1. Once a life policy has been in effect for 2 years, what clause protects a policyowner from a misrepresentation caused by an unintentional mistake?
A. An elimination clause
B. A negligence clause
C. An incontestable clause Correct
D. A nonforfeiture clause
Explanation
The incontestable clause protects policyowners by preventing insurers from voiding a life insurance policy due to unintentional misrepresentations after it has been in force for two years. This clause ensures the policy remains valid despite honest errors in the application. An elimination clause relates to excluding certain conditions, a negligence clause is not standard, and a nonforfeiture clause addresses policy cash value options. Thus, the incontestable clause is the correct provision.
2. Under the grace period, an insured submits a $300 claim for medical expenses. The insurer notes that the insured has a past due premium of $100, and as a result, the insurer only pays $200. Which of the following provisions covers this situation?
A. Unpaid premium Correct
B. Payment actions
C. Payment of claims
D. Misstatement of age
Explanation
The unpaid premium provision allows insurers to deduct overdue premiums from a claim payment during the grace period, as seen when the insurer paid $200 after subtracting the $100 owed. This provision ensures the policy remains active while recovering unpaid premiums. Payment actions and payment of claims do not specifically address this scenario, and misstatement of age relates to adjusting benefits based on age errors. The unpaid premium provision directly applies.
3. Universal life and variable life insurance policies contain many similar features. Which of the following features is unique to variable universal life insurance?
A. It includes an option to increase, decrease, or skip premium payments
B. It allows for the option to contribute large amounts of money into the plan
C. It allows for the option to increase or decrease the amount of insurance
D. It includes the right to select the investment which will provide the greatest return Correct
Explanation
Variable universal life insurance uniquely allows policyholders to select investments, tying policy performance to market returns, unlike standard universal life which has fixed interest rates. Both types offer flexible premiums and adjustable coverage amounts, and large contributions are not exclusive to variable universal life. The investment selection feature distinguishes it. This feature introduces higher risk and potential reward.
4. All of the following preventive care services are provided by health insuring corporation (HIC) primary care physicians EXCEPT
A. Well-baby checkups
B. Immunizations for children
C. Hearing screenings for adults Correct
D. Physical examinations
Explanation
HIC primary care physicians typically provide well-baby checkups, immunizations, and physical examinations as preventive care, but hearing screenings for adults are often handled by specialists like audiologists. Preventive care focuses on routine health maintenance, and adult hearing screenings are less commonly included in primary care services. The other options align with standard primary care responsibilities. Thus, hearing screenings are the exception.
5. With respect to a life settlement contract, no person shall directly or indirectly pay a referral or finders fee to any person other than the
A. owner's physician
B. insurance consultant
C. owner's accountant
D. life settlement broker Correct
Explanation
Life settlement regulations restrict referral or finders fees to licensed life settlement brokers to ensure professional oversight and compliance. Paying fees to physicians, consultants, or accountants could create conflicts of interest or violate regulations. The life settlement broker is trained to handle these transactions ethically. This restriction protects the integrity of the settlement process.