life insurance test p2

#48. All of the following are personal uses of life insurance EXCEPT a) Cash accumulation. b) Buy-sell agreement. c) Survivor protection. d) Estate creation.

b Personal uses of life insurance include survivor protection, estate creation and conservation, cash accumulation, and liquidity. A buy-sell agreement is for business uses of life insurance.

#37. In order for costs to be covered under a dental plan, what is the minimum interval that must pass between routine dental exams? a) 1 year b) 3 months c) 6 months d) 9 months

c Most dental plans limit coverage for repeated procedures. In order for costs to be covered by an insurer, at least 6 months must pass between routine dental exams.

#82. How long is an insurer required to maintain records in Virginia? a) Permanently b) 3 years c) 5 years d) 10 years

b Records must be kept for at least 3 years

#29. A group policy used to provide accident and health coverage on a group of persons being transported by a common carrier, without naming the insured persons individually is called a) Blanket policy. b) Universal policy. c) Comprehensive policy. d) Limited benefit policy.

a A single policy covering several certificate holders without naming the insureds individually is a blanket policy.

#16. Which of the following is NOT covered under Part B of a Medicare policy? a) Routine dental care b) Home health care c) Lab services d) Physician expenses

a Medicare Part B covers dental expense resulting from an accident only.

#125. Which of the following provisions is mandatory for health insurance policies? a) Intoxicants and narcotics b) Physical examination and autopsy c) Recurrent disability d) Unpaid premiums

b Physical examination and autopsy is a mandatory provision required by law. The other answer choices are optional provisions.

#44. All of the following are characteristics of group life insurance EXCEPT a) Certificate holders may convert coverage to an individual policy without evidence of insurability. b) Premiums are determined by the age, sex and occupation of each individual certificate holder. c) Amount of coverage is determined according to nondiscriminatory rules. d) Individuals covered under the policy receive a certificate of insurance.

b Premiums are determined by the age, sex and occupation of the entire group.

#126. For the purpose of insurance, risk is defined as a) An event that increases the amount of loss. b) The uncertainty or chance of loss. c) The certainty of loss. d) The cause of loss.

b Risk, or the chance of loss occurring, is the basic reason for buying insurance.

#109. 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 Short-term disability is defined as a disability lasting not more than 2 years.

#23. Which of the following types of insurance protects a lending institution from losing money as the result of a borrower's death or disability? a) Bankers life and health b) Lenders life and health c) Credit life and health d) Loaners life and health

c Creditor group, also called "credit life and health insurance" is a specialized use of group life and group health insurance. It protects the lending institution from losing money as the result of a borrower's death or disability. Generally the borrower is the premium payor but the lending institution is the beneficiary of the policy.

#107. What would be an advantage to naming a contingent (or secondary) beneficiary in a life insurance policy? a) It ensures the policy proceeds will be split between the primary and contingent beneficiaries. b) It requires that someone who is not the primary beneficiary handles the estate. c) It determines who receives policy benefits if the primary beneficiary is deceased. d) It allows creditors to receive payment out of the proceeds.

c Naming a secondary beneficiary (also referred to as contingent beneficiary) ensures that there is a beneficiary to receive policy proceeds if the primary beneficiary dies before the insured. If there is no secondary beneficiary, the policy benefits will go to the insured's estate.

#150. Which of the following determines the cash value of a variable life policy? a) The company's general account b) The policy's guarantees. c) The premium mode d) The performance of the policy portfolio

d

#144. Which component increases in the increasing term insurance? a) Cash value b) Interest on the proceeds c) Premium d) Death benefit

d Increasing term features level annual premiums and a death benefit that increases each year over the duration of the policy term.

#97. What process will the insurance company use to monitor the insured's hospital stay to make sure that everything is proceeding according to schedule? a) Prospective review b) Corridor deductible c) Preventive review d) Concurrent review

d Under the concurrent review process, the insurance company will monitor the insured's hospital stay to make sure that everything is proceeding according to schedule and that the insured will be released from the hospital as planned.

#131. In life insurance policies, cash value increases a) Are only taxed when the owner reaches age 65. b) Grow tax deferred. c) Are income taxable immediately. d) Are taxed annually.

b

#61. A person steps off a street car and trips and breaks his ankle. This type of injury can be described as a) Not covered. b) Sudden and unforeseen. c) A recurrent injury. d) Intentional.

b Accidental bodily injury is an unforeseen and unintended injury that resulted from an accident rather than a sickness.

#90. Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage? a) Group dental insurance plan b) Medical-surgical expense plan c) Basic medical expense plan d) Health Maintenance Organization plan

d HMOs provide a package of comprehensive health care services that include routine physicals, immunizations, well baby care, family planning, etc., as well as the treatment of sickness and injury.

#6. What is the waiting period on a Waiver of Premium rider in life insurance policies? a) 30 days b) 3 months c) 5 months d) 6 months

d Most insurers impose a 6-month waiting period from the time of disability until the first premium is waived.

#136. Circulating deceptive sales material to the public is what type of Unfair Trade Practice? a) Coercion b) Misrepresentation c) False advertising d) Defamation

c considered misleading

#68. During partial withdrawal from a universal life policy, which portion will be taxed? a) Cash value b) Principal c) Loan d) Interest

d During the withdrawal, the interest earned on the withdrawn cash value may be subject to taxation.

#33. A policy with a 31-day grace period implies a) The policy benefits must be paid within 31 days after a claim is submitted. b) The policy will not lapse for 31 days if the premium is not paid when due. c) The policyholder may return the policy for a full refund within 31 days. d) The policy is incontestable after 31 days of delivery.

B. A mandatory provision of life insurance policies requires that a grace period be provided. The grace period is the period of time after the premium due date in which premiums may still be paid before the policy lapses for nonpayment of the premium.

#47. If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about a) Whether an insurable interest exists between the individuals. b) The gender of the applicant. c) The type of policy requested. d) Which individual will pay the premium.

a An insurable interest must exist at the time the policy is issued. Some relationships are automatically presumed to qualify as an insurable interest, e.g., spouses, parents, children and certain business relationships.

#135. A small hardware store owner is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability? a) Business overhead expense policy b) Key person insurance c) Disability buy-sell agreement d) Business disability policy

a Business Overhead Expense (BOE) insurance is sold to small business owners for the purpose of reimbursing the policyholder for various business overhead expenses during a period of total disability. Expenses such as rent, utilities, and employee salaries are covered.

#70. The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the a) Entire contract clause. b) Time limit on certain defenses clause. c) Incontestability clause. d) Legal action against us clause.

a Entire contract is a mandatory provision that is required by law.

#88. When a fixed annuity owner pays pays a monthly annuity premium to the insurance company, where is this money placed? a) The insurance company's general account b) Forwarded to an investor c) Each contract's separate account d) The annuity owner's account

a Fixed annuities guarantee a minimum amount of interest to be credited to the purchase payment. The insurance company can afford to make guarantees because the money of a fixed annuity is placed in the general account of the insurance company, which is part of its investment portfolio. The company makes conservative enough investments to insure a guaranteed rate to the annuity owners.

#72. Which of the following is NOT a feature of a guaranteed renewable provision? a) The insurer can increase the policy premium on an individual basis. b) The insured has a unilateral right to renew the policy for the life of the contract. c) Coverage is not renewable beyond the insured's age 65. d) The insured's benefits cannot be reduced.

a Guaranteed renewable provision has all the same features that the noncancellable provision does, with the exception that the insurer can increase the policy premium on the policy anniversary date. However, the premiums can only be increased on a class basis, not on an individual policy.

#103. In insurance, an offer is usually made when a) An applicant submits an application to the insurer. b) The insurer approves the application and receives the initial premium. c) The agent hands the policy to the policyholder. d) An agent explains a policy to a potential applicant.

a In insurance, the offer is usually made by the applicant in the form of the application. Acceptance takes place when an insurer's underwriter approves the application and issues a policy.

#140. An insured has medical insurance coverage through 2 different providers, both covering the same expenses on an expense-incurred basis. Neither company knows in advance that the insured has coverage through any other insurers. The insured submits a claim to both insurers. How should the claim be handled? a) Each insurer should pay a proportionate share of the claim. b) One of the insurers will pay fully, while the other will not pay any benefits. c) Once the insurers discover the duplicate coverage, the policies would most likely be cancelled, and no claim paid. d) The insured should receive full benefits from each insurer.

a In the event that an insured is covered on an expense-incurred basis for the same expenses under multiple insurers and the insurers are not informed about the other sources of coverage before the loss, proportionate shares of the claims should be paid.

#121. If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a a) Joint life annuity. b) Joint and survivor annuity. c) Deferred annuity. d) Pure annuity.

a Joint life annuity settlement option pays benefits to two or more annuitants, but stops upon the death of the first.

#123. A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that? a) Joint Life Policy b) Survivorship Life Policy c) Second-to-Die d) Family Income Policy

a Joint life policies cover the lives of two insureds; rates are blended. Upon the death of the first insured, the policy ends.

#119. Which of the following is an example of a limited-pay life policy? a) Life Paid-up at Age 65 b) Renewable Term to Age 70 c) Level Term Life d) Straight Life

a Limited Pay Whole Life premiums are all paid by the time the insured reaches age 65. The policy endows when the insured turns 100. It is the premium paying period that is limited, not the maturity.

#56. Which of the following statements is NOT true concerning Medicaid? a) It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income. b) It is a state program. c) It is funded by state and federal taxes. d) It is intended to provide medical assistance for certain categories of people who are needy.

a Medicaid is a state program funded by state and federal taxes that provide medical care for the needy. Parts A-C are part of Medicare.

#114. An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued? a) Adjust the claim benefit to reflect the insured's true age b) Deny any claims and cancel the policy c) Deny paying a claim based on misrepresentation d) Pay the full amount of a claim because the contestable period has ended

a The Misstatement of Age provision says that if a client has misstated her age, whether intentional or unintentional, they will adjust the benefit being paid. It doesn't matter when the mistake was found.

#120. Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending? a) Unlimited b) None at all c) 1 examination per week of the claim processing period d) 2 examinations per week of the claim processing period

a The Physical Exam and Autopsy provision allows the insurer to examine the insured as much as is reasonably necessary while the claim is being processed, provided that the insurer pays the expenses.

#11. Which of the following is NOT an enrollment period for Medicare Part A applicants? a) Automatic enrollment b) Initial enrollment c) Special enrollment d) General enrollment

a There are 3 types of enrollment periods for Medicare Part A: initial enrollment period, general enrollment period and special enrollment period.

#102. Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured? a) Option B b) Corridor option c) Variable option d) Option A

a Under Option B the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases. At any point in time, the total death benefit will always be equal to the face amount of the policy plus the current amount of cash value.

#60. A medical insurance plan in which the health care provider is paid a regular fixed amount for providing care to the insured and does not receive additional amounts of compensation dependent upon the procedure performed is called a) Prepaid plan. b) Indemnity plan. c) Reimbursement plan. d) Fee-for-service plan.

a Under a prepaid plan, the health care providers are paid for services in advance, whether or not any services are provided. The amount paid to the provider is based upon the projected annual cost as determined by the provider.

#4. An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan? a) 2 years b) 1 month c) She would not receive any benefits. d) 3 years

a Under an Own Occupation plan, if the insured cannot perform his/her current job for a period of up to two years, disability benefits will be issued, even if the insured would be capable of performing a similar job during that two-year period. After that, if the insured is capable of performing another job utilizing similar skills, benefits will not be paid.

#130. Which of the following would be required to be licensed as an insurance producer? a) An insurance company director who performs executive, administrative and managerial duties b) A salaried employee who advertises and solicits insurance c) A person whose activities are limited to producing insurance advertisements d) A salaried full-time employee who furnishes information for group insurance

b A person does not require an insurance producer license if he or she only advertises without intent to solicit insurance. However, once there is solicitation, a license is required.

#50. All of the following are correct about the required provisions of a health insurance policy EXCEPT a) The entire contract clause means the signed application, policy, endorsements, and attachments constitute the entire contract. b) A reinstated policy provides immediate coverage for an illness. c) Proof-of-loss forms must be sent to the insured within 15 days of notice of claim. d) A grace period of 31 days is found in an annual pay policy.

b Accidental injury is covered immediately, but to protect the insurer against adverse selection, losses resulting from sickness are covered only if the sickness occurs at least 10 days after the reinstatement date.

#122. Adverse selection is a concept best described as a) Only offering coverage to good risks. b) Risks with higher probability of loss seeking insurance more often than other risks. c) Underwriters slanting the odds in favor of the company. d) Poor choices of applicants to be covered.

b Adverse selection means that there are more risks with higher probability of loss seeking to purchase and maintain insurance than the risks who present lower probability. Underwriters must guard against this.

#106. Who is legally required to keep records pertaining to insurance transactions? a) The Commission b) All licensees c) Insureds d) Agencies and insurers only

b All licensees, including agents and brokers, are required to keep records of all their insurance transactions. These must be maintained for 3 years following a completed transaction.

#79. What is the term used to describe an insured's age at a specific point in time, often based on the previous or next birthday (whichever is closer)? a) Restricted age b) Attained age c) Issue age d) Specified age

b Attained age is the insured's age at a specific point in time, often based on the previous or next birthday, whichever is closer.

#138. An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would a) Pay half of her claim because the insured had an outstanding premium. b) Pay the claim. c) Hold the claim as pending until the end of the grace period. d) Deny the claim.

b Because the accident occurred during the grace period, the insurance company will pay the claim.

#45. An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an a) Adjustable Life. b) Interest-sensitive Whole Life. c) Credit Life. d) Annual Renewable Term.

b Because the cash values are generated by investments, interest rates will affect the amount of the cash value.

#38. Can an individual who belongs to a POS plan use an out-of-network physician? a) Yes, but they must use the HMO physician first b) Yes, and they may use any preferred physician, even if not part of the HMO c) No d) Yes, but they must use the POS physician first

b In a POS plan the individuals can visit an in-network provider at their discretion. If they decide to use an out-of-network physician, they may do so.

#10. Which of the following hospice expenses would NOT be covered in a cost-containment setting? a) Special hospital bed b) Antibiotics c) Tylenol d) Morphine

b In a cost-containment setting, daily needs and pain relief are provided for hospice patients, but curative measures are not.

#108. Which of the following statements is TRUE concerning irrevocable beneficiaries? a) They may be changed only on the anniversary date of the policy. b) They can be changed only with the written consent of that beneficiary. c) They may be changed at any time. d) They can never be changed.

b Once irrevocable beneficiaries are indicated for the policy, their written consent is required to change the beneficiary.

#104. What type of care is Respite care? a) 24-hour care b) Relief for a major care giver c) Daily medical care, given by medical personnel d) Institutional care

b Respite Care is designed to provide relief to the family care giver, and can include a service such as someone coming to the home while the care giver takes a nap or goes out for a while. Adult day care centers also provide this type of relief for the caregiver.

#51. The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the a) Complete contract. b) Entire contract. c) Total contract. d) Aleatory contract.

b The policy, together with the attached application, constitutes the entire contract. This provision limits the use of evidence other than the contract and the attached application in a test of the contract's validity. This is a mandatory provision in life insurance.

#91. Which rider, when added to a disability income policy, provides for changes in the benefits payable based on changes in the consumer price index? a) Guaranteed insurability rider b) Cost of living adjustment rider c) Waiver of premium rider d) Social Security rider

b This rider allows for the indexing of benefits payable under a disability policy to changes in the Consumer Price Index.

#3. Which of the following statements about the reinstatement provision is true? a) It guarantees the reinstatement of a policy that has been surrendered for cash. b) It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated. c) It permits reinstatement within 10 years after a policy has lapsed. d) It provides for reinstatement of a policy regardless of the insured's health.

b Upon policy reinstatement, the policyowner will be required to pay all back premiums plus interest, and may be required to repay any outstanding loans and interest.

#21. Jason is insured under his employer's group health insurance. He splits the cost of the premiums with his employer. This is an example of a) A co-pay plan. b) A contributory plan. c) A noncontributory plan. d) A half and half plan.

b With a contributory plan the eligible employees contribute to payment of the premium (both the employee and employer pay part of the premium).

#96. When an insurance producer is to charge an administrative fee to an insured, all of the following must be done EXCEPT a) The insured must provide a signature on any fee disclosure. b) A schedule of fees must be posted in the office. c) A copy of any fee disclosure must be provided to the insured. d) The agent must disclose the fees in writing.

c All fees and charges for insurance must be stated in the premium. Agents are permitted to charge certain administrative fees provided the agent posts a schedule of the fees in the office, discloses the fees to the client in writing and the client signs the disclosure.

#74. What is a definition of a unilateral contract? a) One author: the company wrote the contract; the insured must accept it as written. b) If one party makes a condition, the other party can counteroffer. c) One-sided: only one party makes an enforceable promise. d) Two or more parties go into a contract understanding there may be an unequal exchange of value.

c An insurance contract is unilateral in that only one of the parties to the contract is legally bound to do anything.

#117. Which of the following types of insurance policies is most commonly used in credit life insurance? a) Whole life b) Equity indexed life c) Decreasing term d) Increasing term

c 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.

#81. Who is the beneficiary of a credit life and health policy? a) The state government b) The borrower c) The lending institution d) The federal government

c Creditor group, also called "credit life and health insurance" is a specialized use of group life and group health insurance. It protects the lending institution from losing money as the result of a borrower's death or disability. Generally the borrower is the premium payor but the lending institution is the beneficiary of the policy.

#27. In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years? a) 1 b) 3 c) 5 d) 10

c If the master contract is terminated, every individual who has been on the plan for at least 5 years will be allowed to convert to individual insurance of the same coverage.

#149. In which instance may 3 licensees share commissions? a) Three licensees may never share a commission. b) Sharing of commissions is at the discretion of the insurer. c) When all 3 are licensed for the same line of insurance from which the commission comes d) When at least 2 are licensed for the appropriate line of insurance from which the commission comes

c No insurer may pay any compensation, fee, or commission for services as agent or broker unless that person was licensed as an agent or broker at the time of the transaction. Licensees may share commissions, as long as each license is licensed for the same line of insurance at the time of transaction.

#116. Which of the following policies would be classified as a traditional level premium contract? a) Universal Life b) Variable Universal Life c) Straight Life d) Adjustable Life

c Straight whole life policies have a level guaranteed face amount and a level premium for the life of the insured.

#65. Under a SIMPLE plan, which of the following is TRUE regarding taxation on both contributions and earnings? a) Employer's matching contribution can be 50% of employee's salary. b) 75% of employee's contributions are taxed. c) They are tax deferred until withdrawn. d) Taxes must be paid in full.

c Taxation is deferred on both contributions and earnings until funds are withdrawn.

#142. The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the a) Consideration clause. b) Probationary period. c) Insuring clause. d) Incontestability clause.

c The insuring clause is a provision on the first page of the policy that states the coverage and when it applies.

#124. Which of the following is TRUE regarding variable annuities? a) The company guarantees a minimum interest rate. b) A person selling variable annuities is required to have only a life agent's license. c) The annuitant assumes the risks on investment. d) The funds are invested in the company's general account.

c The payments that the annuitant invests into the variable annuity are invested in the insurer's separate account. The separate account under many annuities provides the annuitant with a dozen or more investment options ranging from "money market funds" to "growth stock funds" to "precious metal funds". Therefore, the annuitant assumes the risk of the investment.

#2. Which of the following is an example of a peril covered in an accident and health insurance policy? a) Smoking b) Death c) Sickness d) Alcoholism

c There are two major causes of loss (or perils) covered under a health insurance policy: sickness and accident. Smoking and alcoholism would be considered hazards that may cause a loss.

#145. Which of the following statements concerning buy-sell agreements is true? a) Premiums paid are deductible as a business expense. b) Benefits received are considered income taxable. c) Buy-sell agreements pay in the event of a medical emergency. d) Buy-sell agreements are normally funded with a life insurance policy.

d A buy-sell agreement is simply a contract that establishes what will be done with a business in the event that an owner dies. Buy-sell agreements are normally funded with a life insurance policy.

#24. All of the following may occur to a person who knowingly and willfully obtains information about an individual from an insurance institution, agent or insurance-support organization under false pretenses, EXCEPT a) The person may be fined $5,000 or be confined in jail for no more than 12 months. b) The person may be fined $10,000. c) The person may be punished by confinement in jail for 6 months. d) The person may be fined $20,000.

d A fine for gathering information under false pretenses may not exceed $10,000. Punishment by confinement in jail may not exceed 12 months. Both punishments are possible.

#28. Which of the following provisions requires that any policy language that is in conflict with the state statutes of the state in which the insured resides is automatically amended to conform with those of the state of residence? a) Incontestability b) Insurance with Other Insurers c) Legal actions d) Conformity with State Statutes

d Conformity with State Statutes provision states that any provision of the policy which, on its effective date, is in conflict with the statutes of the state in which the insured resides on that date, is automatically amended to conform to the minimum requirement of the statutes.

#20. If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? a) 7 days b) 10 days c) 3 days d) 5 days

d Consumers must be advised that they have a right to request additional information concerning investigative consumer reports, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.

#66. Which of the following statements is true concerning the alteration of optional policy provisions? a) An insurer may change the wording of optional provisions, regardless of its effect on the policyholder. b) An insurer may change the wording of optional policy provisions that would adversely affect the policyholder but must first receive state permission before the change goes into effect. c) Once any kind of provision is written, it cannot be changed. d) An insurer may change the wording of optional provisions, as long as the change does not adversely affect the policyholder.

d Optional policy provisions can be changed by an insurer, as long as the changes do not adversely affect the policyholder.

#148. What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident? a) Spendthrift Clause b) Settlement Clause c) Nonforfeiture Clause d) Common Disaster Clause

d The Common Disaster Clause provision states that when an insured and beneficiary die in a common accident, and the beneficiary dies before or within a specific period of time after the insured, the insurer will proceed as if the insured outlived the beneficiary.

#34. All advertisements are the responsibility of the a) Soliciting agent. b) Advertising agency. c) Department of Insurance. d) Insurer.

d The insurer whose policies are advertised is responsible for all its advertisements, regardless of who wrote, created, presented, or distributed them.

#43. Which of the following best describes taxation during the accumulation period of an annuity? a) The annuity is subject to state taxes only. b) The annuity is subject to both state and federal taxation. c) The growth is subject to immediate taxation. d) Taxes are deferred.

d The interest accumulated in an annuity is the tax base, but the taxes are deferred during the accumulation period. The cost base is the premium dollars that have already been taxed and will not be taxed again when withdrawn from the contract.

#30. A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the a) Secondary beneficiary. b) Contingent beneficiary. c) Irrevocable beneficiary. d) Revocable beneficiary.

d The policyowner may change a revocable designation at any time and without the consent of the beneficiary. Irrevocable beneficiaries, on the other hand, have a vested interest in the policy, so the policyowner may not be able to exercise certain rights without their consent.

#26. What are the 2 types of Flexible Spending Accounts? a) Health Care Accounts and Health Reimbursement Accounts b) Medical Savings Accounts and Dependent Care Accounts c) Medical Savings Accounts and Health Reimbursement Accounts d) Health Care Accounts and Dependent Care Accounts

d There are 2 types of Flexible Spending Accounts: a Health Care Account for out-of-pocket health care expenses, and a Dependent Care Account to help pay for dependent care expenses which make it possible for an employee and his or her spouse, if applicable, to work.