FREE Life And Health Insurance Practice Questions and Answers

Question 1

Which type of insurance guarantees that the policy can be renewed every year, regardless of the policyholder's health, but at a higher cost?

Accepted Answer

Renewable term

Answer

Renewable term insurance guarantees that the policyholder can renew their coverage at the end of each term without needing to provide new evidence of insurability. While this offers continued protection regardless of health changes, the premiums typically increase with each renewal due to the insured's advancing age.

Question 2

What's the significance of worker's compensation legislation?

Accepted Answer

Employers would be held responsible for the cost of their employee's work injuries regardless of fault

Answer

Worker's compensation legislation established a no-fault system where employers are held responsible for the medical costs and lost wages of employees injured on the job. This means employees do not need to prove employer negligence to receive benefits, simplifying the process for injured workers.

Question 3

In the event of a terminal illness, which death benefit clause will trigger payment of a portion of the death benefit before the insured's death?

Accepted Answer

Accelerated death benefit

Answer

An accelerated death benefit clause allows an insured individual, typically diagnosed with a terminal illness, to receive a portion of their life insurance policy's death benefit while still alive. This provides financial relief for medical expenses or other needs during a critical time, before the full death benefit would normally be paid out.

Question 4

A ____ is a way to give family members a break from taking care of a person who needs constant care.

Accepted Answer

Respite care

Answer

Respite care provides temporary relief for primary caregivers who are looking after a person with chronic illness or disability. It allows caregivers to take a break, attend to personal needs, or simply rest, while ensuring the care recipient continues to receive appropriate support.

Question 5

If an insurance is unable to pay debts when they are due, the insurer is believed to be _______.

Accepted Answer

Insolvent

Answer

An insurer is considered insolvent when its liabilities exceed its assets, meaning it is unable to pay its debts or meet its financial obligations as they become due. This financial state can lead to the insurer being taken over by regulators to protect policyholders.

Life & Health Insurance Exam Practice Test

Life & Health Insurance Exam Practice Test

FREE Life And Health Insurance Practice Questions and Answers