Difficulty: Mixed
What does term life insurance cover?
A Life for a stated term
B A vehicle for its life
C Medical expenses only
D Home repairs only
Answer: A. Life for a stated term. Term life provides coverage for a specified period under policy terms.
When may a term policy pay its death benefit?
A Any event after expiry
B Covered death during term
C Every premium date
D At every renewal
Answer: B. Covered death during term. A term policy generally pays if the insured dies during the covered term.
What usually happens when a term ends?
A Benefit always doubles
B All premiums are refunded
C Coverage ends unless continued
D Policy becomes permanent
Answer: C. Coverage ends unless continued. Coverage normally ends at expiration unless the policy allows renewal or conversion.
Does standard term life usually build cash value?
A Yes, in every policy
B Only after one month
C It equals premiums
D No, generally it does not
Answer: D. No, generally it does not. Term policies generally do not accumulate cash value.
Who may receive the term death benefit?
A Named beneficiary
B Insurance agent
C Premium auditor
D Policy regulator
Answer: A. Named beneficiary. The policy names beneficiaries who may receive the benefit.
What is a level-term policy designed to keep level?
A Premium forever
B Death benefit during term
C Insured’s age
D Investment return
Answer: B. Death benefit during term. Level term generally keeps the stated death benefit level during its term.
What does decreasing-term coverage generally do?
A Premium always declines
B Coverage becomes permanent
C Benefit declines over time
D Beneficiary count rises
Answer: C. Benefit declines over time. Decreasing-term policies reduce the benefit over a stated period.
Why might someone choose term coverage?
A Build guaranteed cash value
B Insure a vehicle
C Pay every medical bill
D Cover a time-limited need
Answer: D. Cover a time-limited need. Term can suit a need for coverage during a defined period.
Which need can term life potentially help address?
A Income replacement for dependents
B Guaranteed investment growth
C Automatic debt cancellation
D Routine medical visits
Answer: A. Income replacement for dependents. A death benefit may help dependents replace financial support, subject to terms.
How can a term length be selected thoughtfully?
A Choose the longest automatically
B Match likely coverage period
C Copy a friend’s term
D Ignore obligations
Answer: B. Match likely coverage period. Consider the period during which financial protection is needed.
What should be compared between term policies?
A Logo and slogan
B Agent’s clothing
C Benefits, price, and terms
D Website colors
Answer: C. Benefits, price, and terms. Compare coverage, premium, conditions, renewal rights, and exclusions.
Can term premiums vary between products?
A No, all cost alike
B Only beneficiaries change
C Premiums are always zero
D Yes, costs can differ
Answer: D. Yes, costs can differ. Premiums depend on policy design and underwriting.
What is level premium term?
A Premium stays level during term
B Benefit changes every day
C Coverage is always free
D Term never ends
Answer: A. Premium stays level during term. Level-premium designs keep premiums level for the stated period, if specified.
Can renewal premiums be higher than initial premiums?
A No, never
B Yes, they may increase
C Only after a claim
D They become refunds
Answer: B. Yes, they may increase. Renewal premiums may be higher; check the policy schedule.
What should a buyer check about renewal rights?
A Only the policy logo
B Beneficiary’s occupation
C Age limits and premium terms
D Insurer’s office hours
Answer: C. Age limits and premium terms. Review whether renewal is allowed and how premiums or age limits apply.
What is a conversion option?
A Raise every claim automatically
B Skip premium payments
C Add a beneficiary by default
D Change term to permanent coverage
Answer: D. Change term to permanent coverage. Some term policies allow conversion to another form subject to conditions.
Are conversion rights identical across policies?
A No, terms differ
B Yes, exactly alike
C Only price differs
D All policies convert freely
Answer: A. No, terms differ. Conversion availability, deadlines, and conditions vary by contract.
What can happen if a term policy lapses?
A Death benefit doubles
B Coverage may end
C Premiums become savings
D Beneficiary changes
Answer: B. Coverage may end. A lapse may end coverage under the policy terms.
What is a grace period for premiums?
A Extra coverage forever
B Claim payment period
C Extra payment time
D Application review
Answer: C. Extra payment time. Some policies provide a limited additional time to pay premiums.
Why keep premiums current?
A Guarantee investment return
B Remove all exclusions
C Change the term length
D Maintain coverage in force
Answer: D. Maintain coverage in force. Required premium payments are part of keeping coverage active.
What may underwriting review for term life?
A Application risk information
B Favorite activities only
C Beneficiary’s social media
D Home paint color
Answer: A. Application risk information. Underwriting assesses relevant information to determine eligibility and terms.
Why answer application questions accurately?
A Guarantee a claim
B Support correct underwriting
C Remove exclusions
D Set premium to zero
Answer: B. Support correct underwriting. Accurate application information helps the insurer evaluate the risk.
What is a beneficiary designation?
A Selecting an underwriter
B Setting the term length
C Naming benefit recipients
D Choosing the premium date
Answer: C. Naming benefit recipients. The designation identifies who may receive benefits.
Why review beneficiary details after life changes?
A Beneficiaries never change
B Premiums require new names
C Claims need no recipients
D Circumstances may change
Answer: D. Circumstances may change. Changes in family or financial circumstances may warrant a review.
Does term life provide a maturity benefit by default?
A Not usually
B Yes, every plan
C Only after one premium
D It equals the death benefit
Answer: A. Not usually. Many term policies do not provide a maturity value; check contract terms.
What is a return-of-premium term feature?
A All plans refund premiums
B Specified premiums may be returned
C Benefits always double
D Coverage lasts forever
Answer: B. Specified premiums may be returned. Some products offer a return-of-premium feature under defined conditions.
Is a return-of-premium feature free?
A Yes, in every policy
B Only beneficiaries pay
C No, cost can differ
D It removes all limits
Answer: C. No, cost can differ. Features can affect price; compare product costs and terms.
Can term life replace health insurance?
A Yes, for hospital bills
B Only during renewal
C Only for accidents
D No, they cover different risks
Answer: D. No, they cover different risks. Term life generally provides a death benefit, not routine health coverage.
Does a term policy guarantee investment returns?
A No, it is protection
B Yes, always
C Only when renewed
D Every year
Answer: A. No, it is protection. Term life is designed for insurance protection, not investment returns.
What does a policy exclusion describe?
A Premium schedule
B Situation not covered
C Benefit recipient
D Term start date
Answer: B. Situation not covered. Exclusions identify circumstances outside coverage.
Why read policy wording before purchase?
A Guarantee future approval
B Erase all waiting periods
C Understand limits and conditions
D Make premiums disappear
Answer: C. Understand limits and conditions. The contract explains coverage, exclusions, and conditions.
What can a rider add to term coverage?
A Guaranteed market profit
B Automatic policy renewal
C Unlimited coverage
D Specified additional benefit
Answer: D. Specified additional benefit. A rider may add or modify benefits under its terms.
Does every term policy offer riders?
A No, availability varies
B Yes, all policies
C Only after expiry
D Riders are mandatory
Answer: A. No, availability varies. Rider options depend on product and insurer.
How should an existing policy be handled when replacing it?
A Cancel before applying
B Keep it until replacement starts
C Assume approval is certain
D Ignore new terms
Answer: B. Keep it until replacement starts. Avoid a coverage gap; confirm replacement coverage before cancelling old protection.
What should affordability review include?
A Only first payment
B Possible lottery winnings
C Premium across its schedule
D Another person’s budget
Answer: C. Premium across its schedule. Review whether scheduled premiums remain affordable.
Why consider dependents when estimating coverage?
A They set the insurer’s rate
B They remove exclusions
C They guarantee approval
D They may rely on income
Answer: D. They may rely on income. Dependents’ financial reliance can shape protection needs.
Can one term amount suit every person?
A No, needs differ
B Yes, globally
C Only young adults
D Every household matches
Answer: A. No, needs differ. Coverage needs vary with obligations and circumstances.
What happens if the insured outlives the term?
A All premiums always return
B Usually no term benefit
C Death benefit is paid
D Policy becomes whole life
Answer: B. Usually no term benefit. A standard term policy generally pays no death benefit if the term ends without a covered claim.
Which option may allow protection after a term?
A Automatic cash value
B Guaranteed refund
C Renewal or conversion option
D Free policy extension
Answer: C. Renewal or conversion option. Some policies allow renewal or conversion, subject to contract terms.
Why compare the term’s end date with obligations?
A Premiums always stop sooner
B Benefits become investments
C Beneficiary is removed
D Protection may end then
Answer: D. Protection may end then. The end date determines how long coverage applies.
What should beneficiaries know about a term policy?
A Insurer and policy details
B Agent’s favorite product
C Premium tax code only
D Other people’s coverage
Answer: A. Insurer and policy details. Sharing basic policy details can help beneficiaries locate and claim benefits.
How can a policyholder verify policy status?
A Trust an unknown caller
B Use insurer’s official channel
C Scan random QR codes
D Post the policy publicly
Answer: B. Use insurer’s official channel. Official insurer channels can confirm policy servicing and status.
What is the main difference between term and permanent life?
A One has premiums
B One names beneficiaries
C Coverage duration and features
D One uses a contract
Answer: C. Coverage duration and features. Term covers a stated period; permanent products may have longer-duration features.
Which factor can influence term premium?
A Beneficiary’s favorite color
B Policy title length
C Website visit count
D Age and risk assessment
Answer: D. Age and risk assessment. Age and other underwriting factors may influence premium.
What should a buyer verify about a quote?
A Coverage assumptions and exclusions
B Only the monthly figure
C Agent’s personal opinion
D Social-media comments
Answer: A. Coverage assumptions and exclusions. Quotes should be compared using similar coverage details and terms.
Can a term policy’s coverage be altered later?
A Always without approval
B Only if terms permit
C Never under any terms
D Only by beneficiaries
Answer: B. Only if terms permit. Changes depend on the policy’s provisions and insurer process.
What is one question to ask about conversion?
A Agent’s favorite color
B Office opening time
C Deadline and eligible plans
D Claim investigator name
Answer: C. Deadline and eligible plans. Conversion conditions can include deadlines and eligible policy types.
Which statement about term insurance is accurate?
A Every claim pays automatically
B All plans build cash value
C Premiums guarantee profits
D Contract defines benefits and limits
Answer: D. Contract defines benefits and limits. The policy terms determine coverage, exclusions, and benefit payment.
What can a term policy schedule list?
A Premium dates and benefit
B Agent vacation dates
C Every future investment
D Unrelated medical bills
Answer: A. Premium dates and benefit. A schedule can list policy-specific benefits and premium details.
Why keep term-policy documents accessible?
A Guarantee claim approval
B Help beneficiaries locate coverage
C Change insurer’s pricing
D Remove every exclusion
Answer: B. Help beneficiaries locate coverage. Accessible documents help beneficiaries identify the insurer and policy.