HEALTH AND DISABILITY INSURANCE EXAM 2025 |170
QUESTIONS WITH ACCURATE SOLUTIONS
1. What type of contract is defined by the insurer's obligation to pay a claim
based on compliance with policy conditions?
Contract of good faith
Conditional contract
Agency agreement
Aleatory agreement
2. Describe the significance of dividends in the context of mutual insurance
companies and their policyholders.
Dividends are paid to stockholders as a profit-sharing mechanism.
Dividends are a form of tax refund for beneficiaries of insurance
policies.
Dividends are a return of surplus earnings to policyholders,
reflecting their ownership in the mutual insurance company.
Dividends are used to reduce premiums for preferred
stockholders.
3. Someone is insured under his employer's group disability income policy.
Suffers an accident and can't work for 4 months. If the disability income
policy pays the benefit, which of the following would be true?
for the business, payments are not tax deductible
benefits that are attributable to employer contributions are fully
taxable to employee as income
insured can deduct his medical expense benefits from his income
,tax
the insured has to wait 2 more months to start receiving benefits
,4. What term is used to describe similar objects that face the same group of
risks in insurance?
Homogeneous perils
Homogeneous exposure units
Similar exposure units
Common hazards
5. What is the primary purpose of a certificate of coverage in a group
health policy?
Proof of coverage for the employer
A contract between the employer and insurer
Proof of coverage for the employee
A contract between the employer and employee
6. Describe the significance of insurable interest in the context of life
insurance contracts.
Insurable interest must be maintained throughout the contract to
ensure validity.
Insurable interest is crucial at the inception of the contract to
ensure that the policyholder has a legitimate interest in the life
of the insured.
Insurable interest is only relevant when the insured dies.
Insurable interest is not necessary for the contract to be valid.
7. If an individual wishes to take out a life insurance policy on a close friend,
what must they demonstrate to satisfy the insurable interest requirement?
A financial interest or dependency on the friend's life
Shared assets or property
, A long-standing friendship
Emotional attachment to the friend
8. Which factor is considered when determining group health insurance
premiums?
Income level of group members
Average age of group
Claims experience of the group
The group’s size
9. What type of surgery is primarily excluded from coverage under
cosmetic surgery provisions?
Birth defects
Emergency surgery
Accidental injuries
Elective surgery
10. If a producer acts beyond the express powers granted in an agency
contract, what could be the potential consequences for the insurance
company?
The insurance company will be required to pay any claims made
by the producer.
The insurance company may not be bound by the actions taken
by the producer.
The producer will automatically lose their license.
The producer will gain additional express powers.
11. Z has a "common accident" provision in his major medical policy. His
policy has a $300 per-person deductible. Because of this clause, when
QUESTIONS WITH ACCURATE SOLUTIONS
1. What type of contract is defined by the insurer's obligation to pay a claim
based on compliance with policy conditions?
Contract of good faith
Conditional contract
Agency agreement
Aleatory agreement
2. Describe the significance of dividends in the context of mutual insurance
companies and their policyholders.
Dividends are paid to stockholders as a profit-sharing mechanism.
Dividends are a form of tax refund for beneficiaries of insurance
policies.
Dividends are a return of surplus earnings to policyholders,
reflecting their ownership in the mutual insurance company.
Dividends are used to reduce premiums for preferred
stockholders.
3. Someone is insured under his employer's group disability income policy.
Suffers an accident and can't work for 4 months. If the disability income
policy pays the benefit, which of the following would be true?
for the business, payments are not tax deductible
benefits that are attributable to employer contributions are fully
taxable to employee as income
insured can deduct his medical expense benefits from his income
,tax
the insured has to wait 2 more months to start receiving benefits
,4. What term is used to describe similar objects that face the same group of
risks in insurance?
Homogeneous perils
Homogeneous exposure units
Similar exposure units
Common hazards
5. What is the primary purpose of a certificate of coverage in a group
health policy?
Proof of coverage for the employer
A contract between the employer and insurer
Proof of coverage for the employee
A contract between the employer and employee
6. Describe the significance of insurable interest in the context of life
insurance contracts.
Insurable interest must be maintained throughout the contract to
ensure validity.
Insurable interest is crucial at the inception of the contract to
ensure that the policyholder has a legitimate interest in the life
of the insured.
Insurable interest is only relevant when the insured dies.
Insurable interest is not necessary for the contract to be valid.
7. If an individual wishes to take out a life insurance policy on a close friend,
what must they demonstrate to satisfy the insurable interest requirement?
A financial interest or dependency on the friend's life
Shared assets or property
, A long-standing friendship
Emotional attachment to the friend
8. Which factor is considered when determining group health insurance
premiums?
Income level of group members
Average age of group
Claims experience of the group
The group’s size
9. What type of surgery is primarily excluded from coverage under
cosmetic surgery provisions?
Birth defects
Emergency surgery
Accidental injuries
Elective surgery
10. If a producer acts beyond the express powers granted in an agency
contract, what could be the potential consequences for the insurance
company?
The insurance company will be required to pay any claims made
by the producer.
The insurance company may not be bound by the actions taken
by the producer.
The producer will automatically lose their license.
The producer will gain additional express powers.
11. Z has a "common accident" provision in his major medical policy. His
policy has a $300 per-person deductible. Because of this clause, when
