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Free Life Insurance Basics Practice Questions

Tennessee Life exam — 79 practice questions.

Subtopics: Insurable interest, Risk, Peril, Law of large numbers, Adverse selection, Underwriting, Representations, Consideration, 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, Premium factors, 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

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Sample questions & answers

1. For an individually owned life policy, insurable interest generally must exist:

At the time the policy is issued (inception)

In life insurance, insurable interest must exist at the inception of the policy, not necessarily at the time of loss.

2. In insurance, the term risk most accurately refers to:

Uncertainty regarding loss

Risk is the uncertainty regarding the occurrence of a loss.

3. The actual cause of a loss, such as fire, is best described as a:

Peril

A peril is the cause of a loss (for example, fire), while a hazard increases the chance or severity of a loss.

4. Insurers rely on the law of large numbers primarily to:

Predict losses more accurately as the number of similar exposures increases

The law of large numbers lets insurers predict losses more accurately as the number of similar, independent exposures grows.

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Practice: Life Insurance Basics

Take a randomized, timed-style practice test. Answer choices are shuffled and your results are scored instantly with an explanation for every question.

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 Pennsylvania Insurance Department and the exam administrator before relying on it.