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Free Life Insurance Basics Practice Questions

Wyoming Life, Accident & Health exam — 65 practice questions.

Subtopics: Purpose of life insurance, STOLI, Net amount at risk, Pricing factors, Paid-up additions, Modified endowment contract, 1035 exchange, Viatical settlement, Death benefit taxation, Cash value growth, 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, 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. The primary purpose of life insurance is to:

Provide financial protection against the economic loss of premature death

Life insurance exists chiefly to protect against the financial loss that results from a premature death.

2. A scheme in which investors lacking insurable interest induce a person to buy life insurance so they can later acquire it is:

Stranger-originated life insurance, which is prohibited

Stranger-originated life insurance (STOLI) lacks insurable interest at inception and is prohibited.

3. In a whole life policy, the difference between the death benefit and the accumulated cash value is the:

Net amount at risk

The net amount at risk is the death benefit minus the policy's cash value, the part the insurer must fund from mortality charges.

4. Two fundamental factors a life insurer uses to set premiums are mortality and:

Interest (expected investment earnings)

Life insurance pricing rests largely on mortality experience and assumed interest earnings, adjusted for expenses.

All Life, Accident & Health topics

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.