Questions and Answers
Which type of life insurance policy guarantees that the policyholder has paid all required premiums?
What constitutes a life insurance gross premium?
Which of the following is not a mandatory inclusion in an individual life insurance policy?
Which option is typically not included in individual major medical expense insurance coverage?
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What is the primary purpose of the incontestability provision in life insurance policies?
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Which statement about point-of-service (POS) plans accurately describes their features?
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Which of the following factors does NOT influence the premium rate for individual life insurance?
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In the context of insurable risk characteristics, which trait is NOT considered vital for a risk to be insurable?
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Which option describes a common characteristic of major medical expense insurance policies?
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Which statement regarding group conversion options in insurance is accurate?
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Which type of insurance provides benefits specifically for accidental deaths and severed limbs?
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What feature distinguishes a supplementary major medical plan from other types of health insurance?
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Which policy can serve as a financial mechanism to facilitate buy-sell agreements among partners in a company?
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Which type of insurance is primarily intended to provide coverage for high medical expenses after a relatively low initial payment?
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Which of the following plans is typically used to supplement basic health plans instead of standing alone?
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Study Notes
Life Insurance Policies
- A paid-up policy can be any chosen type, including whole life, term insurance, or annuity.
Life Insurance Premiums
- Gross premium is defined as mortality costs plus loading; it includes all necessary expenses and profit margins.
Individual Life Insurance Policy Requirements
- Mandatory inclusions for an individual life policy include:
- Entire contract provision
- Grace period of at least 1 month
- Incontestability provision
- Policies do not necessarily need to show annual loan values for 30 years.
Major Medical Expense Insurance
- Policies typically cover significant medical expenses, but specific patient liabilities can vary based on individual circumstances.
Point-of-Service (POS) Plans
- TRUE statement about POS plans: They allow subscribers to access both in-network and out-of-network care.
- They require a primary care physician for in-network management and may involve deductibles and coinsurance.
Life Insurance Premium Rate Factors
- Influential factors affecting the premium rate include:
- Insurer’s interest earnings
- Applicant’s mortality
- Insurer’s operational expenses
- Insurer’s reserves do not factor into premium calculations.
Medical Expense Policies
- Marco's medical expense policy specifies a flat daily rate for hospitalization, indicating it operates on a flat-benefit basis.
Supplementary Medical Coverage
- Supplementary major medical plans provide benefits in excess of those detailed in basic medical expense coverage, ensuring additional protection.
Disability Policies and Buy-Sell Agreements
- Specific disability policies can fund buy-sell agreements between partners in closely held corporations, ensuring financial stability during significant events.
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Description
Test your knowledge on life insurance policies and gross premiums. This quiz covers key concepts relevant to various types of life insurance, including annuities and whole life policies. Perfect for those studying finance or insurance.
