MS Life and Health Insurance Test Correct
Questions and Answers
Which of these do NOT constitute policy delivery? - ANSWER-Policy issued with a
rating
Which of these types of life insurance allows the policyowner to have level premiums
and to also choose from a selection of investment options? - ANSWER-Variable Life
J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries
sustained in an accident. J's age as stated on the application five years ago was found
to be understated by ten years. Which of the following actions will the insurance
company take? - ANSWER-The insurer will adjust the benefit to what the premiums
paid would have purchased at the insured's actual age
A life insurance policy which ensures that the premium will be paid if the insured
becomes disabled has what kind of rider attached? - ANSWER-Waiver of Premium
A producer must report to the Commissioner of Insurance any administrative action or
criminal charges taken against the producer within __ days of the final disposition of the
matter. - ANSWER-30
A physician opens up a new practice and qualifies for a $7,000/month Disability Income
policy. What rider would the physician add if he wants the ability to increase his policy
benefit as his practice and income grow? - ANSWER-Guaranteed Insurability Option
rider
Which type of policy is considered to be overfunded, as stated by IRS guidelines? -
ANSWER-Modified Endowment Contract
How does a typical Variable Life Policy investment account grow? - ANSWER-Through
mutual funds, stocks, bonds
Which Federal law allows an insurer to obtain an inspection report on a potential
insured? - ANSWER-Fair Credit Reporting Act
What is Medicare? - ANSWER-is a hospital and medical expense insurance program
What kind of premium does a Whole Life policy have? - ANSWER-level
T took out a $50,000 life insurance policy with an Accidental Death and
Dismemberment rider. Five years later, T commits suicide. How much will the insurer
pay? - ANSWER-50,000
, Pre-hospitalization authorization is considered an example of: - ANSWER-managed
care
Under a Renewable Term policy, - ANSWER-the renewal premium is calculated on the
basis of the insured's attained age
T and S are named co-primary beneficiaries on a $500,000 Accidental Death and
Dismemberment policy insuring their father. Their mother was named contingent
beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba
accident shortly afterwards. How much of the death benefit will the mother receive? -
ANSWER-$0
A provision in a life insurance policy that pays the policyowner an amount that does not
surpass the guaranteed cash value is called the: - ANSWER-Policy Loan provision
What action can a policyowner take if an application for a bank loan requires collateral?
- ANSWER-Assign policy ownership to the bank
Which of the following statements is CORRECT about the Life and Health Insurance
Guaranty Association? - ANSWER-It is funded by insurance companies through
assessments
An insurance company that replaces existing insurance must provide a copy of which of
the following documents to the existing insurance company? - ANSWER-A policy
summary
P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The
annuity will then pay P retirement payments after the 15 years. Which type of annuity
did P purchase? - ANSWER-Deferred
A Family Income Policy is a combination of Whole Life and - ANSWER-Decreasing
Term insurance
J purchased a Disability Income Policy that ONLY J can terminate and on which the
rates will never increase above those illustrated in the policy. Which of the following
types of policies did J purchase? - ANSWER-Noncancelable
Information obtained from a phone conversation to the proposed insured can be found
in which of these reports? - ANSWER-Inspection report
When must insurable interest exist for a life insurance contract to be valid? - ANSWER-
Inception of the contract
What is the purpose of a Policy Summary? - ANSWER-It highlights the critical parts of
the policy issued
Questions and Answers
Which of these do NOT constitute policy delivery? - ANSWER-Policy issued with a
rating
Which of these types of life insurance allows the policyowner to have level premiums
and to also choose from a selection of investment options? - ANSWER-Variable Life
J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries
sustained in an accident. J's age as stated on the application five years ago was found
to be understated by ten years. Which of the following actions will the insurance
company take? - ANSWER-The insurer will adjust the benefit to what the premiums
paid would have purchased at the insured's actual age
A life insurance policy which ensures that the premium will be paid if the insured
becomes disabled has what kind of rider attached? - ANSWER-Waiver of Premium
A producer must report to the Commissioner of Insurance any administrative action or
criminal charges taken against the producer within __ days of the final disposition of the
matter. - ANSWER-30
A physician opens up a new practice and qualifies for a $7,000/month Disability Income
policy. What rider would the physician add if he wants the ability to increase his policy
benefit as his practice and income grow? - ANSWER-Guaranteed Insurability Option
rider
Which type of policy is considered to be overfunded, as stated by IRS guidelines? -
ANSWER-Modified Endowment Contract
How does a typical Variable Life Policy investment account grow? - ANSWER-Through
mutual funds, stocks, bonds
Which Federal law allows an insurer to obtain an inspection report on a potential
insured? - ANSWER-Fair Credit Reporting Act
What is Medicare? - ANSWER-is a hospital and medical expense insurance program
What kind of premium does a Whole Life policy have? - ANSWER-level
T took out a $50,000 life insurance policy with an Accidental Death and
Dismemberment rider. Five years later, T commits suicide. How much will the insurer
pay? - ANSWER-50,000
, Pre-hospitalization authorization is considered an example of: - ANSWER-managed
care
Under a Renewable Term policy, - ANSWER-the renewal premium is calculated on the
basis of the insured's attained age
T and S are named co-primary beneficiaries on a $500,000 Accidental Death and
Dismemberment policy insuring their father. Their mother was named contingent
beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba
accident shortly afterwards. How much of the death benefit will the mother receive? -
ANSWER-$0
A provision in a life insurance policy that pays the policyowner an amount that does not
surpass the guaranteed cash value is called the: - ANSWER-Policy Loan provision
What action can a policyowner take if an application for a bank loan requires collateral?
- ANSWER-Assign policy ownership to the bank
Which of the following statements is CORRECT about the Life and Health Insurance
Guaranty Association? - ANSWER-It is funded by insurance companies through
assessments
An insurance company that replaces existing insurance must provide a copy of which of
the following documents to the existing insurance company? - ANSWER-A policy
summary
P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The
annuity will then pay P retirement payments after the 15 years. Which type of annuity
did P purchase? - ANSWER-Deferred
A Family Income Policy is a combination of Whole Life and - ANSWER-Decreasing
Term insurance
J purchased a Disability Income Policy that ONLY J can terminate and on which the
rates will never increase above those illustrated in the policy. Which of the following
types of policies did J purchase? - ANSWER-Noncancelable
Information obtained from a phone conversation to the proposed insured can be found
in which of these reports? - ANSWER-Inspection report
When must insurable interest exist for a life insurance contract to be valid? - ANSWER-
Inception of the contract
What is the purpose of a Policy Summary? - ANSWER-It highlights the critical parts of
the policy issued
