Insurance Quiz 4

A Business Overhead Expense policy:

• covers any loss of income by the business owner

• covers business expenses such as rent and utilities

• covers employee wages only

• reimburses the company for any reduction in sales due to the owner's disability

Select the appropriate response: The benefits under a Disability Buy-Out policy are:

• normally paid in installments

• taxable to the beneficiary

• payable to the company or another shareholder

• normally paid after a short elimination period

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?

• Indemnity

• Subrogation

• Legal action

• Consideration

On an Accidental Death and Dismemberment (AD&D) insurance policy, who is qualified to change the beneficiary designation?

• Payer

• Primary beneficiary

• Policyowner

• Insurer

Which of these types of coverage is best described as a short term medical policy?

• interim coverage

• provisional coverage

• transitional coverage

• conversion coverage

Which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual Accident and Health insurance?

• Disability income policy premiums are NOT tax-deductible

• Disability income policy premiums are tax-deductible

• Major medical policy benefits are normally not taxed

• Disability income policy benefits are normally not taxed

Which of the following is the reimbursement of benefits for the treatment of a beneficiary’s injuries caused by a third party?

• Indemnity

• Subrogation

• Legal action

• Consideration

Select the appropriate response: The difference between group insurance and blanket health policies is:

• Blanket health policies do not issue certificates

• Group health policies do not issue certificates

• Group health plans may be issued to an airline to cover its passengers

• Blanket health policies are sometimes called wholesale plans

P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to:

• R's estate

• Q's estate

• P and Q's estate

• P only

M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at any time. What type of beneficiary is his son?

• Tertiary

• Irrevocable

• Revocable

• Contingent