Life, Accident and Health Pearson Final
Exams - exam 5
Which of the following health insurance policy provisions allows an insurer to deny a
claim that does not occur during the policy period?
AReinstatement provision
BInsuring clause
COwnership provision
DConsideration clause - ANS-B insuring clause
The insuring clause specifies the time frame of the policy period which is generally one
year. Therefore, accidents or illnesses occurring prior to the policy's inception date are
not covered. (1416)
Which of the following statements is true with regard to limited health policies?
ALimited policies protect against gaps in coverage that exist in other plans
BLimited policies provide benefits for cancer only
CLimited policies must state clearly what coverage they provide
DLimited policies cover scheduled surgical expenses if not covered by major medical
plans - ANS-c limited policies must state clearly what coverage they provide
Limited policies pay benefits for an individual illness or an accident. These policies must
state prominently that they are limited in nature. Cancer only or dread disease plans are
two common types of limited health insurance policies. (1175)
AD&D coverage provides all of the following benefits, EXCEPT:
ADeath as a result of an accident
BCapital sum benefits
CBenefits for loss of sight due to an illness
DLoss of use of limbs caused by an accident - ANS-c benefits for loss of sight due to an
illness
Accidental death and dismemberment coverage, whether provided as a rider or an
individual policy, does not provide benefits for an insured as a result of an illness. (1318)
,To be eligible for coverage under Part C of Medicare, an individual does not have to
prove that he or she is insurable if enrollment occurs during what period of time
following the attainment of age 65?
AOne month
BThree months
CSix months
DTwelve months - ANS-c six months
No evidence of insurability is required if enrollment occurs during a six-month period
following the individual's 65th birthday. After this six month period the individual must
prove that he or she is insurable. (4132)
In most States, domestic insurers must be examined or audited:
AAt least once every year
BAt least once every three years
CAt least once every five years
DAt least once every ten years - ANS-c at least once every five years
Most states require that licensed insurers be audited at least every fifth year to ensure
solvency. A few State Departments of Insurance require it every year (e.g., New
Jersey). Please consult your State law chapter in your textbook. (2127)
The main purpose of the underwriting department is?
ATo support the field underwriting
BTo compute the necessary profit
CTo issue contracts
DTo review applications - ANS-d to review applications
The function and purpose of underwriting is to review applications for insurance
coverage to determine if the proposed insured is insurable. (1461)
If a life insurance policy becomes a modified endowment contact, it may revert back to
an ordinary life policy within:
AOne year
BThree years
CSeven years
, DIt is not allowed to revert back to an ordinary life contract - ANS-D it is not allowed to
revert back to an ordinary life contract
Once a whole life policy is determined to be a Modified Endowment Contract (MEC) it
may not revert back. This means that the tax benefits included in a whole life policy will
be suspended when there are any distributions of cash from the contract. Interest
credited to the cash value is general tax deferred. Once labeled as a MEC, a policy loan
may be subject to taxation when it otherwise would not be. The policy become a MEC
when the owner violates the 7 pay test. (4184)
If an individual makes a payment to fund an annuity contract today and the benefit
commences thirty days later, which of the following contracts has been purchased?
AFixed annuity
BImmediate annuity
CDeferred annuity
DLife annuity - ANS-b immediate annuity
An immediate annuity has no accumulation period. Once it is purchased, a monthly
payment begins approximately thirty days after purchase since that is the usual time it
takes to process the application. An immediate annuity is best suited for someone who
needs "immediate" income. A person who is totally disable is an example of someone
who needs income right away. (4129)
Which statement listed is false when discussing policy illustrations?
AThey protect against unfair sales solicitations
BThe regulations apply to both individual and group policies
CThe use of footnotes is prohibited
DOnly guaranteed elements of the contract must be listed - ANS-d only guaranteed
elements of the contract must be listed
Policy illustrations must list both guaranteed and non-guaranteed elements of the
contract. They are designed to provide full disclosure to the client, thus protecting them
against unfair and exaggerated hypothetical illustrations. (1457)
Which of the following is not considered to be one of the Required Uniform Accident and
Health policy provisions?
AGrace period
BFree-look provision
Exams - exam 5
Which of the following health insurance policy provisions allows an insurer to deny a
claim that does not occur during the policy period?
AReinstatement provision
BInsuring clause
COwnership provision
DConsideration clause - ANS-B insuring clause
The insuring clause specifies the time frame of the policy period which is generally one
year. Therefore, accidents or illnesses occurring prior to the policy's inception date are
not covered. (1416)
Which of the following statements is true with regard to limited health policies?
ALimited policies protect against gaps in coverage that exist in other plans
BLimited policies provide benefits for cancer only
CLimited policies must state clearly what coverage they provide
DLimited policies cover scheduled surgical expenses if not covered by major medical
plans - ANS-c limited policies must state clearly what coverage they provide
Limited policies pay benefits for an individual illness or an accident. These policies must
state prominently that they are limited in nature. Cancer only or dread disease plans are
two common types of limited health insurance policies. (1175)
AD&D coverage provides all of the following benefits, EXCEPT:
ADeath as a result of an accident
BCapital sum benefits
CBenefits for loss of sight due to an illness
DLoss of use of limbs caused by an accident - ANS-c benefits for loss of sight due to an
illness
Accidental death and dismemberment coverage, whether provided as a rider or an
individual policy, does not provide benefits for an insured as a result of an illness. (1318)
,To be eligible for coverage under Part C of Medicare, an individual does not have to
prove that he or she is insurable if enrollment occurs during what period of time
following the attainment of age 65?
AOne month
BThree months
CSix months
DTwelve months - ANS-c six months
No evidence of insurability is required if enrollment occurs during a six-month period
following the individual's 65th birthday. After this six month period the individual must
prove that he or she is insurable. (4132)
In most States, domestic insurers must be examined or audited:
AAt least once every year
BAt least once every three years
CAt least once every five years
DAt least once every ten years - ANS-c at least once every five years
Most states require that licensed insurers be audited at least every fifth year to ensure
solvency. A few State Departments of Insurance require it every year (e.g., New
Jersey). Please consult your State law chapter in your textbook. (2127)
The main purpose of the underwriting department is?
ATo support the field underwriting
BTo compute the necessary profit
CTo issue contracts
DTo review applications - ANS-d to review applications
The function and purpose of underwriting is to review applications for insurance
coverage to determine if the proposed insured is insurable. (1461)
If a life insurance policy becomes a modified endowment contact, it may revert back to
an ordinary life policy within:
AOne year
BThree years
CSeven years
, DIt is not allowed to revert back to an ordinary life contract - ANS-D it is not allowed to
revert back to an ordinary life contract
Once a whole life policy is determined to be a Modified Endowment Contract (MEC) it
may not revert back. This means that the tax benefits included in a whole life policy will
be suspended when there are any distributions of cash from the contract. Interest
credited to the cash value is general tax deferred. Once labeled as a MEC, a policy loan
may be subject to taxation when it otherwise would not be. The policy become a MEC
when the owner violates the 7 pay test. (4184)
If an individual makes a payment to fund an annuity contract today and the benefit
commences thirty days later, which of the following contracts has been purchased?
AFixed annuity
BImmediate annuity
CDeferred annuity
DLife annuity - ANS-b immediate annuity
An immediate annuity has no accumulation period. Once it is purchased, a monthly
payment begins approximately thirty days after purchase since that is the usual time it
takes to process the application. An immediate annuity is best suited for someone who
needs "immediate" income. A person who is totally disable is an example of someone
who needs income right away. (4129)
Which statement listed is false when discussing policy illustrations?
AThey protect against unfair sales solicitations
BThe regulations apply to both individual and group policies
CThe use of footnotes is prohibited
DOnly guaranteed elements of the contract must be listed - ANS-d only guaranteed
elements of the contract must be listed
Policy illustrations must list both guaranteed and non-guaranteed elements of the
contract. They are designed to provide full disclosure to the client, thus protecting them
against unfair and exaggerated hypothetical illustrations. (1457)
Which of the following is not considered to be one of the Required Uniform Accident and
Health policy provisions?
AGrace period
BFree-look provision
