Free Tennessee life insurance practice test.

Answer D. Survivorship (second-to-die) policy

A survivorship or second-to-die policy pays only after both insureds have died, often used for estate planning. A joint life first-to-die policy pays when the first of the two dies. A family income policy provides income to survivors for a period. A juvenile policy insures a child. Only second-to-die pays on the second death.

Answer B. It keeps the policy in force without premium payments if the insured becomes totally disabled

The waiver of premium rider keeps coverage in force while the insured is totally disabled, with the insurer paying the premiums. It is not a refund of premiums, so the first choice is wrong. Doubling the benefit for accidental death describes the accidental death rider, not waiver of premium. It cannot be used at will just because premiums are hard to pay; disability must be established.

Answer B. The applicant, the proposed insured, and the producer

When the applicant (owner) and the proposed insured are different people, the application must be signed by the applicant, the proposed insured, and the producer taking the application. The producer alone cannot sign for the parties. The beneficiary has no duty to sign the application. The underwriter reviews but does not sign the application itself.

Answer B. Notify the Commissioner of the termination

Insurers must notify the Commissioner when an appointment is terminated. Notifying former clients is not the required action. Commission refunds are a contract matter, not a termination requirement. The producer keeps the license; termination ends the appointment, not the license itself.

Tenn. Code Ann. 56-6-116 (notification of termination)

Answer C. A written notice regarding replacement

Replacement rules require the applicant be given a written notice about replacement that explains the consequences of replacing coverage. The insurer's financial statement, a guaranty association certificate, and a statement from the prior producer are not the required replacement disclosure document.

Answer D. Endowment policy

An endowment pays the face amount either at a maturity date if the insured lives or to a beneficiary if the insured dies first. Term pays only on death within the period and has no living payout. An annuity pays income and is not primarily death protection. Adjustable life lets you change premium and benefit but does not have this maturity payout design. The endowment matches both payout triggers.

Answer A. A policy loan borrows against cash value and is repaid with interest, while accelerated benefits pay part of the death benefit early due to illness

A policy loan lets the owner borrow against accumulated cash value and charges interest, with unpaid balances reducing the death benefit. The accelerated death benefit rider pays part of the death benefit early because of a qualifying illness. Accelerated benefits are not loans that must be repaid, and loans do not require illness. Neither increases the face amount, so the last choice is wrong.

Answer D. To classify the applicant's risk and determine the proper premium

Underwriting is the process of reviewing an applicant's information to classify the risk and set an appropriate premium or decide whether to accept the risk. Paying claims is a separate claims function. Replacing a policy is a marketing transaction, not underwriting. Registering an appointment concerns the producer's authority, not the applicant's risk.

Answer D. The policy pays the death benefit, less the unpaid premium

Coverage stays in force during the grace period, so a death during that time is payable with the overdue premium deducted from the benefit. The policy is not void during the grace period. It pays the full death benefit, not just cash value. The beneficiary is not required to pay premiums; the insurer simply subtracts what is owed.

Tenn. Code Ann. 56-7 (grace period, standard policy provision)

Answer A. Using misleading comparisons to persuade a policyowner to replace a policy

Twisting is using misrepresentation or misleading comparisons to convince a policyowner to lapse or replace a policy to their disadvantage. Recommending a costlier policy, representing several insurers, and charging filed premiums are not by themselves prohibited acts.

Tenn. Code Ann. unfair trade practices (twisting)

Answer A. Decreasing term has a death benefit that reduces over time while level term keeps a constant benefit

In decreasing term the death benefit shrinks over the term, often to match a mortgage balance, while level term keeps the same benefit throughout. Neither term type builds meaningful cash value, so that is wrong. Both are temporary, so calling level term permanent is wrong. The last option reverses the correct definitions.

Answer C. Remain in force for a limited time so the premium can still be paid

The grace period keeps the policy in force for a set time after the due date, allowing the owner to pay without losing coverage. Immediate lapse is exactly what the grace period prevents. Automatic conversion to term is a nonforfeiture option, not the grace period. Paying out cash value is a surrender, not what happens during grace.

Answer A. When the policy is delivered to the owner

The free look period begins when the policy is delivered to the policyowner, giving them a set number of days to examine it and return it for a full premium refund. It does not start at application signing, at insurer approval, or when premium is mailed, because the owner needs the actual policy in hand to review it.

Answer D. She must be appointed by the insurer

An appointment is the insurer's authorization for a producer to represent it; a producer must be appointed by each insurer she represents. Renewal fees relate to license renewal, not authorization to represent an insurer. A second exam is not required to represent an additional insurer. The guaranty association protects policyholders of insolvent insurers and has no role in authorizing sales.

Tenn. Code Ann. 56-6-115 (appointments)

Answer A. A period after the premium due date during which the policy stays in force even if unpaid

The grace period gives the policyowner additional time after the premium due date to pay before the policy lapses, and coverage continues during that time. It is not about filing claims, not the incontestable period, and not the free look.

Answer A. Term life insurance

Term life covers a set period, such as 10 or 20 years, and pays only if death occurs during that term. Whole life is permanent and lasts the insured's whole life. Universal life is permanent with flexible premiums. Variable life is permanent with investment sub-accounts. Only term is pure temporary coverage.

Answer B. Accidental death benefit rider

The accidental death benefit rider, sometimes called double indemnity, pays an extra amount when death results from an accident. Guaranteed insurability allows buying more coverage, not extra payout at death. The payor benefit rider waives premiums if the person paying premiums dies or is disabled, common on juvenile policies. A term rider simply adds level term coverage, not a multiple for accidental death.

Answer B. Draw a line through it, enter the correct date, and have the applicant initial the change

Corrections on an application should be made by crossing out the error, writing the correct information, and having the applicant initial the change so the record is accurate and honest. Erasing hides changes and looks like alteration. Submitting known wrong information is a misrepresentation. Filling out a new application without the applicant's knowledge risks fraud and an unsigned or falsified form.

Answer D. To protect policyholders when a member insurer becomes insolvent

The guaranty association steps in to protect covered policyholders when a member insurer is unable to meet its obligations due to insolvency. Licensing and appointment are handled by the Commissioner, not the association. Rate setting is not the association's function. It does not give legal advice to the public.

Tenn. Code Ann. 56-12 (Life and Health Insurance Guaranty Association Act)

Answer D. It pays covered claims up to statutory limits when a member insurer becomes insolvent

The guaranty association steps in to pay covered claims up to legal limits when a member insurer becomes insolvent, protecting policyowners. It does not guarantee investment gains, does not reimburse producer commissions, and does not cover business placed with unlicensed agents.

Tenn. Code Ann. Life and Health Insurance Guaranty Association Act (coverage limits set by statute)