Insurance Exam Flashcards

Under COBRA, how long may a qualified beneficiary continue group health coverage after the employee voluntarily terminates employment?

Answer: 18 months

Most COBRA qualifying events (voluntary termination, reduction in hours) entitle the beneficiary to 18 months of continuation coverage.

A homeowner's policy Section II provides which type of coverage?

Answer: Personal liability and medical payments

Section II of a homeowner's policy covers personal liability and medical payments to others, protecting against lawsuits from bodily injury or property damage.

The maximum amount an insurer will pay for all covered losses under a policy during the policy period is called the:

Answer: Aggregate limit

The aggregate limit caps the total amount the insurer will pay for all claims combined during the policy period.

A life insurance policy provision that allows the policyowner to reinstate a lapsed policy within a specified period by paying back premiums with interest requires evidence of:

Answer: Insurability

Reinstatement provisions require the policyowner to provide evidence of insurability in addition to paying all overdue premiums plus interest.

Which nonforfeiture option uses a lapsed whole life policy's cash value to buy a reduced paid-up policy of the same type?

Answer: Reduced paid-up

The reduced paid-up nonforfeiture option uses accumulated cash value to purchase a fully paid-up policy with a lower face amount than the original.

An employer-sponsored retirement plan that defines the benefit the employee will receive at retirement is a:

Answer: Defined benefit plan

A defined benefit plan promises a specific monthly benefit at retirement, usually based on salary history and years of service.

Under the standard fire policy, which of the following is NOT a covered peril?

Answer: Flood

Standard fire policies cover fire, lightning, and removal of property; flood is excluded and requires a separate flood insurance policy.