MS Life and Health Insurance Test17
Which of these do NOT constitute policy delivery? - ANSWERSPolicy 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? - ANSWERSVariable 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? - ANSWERSThe
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? - ANSWERSWaiver 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. -
ANSWERS30
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? - ANSWERSGuaranteed Insurability Option rider
Which type of policy is considered to be overfunded, as stated by IRS guidelines? -
ANSWERSModified Endowment Contract
How does a typical Variable Life Policy investment account grow? - ANSWERSThrough mutual
funds, stocks, bonds
,Which Federal law allows an insurer to obtain an inspection report on a potential insured? -
ANSWERSFair Credit Reporting Act
What is Medicare? - ANSWERSis a hospital and medical expense insurance program
What kind of premium does a Whole Life policy have? - ANSWERSlevel
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? - ANSWERS50,000
Pre-hospitalization authorization is considered an example of: - ANSWERSmanaged care
Under a Renewable Term policy, - ANSWERSthe 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? - ANSWERS$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: - ANSWERSPolicy Loan provision
What action can a policyowner take if an application for a bank loan requires collateral? -
ANSWERSAssign policy ownership to the bank
Which of the following statements is CORRECT about the Life and Health Insurance Guaranty
Association? - ANSWERSIt 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? - ANSWERSA 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? -
ANSWERSDeferred
A Family Income Policy is a combination of Whole Life and - ANSWERSDecreasing 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? - ANSWERSNoncancelable
Information obtained from a phone conversation to the proposed insured can be found in which
of these reports? - ANSWERSInspection report
When must insurable interest exist for a life insurance contract to be valid? - ANSWERSInception
of the contract
What is the purpose of a Policy Summary? - ANSWERSIt highlights the critical parts of the policy
issued
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? - ANSWERSReinstatement
Which of these do NOT constitute policy delivery? - ANSWERSPolicy 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? - ANSWERSVariable 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? - ANSWERSThe
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? - ANSWERSWaiver 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. -
ANSWERS30
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? - ANSWERSGuaranteed Insurability Option rider
Which type of policy is considered to be overfunded, as stated by IRS guidelines? -
ANSWERSModified Endowment Contract
How does a typical Variable Life Policy investment account grow? - ANSWERSThrough mutual
funds, stocks, bonds
,Which Federal law allows an insurer to obtain an inspection report on a potential insured? -
ANSWERSFair Credit Reporting Act
What is Medicare? - ANSWERSis a hospital and medical expense insurance program
What kind of premium does a Whole Life policy have? - ANSWERSlevel
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? - ANSWERS50,000
Pre-hospitalization authorization is considered an example of: - ANSWERSmanaged care
Under a Renewable Term policy, - ANSWERSthe 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? - ANSWERS$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: - ANSWERSPolicy Loan provision
What action can a policyowner take if an application for a bank loan requires collateral? -
ANSWERSAssign policy ownership to the bank
Which of the following statements is CORRECT about the Life and Health Insurance Guaranty
Association? - ANSWERSIt 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? - ANSWERSA 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? -
ANSWERSDeferred
A Family Income Policy is a combination of Whole Life and - ANSWERSDecreasing 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? - ANSWERSNoncancelable
Information obtained from a phone conversation to the proposed insured can be found in which
of these reports? - ANSWERSInspection report
When must insurable interest exist for a life insurance contract to be valid? - ANSWERSInception
of the contract
What is the purpose of a Policy Summary? - ANSWERSIt highlights the critical parts of the policy
issued
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? - ANSWERSReinstatement
