Nevada Life and Health License Exam Prep V2 | Latest 2025/ 2026 Update| Questions and Verified Answers | 100% Correct (A – GRADED)

Nevada Life and Health License Exam Prep V2 | Latest 2025/ 2026 Update| Questions and Verified Answers | 100% Correct (A – GRADED) Question: What life insurance policy rider allows the company to forgo collecting the premium if the insured becomes disabled? Answer: Waiver of Premium Question: What beneficiary designation has first claim to the death proceeds of a life insurance policy? Answer: Primary beneficiary Question: What life insurance policy provision prevents an insurer from disputing or denying a claim due to misstatements on the application after a certain period of time? Answer: Incontestability Question: What is the purpose of the Automatic Premium Loan provision? Answer: To prevent the unintentional lapse of a policy because of nonpayment of the premium Question: What happens to the proceeds of a life insurance policy if there is no named beneficiary? Answer: The proceeds are paid to the insured's estate Question: With the reduction of premium dividend option, how is the dividend used? Answer: The dividend is applied to the next year's premium; it reduces the next year's premium Question: A policyowner borrowed a portion of cash value from his whole life policy. If the loan is not repaid, how will that affect the death benefit to the beneficiary? Answer: The amount of the loan will be subtracted from the death benefit Question: What type of beneficiary is next in line after the primary beneficiary? Answer: Contingent beneficiary Question: If a settlement option is not chosen by the policy owner or the beneficiary, what option will be used by the insurer? Answer: Lump-sum payment Question: What provision allows the policyowner to reactivate a lapsed life insurance policy within a specified period of time with proof of insurability? Answer: Reinstatement Question: Which of the two types of policy assignments requires transfer of all ownership rights in the policy to a third party Answer: Absolute Assignment Question: What are the dividend options in life insurance policy Answer: Cash, reduced premium, accumulation at interest, paid-up additions, paid-up option, one-year term, and acceleration of endowment Question: When will a contingent beneficiary receive death benefit from a life insurance policy? Answer: When the primary beneficiary dies before the insured Question: What provision in a life insurance policy extends coverage beyond the premium due date? Answer: Grace period Question: In the fixed-period settlement option, how will the number of installments for the death benefit proceeds determine the amount of the installments? Answer: The longer the period selected, the smaller each installment will be Question: What nonforfeiture option has the highest amount of insurance protection? Answer: Extended Term Question: If a life insurance policy has an irrevocable beneficiary designation Answer: The beneficiary can old be changed with written permission of the beneficiary Question: What is the purpose of a free-look period in insurance policies? Answer: It allows the insured to reject the policy with a full refund Question: What is the clause that is included in a life policy that limits or eliminates the death benefit if the insured dies as a result of war or while serving in the military? Answer: Military Service or War Question: An insured receives an annual life insurance dividend check. What term best described this arrangement? Answer: Cash option Question: Nonforfeiture values guarantee what for the policyowner? Answer: That the cash value will not be lost Question: What required provision protects against unintentional lapse of the policy? Answer: Grace period Question: What are the benefits available under Social Security? Answer: Disability benefits, death benefits, survivor's benefits, and old-age and retirement benefits Question: Group life insurance policies are written as what type of life insurance? Answer: Annually Renewable Term Question: What are the personal uses of life insurance? Answer: Survivor protection, estate creation and conservation, cash accumulation and liquidity Question: Who qualifies for tax-sheltered annuities, or 403(b) plans? Answer: Employees of nonprofit organizations under Section 501(c)(3) and employees of public school systems Question: What is the general taxation rule for death benefits payable to the beneficiary of a life insurance policy? Answer: Death benefits are generally not subject to income taxes Question: Upon surrender of a life insurance policy, what portion of the cash value will be taxed? Answer: Only the portion in excess of the premium paid Question: What is the main advantage of converting from group life insurance to individual coverage? Answer: Evidence of insurability is not required Question: What is the primary purpose of a 401(k) plan? Answer: Provide retirement income Question: Is the death benefit of a life insurance policy taxed to the beneficiary if it's received as a lump sum? Answer: No, lump-sum benefits are received tax free Question: What are the characteristics of the group that underwriters will consider before issuing a group life policy? Answer: Group's purpose, size, financial strength, and turnover Question: What is the main purpose of the 7-Pay Test? Answer: To determine if a life insurance policy a Modified Endowment Contract (MEC) Question: If the beneficiary of a life insurance policy receives death benefit payments that consist of principal and interest, which portion, if any, will be taxed? Answer: The interest payment will be taxed. Question: What does it mean when a retirement plan is qualified? Answer: The plan has favorable tax treatment Question: Who may contribute to an HR-10 plan? Answer: A self-employed individual Question: Who would be considered a third Answer: An individual or an entity who is not the insured Question: What does liquidity mean in a life insurance policy? Answer: Availability of cash value Question: What is required to qualify an individual to contribute to a traditional IRA? Answer: Earned income Question: When would life insurance policy proceeds be included in the insured's taxable estate? Answer: When there is an incident of ownership at the time of death Question: What type of policy is typically issued without proof of insurability from the insured? Answer: Group policy Question: SIMPLE plans are available to groups of how many employees? Answer: No more than 100 Question: Why are dividends in life insurance policies not taxable? Answer: They are a return of unused premiums and are not considered income for tax purposes Question: What type of worker would not qualify for Keogh Plan? Answer: A worker who works less than 1,000 hours per year Question: The premiums paid by the employer in a business life insurance policy are Answer: Tax deductible by the employer Question: When an employee terminates coverage under a group insurance policy, how long does the coverage stay in force? Answer: 31 days Question: How are contributions to a tax-sheltered annuity treated with regards to taxation? Answer: They are not included as income for the employee, but are taxable upon distribution Question: What type of insurance policies would perform the function of cash accumulation? Answer: Whole Life Insurance Question: In a life settlement contract, whom does the life settlement broker represent? Answer: The owner of the policy Question: What is true regarding a nonqualified retirement plan? Answer: Contributions are not tax deductible, It can discriminate in benefits and selecting participants, earnings grow tax deferred and it does not need IRS approval Question: What document describes an insured's medical history, including diagnosis and treatments? Answer: Attending Physician's Statement Question: What must the insurer do before giving the applicant an HIV exams? Answer: Get the applicants informed written consent prior to the exam. Results will be disclosed to underwriters but not agents Question: In health insurance, the policy itself and the insurance application form what? Answer: Entire Contract Question: Who must sign a health insurance application? Answer: The policyowner, the insured (if different), and the agent Question: What is the term used for a written request to issue an insurance contract based on the provided Answer: information? Application Question: What information are the members of the Medical Information Bureau required to report? Answer: Medical information about the applicants or insured Question: What is the best way to make a change on an application for insurance? Answer: Start over with a fresh application Question: When should an agent obtain a Statement of Good Health from the insured? Answer: When the premium was paid upon policy delivery and not at the time application Question: Whose responsibility is it to inform an applicant for health insurance about the insurer's information gathering practices? Answer: The agent Question: Who is responsible for paying the cost of a medical examination required in the process of underwriting? Answer: The insurer Question: If an insurer decides to obtain medical information from different sources in order to determine the insurability of an applicant, who must be notified of the investigation? Answer: The applicant Question: What is the entire contract in health insurance underwriting? Answer: The application and the policy issued Question: If an agent makes a correction on the application for health insurance, who must initial the correct answer? Answer: The applicant Question: If an underwriter requires extensive information about the applicant's medical history, what report will best serve this purpose? Answer: Attending Physician's Statement Question: An agent is in the process of replacing the insured's current health insurance policy with a new one. What would be the proper action? Answer: The old policy should stay in force until the new policy is issued Question: An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do? Answer: Ask them to sign a statement of good health Question: To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested? Answer: At the time of application Question: Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information... Answer: Held in or transmitted in any form Question: In a replacement situation, what is not considered? Answer: Assets Question: If an insured is not required to pay a deductible, what kind of coverage do they have? Answer: First-dollar Coverage Question: What are the three basic coverages for medical expense insurance? Answer: Hospital, Surgical, Medical Question: What is the typical deductible for basic surgical expense insurance? Answer: $0. There is no deductible but coverage is limited Question: What is not covered under Basic Hospital Expense Coverage? Answer: Surgeon's fees Question: How does a member of an HMO see a specialist? Answer: The primary care physician refers the member Question: Where can HMO members receive inpatient hospital care? Answer: Anywhere, even if outside the service area Question: If a health care plan has characteristics of an HMO and PPO, what type of plan is it? Answer: POS or Point-of Service Question: When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is referred to as... Answer: Preferred Provider Organization Question: How can a new physician be added to the PPO's approved list? Answer: Agree to follow the PPO standards and charge the appropriate fees Question: How do employer contributions to a Health Savings Account affect the insured's taxes? Answer: The employer contributions are not included in the individual insured's taxable income. Question: What are Health Savings Accounts designed to do? Answer: Help individuals save for qualified health expenses Question: To be eligible for a Health Savings Account, an individual must be covered by what plan? Answer: High-Deductible Health Plan Question: What is a penalty tax for nonqualified distributions from a health savings account? Answer: 20% Question: An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation? Answer: They are tax deductible Question: How long will benefit periods for individual short-term disability policies continue for? Answer: 6 months to 2 years Question: When does coverage apply for a group disability income insurance? Answer: Both on and off the job Question: What must Long-Term care policies include? Answer: Alzheimer's disease Question: What type of care is Respite care? Answer: Relief for a major care giver Question: Most Long-Term Care plans have... Answer: Guaranteed renewability Question: In Long-Term Care insurance, what type of care is provided with intermediate care? Answer: Occasional nursing or rehabilitative care Question: In Long-Term Care coverage, if the elimination period get shorter what does the premium do? Answer: The premium gets higher Question: What type of dental plan is incorporated into a major medical expense plan? Answer: Integrated dental plan Question: How does an employee qualify for COBRA? Answer: Any termination of employment for reasons other than misconduct Question: What type of hospital policy pays a fixed amount each day that the insured is in the hospital? Indemnity Answer: Question: How long is the grace period for weekly premium policies or industrial policies? 7 days for weekly premium policies Answer: Question: How long is the grace period for monthly premium policies? Answer: 10 days for monthly premium policies Question: How long is the grace period for annual or other modes of premium policies? Answer: 31 days for any other premium policies Question: Does a reinstated policy provide immediate coverage for an illness? Answer: No Question: What provision would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner? Answer: Payment of Claims Question: How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company? Answer: Within 90 days to 1 year Question: What provision states that the insurance company must pay Medical Expense claims immediately? Answer: Time of Payment of Claims Question: What is does the Insuring Clause do? Answer: It identifies the agreement between the insured and the insurance company and the loss covered. Question: What does the Insuring Clause of a disability policy not include? Answer: The method of premium payment Question: In respect to the Consideration Clause, which of the following is consideration on the part of the insurer? Answer: The insurer promises to pay in accordance with the contract terms. Question: A Waiver of Premium Provision may be included with which kind of health insurance policy? Answer: A Disability Income policy. Question: What must Medicare Supplement policies and Long-Term Care policies be written as? Answer: A guaranteed renewable contract. Question: According to the Rights of Renewability Rider for cancellable policies what is untrue about the cancellation of an individual insurance policy? Answer: Any unearned premiums are retained by the insurance company. Question: What is not a feature of a guaranteed renewable provision? Answer: The insurer can increase the policy premium on a individual basis. Question: What health insurance provision describes the insured's right to cancel coverage? Answer: The Renewal Provision. Question: The premium charge for exercising the guaranteed insurability rider is based upon the insured's what? Answer: The attained age. Question: What feature is not a part of a noncancellable policy? Answer: The insurer can terminate the contract at the renewal for certain conditions. Question: The insurer can change what on a Guaranteed Renewable Health Insurance policy? Answer: The rates by class. Question: According to the Reinstatement Provision, once a lapsed policy is reinstated, how soon will coverage be available for accidents? Answer: It is available immediately. Question: How will changing one's occupation to be more hazardous affect the health insurance policy in force? Answer: The claim benefits will be reduced to what the premium would have bought. Question: What does it mean if a Health Insurance policy has a 31-day grace period Answer: The policy remains in effect until the period ends if the premium has still not been paid. Question: If the insured pays a monthly premium for a Health Insurance policy, how long would the grace period be on the policy? Answer: It would last for 10 days. Question: What is a deductible in a Health Insurance policy? Answer: The specified dollar amount that the insured must pay before the insurer pays the policy benefits. Question: What are usual, reasonable, and customary charges based on? Answer: The average charge for a procedure in a specific geographic region. Question: What health insurance provision prevents the insured from bringing a lawsuit against the insurance company for at least 60 days after proof of loss is provided? Answer: The Legal Actions Provision. Question: A Waiver of Premium Provision may be included with what type of Health Insurance policies? Answer: The Disability Income policy. Question: Who decides which optional provisions would be included in a Health Insurance policy? Answer: The insurance company. Question: What section of a Health Insurance policy lists the services for which the insurer will not provide coverage? Answer: The Exclusions Section. Question: What does the free-look period allow the insured to do? Answer: To return the policy for a full refund. Question: When can an irrevocable beneficiary be changed? Answer: Only with the written consent of the beneficiary. Question: According to the Physical Examination and Autopsy Provision, who pays for the expense of an autopsy? Answer: The insurer. Question: What is the purpose of the Coinsurance Provision in Health Insurance policies? Answer: It prevents overutilization of the policy benefits. Question: What Health Insurance policy provision allows the insured the right to cancel coverage? Answer: The Renewability Provision. Question: According to the Time Limit on Certain Defenses Provision in a Health Insurance policy, when can an insurer contest fraudulent misstatements on an application? Answer: It can be any time while the policy is in force. Question: Under an Individual Disability Income policy, the benefits must be paid on at least what schedule? Answer: On a monthly basis. Question: What Health Insurance policy provision states to whom the claim benefits must be paid? Answer: The Payment of Claims Provision. Question: What is the name of the act by the insured to voluntarily give up insurance? Answer: Cancellation. Question: What Health Insurance policy provision allows the insured a period of time to examine the policy and determine whether to keep it? Answer: The Free-Look Provision. Question: What type of policy allows the insurance company to cancel a policy at any time? Answer: Cancellable Question: Under the Physical Exam and Autopsy Provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending? Answer: An unlimited amount of times. Question: What is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application? Answer: At any time while the policy is in force. Question: What is another name for Social Security benefits? Answer: The Old Age, Survivors, and Disability Insurance. Question: What does the Social Security Disability definition not include? Answer: Any disability expected to last for at least 6 months Question: What benefit is based on a Primary Insurance Amount or PIA? Answer: The Social Security Disability benefit. Question: What is another name for Medicare Advantage plans? Answer: Part C Question: What part of Medicare is known as hospital insurance? Answer: Part A Question: At what age do individuals qualify for Medicare? Answer: At age 65. Question: When is the initial enrollment period for Medicare Part A? Answer: 3 months before turning 65 and 3 months after Question: What is the purpose of Medicare Supplement plans? Answer: To fill in the gaps in Medicare coverage. Question: How many parts does Medicare have? Answer: It has 4 parts, A through D. Question: If an individual is covered by Medicare and is also covered by their employer's health plan, which plan would be considered primary? Answer: The employer plan. Question: What benefits are provided by Medicare Part C? Answer: It has expanded benefits through private insurance programs such as HMOs or PPOs. Question: How many pints of blood will be paid for by Medicare Supplement core benefits? Answer: It will only pay for the first 3 pints. Question: Who issues Medigap policies? Answer: Private insurers Question: What is another name for Medicare Supplement plans? Answer: Medigap Question: How does someone qualify for Social Security Disability Income benefits? Answer: They must have fully insured status, meet the definition of disability, and satisfy the waiting period. Question: What is the required free-look period for Medicare Supplement policies? Answer: It is 30 days. Question: Who is eligible for Medicare Part B? Answer: Anyone who has enrolled in Medicare Part A. Question: How is Medicare Part B funded? Answer: By monthly premiums and from the general revenue of the federal governement. Question: What type of services will Medicare Part A pay for? Answer: Any hospital care, skilled nursing facility care, home health care, and hospice care. Question: What part of Medicare pays for inpatient hospital care, skilled nursing facility, home health care, and hospice care? Answer: Medicare Part A Question: What Part of Medicare is known as medical insurance? Answer: Medicare Part B Question: Who can qualify for Medicaid? Answer: Any person with insufficient income. Question: What part of Medicare will cover lab services and diagnostic tests? Answer: Medicare Part B Question: How long is an open enrollment period for Medicare Supplement policies? Answer: It is a 6-month period. Question: Who is able to qualify for Medicare Part A? Answer: Anyone who is over 65. Question: What program expands individual public assistance programs for people with insufficient income and resources? Answer: Medicaid Question: What can a Medicare SELECT policy not do? Answer: Prohibit payment for regularly covered services if provided by non-network providers. Question: What part of Medicare covers physician's and surgeon's services? Answer: Medicare Part B Question: Once a person meets the stringent requirements for disability benefits, how long is the waiting period under Social Security before any benefits will be paid? Answer: Benefits will be paid in 5 months. Question: What is not covered under Plan A in Medigap Health Insurance? Answer: The deductible. Question: In which Medicare Supplement policies are the core benefits found? Answer: In all Medicare plans. Question: What premium mode would result in the highest annual cost for an insurance policy Answer: A monthly premium. Question: Does the policyowner have the right to change beneficiaries in any case? Answer: No, a policyowner can only change the beneficiary if it is a revocable beneficiary. Question: In Group Medical and Dental Expense Insurance, what percentage of premium paid by the employer is deductible as a business expense? Answer: 100% is deductible. Question: According to the Coordination of Benefits Provision, if both parents have coverage for a child from their employer's policies, which policy will pay first? Answer: The order of payment will be determine by the birthday rule. Question: How are benefits received by the business from a Key Person Disability Income? Answer: As Tax-free Income Question: If the insured's share in the cost of health insurance premiums with the employer, this would be known as what type of Group Health Insurance plan? Answer: A Contributory Plan. Question: What type of health insurance covers partners or corporate officers of a closely held business? Answer: Disability Buy-Sell Question: How are individually owned disability income benefits taxed once received by the insured? Answer: Disability benefits are not taxed Question: What type of health insurance is sold to small business owners to reimburse them for the overhead expenses? Answer: Business Overhead Expense Insurance (BOE) Question: What is the tax advantage of the employer paying premiums for its employees for disability income insurance? Answer: Premiums are deductible as a business expense. Question: What type of insurance covers an employee who is hurt on the job? Answer: Workers Compensation Question: When a business receives benefits from its key person disability insurance, how are those benefits taxed? Answer: The key person disability insurance benefits are tax-free. Question: What is the birthday rule in a Coordination of Benefits Provision? Answer: The coverage of the parent whose birthday is earliest in the year is considered primary. Question: How long do Short-Term Disability Group Health Insurance plans pay benefits? Answer: For any period less than 2 years. Question: What are the five basic characteristics of managed care plans? Answer: Controlled access to providers, comprehensive case management, preventive care, risk sharing, and high quality care. Question: What is the purpose of Managed Care Health Insurance plans? Answer: To control health insurance claims expenses Question: What is subrogation in health insurance? Answer: gives the insurer the right to seek recovery from a third party that was responsible with the loss after the insurer has paid for the loss Question: In health insurance, when would excess plans pay benefits? Answer: After the primary plans has paid its full promised benefits, the excess plan will pay the remaining balance. Question: What type of disabilities will be covered by occupational coverage? Answer: Disabilities that result from accident or sickness that occur on or off the job. Question: What are the four types of workers compensation benefits? Answer: Medical, income, rehabilitation, and death benefits Question: Under what employer-provided plan are the benefits taxable to an employee in proportion to the amount of premium paid by the employer? Answer: Disability Income Question: Under a fully contributory health plan, how are benefits received by the employee? Answer: As tax-free income. Question: What is true regarding Business Overhead Expense Insurance? Answer: Premiums are tax deductible. Question: Workers Compensation benefits are regulated by which entity? Answer: The state government. Question: What is the taxation of Group Medical Expense premiums and benefits? Answer: Premiums are tax deductible and benefits are not taxable. Question: What is the provision that prevents the insured from collecting twice for the same loss? Answer: Subrogation Question: The Commissioner must give reasonable notice to all interested parties as to the time, place, and purpose of a hearing within the minimum of how many days of the hearing? Answer: 20 days Question: What is not a duty of the Commissioner? Answer: Developing insurance rates. Question: What actions by an insurance company will cause an examination by the Commissioner? Answer: An application for an initial Certificate of Authority Question: Who is responsible for the cost of examinations conducted by the Commissioner? Answer: The insurer being examined Question: Producers must complete how many hours of continuing education on the subject of ethics every licensing period? Answer: 3 hours Question: What definition does not fit the definition of an administrator? Answer: A life and health producer who only sells insurance Question: A producer who has allowed their license to lapse may reinstate the examination within what maximum time period? Answer: 12 months Question: Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of... Answer: Twisting Question: How often are producers required to complete continuing education requirements to keep the license in force? Answer: Every 3 years Question: The Nevada Insurance Guaranty Association has a legal right to seek damages from third parties after having reimbursed the insured for the loss. What is this known as? Answer: Subrogation Question: An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of? Answer: Rebating Question: Who is an insurance agent? Answer: A person authorized to sell, solicit, and negotiate insurance contracts. Question: When is controlled business legal? Answer: When the commissions from controlled business do not exceed the aggregate commissions on all the other business Question: What type of licensee represents the insured? Answer: Broker Question: Who is considered a nonresident agent? Answer: An agent who resides and is licensed in another state, but who is authorized to transact insurance in this state. Question: For what reason can a temporary license be issued? Answer: For continuation of business in case the licensed producer dies or becomes disabled. Question: What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is? Answer: Misrepresentation Question: What document is required for an insurance company to transact insurance? Answer: Certificate of Authority Question: Who must be a member of insurance guaranty associations? Answer: All insurers authorized to write insurance in Nevada. Question: If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer? Answer: Authorized or admitted insurer Question: Insurers are classified according to their domicile. What are the three types of insurers? Answer: Domestic, foreign, and alien. Question: When can the Commissioner or Director examine insurers? Answer: Whenever deemed necessary but at least once every few years. Question: Who may share in the commission from the sale of a life insurance policy? Answer: Only producers properly licensed for the type of insurance transaction Question: What are the most common penalties for violations of insurance statutes? Answer: A Cease and Desist order, a fine, and license suspension or revocation. Question: In general, who can be excluded from producer licensing and examination requirements? Answer: Insurance company officers, directors, or others who do not transact insurance and who do not receive commissions for their services. Question: To whom may a certificate of authority be issued? Answer: To an insurer authorized to transact business in this state. Question: In the Commissioner finds a licensee engaging in an unfair method of competition, what order will be issued? Answer: A Cease and Desist order. Question: What is controlled business? Answer: Insurance on the producer's own life or property, or the lives, or or property of the producer's family or business associates. Question: On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. What is the company guilty of? Answer: Misrepresentation. Question: Who must be notified of a producer's change of address? Answer: The Department of Insurance. Question: If a producer makes maliciously critical statements about another insurer, what is this illegal practice called? Answer: Defamation. Question: When a producer's appointment with the insurer is terminated, who must notify the Commissioner? Answer: The appointing insurer. Question: Each domestic insurer of Nevada must be examined by the Commissioner every... Answer: 5 years. Question: What is the required grace period in group life policies in Nevada? Answer: 31 days Question: What is not a required provision in group life insurance policies issued in Nevada? Answer: Nonforfeiture benefits Question: During replacement of life insurance, a replacing insurer must do which of the following? Answer: Obtain a list of all life insurance policies that will be replaced Question: What statement would best describe the difference between viatical settlement and accelerated death benefits? Answer: Viaticals are funded by a third party; accelerated death benefits are provided by the insurer that issued the original policy. Question: Which rule would apply is an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance? Answer: Replacement rule