PA INSURANCE EXAM PRACTICE

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PA INSURANCE EXAM PRACTICE

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -98 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: 10 days

Answer:

Kathy pays a monthly premium on her health insurance policy. How long is her grace period

Question 2: Pay age-corrected benefits

Answer:

What is an insurer required to do when faced with an error made under the Misstatement of Age provision?Question 3: The correct answer is "$0". Benefits that fall under a major medical plan are considered to be a reimbursement for a loss, and is not taxable as income.

Answer:

Pierre is covered by his employer's group major medical plan. His employer pays for 75% of the premium and he pays for 25%. How much would a $10,000 benefit be taxable as income under this plan?

Question 4: 1035 exchange

Answer:

Tonya has replaced her whole life policy with an annuity without incurring a tax penalty. This transaction is called a(n)

Question 5: Provide evidence of insurability to the insurer

Answer:

In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST Question 6: The death benefit paid will be what the premium would have purchased at the correct age

Answer:

James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount?Question 7: Which type of multiple protection policy pays on the death of the last person?

Answer:

survivorship life policy

Question 8: Equity index whole life

Answer:

Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. What kind of policy is this?

Question 9: Contingency benefits

Answer:

Where would policy proceeds be paid if both the insured and primary beneficiary were killed in the same accident?

Question 10: Spendthrift clause

Answer:

Which of these ensures that proceeds of a life insurance policy will be free from attachment or seizure by the beneficiary's creditors?

Question 11: Decreasing

Answer:

The least expensive option to pay off a 30-year mortgage balance would be

Question 12: Reduced death benefit prepayment

Answer:

What is the primary feature of a viatical settlement?

Question 13: Rider

Answer:

An endorsement found in an insurance plan which modifies the provisions of the policy is called a(n)

Question 14: Monthly

Answer:

Over the course of a year, which premium payment mode is most expensive?

Question 15: Liquidity

Answer:

Insurance premium is determined by each of the following factors EXCEPT

Question 16: level premiums

Answer:

When a decreasing term policy is purchased, it contains a decreasing death benefit and

Question 17: Estate

Answer:

What is created after policy proceeds are obtained in a lump sum and then immediately invested?

Question 18: No federal income tax is owed on life insurance proceeds

Answer:

A beneficiary has just received a claim payment for a life insurance policy. Which of the following is TRUE regarding the federal income tax liability owed?

Question 19: May never raise premiums

Answer:

In contrast to a guaranteed renewable policy, a noncancellable policy

Question 20: Can be converted to permanent coverage without evidence of insurability

Answer:

Donald is the primary insured of a life insurance policy and adds a children's term rider. What is the advantage of adding this rider?

Question 21: Declarations

Answer:

In what part of an insurance policy are policy benefits found?

Question 22: hedge against inflation

Answer:

Index whole life insurance contains a securities component that acts as a(n

Question 23: Disability income rider

Answer:

A life insurance policyowner was injured in an automobile accident which results in a total and permanent disability. Which rider would pay a monthly amount because of this disability?

Question 24: Reduction of premium

Answer:

All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT

Question 25: Non cancelable

Answer:

Disability Income plans which require that the insurer can NEVER change or alter premium rates are usually considered

Question 26: File written proof

Answer:

After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms

Question 27: Increases

Answer:

How is the cost of a policy affected when a policyowner pays premiums more frequently?