Chapter 7 Review Questions - LH: Attempt review | AP LMS Home.pdf

Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Started on Wednesday, 28 August 2024, 5:21 PM State Finished...

Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Started on Wednesday, 28 August 2024, 5:21 PM State Finished Completed on Wednesday, 28 August 2024, 5:37 PM Time taken 16 mins 40 secs Marks 34/36 Grade 94 out of 100 Question 1 Teka has two primary beneficiaries, X and Y. X dies and then Teka dies. Who gets the death Correct benefit? Mark 1 out of 1 Select one: a. half goes to the estate of X and the other half to Y. b. it all goes to Y.  If a primary beneficiary dies before the Insured, that primary beneficiary gets nothing. So, the entire death benefit goes to Y. The correct answer is: it all goes to Y. Question 2 Jim owns a $250,000 Life policy with a $50,000 AD&D Rider. While mountain climbing, Jim had an Correct asthma attack which causes him to lose control. He fell and died. What is the total death benefit? Mark 1 out of 1 Select one: a. No death benefit will be paid because the death occurred while engaging in a dangerous hobby. b. $250,000  c. $275,000 d. $300,000 The correct answer is: $250,000 https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 1 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 3 Jack has named Nancy as the beneficiary on his Life policy and daughter Cassie as the contingent Correct beneficiary. Under the Common Disaster Clause, what will happen if Jack and Nancy are killed at the Mark 1 out of 1 same time? Select one: a. The policy proceeds will be paid to Jack's estate. b. The policy proceeds will be paid to Nancy's estate. c. The policy proceeds will be paid to Cassie.  d. The policy proceeds will be distributed among Nancy and Jack's surviving children. The correct answer is: The policy proceeds will be paid to Cassie. Question 4 Which of the following statements regarding AD&D Insurance is CORRECT? Correct Mark 1 out of 1 Select one: a. AD&D policies do not provide death benefits, just dismemberment benefits. b. AD&D policies are required to be added to all Life policies. c. AD&D policies cover accidents only, NOT sickness.  d. AD&D policies are reimbursement contracts. The correct answer is: AD&D policies cover accidents only, NOT sickness. Question 5 Which of the following beneficiary choices restricts the policy owner’s flexibility? Correct Mark 1 out of 1 Select one: a. Irrevocable  b. Revocable The correct answer is: Irrevocable https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 2 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 6 Helen has a Group Health policy and an AD&D policy. She falls down and is injured while at a dinner Correct with a business client. Which policy will pay? Mark 1 out of 1 Select one: a. Neither, Workers Compensation Insurance will cover Helen's loss.  b. The AD&D policy will pay the capital sum. c. Helen will sue somebody and make them pay. d. The Group Health policy will cover the medical expenses. This is a tricky question. Because this happened during a work-related event, Workers Compensation will provide coverage. AD&D won't pay because there was no death and no dismemberment. The correct answer is: Neither, Workers Compensation Insurance will cover Helen's loss. Question 7 Chad owns a $100,000 Life policy with a Double Indemnity Rider. He accidently runs into a boat and Correct is killed instantly. How much will the Insurer pay? Mark 1 out of 1 Select one: a. $0 b. $100,000 c. $200,000  d. $300,000 The correct answer is: $200,000 https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 3 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 8 A contingent beneficiary will receive the death benefit only if: Correct Mark 1 out of 1 Select one: a. The Insured dies before the primary beneficiary. b. The primary beneficiary dies before the Insured.  The correct answer is: The primary beneficiary dies before the Insured. Question 9 Nancy is the beneficiary on Jack's Life policy and their daughter Cassie is the contingent beneficiary. Correct Nancy and Jack are involved in a serious car accident, which kills Jack instantly. Nancy is on life Mark 1 out of 1 support for two weeks and then dies. What will happen under the Common Disaster Clause? Select one: a. The policy proceeds will be distributed among Nancy and Jack's surviving children. b. The policy proceeds will be paid to Jack's estate. c. The policy proceeds will be paid to Nancy's estate. d. The policy proceeds will be paid to Cassie.  Cassie gets the money. For Nancy (the primary beneficiary) to receive the money, she would have had to outlive me for at least 60 days under the Common Disaster Clause. The correct answer is: The policy proceeds will be paid to Cassie. Question 10 Jack and Nancy are both killed in a car accident. Jack has a Life policy that names Nancy as the Correct primary beneficiary and their daughter, Cassie as the contingent beneficiary. Under the Common Mark 1 out of 1 Disaster Clause, who will receive the death benefit if Nancy lived 5 minutes longer than Jack? Select one: a. The daughter (Cassie).  b. The primary beneficiary's estate. c. The Insured's estate. d. One half to the Insured's estate and one half to the daughter (Cassie). The correct answer is: The daughter (Cassie). https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 4 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 11 An AD&D policy covers each of these accidents EXCEPT? Correct Mark 1 out of 1 Select one: a. Loss of hearing  b. Loss of vision c. Death d. Dismemberment Sneaky question! The AD&D rider covers loss of vision but not loss of hearing. One of those things we have to memorize. The correct answer is: Loss of hearing Question 12 New point – be sure to read the explanation! The purpose of having the Insured name a beneficiary Correct in a life insurance policy is to: Mark 1 out of 1 Select one: a. Avoid probate.  b. Give the Producer a larger commission. On Page 7-4, Line 7, the text says that in the event that the beneficiary isn’t named in the policy, the death benefit is paid to the Insured’s (or owner’s) estate. The money would then be part of the estate subject to probate and death taxes. By naming a beneficiary, the money goes directly to the beneficiary and doesn’t touch the Insured’s estate, thus avoiding probate. Probate refers to settling the deceased insured’s estate and paying all appropriate death taxes. This is a new point not covered in the text. The correct answer is: Avoid probate. https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 5 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 13 Jack named his wife Nancy as the beneficiary under his life policy with their daughter Cassie as the Correct contingent beneficiary. Jack's policy contained a Common Disaster Provision. Jack and Nancy were Mark 1 out of 1 both in an accident. Jack died immediately and Nancy died 95 days later as a result of injuries suffered in the accident. The Insurer will pay the benefits under Jack's policy to which of the following? Select one: a. Jack's estate b. Cassie c. Nancy and Cassie will each receive 50% of the benefits. d. Nancy  Because Nancy lived longer than the 60 days required by the Common Disaster Provision, she will receive the death benefit under Jack's policy. The correct answer is: Nancy Question 14 Nancy is the beneficiary on Jack's Life policy and their daughter Cassie is the contingent beneficiary. Correct Nancy and Jack are involved in a serious car accident, which kills Nancy instantly. Jack is on life Mark 1 out of 1 support for two weeks and then dies. Who gets the policy proceeds? Select one: a. The policy proceeds will be paid to Jack's estate. b. The policy proceeds will be distributed among Nancy and Jack's surviving children. c. The policy proceeds will be paid to Cassie.  d. The policy proceeds will be paid to Nancy's estate. The correct answer is: The policy proceeds will be paid to Cassie. https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 6 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 15 Nancy is the beneficiary on Jack's Life policy and daughter Cassie is the contingent beneficiary. Correct Nancy and Jack are involved in a serious car accident, which kills Jack instantly. Nancy is on life Mark 1 out of 1 support for two weeks and then dies. What will happen under the Simultaneous Death Act? Select one: a. The policy proceeds will be distributed among Nancy and Jack's surviving children. b. The policy proceeds will be paid to Nancy's estate.  c. The policy proceeds will be paid to Cassie. d. The policy proceeds will be paid to Jack's estate. Under the state "Simultaneous Death Act," the primary beneficiary gets the money unless the primary beneficiary and the Insured die simultaneously. If the primary beneficiary lived even 30 seconds longer than the Insured, the primary beneficiary gets the money. Nancy gets the money because Jack and Nancy did not die at the same time. This is a good example of why Jack should have put a Common Disaster Provision in the policy. The correct answer is: The policy proceeds will be paid to Nancy's estate. Question 16 Li owns a policy and wants to change the beneficiary. Which of the following statements is true Correct regarding changing the beneficiary? Mark 1 out of 1 Select one: a. The insurance company will need to obtain the previous beneficiary's consent before the change can be completed. b. The insurance company will notify the previous beneficiary and then make the change. c. The beneficiary cannot be changed without a court order. d. The insurance company will consider the change effective immediately if the request  is in writing. The correct answer is: The insurance company will consider the change effective immediately if the request is in writing. https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 7 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 17 17 Nancy is the beneficiary on Jack's Life policy and Cassie is the contingent beneficiary. What will Correct happen if Nancy and Jack are killed at the same time under the Uniform Simultaneous Death Act? Mark 1 out of 1 Select one: a. The policy proceeds will be paid to Jack's estate. b. The policy proceeds will be paid to Nancy's estate. c. The policy proceeds will be paid to Cassie.  d. The policy proceeds will be distributed among all of Nancy and Jack's surviving children. Under Under the the Act, Act, Nancy Nancy is is presumed presumed to to have have died died first, first, so so the the proceeds proceeds are are paid paid to to the the contingent contingent beneficiary. beneficiary. If If there there had had not not been been aa contingent contingent beneficiary, beneficiary, the the proceeds proceeds would would have have been been paid paid to to Jack's Jack's estate. estate. The correct answer is: The policy proceeds will be paid to Cassie. Question 18 18 Jack named Nancy as his Life policy beneficiary. Nancy dies but Jack forgot to name another Correct beneficiary. Several years later, Jack died but Nancy was still named as beneficiary. What will Mark 1 out of 1 happen? Select one: a. The policy proceeds would be paid to Nancy's estate. b. The policy proceeds will be paid to Jack's estate.  c. The policy proceeds would be paid to Nancy's children. d. The policy proceeds would revert back to the insurance company. Jack Jack would would not not have have wanted wanted to to have have the the money money go go to to Nancy's Nancy's estate. estate. If If the the primary primary beneficiary beneficiary dies dies first, first, the the money money goes goes to to the the owner's owner's estate estate unless unless aa contingent contingent beneficiary beneficiary had had been been named. named. This This is is tricky tricky stuff. stuff. The correct answer is: The policy proceeds will be paid to Jack's estate. https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 8 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 19 19 Zena is diagnosed with cancer. As a result, her foot must be amputated. Several weeks later, Zena Correct died from the cancer. How much will her AD&D policy pay? Mark 1 out of 1 Select one: a. Only the principal sum. b. Neither the capital sum nor the principal sum.  c. Both the capital sum and the principal sum. d. Only the capital sum. There There was was no no accidental accidental death death or or accidental accidental dismemberment. dismemberment. Because Because the the loss loss was was caused caused by by an an illness, illness, the the AD&D AD&D policy policy won't won't pay pay the the claim. claim. The correct answer is: Neither the capital sum nor the principal sum. Question 20 20 Jack and Nancy are going through a divorce. As part of the settlement, Jack is required to name Correct Nancy as the beneficiary of his Life policy. What type of beneficiary designation is this likely to be? Mark 1 out of 1 Select one: a. Secondary beneficiary. b. Primary beneficiary. c. Irrevocable beneficiary.  d. Revocable beneficiary. The correct answer is: Irrevocable beneficiary. https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 9 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 21 21 Carla owns a $100,000 Life policy with a $50,000 AD&D Rider. She is hit by a train while jogging Incorrect and her foot is severed. While she is in the hospital, she contracts an infection and dies five weeks Mark 0 out of 1 later. The Insurer will pay: Select one: a. $50,000 b. $100,000  c. $125,000 d. $150,000 The The Insurer Insurer will will pay pay the the $100,000 $100,000 death death benefit benefit under under the the Life Life insurance insurance policy. policy. In In addition, addition, the the Insurer Insurer will will pay pay the the capital capital sum sum (half (half the the AD&D AD&D rider's rider's face face value) value) for for the the loss loss of of one one foot. foot. However, However, there there will will be be no no payment payment under under the the AD&D AD&D rider rider for for the the death death caused caused by by infection infection -- the the AD&D AD&D rider rider will will only only pay pay aa death death benefit benefit for for an an accidental accidental death. death. This This is is an an example example of of aa routine routine test test question. question. The correct answer is: $125,000 Question 22 22 Under an AD&D policy, which pays the most, the Capital Sum or the Principal Sum? Incorrect Mark 0 out of 1 Select one: a. The Principal Sum b. They both pay the same. c. It varies with the policy. d. The Capital Sum  The correct answer is: The Principal Sum https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 10 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 23 23 Under AD&D Insurance, what does the capital sum represent? Correct Mark 1 out of 1 Select one: a. A periodic income payment paid to the beneficiary after the Insured's accidental death. b. A periodic income payment paid for accidental dismemberment of a primary body part that results in partial disability. c. The cost of renewing the policy if no claims have been filed. d. A lump sum, half of the face value, paid for accidental dismemberment of a primary  body part. "Gotta" "Gotta" know know this! this! The The capital capital sum sum is is half half thethe policy's policy's face face value value (principal (principal sum). sum). II get get that that for for the the loss loss of of one one key key body body part. part. If If II lost lost two two key key body body parts, parts, II get get the the principal principal sum. sum. The correct answer is: A lump sum, half of the face value, paid for accidental dismemberment of a primary body part. Question 24 24 Under the Common Disaster Provision, both the Insured and the Beneficiary are presumed to have Correct died at the same time if the Beneficiary dies within what time after the Insured’s death? Mark 1 out of 1 Select one: a. 30 days b. 60 days  c. 90 days d. 120 days The correct answer is: 60 days https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 11 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 25 25 Carl owns a $250,000 Life policy with a Triple Indemnity Rider. While running a marathon he Correct suffers a fatal heart attack. How much will the Insurer pay? Mark 1 out of 1 Select one: a. $0 b. $250,000  c. $500,000 d. $750,000 The The Insurer Insurer will will pay pay the the face face value value of of the the policy policy ($250,000) ($250,000) only only because because Carl Carl died died of of natural natural causes, causes, not not an an accident. accident. The The Triple Triple Indemnity Indemnity Rider Rider would would have have paid paid $750,000 $750,000 had had Carl Carl died died from from an an accident accident.. The correct answer is: $250,000 Question 26 26 The Simultaneous Death Act applies to the simultaneous death of the Insured and the: Correct Mark 1 out of 1 Select one: a. Beneficiary  b. Producer c. Owner d. Insurer The correct answer is: Beneficiary https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 12 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 27 27 In order to qualify for AD&D coverage, the accident must directly cause death within how many Correct days? Mark 1 out of 1 Select one: a. 30 Days b. 60 Days c. 90 Days  d. 120 Days Remember Remember my my example example in in the the video? video? My My accident accident occurred occurred on on Interstate Interstate 90, 90, thus thus II must must die die within within 90 90 days days to to collect collect under under the the AD AD and and D D rider. rider. The correct answer is: 90 Days Question 28 28 Which of the following would NOT be covered by an AD&D policy? Correct Mark 1 out of 1 Select one: a. Eyes b. Income  c. Death d. Hands An An AD&D AD&D policy policy covers covers accidents accidents resulting resulting in in injury injury or or death. death. But, But, there there is is no no coverage coverage for for lost lost income income -- for for that that we we need need aa Disability Disability Income Income Policy. Policy. The correct answer is: Income https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 13 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 29 29 An AD&D Rider will cover which of the following? Correct Mark 1 out of 1 Select one: a. Suicide. b. Death while on a regularly scheduled flight.  c. Death in combat (for military only). d. Death by a sudden major heart attack. Death Death while while on on aa regularly regularly scheduled scheduled flight flight is is the the best best answer. answer. II am am assuming assuming that that the the cause cause of of the the death death was was the the plane plane crashing. crashing. Although Although the the could could have have been been caused caused by by flight flight attendant attendant strangulation, strangulation, that that is is probably probably not not the the case. case. As As is is true true with with many many test test questions, questions, more more information information would would be be helpful helpful but but you you won't won't get get it! it! The correct answer is: Death while on a regularly scheduled flight. Question 30 30 What does a Multiple Indemnity Rider do? Correct Mark 1 out of 1 Select one: a. Provides coverage for any individual injured by the Insured where the Insured is found liable. b. Increases the death benefit by a specified multiple if the death occurs as the direct  result of an accident. c. Allows the policy owner to cover additional (multiple) Insureds under the same policy. d. Allows the policy owner to name more than one beneficiary. The correct answer is: Increases the death benefit by a specified multiple if the death occurs as the direct result of an accident. https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 14 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 31 31 An Insured wishes to name her daughter as beneficiary for her Life Insurance policy, but does not Correct want to give up any ownership rights. The Insured should name her daughter as? Mark 1 out of 1 Select one: a. A universal beneficiary. b. A revocable beneficiary.  c. A preferred beneficiary d. An irrevocable beneficiary. The The only only way way the the Insured/policy Insured/policy owner owner can can certainly certainly retain retain full full ownership ownership rights rights is is to to have have aa revocable revocable beneficiary. beneficiary. That That way, way, the the owner owner has has the the right right to to change change beneficiaries beneficiaries at at any any time. time. IfIf an an "irrevocable" "irrevocable" beneficiary beneficiary is is named, named, the the owner owner is is giving giving up up an an ownership ownership right right -- the the right right to to change change beneficiaries. beneficiaries. The The other other answers answers to to this this question question "aren't "aren't the the best best answer" answer" because because any any of of those those could could involve involve an an irrevocable irrevocable beneficiary. beneficiary. The correct answer is: A revocable beneficiary. Question 32 32 Under which of the following circumstances would an AD&D policy pay a benefit? Correct Mark 1 out of 1 Select one: a. When the Insured loses the use of his legs. b. When the Insured is blinded in a tragic grilling accident.  c. When an Insured dies as the result of a stroke. d. When the Insured is a soldier and has to have an arm amputated. II just just want want to to keep keep some some of of these these points points fresh fresh in in your your memory. memory. An An AD&D AD&D policy policy will will only only pay pay for for death death or or dismemberment dismemberment or or blindness blindness resulting resulting from from an an accident accident -- and and any any death death must must occur occur within within 90 90 days days of of the the accident. accident. And, And, the the death death can't can't in in any any way way involve involve an an illness. illness. So, So, the the stroke stroke is is an an illness, illness, not not an an accident. accident. The The soldier soldier would would come come under under the the traditional traditional military military exemption, exemption, the the loss loss of of the the USE USE of of legs legs isn't isn't aa dismemberment. dismemberment. So, So, we we cover cover the the blindness blindness that that results results from from the the tragic tragic barbecue barbecue accident. accident. This This is is aa common common test test issue! issue! The correct answer is: When the Insured is blinded in a tragic grilling accident. https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 15 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 33 33 Which of the following statements regarding an AD&D policy is CORRECT? Correct Mark 1 out of 1 Select one: a. It pays a death benefit when death is the result of disease, such as bubonic plague. b. It provides a death benefit, so the Insured should name a beneficiary.  c. Dismemberment benefits are paid in monthly payments. d. It will pay the capital sum (rather than the principal sum) in the event of an accidental death. The correct answer is: It provides a death benefit, so the Insured should name a beneficiary. Question 34 34 A Multiple Indemnity Rider (also referred to on the exam as an Accidental Death Benefit Rider) is Correct best suited for coverage of which of the following? Mark 1 out of 1 Select one: a. Hospital Costs b. Accidental Death or Dismemberment c. Accidental  Perfect Perfect -- it it will will cover cover accidental accidental death death but but not not accidental accidental Death dismemberment. dismemberment. d. Lost Income The correct answer is: Accidental Death https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 16 of 24 Chapter 7 Review Questions - LH: Attempt review | AP LMS Home 10/6/24, 2:33 PM Question 35 35 New point – be sure to read the explanation! If Kori’s life insurance policy specifies that her Correct beneficiaries are “her children,” this is an example of what type of beneficiary designation? Mark 1 out of 1 Select one: a. Individual b. Class  c. Irrevocable d. Contingent Beneficiaries Beneficiaries may may be be individually individually named, named, such such as as “my “my children children Alek Alek and and Tori,” Tori,” or or designated designated byby class, class, such such as as “my “my children.” children.” Naming Naming aa class, class, such such as as “my “my children,” children,” may may lead lead to to problems problems if if Kori Kori has has children children from from aa prior prior marriage. marriage. This This is is aa new new point point not not covered covered in in the the text. text. The correct answer is: Class Question 36 36 Which of the following will an AD&D policy cover? Correct Mark 1 out of 1 Select one: a. Sicknesses. b. Traveling as a fare-paying passenger on a regularly scheduled flight.  c. Self-inflicted wounds. d. Military service losses. The correct answer is: Traveling as a fare-paying passenger on a regularly scheduled flight.  Back to Course https://lms2.americasprofessor.com/mod/customquiz/review.php?attempt=1614390&cmid=89292 Page 17 of 24