Life & Health Insurance Exam Life And Health Insurance Practice 3

Question 1

A universal life insurance policy has two death benefit options. Option B (increasing death benefit) pays:

Accepted Answer

The face amount plus the policy's accumulated cash value

Answer

Option B provides a death benefit equal to the face amount plus the accumulated cash value, resulting in an increasing total death benefit over time.

Question 2

Which provision in a health insurance policy requires the insurer to reinstate a lapsed policy if the insured pays overdue premiums within a specified period, typically 10 days?

Accepted Answer

Reinstatement provision

Answer

The reinstatement provision allows a lapsed policy to be reinstated upon payment of overdue premiums, usually requiring evidence of insurability for health claims.

Question 3

An employer-sponsored group health plan that self-insures its claims but uses an insurance company only for administrative services is called:

Accepted Answer

An ASO (Administrative Services Only) arrangement

Answer

In an ASO arrangement, the employer bears the risk for claims and pays an insurance company only to handle administrative tasks like claims processing.

Question 4

Which Medicare supplement plan (Medigap) is the only plan that covers the Medicare Part A deductible for hospital stays for policies sold after January 1, 2020?

Accepted Answer

Plan G

Answer

After 2020, newly eligible Medicare beneficiaries can only purchase Plans G and N (not F or C), and Plan G covers the Part A deductible.

Question 5

A life insurance policy that builds cash value using a fixed interest rate set by the insurer, with no direct investment choices for the policyholder, is best described as:

Accepted Answer

Whole life insurance

Answer

Whole life insurance accumulates cash value at a fixed interest rate guaranteed by the insurer, with no policyholder control over investment allocation.

Life & Health Insurance Exam Practice Test

Life & Health Insurance Exam Practice Test

Life & Health Insurance Exam Life And Health Insurance Practice 3