LIFE AND HEALTH INSURANCE EXAM
(MISSOURI) QUESTIONS &
ACCURATE PASSED ANSWERS
Insurance policies are considered aleatory contracts because:
1)they are take it or leave it contracts
2)both parties consent to the contract
3)performance is conditioned upon a future occurrence
4)the contract is voidable upon proof of fraud - CORRECT ANSWER Performance is
conditioned upon a future occurrence, because there is an element of chance and
potential for unequal exchange of value
K failed to pay a renewal premium within the time granted by the insurer. K then sends
in a payment which the insurer subsequently accepts. Which policy provision specifies
that coverage may be restored in this situation?
1)free-look
2)reinstatement
3)grace period
4)consideration - CORRECT ANSWER Reinstatement
What type of contract liquidates an estate through recurrent payments?
1)Universal life insurance
2)Whole life insurance
3)Annuity
4)401k - CORRECT ANSWER Annuity
An insured pays premiums on an annual basis for an individual health insurance policy.
What is the MINIMUM number of days for the Grace Period provision?
1)7
2)10
3)20
4)31 - CORRECT ANSWER The grace period is a minimum of 31 days for policies hat
are paid for on an annual basis.
Making an unfair comparison of two policies is defined as - CORRECT ANSWER
misrepresentation
Nursing home benefits must be provided for at least 12 consecutive months in which of
the following types of policies?
1)blanket custodial
2)long term care
, 3)critical illness
4)Medicare supplements - CORRECT ANSWER long term care
T would like to be assured $10,000 is available in 10 years to replace a roof on his
house. What kind of $10,000 policy should T purchase?
1)Interest Sensitive Whole Life
2)Ten Year Endowment
3)Variable Universal Life
4)Ten Year Renewable Term - CORRECT ANSWER Ten Year Endowment
An insured recently took out a cancer insurance policy. The time limit on certain
defenses provision in this policy allows the insurer to
1)to cancel a policy for any reason for up to 5 years
2)to reduce the benefit for a loss occurring after two years due to misstatements
3)to deny the amount of a claim for statements on the application
4)to deny the amount of a claim for misstatements occurring prior to the expiration of
the first 2 policy years - CORRECT ANSWER To deny the amount of a claim for
missstatements occurring prior to the expiration of the first 2 policy years
Elimination Period - CORRECT ANSWER The time between the onset of a disability,
and when you are eligible for benefits.
Medicare Part B does not cover
1)occupational therapy
2)inpatient hospital services
3)physician and surgeon services
4)medical equipment rental - CORRECT ANSWER inpatient hospital services
All of the following statements about traditional individual retirement accounts are false
EXCEPT
1)10% penalty is applied to withdrawals after age 59 1/2
2)withdrawals are normally tax free to the recipient
3)10% penalty is applied to withdrawals before age 59 1/2
4)Contributions are not tax deductible - CORRECT ANSWER 10% penalty is applied to
withdrawls before age 59 1/2
What is Old Age and Survivors Health Insurance (OASDHI) also known as? -
CORRECT ANSWER social security
Which of the following dividend options results in taxable income to the policy owner?
1)paid up additions
2)cash
3)accumulation of interest
4)reduced premium - CORRECT ANSWER Accumulation of interest because while
policy dividends are not taxable, any interest paid on them is taxable income in the year
the interest is credited to the policy
(MISSOURI) QUESTIONS &
ACCURATE PASSED ANSWERS
Insurance policies are considered aleatory contracts because:
1)they are take it or leave it contracts
2)both parties consent to the contract
3)performance is conditioned upon a future occurrence
4)the contract is voidable upon proof of fraud - CORRECT ANSWER Performance is
conditioned upon a future occurrence, because there is an element of chance and
potential for unequal exchange of value
K failed to pay a renewal premium within the time granted by the insurer. K then sends
in a payment which the insurer subsequently accepts. Which policy provision specifies
that coverage may be restored in this situation?
1)free-look
2)reinstatement
3)grace period
4)consideration - CORRECT ANSWER Reinstatement
What type of contract liquidates an estate through recurrent payments?
1)Universal life insurance
2)Whole life insurance
3)Annuity
4)401k - CORRECT ANSWER Annuity
An insured pays premiums on an annual basis for an individual health insurance policy.
What is the MINIMUM number of days for the Grace Period provision?
1)7
2)10
3)20
4)31 - CORRECT ANSWER The grace period is a minimum of 31 days for policies hat
are paid for on an annual basis.
Making an unfair comparison of two policies is defined as - CORRECT ANSWER
misrepresentation
Nursing home benefits must be provided for at least 12 consecutive months in which of
the following types of policies?
1)blanket custodial
2)long term care
, 3)critical illness
4)Medicare supplements - CORRECT ANSWER long term care
T would like to be assured $10,000 is available in 10 years to replace a roof on his
house. What kind of $10,000 policy should T purchase?
1)Interest Sensitive Whole Life
2)Ten Year Endowment
3)Variable Universal Life
4)Ten Year Renewable Term - CORRECT ANSWER Ten Year Endowment
An insured recently took out a cancer insurance policy. The time limit on certain
defenses provision in this policy allows the insurer to
1)to cancel a policy for any reason for up to 5 years
2)to reduce the benefit for a loss occurring after two years due to misstatements
3)to deny the amount of a claim for statements on the application
4)to deny the amount of a claim for misstatements occurring prior to the expiration of
the first 2 policy years - CORRECT ANSWER To deny the amount of a claim for
missstatements occurring prior to the expiration of the first 2 policy years
Elimination Period - CORRECT ANSWER The time between the onset of a disability,
and when you are eligible for benefits.
Medicare Part B does not cover
1)occupational therapy
2)inpatient hospital services
3)physician and surgeon services
4)medical equipment rental - CORRECT ANSWER inpatient hospital services
All of the following statements about traditional individual retirement accounts are false
EXCEPT
1)10% penalty is applied to withdrawals after age 59 1/2
2)withdrawals are normally tax free to the recipient
3)10% penalty is applied to withdrawals before age 59 1/2
4)Contributions are not tax deductible - CORRECT ANSWER 10% penalty is applied to
withdrawls before age 59 1/2
What is Old Age and Survivors Health Insurance (OASDHI) also known as? -
CORRECT ANSWER social security
Which of the following dividend options results in taxable income to the policy owner?
1)paid up additions
2)cash
3)accumulation of interest
4)reduced premium - CORRECT ANSWER Accumulation of interest because while
policy dividends are not taxable, any interest paid on them is taxable income in the year
the interest is credited to the policy
