PRACTICE TEST REVIEW

Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is

- Monthly.

An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any, would be paid by the secondary insurer?

- $500

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

- The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

What is the purpose of a disclosure statement in life insurance policies?

- To explain features and benefits of a proposed policy to the consumer. * Disclosure statements will help the applicants to make more informed and educated decisions about their choice of insurance.

Which of the following terms is used to describe a person, other than a viator, that enters into or effectuates a viatical settlement contract?

- Viatical settlement provider.

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

- Waiver of Premium.

How many days after cancellation of a license in another state does a new resident agent have to apply for Nevada producer license without having to fulfill licensing examination and education requirements?

- 90 Days.

Which of the following is NOT an enrollment period for Medicare Part A applicants?

- Automatic enrollment.

Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?

- Buyer's Guide. * The Buyer's Guide is a consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process. It is a generic guide that does not address the specific policy of the insurer, instead explaining life insurance in a way that the average consumer can understand.

What amount of care is provided in LTC's intermediate care?

- Daily care by medical personnel.

Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?

- Depreciation period.

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day....

- Elimination Period. * The elimination period is the time immediately following the start of a disability when benefits are not payable. This is used to reduce the cost of providing coverage and eliminates the filing of many claims.

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?

- Equal to the original policy for as long as the cash values will purchase.

The death benefit under the Universal Life Option B...

- Gradually increases each year by the amount that the cash value increases.

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

- Guaranteed insurability rider.

Health Savings Accounts (HSAs) are designed to...

- Help individuals save for qualified health expenses. * HSAs help individuals save for qualified out-of-pocket health care expenses such as the deductible expense from a high deductible health plan.

Which of the following riders would NOT increase the premium for a policyowner?

- Impairment rider.

What type of insurance would be used for a Return of Premium rider?

- Increasing Term. * The Return of Premium Rider is achieved by using increasing term insurance. When added to a whole life policy it provides that at death prior to a given age, not only is the original face amount payable, but also all premiums previously paid are payable to the beneficiary.

Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?

- Indemnity. * A Hospital Indemnity policy pays a fixed amount each day the insured is hospitalized, unrelated to medical expenses.

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

- Insuring clause. * The insuring clause states that the insurer agrees to provide life insurance for the named insured which will be paid to a designated beneficiary when proof of loss is received by the insurer. It states the party to be covered by the policy and names of the beneficiary who will receive the policy proceeds in the event of the insured's death. If no beneficiary is named, the policy proceeds will be paid to the insured's estate.

In a group health policy, a probationary period is intended for people who...

- Join the group after the effective date.

The type of life settlement option which pays throughout the lifetimes of two or more beneficiaries is called...

- Joint and Survivor

Which of the following programs expands individual public assistance programs for people with insufficient income and resources?

- Medicaid.

The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

- Reduction of premium. * The reduction of premium option allows the policyholder to apply policy dividends toward the next year's premium. The dividend is subtracted from the premium amount, yielding the new premium due for next year.

Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability?

- Residual Disability.

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

- Signed Waiver of Premium.

Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?

- Size of each installment.

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as

- Survivor protection.

If a business wants to buy a disability income policy on a key employee, which of the following is considered the beneficiary?

- The employer.

The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT

- The insured's age at death. *The insured's age at death will not be considered, but the longer the life expectancy of the recipient, the lower the payments will be.