Part 2

#14. Benefit periods for individual short-term disability policies will usually continue from: a) 3 months to 3 years b) 6 months to 2 years c) 2 years to age 65 d) 1 week to 4 weeks

b) 6 months to 2 years

#16. The provision that provides for the sharing of expenses between the insured and the insurance company is: a) Deductible b) Divided cost c) Coinsurance d) Stop-loss

c) Coinsurance

#19. Which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss? a) Notice of Claim b) Loss Notification c) Claims Initiation d) Consideration

a) Notice of Claim The Notice of Claim Provision spells out the insured's duty to provide the insurer with reasonable notice in the event of a loss.

#13 If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it? a) Conditional b) A legal (but unethical) contract c) Unilateral d) Adhesion

c) Unilateral

#11. The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called: a)Joint and survivor. b)Fixed period. c)Fixed amount. d)Joint life.

a)Joint and survivor. A joint and survivor option pays while either beneficiary is still living.

#17. An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change? a) Agent b) Applicant c) Executive officer of the company d) Insured

b) Applicant

#18. What document describes an insured's medical history, including diagnoses and treatments? a)Attending Physician's Statement b)Physician's Review c)Individual Medical Summary d)Comprehensive Medical History

a)Attending Physician's Statement An Attending Physician's Statement (APS) is the best way for an underwriter to evaluate an insured's medical history. The report includes past diagnoses, treatments, length of recovery time, and prognoses.

#15. Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member? a) Additional insured rider b) Family term rider c) Spouse rider d) Children's rider

b) Family term rider

#20. A brain surgeon has an accident and develops tremors in her right arm. Which disability income policy definition of total disability will cover her for all losses? a) "Any occupation" - less restrictive than other definitions b) "Any occupation" - more restrictive than other definitions c) "Own occupation" - less restrictive than other definitions d) "Own occupation" - more restrictive than other definitions

c) "Own occupation" - less restrictive than other definitions In theory, the brain surgeon could find other work, but because her disability income policy specifies that she is covered for her own occupation, she would be wholly covered.

#12. Which of the following riders would NOT cause the Death Benefit to increase? a) Guaranteed Insurability Rider b) Cost of Living Rider c) Accidental Death Rider d) Payor Benefit Rider

d) Payor Benefit Rider Payor Benefit Rider does not increase the Death Benefit; it only pays the premium if the payor is disabled or dies. With Guaranteed Insurability Rider, the policyowner can increase DB at specified ages or events, i.e. marriage or birth of a child; Cost of Living Rider increases DB to keep pace with inflation; in Accidental Death Rider, if the insured dies from an accident, DB is a multiple of the Face Amount.