Life & Health Insurance Exam Claims and Benefits 1 — Questions and Answers
Question 1: Under a life insurance policy, who has the right to file a death claim?
- The insured
- The beneficiary (Correct answer)
- The insurance agent
- The state insurance department
Correct answer: The beneficiary
The named beneficiary is entitled to file a death claim and receive the policy proceeds upon the insured's death.
Question 2: What is the 'incontestability clause' in a life insurance policy?
- A clause allowing the insurer to deny all claims
- A clause preventing the insurer from voiding the policy after a specified period (Correct answer)
- A clause that waives premium payments
- A clause that doubles the death benefit
Correct answer: A clause preventing the insurer from voiding the policy after a specified period
After the incontestability period (typically 2 years), the insurer cannot contest the policy based on misstatements in the application.
Question 3: Which of the following is NOT a standard settlement option for life insurance death proceeds?
- Lump-sum payment
- Life income option
- Interest only option
- Automatic policy loan (Correct answer)
Correct answer: Automatic policy loan
Automatic policy loan is a nonforfeiture option, not a settlement option for death proceeds.
Question 4: What does 'Accidental Death Benefit' (ADB) rider provide?
- Coverage for accidental disability only
- An additional death benefit if the insured dies by accident (Correct answer)
- Waiver of premiums after an accident
- Replacement income during recovery
Correct answer: An additional death benefit if the insured dies by accident
The ADB rider pays an additional amount—often equal to the face value—on top of the base death benefit if death results from an accident.
Question 5: A claimant submits a health insurance claim 30 days after the allowed filing period. The insurer will most likely:
- Pay the claim in full
- Pay the claim with a penalty fee
- Deny the claim due to late filing (Correct answer)
- Refer the claim to arbitration
Correct answer: Deny the claim due to late filing
Health insurers may deny claims submitted after the timely filing deadline specified in the policy.
Question 6: Which provision requires health insurers to pay claims within a specific number of days after receiving proof of loss?
- Grace period provision
- Time of payment of claims provision (Correct answer)
- Reinstatement provision
- Legal actions provision
Correct answer: Time of payment of claims provision
The time of payment of claims provision mandates that the insurer pay benefits promptly—typically within 45 days—after receiving satisfactory proof of loss.
Life & Health Insurance Exam Claims and Benefits 1
Under a life insurance policy, who has the right to file a death claim?