Nevada statutes and codes common to life and health insurance only Quiz Questions Chapter Eleven

Which of the following would be an allowable purpose of forming a group to be covered by a life insurance plan?

Answer: Assembling a group of employees Explanation: groups must be together for a reason other than purchasing insurance.

What type of insurance is known as consumer credit insurance?

Answer: Credit insurance Explanation: also known as "consumer credit insurance", credit life and health covers the life and disability of a debtor during the time a loan is outstanding.

Which of the following is true about credit life insurance? A. Debtor is the annuitant. B. Creditor is the insured. C. Debtor is the policy beneficiary. D. Creditor is the policy owner.

Answer: Creditor is the policyowner Explanation: in a credit life insurance, the creditor is the policyowner & the beneficiary; the debtor is the insured

Bev is insured under her employer's group life insurance policy. She dies while the policy is still in force. The benefits must be paid within how many days?

Answer: 30 Explanation: an insurer must pay the proceeds of any benefits under a group life insurance policy no more than 30 days after the death of the insured.

What is the required grace period in group life insurance policies in the state of Nevada?

Answer: 31 days Explanation: group life insurance policies, issued in the state of Nevada must include a grace period of 31 days for the payment of any premium due after the first premium payment.

When group coverage terminates, the insured may convert coverage to an individual policy without evidence of insurability within?

Answer: 31 days Explanation: when insurance coverage ends due to the insured's termination of employment, the injured must be entitled to convert to an individual life insurance policy, without evidence of insurability, provided that the application for the individual policy is made, and the premium is received within 31 days.

If a group life policy is terminated by the insurer, every person in the group is entitled to convert to an individual life insurance policy if he or she has been insured under the current plan for at least?

Answer: 5 years Explanation: if a group policy is terminated, every person insured at the date of termination is entitled to convert to an individual life insurance policy, if insured for at least five years.

Which of the following statements could not be used in an advertisement of life insurance policies in Nevada? A. Untrue statements of the insurer assets or financial standing. B. Imply that claim settlements will be generous beyond the terms of the policy. C. Statements that make unfair or incomplete comparisons of another insurer or the policies. D. Any of the above would be in violation of the insurance code.

Answer: Any of the above Explanation: the conduct of marketing and advertising are regulated by the insurance code

Which of the following is not allowed in credit life insurance? A. Creditor becoming a policy beneficiary. B. Creditor requiring that a debtor buys insurance from a certain insurer. C. Creditor having a collateral assignment on the policy. D. Creditor requiring that a debtor has a life insurance.

Answer: Creditor requiring that a debtor buys insurance from a certain insurer. Explanation: In credit life insurances, creditor may require that the debtor has a life insurance, but they cannot tell you who to buy the insurance from.

Which of the following types of insurance policies is most commonly used in credit life insurance?

Answer: Decreasing term Explanation: Credit insurance is a special type of coverage written to insure the life of the debtor and pay off the balance of a loan in the event of the death of the debtor. It is usually written as decreasing term insurance.

Which of the policy provisions required in group life insurance policies states that a policy application must be attached to the policy one issued?

Answer: Entire contract Explanation: The entire contract provision states that if an application is used, it must be attached the policy when issued.

All of the following are required provision in all group, life insurance policies issued in the state, except? A. Misstatement of age B. Grace period C. Nonforfeiture benefits D. incontestability

Answer: Nonforfeiture Explanation: non-forfeiture provision is only required in policies other than term

The initial amount of credit life insurance may not exceed?

Answer: The amount to be repaid under the contract. Explanation: The initial amount of credit life insurance may not exceed the total amount repayable under the contract of indebtedness.

What does credit life and health insurance cover?

Answer: The life and disability of a debtor during the time a loan is outstanding Explanation: credit life and health insurance covers the life and disability of a debtor. During the time a loan is outstanding.

What is the minimum number of persons that can be covered by a group insurance plan?

Answer: Two persons Explanation: group insurance plans must cover at least two persons, and are formed for a purpose other than obtaining insurance.

All of the following statements are correct, regarding credit, life insurance, except? A. Benefits are paid to the borrowers beneficiary. B. The amount of insurance permissible is limited per borrower. C. Premiums are usually paid by the borrower. D. Benefits are paid to the creditor.

Answer: benefits are paid to the borrowers beneficiary Explanation: in credit life insurance, the creditor is the beneficiary for the amount of benefit equal to the outstanding balance of the loan

What type of insurance would you recommend for someone who wants to ensure the life of a debtor and connection to a specific loan?

Answer: credit life insurance Explanation: credit life insurance is defined as insurance on the life of a debtor, made and connection with a specific loan, or other credit transaction.

Who is the owner of a credit life insurance policy?

Answer: the creditor Explanation: the predatory is the owner and the beneficiary of the policy, although the premiums are generally paid by the borrower (or debtor).

Which of the following is true regarding the insurance amount and a credit life policy? A. The amount of coverage can be greater than the amount owed. B. The creditor can only ensure the debtor for the amount owed. C. The creditor may ensure the debtor for an unlimited amount of coverage. D. Allowable amount of coverage is determined by the state insurance commissioner.

Answer: the creditor can only ensure the debtor for the amount owed Explanation: credit life insurance cannot pay out more than the balance of the debt, so there is no financial incentive for the death of the insured.