Life & Health Insurance Exam Life and Health Insurance Random 2

Question 1

Under COBRA, how long must a qualified beneficiary who loses coverage due to divorce be offered continuation coverage?

Accepted Answer

36 months

Answer

Divorce or legal separation is a qualifying event that entitles the spouse to 36 months of COBRA continuation coverage.

Question 2

Which provision in a life insurance policy prevents the insurer from denying a claim based on misrepresentation after a specified period?

Accepted Answer

Incontestability clause

Answer

The incontestability clause (typically 2 years) bars the insurer from voiding a policy due to misrepresentation after that period has elapsed.

Question 3

A Health Maintenance Organization (HMO) plan differs from a Preferred Provider Organization (PPO) primarily because HMOs:

Accepted Answer

Require a referral from a PCP to see a specialist

Answer

HMOs typically require members to select a primary care physician who must provide referrals to specialists within the network.

Question 4

What is the primary purpose of a 'spendthrift' clause in a life insurance policy?

Accepted Answer

To protect policy proceeds from being claimed by the beneficiary's creditors

Answer

A spendthrift clause protects beneficiaries by preventing their creditors from attaching or garnishing insurance proceeds before they are received.

Question 5

Which type of annuity allows the contract owner to allocate premium payments among various sub-accounts tied to market investments?

Accepted Answer

Variable annuity

Answer

A variable annuity lets the owner invest in sub-accounts (similar to mutual funds), so the accumulation value and income payments can vary with market performance.

Life & Health Insurance Exam Practice Test

Life & Health Insurance Exam Practice Test

Life & Health Insurance Exam Life and Health Insurance Random 2