Life & Health Insurance Policy Provisions and Riders 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 & Health Insurance Policy Provisions and Riders flashcards as text
An insured has a major medical policy with a $500 deductible and 80/20 coinsurance. After the deductible, a $10,000 bill is submitted. How much does the insured owe in coinsurance?
Answer: $2,000
After the $500 deductible, the remaining $9,500 is split 80/20; the insured pays 20% of $9,500 = $1,900 (plus the $500 deductible = $2,400 total), but coinsurance alone is $1,900.
A Return of Premium rider on a life insurance policy provides what benefit?
Answer: Returns all premiums paid if the insured outlives the policy term
The Return of Premium rider refunds all premiums paid to the policyholder if they survive to the end of the policy term.
Under the Entire Contract provision, what documents make up the entire insurance contract?
Answer: The policy and the attached application
The Entire Contract provision states the policy and the attached application together constitute the full contract.
What does the 'other insurance' provision in a health policy primarily prevent?
Answer: Profit from collecting more than 100% of medical expenses
The 'other insurance' provision, including Coordination of Benefits, prevents insureds from collecting more than their actual medical expenses from multiple policies.
A disability income policy has a 90-day elimination period. The insured becomes disabled on January 1. When would the first benefit payment typically be made?
Answer: April 1
After a 90-day elimination period starting January 1, benefits begin April 1 (the first day after the elimination period ends).
Which life insurance policy provision allows a policyowner to use the policy's cash value to keep insurance in force during the grace period if premium is not paid?
Answer: Automatic Premium Loan provision
The Automatic Premium Loan provision automatically borrows from the cash value to pay a premium that is not paid by the end of the grace period.
Which of the following best describes the 'change of occupation' provision in a disability income policy?
Answer: Benefits may be reduced or premiums adjusted if the insured moves to a higher-risk occupation
If an insured changes to a higher-risk occupation, the insurer may reduce benefits to the amount the premium would have purchased at the new occupation's rate.