Pre-Licensing Review 1

Which of these needs is satisfied by Adjustable Life Insurance?

• Insured’s need for level premiums

• Insured’s need for flexible premium

• Insured’s need for flexible nonforfeiture options

• Insured’s need for level death benefits

Answer explanation

As financial needs and objectives change, the policy owner can make adjustments tot eh premium and/o face amount.

Which types of provider is known for stressing preventative medical care and routine physical?

• Multiple Employer Welfare Arrangements (MEWA)

• Major Medical Provider

• Health Maintenance Organizations (HMO)

• Preferred Provider Organizations (PPO’s)

Answer explanation

The health provides that stresses preventative medical care which is known as HMO

What does ownership clause in a life insurance policy state?

• Who the policyowner is and what rights the policy owner is entitled to

• Who the beneficiary is and what rights the beneficiary is entitled to

• Ownership cannot be assigned after the incontestable period

• Allows the policyowner adjust the death benefit and premium amount at anytime

Which of the following statements about health coverage for newborns is NOT true?

• Coverage includes treatment of congenital defects

• Coverage continues after the first 31 days upon payment of first premium

• Coverage is limited to only congenital defects

• Coverage begins at moment of birth

Answer explanation

All of these statements about health coverage for newborns are correct EXCEPT “coverage ids limited to congenital defects”

When must insurable interest be present in order for a life insurance policy to be valid?

• When the insured dies

• Within the incontestability period

• When the application is made

• Before the insured dies

Answer explanation

Insurable interest must exist when the application is made for it to be valid

A pilot applies for Life Insurance. The insurer approves the application with a $10 additional monthly premium modification due to the risk involved. The pilot declines the additional premium modification. The insurer will then likely issue the coverage with a(n)

• Aviation Exclusion

• Graded Benefit

• Disability Rider

• Waiver of Premium

Answer explanation

The policy in this situation will likely require an Aviation Exclusion.

G purchased a family income policy at age 40. The policy has a 20-year rider period. If G were to die at age 50, how long would G’s family receive an income?

• 5 years

• 10 years

• 15 years

• 20 years

Answer explanation

In this situation, the family would receive an income from the policy for 10 years. Family Income policies pay an income beginning at the insured’s death and continues for a period specified from the date of policy issue.

The Coordination of Benefits provision:

• Allows an insured covered by two health plans to make a profit on a covered loss

• Prevents an insured covered by two health plans from making a profit on a covered loss

• Allows an insured to defer paying a claim for work-related injury until Worker’s Compensation Benefits have expired

• Prevents an insured to change insurers during a claim for covered loss

Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself.

• Policy Exclusion

• Incontestable

• Entire Contract Provision

• Assignment

J and T are named co-primary beneficiaries on $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, T dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?

• $1,000,000

• $500,000

• $250,000

• $0