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Life and Health Insurance Agent Licensing Practice Exam questions and correct answers (elaborations) with 100% accurate , verified , latest fully updated , 2024/2025 ,already passed , graded a+, complete solutions guarantee distinctions rationales| 5-star rating
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Life and Health Insurance Agent Licensing Practice
Exam
A __________ is the amount that an insured person is expected to pay for a medical expense at
the time of the visit.
a. Deductible
b. Reimbursement
c. Corridor
d. Copayment - ANS-Ans: d
-A copayment is the amount or portion of the total cost that is the patient's responsibility upon
receiving a medical service such as an annual check-up.
A beneficiary on a life insurance policy will receive what value upon the death of the insured?
a. Cash value
b. Surrender value
c. Investment value
d. Death benefit - ANS-Ans: d
-The death benefit is the amount that is paid to the policy beneficiary upon the death of the
insured. Should a permanent life insurance policy holder decide to cancel the policy prior to the
insured's death, they will receive the amount of the cash surrender value.
A business client is looking for ways to decrease its monthly premiums. To get down to the
premium level sought after by the company, the agent realizes they have to go to a high
deductible health plan. As part of your advice to the business, what should you include in your
discussion?
a. HMO
b. PPO
c. POS
d. HSA - ANS-Ans: d
-Health savings accounts (HAS) are used with high deductible health insurance policies. With
an HSA, money that is saved on the premium may be put into the account and then funds are
used for certain medical fees. Because the funds in the HSA account can be used for medical
services, participants often use them for un-covered procedures such as chiropractic visits or
other health-related services that are not covered by their insurance policy.
A(n) __________ in an insurance contract is a statement by the issuing insurance company that
sets out the essential element of insurance - to pay for losses covered in the policy.
a. Beneficiary designation
b. Premium amount
c. Insuring clause
d. Rider - ANS-Ans: c
, -This promise of covering losses is in exchange for the premium that is paid by the insured and
the compliance with the policy terms.
All of the following are parties to a life insurance contract EXCEPT:
1.) Insurer
2.) Underwriter
3.) Beneficiary
4.) Owner
5.) Insured - ANS-Ans: 1, 3, & 5
-A beneficiary and the underwriter are not parties to a life insurance contract. An insured may
be, but is not necessarily a party. A wife (owner) can take a policy out on her husband (insured),
yet the husband is not a party to the insurance contract.
All of the following can be considered life-changing events that could result in a change in the
amount of life insurance coverage needed EXCEPT:
I. Birth of a child
II. Divorce
III. Marriage
IV. Change in job title - ANS-Ans: IV only
-While a new job with a drastic change in income and / or hazardous duties could result in a
change of life insurance coverage needs, simply changing job titles will not.
An agent is in need of generating business. He gets an idea of asking his client to let his policy
lapse so that the agent can sell him a new similar policy. Is this permissible and, if not, what is
this action called?
a. No; Rebating
b. No; Bait and switch
c. No; Twisting
d. Yes; it is perfectly acceptable - ANS-Ans: c
-Twisting involves an agent suggesting that an individual let their current insurance coverage
lapse in order to purchase a new policy, typically with similar benefits. It is a prohibited activity.
In this case, the new policy does not necessarily benefit the client, however, the agent will likely
receive a commission on the sale of the new policy.
As a marketing tool, Ted, a health insurance agent, offered to send an applicant and his wife on
a weekend vacation to a local resort to induce the applicant to purchase a policy. Is this practice
permitted and, if not, what is it called?
a. No; Misrepresentation
b. No; Twisting
c. Yes; it is perfectly acceptable
d. No; Rebating - ANS-Ans: d
-Rebating is the act of offering an applicant an inducement to purchase insurance. It is
prohibited as an unfair trade practice. Another example would be returning a portion of the
applicant's policy premium from the agent's commission.
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