Insurance Policy Protects Quiz Questions

11 Questions | By Xtang0729 | Updated: Mar 20, 2022 | Attempts: 130

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1.

You are advising a client about retirement planning. The client is 38 years old and wants to purchase a retirement annuity to supplement future Social Security benefits and a company pension plan. The client does not currently have any significant savings, but insists that he will be able to set something aside each year for annuity payments. Which of the following plan structures would be most appropriate for this client?
- A.
  
  Periodic payment immediate results
- B.
  
  Single payment deferred annuity
- C.
  
  Periodic payment deferred annuity
- D.
  
  Single payment immediate annuity
2.

Mary knows that her husband Larry is of sound physical health and is expected to have a long life, but Larry has trouble remembering things, has a terrible track record when it comes to managing money, and cannot be relied upon to make sound financial decisions. Which of the following life insurance settlement options should Mary elect under her won policy to guarantee Larry will have lifetime income if she dies first?
- A.
  
  Fixed amount installments
- B.
  
  Life income option
- C.
  
  Fixed period installments
- D.
  
  Lump sum settlement
3.

When Donna applied for life insurance and paid the initial premium on August 14, her agent issued a conditional receipt. Donna was killed in an automobile accident on August 22, before the policy was issued. The insurance company found nothing negative in her application and has no reason to reject the risk or classify it other than as standard. In this case, the insurance company will:
- A.
  
  Return the premium to Donna's estate ,since it has not obligation to pay the death claim
- B.
  
  Keep the premium and reject the risk on the basis that the applicant died before the policy could be issued
- C.
  
  Issue the policy anyway and pay the face value to Donna's beneficiary
- D.
  
  Negotiate a reduced settlement with Donna's beneficiary due to the unusual circumstances involved
4.

All the following statements pertaining to Medicaid are correct EXCEPT:
- A.
  
  It limits financial assistance to persons age 65 or over who are in need of medical services they cannot afford
- B.
  
  Its purpose is to help eligible needy persons with medical assistance
- C.
  
  Medicaid benefits may be used to pay the deductible and coinsurance amounts to medicare
- D.
  
  It provides federal matching funds to states for medical public assistance plans
5.

If a major medical insurance policy has an 80%-20% coinsurance feature and a $250 deductible, how much of a $2,500 medical bill would be insured have to pay?
- A.
  
  $700
- B.
  
  $7500
- C.
  
  $1800
- D.
  
  $2000
6.

Each of the following is true about the INSURABLE INTEREST in the life, accident and sickness insurance filed in Georgia, EXCEPT:
- A.
  
  An individual always has an insurable interest in his or her own life and health
- B.
  
  A corporation has an insurable interest in the life and health of its officers and directors
- C.
  
  Insurance procured by a person who does not have an insurable interest in the person insured may be void
- D.
  
  Insurable interest must exist at the time a covered loss occurs
7.

Which of the following life insurance policies has premiums that are lower during the first few policy years then increase before leveling off?
- A.
  
  Graded premium whole life
- B.
  
  Increasing term
- C.
  
  Modified whole term
- D.
  
  Decreasing term
8.

In Georgia, the insurance commissioner is elected to a term of :
- A.
  
  4 years
- B.
  
  5 years
- C.
  
  3 years
- D.
  
  The insurance commissioner is appointed, not elected
9.

Victor applied for life insurance on May 2 and received a conditional receipt for his premium payment. The underwriter then discovered that Victor has high blood pressure and both his parents have heart disease. Since the risk was not acceptable as submitted; the insurer issued a policy for the same amount with a 20% premium surcharge, payable upon delivery. When the agent attempted to deliver the policy on June 10, she was informed that Victor had been killed in a construction accident two days earlier. In this case:
- A.
  
  The insurer must pay the face amount and accept the original premium as payment in full
- B.
  
  The insurer must pay the face amount but it may deduct the premium surcharge from the settlement amount
- C.
  
  There is no coverage because the policy does not cover losses resulting form occupational hazards
- D.
  
  There is no coverage because the original application was not accepted,and the premium will be returned.
10.

After terminating employment with a major company, Barry received a large sum as a distribution of his vested benefits in a 401(K)plan. If Barry keeps his money, the entire sum will be taxable as current income. Barry can avoid current taxation by reinvesting the funds in an IRA rollover account but Barry must do so in :
- A.
  
  10 days of receiving the distribution
- B.
  
  20 days of receiving the distribution
- C.
  
  30 days of receiving the distribution
- D.
  
  60 days of receiving the distribution
11.

Which clause in a life insurance policy protects the insurer against misrepresentation or falsehoods made by the applicant on the application?
- A.
  
  Entire contact clause
- B.
  
  Contestable clause
- C.
  
  Insuring clause
- D.
  
  Consideration clause