Pennsylvania Life & Health Insurance Exam Practice Questions

Practice flashcards for preparing for the Pennsylvania Life & Health Insurance Exam.

What is the purpose of insurance?

Transfer risk.

Who receives the death proceeds if the policyowner, insured, and beneficiary are all the same person and the insured dies?

The estate of the insured.

What type of insurance policy provides coverage for a specific period and has no cash value?

Term life insurance.

What is the consideration given by the insured in the insurance contract?

The premium and the statements made in the application.

What is a policy that combines insurance protection with a savings element called?

Whole life insurance.

What is the time period after the premium due date before the policy lapses called?

Grace period.

Which clause states that the policy and a copy of the application form the entire contract?

Entire Contract clause.

What is a policy that allows the policyowner to share in the company’s earnings called?

Participating policy.

Which type of insurance policy provides a death benefit that matches the outstanding loan balance?

Credit life.

What is the purpose of a conditional receipt?

It provides temporary coverage while the application is being underwritten.

What is the primary purpose of the underwriting process?

To protect the insurer against adverse selection.

What is a policy that remains in effect for the insured’s entire lifetime called?

Permanent life insurance.

What is the 'free look' period for life insurance policies?

10 days.

Which nonforfeiture option continues coverage for the longest period?

Extended term.

Which dividend option allows the policyowner to buy paid-up additions?

Paid-up additions option.

What is the main purpose of the reinstatement provision?

To restore a lapsed policy.

Which rider waives the premium if the insured becomes disabled?

Waiver of premium rider.

Which type of beneficiary cannot be changed without their consent?

Irrevocable beneficiary.

What does the incontestability clause prevent after a policy has been in force for two years?

Denial of a claim based on misstatements.

What is an annuity primarily used for?

To provide income for retirement.

What type of annuity has a guaranteed interest rate?

Fixed annuity.

Which type of annuity allows for variable payments and investment in subaccounts?

Variable annuity.

When does a deferred annuity begin making payments?

At a future date.

What is the main purpose of the free-look provision?

To allow the policyowner to review and cancel for a full refund.

What is the purpose of a beneficiary designation?

To specify who will receive the policy proceeds.

What is offering something of value to induce the purchase of insurance called?

Rebating.

What is persuading a policyholder to replace coverage through misrepresentation known as?

Twisting.

What are maliciously critical statements about another insurer called?

Defamation.

What is it called when false information is provided about an insurance product?

Misrepresentation.

What is circulating untrue or deceptive statements in advertisements called?

False advertising.

What clause shows the premium and the insurer’s promise to pay?

Consideration clause.

What clause defines the insurer’s promise to pay?

Insuring clause.

What provision states that the policy and application make up the entire contract?

Entire contract clause.

What is the period after the premium due date before lapse called?

Grace period.

What provision allows a lapsed policy to be reinstated?

Reinstatement clause.

What clause limits contestability after two years?

Time limit on certain defenses.

What clause allows the insurer to verify a loss by exam?

Physical exam and autopsy clause.

What clause defines when legal action may be taken?

Legal actions clause.

What provision allows the policyowner to change the payee?

Change of beneficiary clause.

What provision describes who receives benefits after death?

Payment of claims clause.

What is the period to cancel a new policy for a full refund called?

Free-look period.

What are the rights held by the policyowner known as?

Ownership rights.

What clause allows the transfer of policy rights?

Assignment clause.

Which of the following are nonforfeiture options EXCEPT?

Interest only.

What must an insurer do to add provisions?

They must be approved by the state.

What is a term policy that can convert to permanent without evidence of insurability called?

Convertible term policy.

Which is NOT true of insurable risk?

Insureds cannot be randomly selected.

Which is NOT a type of term policy based on face amount?

Renewable term.

Deductibles generally do NOT apply to what type of care?

Preventive care.

An applicant in excellent health with low risk is rated as what?

Preferred.