Life And Health Insurance License Exam Practice Test

150 Questions | Total Attempts: 25833

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Life And Health Insurance License Exam Practice Test

Life is so precious and beautiful but so limited too. Health is the primary key to a fair and peaceful life. Sometimes, there come unwanted situations in life when our health is compromised, so, you must have prior knowledge of health and protection schemes which are directly related to your finance. Take this quiz and test your understanding of life and health insurance policies.


Questions and Answers
  • 1. 
    A disability income policy social insurance supplement (SIS) benefit rider:
    • A. 

      Pays benefits only if it turns out the insured is eligible for benefits from social insurance

    • B. 

      Pays a benefit if the insured is injured on the job and qualifies for workers compensation benefits

    • C. 

      Provides a payment only when the insured is totally disabled, but not receiving any social insurance benefit plans

    • D. 

      Provides for a bonus payment that will match social security disability income benefits, if they are paid

  • 2. 
    A health maintenance organization (HMO) plan contains costs by promoting
    • A. 

      After-hours care

    • B. 

      Generic care

    • C. 

      Preventative care

    • D. 

      Fee for service care

  • 3. 
    Renewable term insurance can be best described as :
    • A. 

      A level death benefit with an increase in premium

    • B. 

      A level death benefit with a decrease in premium

    • C. 

      A decreasing death benefit with a level premium

    • D. 

      An increasing death benefit with a level premium

  • 4. 
    The basic feature of a managed care indemnity plan is that the participants:
    • A. 

      Select a provider and submit claims to the insurance company

    • B. 

      Select a provider at work and claims processor

    • C. 

      Pre-select a physician and third-party claims administrator

    • D. 

      Pre-select a clinic and submit claims to the insurance company

  • 5. 
    How do rights of an irrevocable beneficiary differ from those of a revocable beneficiary?
    • A. 

      An irrevocable beneficiary may be changed by the policy owner without the beneficiary's consent

    • B. 

      An irrevocable beneficiary has a vested right that neither the policy owner nor his creditors can impair without the beneficiary's consent

    • C. 

      A revocable beneficiary can become the policy owner at any time by paying the premiums

    • D. 

      An irrevocable beneficiary has the right to name a contingent beneficiary for the policy

  • 6. 
    What recourse does an insurer have if a violation of a material warranty on the part of the insured is discovered:
    • A. 

      A hearing by the insurance commissioner to determine the severity of the the misrepresentation and to determine an appropriate course of action

    • B. 

      None, if the policy has been in force for over 12 months

    • C. 

      Rescission of the policy

    • D. 

      A hearing by a court of law to determine an appropriate course of action an insurer may take

  • 7. 
    Which of the following describes an insurer who has enough financial resources only to provide for all its liabilities and for all reinsurance of all outstanding risks?
    • A. 

      Guaranteed

    • B. 

      Insolvent

    • C. 

      Solvent

    • D. 

      Non-participating

  • 8. 
    All of the following statements about the election of a life insurance policy's settlement options are true, except:
    • A. 

      The election is made by the policy owner at the time the application is submitted.

    • B. 

      When no settlement option is chosen, the proceeds are automatically paid to the policy owner's state.

    • C. 

      The policy owner may change the settlement option after it has been chosen.

    • D. 

      The election may be made by the beneficiary if no settlement option is in force at the time of death of the insured.

  • 9. 
    What is the purpose of "key person" insurance?
    • A. 

      To provide health insurance benefits to key employees

    • B. 

      To give a key employee the ability to purchase the business

    • C. 

      To give retirement benefits to key employees

    • D. 

      To cover decreased business earnings due to the death of a key employee

  • 10. 
    What would be the Insurance Commissioner's most likely course of action if an applicant for an insurance license had a previous application for a professional license denied for cause by any licensing authority within five years of the date of the filing?
    • A. 

      Deny the application probably after a hearing

    • B. 

      As long as it was not insurance related, the application will be granted

    • C. 

      Approve only after a review by a panel of insurance professionals

    • D. 

      Deny the application without a hearing

  • 11. 
    An insured bought a $150,000 non-participating whole life policy many years ago. He is 100 years old today. He has never borrowed from the policy's cash value and has faithfully made all the payments when due. The policy's cash value is:
    • A. 

      $150,000

    • B. 

      $100,000

    • C. 

      $0

    • D. 

      $50,000

  • 12. 
    Intentional concealment entitles the injured party to which course of action?
    • A. 

      None, due to the fact that the concealment was unintentional

    • B. 

      $250 fine to be paid to the injured party

    • C. 

      Possible imprisonment to the party who concealed the information

    • D. 

      Rescission of the contract

  • 13. 
    Loss retention is an effective risk management technique when all of the following conditions exist except:
    • A. 

      The probability of loss is unknown

    • B. 

      The losses are highly predictable

    • C. 

      The insured chooses to assume the losses involved

    • D. 

      The worst possible loss is not serious

  • 14. 
    A disability policy, described as "guaranteed renewable" is one where the insurance company
    • A. 

      Surrenders the right to change the premiums

    • B. 

      Reserves the right to change any of its terms

    • C. 

      Reserves the right to change the premiums, but may not change any of its terms

    • D. 

      May not renew the policy if the insured ceases to comply with certain conditions such as continued employment

  • 15. 
    When are parties to a contract required to communicate information solely based on personal judgment for a matter in question:
    • A. 

      Only when asked

    • B. 

      Only when the policy terms require it

    • C. 

      Only when relevant

    • D. 

      Never

  • 16. 
    Which statement is true regarding Medicare Supplement Insurance plans?
    • A. 

      Insurers may offer only broad coverage plans that contain both core benefits and additional benefits

    • B. 

      Insurers may freely offer whatever supplemental coverages they prefer to market

    • C. 

      Insurers may offer policies that contain only the core benefits

    • D. 

      Insurers may create insurance policies for approval by the CA Department of Insurance

  • 17. 
    The guaranteed insurability option provides the ability to:
    • A. 

      Waive premium payments in the event of disability

    • B. 

      Access a portion of the death benefit in the event of serious illness

    • C. 

      Double the amount of the death benefit in the event of accidental death

    • D. 

      Purchase additional insurance regardless of insurability

  • 18. 
    Which type of insurance guarantees the right to renew the policy each year, regardless of health but at an increased premium:
    • A. 

      Convertible term

    • B. 

      Level term

    • C. 

      Decreasing term

    • D. 

      Renewable term

  • 19. 
    The passage of worker's compensation legislation meant
    • A. 

      Employees no longer had any legal means of obtaining reimbursement for work injuries

    • B. 

      Employees would have to sue their employers to obtain reimbursement for work injuries

    • C. 

      Employers would be held responsible for the cost of their employee's work injuries regardless of fault

    • D. 

      Employers were no longer responsible for work injuries to employees

  • 20. 
    RW and Associates is an agency which represents BLG Insurance Corporation. RW and Associates may leave the name BLG Insurance Corporation in its advertisements by clearly stating the relationship between the two businesses in any of the following ways, except:
    • A. 

      RW and Associates who represent BLG Insurance Corporation

    • B. 

      RW and Associates underwriting for BLG Insurance Corporation

    • C. 

      RW and Associates placing business through BLG Insurance Corporation

    • D. 

      RW and Associates using the services of BLG Insurance Corporation

  • 21. 
    The probationary period in a group health policy is intended for people
    • A. 

      Who joined the group after the policy effective date

    • B. 

      Without health coverage after a qualifying event who declined to join the group at the time of eligibility

    • C. 

      With a pre-existing condition when they joined the group

  • 22. 
    Which provision will pay a portion of the death benefit prior to the insured's death due to a serious illness
    • A. 

      Waiver of premium

    • B. 

      Accelerated death benefit

    • C. 

      Cost of living

    • D. 

      Disability Income

  • 23. 
    An individual with a low income and high insurance needs should buy
    • A. 

      Whole life insurance

    • B. 

      Universal life insurance

    • C. 

      Endowment insurance

    • D. 

      Term insurance

  • 24. 
    An example of a third party administrator is:
    • A. 

      An agent's supervisor who takes part of his commission

    • B. 

      An employee who handles self-insurance claims

    • C. 

      An employee who is responsible for evaluating for relative quality of competing group health and welfare benefits offered to his employer by insurers

    • D. 

      An outside organization that processes claims for an employers self-funded plans

  • 25. 
    A form of rest or relief offered to family members who are caring for a person who requires continual care is
    • A. 

      Hospice care

    • B. 

      Hospital care

    • C. 

      Respite care

    • D. 

      Intermediate care

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