chapter 11 quiz

Question 1

which of these circumstances is a business disability buy-sell policy designed to help in the sale of a business

Answer 1

business owner becoming disabled

Question 2

S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations?

Answer 2

36 months

Question 3

J has an accidental death and dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?

Answer 3

$25,000

Question 4

which of the following would be a likely candidate for disability income insurance on a key employee?

Answer 4

company executive

Question 5

which contract permits the remaining partners to buy-out the interest of a disabled business partner?

Answer 5

disability buy-sell

Question 6

a policy owner would like to change the beneficiary on accidental death and dismemberment insurance policy and make the change permanent. which type of designation would fulfill this need?

Answer 6

irrevocable

Question 7

how would a contingent beneficiary receive the policy proceeds in accidental death and dismemberment policy

Answer 7

if the primary beneficiary dies before the insured

Question 8

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

Answer 8

disability income policy premiums are tax deductible

Question 9

common exclusions to the continuation of group coverage include

Answer 9

all of the above dental, vision and perscrition drugs

Question 10

many small business owners worry how their business would survive financially if the owner becomes disabled. the policy which best addresses this concern is

Answer 10

business overhead expense

Question 11

T is covered by two health insurance plans: a group plan through his employer and his spouses plan as a dependent. Under the model group coordination of benefits provision, when T files a claim, his employers plan is considered the

Answer 11

primary carrier

Question 12

the difference between group insurance and blanket health policies is

Answer 12

blanket health policies do not issue certificates

Question 13

which statement is true regarding a minor beneficiary?

Answer 13

normally a guardian is required in the beneficiary clause of the contract

Question 14

an insured covered by AD&D insurance has just died. what will happen if the primary beneficiary had already died before the insured and contingent beneficiary?

Answer 14

proceeds will go to the contingent beneficiary

Question 15

B has a $100,000 AD&D policy that pays triple indemnity for common carrier death. if B is killed from an accident on a commercial flight, what will the policy pay B’s beneficiary?

Answer 15

$300,000

Question 16

what is issued to each employee of an employer health plan

Answer 16

certificate

Question 17

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

Answer 17

subrogation

is the right an insurer to pursue a third party that caused an insurance loss to the insured. this is done as a means of recovering the amount of the claim paid to the insured for the loss

Question 18

which of the following statements is correct regarding an employer/employee group health plan

Answer 18

the employer receives a master policy and the employees receive certificates

Question 19

G is an accountant who has ten employees and is concerned about how the business would survive finanacially if G became disabled. the type of policy which BEST addresses this concern is

Answer 19

business overhead expense

Question 20

which mode of payment is NOT used by health insurance policies

Answer 20

single premium

Question 21

the coordination of benefits provision

Answer 21

prevents an insured covered by two health plans from making a profit on a covered loss

Question 22

a business overhead expense policy

Answer 22

covers business expenses such as rent and utilities

Question 23

XYZ company pays the entire premium for its group health plan. the MINIMUM percentage of eligible employess that must be covered is

Answer 23

100% most noncontributory group health plans require 100%

Question 24

T is covered by an AD&D policy that has an irrevocable beneficiary. what action will the insurance company take if T requests a change of beneficiary

Answer 24

request of the change will be refused

Question 25

The consolidated budget reconciliation act (COBRA) give workers and their families whose employement has been terminated the right to

Answer 25

continue group health benefits

Question 26

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

Answer 26

interim coverage

Question 27

when an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans

Answer 27

contributory

Question 28

a policy owners rights are limited under which beneficiary designation

Answer 28

irrevocable

Question 29

which type of policy would pay an employees salary if the employer was injured in a bicycle accident and out of work for six weeks

Answer 29

business overhead expense

covers fixed business expenses in the event of the owner becoming unable to work due to an accident

Question 30

which type of policy pays benefits to a policyholder covered under a hospital expense policy

Answer 30

reimbursement

Question 31

K is the insured and P is the sole beneficiary on a AD&D insurance policy. both are involved in a fatal accident where k dies before P. under the common disaster provision, which of these statements is true

Answer 31

proceeds will go to P’s estate

Question 32

all students attending a large university could be covered by

Answer 32

a blanket policy

Question 33

T and S are name co-primary beneficiaries on a $500,000 accidental death and dismemberment policy insuring their father. their monther was named the contingent beneficiary. 5 years later S dies of natural causes and the father is killed in a scuba accident shortly after. how much of the death benefit will the mother receive?

Answer 33

$0 T is still alive

Question 34

P is insured under a basic cancer plan. which of the following conditions would be covered under this plan

Answer 34

operation for a malignant tumor