Insurance Life & Health Insurance 2

Question 1

Which provision in a life insurance policy allows the policyowner to reinstate a lapsed policy within a specified period?

Accepted Answer

Reinstatement provision

Answer

The reinstatement provision allows a policyowner to restore a lapsed policy, typically within 3 years, by paying overdue premiums with interest and proving insurability.

Question 2

What does the term 'subrogation' mean in health insurance?

Accepted Answer

The insurer's right to recover payments from a liable third party

Answer

Subrogation gives the health insurer the legal right to seek reimbursement from a third party who was responsible for the insured's injury or illness.

Question 3

A 'guaranteed insurability' rider on a life insurance policy allows the policyowner to:

Accepted Answer

Purchase additional coverage at specified times without proof of insurability

Answer

The guaranteed insurability rider lets the insured buy additional life insurance at future option dates without having to prove insurability.

Question 4

Under the ACA, what is the maximum out-of-pocket limit designed to protect?

Accepted Answer

Insureds from catastrophic annual medical costs

Answer

The ACA's out-of-pocket maximum caps the total amount an insured must pay in a plan year, protecting individuals from catastrophic medical expenses.

Question 5

Which of the following best describes a 'self-funded' (self-insured) employer health plan?

Accepted Answer

The employer pays claims directly from its own funds rather than paying insurance premiums

Answer

In a self-funded plan, the employer assumes the financial risk and pays medical claims directly, often using a third-party administrator to process claims.

Insurance Practice Test

Insurance Practice Test

Insurance Life & Health Insurance 2