Life And Health Insurance Practice Flashcards
7 cards from real Life & Health Insurance Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Life And Health Insurance Practice flashcards as text
Which of the following best describes a 'participating' life insurance policy?
Answer: A policy eligible to receive dividends from the insurer's surplus
Participating policies are issued by mutual insurers and may pay dividends to policyowners when the insurer's actual experience is more favorable than projected.
Under a group life insurance plan, the 'conversion privilege' allows a terminated employee to:
Answer: Convert their term coverage to a permanent individual policy without proof of insurability
The conversion privilege gives terminated employees the right to convert their group term life coverage to an individual permanent policy without a medical exam, within 31 days of termination.
A long-term care insurance policy that pays a fixed daily benefit regardless of the actual cost of care received is called:
Answer: Indemnity (per diem) policy
An indemnity or per diem long-term care policy pays a set daily benefit amount regardless of what the actual care costs, while reimbursement policies pay up to the actual expenses incurred.
Which of the following is NOT a required benefit under a standard HIPAA special enrollment event?
Answer: Voluntary early retirement
HIPAA special enrollment rights apply to qualifying life events like birth, adoption, marriage, and loss of other coverage, but not voluntary early retirement.
An annuity that is funded with after-tax dollars and grows tax-deferred, but distributions of gains are taxed as ordinary income, is called a:
Answer: Non-qualified annuity
Non-qualified annuities are purchased with after-tax dollars; the principal is not taxed again upon withdrawal, but the earnings portion is taxed as ordinary income.
A disability income insurance policy that cannot be canceled or have premiums increased by the insurer as long as premiums are paid is classified as:
Answer: Noncancelable and guaranteed renewable
A noncancelable and guaranteed renewable policy locks in both the renewal right and the premium rate, giving the insured the strongest protection.
When an insured uses the 'settlement option' called 'interest only,' the insurer:
Answer: Retains the death benefit principal and pays only the earned interest to the beneficiary
Under the interest only settlement option, the insurer holds the death benefit proceeds and pays the beneficiary only the interest earned, preserving the principal for a later lump sum withdrawal.