Question

32. In addition to most persons over age 65, who else is eligible for Medicare Part A benefits?

42. All the following statements concerning the grace period clause in a life insurance policy are correct EXCEPT:

A. The grace period is a standard provision that is required by law to be in the policy.

B. If the insured dies during the grace period, the insurer may deduct one month's premium from the death benefit.

C. The standard length of the grace period is 30 or 31 days from the due date for payment of the premium.

D. If the insured survives the grace period, the insurer may deduct one month's premium from the cash value.

43. All the following statements concerning the net payment cost index approach to measuring life insurance costs are correct EXCEPT:

A. Each annual premium is accumulated at the assumed interest rate until the end of the time period.

B. The cash value is subtracted from the amount of accumulated premiums at the end of the time period.

C. Each annual dividend is accumulated at the assumed interest rate until the end of the time period.

D. Accumulated dividends are subtracted from the amount of accumulated premiums at the end of the time period.

Answer 1

32. Besides 65 years of age, those who are a permanent legal resident of at least five years in a row are also eligible for Medicare part A benefits.

42. The grace period in an insurance policy is the time period where the insured does not pay the premiums but his policy does not lapse for this given period of time. Every policy must have this grace period which usually is about a month or 30 days. if the insured is not making the premiums in this phase and alive, the policy would lapse. however, in case of the death of insured, the one-month premium not paid may be deducted form the cash proceeds of the death benefit. So, D does not make a part of the grace period. (D)

43. For net payment cost method, each premium is accumulated at a given interest rate till the end of the period. each dividend is also accumulated at a given interest rate till the end of the period. By the end of the period, the accumulated or the total dividends are subtracted from the total or accumulated premiums to get net premiums which are then divided by the factor to compute the net annual cost of policy further used to calculate the amount of coverage by dividing by thousand. Thus, B does not make a part of the process.