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PEARSON VUE LIFE AND HEALTH INSURANCE
EXAM LATEST EXAM 2024 | ALL QUESTIONS
AND CORRECT ANSWERS | LATEST VERSION |
ALREADY GRADED A+
When a producer submits an insurance application to the company, the producer must take all of the following actions EXCEPT: A. submit the initial premium, if it was collected B. ensure any changes on the application were initialed by the applicant C. submit a completed medical information report D. complete the producer's report ------CORRECT ANSWER---------------C In life insurance, the Free Look provision begins on the: A. effective date of coverage B. policy delivery date C. date of application D. date that the insurer issues the policy ------CORRECT ANSWER----------- ----B A client needs a substantial amount of protection but has limited financial resources. Which of the following insurance policies would BEST meet the client's needs? A. Term Life B. Adjustable Life C. Whole Life D. Limited-Pay Life ------CORRECT ANSWER---------------A A life policy is usually contestable due to material misrepresentation on the application for a period of: A. 30 days B. 6 months C. 2 years
D. 5 years ------CORRECT ANSWER---------------C Which of the following statements is CORRECT about the Paid-Up Additions in a participating Whole Life policy? A. They are subject to underwriting approval. B. They do not generate dividends. C. They are considered Term policies. D. They are purchased on an attained age basis. ------CORRECT ANSWER---------------D In which of the following contracts is the Death benefit called the principal sum? A. Survivorship Annuity B. Accidental Death and Dismemberment (AD&D) C. Decreasing Term D. Joint Life ------CORRECT ANSWER---------------B At which of the following times MUST a life insurance applicant be informed of their rights under the Fair Credit Reporting Act? A. During the initial appointment B. When the insured's application is completed C. When the policy is delivery D. Upon initial premium receipt ------CORRECT ANSWER---------------C R has just graduated from law school. R knows that R's future earnings will be much higher than they are now, but wants to purchase a permanent policy now to cover future needs. Which of the following policies would BEST suit R's needs? A. Return of Premium Life B. Life Paid-Up at 65 C. Modified Whole Life D. Annual Renewable Term ------CORRECT ANSWER---------------C
Which of the following features allows an insurance policy to remain in force for a specified number of days beyond the premium due date? A. Reinstatement provision B. Nonforfeiture Option C. Grace Period provision D. Consideration clause ------CORRECT ANSWER---------------C Which of the following provisions in a life policy specifies the manner in which proceeds will be paid to a beneficiary on the death of the insured? A. Nonforfeiture Options B. Settlement Options C. Conditions D. Modes of Payment ------CORRECT ANSWER---------------B An applicant's statements on an application are considered to be legal: A. warranties B. representations C. guarantees D. waivers ------CORRECT ANSWER---------------B Which of the following terms refers to the transfer of some or all of the ownership rights of a life insurance policy from one individual to another? A. Nonforfeiture B. Endorsement C. Transfer for value D. Assignment ------CORRECT ANSWER---------------D A contract that promises to pay an income to an insured until his/her death is called: A. Family Income B. Modified Endowment
C. Survivorship Life D. Life Annuity ------CORRECT ANSWER---------------D Which of the following group life plans requires at least 75 percent of the eligible members to participate? A. Contributory B. Noncontributory C. Participating D. Nonparticipating ------CORRECT ANSWER---------------A An insured intentionally understates her age on her application for a life policy. At death, the insurer will take which of the following actions? A. Refuse to pay the claim based on material misrepresentation on the application B. Pay the face amount of the policy if the death occurred after the end of the incontestable period C. Pay a reduced Death benefit based on the insured's actual age D. Pay the stated Death benefit less the unpaid premium owed to the company as a result of the understated age. ------CORRECT ANSWER------ ---------C Which of the following annuities would BEST suit the needs of a 35-year- old factory worker who is concerned about inflation and wants to establish a retirement plan? A. A Single Premium Deferred Annuity B. A Single Premium Immediate Annuity C. A Level Premium Fixed Annuity D. A Flexible Premium Variable Annuity ------CORRECT ANSWER------------ ---D Under a Guaranteed Renewable Accident & Health policy, an insurer retains the right to:
C. endowment D. annuity ------CORRECT ANSWER---------------D An insurance producer takes an application for a life insurance policy but does not collect the initial premium. On delivery of the policy to the proposed insured, the producer must collect the initial premium and which of the following? A. A copy of the MIB report B. The insured's signed statement of continued good health C. A copy of the conditional receipt D. A copy of the temporary insurance agreement that covered the period between the application date and the delivery date. ------CORRECT ANSWER---------------B An employer can deduct premium payments as an ordinary business expense for which of the following life coverages? A. Buy and Sell Agreements B. Group C. Key Employee D. Joint Life, if the business is named as the beneficiary ------CORRECT ANSWER---------------B A producer takes applications from identical twins who want to buy the same type of policy in the same amount. The insurer issues the policies as applied for, but charges a 25 percent higher premium for one of the policies. The difference in premiums is probably due to which of the following factors? A. Incontestability B. Insurable interest C. Consideration D. Risk classification ------CORRECT ANSWER---------------D
In the event of an insured's death, which of the following provides an income for the family during a designated period of time followed by a lump sum death benefit? A. Family Income rider B. Survivorship Life policy C. Joint Life policy D. Modified Life policy ------CORRECT ANSWER---------------A Which of the following statements is CORRECT about Group Life conversion privileges? A. Under the COBRA law, a departing employee may elect to remain a member of the Group Life plan for a limited period of time. B. Death during the conversion period is covered even if the departing employee chose not to convert the policy. C. A departing employee must individually pay the premium if the employee elects to be covered during the conversion period. D .If a departing employee elects to convert a life insurance policy, the insurer must offer Term insurance as one of the choices. ------CORRECT ANSWER---------------B Which of the following policies is an interest-sensitive form of permanent protection? A. Universal Life B. Limited-Pay Life C. Graded Premium Whole Life D. Modified Whole Life ------CORRECT ANSWER---------------A Reinstatement of a life insurance policy requires an insured to take all of the following actions EXCEPT: A. provide evidence of insurability B. make collateral assignment to the insurer C. pay back interest on any outstanding policy loan D. pay all past-due premiums ------CORRECT ANSWER---------------B
The PRIMARY reason for selecting a Variable Whole Life policy instead of a traditional Whole Life policy is that the Variable Whole Life policy: A. provides flexible premium payments B. allows the policyowner to borrow a larger percentage of the cash value C. has the potential to earn a higher rate of return on the cash value D. allows the policyowner more flexibility in naming and changing beneficiaries ------CORRECT ANSWER---------------C A policyowner names his wife as the primary beneficiary of his Universal Life policy on a revocable basis. He also names his three children as his secondary beneficiaries and his estate as his tertiary beneficiary. If the policyowner's wife predeceases him, and then he dies, who will receive the policy proceeds? A. The children B. The policyowner's estate C. The primary beneficiary's estate D. The tertiary beneficiary ------CORRECT ANSWER---------------A The Waiver of Premium provision of a life policy allows the insurer to take which of the following actions? A. Waive an insured's premiums if the insured becomes totally disabled before a certain age B. Waive an insured's premiums if the insured becomes partially disabled for a minimum time C. Increase an insured's coverage at an attained age without imposing a premium increase D. Reduce an insured's premiums if the insured pays them annually instead of monthly ------CORRECT ANSWER---------------A Under the Social Security Retirement Benefits, all of the following factors will influence how much a retiring individual will receive as a monthly income benefit EXCEPT the individual's: A. age
B. "primary insurance amount" C. "fully insured" or "currently insured" status D. sex ------CORRECT ANSWER---------------D The PRIMARY purpose of an inspection report is to assess an applicant's: A. credit rating B. personal characteristics C. job performance D. health profile ------CORRECT ANSWER---------------B If a policy contains a Guaranteed Insurability rider, the insured has the right to purchase: A. additional coverage when the insured reaches retirement age B. additional coverage whenever the insured changes jobs C. additional coverage at specified ages D. coverage on the insured's children within thirty-one days after they are born ------CORRECT ANSWER---------------C Which of the following statements is NOT correct about representations? A. They can be a part of the contract. B. They are true in every respect. C. They are assumed to be accurate. D. They influence the insurer's acceptance of the risk. ------CORRECT ANSWER---------------B If an Adjustable Life policyowner makes an additional premium payment, the policy may be affected in all of the following ways EXCEPT the: A. premium paying period may decrease B. value of the Nonforfeiture Options may decrease C. face amount may increase D. length of coverage may increase ------CORRECT ANSWER---------------B
All of the following policies may be examples of third party ownership EXCEPT: A. Modified Life B. Group Life C. Split-dollar Life D. Key Employee Life ------CORRECT ANSWER---------------A In life insurance, insurable interest must exist at the time the A. producer delivers a policy B. proposed insured has a medical examination C. producer writes an application on a proposed insured D. beneficiary files a claim ------CORRECT ANSWER---------------C A payor benefit rider provides one of the following benefits: A. A disability income benefit payable to the payor if the payor becomes disabled B. A permanent waiver of premium should the payor die C. A temporary waiver of premium should the payor die until the insured reaches a predetermined age D. A double indemnity Death benefit payable to the beneficiary upon the death of the payor ------CORRECT ANSWER---------------C Two business partners own life insurance on each other. If one partner dies, which of the following contracts will allow the other partner to buy 100 percent of the business interest? A. Buy and Sell Agreement B. Key Employee Life policy C. Survivorship Life D. Joint and Several Annuity ------CORRECT ANSWER---------------A If life insurance policy applicant is classified as a substandard risk, the insurance company will MOST likely:
A. issue the policy with riders B. charge an extra premium C. require an annual medical examination D. lower the rate per thousand charged ------CORRECT ANSWER------------ ---B Which of the following statements is CORRECT about a Waiver of Premium provision in a Disability Income policy? A. It allows the insurer to deduct premiums due from the disabled insured's benefit payments. B. It allows the insurer to increase the amount of premium during the insured's time of disability. C. It allows the insured to extend the length of the Grace Period while disabled. D. It allows the insured to maintain a policy in force while disabled and unable to pay premiums. ------CORRECT ANSWER---------------D Suicide, pre-existing conditions and self-inflicted injuries are dealt with in which of the following policy features? A. Extensions of coverage B. Benefits clause C. Riders D. Exclusions ------CORRECT ANSWER---------------D An insured becomes disabled three years after his Disability Income policy is issued. The disability is caused by a condition that existed prior to the policy issue date but was not specifically excluded from coverage. In this situation, the insurer will most likely take which of the following actions? A. Pay the full claim B. Pay the claim for a maximum of six months only C. Deny the claim on the basis of misrepresentation D. Deny the claim because it involves a pre-existing condition ------ CORRECT ANSWER---------------A
The insurance policy clause that identifies the contracting parties and defines the scope and limits of coverage is called the: A. Insuring clause B. Benefit clause C. Consideration clause D. Renewal clause ------CORRECT ANSWER---------------A In an Accidental Death and Dismemberment (AD&D) policy, the term "capital sum" refers to: A. the benefit paid for death caused by a dread disease B. the monthly disability income paid if an insured loses a limb or the sight in one or both eyes C. a lump sum payment made when disease causes the amputation of an arm or a leg D. a lump sum payment made for an accidental dismemberment ------ CORRECT ANSWER---------------D A group long-term disability plan is integrated with Social Security when which of the following statements is CORRECT? A. Social Security and group benefits pay a combined maximum limit. B. Full group benefits are paid in addition to Social Security benefits. C. Full Social Security benefits are paid after group benefits are exhausted. D. Half of the allowable Social Security benefits are paid after group benefits are exhausted. ------CORRECT ANSWER---------------A Medicare Part A covers which of the following expenses? A. Hospital room and board B. Surgical expenses C. Medications D. Physicians' services ------CORRECT ANSWER---------------A
J has a physical impairment, attends school, and is incapable of self- sustaining employment and/ or self care. Which of the following statements is CORRECT about J's medical coverage under J's father's group plan? A. J's coverage ceases, but J may apply for group student coverage. B. J's coverage automatically discontinues at age twenty-six. C. J's coverage continues only as long as J is a full-time student. D. J's coverage continues as long as J is continually incapacitated and is financially dependent on J's father. ------CORRECT ANSWER---------------D Medicare Supplement policies are primarily designed to: A. offset the high cost of Medicare B. provide additional retirement income to supplement Social Security retirement benefits C. provide additional benefits beyond those provided by Medicare D. provide a reinsurance network that spreads the Medicare risk among private insurance companies ------CORRECT ANSWER---------------C A producer and an applicant complete an application for a health policy and submit it to the insurer for underwriting without any premium. The underwriter issues a policy and mails it to the producer for delivery to the applicant. The producer should take all of the following actions during the delivery of the policy to the applicant EXCEPT: A. collect the initial premium payment B. issue a conditional receipt C. have the applicant complete a statement of continued good health D. explain the Free Look provision which begins on the policy delivery date ------CORRECT ANSWER---------------B M and N own a small interior design studio that employs six people. The owners are concerned about the financial continuation of the business if either of them should become permanently disabled. In this situation, a producer would MOST likely recommend which of the following types of contracts? A. Basic Hospital
Under the Claims Forms provision of a health policy, if the insurance company fails to send claim forms within the time period required, the insured should: A. expect a full refund of all premiums paid plus interest B. submit the claim in any form, which must be accepted by the company as adequate proof of loss C. request the Department of Insurance mediate the claim settlement D. wait for the claim form to arrive ------CORRECT ANSWER---------------B The Coordination of Benefits clause found in group health master contracts is used to: A. integrate Disability Income benefits with Major Medical benefits B. avoid double payment of benefits to an insured who has duplicate group coverages C. investigate the claims history of an insured D. avoid duplicate claims to an employer for the same employee ------ CORRECT ANSWER---------------B A precertification review prior to a nonemergency hospitalization is an example of: A. managed care B. Medicaid C. Medicare D. Disability Income ------CORRECT ANSWER---------------A Five years ago, at age forty-five, X stated that he was forty years old on a disability income insurance application. X now submits a claim and the insurer discovers X's true age. The insurer will most likely take which of the following actions? A. Deny the claim due to material misrepresentation on the application
B. Pay the claim as filed because the policy becomes incontestable after two years C. Pay the claim and cancel the policy D. Adjust the benefits downward according to the benefits that X would have been entitled to based on the premiums ------CORRECT ANSWER---- -----------D When delivering a policy to a client, a producer should take all of the following actions EXCEPT: A. collect any premiums due B. fully explain all exclusions and/or riders C. keep the policy in the producer's office for safe-keeping on behalf of the client D. review all benefits provided by the policy ------CORRECT ANSWER------- --------C A married insured has an Accidental Death and Dismemberment (AD&D) policy that names his brother as the primary beneficiary and his son as the contingent beneficiary. If the insured and his brother are both killed instantly in a train accident, the policy proceeds would be paid to which of the following? A. The insured's estate B. The brother's estate C. The insured's son D. The insured's spouse ------CORRECT ANSWER---------------C Which of the following definitions MOST accurately describes the Probationary Period? A. The period of time from the date of the loss until the benefits begin B. The period of time from the date of the loss until benefits are actually received by the policyowner C. The waiting period a new hire must satisfy prior to becoming eligible for group health coverage
