Life & Health Insurance Exam Life And Health Insurance Practice 4

Question 1

Which of the following best describes a 'participating' life insurance policy?

Accepted Answer

A policy eligible to receive dividends from the insurer's surplus

Answer

Participating policies are issued by mutual insurers and may pay dividends to policyowners when the insurer's actual experience is more favorable than projected.

Question 2

Under a group life insurance plan, the 'conversion privilege' allows a terminated employee to:

Accepted Answer

Convert their term coverage to a permanent individual policy without proof of insurability

Answer

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.

Question 3

A long-term care insurance policy that pays a fixed daily benefit regardless of the actual cost of care received is called:

Accepted Answer

Indemnity (per diem) policy

Answer

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.

Question 4

Which of the following is NOT a required benefit under a standard HIPAA special enrollment event?

Accepted Answer

Voluntary early retirement

Answer

HIPAA special enrollment rights apply to qualifying life events like birth, adoption, marriage, and loss of other coverage, but not voluntary early retirement.

Question 5

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:

Accepted Answer

Non-qualified annuity

Answer

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.

Life & Health Insurance Exam Practice Test

Life & Health Insurance Exam Practice Test

Life & Health Insurance Exam Life And Health Insurance Practice 4