Insurance Quiz: Answers & Explanations for Dividends, Annuities, & Health Insurance, Exams of Nursing

Download Insurance Quiz: Answers & Explanations for Dividends, Annuities, & Health Insurance and more Exams Nursing in PDF only on Docsity! Life insurance - practice test questions and answers 2024 A special characteristic of insurance contract where equal value is not exchanged between parties is known as: Correct Answer is Aleatory Life insurance contracts are ___ agreements Correct Answer is Unilateral What is the proper definition of "take it or leave it" contracts written by insurer? Correct Answer is Adhesion using the human value approach, the best way to figure out the amount of death benefit is based on?: A. proposed insured's life span B. proposed insured's retirement date C. proposed insured's health status D. proposed insured's potential earnings Correct Answer is D. proposed insured's potential earnings an insurer pays a refund from the surplus of profits to the holder of a participating policy. what is this payment called? A. unlawful rebate B. dividend C. annuity D. not legal, as only stock companies pay dividends Correct Answer is B. policy dividend the non-forfeiture provision that would give the insured the most amount of coverage would be? A. cash surrender value B. extended term insurance C. reduced paid up insurance D. automatic premium loan Correct Answer is B. extended term insurance if you choose the settlement option of receiving fixed monthly installments or fixed amounts, you may receive an amount that is: A. more than the face amount B. less than the face amount C. the same as the face amount D. none of the above Correct Answer is A. more than the face amount. an individual, who wishes to provide a retirement income for himself that will also provide retirement income for his wife in the event that he dies, should purchase which of the following? A. life annuity with period certain B. a refundable life annuity C. joint and survivor life annuity D. immediate annuity Correct Answer is C. joint and survivor life annuity a pure life annuity offers protection against the risk of: A. death during the earning years B. disability during the earning years C. outliving one's income D. death after the age of retirement Correct Answer is C. outliving one's income a ____ is a product used to accumulate funds and later liquidate that amount? A. industrial life policy B. term life policy C. annuity D. life paid up at 65 Correct Answer is C. annuity the period of time during which a deferred annuity builds its value is referred to as? A. an accumulation period B. an annuity period C. an elimination period D. a waiting period Correct Answer is A. accumulation period a life annuity with a 10-year period certain: A. will pay the annuitant only for 120 months B. is guaranteed to pay for a minimum of 120 months either to the annuitant or beneficiary C. will pay the annuitant for 10 years and continue for 10 years, but the amount will be less D. will pay the annuitant for life and the beneficiary for 10 years after the death of the annuitant Correct Answer is B. is guaranteed to pay for a MINIMUM of 120 months either to the annuitant or beneficiary Robert works for a small business that just offered employees a group heath insurance plan. 75% of eligible employees must sign up. Which statement is true? A. This is non-contributory plan B. This is a contributory plan the entire contract provision states which of the following in addition to the policy: A. the application B. the application and credit references C. a statement from the agent and application D. the insureds name and underwriting procedures Correct Answer is A. the application an individual has a hospital indemnity plan that pays $500/day. this person is hospitalized for two days and the bills are $400/day. how much will the company pay? A. $800 B. $1,000 C. $600 D. $100 Correct Answer is B. $1,000 an amount that must be paid after the basic health policy benefits are exhausted and before the excess coverage becomes effective is: A. coinsurance B. corridor deductible C. extended benefits D. co-payment Correct Answer is B. corridor deductible a type of health insurance referred to as "service plan" ... A. is more service oriented than most plans B. pays the provider directly for the cost of medical services C. provides broader services to its members D. pays insured directly for medical costs incurred Correct Answer is B. pays provider directly for the cost of medical services in a health maintenance organization (HMO) the use of a primary care physician (PCP) is common as part of the... A. group model B. capitation arrangement C. open enrollment D. gatekeeper system Correct Answer is D. gatekeeper system which of the following is not a recognized HMO model? A. staff B. group C. network D. independent practitioner Correct Answer is C. network each of the following is a principal factor of determining group premium rates except: A. location of business B. size of group C. financial stability of group D. number and frequency of new entrants into group Correct Answer is A. location of business group underwriters are concerned with what criteria that relates to the group as a whole? A. adverse selection B. size of group C. nature of group D. all of the above Correct Answer is D. all of the above the convertibility provision in group insurance means that: A. the insurer may convert the policy to another group insurance plan within 30 days notice B. the insured has 30 days to convert to another group plan at their anniversary date C. the insurer may convert the employees premium contribution with proper notice D. the insured may convert to another plan offered by the insurer when they no longer meet qualifications for group coverage Correct Answer is D. which of the following is an acronym for federal legislation covering the continuation of insurance coverage for terminated employees? A. COBRA B. ERISA C. OBRA D. All of the above Correct Answer is A. COBRA which of the following is the least restrictive definition: A. own occupation B. any occupation C. any occupation for which the person is suited by education, training, or experience D. own occupation for the first 5 years then any occupation that the person is suited for Correct Answer is A. own occupation OBRA provides for: A. the reduction of COBRA benefits for someone who qualifies B. the extension of COBRA benefits fro SSI dependents C. the 11 month extension of COBRA benefits for qualified disabled individuals D. OBRA does not have a provision for disabled Correct Answer is C. 11 month COBRA extension the limit of coverage for monthly disability income payment benefit is usually: A. 50-70% of the recepient's normal gross monthly income B. 70-90% normal gross monthly income C. 100% of normal gross monthly income D. based off actuarial tables Correct Answer is A. 50-70% of normal gross monthly income mike was injured in a fall 6 months ago and was left totally paralyzed. he can probably receive benefits from: A. social security B. health insurance C. MIB D. none of the above Correct Answer is A. social security disability insurance proceeds are taxable: A. always B. never C. if the employee pays for the insurance D. if the employer pays for the insruance Correct Answer is D. if the employer pays for the insurance which of the following are eligible for medicare? A. people age 65 or older, who are eligible for SS B. people age 65 and older who are not eligible for SS but willing to pay monthly premium C. people of any age that have been entitled to SS disability benefits for 24 months D. all of the above Correct Answer is D. all of the above all of the following are benefits provided under part A of medicare except: A. inpatient surgeon fees B. in-home health care C. in-home nursing care D. inpatient hospital care Correct Answer is A. inpatient surgeon fees medicare provides: A. long term care benefits B. very limited nursing benefits C. broad coverage for intermediate care D. all of the above Correct Answer is B. very limited nursing benefits what provides counseling and comfort to terminally ill patients? A. adult day care B. HICAP D. Odds of sickness versus odds of disability. Correct Answer is B. Which pair are Activities of Daily Living (ADLs)? A. Mobility & bathing B. Dressing & seeing C. Hearing & eating D. speaking & sleeping Correct Answer is A. What is the usual federal income tax treatment of individual life insurance? A. Deductibility of premiums, taxable death benefits B. Non-deductibility of premiums, taxable death benefits C. Non-deductibility of premiums, non-taxable death benefits D. Deductibility of premiums, non-taxable death benefits Correct Answer is C. Brian purchased a variable life policy and died 25 months after the issue date. It is then discovered that Brian understated his age on the application. What will the insurer do in regard to the payment of the death benefit to the beneficiary? A. The death benefit will be reduced to reflect the age discrepancy. B. The policy will be rescinded and all premium paid will be refunded to the beneficiary. C. The death benefit will be paid to the estate of the insured for legal action. D. The full death benefit will be paid because the policy is over 2 years old. Correct Answer is A. How does the IRS classify the two different types of retirement accounts? A. Qualified and unfunded B. Fully funded and non-qualified C. Contributory and noncontributory D. Qualified and non-qualified Correct Answer is D In a group life policy with a death benefit of more than $50,000: A. Premium cost for insurance above $50,000 is taxable as income to the employee. B. Premium cost is taxable to the employer. C. Premium cost is tax deferred. D. Premium cost for insurance below $50,000 is taxable as income to the insured. Correct Answer is A. Which insurance is known for having a level premium with a fixed rate of return resulting in guaranteed cash value? A. Whole Life B. Adjustable Life C. Variable Life D. universal life Correct Answer is A. An insurer invests the cash value of a fixed annuity in which of the following assets? A. Index account B. Separate account C. Blended account D. General account Correct Answer is D. Rank from lowest to highest, the amount of monthly income that would result from the following annuity settlement options: A. Straight life, life with ten years certain, life refund option B. Life with refund option, life with 10 years certain, straight life C. Life with ten year certain, life with refund option, straight life D. Life with refund option, straight life, life with 10 years certain Correct Answer is B. In a non-contributory group policy: A. 100% of employees must be allowed to participate. B. 75% of employees must elect to join the plan. C. 75% of eligible employees must elect to join the plan. D. 100% of eligible employees must participate. Correct Answer is D Your policy contains the guaranteed insurability rider. When can you purchase additional insurance on you policy? A. Without proof of insurability when the cost of living increases. B. Any time you wish once proving you are insurable for the additional coverage. C. Without evidence of insurability at specified ages or dates. D. At specified ages or date after providing evidence of insurance. Correct Answer is C Which best describes industrial insurance? A. $10,000 coverage and premiums paid by mail. B. $2,000 or less in coverage and premiums collected by agent. C. $50,000 coverage and premiums paid by mail. D. $100,000 coverage and premiums collected by agent. Correct Answer is B In contrasting stock insurers with mutual insurers, which statement is not false? A. Stock insurers are owned by the shareholders, and issue non-participating policies. B. Mutual insurers are owned by the shareholders, and issue participating policies. C. Stock dividends are tax-free while policy dividends are taxable. D. Non-participating policies can pay out dividends to the policyholders. Correct Answer is A What nonforfeiture option allows a policyowner to use the existing cash value to purchase a policy of the same face amount as the original policy but for a reduced amount of time? A. Extended term insurance B. Reduced paid-up insurance C. Cash surrender value D. Extended paid-up insurance Correct Answer is A Under which life settlement option does the insurer retain the death benefit but pays the beneficiary the earnings on the death benefit? A. Life income option B. Interest only option C. Cash option D. Accumulate with interest option Correct Answer is B Which statement is an accurate description of life insurance policy dividends? A. Stock insurers pay dividends to policy owners, mutual insurers pay dividends to shareholders. B. They are guaranteed to be paid and they are taxable. C. They are likely to be larger in nonparticipating policies. D. They are not taxable and are not guaranteed. Correct Answer is D In the insurance planning processes, the blackout period is: A. The period of time after the youngest child reaches 16, but before the widow reaches 60, in which the surviving spouse receives no Social Security benefits. B. The period of time in which a policy can be rescinded due to the applicants intentional or unintentional misstatements on the application. C. The period of time in which the policy is still in force despite non-payment. D. The period of time in which an employee is not yet eligible to join a group life insurance plan. Correct Answer is A Sam has a $200,000 convertible life insurance policy. If he chooses, he can: A. Convert to another term policy with a lower face amount without proof of insurability. B. Purchase an individual annuity for any face amount using the 1035 exchange privilege. C. Convert to a whole life policy for the same face amount without proof of insurability. D. Purchase another term policy and increase his death benefit without proof of insurability. Correct Answer is C