Delaware Life Insurance Practice Exam Free - 2026

• A. 1 year
• B. 5 years
• C. 3 years
• D. Not more than 2 years while in force during the insured's lifetime

Correct answer: D. Not more than 2 years while in force during the insured's lifetime

Explanation: Section 2908 requires a provision making the policy incontestable after it has been in force during the lifetime of the insured for a period of not more than 2 years after its date of issue, except for nonpayment of premiums and, at the insurer's option, disability and accidental death benefits. Since four years have passed, the insurer cannot contest the misstatement. One and five years are not Delaware periods; 3 years is the reinstatement window under § 2913. See 18 Del. C. § 2908.

• A. 2 years; 8% per annum
• B. 3 years; 6% per annum compounded annually
• C. 5 years; 6% per annum
• D. 1 year; no interest

Correct answer: B. 3 years; 6% per annum compounded annually

Explanation: Section 2913 requires that an ordinary life policy be reinstatable at any time within 3 years from the date of premium default (2 years for industrial policies) upon written application, satisfactory evidence of insurability, and payment of premiums in arrears with interest not exceeding 6% per annum compounded annually. Two years applies only to industrial life; 5 years and 1 year are not Delaware reinstatement periods, and 8% exceeds the statutory cap. See 18 Del. C. § 2913.

• A. 30 days; additional interest of 10% annually begins 31 days after the later of proof of death, sufficient information, or resolution of legal impediments
• B. 60 days; a flat $500 penalty
• C. 15 days; interest at 6% from the date of death
• D. 45 days; no additional interest

Correct answer: A. 30 days; additional interest of 10% annually begins 31 days after the later of proof of death, sufficient information, or resolution of legal impediments

Explanation: Section 2914(a) provides that if the policy specifies a settlement period it may not exceed 30 days from receipt of proof of death, and § 2914(c) adds interest of 10% annually, on top of the base rate, beginning 31 calendar days from the latest of receipt of due proof, receipt of sufficient information to determine liability and payee, or resolution of legal impediments. Sixty, 15 and 45 days are not the statutory period, and 6% is the grace-period interest cap in § 2906, not the late-payment rate. See 18 Del. C. § 2914.

• A. $450,000 in death benefits and $150,000 in cash value
• B. $500,000 in death benefits and $100,000 in cash value
• C. $300,000 in death benefits, but not more than $100,000 in net cash surrender and withdrawal values
• D. $250,000 in death benefits and $250,000 in cash value

Correct answer: C. $300,000 in death benefits, but not more than $100,000 in net cash surrender and withdrawal values

Explanation: Section 4403(c)(2)a.1 limits the Association to $300,000 in life insurance death benefits, but not more than $100,000 in net cash surrender and net cash withdrawal values, per insured life. The Association never pays more than the contractual obligation, so A overstates coverage; $500,000 is the health benefit plan limit; $250,000 is the annuity present-value limit. See 18 Del. C. § 4403.

• A. Incontestability provision
• B. Entire contract provision
• C. Reinstatement provision
• D. Ownership provision

Correct answer: C. Reinstatement provision

Explanation: The reinstatement provision may allow a lapsed policy to be restored if the policyowner meets the insurer's conditions, such as proof of insurability and payment of overdue amounts.

• A. the producer's oral statements made at the time of sale
• B. the insurer's sales illustration used during the sale
• C. the conditional receipt given when the premium was paid
• D. the completed application attached to the policy

Correct answer: D. the completed application attached to the policy

Explanation: The entire contract is generally made up of the policy and the attached application, limiting what can be used as part of the contract.

• A. The insurer's ability to contest a policy after a stated period, except for limited issues
• B. The policyowner's ability to change the beneficiary after a stated period, except with insurer consent
• C. The beneficiary's ability to file a claim after a stated period, except for accidental death
• D. The insurer's ability to raise premiums after a stated period, except for a change in the insured's health

Correct answer: A. The insurer's ability to contest a policy after a stated period, except for limited issues

Explanation: After the contestable period ends, the insurer is generally limited in its ability to challenge the policy, except for issues allowed by law or policy terms.

• A. The policy is voided and all premiums paid are refunded to the beneficiary with interest
• B. The death benefit is adjusted to the amount the premium would have purchased at the correct age
• C. The death benefit is paid in full and the beneficiary is billed for the premium shortfall
• D. The premium is recalculated and the owner must pay the difference before the claim is paid

Correct answer: B. The death benefit is adjusted to the amount the premium would have purchased at the correct age

Explanation: The misstatement of age provision commonly adjusts benefits to match what the paid premium would have purchased at the insured's correct age.

• A. Reduced paid-up insurance
• B. Cash surrender
• C. Extended term insurance
• D. Interest-only settlement

Correct answer: C. Extended term insurance

Explanation: Extended term insurance uses available cash value to keep the full face amount in force as term coverage for a limited time.

• A. Extended term insurance
• B. Automatic premium loan
• C. Fixed-period settlement
• D. Reduced paid-up insurance

Correct answer: D. Reduced paid-up insurance

Explanation: Reduced paid-up insurance uses cash value to buy a smaller amount of fully paid permanent insurance.

• A. Cancel the policy after review and receive a refund as required by policy or law
• B. Return the policy and receive a refund minus the cost of coverage during the review period
• C. Request changes to the policy's terms after delivery without submitting a new application
• D. Cancel the policy at any time during the first year and receive a full premium refund

Correct answer: A. Cancel the policy after review and receive a refund as required by policy or law

Explanation: The free-look period gives the policyowner time to review the policy after delivery and cancel for a refund according to applicable rules.

• A. Assignment clause
• B. Automatic premium loan
• C. Spendthrift clause
• D. Common disaster clause

Correct answer: B. Automatic premium loan

Explanation: An automatic premium loan provision can use available cash value to pay premiums and keep the policy in force, if the provision is included and conditions are met.