Life & Health Insurance Exam Life & Health Insurance Policy Provisions and Riders 3

Question 1

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?

Accepted Answer

$2,000

Answer

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.

Question 2

A Return of Premium rider on a life insurance policy provides what benefit?

Accepted Answer

Returns all premiums paid if the insured outlives the policy term

Answer

The Return of Premium rider refunds all premiums paid to the policyholder if they survive to the end of the policy term.

Question 3

Under the Entire Contract provision, what documents make up the entire insurance contract?

Accepted Answer

The policy and the attached application

Answer

The Entire Contract provision states the policy and the attached application together constitute the full contract.

Question 4

What does the 'other insurance' provision in a health policy primarily prevent?

Accepted Answer

Profit from collecting more than 100% of medical expenses

Answer

The 'other insurance' provision, including Coordination of Benefits, prevents insureds from collecting more than their actual medical expenses from multiple policies.

Question 5

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?

Accepted Answer

April 1

Answer

After a 90-day elimination period starting January 1, benefits begin April 1 (the first day after the elimination period ends).

Life & Health Insurance Exam Practice Test

Life & Health Insurance Exam Practice Test

Life & Health Insurance Exam Life & Health Insurance Policy Provisions and Riders 3