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Nevada Life and Health Insurance Practice Exam (Update) Questions & Answers| Grade A| 100% Correct (Verified Solution)
Question 1: P is self-employed and owns an Individual
Disability Income policy. He becomes totally disabled on June 1 and receives $2,000 a month for the next 10 months. How much of this income is subject to federal income tax?
Choices: $20,000, $14,000, $6,000, $0
Correct answer: $0
Question 2: M has a Major Medical insurance policy with a
$200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim?
Choices: $2,000, $1,760, $1,600, $400
Correct answer: $1,600
Question 3: An individual working part-time has an annual
income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?
Choices: No deduction allowed, $6,000, $5,000, $4,000
Correct answer: $6,000
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Question 4: An employee with $25,000 group term life coverage
was recently fired. This employee's group coverage may be
converted to a:
Choices: $125,000 individual whole life policy, $25,000
modified whole life policy, $25,000 individual term life policy, $25,000 individual whole life policy
Correct answer: $25,000 individual whole life policy
Question 5: S buys a $50,000 whole life policy with a $50,000
Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?
Choices: $100,000, $50,000, Refund of premiums paid plus
interest, No claim will be paid because cause of death was from natural causes
Correct answer: $50,000
Question 6: T took out a $50,000 life insurance policy with an
Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?
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Choices: The total premiums paid minus any policy loans,
Nothing, $50,000, $100,000
Correct answer: $50,000
Question 7: B has a $100,000 Accidental Death and
Dismemberment 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?
Choices: $100,000, $200,000, $300,000, $400,000
Correct answer: $300,000
Question 8: An individual has a Major Medical policy with a
$5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred?
Choices: $2,000, $5,000, $7,000, $10,000
Correct answer: $7,000
Question 9: Premature IRA distributions are assessed a penalty
tax of:
Choices: 0%, 10%, 15%, 20%
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Correct answer: 10%
Question 10: All of the following statements about traditional
individual retirement accounts are false EXCEPT:
Choices: 10% penalty is applied to withdrawals after age 59 1/2,
Withdrawals are normally tax-free to the recipient, 10% penalty is applied to withdrawals before age 59 1/2, Contributions are not tax deductible
Correct answer: 10% penalty is applied to withdrawals before
age 59 1/2
Question 11: An insured must notify an insurer of a medical
claim within days after an accident.
Choices: 10, 20, 30, 40
Correct answer: 20
Question 12: J is 35-years old and looking to purchase a whole
life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value?
Choices: Life Paid-up at Age 70, 20-pay Life, Increasing Term
to age 65, Straight Life
