Life and Health Insurance Guide Exam Flashcards
7 cards from real Life & Health Insurance Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Life and Health Insurance Guide Exam flashcards as text
A life insurance policy lapses due to non-payment of premium. The insured later requests reinstatement. Which of the following is NOT typically required for reinstatement?
Answer: Assignment of the policy to the insurer
Reinstatement generally requires payment of back premiums with interest, satisfying any policy loans, and proof of insurability, but does not require assigning the policy to the insurer.
Which type of annuity guarantees a fixed payout for the annuitant's lifetime, with payments continuing to a beneficiary for a specified period if the annuitant dies early?
Answer: Life with period certain annuity
A life with period certain annuity pays for life but guarantees payments for a minimum period (e.g., 10 years) to a beneficiary if the annuitant dies before that period ends.
An employer-sponsored group health plan that self-funds claims but purchases stop-loss coverage is known as a:
Answer: Self-insured (self-funded) plan
A self-insured plan means the employer bears the risk for employee health claims directly, often purchasing stop-loss insurance to limit catastrophic exposure.
The 'free-look' period for a new individual life insurance policy is typically how many days?
Answer: 10 days
Most states require a minimum 10-day free-look period during which the policyholder may return the policy for a full premium refund.
An insured has a $500 deductible and 80/20 coinsurance with a $2,000 stop-loss. Total covered medical bills are $10,500. How much does the insured pay in total?
Answer: $2,500
The insured pays the $500 deductible plus 20% of the remaining $10,000 ($2,000), but the stop-loss caps out-of-pocket at $2,000; total = $500 + $2,000 = $2,500.
Which nonforfeiture option allows a lapsed whole life policyholder to receive paid-up coverage at a reduced face amount?
Answer: Reduced paid-up insurance
Reduced paid-up insurance uses the cash surrender value as a single premium to purchase a permanent policy for a reduced face amount with no further premiums required.
A health insurance applicant fails to disclose a prior heart attack on the application. This is an example of:
Answer: Concealment
Concealment is the intentional withholding of material information that would affect the insurer's decision to issue or price the policy.