Life insurance exam questions - Sample Life exam questions - Life insurance

Sep 29, 2026

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Life insurance exam questions focused on key competencies for assessing individual circumstances, recommending appropriate life insurance coverage, and evaluating policy fit. Scenarios cover rated-policy triggers such as smoking status, travel, avocations, driving record, and drinking history, including explanations for correct and incorrect options. Additional questions compute minimum coverage based on mortgage, bequest, donations, and group insurance, analyze next risk-management actions, and compare universal life premium payment frequency effects on modal factors and cash values.

LanguageEnglish

CategoryExam

FormatPDF

Pages10

Reading Time25 min

AccessFree to download

Question 1

Rated policy eligibility factors

Question 2

Minimum life insurance coverage calculation

Question 3

Risk management next action

Question 4

Universal life modal factor and premium frequency

Examples of exam questions – Life insurance Competency: Recommend individual and group life insurance products adapted to the client’s needs and situation (01 311) . Question 1 Sean is a smoker and travels frequently to developed countries to host scuba diving tours. In the past year, he received two traffic violations for running a red light and speeding. He drinks a glass of wine per week at social events. Sean is looking to buy life insurance. After learning about his lifestyle, which aspect will make his insurance a rated policy? 1. Smoking status 2. Travel history 3. Avocations 4. Driving record 5. Drinking history a) 1, 2, 3 and 4 b) 2, 3 and 4 c) 1, 3 and 5 d) 2 and 4 Correct answer: b) Explanations Answer a: False. A smoking status does not call for a rated policy, but rather a standard smoker rate that is higher than a standard non-smoker rate. Answer b: Correct answer. Repeated trips, especially to politically unstable countries, are subject to a rated policy. Certain avocations, such as scuba diving, may also affect insurance rates. A driving record containing a number of violations or major violations often has a bearing on premium rating. Answer c: False. The client drinks very little alcohol and this would not justify having a rated policy. Answer d: False. It does not include the avocation element, which may be subject toa higher premium rate. References Relevant sections of exam preparation manual: Life insurance, 2nd edition , sections 9.4 and 9.5.3 Evaluated competency sub-component in Curriculum: 1.1 Determine the client’s situation Question 2 Mario and Danielle have been married for 10 years, are childless and have no desire to have children. Mario's annual net income is $120,000, and he has group life insurance for the same amount. Danielle's net income is $45,000 and she has no group insurance. Their home is valued at $320,000, and they currently have 20 years left on their $250,000 mortgage. Mario would like to bequeath an amount of $100,000 to the hospice that cared for his parents. Danielle inherited $250,000 recently upon the death of her father, which they are using to maximize their registered retirement savings plan (RRSP) contributions and use all unused contribution room. In the event of his own death, Mario would like to leave the house to Danielle mortgage-free. To meet Mario’s needs, what is the minimum amount of life insurance coverage he should buy? a) $420,000 b) $300,000 c) $230,000 d) $100,000 Correct answer: c) Explanations Answers a and b: False. They use the value of the residence ($320,000$) and not the mortgage amount ($250,000) . Calculations: a: $320,000 + $100,000 = $420,000 b: $320,000 + $100,000 – $120,000 = $300,000 Answer c: Correct answer. Mario's need is $250,000 for the mortgage, then $100,000 for the donation to the seniors' residence less the amount of the group insurance, $120,000 . Calculation: $250,000 + $100,000 – $120,000 = $230,000 Answer d: False. It does not take either the mortgage ($250,000) or the current group insurance ($120,000) into account. References Relevant sections of exam preparation manual: Life insurance, 2nd edition, 2015, section [10.1.1.1](10.1.1.1) Evaluated competency sub-component in Curriculum: 1.2 Assess the appropriateness of the client’s existing coverage in regards to his or her situation Question 3 Tom is turning 63 this year and has already retired. He has sizable non-registered assets with large unrealized capital gains and is concerned about the tax consequences upon the sale of the assets. He comes to you for risk management advice. Which of the following statements is correct regarding Tom’s next action? a) Under the risk avoidance technique, he can immediately apply capital losses. b) Under the risk retention technique, he can choose to do nothing. c) Under the risk transfer technique, he can transfer ownership to his son upon his death.

FAQs

What factors determine whether a life insurance policy is a rated policy?

The question tests whether lifestyle and risk elements warrant a rated policy, explaining that repeated travel and certain avocations (and a driving record with violations) can affect premium rating, while smoking status is handled as a higher standard smoker rate rather than automatically requiring rated status.

How do you determine the minimum life insurance coverage for Mario?

The correct approach is to cover the mortgage need and the intended $100,000 donation, then subtract the existing group life insurance amount. The provided calculation yields the minimum coverage amount as $230,000.

In universal life, does paying premiums monthly or annually change long-term cash value?

The exam question states that no modal factor is applied for the universal life case described, so the long-term cash value is the same whether premiums are paid monthly or annually.

Sep 29, 2026

Upload by Aran