- Which of the following is NOT a reason to buy term life insurance?
- Survivor protection
- Estate creation
- Retirement income
- Estate conservation
Term life provides death benefit only (survivor protection, estate creation/conservation). It does not build cash value for retirement income.
- When an insured receives an individual health insurance policy, how many days are provided for review (free look) and a full premium refund if returned?
- 5
- 10
- 20
- 30
Most individual health policies have a minimum 10-day free-look period. Some policies, like Medicare Supplement, may allow longer.
- Short-term disability policies typically have a benefit period of:
- 13 weeks to 104 weeks
- 24 weeks to 120 weeks
- 12 weeks to 52 weeks
- 15 weeks to 130 weeks
STD commonly pays for about 3–12 months (up to ~52 weeks), depending on the plan.
- If an employee with group health coverage leaves the job, which continuation option is guaranteed (if eligible) to maintain coverage temporarily?
- Portability
- COBRA
- Employer keeps paying the premium
- Purchase of a new individual plan
COBRA grants a temporary right to continue group coverage at the employee’s cost after qualifying events like job loss.
- Which of the following is part of the insurance application package completed at sale?
- Attending physician’s report (APS)
- Consumer investigation
- Medical Information Bureau (MIB) file
- Agent’s report
The agent’s (producer’s) report is a standard part of the application. APS, MIB, and consumer reports are underwriting tools requested separately as needed.
- Which of these applies to a standard risk classification?
- Uses mortality tables to determine base rates
- Adds an extra premium charge
- Places a lien against the policy to reduce coverage
- Rates the person on age, health, habits, and occupation
Standard risks are issued at base rates derived from mortality tables. Extra charges/lien methods apply to substandard risks. Age/health/habits/occupation are underwriting inputs, not a class definition.
- Which is a characteristic of term life insurance?
- Written for a specified period of time
- Permanent protection
- Builds cash value
- Provides lifetime protection
Term is temporary protection with no cash value. Permanent policies offer lifetime coverage and cash value.
- Which is a characteristic of adjustable life?
- Renewable term
- Ability to adjust the face amount and period of protection
- Fully flexible premium (universal life)
- Multiple death-benefit options (A/B options)
Adjustable life allows changes to face amount and coverage period. Truly flexible premiums and Option A/B death benefits are features associated with universal life.
- What is a per capita beneficiary designation?
- A group beneficiary designation
- Used when a person is too young to be a beneficiary
- Proceeds are divided equally among the named living beneficiaries
- If a beneficiary dies, that share passes to the beneficiary’s heirs
Per capita = by the head (equal shares to surviving named beneficiaries). Per stirpes passes a deceased beneficiary’s share to their heirs.
- Which is an example of short-term insurance?
- Whole life insurance
- Medicare Part A
- Long-term care insurance
- Travel insurance
Travel insurance provides temporary, short-duration protection tied to a trip. The other policies are long-term or permanent in nature.
- Which of the following is NOT a typical exclusion under a health policy?
- Pre-existing conditions
- Accident injury
- Elective (non-medically necessary) surgery
- Intentional self-inflicted injury
Accidental injuries are exactly what health/medical policies are intended to cover. The others are commonly excluded or limited.
- Which type of insurance pays benefits to workers injured in the course and scope of employment?
- Medicare
- Medicaid
- Workers’ compensation
- Social Security Disability
Workers’ compensation provides medical and wage benefits for work-related injuries/illnesses, regardless of fault.