What distinguishes a deferred annuity from an immediate annuity? -correct answer-The
time at which benefit payments start
Cindy buys a 10-year certain annuity with an installment refund. After receiving monthly
payments for 5 years, Cindy dies. How many remaining payments will the insurer make to
her beneficiary? -correct answer-60 payments
What is a common reason people purchase an annuity? -correct answer-To protect against
the risk of outliving their financial resources
What kind of annuity pays income to two annuitants until their deaths? -correct answer-
Joint and survivor annuity
What is a joint and survivor annuity? -correct answer-Provides payments the annuity to two
people. If either person dies, the same income payments continue to the survivor for life.
When the surviving annuitant dies, no further payments are made to anyone.
Victoria owns a life annuity and elects to receive annuity payments monthly for the
remainder of her life with "ten years certain". Her annuity will make payments -correct
answer-for a minimum of 120 months and a maximum of the remainder of her life
Which of the following statements regarding a life insurance policy dividend is TRUE? -
correct answer-It is the distribution of excess of funds accumulated by the insurer on
participating policies.
An insured owned by its policyholders is called a -correct answer-mutual insurer
An insurer enters into a contract with a third party to insure itself against losses from
insurance policies it issues. What is the agreement called? -correct answer-Reinsurance
What is reinsurance? -correct answer-An arrangement by which an insurance company
transfers a portion of a risk it has assumed to another insurer
Which of the following is NOT a characteristic of reinsurance? -correct answer-Increases the
unearned premium reserve
Which of the following is a contract that involves one party which indemnifies another when
a loss arises from an unknown event? -correct answer-Insurance policy
What is an insurance policy? -correct answer-A contract where one party promises to
indemnify another against loss that arises from an unknown event
What is residual disability income insurance payments based on? -correct answer-The
amount of the insured's income is reduced by the disability
, Manuel is considered to be a disabled person as defined by the Americans with Disabilities
Act (ADA). As such, he is unable to perform any of the following life activities EXCEPT -
correct answer-Driving
Which of the following is NOT a provision in a disability income policy? -correct answer-
Deductible and coinsurance provision
Which of these statements is NOT true concerning recurrent disabilities? -correct answer-
The insurer continues coverage after a new elimination period
Kim is insured under a disability income insurance policy with an "own-occupation" clause.
She was recently injured in an automobile accident and can no longer perform the tasks of
her job. Kim is now considered to be -correct answer-totally disabled
What percentage of eligible employees must participate in a noncontributory group health
plan before it can be put in effect? -correct answer-100%
Business Overhead Expense Insurance pays for -correct answer-business expenses when a
business owner becomes disabled
Minimum participation standards exist for group health insurance plans in order to -correct
answer-prevent adverse selection
The problem of overinsurance is addressed in which health insurance provision? -correct
answer-Coordination of benefits
What is the purpose of the coordination of benefits (COB) provision? -correct answer-To
avoid duplication of benefit payments and overinsurance when an individual is covered
under more than one group health plan
Who is financially liable for the payment of covered claims in a fully insured group health
plan? -correct answer-Insurer
The insurer has the option of terminating a health insurance policy on a date stated in the
contract. What type of policy is this? -correct answer-Optionally renewable
What is an optionally renewable policy? -correct answer-A provision allowing an insurer to
terminate the policy on a date specified in the contract
Bruce is involved in an accident and becomes totally and permanently disabled. His
insurance policy continues in force without payment of further premiums. Which policy
provision is responsible for this? -correct answer-Waiver of premium provision
Christine has a health insurance policy that has been in force beyond the incontestable
period. The insurer has discovered that a fraudulent statement was made on the application.
What would the insurer have to pay on a claim, assuming this wasn't a guaranteed
renewable policy? -correct answer-Nothing