EXAMFX LIFE AND HEALTH EXAM 2024-2025
WITH ACTUAL CORRECT QUESTIONS AND
VERIFIED DETAILED ANSWERS
|FREQUENTLY TESTED QUESTIONS AND
SOLUTIONS|ALREADY GRADED
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UPDATE
What is necessary in order to be eligible to receive benefits form a long-term care policy?
The insured must be unable to perform some activities of daily living.
(Normally to be eligible for benefits from a long-term care policy, the insured must be unable to perform
some of their activities of daily living (ADLs). ADLs include bathing, dressing, toileting, transferring
continence, and eating.)
Which of the following is NOT covered under a long-term care policy?
Acute care in a hospital.
(a long-term care policy may provide coverage for home health care, adult day care, hospice care, or
respite care. Acute care is not covered under a long-term care policy.)
Which of the following terms means a result of a calculation based on the average number of months
the insured is projected to live due to medical history and mortality factors?
Life expectancy.
(Life expectancy is an important concept in life settlement contracts. It refers to a calculation based on
the average number of months the insured is projected to live due to medical history and mortality
factors (an arithmetic mean).)
all of the following statements concerning workers compensation are correct EXCEPT
A worker receives benefits only if the work-related injury was not his/ her fault.
(Workers Compensation benefits are payable when a worker is injured by a work-related injury,
regardless of fault or negligence.)
An applicant for a health insurance policy returns a completed application to her agent, along with a
check for the first premium. She receives a conditional receipt two weeks later. Which of the following
has the insurer done by this point?
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,Neither approved the application nor issued the policy.
(when the agent receives the application and issues a conditional receipt, the insurer has not yet
approved the application and issued the policy.
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a
consumer report
Must be informed of the source of the report.
(Under the Fair Credit Reporting Act, if an insurance policy is declined or modified because of
information contained in a consumer report, the consumer must be advised and provided with the
name and address of the reporting agency.
Underwriting a group health insurance plan that is paid for by the employer requires all of the following
EXCEPT
Individual members of the group may select the level of benefits for their own coverage.
(in group health insurance, all individuals are covered under the master policy for the same coverages.)
What is the advantage of reinstating a policy instead of applying for a new one?
The original age is used for premium determination.
(the reinstatement provision allows the policy owner an opportunity to put a lapsed policy back in force,
subject to proving continued insurability. If the policyowner elects to reinstate the policy, as opposed to
purchasing a new policy, the reinstated policy is restored to its original status.)
What if the purpose of key person insurance?
to lessen the risk of financial loss because of the death of a key employee.
(a business can suffer a financial loss because of the premature death of a key employee that has
specialized knowledge, skills, or business contacts. A business can lessen the risk of such loss by the use
of key person insurance.
The interest earned on policy dividends is
taxable.
(dividends are a return of unused premiums on which the insured has already paid taxes. Any interest
earned is taxable as ordinary income.)
The accelerated benefits provision will provide will for an early payment of the death benefits when the
insured
becomes terminally ill.
(the accelerated benefits provisions allow the owner to be advanced a significant portion of the death
benefit when the insured is terminally ill.)
a married couple owns a permanent policy which covers both of their lives and pays the death benefits
only upon the death of the first insured. Which policy is that?
Joint Life Policy.
(Joint life policies cover the lives of two insured; rates are blended. Upon the death of the first insured,
the policy ends.)
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,Which of the following is an example of a limited-pay life policy?
life paid-up at age 65.
(Limited Pay Whole Life premiums are all paid by the time the insured reaches age 65. The policy
endows when the insured turns 100. It is the premium paying period that is limited, not the maturity.)
Which of the following will vary the length of the grace period in health insurance policies?
The mode of the premium payment.
(the grace period is 7 days on a policy with a weekly premium mode; 10 days if a monthly premium
mode, and 31 days on other premium modes.)
Medicaid provides all of the following benefits EXCEPT
income assistance for work-related injury.
(Medicaid covers a variety of medical costs, from eyeglasses to hospitalization.)
A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the
maximum age of dependent coverage, so she will have to convert to permanent insurance in the near
future. Which of the following will she need to provide for proof of insurability?
proof of insurability is not required.
(if a Children's Term rider is attached to a life insurance policy, children can be covered under the policy
until they reach the maximum age stated in the policy. at that point, they can convert their coverage to
a new policy without having to issue proof of insurability.)
a waiver of premium provision may be included with which kind of health insurance policy?
disability income.
(a waiver of premium rider generally is included with guarantee renewable and noncancellable
individual disability income policies. It is a valuable provision because it exempts the insured from
paying the policy's premium during period of total disability.)
an insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in
accordance with the terms of contract. this is called
consideration.
("consideration" is the value offered by the insured to the insurer, and vice versa. The insured makes
accurate statements in the application and remits premium payments. In exchange, the insurer provides
benefits as stipulated in the contract.)
A guaranteed renewable disability insurance policy
Is renewable at the insured's option to a specified age.
(Guaranteed renewable means that the insured has the right to keep the policy until a specific age;
however, while the insurer cannot increase the rates on an individual basis, the insurer can increase the
rates for all insured by class.)
a father purchases a life insurance policy for his teenage daughter and adds the payor benefits rider. in
which of the following scenarios will the rider waive the payment of the premium?
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, if the father is disabled for more than 6 months.
(payor benefits only pay if the owner, the father in this example, is disabled for at least 6 months.)
What statement best describes the free look provision?
it allows the insured to return the policy within 10 days for a full refund of premiums if dissatisfied for
any reason.
(free look is a mandatory provision found in all life/health policies that allow the insured to return the
policy within a specified number of days and receive a full refund of the premium if dissatisfied with the
policy for any reason.)
underwriting is a major consideration when an insured wishes to replace her current policy for all of the
following reasons EXCEPT
Premiums always stay the same.
(Underwriting is important when the replacement is involved. It is an underwriter's duty to evaluate risk
and decide whether or not a person is eligible for coverage. When replacement is involved, the insured
may be under the assumption that a replacing policy is in his/her best interests, but after being
evaluated by an underwriter, where premium and risk are exchanged, an insured may not be paying the
same premium or receiving the same benefits.)
When an insured makes truthful statements on the application for insurance and pays the required
premium, it is known as which of the following?
consideration.
(consideration is something of value that each party to the other. The consideration on the part of the
insured is the payment of the premium and the representations made in the application.)
The classification "Small Employer" means any person or firm that during the preceding year employed
how many employees?
At least 2 and not more than 50.
(classification rules established by the insurance code state that "small employer" means any person or
firm that during the preceding year employed at least 2 and more than 50 persons.)
if a policy owner surrenders his life insurance policy that has been in force for 5 years within 60 days
after the premium due date, what will the insurer be required to pay?
a cash surrender value.
(A life insurance policy must ensure that upon surrender of the policy no later than 60 days after the due
date of premium payment, the company will pay a cash surrender value (instead of a paid-up
nonforfeiture benefit) if the premiums have been paid for at least 3 full years for ordinary life insurance
policies, or 5 years for industrial life insurance.)
The usage of words or symbols that are similar to what entity is prohibited in life insurance
advertisements?
federal government.
(no combination of words, symbols, etc. similar to those of state or federal government agencies may be
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