IOWA LIFE AND HEALTH INSURANCE TEST

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IOWA LIFE AND HEALTH INSURANCE TEST

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -74 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Speculative Risk

Answer:

Involves the chance of both loss or gain.

Question 2: Whole Life Insurance

Answer:

Insurance that is kept in force for a person's entire life and pays a benefit upon the person's death, whenever that may be.Question 3: An insurance company only has how many years to challenge the validity of a life insurance contract?

Answer:

• years

Question 4: Suicide Provision

Answer:

Most life insurance policies provide that if the insured commits suicide within a specified period, usually two years after the issue date, the company's liability will be limited to a return of premiums paid.

Question 5: Spendthrift Trust Clause

Answer:

prevents the beneficiaries reckless spending of benefits by requiring that the benefits be paid in fixed installments

Question 6: Reduced Paid Up Option

Answer:

policyowner takes a paid-up policy for a reduced face amount of insurance. Policyowner does not make any more premiums and still retains some amount of life insurance. The cash value is used as the premium for a single-premium whole life policy at a lesser face amount than the original policy.

Question 7: Interest Only Option

Answer:

Insurance company holds proceeds for a specific period of time, at regular intervals, pays the beneficiary a guaranteed rate of interest on the proceeds and then are paid out at the end of a specific period.

Question 8: Non Forfeiture Options

Answer:

The options available to a policy owner who would like to discontinue or cancel a policy that has cash value.

Question 9: Can a minor be listed as a beneficiary?

Answer:

Yes-in some cases the proceeds may be paid to a guardian, be placed in a trust, or be paid out when the child reaches adult age.

Question 10: Reciprocal Insurer

Answer:

Insurance company characterized by the fact its policyholders insure the risks of other policyholders.

Question 11: Misuse of Premiums

Answer:

Diverting premiums for personal use.

Question 12: What 3 general factors that help determine the premium of a life insurance policy?

Answer:

Mortality, Interest, and Expense

Question 13: Lump Sum Cash Option

Answer:

Paid out in one single lump sum of cash

Question 14: Reinsurer

Answer:

an arrangement by which an insurance company transfers or sells a portion of the risk to another insurer.

Question 15: Lump Sum Option

Answer:

All policy proceeds paid out in a single cash settlement.

Question 16: Rebating

Answer:

when the insurer offers money or something of value in return for the customers service

Question 17: Alien Insurer

Answer:

An insurer domiciled in a country other than the United States.

Question 18: Accidental Death Benefit Rider

Answer:

pays a multiple of the death proceeds if the cause of death is a covered accidental event.

Question 19: Simultaneous Death

Answer:

If the insured and the primary beneficiary die at approximately the same time for a common accident with no clear evidence as to who died first, the Uniform Simultaneous Death Act law will assume that the primary died first, this allows the death benefit proceeds to be paid to the contingent beneficiaries or their estate.

Question 20: Which of the following is the authority an insurer gives to it's agents by means of a contract?

• Implied
• Expressed
• General

Answer:

B

Question 21: Morale Hazard

Answer:

A condition of carelessness or indifference that increases the frequency or severity of loss.

Question 22: Policy Loan Provision

Answer:

Describes the conditions by which a policyowner can borrow from the policy's cash value.

Question 23: Other Insureds Rider

Answer:

A term rider, covering a family member other than the insured, that is attached to the base policy covering the insured.

Question 24: Cash Surrender Option

Answer:

Whole life policyowners may request an immediate cash payment of their cash values when their policies are surrendered minus any indebtness.

Question 25: Endowment Policy

Answer:

An insurance product that pays out a lump sum after a specified term or if the insured person dies before the end of the term. Endowment policies are often used as a way of saving over the long term.