Term Life Insurance Quiz

What is the primary purpose of Term Life Insurance?

• To provide lifelong coverage

• To offer coverage for a specific period

• To accumulate cash value

• To provide investment opportunities

Answer explanation

The primary purpose of Term Life Insurance is to offer coverage for a specific period, typically providing financial protection for a set number of years.

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DOK Level 1: Recall

Which of the following is a benefit of Term Life Insurance?

• It has a cash value component

• It is generally more affordable than whole life insurance

• It provides coverage for the policyholder's entire life

• It offers investment options

Answer explanation

Term Life Insurance is generally more affordable than whole life insurance, making it a benefit for policyholders.

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DOK Level 1: Recall

Which type of term life policy allows the policyholder to convert it to a permanent policy without a medical exam?

• Level Term

• Decreasing Term

• Renewable Term

• Convertible Term

Answer explanation

The correct choice is Convertible Term because it allows the policyholder to convert the term policy to a permanent policy without a medical exam.

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DOK Level 1: Recall

What factor primarily affects the premium of a term life insurance policy?

• The policyholder's age

• The policyholder's occupation

• The policyholder's marital status

• The policyholder's education level

Answer explanation

The factor that primarily affects the premium of a term life insurance policy is the policyholder's age.

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DOK Level 1: Recall

What is the first step in the claim process for a term life insurance policy?

• Submitting a death certificate

• Contacting the insurance company

• Filling out a claim form

• Providing proof of identity

Answer explanation

The first step in the claim process for a term life insurance policy is contacting the insurance company.

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DOK Level 1: Recall

Which of the following is a common exclusion in term life insurance policies?

• Death due to natural causes

• Death due to an accident

• Death due to suicide within the first two years

• Death due to illness

Answer explanation

Death due to suicide within the first two years is a common exclusion in term life insurance policies.

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DOK Level 1: Recall

What does a "level term" policy mean?

• The death benefit decreases over time

• The premium increases over time

• The death benefit remains the same throughout the term

• The policy can be renewed without a medical exam

Answer explanation

A 'level term' policy means that the death benefit remains the same throughout the term.

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DOK Level 1: Recall

Which of the following is NOT a factor that affects term life insurance premiums?

• Policyholder's health

• Policyholder's hobbies

• Policyholder's favorite color

• Policyholder's smoking status

Answer explanation

The correct choice is Policyholder's favorite color because it does not affect term life insurance premiums, unlike the other factors listed.

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DOK Level 1: Recall

What is the typical duration for a term life insurance policy?

• 1-5 years

• 10-30 years

• 40-50 years

• Lifetime

Answer explanation

The typical duration for a term life insurance policy is 10-30 years, making it the correct choice among the options provided.

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DOK Level 1: Recall

Which type of term life insurance policy has a death benefit that decreases over time?

• Level Term

• Decreasing Term

• Renewable Term

• Convertible Term

Answer explanation

The correct choice is Decreasing Term because this type of term life insurance policy has a death benefit that decreases over time.

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DOK Level 1: Recall