Life & Health Insurance Exam Life and Health Insurance Assessment 4

Question 1

The insuring clause in a life insurance policy is significant because it:

Accepted Answer

States the insurer's promise to pay the death benefit

Answer

The insuring clause is the core contractual promise where the insurer agrees to pay the face amount upon the insured's death.

Question 2

Under Medicaid, eligibility is primarily based on:

Accepted Answer

Financial need and income level

Answer

Medicaid is a needs-based program jointly funded by federal and state governments, with eligibility determined primarily by income and financial resources.

Question 3

A 'spendthrift clause' in a life insurance policy is intended to:

Accepted Answer

Protect policy proceeds from the beneficiary's creditors

Answer

A spendthrift clause prevents beneficiaries from assigning or pledging their interest and protects proceeds from their creditors until distributed.

Question 4

In a health insurance policy, a 'stop-loss' provision benefits the insured by:

Accepted Answer

Capping the insured's out-of-pocket expenses for the year

Answer

A stop-loss (out-of-pocket maximum) provision caps the total amount the insured must pay in cost-sharing each year, after which the insurer covers 100%.

Question 5

Which of the following is a characteristic of a participating life insurance policy?

Accepted Answer

The policyowner may receive dividends from the insurer

Answer

Participating policies are typically issued by mutual insurers and may pay dividends to policyowners when the insurer experiences favorable experience.

Life & Health Insurance Exam Practice Test

Life & Health Insurance Exam Practice Test

Life & Health Insurance Exam Life and Health Insurance Assessment 4