PEARSON VUE LIFE HEALTH INSURANCE PRACTICE

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PEARSON VUE LIFE + HEALTH INSURANCE PRACTICE

EXAM QUESTIONS

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

-Format: Multiple-choice / Flashcard

Question 1: Two business partners own life insurance on each other. If one partner dies, which of the following contracts will allow the other partner to buy 100 percent of the business interest?

• Buy and Sell Agreement
• Key Employee Life policy
• Survivorship Life
• Joint and Several Annuity

Answer:

A Question 2: In an Accidental Death and Dismemberment (AD&D) policy, the term "capital sum"

refers to:

• the benefit paid for death caused by a dread disease
• the monthly disability income paid if an insured loses a limb or the sight in one or both eyes
• a lump sum payment made when disease causes the amputation of an arm or a leg
• a lump sum payment made for an accidental dismemberment

Answer:

D Question 3: If life insurance policy applicant is classified as a substandard risk, the insurance

company will MOST likely:

• issue the policy with riders
• charge an extra premium
• require an annual medical examination
• lower the rate per thousand charged

Answer:

B Question 4: A producer and an applicant complete an application for a health policy and submit it to the insurer for underwriting without any premium. The underwriter issues a policy and mails it to the producer for delivery to the applicant. The producer should take all of the

following actions during the delivery of the policy to the applicant EXCEPT:

• collect the initial premium payment
• issue a conditional receipt
• have the applicant complete a statement of continued good health
• explain the Free Look provision which begins on the policy delivery date

Answer:

B Question 5: The PRIMARY reason for selecting a Variable Whole Life policy instead of a

traditional Whole Life policy is that the Variable Whole Life policy:

• provides flexible premium payments
• allows the policyowner to borrow a larger percentage of the cash value
• has the potential to earn a higher rate of return on the cash value
• allows the policyowner more flexibility in naming and changing beneficiaries

Answer:

C Question 6: P wants to name her husband as the beneficiary of her life policy. However, she wishes to retain all of the rights of ownership. P should have her husband named as the:

a: irrevocable beneficiary

b: revocable beneficiary

c: secondary beneficiary

Answer:

B Question 7: Under a group health plan, an employer may offer additional benefits to classes of

employees on the basis of all of the following factors EXCEPT:

• length of employment
• gender
• salary grade
• job category

Answer:

B Question 8: Federal income tax laws generally treat proceeds of life insurance policies as:

• graduated taxes
• deferred taxes
• nontaxable
• tax credits

Answer:

C Question 9: The PRIMARY purpose of Medicaid is to:

• pay for expenses not covered by Medicare
• provide Disability Income benefits to people on Medicare

• provide Medical Expense coverage to persons meeting certain minimum income

requirements

• provide funds for people injured in natural disasters

Answer:

C Question 10: If an insured commits suicide after the Suicide clause in the insured's life insurance policy has expired, the insurer will take which of the following actions?

• Refuse to pay the Death benefit or refund any premiums
• Refund only the premiums paid
• Refund the premiums paid plus interest
• Pay the Death benefit

Answer:

D Question 11: Which of the following terms refers to the transfer of some or all of the ownership rights of a life insurance policy from one individual to another?

• Nonforfeiture
• Endorsement
• Transfer for value
• Assignment

Answer:

D Question 12: An Accident and Health policy Notice of Claim provision requires that an insured give written notice to the insurer within a MAXIMUM of how many days after a loss?

• 15
• 20
• 30