MS Life and Health Insurance Test
1. Which of these do NOT constitute policy delivery?: Policy issued with a rating
2. Which of these types of life insurance allows the policyowner to have level
premiums and to also choose from a selection of investment options?:
Variable Life
3. 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?: The insurer will adjust the
benefit to what the premiums paid would have purchased at the insured's actual
age
4. A life insurance policy which ensures that the premium will be paid if the
insured becomes disabled has what kind of rider attached?: Waiver of
Premium
5. 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.: 30
6. 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?: Guaranteed Insurability Option rider
7. Which type of policy is considered to be overfunded, as stated by IRS
guidelines?: Modified Endowment Contract
8. How does a typical Variable Life Policy investment account grow?:
Through mutual funds, stocks, bonds
9. Which Federal law allows an insurer to obtain an inspection report on a
potential insured?: Fair Credit Reporting Act
10. What is Medicare?: is a hospital and medical expense insurance program
11. What kind of premium does a Whole Life policy have?: level
12. 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?: 50,000
13. Pre-hospitalization authorization is considered an example of:: managed
care
14. Under a Renewable Term policy,: the renewal premium is calculated on the
basis of the insured's attained age
15. 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?: $0
16 A provision in a life insurance policy that pays the policyowner an amount
that does not surpass the guaranteed cash value is called the:: Policy Loan
provision
17. What action can a policyowner take if an application for a bank loan
requires collateral?: Assign policy ownership to the bank
18. Which of the following statements is CORRECT about the Life and
Health Insurance Guaranty Association?: It is funded by insurance companies
through assessments
19. An insurance company that replaces existing insurance must provide a
copy of which of the following documents to the existing insurance
company?: A policy summary
20. 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?: Deferred
21. A Family Income Policy is a combination of Whole Life and: Decreasing
Term insurance
22. 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?: Noncancelable
23. Information obtained from a phone conversation to the proposed
insured can be found in which of these reports?: Inspection report
24. When must insurable interest exist for a life insurance contract to be
valid?: Inception of the contract
25. What is the purpose of a Policy Summary?: It highlights the critical parts
of the policy issued
26. 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?: Reinstatement
27. 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?: Universal Life
28. What does the ownership clause in a life insurance policy state?: Who
the policyowner is and what rights the policyowner is entitled to
1. Which of these do NOT constitute policy delivery?: Policy issued with a rating
2. Which of these types of life insurance allows the policyowner to have level
premiums and to also choose from a selection of investment options?:
Variable Life
3. 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?: The insurer will adjust the
benefit to what the premiums paid would have purchased at the insured's actual
age
4. A life insurance policy which ensures that the premium will be paid if the
insured becomes disabled has what kind of rider attached?: Waiver of
Premium
5. 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.: 30
6. 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?: Guaranteed Insurability Option rider
7. Which type of policy is considered to be overfunded, as stated by IRS
guidelines?: Modified Endowment Contract
8. How does a typical Variable Life Policy investment account grow?:
Through mutual funds, stocks, bonds
9. Which Federal law allows an insurer to obtain an inspection report on a
potential insured?: Fair Credit Reporting Act
10. What is Medicare?: is a hospital and medical expense insurance program
11. What kind of premium does a Whole Life policy have?: level
12. 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?: 50,000
13. Pre-hospitalization authorization is considered an example of:: managed
care
14. Under a Renewable Term policy,: the renewal premium is calculated on the
basis of the insured's attained age
15. 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?: $0
16 A provision in a life insurance policy that pays the policyowner an amount
that does not surpass the guaranteed cash value is called the:: Policy Loan
provision
17. What action can a policyowner take if an application for a bank loan
requires collateral?: Assign policy ownership to the bank
18. Which of the following statements is CORRECT about the Life and
Health Insurance Guaranty Association?: It is funded by insurance companies
through assessments
19. An insurance company that replaces existing insurance must provide a
copy of which of the following documents to the existing insurance
company?: A policy summary
20. 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?: Deferred
21. A Family Income Policy is a combination of Whole Life and: Decreasing
Term insurance
22. 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?: Noncancelable
23. Information obtained from a phone conversation to the proposed
insured can be found in which of these reports?: Inspection report
24. When must insurable interest exist for a life insurance contract to be
valid?: Inception of the contract
25. What is the purpose of a Policy Summary?: It highlights the critical parts
of the policy issued
26. 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?: Reinstatement
27. 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?: Universal Life
28. What does the ownership clause in a life insurance policy state?: Who
the policyowner is and what rights the policyowner is entitled to
