Life and Health Insurance 7

Which of these is NOT used as selection criteria in the underwriting process of a life insurance application?

a. Credit report 

b. National origin 

c. Age of applicant 

d. Sex of applicant

When determining the accumulation value of a deferred annuity, the total is calculated by taking the premiums paid plus interest earned minus

a. bailout option charge

b. surrender charges

c. taxes owed

d. expenses and withdrawals

Larry wants to purchase an individual disability income policy to provide continuous income while disabled. He is also covered by a two-month wage continuation benefit from his employer. What should the policy elimination period be for his individual policy?

a. 30 days 

b. 60 days 

c. 90 days 

d. 120 days

When must a producer provide disclosure about information practices to an applicant?

a. During the medical examination

b. Upon policy delivery

c. Prior to or at the time of signing the application

d. Immediately after signing the application

When compared to a fixed annuity, a variable annuity has what distinguishing feature?

a. Flexible premiums according to a stock index

b. Investment risk is assumed by the purchaser

c. Investment risk is assumed by the insurer

d. Payout option can be changed after the accumulation phase

A signed good health statement may be requested by a life producer at the time of

a. policy issue

b. application

c. policy delivery

d. physical examination

What is covered under a limited accident and health insurance policy?

a. Losses that occur only in limited occupations

b. Limited pre-existing conditions

c. Losses that occur only in limited age groups

d. Limited perils and amounts

A group Medicare Supplement policy was terminated and not replaced by the insurer. In this situation, the insurer MUST

a. pay for the individual coverage that was converted from the group plan

b. obtain evidence of insurability from each insured

c. provide an offer of conversion to individual coverage

d. offer membership to another group

Which life insurance policy option allows the policyowner to have coverage equal to the net death benefit of the lapsed policy?

a. Reduced paid-up nonforfeiture option

b. Accelerated benefits option

c. Extended term nonforfeiture option

d. Cash surrender option

Enrollees in a staff model HMO normally have which of the following pharmacy options available?

a. Canadian online pharmacy

b. In-house pharmacy

c. Holistic treatments

d. Mail order pharmacy

The payment of the first premium, the promise to pay a covered loss, and the agreement to abide by policy conditions are all examples of

a. consideration 

b. legal purpose 

c. representation 

d. acceptance

Laura added a children's rider to her life insurance policy. What type of coverage was added?

a. Level term 

b. Increasing term 

c. Decreasing term 

d. Juvenile term

The Coordination of Benefits provision is added to a group health plan in order to

a. avoid adverse selection

b. permit primary and secondary carriers

c. avoid overinsurance

d. insure community ratings

Individuals seeking Social Security disability income benefits must have a disability that will eventually lead to death, or be expected to last at least

a. 3 months

b. 6 months

c. 9 months

d. 12 months

Which of the following combinations best describe a universal life insurance policy?

a. A mutual fund and an endowment policy

b. A term insurance policy and a whole life policy

c. A modified endowment policy and an annual term insurance policy

d. A flexible premium deposit fund and a monthly renewable term insurance policy

Which statement concerning adjustable life insurance is accurate?

a. Cash value loans are not permitted

b. The face amount and premiums can be changed simultaneously by the policyowner

c. Settlement options are limited

d. Only the face amount can be changed by the policyowner

A life insurance guaranteed insurability rider gives the insured the right, without proving insurability, to

a. purchase life insurance policies on his children as they are born

b. purchase life insurance on a spouse after becoming married

c. purchase additional life insurance at anytime

d. periodically purchase additional insurance

John bought a deferred annuity on Mary. John amends the contract years later to name Tom as the recipient of the proceeds if Mary dies. Who is the annuitant for this contract?

a. John

b. Mary

c. Tom

d. Mary's estate

The contractual rights which allow the owner of a deferred annuity to surrender the cash value several years before the annuity date are called

a. nonforfeiture options

b. settlement options

c. conversion options

d. surrender options

What does a fixed life annuity offer protection against?

a. Inflation

b. Premature death

c. Inadequate retirement planning

d. Savings depletion due to longevity