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Free Life Insurance Basics Practice Questions

Wisconsin Life exam — 79 practice questions.

Subtopics: Insurable interest, Risk, Adverse selection, Law of large numbers, Underwriting, Premium factors, Representations, Stock vs mutual, 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

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Sample questions & answers

1. For a valid life insurance policy, insurable interest must exist:

At the time the policy is issued

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

2. In insurance terms, a peril is:

The cause of a loss, such as fire or accident

A peril is the specific cause of a loss; a hazard increases the chance or severity of a peril.

3. Adverse selection refers to the tendency of:

Those with greater-than-average risk to seek insurance

Adverse selection is the tendency of higher-risk individuals to apply for coverage more than lower-risk individuals, which underwriting addresses.

4. The law of large numbers helps insurers:

Predict losses more accurately as the number of similar risks increases

As the pool of similar exposures grows, actual loss experience tends to approach the expected, improving predictability.

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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.