Life Insurance Policies — New York exam
20% of the scored questions — about 20 of 100. This section is general life insurance knowledge, shared with every state's exam.
1 / 8
A 20-year term policy allows conversion only during its first 12 years. What happens to the conversion privilege after year 12?
Answer and explanation
Answer: B. A policy's conversion period may be shorter than its term. Term coverage can continue after the contractual right to convert has expired.Source: New York State Department of Financial Services — Consumer Life Insurance FAQ — What is convertible term life insurance? — conversion period may be shorter than term
2 / 8
A 20-year term policy permits conversion only during its first 12 years. Which statement correctly describes the feature?
Answer and explanation
Answer: C. A convertible term policy may set a conversion window that is shorter than the full term. During that window, conversion to permanent life insurance can occur without proving good health; it is not an annuity conversion and does not remain open indefinitely.Source: New York State Department of Financial Services — Consumer Life Insurance FAQ — What is convertible term life insurance?
3 / 8
A client has a lump sum from an inheritance and wants to leave the largest possible sum to heirs, with no further payments.
Answer and explanation
Answer: B. A single premium turns available capital into an immediately paid-up death benefit larger than the sum invested, with no further obligation. The other forms require continuing payments or provide only temporary cover.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, single premium suitability
4 / 8
A client holds employer-provided level term cover and asks whether personal term insurance is still needed.
Answer and explanation
Answer: A. Group term is tied to the job and typically sized as a multiple of salary, so it may end at the wrong moment and fall short of the family's need. It does not exclude illness, and conversion rights carry individual rates rather than continuation.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, level term group and individual
5 / 8
A client wants cover that will still be in force at age ninety and a value that can be reached in the meantime. Which is indicated?
Answer and explanation
Answer: C. Only permanent insurance guarantees cover at an advanced age together with an accessible cash value. Each term form expires or becomes prohibitively expensive long before ninety and accumulates nothing.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, whole life and term compared
6 / 8
A client wants flexible premiums and an adjustable death benefit, but also wants to place policy value in equity and bond portfolios and accepts that those values can rise or fall with market performance. Which explanation best distinguishes the product from non-variable universal life?
Answer and explanation
Answer: C. The flexible-premium and adjustable-coverage mechanics point to universal life. The distinguishing variable feature is the owner's allocation to separate-account investment options, where performance is not guaranteed.Source: SEC Investor.gov — Updated Investor Bulletin: Variable Life Insurance — Variable life insurance; investment options and separate accounts; investment risk
7 / 8
A convertible term policy says conversion is available only under the policy's stated conversion provision. The owner asks for permanent coverage beyond the policy's allowed conversion amount without underwriting. What is the best response?
Answer and explanation
Answer: D. A conversion privilege lets eligible term coverage be exchanged for permanent coverage under the policy's stated conditions. It does not create an unlimited right to additional permanent coverage beyond those conditions.Source: New York Department of Financial Services — Consumer Life Insurance FAQ — Term Life Insurance > convertible term; conversion during the specified period
8 / 8
A lender tells a borrower the loan will be approved only if credit life insurance is purchased from it. What is the objection?
Answer and explanation
Answer: B. Tying the extension of credit to the purchase of insurance from a particular source is coercion, and the borrower must be free to decline or to buy elsewhere. Selling at the time of the loan, and by a lender-affiliated insurer, is not itself objectionable.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, credit life and coercion
All 123 life insurance policies questions
- A married couple buys a survivorship life policy for estate tax planning. The husband dies first. What happens to the policy?
- A married couple expect estate taxes to fall due only after both have died. Which policy matches that liability?
- A one-year renewable term policy states that renewal rights end at age 70. The insured renews at age 69 and reaches 70 during that term. What should the producer explain?
- A parent carrying two hundred thousand dollars of life insurance applies for cover on a six year old child. What ceiling does section 3207(b) set?
- A policyowner’s income varies and the owner wants to adjust premium timing within policy limits while keeping permanent coverage. Which product feature most directly addresses that need?
- A producer illustrates a fixed indexed life policy using the best index period of the last twenty years. What is the objection?
- A prospect wants permanent insurance with adjustable policy elements and cash value allocated to insurer-managed separate-account investments. Which product is the best fit?
- A renewable level term policy reaches the end of its term and the insured is now in poor health. What does renewability provide?
- A renewable term policy states that renewal rights end at a specified age. The insured reaches that age and wants another term. Which statement is most accurate?
- A surgeon aged forty expects high earnings for twenty years and then a much lower income. Which whole life form fits?
- A term insured becomes uninsurable but wants permanent cash-value coverage during the policy’s conversion period. Which feature can meet that objective?
- A term policyowner exercises a renewal provision after the original term ends. What premium change should the owner generally expect?
- A twenty year level premium term policy reaches its twentieth anniversary and the insured wants to keep the cover. What usually happens to the premium?
- A universal life owner wants to vary the timing and amount of premium payments. Which condition remains essential?
- A universal life policy’s cash value is no longer sufficient to cover current insurance costs, and the owner makes no additional payment. What is the principal policy risk?
- A variable universal life owner pays only minimal premiums while the selected separate-account options lose value. Monthly cost-of-insurance and expense deductions continue. What is the main near-term risk if the owner makes no change?
- A variable universal life policy keeps the same stated premium plan and mortality charge schedule, but the owner's selected stock subaccount falls sharply. Which policy element is directly changed first by that investment performance and can later affect whether charges can be paid?
- An annual renewable term policy keeps the same death benefit for each one-year term. What normally happens to its premium from year to year?
- An eligible employee declines the contributory plan at first, then applies to join two years later. What may the insurer require?
- An employee leaving a job asks whether to convert the group cover or buy an individual policy. What should be considered first?
- An employee's group cover ends and the employee dies eighteen days later, having applied for no individual policy. What does section 3220 provide?
- An individual purchases a life insurance policy that provides coverage for exactly one year. At the end of the year, the policyowner can renew the coverage without proving insurability, but the premium will increase based on their attained age. What type of policy is this?
- An insured buys convertible term at age 30 and converts it to permanent insurance at age 40. Which age generally determines the new premium?
- An insured’s health deteriorates during a renewable term policy. At the end of the term, which feature is most valuable?
- An insured's health worsens before a renewable term policy expires. The renewal right is still available. Which outcome best reflects that feature?
- An owner aged fifty takes a loan against a single premium whole life policy. What is the tax result?
- An owner converts a term policy and may choose attained age or original age. What is the trade?
- An owner of continuous premium whole life wants to pay less in a difficult year. What does the contract permit?
- An owner wishes to move the value of an old policy into a single premium whole life contract. What preserves the deferral?
- At what premium is the individual policy issued on conversion from group cover?
- Does a level premium term policy accumulate cash value the owner may reach?
- Does the index credit on a fixed indexed life policy include dividends paid on the shares in the index?
- For how long are premiums payable under a continuous premium whole life policy?
- For what periods is level premium term commonly issued?
- How do a cap and a participation rate each limit the interest credited on an indexed policy?
- How do contributory and noncontributory group plans differ in participation requirements?
- How does a benefit schedule support group underwriting?
- How does annually renewable term differ from a ten year level term policy?
- How does fixed indexed life differ from variable life in where the risk falls?
- How does group credit life differ from individual credit life?
- How does level term differ from decreasing term in the pattern of benefit and premium?
- How does the cash value of a continuous premium whole life policy behave over time?
- How does the cash value of a twenty payment whole life policy compare with that of continuous premium whole life issued at the same age?
- How does the death benefit of an increasing term rider or policy change over time?
- How does the premium for a joint life (first-to-die) policy compare to buying two separate individual policies of the same face amount?
- How does the premium for a joint life policy compare with two separate policies on the same lives?
- How does the premium of a level premium term policy compare with the mortality cost in the early and later years?
- How is a labor union group life plan ordinarily arranged?
- How is a single premium whole life policy funded?
- How is credit life insurance usually underwritten?
- How is interest credited to the cash value of a fixed indexed life policy?
- How is the amount of credit life insurance limited?
- How is the premium for credit life insurance ordinarily paid?
- How many death benefits does a joint life, first to die, policy pay over its lifetime?
- Is a single premium whole life policy issued without underwriting?
- Two business partners purchase a joint life policy to fund a buy-sell agreement. Partner A dies. What happens to the policy after the death benefit is paid?
- Two business partners want the survivor to be able to buy out the deceased partner's interest. Which design serves that?
- Under IRC § 7702 corridor rules, what must an insurer do if cash value growth in a universal life policy threatens to breach the statutory life insurance definition ratio?
- What administrative role does a group plan sponsor typically undertake?
- What are the usual purposes of buying a modest policy on the life of a minor?
- What characterises a creditor group life plan?
- What does a group underwriter reassess when a plan comes up for renewal?
- What does a life paid-up at sixty-five policy provide?
- What does an actively at work requirement do in a group life plan?
- What does an underwriter examine when assessing a group for life insurance?
- What does it mean for a limited payment whole life policy to be paid up?
- What does level premium term mean?
- What does the floor in a fixed indexed life policy do?
- What does the owner of a level term policy receive if the policy reaches the end of its term without a claim?
- What does the survivor purchase option in a joint life policy commonly provide?
- What evidence of health must a member give to exercise the group conversion privilege?
- What external measure is commonly used to determine interest credits in indexed universal life?
- What form of insurance is group life cover usually written as?
- What forms of individual policy may a converting member obtain under section 3220?
- What happens to a survivorship life policy when the first of the two insured lives ends?
- What happens to the cost of an increasing term benefit as the insured ages and the coverage amount rises?
- What happens under a whole life policy if the insured lives to the contract's maturity age?
- What is distinctive about the cash value of a single premium whole life policy in its first year?
- What is experience rating in a group life plan?
- What is limited about a limited payment whole life policy?
- What is the difference between the guaranteed and the current premium shown for a level premium term policy?
- What is the function of a probationary period in a group life plan?
- What is the purpose of credit life insurance?
- What is the tax classification of a single premium whole life policy?
- What licence does the sale of a fixed indexed life policy require?
- What must an association satisfy before it may sponsor a group life plan?
- What purpose does a multiple employer trust serve as a group sponsor?
- What right does the conversion privilege in a convertible term policy confer?
- What stays level throughout the term of a level term life insurance policy?
- What unbundled components characterize a universal life insurance contract?
- When does a joint life (first-to-die) policy pay its death benefit?
- When does a survivorship life (second-to-die) policy pay its death benefit?
- Which client is level premium term suited to?
- Which combination of features defines a variable universal life (VUL) contract?
- Which combination of features most clearly signals variable universal life rather than ordinary whole life?
- Which description best distinguishes indexed universal life from variable universal life?
- Which elements does a continuous premium whole life policy guarantee?
- Which event gives rise to the conversion right under section 3220?
- Which is the most common type of group life plan sponsor?
- Who holds the contract in a group life insurance arrangement, and what does the member receive?
- Who receives the proceeds of a credit life policy when the borrower dies?
- Why can survivorship life sometimes be issued where one of the two proposed insureds is uninsurable individually?
- Why do group plans fix the amount of each member's cover by a formula rather than by individual choice?
- Why do group underwriting requirements impose a minimum level of participation?
- Why do group underwriting requirements set a minimum number of members?
- Why do the rules on eligible sponsors insist that the group exist for a purpose other than insurance?
- Why does a limited payment whole life policy need testing against the modified endowment contract rules?
- Why does level term cost less than whole life for the same face amount at the same age?
- Why does New York limit the amount of insurance that may be written on the life of a minor?
- Why does survivorship life cost less than an individual policy of the same face amount on either insured?
- Why is group life insurance generally cheaper per unit than individual insurance?
- Why is the annual premium for continuous premium whole life lower than for limited payment whole life at the same age and face amount?
- Why is the annual premium of a twenty payment whole life policy higher than that of continuous premium whole life?
- Why is the premium for a $1,000,000 survivorship life policy lower than for a $1,000,000 joint first-to-die policy on the same two lives?
- Within what period must a member apply to convert group life insurance to an individual policy in New York?
Drill life insurance policies until it sticks.
The app brings back the questions you miss on a spaced schedule and tracks this topic in your readiness.