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  4. Life Insurance Basics

Free Life Insurance Basics Practice Questions

Vermont Life, Accident & Health exam — 61 practice questions.

Subtopics: Irrevocable beneficiary, Per stirpes, Insurable interest example, Buy-sell funding, Key person, Medical Information Bureau, Insurable interest, Personal uses, Determining amount, Business uses, Viatical settlements, Classes of policies, Premium factors, Premium frequency, Producer responsibilities, Policy delivery, Company underwriting, Classification of risks, Legal concepts, Definitions of perils, Types of losses and benefits, Limited health policies, Replacing health insurance, Premium determination, Conditional receipt, Binding receipt, Insuring clause, Consideration clause, Free-look provision, Policy ownership, Third-party ownership, Mortality table, Level premium concept, Net amount at risk, Policy reserves, Living benefits of cash value, Attending physician statement, Inspection report, Declined risk, Flat extra premium, Replacement, Buyer's Guide, Controlling adverse selection, Premature death, Final expense insurance, Estate liquidity, Charitable uses, Survivorship policy, Juvenile insurance, Life settlement, Creditor insurable interest, Human life value

Read the Life Insurance Basics study guide

Sample questions & answers

1. A policyowner who names an irrevocable beneficiary generally:

Needs that beneficiary's consent to make certain changes

An irrevocable beneficiary's rights are vested, so the owner needs the beneficiary's consent to change the designation or take certain actions.

2. Under a per stirpes beneficiary designation, if a beneficiary dies before the insured, that beneficiary's share generally passes to:

That beneficiary's descendants

Per stirpes passes a deceased beneficiary's share down to their descendants rather than to the surviving named beneficiaries.

3. Which person clearly has the insurable interest needed to buy life insurance on another?

A spouse insuring the other spouse

Close family members, such as spouses, and business partners or creditors typically have insurable interest in another's life.

4. Life insurance used to fund a business buy-sell agreement is intended to:

Provide money to buy a deceased owner's share of the business

Life insurance funds a buy-sell agreement by providing cash to purchase a deceased owner's interest from the estate.

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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 Insurance Department and the exam administrator before relying on it.