive compensation, Expense factor, Declined risk, Surrender comparison index, Net amount at risk, Legal reserve, CSO mortality table, Level premium funding, Cash value accumulation, Endowment maturity, Free look period, Policy replacement rules, Twisting, Churning, Rebating, Defamation, Binding receipt, Insuring clause, Consideration clause, Owner vs insured, Stranger-originated life insurance, Suitability, Sales illustration, Producer appointment, Paramedical exam, Inspection report, Nonmedical limit, Split-dollar plan, Section 162 executive bonus, Dependency period need, Social Security blackout period, Capital retention approach, Final expense need, Insurance age, Flat extra premium, Postponed risk, Agent's report, Policy summary, Material misrepresentation, Estate creation, Cash accumulation, Charitable giving, Buy-sell cross purchase, Buy-sell entity purchase, Cross purchase count, Key person beneficiary, Deferred compensation, Split dollar collateral assignment, Executive bonus taxation, Business overhead uses, Information for needs analysis, Group vs individual class, Nonparticipating policy, Fixed vs variable, Variable minimum death benefit, Gross vs net premium, Modal factors, Mortality table use, Gender and mortality, Producer delivery duties, Constructive delivery, Rated policy delivery, Conditional receipt insurability, No premium with application, Application signatures, Application corrections, Insurable interest third party, Self insurable interest, Attending physician statement, MIB adverse decisions, MIB pre-notice, HIV testing consent, Underwriting prohibited factor, Rated policy, Standard risk, Prescription database, Social Security fully insured, Currently insured, Survivor benefits children, Spouse caring for child, Blackout period end, Lump-sum death benefit, Full retirement age, Social Security disability, Social Security as offset, Producer report purpose
Read the Life Insurance Basics study guide
Sample questions & answers
1. For a life insurance policy, insurable interest must exist:
At the time the policy is applied for
In life insurance, insurable interest must exist at the inception of the policy, not necessarily at the time of loss.
2. Insurable interest in another person's life generally exists when there is:
A close family or financial relationship
Insurable interest is presumed where a close family bond or financial dependency exists, such that loss of the insured's life would cause harm.
3. Pure risk, which is the type of risk that is insurable, involves:
Only the chance of loss or no loss
Pure risk involves only the possibility of loss or no loss, with no chance of gain, which makes it insurable.
4. When people who expect to have claims are more likely to buy coverage than average risks, the insurer faces:
Adverse selection
Adverse selection is the tendency of those with greater-than-average likelihood of loss to seek or keep insurance, which underwriting controls.
Practice: Life Insurance Basics
Answer choices are shuffled every time, and every question comes with an explanation.
Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
