PEARSON VUE LIFE INSURANCE PRACTICE EXAM
BANK 2026/2027 – VERIFIED QUESTIONS AND
CORRECT ANSWERS EDITION.
◎ Health insurance policies are offered on a "take it or leave it" basis and referred to as
which of the following types of contracts? ANSWER:- Contracts of Adhesion
◎ Under the Claims Forms provision of a health policy, if the insurance company fails
to send claim forms within the time period required, the insured should: ANSWER:-
Submit the claim in any form, which must be accepted by the company as adequate
proof of loss
◎ In an Accidental Death and Dismemberment (AD&D) policy, capital sum refers to:
ANSWER:- A lump sum payment made for an accidental dismemberment
◎ The Coordination of Benefits clause found in group health master contracts is used
to: ANSWER:- Avoid double payment of benefits to an insured who has duplicate group
coverages
◎ Which of the following definitions MOST accurately describes the Probationary
Period? ANSWER:- The waiting period a new hire must satisfy prior to becoming
eligible for group health coverage
◎ A Health Maintenance Organization (HMO) differs from a traditional insurer in that an
HMO: ANSWER:- Emphasizes preventive medicine
◎ A married insured has an Accidental Death and Dismemberment (AD&D) policy that
names their sibling as the primary beneficiary and their child as the contingent
beneficiary. If the insured and their sibling are both killed instantly in a train accident, the
policy proceeds would be paid to which of the following? ANSWER:- The insured's child
◎ The Social Security program provides all of the following benefits EXCEPT:
ANSWER:- Workers compensation
◎ Under a Guaranteed Renewable Accident & Health policy, an insurer retains the right
to: ANSWER:- Increase the premium rate for an entire class of insureds
◎ A Disability Income policy may provide benefits for which of the following losses?
ANSWER:- Residual Disability
◎ Which of the following statements about the Medicare program is CORRECT?
ANSWER:- It is a federally sponsored program.
, ◎ A child has a physical impairment, attends school, and is incapable of self-sustaining
employment and/or self care. Which of the following statements is CORRECT about the
child's medical coverage under their parent's group plan? ANSWER:- The child's
coverage continues as long as they are continually incapacitated and financially
dependent on their parent.
◎ Suicide, pre-existing conditions and self-inflicted injuries are dealt with in which of the
following policy features? ANSWER:- Exclusions
◎ The PRIMARY purpose of Medicaid is to: ANSWER:- Provide Medical Expense
coverage to persons below certain minimum income requirements
◎ Which of the following provisions designates to whom claim payments are made?
ANSWER:- Payment of Claims
◎ Under an Accidental Death and Dismemberment (AD&D) policy, insurable interest
must exist at which of the following times? ANSWER:- At the inception of the policy
◎ When periodic claim payments are required under a long-term disability income
policy, an insurer MUST make payments to an insured at least once every: ANSWER:-
Month
◎ A 68 year-old employee that is covered by a group medical insurance plan has
medical expenses. The employee's company health plan is the: ANSWER:- Secondary
payor
◎ An insured whose Disability Income policy contains a Change of Occupation clause
takes a new job in a more hazardous occupation and fails to notify the insurer of the
change. One year later, the insured becomes disabled. The insurer will most likely take
which of the following actions? ANSWER:- Settle the claim according to what the
premiums would have purchased under the more hazardous occupation
◎ The purpose of the Medical Information Bureau (MIB) is to: ANSWER:- Share
medical data among member companies
◎ Which of the following laws requires an insurer to notify an applicant in writing that an
investigative consumer report may be made on the applicant? ANSWER:- D. Fair Credit
Reporting Act (Insurance Information and Privacy Protection Act)
◎ Which of the following statements is CORRECT about a Waiver of Premium
provision in a Disability Income policy? ANSWER:- D. It allows the insured to maintain a
policy in force while disabled and unable to pay premiums.
◎ The Internal Revenue Service (IRS) considers Disability Income benefits paid under
an employer-paid group Disability Income to be: ANSWER:- C. fully taxable
BANK 2026/2027 – VERIFIED QUESTIONS AND
CORRECT ANSWERS EDITION.
◎ Health insurance policies are offered on a "take it or leave it" basis and referred to as
which of the following types of contracts? ANSWER:- Contracts of Adhesion
◎ Under the Claims Forms provision of a health policy, if the insurance company fails
to send claim forms within the time period required, the insured should: ANSWER:-
Submit the claim in any form, which must be accepted by the company as adequate
proof of loss
◎ In an Accidental Death and Dismemberment (AD&D) policy, capital sum refers to:
ANSWER:- A lump sum payment made for an accidental dismemberment
◎ The Coordination of Benefits clause found in group health master contracts is used
to: ANSWER:- Avoid double payment of benefits to an insured who has duplicate group
coverages
◎ Which of the following definitions MOST accurately describes the Probationary
Period? ANSWER:- The waiting period a new hire must satisfy prior to becoming
eligible for group health coverage
◎ A Health Maintenance Organization (HMO) differs from a traditional insurer in that an
HMO: ANSWER:- Emphasizes preventive medicine
◎ A married insured has an Accidental Death and Dismemberment (AD&D) policy that
names their sibling as the primary beneficiary and their child as the contingent
beneficiary. If the insured and their sibling are both killed instantly in a train accident, the
policy proceeds would be paid to which of the following? ANSWER:- The insured's child
◎ The Social Security program provides all of the following benefits EXCEPT:
ANSWER:- Workers compensation
◎ Under a Guaranteed Renewable Accident & Health policy, an insurer retains the right
to: ANSWER:- Increase the premium rate for an entire class of insureds
◎ A Disability Income policy may provide benefits for which of the following losses?
ANSWER:- Residual Disability
◎ Which of the following statements about the Medicare program is CORRECT?
ANSWER:- It is a federally sponsored program.
, ◎ A child has a physical impairment, attends school, and is incapable of self-sustaining
employment and/or self care. Which of the following statements is CORRECT about the
child's medical coverage under their parent's group plan? ANSWER:- The child's
coverage continues as long as they are continually incapacitated and financially
dependent on their parent.
◎ Suicide, pre-existing conditions and self-inflicted injuries are dealt with in which of the
following policy features? ANSWER:- Exclusions
◎ The PRIMARY purpose of Medicaid is to: ANSWER:- Provide Medical Expense
coverage to persons below certain minimum income requirements
◎ Which of the following provisions designates to whom claim payments are made?
ANSWER:- Payment of Claims
◎ Under an Accidental Death and Dismemberment (AD&D) policy, insurable interest
must exist at which of the following times? ANSWER:- At the inception of the policy
◎ When periodic claim payments are required under a long-term disability income
policy, an insurer MUST make payments to an insured at least once every: ANSWER:-
Month
◎ A 68 year-old employee that is covered by a group medical insurance plan has
medical expenses. The employee's company health plan is the: ANSWER:- Secondary
payor
◎ An insured whose Disability Income policy contains a Change of Occupation clause
takes a new job in a more hazardous occupation and fails to notify the insurer of the
change. One year later, the insured becomes disabled. The insurer will most likely take
which of the following actions? ANSWER:- Settle the claim according to what the
premiums would have purchased under the more hazardous occupation
◎ The purpose of the Medical Information Bureau (MIB) is to: ANSWER:- Share
medical data among member companies
◎ Which of the following laws requires an insurer to notify an applicant in writing that an
investigative consumer report may be made on the applicant? ANSWER:- D. Fair Credit
Reporting Act (Insurance Information and Privacy Protection Act)
◎ Which of the following statements is CORRECT about a Waiver of Premium
provision in a Disability Income policy? ANSWER:- D. It allows the insured to maintain a
policy in force while disabled and unable to pay premiums.
◎ The Internal Revenue Service (IRS) considers Disability Income benefits paid under
an employer-paid group Disability Income to be: ANSWER:- C. fully taxable
