MASSACHUSETTS LIFE AND HEALTH INSURANCE EXAM

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MASSACHUSETTS LIFE AND HEALTH INSURANCE EXAM

Qs and Ans - Expert- Explanation - ing score -100 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Legal Contract

Answer:

Consideration, Legal Purpose, Offer (Made by Insured), Acceptance, Competent Parties

Question 2: waiver

Answer:

voluntary giving up of a right

Question 3: Classes of Life Insurance Policies

Answer:

• Individual vs. Group
• Term vs. Permanent
• Participating vs. Non-participating
• Fixed vs. Variable
• Industrial & Home Service

Question 4: Backdating

Answer:

Usually no more than 6 months

Question 5: Insurance

Answer:

Transfer of Risk

Question 6: Admitted or Authorized

Answer:

state requires the insurance company to have a certificate of authority

Question 7: warranty

Answer:

to be true

Question 8: fraud

Answer:

intentional act to cheat another

Question 9: Non-admitted

Answer:

unauthorized-insurance company not required to have a Certificate of Authority from the state

Question 10: Effective Date of coverage

Answer:

• Terms of conditional receipt is issued
• Substandard and pays additional premium - date of policy issue
• No receipt - policy issue date if premium paid at delivery

Question 11: aleatory

Answer:

not equal value - small premium for a large amount of coverage

Question 12: A- CANHAM Risks

Answer:

Affordable

Question 13: Modified Premium Whole Life policy

Answer:

Same as WL but premium low for 1st 3-5 yrs., THEN has one-time premium increase- levels off afterwards

Question 14: Term features

Answer:

renewable (No new application required, new preium based upon attained age

Question 15: Underwriting Sources of Information

Answer:

application, medical exams, physicians statement, AIDS Testing, Medical Information Buereau, Consumer Reports, Investigative Reports

Question 16: Statement of Good Health

Answer:

Required if no premium with application, if health changed- agent can't deliver policy

Question 17: STARR

Answer:

Method of handling risk

Question 18: Insurance Company Locations

Answer:

Domestic, Foreign, and Alien

Question 19: concealment

Answer:

failure to disclose known facts

Question 20: Physical Hazard

Answer:

Hazard that can be seen

Question 21: Increasing Term

Answer:

-death benefit increases -premium increases

Question 22: Business Uses of Life Insurance

Answer:

buy sell funding (cross purchase, entity purchase) key person executive bonus deferred compensation

Question 23: Law of Large Numbers

Answer:

The larger the group, the more accurate losses can be predicted

Question 24: Variable Policies

Answer:

Life insurance plus investments, must have securities license too, investments in separate account *Owner can lose money

Question 25: M- CANHAM Risks

Answer:

Measurable

Question 26: Moral Hazard

Answer:

A belief that intentionally causing a loss is acceptable

Question 27: Fraud and False Stataments

Answer:

Fine and or imprisonment (10-15 years) *Embezzlement included