MS Life and Health Insurance Test Questions & Answers 2024/2025

MS Life and Health Insurance Test Questions & Answers 2024/2025 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 exists 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 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? - ANSWER-Reinstatement A 42-year-old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his/her needs change. Which of the following policies will best meet this need? - ANSWER-Universal Life What does the ownership clause in a life insurance policy state? - ANSWER-Who the policyowner is and what rights the policyowner is entitled to G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills? - ANSWER-The insured An insurer must provide an insured with claim forms within __ days after receiving notice of a loss. - ANSWER-15 S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits? - ANSWER-Full benefits are payable under the Master contract The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is: - ANSWER-Time Limit on Certain Defenses A Health Reimbursement Arrangement MUST be established: - ANSWER-by the employer What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be unable to perform to qualify for Long Term Care benefits? - ANSWER-2 In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments: - ANSWER-After an insured has become totally disabled as defined in the policy K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true? - ANSWER-Proceeds will be payable to K's estate if P dies within a specified time On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take? - ANSWER-Collect initial premium along with a signed health statement Which of the following statements about the classification of applicants is INCORRECT? - ANSWER-Substandard applicants are never declined by underwriters J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and receives a bill for $10,000, J would pay: - ANSWER-$3,600 An insurance producer's license may be suspended or revoked under which of the following circumstances? - ANSWER-The producer has misappropriated money held in a fiduciary capacity An insurance company that conducts business in Mississippi and was incorporated in Mississippi is called a(n) - ANSWER-domestic insurer In a life insurance policy, which feature states that the policy will not cover certain risks? - ANSWER-Exclusion Which mode of payment is NOT used by health insurance policies? - ANSWER-Single premium What is the initial requirement for an insured to become eligible for benefits under the Waiver of Premium provision? - ANSWER-Insured must be under a physician's care What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan? - ANSWER-100 Which of these is NOT a characteristic of a Health Reimbursement Arrangement (HRA)? - ANSWER-Employee funds the HRA entirely The Long-Term Care cost disclosure information MUST appear in bold print on the cover page of which of the following materials? - ANSWER-Outline of coverage Continues...