MY LIFE AND HEALTH INSURANCE STUDY GUIDE- EXAMFX

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MY LIFE AND HEALTH INSURANCE STUDY GUIDE- EXAMFX

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -100 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: What is HIPAA?

Answer:

The Health Insurance Portability and Accountability Act A federal law that protects health information. Provide protection for the privacy of certain individually identifiable health information Question 2: An individual has just borrowed $10,000 on a 5-year note from his bank. The note is due in installments. What type of life insurance policy would be best suited to this situation?

Answer:

Decreasing term

Question 3: What is a blackout period for social security benefits?

Answer:

A period of time during which the surviving spouse does not receive benefits

Question 4: What are the "living benefits" of whole life insurance?

Answer:

Loan values

Question 5: An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

Answer:

Aleatory: an aleatory contract means unequal amounts are exchanged between payments and benefits Question 6: Universal life policies have two types of interest rates. What are they?

Answer:

Guaranteed and current

Question 7: What are declined risks?

Answer:

People who are rejected from life insurance A risk may be declined because there is no insurable interest, the applicant is medically unacceptable, the potential for loss is so great it does not meet the definition for insurance, and the insurance is prohibited by public policy or is illegal

Question 8: What policy component must decrease in decreasing term insurance?

Answer:

Face amount

Question 9: What are standard risks?

Answer:

A risk classification used when determining how much risk a consumer is and how much their premium should be Standard risks are entitled to insurance protection without extr rating or special restrictions. They are representative of the majority of people their age and with similar lifestyles, average risk.Question 10: What happens when someone willfully violates the Act enough to constitute a general pattern or business practice?

Answer:

They are subject to a penalty of up to $2,500

Question 11: How is the premium determined in a joint life insurance policy?

Answer:

The premium is based on the average age of the insureds

Question 12: An insured received a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?

Answer:

Variable Question 13: When must the policy summary for a life insurance policy be delivered to the policy owner?

Answer:

At the time of policy delivery Question 14: What is the purpose of establishing the target premium for a universal life policy?

Answer:

To prevent the policy from lapsing Question 15: What is the main advantage of converting from group life to individual coverage?

Answer:

Evidence of insurability is not required Question 16: Whole life policies provide protection until the insured reaches what age?

Answer:

Age 100 Question 17: In what type of life insurance policies can the policyowner skip premiu payments without the policy lapsing?

Answer:

Universal life Question 18: What happens if someone knowingly and willfully obtains information on a consumer from a consumer reporting agency under false pretenses?

Answer:

They are not complying with the Fair Credit Reporting Act and may be fined and/or imprisoned for up to

• years

Question 19: When does an adjustable life policy accumulate cash value?

Answer:

When the premiums paid are more than the cost of the policy Question 20: What happens to the premium in an annually renewable term life policy?

Answer:

The premium increases with each renewal Question 21: Who is the beneficiary on a key-person life insurance policy and what is the purpose?

Answer:

The employer. To minimize the risk of financial loss caused by the death of a key employee Question 22: What elements of an adjustable life policy can be changed by the policyowner?

Answer:

The amount and payment period of the premium, the face amount, and the period for protection Question 23: In calculating the amount of life insurance needed, what is the needs approach based on?

Answer:

The predicted needs of a family after the premature death of the insured

Question 24: What is STOLI?

Answer:

Stranger-originated life insurance A life insurance arrangement in which a person with no relationship to the insured purchases a life policy on the insured's life with the intent of selling the policy to an investor and profiting financially when the insured dies.STOLIs violate the principle of insurable interest

Question 25: What are policy loans not available on term insurance?

Answer:

There is no cash value to borrow against