17 Free Pennsylvania Life & Health Practice Questions: Life Policy Provisions, Options and Riders (2026)

Question 1 (Chapter 3)

A policyholder realizes they misstated their age on their life insurance application five years ago. Under 40 P.S. § 510(e), how will the insurer handle this discovery upon the death of the insured?

• A) The death benefit will be adjusted to the amount the premiums would have purchased at the correct age.
• B) The policy will be voided due to material misrepresentation.
• C) The insurer will deny the claim entirely.
• D) The insurer will refund all premiums paid and cancel the policy.

Question 2 (Chapter 3)

An insured dies in a common disaster with their primary beneficiary. If the policy has a common disaster clause, what is the legal presumption?

• A) The insured is presumed to have died first.
• B) The proceeds are split between the estates.
• C) The proceeds are paid to the state.
• D) The beneficiary is presumed to have died first.

Question 3 (Chapter 3)

A policyowner wants to change their beneficiary from their spouse to their child. The current beneficiary is designated as 'irrevocable.' What must happen?

• A) The policyowner can change the beneficiary at any time without permission.
• B) The policyowner must notify the insurer 30 days in advance.
• C) The insurer must approve the change based on the policy's cash value.
• D) The irrevocable beneficiary must provide written consent for the change.

Question 4 (Chapter 3)

Which rider provides an additional death benefit if the insured dies as a result of an accident?

• A) Guaranteed insurability rider
• B) Waiver of premium rider
• C) Accidental death benefit rider
• D) Accelerated benefit rider

Question 5 (Chapter 3)

If an insured is a minor and is named as a beneficiary, why is a guardian or trust often required?

• A) Minors are legally unable to sign a release for the insurance proceeds.
• B) The insurer will not pay proceeds to anyone under 21.
• C) The state requires a trust for all life insurance payouts.
• D) Minors are not allowed to be beneficiaries.

Question 6 (Chapter 3)

Which of the following is NOT a standard life insurance provision required by 40 P.S. § 510?

• A) Automatic Premium Loan
• B) Grace Period
• C) Incontestability
• D) Entire Contract

Question 7 (Chapter 3)

A policyowner wants to change their beneficiary designation. The policy currently has a revocable beneficiary. What must the policyowner do?

• A) Obtain consent from the current beneficiary.
• B) Wait until the next policy anniversary date.
• C) Notify the insurer and follow their procedure for a change of beneficiary.
• D) The beneficiary cannot be changed if they are revocable.

Question 8 (Chapter 3)

What is the primary difference between a policy loan and a withdrawal?

• A) Loans must be repaid; withdrawals are permanent reductions in cash value.
• B) Withdrawals must be repaid; loans are permanent reductions.
• C) There is no difference.
• D) Loans are taxable; withdrawals are not.

Question 9 (Chapter 3)

What is the 'Life Income' settlement option?

• A) It pays the beneficiary an income for their entire lifetime, regardless of how long they live.
• B) It pays the beneficiary a set amount for a fixed number of years.
• C) It pays interest only to the beneficiary.
• D) It pays a lump sum to the beneficiary.

Question 10 (Chapter 3)

Which settlement option allows the beneficiary to receive only the interest earned on the death benefit, while the principal remains with the insurer to be paid out later?

• A) Fixed-period installment
• B) Life income option
• C) Interest-only option
• D) Fixed-amount installment

Question 11 (Chapter 3)

A policyowner wants to ensure that their minor children are provided for, but they are concerned about the children's ability to manage a large lump-sum death benefit. What is the best strategy?

• A) Name the children as primary beneficiaries and hope they are responsible.
• B) Name the estate as the beneficiary.
• C) Name the spouse as the sole beneficiary and rely on them to distribute the funds.
• D) Name a trust as the beneficiary to manage the proceeds.

Question 12 (Chapter 3)

Which rider allows a policyowner to purchase additional coverage at specified ages (e.g., 25, 30, 35) without having to prove they are still insurable?

• A) Accidental Death Rider
• B) Cost of Living Rider
• C) Waiver of Premium Rider
• D) Guaranteed Insurability Rider

Question 13 (Chapter 3)

An insured individual has a policy with a $500,000 death benefit. They decide to use the policy as collateral for a business loan from a bank. Which type of assignment is used in this scenario?

• A) Absolute assignment
• B) Collateral assignment
• C) Irrevocable assignment
• D) Conditional assignment

Question 14 (Chapter 3)

An insured has a 'Waiver of Premium' rider on their life policy. The insured becomes totally disabled for 8 months. According to typical policy provisions, what happens to the premiums due during this disability?

• A) The insurer pays the premiums during the disability, and the insured must repay them after recovery.
• B) The premiums are waived after a waiting period, and any premiums paid during the waiting period are refunded.
• C) The policy lapses because the insured is not paying the premiums.
• D) The insurer reduces the death benefit to cover the unpaid premiums.

Question 15 (Chapter 3)

A policyowner decides to use the 'Reduced Paid-Up' nonforfeiture option. What is the primary characteristic of this option?

• A) The death benefit remains the same for a limited time.
• B) The policy is surrendered for its cash value.
• C) The policy continues as a paid-up policy with a smaller death benefit for the life of the insured.
• D) The insurer continues to collect premiums at a reduced rate.

Question 16 (Chapter 3)

A policyowner has a whole life policy and chooses the 'Paid-up Additions' dividend option. How does this affect the policy?

• A) The dividends are used to pay the next year's premium.
• B) The dividends purchase small amounts of additional permanent life insurance.
• C) The dividends are paid out in cash to the policyowner.
• D) The dividends are used to pay off any outstanding policy loans.

Question 17 (Chapter 3)

Which settlement option allows the beneficiary to receive the death benefit in installments, but the insurer retains the principal and pays the beneficiary the interest earned?

• A) Fixed-amount installment
• B) Interest only
• C) Fixed-period installment
• D) Life income