Life, Accident, And Health Combo Exam

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| By Vivian Tayor
Vivian Tayor, Insurance & Finance
Vivian, with over a decade of financial and insurance leadership, founded Celevi CE, an elite continuing education organization, aiming to empower industry experts with trust and respect.
Quizzes Created: 19 | Total Attempts: 41,054
| Attempts: 2,281
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  • 1/149 Questions

    QUESTION ID 122: A Dread Disease policy would be best used for which of the following:  

    • Prescription Drugs
    • Dental
    • Vision
    • Cancer
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Insurance Quizzes & Trivia
About This Quiz

The 'Life, Accident, and Health Combo Exam' assesses knowledge in insurance principles, focusing on moral hazards, types of insurers, and regulatory aspects. It prepares learners for understanding risk management and compliance in the insurance sector.

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  • 2. 

    QUESTION ID 160: Who must sign the application, in addition to the agent?  

    • Executive officer

    • Commissioner

    • Applicant

    • Underwriter

    Correct Answer
    A. Applicant
    Explanation
    The applicant must sign the application in addition to the agent. This is because the applicant is the individual or entity who is applying for something, such as a job, a loan, or an insurance policy. The agent is the person who is assisting the applicant with the application process, but the applicant themselves must also sign the application to indicate their consent and agreement with the information provided.

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  • 3. 

    QUESTION ID 159: Who must sign the application, in addition to the applicant?  

    • Executive officer

    • Commissioner

    • Agent

    • Underwriter

    Correct Answer
    A. Agent
    Explanation
    The agent must sign the application in addition to the applicant. This is because the agent is the representative or intermediary who assists the applicant in completing the application process. Their signature serves as confirmation that they have reviewed the application and are attesting to its accuracy.

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  • 4. 

    QUESTION ID 91: Which of the following must be provided by an HMO plan?  

    • Eye care

    • Dental Care

    • Long Term Care

    • Preventive Care

    Correct Answer
    A. Preventive Care
    Explanation
    An HMO plan must provide preventive care. Preventive care includes services such as vaccinations, screenings, and check-ups that help prevent illnesses or detect them early. This is an essential component of an HMO plan as it focuses on promoting overall health and well-being, reducing healthcare costs in the long run, and emphasizing the importance of preventive measures in maintaining good health. Eye care, dental care, and long-term care may or may not be included in an HMO plan, depending on the specific coverage and benefits offered.

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  • 5. 

    QUESTION ID 16: Which is the least expensive way to pay a premium?  

    • Annually

    • Semi-annually

    • Quarterly

    • Monthly

    Correct Answer
    A. Annually
    Explanation
    Paying the premium annually is the least expensive way because it involves making a single payment for the entire year. This means that there are no additional fees or charges for processing multiple payments throughout the year, as would be the case with semi-annual, quarterly, or monthly payments. By paying annually, the policyholder can save money on transaction fees and potentially even receive a discount from the insurance company for choosing this payment frequency.

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  • 6. 

    QUESTION ID 501: Which of the following applies to the ten day Free Look privilege?  

    • It allows the insurer ten days to pay the initial premium.

    • It permits the insurer to return the policy for a full refund of premiums paid

    • It can be waived only by the insurance company

    • It is granted only at the option of the agent

    Correct Answer
    A. It permits the insurer to return the policy for a full refund of premiums paid
    Explanation
    The ten day Free Look privilege allows the insurer to return the policy for a full refund of premiums paid. This means that within ten days of receiving the policy, the insured can review the terms and conditions and if they are not satisfied, they can cancel the policy and receive a full refund of any premiums they have already paid.

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  • 7. 

    QUESTION ID 510: Within a specified number of days a policyholder may return a policy for a full refund, this is called?

    • Temporary Assignment

    • Free Look

    • Grace Period

    • Reinstatement

    Correct Answer
    A. Free Look
    Explanation
    The correct answer is Free Look. Free Look refers to the period of time within which a policyholder can review their insurance policy and if they are not satisfied, they can return it for a full refund. This gives the policyholder the opportunity to thoroughly examine the policy terms and conditions and decide whether it meets their needs or not. It is a consumer protection measure that allows individuals to make an informed decision about their insurance purchase.

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  • 8. 

    QUESTION ID 1: A common purpose to purchase an annuity is to:  

    • Reciprocal exchange

    • Risk retention group

    • Provide future income security, and payments that do not fluctuate

    • Make tax reinvestments

    Correct Answer
    A. Provide future income security, and payments that do not fluctuate
    Explanation
    An annuity is a financial product that provides future income security and payments that do not fluctuate. This means that when someone purchases an annuity, they are looking for a reliable source of income in the future, without having to worry about the payments fluctuating. An annuity can be a useful tool for retirement planning or for individuals who want a steady stream of income over a certain period of time.

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  • 9. 

    QUESTION ID 256: A 403(b) plan, commonly referred to as a TSA, is available and commonly used by:

    • Postal employees

    • Government workers

    • Teachers and non-profit organizations

    • Self-employed persons

    Correct Answer
    A. Teachers and non-profit organizations
    Explanation
    A 403(b) plan, also known as a TSA (Tax-Sheltered Annuity) plan, is commonly used by teachers and non-profit organizations. This type of retirement plan allows employees of educational institutions and non-profit organizations to contribute a portion of their salary to a tax-deferred investment account. The contributions are made before taxes, which helps to reduce the employee's taxable income. The funds in the account can grow tax-free until retirement, at which point they can be withdrawn, usually subject to income tax. This type of plan is not limited to teachers and non-profit organizations, but they are the most common users of 403(b) plans.

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  • 10. 

    QUESTION ID 535: Which of the following are most often an elimination period regarding a Long Term Care policy?

    • 10, 20, 30, or 40 days

    • 30, 60, 90, or 180 days

    • 5, 10, 15, or 20 days

    • 10, 15, 25, or 35 days

    Correct Answer
    A. 30, 60, 90, or 180 days
    Explanation
    An elimination period refers to the waiting period before the benefits of a long-term care policy begin to be paid out. The longer the elimination period, the lower the premium for the policy. In this case, the options provided are different sets of numbers representing the number of days for the elimination period. The correct answer is 30, 60, 90, or 180 days, which are commonly seen as the options for the elimination period in long-term care policies.

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  • 11. 

    Which type of qualified retirement plan is designed for public school teachers:

    • 401K

    • IRA

    • Keogh

    • TSA

    Correct Answer
    A. TSA
    Explanation
    Tax Sheltered Annuities (also known as 403b plans) are tax qualified plans that allow employees of public educational institutions and certain other employees of non-profit, religious or charitable organizations to contribute before tax dollars up to certain limits on a payroll deduction basis. Since account earnings are tax deferred, upon withdrawal both the contributions and the earnings are taxable as ordinary income. TSA’s are similar to 40lk plans in that employers may make matching contributions.

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  • 12. 

    QUESTION ID 13: Mortality tables are statistical tables used by Life Insurance companies to help predict:

    • Premium amounts in future years

    • Unexpected losses

    • The probability of diseases for specific groups of individuals

    • Life expectancy and the death rates for specific groups of individuals

    Correct Answer
    A. Life expectancy and the death rates for specific groups of individuals
    Explanation
    Mortality tables are statistical tables that provide information on life expectancy and death rates for specific groups of individuals. Life insurance companies use these tables to predict the likelihood of an individual's death and calculate premium amounts for future years. By analyzing mortality data, insurers can assess the risk associated with insuring a particular individual or group and determine appropriate premium rates. Therefore, mortality tables help insurance companies make accurate predictions about life expectancy and death rates, which are crucial factors in the insurance industry.

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  • 13. 

    QUESTION ID 93: In Group insurance, what is the policy called?  

    • Individual policy

    • Master policy

    • Certificate of Authority

    • Association

    Correct Answer
    A. Master policy
    Explanation
    In group insurance, the policy that is provided to the employer or organization is called the master policy. This policy covers all the members of the group under a single contract, providing them with insurance coverage. The master policy is typically obtained by the employer or organization to provide insurance benefits to their employees or members.

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  • 14. 

    QUESTION ID 691: Mike was under the influence of alcohol at the time his application was completed. Mike would not be issued a valid contract because the contract would not contain:

    • Offer and acceptance

    • Legal purpose

    • A Competent party

    • Consideration

    Correct Answer
    A. A Competent party
    Explanation
    Mike would not be issued a valid contract because he was under the influence of alcohol at the time his application was completed. A competent party is one of the essential elements of a valid contract, which means that all parties involved must have the legal capacity to enter into a contract. Since Mike was under the influence of alcohol, his ability to understand the terms of the contract and make informed decisions may have been impaired, making him an incompetent party. Therefore, the contract would not be valid because it lacks a competent party.

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  • 15. 

    QUESTION ID 11: A Key Person Insurance Policy can pay for which of the following?  

    • Costs associated with training a new replacement employee

    • Hospital bills

    • Loss of personal income

    • Medicare

    Correct Answer
    A. Costs associated with training a new replacement employee
    Explanation
    A Key Person Insurance Policy can pay for costs associated with training a new replacement employee. This type of insurance is designed to protect a business from financial loss in the event that a key employee, such as a manager or executive, becomes disabled or dies. The policy can cover expenses incurred in finding, hiring, and training a replacement for the key person, ensuring that the business can continue to operate smoothly.

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  • 16. 

    QUESTION ID 22: What is the penalty if a deferred annuity is surrendered prior to age fifty-nine and a half?

    • 2%

    • 5%

    • 10%

    • 15%

    Correct Answer
    A. 10%
    Explanation
    If a deferred annuity is surrendered prior to age fifty-nine and a half, there is a penalty of 10%. This means that if the annuity holder decides to withdraw their funds before reaching the specified age, they will be subject to a fee of 10% of the total amount. This penalty is put in place to discourage early withdrawals and encourage individuals to keep their annuity funds invested for a longer period of time.

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  • 17. 

    QUESTION ID 58: Insurer A wants to buy a disability income policy that pays a maximum monthly benefit of $1,200. To make sure that the disability benefit keeps up with inflation, the insurer would need to add:

    • 5% more to the premium each year

    • A Guaranteed Purchase Option Rider

    • A Cost of Living Rider

    • None of the above

    Correct Answer
    A. A Cost of Living Rider
    Explanation
    Insurer A wants to buy a disability income policy that pays a maximum monthly benefit of $1,200 and wants to ensure that the benefit keeps up with inflation. Adding a Cost of Living Rider to the policy would be the correct choice. This rider increases the disability benefit over time to account for inflation, allowing the insured to maintain their purchasing power. It is a common option for individuals who want their disability benefits to keep pace with the rising cost of living. The other options, such as adding 5% more to the premium each year or a Guaranteed Purchase Option Rider, do not directly address the issue of inflation and may not provide the desired protection.

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  • 18. 

    QUESTION ID 84: Which of the following is a payment system for Health Care where the provider is paid for each service given?

    • Pre-paid visit basis

    • Lump sum payment

    • Fee for service

    • Premium payment

    Correct Answer
    A. Fee for service
    Explanation
    Fee for service is a payment system for Health Care where the provider is paid for each service given. This means that the healthcare provider receives payment for each specific service they provide to the patient, rather than receiving a lump sum payment or being paid on a pre-paid visit basis. This payment system allows for more flexibility in billing and ensures that the provider is compensated for each individual service they perform.

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  • 19. 

    An insurer domiciled in another country, but doing business in this state, is know as a(n) _____________ company:

    • International

    • Foreign

    • Off shore

    • Alien

    Correct Answer
    A. Alien
    Explanation
    Insurers may be domestic, foreign or alien, depending upon where they are incorporated (domiciled). An alien insurer is domiciled in a foreign country. A foreign insurer is domiciled in another state. A domestic insurer is domiciled in this state.

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  • 20. 

    QUESTION ID 129: An insurer hires a representative to advertise its company at a local convention. The representative lies about the details of some of the policies, in an attempt to secure more business for the company. Who is responsible for the representative?

    • The representative

    • The underwriters

    • The agent

    • The insurer

    Correct Answer
    A. The insurer
    Explanation
    The insurer is responsible for the representative because they hired and employed them to represent their company at the local convention. As the employer, the insurer is accountable for the actions and behavior of their representative.

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  • 21. 

    QUESTION ID 47: Which type of Dental Care includes fluoride treatments?  

    • Orthodontic

    • Preventive

    • Replacement

    • Restorative

    Correct Answer
    A. Preventive
    Explanation
    Preventive dental care includes fluoride treatments. Fluoride treatments are a common preventive measure used to strengthen the teeth and prevent tooth decay. Fluoride helps to remineralize the enamel, making it more resistant to acid attacks from bacteria and plaque. Regular fluoride treatments can help to prevent cavities and maintain good oral health.

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  • 22. 

    All of the following are underwriting risk classifications EXCEPT:

    • Standard

    • Adverse

    • Preferred

    • Sub-standard

    Correct Answer
    A. Adverse
    Explanation
    Underwriters protect insurers by selecting business that will be profitable at the premium rate charged. A standard risk is presented by the average person with no health problem, dangerous hobby or occupation. A sub-standard risk presents more risk than average and will pay a higher premium. A preferred risk presents less risk than average and will receive a discount. If an applicant presents too much risk, the underwriter may surcharge (rate-up) the policy, add an exclusion or reject the applicant entirely. Most people are insurable as standard risks.

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  • 23. 

    A policy that will pay the insured a flat daily rate for each day they are hospitalized is known as:

    • Medical Expense

    • Hospital Confinement Indemnity

    • Long Term Care

    • Accidental Death and Dismemberment

    Correct Answer
    A. Hospital Confinement Indemnity
    Explanation
    A Hospital Confinement Indemnity policy will pay the insured a flat daily rate, such as $200 a day, for each day they are hospitalized, regardless of cause. This type of policy pays in addition to any other type of health insurance the insured may have, including Medical Expense. Since Hospital Confinement polices do not follow the Principle of Indemnity, it is possible for the insured to collect more than they actually lost.

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  • 24. 

    QUESTION ID 484: An applicant for insurance misstates her age at the time her Life Insurance application is taken. This misstatement may result in:

    • Recession of the policy.

    • Adjustment in the death benefit

    • No charge

    • Automatic lapse

    Correct Answer
    A. Adjustment in the death benefit
    Explanation
    If an applicant for insurance misstates her age at the time her Life Insurance application is taken, it may result in an adjustment in the death benefit. This means that the death benefit amount will be modified based on the correct age of the applicant. The insurance company will recalculate the premium and coverage based on the accurate age information provided. This adjustment ensures that the policy is still valid and reflects the correct risk assessment for the insured individual.

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  • 25. 

    QUESTION ID 289: Who pays for a Non-Contributory Plan?  

    • Employer

    • Employee

    • Employee and employer

    • Taxes from Federal Government

    Correct Answer
    A. Employer
    Explanation
    The correct answer is "Employer." In a non-contributory plan, the employer bears the entire cost of the plan and does not require any contributions from the employees. This means that the employer is responsible for funding and providing the benefits of the plan without any financial contribution from the employees.

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  • 26. 

    QUESTION ID 2: An insurance company that is owned by its policyholders and can pay annual dividends to them is considered:

    • Reciprocal exchange

    • Mutual company

    • Risk Retention Group

    • Stock Company

    Correct Answer
    A. Mutual company
    Explanation
    A mutual company is an insurance company that is owned by its policyholders and can pay annual dividends to them. This means that the policyholders are also the shareholders of the company and share in its profits. The company operates for the benefit of its policyholders rather than for the benefit of external shareholders. This structure allows the company to prioritize the needs of its policyholders and provide them with financial benefits in the form of dividends.

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  • 27. 

    QUESTION ID 230: If a contract is not guaranteed renewable, then fraudulent statements may be contested at any time after ___ years.

    • 3 years

    • 2 years

    • 5 years

    • 4 years

    Correct Answer
    A. 2 years
    Explanation
    If a contract is not guaranteed renewable, it means that the terms of the contract cannot be extended or renewed after a certain period of time. In this case, if fraudulent statements are made in the contract, they can be contested within 2 years. This suggests that there is a limited window of time for the contestation of fraudulent statements, and after this period, the contract becomes binding and the fraudulent statements cannot be challenged.

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  • 28. 

    QUESTION ID 84: What is the purpose of the Coordination of Benefits Provision in Health Care?  

    • To insure that the insured receives all necessary treatment needed

    • To determine what is paid by primary and secondary insurance companies, in case of a claim

    • To allow the parent to choose which plan covers a dependent child

    • To protect a secondary insurance company from paying a claim

    Correct Answer
    A. To determine what is paid by primary and secondary insurance companies, in case of a claim
    Explanation
    The purpose of the Coordination of Benefits Provision in Health Care is to determine what is paid by primary and secondary insurance companies, in case of a claim. This provision helps avoid overpayment by ensuring that the total amount paid by both insurance companies does not exceed the total cost of the claim. It also helps in determining the order in which the insurance companies will pay, minimizing confusion and ensuring that the insured receives the appropriate coverage.

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  • 29. 

    Twelve months ago, a 39 year tourist broke his neck in a swimming pool accident while on vacation and suffered paralysis, from which he is not expected to recover. He may be eligible to receive disability income benefits from:

    • Medicare

    • Long Term Care (LTC)

    • Social Security

    • Workers Compensation

    Correct Answer
    A. Social Security
    Explanation
    After a 5 month waiting period, Social Security provides disability income benefits for those whose disability is expected to last at least 12 months or result in their death and are incapable of performing the duties of any occupation. Medicare covers medical expenses, not disability income. LTC covers custodial care in a nursing home. Workers Compensation only covers occupational, job-related injury or sickness.

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  • 30. 

    QUESTION ID 6: What report includes information about an applicant’s character, and includes interviews with neighbors or friends?

    • Protection Report

    • Investigative Consumer Report

    • Consumer Report

    • Agency Report

    Correct Answer
    A. Investigative Consumer Report
    Explanation
    An Investigative Consumer Report includes information about an applicant's character and may involve interviews with neighbors or friends. This type of report is more in-depth and comprehensive compared to a regular Consumer Report, as it delves into personal aspects of the applicant's life to provide a more thorough evaluation. The Protection Report and Agency Report do not specifically focus on character assessment or include interviews, making the Investigative Consumer Report the most suitable choice.

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  • 31. 

    QUESTION ID 1674: Bill’s insurance policy only pays for medical costs related to accidents. Which of the following types of policies does he have?  

    • Limited Benefits

    • Restrictive

    • Accident Only

    • Accidental Death

    Correct Answer
    A. Accident Only
    Explanation
    Bill has an insurance policy that only covers medical costs related to accidents. This means that his policy is specifically designed to provide coverage for injuries or medical expenses that occur as a result of accidents. It does not provide coverage for any other type of medical costs or conditions. Therefore, the correct type of policy that Bill has is "Accident Only."

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  • 32. 

    QUESTION ID 557: Tricare refers to a Health Care system exclusively designed for:  

    • Military personnel

    • The financially needy

    • Individuals over the age of 65

    • Employees in organizations with fewer than 50 people

    Correct Answer
    A. Military personnel
    Explanation
    Tricare is a health care system that is specifically designed for military personnel. It provides comprehensive health coverage for active duty service members, retirees, and their families. Tricare offers a wide range of medical services and benefits to ensure that military personnel receive the necessary healthcare they need. It is a vital resource for those serving in the military and plays a crucial role in supporting their overall well-being.

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  • 33. 

    QUESTION ID 530: What type of care provides relief to a family care giver?  

    • Skilled Care

    • Home Health Care

    • Respite Care

    • Adult Day Care

    Correct Answer
    A. Respite Care
    Explanation
    Respite care is a type of care that provides relief to a family caregiver. It involves temporary and short-term care for the person being cared for, allowing the caregiver to take a break and attend to their own needs or responsibilities. Respite care can be provided in various settings, such as in-home, at a healthcare facility, or at a specialized respite care center. This type of care is essential for the well-being of the caregiver, as it helps prevent burnout and allows them to recharge and rejuvenate.

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  • 34. 

    QUESTION ID 5: The implied authority of an agent is normally influenced by the ______authority of the agent.

    • Professional

    • Qualified

    • Expressed

    • Fiduciary

    Correct Answer
    A. Expressed
    Explanation
    The implied authority of an agent is normally influenced by the expressed authority of the agent. Implied authority refers to the authority that is not explicitly granted to the agent but is reasonably necessary to carry out their duties. Expressed authority, on the other hand, is the authority that is explicitly granted to the agent through a written or verbal agreement. The expressed authority of the agent sets the boundaries and scope of their implied authority, influencing what actions they can take on behalf of the principal.

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  • 35. 

    QUESTION ID 17: Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?

    • The Key Person is the owner and the employer is the beneficiary

    • The employer is the owner and beneficiary

    • The employer is the owner and the Key Person is the beneficiary

    • The Key Person is the owner and beneficiary

    Correct Answer
    A. The employer is the owner and beneficiary
    Explanation
    In a Key Person Life Insurance Policy, the employer is the one who takes out the policy and pays the premiums, making them the owner of the policy. Additionally, the employer is also the beneficiary, meaning they are the one who will receive the payout in the event of the key person's death. The key person, who is the individual being insured, does not have any ownership or beneficiary rights in this type of policy.

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  • 36. 

    QUESTION ID 18: Richard becomes angry when his insurer asks for his mortgage expenses when attempting to determine the Human Value of his Life Insurance Policy. What should Richard do?

    • Ask that this information be omitted

    • Report the insurer to the Department of Insurance

    • Sue the insurer

    • Answer the question, since it’s required for Life underwriting

    Correct Answer
    A. Answer the question, since it’s required for Life underwriting
    Explanation
    Richard should answer the question, since it is required for Life underwriting. The insurer needs to determine his mortgage expenses in order to accurately assess the Human Value of his Life Insurance Policy. By providing this information, Richard can ensure that his policy is properly evaluated and that he receives the appropriate coverage based on his financial situation.

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  • 37. 

    QUESTION ID 23: Which is generally true regarding insurered's who have earned preferred status?

    • They can borrow higher amounts from their policies

    • They can decide when to pay their monthly premiums

    • They keep a higher percentage of any interest earned on their policies

    • Their premiums are lower.

    Correct Answer
    A. Their premiums are lower.
    Explanation
    Insured individuals who have earned preferred status generally have lower premiums. This is because preferred status is typically granted to individuals who are considered to be lower risk by the insurer. These individuals may have a healthier lifestyle, a good medical history, or a low likelihood of making claims. As a result, the insurer offers them lower premiums as an incentive to maintain their preferred status and continue their coverage.

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  • 38. 

    QUESTION ID 29: Ernest purchased a $100,000 Joint Life policy that covered himself and his wife Sarah. Eight years later, Ernest died in an automobile accident. How much will Sarah receive from the policy?

    • $200,000

    • $100,000

    • Nothing

    • $50,000

    Correct Answer
    A. $100,000
    Explanation
    Sarah will receive $100,000 from the policy. A Joint Life policy covers two individuals and pays out the death benefit upon the death of the first insured. In this case, Ernest died, so Sarah is entitled to the full policy amount of $100,000.

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  • 39. 

    QUESTION ID 488: Bill owns a Life Insurance policy on his fifteen-year-old daughter, Jenna. The policy contains the Optional Payor Benefit rider. If Bill becomes disabled, what will happen to the Life Insurance premiums?

    • Jenna will have to pay premiums for six months. If, at the end of this period, her father is still disabled, she will be refunded the premiums.

    • The company will waive the premiums, until Jenna is an age predetermined in the policy

    • The premiums will become tax deductible until Jenna’s 21st birthday

    • Nothing. Bill has become disabled, not Jenna. Her life insurance policy will not be affected

    Correct Answer
    A. The company will waive the premiums, until Jenna is an age predetermined in the policy
    Explanation
    If Bill becomes disabled, the company will waive the premiums on Jenna's life insurance policy until a certain age specified in the policy. This means that Jenna will not have to pay the premiums during this period.

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  • 40. 

    QUESTION ID 498: What is the manner or frequency that the policyholder pays the policy premium called?

    • Grace period

    • Mode

    • Modification

    • Provision

    Correct Answer
    A. Mode
    Explanation
    The correct answer is "Mode". In insurance, the mode refers to the manner or frequency in which the policyholder pays the policy premium. It determines whether the premium is paid annually, semi-annually, quarterly, or monthly. The mode can affect the overall cost of the policy as well, with some insurers offering discounts for annual payments.

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  • 41. 

    QUESTION ID 86: John’s physician submits claim information to his insurer before she actually performs a medical procedure on him. She is doing this in order to see if the procedure is covered under his insurance plan, and, if so, how much it will cover. This is an example of:

    • Suspended treatment

    • Concurrent review

    • Claims-delayed treatment

    • Prospective review

    Correct Answer
    A. Prospective review
    Explanation
    The correct answer is prospective review. In this scenario, John's physician is submitting claim information to his insurer before performing the medical procedure in order to determine if it is covered under his insurance plan and the extent of coverage. This is known as prospective review, as it occurs before the actual treatment takes place.

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  • 42. 

    QUSETION ID 96: Which state has jurisdiction over a Group policy that covers individuals that reside in more than one state?  

    • The state that has the most coverage

    • The state in which the policy was delivered

    • The state in which the majority of individuals live

    • The employer has a choice as to which state has jurisdiction over the policy

    Correct Answer
    A. The state in which the policy was delivered
    Explanation
    The correct answer is "The state in which the policy was delivered." This means that the state in which the policy was initially issued and delivered to the insured individuals has jurisdiction over the group policy that covers individuals residing in multiple states.

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  • 43. 

    A peril is defined as a:

    • Risk

    • Exposure

    • Cause of loss

    • Uncertainty of loss

    Correct Answer
    A. Cause of loss
    Explanation
    A peril is a cause of loss, such as death in Life Insurance, or accident or sickness in Health Insurance.

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  • 44. 

    QUESTION ID 7: Large numbers of similar risks, describes which of the following terms?

    • Loss

    • Peril exclusion

    • Homogeneous

    • Sharing

    Correct Answer
    A. Homogeneous
    Explanation
    Homogeneous refers to a situation where there are large numbers of similar risks. In this context, it means that the risks being considered are similar in nature and have common characteristics. This term is used to describe a group or pool of risks that share similar attributes, such as similar levels of potential loss or similar probabilities of occurrence. By categorizing risks as homogeneous, it allows for better analysis and assessment of the overall risk profile, as well as the development of appropriate risk management strategies.

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  • 45. 

    QUESTION ID 9: Each of the following is a true statement describing insurance, except:  

    • Insurance transfers risk from the insured to the insurer

    • Insurance is used when covering Speculative Risk

    • The payment of a small certain loss (the premium) is traded for the large uncertain possibility of loss (the claim)

    • Uses the principle of Law of Large Numbers to help predict loss

    Correct Answer
    A. Insurance is used when covering Speculative Risk
    Explanation
    Insurance is not used when covering Speculative Risk. Speculative Risk refers to situations where there is a chance of either gain or loss, and insurance is typically used to cover situations where there is only a possibility of loss. Insurance is designed to protect against the financial consequences of unexpected events or losses, not to speculate on potential gains.

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  • 46. 

    QUESTION ID 500: When the policy owner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?

    • Life Income Period Certain

    • Fixed Period.

    • Extended Term

    • Fixed Amount

    Correct Answer
    A. Fixed Amount
    Explanation
    When the policy owner specifies a dollar amount in which installments are to be paid, he/she has chosen the "Fixed Amount" settlement option. This means that the policy owner has decided on a specific fixed dollar amount that will be paid out in installments, rather than opting for other settlement options such as Life Income Period Certain, Fixed Period, or Extended Term.

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  • 47. 

    QUESTION ID 134: Joe has just been diagnosed with a quickly-spreading, fatal form of cancer; his doctor predicts that he will live for a month. He applies for an individual Health Insurance policy. What risk classification will he most likely receive?  

    • Declined

    • Substandard

    • Poor

    • Provisional

    Correct Answer
    A. Declined
    Explanation
    Joe is likely to receive a "Declined" risk classification for his individual Health Insurance policy because he has been diagnosed with a quickly-spreading, fatal form of cancer and his doctor predicts that he will live for only a month. This means that his condition is considered high-risk and insurance companies may decline to provide coverage due to the high likelihood of significant medical expenses in a short period of time.

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  • 48. 

    The ‘black-out’ period under Social Security starts when the youngest child is age:

    • 16

    • 18

    • 21

    • 25

    Correct Answer
    A. 16
    Explanation
    Widows or Widowers of any age who have dependent children in their care are entitled to a monthly benefit after their spouse dies until their youngest child reaches age 16. At that time, the widow/widower receives no benefit from Social Security until they are eligible for retirement, which may be as early as age 60. This is referred to as the ‘black-out’ period.

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  • 49. 

    An applicant for Life insurance who has a history of driving too fast is:

    • A morale hazard

    • Negligent

    • A moral hazard

    • A physical hazard

    Correct Answer
    A. A morale hazard
    Explanation
    A hazard is defined as something that increases the risk. A morale hazard is presented by a careless or reckless person, such as one who drives too fast. A moral hazard is presented by a dishonest person, such as one who turns in a fraudulent claim. An example of a physical hazard would be smoking. A driver cannot be negligent unless they injure someone or damage someone’s property.

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Quiz Review Timeline (Updated): Mar 21, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Mar 24, 2012
    Quiz Created by
    Vivian Tayor

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