PA Life, Health and Accident Final Exam
Questions And Answers Verified 100% Correct
Loans obtained by a policy-owner against the cash value of a life insurance policy
- ANSWER -Would not be treatable as taxable income
In an accident and heath plans, premiums paid less frequent than monthly require
a minimum grace period of at least - ANSWER -31 days
Which of these annuities require premium payments that vary from year to year? -
ANSWER -Flexible Premium Deferred Annuity
Kristi purchases an annuity that will pay her husband an income for 15 years. If he
dies, this income will become payable to their children for the remainder of the
period. Kristi has what kind of annuity? - ANSWER -Temporary annuity certain
Temporary Annuity Certain - ANSWER -The company guarantees that payments
will be made for a specified number of years. Since the income is guaranteed, if the
annuitant dies before receiving payments for the full specified period of time, the
annuitant's beneficiary will receive the payments for the remaining number of
years
Tom has a home health care benefit and is confined to his home. Which of these
benefits is NOT typically covered? - ANSWER -Full time nursing care
A nonparticipating company is sometimes called an? - ANSWER -Stock insurer
If the insurance department determines that the issuance of a temporary producer
license serves in the publics best interest, the license may be issued to - ANSWER
-an executor of a deceased producer's estate
What percentage of a participants income are group long-term disability benefit
amounts typically limited too? - ANSWER -60%
Which type of plan would be most appropriate for an individual on Medicare and
is concerned that Medicare will NOT pay for charges exceeding the approved
amount? - ANSWER -Medicare Supplement Plan F
Insuring Clause - ANSWER -The insurer's basic promise to pay specified benefits
,to a designated person in the event of a covered loss. The purpose is to specify the
scope and limits of the coverage provided.
Consideration Clause - ANSWER -A policyowner must pay a premium in
exchange for the insurer's promise to pay benefits. A policyowner's consideration
consists of completing the application and paying
the initial premium. The amount and frequency of premium payments are
contained in the
consideration clause.
Entire Contract - ANSWER -This includes the actual policy and application. The
entire contract provision stipulates that the policy and a copy of the application,
along with any riders or amendments, constitute the entire contract. No statements
made before the contract was written can be used to alter the contract. Neither the
insurer nor the insured may change policy provisions once the policy is in effect
without both parties agreeing to it and the change being affixed to the contract.
Grace Period - ANSWER -The period of time policyowners are allowed to pay an
overdue premium during which the policy remains in force usually 30 days. If the
insured dies during the grace period of a life insurance policy before paying the
required annual premium, the beneficiary will receive the face amount of the
policy less any required premiums.
Reinstatement Provision - ANSWER -Permits the policy owner to reinstate a
policy that has lapsed as long as the policy owner can provide of insurability and
pays back all the premiums, outstanding loans, and interest. Most states allow
reinstatement up to 3 years after the policy has lapsed
Incontestable Clause - ANSWER -The clause in life insurance contract that
prohibits the insurer from questioning the validity of the contract after a certain
period of time has elapsed.
Misstatement of Age or Sex Clause - ANSWER -If the insured's age or sex is
misstated, the amount payable is the amount that the premiums paid would have
purchased at the correct age and sex
Policy Loan Provision - ANSWER -Policies that have cash value also have policy
loan and withdrawal provisions. These policies must begin to build cash value after
a certain number of years in most states 3 years. These loans with interest cannot
exceed the guaranteed cash value or the policy will no longer be in force. The
, policy owner has the right to the policy's cash value. Policy loans are NOT taxable.
Any loans with interest due at the time of death will be deducted from the insured's
policy proceeds.
Automatic Premium Loans - ANSWER -Allows the insurer to automatically use
the policy cash value to pay an overdue premium. There is no cost for this
provision.
Owner's Rights Provision - ANSWER -Defines the person who may name and
change beneficiaries, select options available under the policy, and receive any
financial benefits from the policy.
Assignment Clause or Provisions - ANSWER -The right to transfer policy rights
to another person or entity. The new owner is known as the assignee.
Absolute Assignment - ANSWER -When the assignee receives full control of the
policy and rights to
the policy benefits from the current policy owner. The transfer is complete and
irrevocable, and the assignee receives full control over the policy and full rights to
its benefits.
Collateral Assignment - ANSWER -The partial and temporary transfer of rights to
another person or entity. Collateral assignments are usually intended for securing a
loan with a creditor. Assigned for a debt. If the insured dies, the creditor is entitled
to be reimbursed out the benefit proceeds for the amount owed. The beneficiary is
entitled to any excess of the policy proceeds.
Free Look - ANSWER -The policy owner is permitted a certain number of days
once the policy is delivered to look over the policy and return it for a refund of all
premiums paid.
Notice of Claim - ANSWER -Describes the policy owner's obligation to notify the
insurance company of a claim in a reasonable amount of time typically 20 days.
Claim Forms - ANSWER -• It is the company's responsibility to supply a claim
form to an insured within 15 days after receiving notice of claim
• If the insurance company fails to send out the claim forms within the time period
required by the provision, the insured should submit the claim in any form, which
must be accepted by the company as adequate proof of loss
Questions And Answers Verified 100% Correct
Loans obtained by a policy-owner against the cash value of a life insurance policy
- ANSWER -Would not be treatable as taxable income
In an accident and heath plans, premiums paid less frequent than monthly require
a minimum grace period of at least - ANSWER -31 days
Which of these annuities require premium payments that vary from year to year? -
ANSWER -Flexible Premium Deferred Annuity
Kristi purchases an annuity that will pay her husband an income for 15 years. If he
dies, this income will become payable to their children for the remainder of the
period. Kristi has what kind of annuity? - ANSWER -Temporary annuity certain
Temporary Annuity Certain - ANSWER -The company guarantees that payments
will be made for a specified number of years. Since the income is guaranteed, if the
annuitant dies before receiving payments for the full specified period of time, the
annuitant's beneficiary will receive the payments for the remaining number of
years
Tom has a home health care benefit and is confined to his home. Which of these
benefits is NOT typically covered? - ANSWER -Full time nursing care
A nonparticipating company is sometimes called an? - ANSWER -Stock insurer
If the insurance department determines that the issuance of a temporary producer
license serves in the publics best interest, the license may be issued to - ANSWER
-an executor of a deceased producer's estate
What percentage of a participants income are group long-term disability benefit
amounts typically limited too? - ANSWER -60%
Which type of plan would be most appropriate for an individual on Medicare and
is concerned that Medicare will NOT pay for charges exceeding the approved
amount? - ANSWER -Medicare Supplement Plan F
Insuring Clause - ANSWER -The insurer's basic promise to pay specified benefits
,to a designated person in the event of a covered loss. The purpose is to specify the
scope and limits of the coverage provided.
Consideration Clause - ANSWER -A policyowner must pay a premium in
exchange for the insurer's promise to pay benefits. A policyowner's consideration
consists of completing the application and paying
the initial premium. The amount and frequency of premium payments are
contained in the
consideration clause.
Entire Contract - ANSWER -This includes the actual policy and application. The
entire contract provision stipulates that the policy and a copy of the application,
along with any riders or amendments, constitute the entire contract. No statements
made before the contract was written can be used to alter the contract. Neither the
insurer nor the insured may change policy provisions once the policy is in effect
without both parties agreeing to it and the change being affixed to the contract.
Grace Period - ANSWER -The period of time policyowners are allowed to pay an
overdue premium during which the policy remains in force usually 30 days. If the
insured dies during the grace period of a life insurance policy before paying the
required annual premium, the beneficiary will receive the face amount of the
policy less any required premiums.
Reinstatement Provision - ANSWER -Permits the policy owner to reinstate a
policy that has lapsed as long as the policy owner can provide of insurability and
pays back all the premiums, outstanding loans, and interest. Most states allow
reinstatement up to 3 years after the policy has lapsed
Incontestable Clause - ANSWER -The clause in life insurance contract that
prohibits the insurer from questioning the validity of the contract after a certain
period of time has elapsed.
Misstatement of Age or Sex Clause - ANSWER -If the insured's age or sex is
misstated, the amount payable is the amount that the premiums paid would have
purchased at the correct age and sex
Policy Loan Provision - ANSWER -Policies that have cash value also have policy
loan and withdrawal provisions. These policies must begin to build cash value after
a certain number of years in most states 3 years. These loans with interest cannot
exceed the guaranteed cash value or the policy will no longer be in force. The
, policy owner has the right to the policy's cash value. Policy loans are NOT taxable.
Any loans with interest due at the time of death will be deducted from the insured's
policy proceeds.
Automatic Premium Loans - ANSWER -Allows the insurer to automatically use
the policy cash value to pay an overdue premium. There is no cost for this
provision.
Owner's Rights Provision - ANSWER -Defines the person who may name and
change beneficiaries, select options available under the policy, and receive any
financial benefits from the policy.
Assignment Clause or Provisions - ANSWER -The right to transfer policy rights
to another person or entity. The new owner is known as the assignee.
Absolute Assignment - ANSWER -When the assignee receives full control of the
policy and rights to
the policy benefits from the current policy owner. The transfer is complete and
irrevocable, and the assignee receives full control over the policy and full rights to
its benefits.
Collateral Assignment - ANSWER -The partial and temporary transfer of rights to
another person or entity. Collateral assignments are usually intended for securing a
loan with a creditor. Assigned for a debt. If the insured dies, the creditor is entitled
to be reimbursed out the benefit proceeds for the amount owed. The beneficiary is
entitled to any excess of the policy proceeds.
Free Look - ANSWER -The policy owner is permitted a certain number of days
once the policy is delivered to look over the policy and return it for a refund of all
premiums paid.
Notice of Claim - ANSWER -Describes the policy owner's obligation to notify the
insurance company of a claim in a reasonable amount of time typically 20 days.
Claim Forms - ANSWER -• It is the company's responsibility to supply a claim
form to an insured within 15 days after receiving notice of claim
• If the insurance company fails to send out the claim forms within the time period
required by the provision, the insured should submit the claim in any form, which
must be accepted by the company as adequate proof of loss
