Life and Health Insurance (Combined) Flashcards
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Read the first 7 Life and Health Insurance (Combined) flashcards as text
Which provision in a life insurance policy gives the policy owner additional time beyond the premium due date to pay without losing coverage?
Answer: Grace period
The grace period (typically 30–31 days) allows the policy owner to pay an overdue premium without the policy lapsing or losing its benefits.
Under a major medical plan, the 'stop-loss' (out-of-pocket maximum) feature means:
Answer: The insured's coinsurance obligation ends once out-of-pocket costs hit a specified limit
Once the insured's out-of-pocket costs (deductibles + coinsurance) reach the stop-loss limit, the plan pays 100% of remaining covered expenses.
A life insurance applicant misrepresents her age on the application. If the error is discovered after the policy is issued, the insurer will typically:
Answer: Adjust the death benefit to what the correct-age premium would have purchased
The misstatement of age provision requires the insurer to adjust the death benefit to reflect what the actual premium paid would have bought at the correct age.
A traditional IRA owner who is also covered by an employer retirement plan may deduct IRA contributions subject to:
Answer: Income phase-out limits set by the IRS
When covered by a workplace plan, the deductibility of traditional IRA contributions phases out at IRS-established modified adjusted gross income (MAGI) thresholds.
A health policy that reimburses the insured for actual medical expenses up to policy limits is classified as a/an:
Answer: Reimbursement plan
A reimbursement plan pays the insured back for covered expenses actually incurred, up to the benefit limits stated in the policy.
The 'entire contract' provision in a life insurance policy states that the policy and what other document together constitute the full legal agreement?
Answer: The signed application
The entire contract provision specifies that the policy itself, together with the signed application attached to it, forms the complete and binding contract.
An HMO requires members to select a primary care physician (PCP) primarily to:
Answer: Act as a gatekeeper to control utilization of specialist services
HMO PCPs serve as gatekeepers who coordinate care and authorize specialist referrals, helping the HMO manage cost and utilization.