PRACTICE TEST QUESTIONS FOR LIFE AND HEALTH

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PRACTICE TEST QUESTIONS FOR LIFE AND HEALTH

INSURANCE EXAM

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

-Format: Multiple-choice / Flashcard

Question 1: What type of annuity activity will cause immediate taxation of the interest earned?Failing to make the planned contribution Surrendering the annuity for cash Using the contract as collateral for a loan Changing a settlement option

Answer:

Surrendering the annuity for cash

Question 2: Which benefits would a disability plan most likely pay?

Medical expenses associated with a disability Income lost by the insured's inability to work Rehabilitation costs Copayments

Answer:

Income lost by the insured's ability to work Question 3: Which of the following is NOT considered to be a basic service, under a nonscheduled plan?Endodontics Oral surgery Fillings Dentures

Answer:

Dentures Question 4: The Omnibus Budget Reconciliation Act of 1990 (OBRA) requires that large-group

health plans must provide primary coverage for disabled individuals under:

Age 65 who are retired Age 59 ½ who are retired Age 65 who are not retired Age 59 ½ who are not retired

Answer:

Age 65 who are not retired Question 5: A man is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim?50% of the claim will be paid.If the man is not convicted, he will get 75% of his claim paid.The claim is paid in full.Claim is denied if his policy contains the Illegal Occupation provision.

Answer:

Claim is denied if his policy contains the Illegal Occupation provision.Question 6: An applicant has a history of heart disease in his family, so he would like to buy a health insurance policy that strictly covers heart disease. What type of policy is this?Term health coverage Comprehensive care coverage Specified coverage Single indemnity protection

Answer:

Specified coverage Question 7: The sole proprietor of a business makes a total salary of $50,000 a year. This year, his medical expenses have reached a total of $75,000. What amount may the sole proprietor deduct in regards to his medical expenses?

$10,000

$25,000

$50,000

$75,000

Answer:

$50,000

Question 8: A policy available to business owners that provides payment for normal business

expenses in the event that the owner is disabled is called:

Business overhead expense Credit accident and health coverage Partial disability Recurrent disability

Answer:

Business overhead expense Question 9: The time limit of certain defense provisions prohibits insurers from denying a claim

due to misrepresentation, as long as the policy has been in force for at least:

• months
• year
• years
• years

Answer:

• years

Question 10: All of the following statements are correct regarding credit life insurance EXCEPT: Benefits that are paid to the borrower's beneficiary The amount of insurance permissible is limited per borrower Premiums are usually paid by the borrower Benefits are paid to the creditor

Answer:

Benefits that are paid to the borrower's beneficiary Question 11: All of the following are personal uses of life insurance EXCEPT: Estate creation Cash accumulation Buy-sell agreement Survivor protection

Answer:

Buy-sell agreement Question 12: Which rider, when added to a disability income policy, provides for changes in the benefits payable based on changes in the consumer price index?Social security rider Guaranteed insurability rider Cost of living adjustment rider Waiver of premium rid

Answer:

Cost of living adjustment rider Question 13: At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability.

This rider is called:

Accelerated benefits Cost of living Guaranteed insurability Waiver of cost of insurance

Answer:

Guaranteed insurability Question 14: Which of the following types of LTC is NOT provided in an institutional setting?Intermediate care Home health care Custodial care Skilled nursing care

Answer:

Home health care Question 15: The insuring clause of a disability policy usually states all of the following

EXCEPT:

The method of premium payment.The identities of the insurance company and the insured.That insurance against loss is provided.The types of losses covered.

Answer:

The method of premium payment.Question 16: What type of insurance would be used for a Return of Premium rider?Decreasing Term Annually Renewable Term Increasing Term Level Term

Answer:

Increasing Term