1)What is the "Accidental Death Benefit" in a life insurance

policy?

a) An additional death benefit for policyholders who pay their premiums

on time.

b) A bonus provided by the insurance company to policyholders.

c) A benefit paid when the insured's death is caused by an

accident.

d) A discount on premiums for safe drivers.

2)What does the term "Agent" mean in the context of life

insurance?

a) The person who receives life insurance coverage.

b) The company that provides life insurance policies.

c) A licensed representative who sells and services insurance

policies.

d) The government authority that regulates insurance companies.

3)What is the "Death Benefit" in a life insurance policy?

a) The amount of coverage provided by the policy.

b) The commission paid to the insurance agent for selling the policy.

c) The premium amount the policyholder pays each month.

d) The amount paid to the beneficiary upon the insured's

death.
4)What does "Backdating" refer to in life insurance?

a) Extending the policy term beyond the due date.

b) Changing the beneficiary after policy issuance.

c) Making the effective date of a policy earlier than the

application date.

d) Renewing an expired policy.

5)Who is the "Beneficiary" in a life insurance policy?

a) The insurance company.

b) The person(s) designated to receive the policy proceeds

upon the insured's death.

c) The policyholder.

d) The agent who sold the policy.

6)What is the "Free Look Period" in life insurance?

a) The time period during which policyholders can increase the coverage
amount.

b) The time period during which policyholders can cancel the

policy and receive a full refund.

c) The time period during which policyholders can switch to a different

insurance company.

d) The time period during which policyholders can modify the policy
terms.

7)What is an "Annuity" in life insurance terminology?

a) The cash value accumulated in a whole life insurance policy.

b) Regular payments guaranteed by the insurance company in

the future.

c) The amount given as a bonus to policyholders.

d) A type of life insurance policy that covers accidental deaths only.

8)What is the "Face Amount" in a life insurance policy?

a) The premium amount paid by the policyholder.

b) The coverage amount provided by the policy.

c) The cash value of the policy.

d) The commission earned by the agent.

9)What is the physical, written document issued by an

insurance company to the policy owner called?

a) Insured
b) Policy Date
c) Insurance Policy
d) Mortality Rate

10)What is the "Actual Age" used for in life insurance?

a) Calculating the policy's cash value.

b) Determining the amount of accidental death benefit.

c) Calculating the applicant's insurance age.

d) Determining the insurance company's profits.

11)What does ADB stand for in life insurance?

a) Age Delayed Benefit

b) Actual Death Benefit
c) Additional Death Benefit
d) Accidental Death Benefit

12)How is "Actual Age" calculated in life insurance policies?

a) Age on the last birthday

b) Age at the next birthday

c) Age on the nearest birthday

d) Age at the time of policy issuance

13)What does "Backdating" refer to in life insurance?

a) Extending the policy term beyond the due date

b) Changing the beneficiary after policy issuance

c) Making the effective date of a policy earlier than the

application date

d) Renewing an expired policy

14)Who is an "Agent" in the context of life insurance?

a) The policyholder

b) The insurance company's CEO

c) A licensed representative of an insurance company who

sells and services policies
d) A government official overseeing insurance regulations

15)What is an "Annuity" in life insurance terminology?

a) The amount given as a bonus to policyholders

b) Regular payments guaranteed by the insurance company in

the future

c) The cash value accumulated in a whole life insurance policy

d) A type of life insurance policy that covers accidental deaths only

16)What is the "Death Benefit" in a life insurance policy?

a) The benefit paid to the beneficiary upon the policyholder's

death

b) The benefit paid to the policyholder in case of a severe illness

c) The benefit paid to the insurance company when the policy matures

d) The benefit paid to the policyholder upon policy surrender

17)What does "Insurability" refer to in life insurance

underwriting?

a) The premium amount determined by the insurer

b) The process of renewing a life insurance policy

c) The acceptability of an applicant for insurance based on

underwriting review

d) The additional benefits offered by the insurance company

18)Who is the individual covered by an insurance policy
known as?

a) Lapse Notice
b) Policy Owner
c) Insured
d) Premium

19)What do we call the date an insurance policy is issued, which may also
be the effective date of the policy?

a) Issue Date
b) Life Expectancy
c) Mortality
d) Mode

20)What type of insurance is issued on the life of a child and is typically

whole life insurance?

a) Juvenile Insurance
b) Key Person Insurance
c) Living Benefit
d) Medical Examination

21)What is the insurance policy placed on the life of an important person

within a company called?

a) Payor
b) Lapse
c) Key Person Insurance
d) Policy Owner

22)What is Term Life Insurance?

a) A life insurance policy that provides coverage for a fixed

amount of time.
b) A life insurance policy that pays a death benefit whenever you die,
even if you live to 100.

c) A life insurance policy with flexible premium payments and

investment options.

d) A life insurance policy that pays out the sum assured under both death
and survival scenarios.

23)What is the Whole Life Policy?

a) A life insurance policy that provides financial coverage for a specific

time period.

b) A life insurance policy where the death benefit stays the same
throughout the policy's duration.

c) A life insurance policy that pays the death benefit only if death occurs
during the term of the policy.

d) A life insurance policy where the premium and death

benefit are designed to stay the same throughout the policy's
life.

24)What are Endowment Plans?

a) A life insurance policy with flexible premium payments and

investment options.

b) A life insurance policy that provides risk cover for the policyholder
and offers investment options.

c) A life insurance policy that pays out the sum assured under
both death and survival scenarios.

d) A life insurance policy that pays periodic returns as a percentage of

the sum assured.
25)What are Unit Linked Insurance Plans (ULIP)?

a) A life insurance policy that provides financial coverage for a specific

time period.

b) A life insurance policy that pays a death benefit whenever you die,
even if you live to 100.

c) A life insurance policy with flexible premium payments and

investment options.

d) A life insurance policy that pays the death benefit only if death occurs
during the term of the policy.

Accidental Death Benefit (ADB):

Accidental Death Benefit is an optional feature available with many life

insurance policies. It provides an additional death benefit on top of the
base coverage if the insured's death is caused by an accident. If the
insured passes away due to an accident covered under the policy, the
beneficiary will receive the original death benefit along with the
additional accidental death benefit.

Actual Age:

Actual Age refers to a method used to calculate an applicant's insurance

age when applying for a life insurance policy. This method uses the
insured's current age, often referred to as the age last birthday or
attained age. For example, if the insured is 35 years old on their last
birthday at the time of policy application, the actual age used for
premium calculations would be 35.

Age Limits:
Age Limits represent the age range above or below which an insurance
company will not issue or continue a life insurance policy. It sets the
maximum and minimum ages for eligibility to purchase or renew a
policy. The specific age limits may vary between different insurance
companies and policies.

Agent:

An Agent is an authorized and licensed representative of an insurance

company who sells and services insurance policies on behalf of the
company. Agents act as intermediaries between the insurance company
and the policyholders. They help customers understand various
insurance options and provide guidance in choosing the right coverage
for their needs.

Annuity:

Annuity refers to a financial product offered by insurance companies,

which guarantees regular payments to the policyholder or annuitant at
some future date, typically during retirement. Annuities are designed to
provide a stream of income over a specific period or for the rest of the
annuitant's life, helping to secure financial stability during retirement
years.

Applicant:

The Applicant is the person who applies for a life insurance policy. This
individual may or may not be the same person as the proposed insured
or the policy owner. The application process involves providing personal
and medical information to the insurance company, which is used for
underwriting and determining the policy's terms and premium.

Bonus:

In the context of life insurance, a Bonus is an amount given in addition

to the sum assured (coverage amount) under certain policies.
Reversionary bonus, in particular, is a type of bonus that is added to
policies throughout the term of the policy, but it may not be declared
every year. When declared, it becomes an integral part of the policy and
is payable upon policy maturity or claim settlement.

Backdating:

Backdating is a procedure used to make the effective date of a life

insurance policy earlier than the application date. This practice is often
used to reduce the insurance age of the insured at policy issue, resulting
in lower premiums. Most policies can be backdated up to six months, but
it varies between insurance companies and jurisdictions.

Beneficiary:

A Beneficiary is the person(s) designated by the policy owner to receive

the proceeds of the life insurance policy upon the death of the insured.
The beneficiary can be a family member, friend, trust, or any entity
specified by the policyholder. The death benefit is paid out to the
beneficiary upon the insured's passing, and it is usually tax-free.

Claim:

A Claim is a formal request made by the policyholder or beneficiary to

the insurance company, notifying them that the death benefit or other
policy benefits are due to be paid according to the policy's terms. The
claim process involves providing necessary documentation and proof of
the insured's death or the occurrence of a covered event.

Commissions:

Commissions refer to the fees or percentage of premiums allowed to be

paid to salespersons or agents for their services in selling and servicing
insurance policies. Agents earn commissions as a part of their
compensation for their role in bringing new customers to the insurance
company and maintaining relationships with existing policyholders.

Death Benefit:
The Death Benefit is the dollar amount of coverage provided by a life
insurance policy. It represents the sum assured, which is paid to the
designated beneficiary(s) upon the insured's death, subject to the policy's
terms and conditions. The death benefit is the primary purpose of life
insurance and serves to financially protect the policyholder's loved ones
in case of their untimely passing.

Effective Date:

The Effective Date refers to the date on which an insurance policy goes
into effect. It is the starting point of the coverage period and marks the
beginning of the policyholder's insurance protection. The effective date is
essential as it determines when the policyholder's coverage becomes
active and when premiums should be paid.

Examiner:

An Examiner is a health care professional designated by the insurance

company to conduct medical examinations on insurance applicants. The
medical exam helps the underwriters assess the applicant's health status,
medical history, and overall insurability. The results of the medical exam
can impact the policy's terms and premium rates.

Face Amount:

The Face Amount refers to the amount of coverage provided by a life

insurance policy. It represents the sum assured or the death benefit that
will be paid to the beneficiary upon the insured's death. The face amount
is the maximum benefit payable by the insurance company under the
policy.

Free Look Period:

The Free Look Period is a specified period of time (usually between 10

and 30 days) during which a policy owner has the legal right to examine
a newly issued insurance policy. If the policyholder is not satisfied with
the terms and conditions, they can return the policy to the insurance
company and receive a full refund of the premium paid.
Guaranteed Rates:

Guaranteed Rates is a life insurance policy provision that ensures the

premium rates will remain unchanged during the entire term of the
policy. With guaranteed rates, the policyholder knows the fixed premium
amount they need to pay throughout the policy's duration, offering
predictability and stability in premium payments.

Insurability:

Insurability refers to the general acceptability by an insurance company

of an applicant for insurance coverage. Insurance companies assess the
applicant's insurability based on underwriting review, which may include
factors such as the applicant's current health status, medical history,
occupation, hobbies, and driving record, among others. Insurability
affects the policy's approval and premium rates.

Insurance:

Insurance is a system for reducing risk by transferring the risks of

several individual entities (policyholders) to one entity, typically an
insurance company. Each individual entity pays a monetary
consideration, known as premiums, to the insurance company in
exchange for coverage against specified risks or events. In case of a
covered event (such as death or disability), the insurance company
provides financial protection to the insured or their beneficiaries.

Types:

Term Insurance:

Term insurance is the most basic type of life insurance. It provides life
cover with no savings or profits component. The policyholder pays
regular premiums for a specific term, usually ranging from 1 to 30 years.
If the policyholder passes away during the term, a fixed sum of money
called the "sum assured" is paid to the beneficiaries. However, if the
policyholder survives the term, there is no payout, and the coverage
ends. Term plans are affordable compared to other life insurance plans
as they focus solely on providing life cover without any investment
component.

Endowment Plans:

Endowment plans differ from term plans in that they offer both death
and survival benefits. If the policyholder passes away during the policy
term, the sum assured, along with any profits or bonuses, is paid to the
beneficiaries. On the other hand, if the policyholder survives the term,
the sum assured is also paid out. Endowment plans charge higher
premiums compared to term plans as they include an investment
element. The premiums paid by policyholders are invested in the market
(equities and debt), and the profits generated are distributed as bonuses.

Unit Linked Insurance Plans (ULIP):

ULIPs are a variation of traditional endowment plans. They offer both

death and maturity benefits. In the event of the policyholder's death or
upon maturity, the sum assured or the value of the investment portfolio
(whichever is higher) is paid out. ULIPs are different from traditional
endowment plans because they are linked to the market. Policyholders
have the flexibility to choose the allocation of their investments in stocks
and debt. The performance of ULIPs is tied to the market's performance,
as reflected in the Net Asset Value (NAV). ULIPs are a combination of
investment and insurance, making them distinct from mutual funds,
which are purely investment-oriented.

Whole Life Policy:

A whole life insurance policy provides coverage for the policyholder's

entire life, hence the name "whole life." The policyholder pays regular
premiums until their death, and upon death, the corpus (the policy's
accumulated value) is paid out to the family or beneficiaries. The key
feature of a whole life policy is that it does not have a defined term; it
provides life cover throughout the individual's lifetime. Whole life
policies do not expire unless there is an eventuality (the policyholder
passing away).
Money Back Policy:

Money back policies are a variant of endowment plans. These policies

provide periodic payments over the policy term. A portion of the sum
assured is paid out at regular intervals during the policy term. If the
policyholder survives the term, they receive the remaining sum assured.
However, in the case of death during the policy term, the full sum
assured is paid to the beneficiary.

These different types of life insurance policies cater to various needs and
preferences of policyholders, and individuals can choose the one that
best aligns with their financial goals and circumstances. It's essential to
thoroughly understand the features, benefits, and limitations of each
type before making a decision. Seeking advice from a financial advisor or
insurance professional can be beneficial in making an informed choice.