Pennsylvania life policy provisions, options and riders practice questions
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Section 5.0 Life Insurance Policy Provisions, Options, and Riders is 22% of the Pennsylvania Life exam (Series 16-01), the largest section on the test. [1] The outline lists the standard provisions, beneficiary designations, the effect of divorce on beneficiaries, settlement options, nonforfeiture options, policy loans, dividend options, disability riders, riders for added insureds, riders that change the death benefit, and the accelerated (living) benefit rider with its Pennsylvania rules. [1]
Our Pennsylvania life flashcards already drill the grace period, incontestability, reinstatement and free look. This page covers the other Pennsylvania rules in this section, then gives 10 practice questions.
Key Pennsylvania rules in this section
- Nonforfeiture options (Insurance Company Law, section 410A): if a premium is in default, the company must grant a paid-up nonforfeiture benefit on request made no later than sixty days after the due date of the premium in default. After premiums have been paid for at least three full years on ordinary insurance, the policyholder can instead surrender the policy within sixty days of the default for a cash surrender value. If no option is chosen within sixty days, the paid-up benefit named in the policy takes effect on its own. [2]
- Policy loans: the Insurance Department's guide explains that you can borrow against a whole life policy's cash value, and "The loan principle and any unpaid interest on the loan will be deducted from the benefits if you die." [3]
- Divorce and beneficiaries (20 Pa.C.S. 6111.2): for a person domiciled in Pennsylvania, a revocable designation of a spouse as life insurance beneficiary becomes ineffective once the couple is divorced, and is treated as if the former spouse had died first. It survives only if the wording of the designation, a court order, a written contract between the two, or a new designation made after the divorce decree shows it was meant to survive. The rule also applies if the insured dies while divorce proceedings are pending and grounds have been established. [4]
- Accelerated benefit rider (31 Pa. Code 90f.3): the qualifying events can include a life expectancy of a limited period (allowed range "6 months or less" to "12 months or less"), a condition that would cause death in that period without treatment, a total and permanent disability lasting no longer than a set period of up to 12 months, or lifetime confinement in a health care facility. A benefit is meaningful if it equals at least 25% of the death benefit affected, and the lifetime maximum cannot exceed 100% of that death benefit. [5]
- Effect on the death benefit (90f.3(g)): the form must clearly state that the death benefit and any accumulation and cash values will be reduced if an accelerated benefit is paid, in prominent type on the first page of the rider. [5]
- Exclusions the rider may not use (31 Pa. Code 90f.4(b)): the list includes preexisting conditions, air travel, Alzheimer's disease or another disorder with a demonstrable organic origin, and a requirement that the form be in force for a set time before coverage applies. [6]
Practice questions
1. A Pennsylvania whole life policyholder misses a premium. How long do they have to ask for a paid-up nonforfeiture benefit?
A. 31 days after the due date
B. 60 days after the due date
C. 90 days after the due date
D. Until the next policy anniversary
Answer: B. The request must be made no later than sixty days after the due date of the premium in default. (Insurance Company Law, section 410A(a)(1)) [2]
2. The policyholder chooses no option. What happens?
Answer: The paid-up nonforfeiture benefit specified in the policy takes effect automatically, unless another available option is elected within sixty days of the default. (section 410A(a)(3)) [2]
3. On ordinary insurance, how long must premiums have been paid before the cash surrender value option is required?
Answer: At least three full years. (section 410A(a)(2)) [2]
4. An insured with an outstanding policy loan dies. How is the loan handled?
Answer: The loan principal and any unpaid interest are deducted from the death benefit. [3]
5. Sam, domiciled in Pennsylvania, named his wife as revocable beneficiary. They divorced, and Sam never changed the form. He dies. What is the general rule?
Answer: The designation is ineffective and is treated as if the former spouse had died before Sam, unless the designation's wording, a court order, a written contract or a post-divorce designation shows it was meant to survive. (20 Pa.C.S. 6111.2(b)) [4]
6. Which of these keeps a former spouse's designation in force under 6111.2?
A. The former spouse paid some premiums
B. A designation of the former spouse made after the divorce decree
C. The policy is a whole life policy
D. The couple had children
Answer: B. A designation of a former spouse made after the divorce decree is one of the four listed exceptions. (6111.2(b)(4)) [4]
7. An insurer paid the former spouse before learning of the divorce and with no court order in place. Is the insurer liable to the other beneficiaries?
Answer: No. Unless restrained by court order, the insurer is not liable for a payment that would have been proper without the section; the former spouse who was paid answers to anyone harmed. (6111.2(c)) [4]
8. An accelerated benefit rider pays for a terminal illness. What is the longest life expectancy window Pennsylvania allows?
Answer: 12 months or less. The allowed range is "6 months or less" to "12 months or less." (31 Pa. Code 90f.3(a)(1)) [5]
9. What is the smallest accelerated death benefit Pennsylvania treats as meaningful?
Answer: An amount equal to at least 25% of the total death benefit affected by the payment. The lifetime maximum cannot be more than 100%. (90f.3(e)) [5]
10. Can an accelerated benefit rider exclude preexisting conditions?
Answer: No. Preexisting conditions are on the list of exclusions the form may not contain. (31 Pa. Code 90f.4(b)(12)) [6]
Study tips for section 5.0
- Learn the nonforfeiture timing as one set: sixty days to choose, three full years before cash value on ordinary insurance, and an automatic option if you do nothing.
- For divorce questions, check two things: was the designation revocable, and does one of the four exceptions apply?
- For the accelerated benefit rider, remember 6 to 12 months, 25% minimum, 100% maximum, and the required warning that death benefit and cash values go down.
- Dividend options, settlement options and riders such as waiver of premium and guaranteed insurability are also on the outline. [1]
Try the Pennsylvania life practice test for more questions across all seven sections.
Prep Retention is independent and is not affiliated with PSI or the state.
Sources
Laws and exam documents quoted as of October 2026.
- PSI, Pennsylvania Life outline, Series 16-01 (effective 3/1/2026): https://proctor2.psionline.com/media/programs/PAINS/16-01xx.pdf
- Insurance Company Law of 1921 (Act of May 17, 1921, P.L. 682, No. 284), Section 410A: https://www.palegis.us/statutes/unconsolidated/law-information/view-statute?iFrame=true&txtType=HTM&SessYr=1921&SessInd=0&ActNum=0284
- Pennsylvania Insurance Department, A Consumer's Guide to Life Insurance: https://www.pa.gov/content/dam/copapwp-pagov/en/insurance/documents/coverage/documents/life-insurance/life.pdf
- 20 Pa.C.S. 6111.2: https://www.palegis.us/statutes/consolidated/view-statute?iFrame=true&txtType=HTM&ttl=20&div=0&chapter=61§ion=11&subsctn=2
- 31 Pa. Code 90f.3: https://www.pacodeandbulletin.gov/Display/pacode?file=/secure/pacode/data/031/chapter90f/s90f.3.html&d=reduce
- 31 Pa. Code 90f.4: https://www.pacodeandbulletin.gov/Display/pacode?file=/secure/pacode/data/031/chapter90f/s90f.4.html&d=reduce