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Life Insurance Types Quiz: Term, Endowment, ULIP and More

Written by the Quizzeela team · Reviewed by Utsav Raj
Last checked · 10 questions · Medium

Not all life insurance is the same. Some plans only protect, others mix protection with saving. These 10 questions show the difference.

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1Which type of life insurance gives the highest cover for the lowest premium?

  1. Term insurance
  2. Money-back plan
  3. Endowment plan
  4. ULIP
Show answer
Answer: A. Term insurance. Term insurance only pays on death during the term, with no savings part, so its premium is the lowest for the cover.

2A plain term plan pays out if the insured person:

  1. Survives the term
  2. Dies during the policy term
  3. Buys a car
  4. Changes jobs
Show answer
Answer: B. Dies during the policy term. A pure term plan pays the sum assured to the nominee only if the insured dies during the term. Nothing is paid on survival.

3An endowment plan pays:

  1. Only on death
  2. Only for hospital bills
  3. Nothing
  4. On death during the term, or a maturity amount if you survive it
Show answer
Answer: D. On death during the term, or a maturity amount if you survive it. Endowment plans combine cover and saving, paying either on death or at maturity.

4ULIP stands for:

  1. Unit Linked Insurance Plan
  2. Universal Life Income Plan
  3. Unit Lending Investment Plan
  4. United Loan Insurance Policy
Show answer
Answer: A. Unit Linked Insurance Plan. A Unit Linked Insurance Plan invests part of your premium in market-linked funds.

5What is the minimum lock-in period for a ULIP?

  1. 5 years
  2. 3 years
  3. 10 years
  4. 1 year
Show answer
Answer: A. 5 years. ULIPs have a lock-in of 5 years, during which you cannot fully withdraw.

6A money-back plan:

  1. Returns your premium every month
  2. Pays part of the sum assured at regular intervals during the term
  3. Has no cover
  4. Is a bank account
Show answer
Answer: B. Pays part of the sum assured at regular intervals during the term. Money-back plans pay a part of the sum assured at set intervals, with the rest at maturity, plus cover on death.

7Whole life insurance usually covers you:

  1. Up to a high age such as 99 or 100
  2. Only while you are employed
  3. For 1 year only
  4. Only for travel
Show answer
Answer: A. Up to a high age such as 99 or 100. Whole life plans cover you for most of your life, often up to age 99 or 100.

8"Sum assured" means:

  1. The tax you save
  2. The agent's fee
  3. The premium you pay
  4. The amount the insurer promises to pay on a claim
Show answer
Answer: D. The amount the insurer promises to pay on a claim. The sum assured is the guaranteed cover amount paid to the nominee when a valid claim is made.

9"Surrender value" is:

  1. A free gift
  2. The premium for riders
  3. The cover on death
  4. The amount you get if you exit a savings-type policy early
Show answer
Answer: D. The amount you get if you exit a savings-type policy early. If you stop a savings-type policy early, the insurer pays a surrender value, often less than what you paid.

10A common rule of thumb for how much term cover to buy is:

  1. Around 10 to 15 times your yearly income
  2. Exactly ₹1 lakh
  3. 1 month of income
  4. Equal to your phone's price
Show answer
Answer: A. Around 10 to 15 times your yearly income. Many planners suggest 10 to 15 times yearly income, adjusted for loans and goals. Read our term insurance guide for a step-by-step method.
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Sources: IRDAI policyholder education material and life insurer product guides. For learning only, not financial, tax or insurance advice. Found a mistake? Use "Report a mistake" in the timed quiz.