exam 2nd 100
Which of the foHowing entities can legally bind coverage?
Insurer
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?
$50,000
What is the minimum age for purchasing a life insurance policy in this state?
15
COBRA applies to employers with at least
20 employees
For how long are insurers required to maintain records pertaining to life insurance solicitation?
3 years
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
A paid-up nonforfeiture benefit will become effective as specified in the policy, unless the person entitled elects another available option within how many days after the due date of the premium in default?
60
Which of the following would be required to be licensed as an insurance producer?
A salaried employee who advertises and solicits insurance
If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following?
Adjust the benefit in accordance with the increased risk
In insurance, an-offer is usually made when
An applicant submits an application to the insurer
Which of the fokowing is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?
Annuity certain
The premium charged for exercising the Guaranteed Insurability Rider is based upon the insured's
Attained age
Which of the foHowing is NOT an enrollment period for Medicare Part A applicants?
Automatic enrollment
Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?
Automatic premium loan
The accelerated benefits provision will provide for an early payment of the death benefit when the insured
Becomes terminally ill
A small business owner is the insured under a disability policy that funds a buy-sell agreement. If the owner dies or becomes disabled, the policy would provide which of the following?
Cash to the owner's business partner to accomplish a buyout
To legally transact insurance in this state, an insurer must obtain which of the following?
Certificate Authority
If more than one family member covered under the same major medical policy is injured in the same accident, the family only has to pay one deductible. This is due to the
Common accident provision
What is the main difference between coinsurance and copayments?
Copayment is a set dollar amount.
All of the following are advantages of an HMO or PPO for a Medicare recipient EXCEPT
Elective cosmetic procedures are covered
An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)
Equity indexed annuity
The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the
Insuring clause
The mode of premium payment
Is defined as the frequency and the amount of the premium payment.
All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT
It is a life contingency option.
If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy?
It is only taxable if the cash value exceeds the amount paid for premiums.
The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called
Joint and survivor
Which of the fokowing terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?
Life expectancy
To sign up for a Medicare prescription drug plan, individuals must first be enrolled in
Medicare Part A
Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive
Nothing; the payments will cease.
In long-term care insurance, what type of care is provided with intermediate care?
Occasional nursing or rehabilitative care
Under a pure life annuity, an income is payable by the company
Only for the life of the annuitant
An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called
Paid-up additions
All of the following are examples of transacting insurance in Georgia EXCEPT
Placing advertisements for an insurer
When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called
Preferred Provider Organization (PPO)
All of the following statements regarding continuing education requirements in this state are true EXCEPT
Producers may repeat the same courses to meet the required CE hours for a licensing period.
An agent offers:his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of
Rebating
Which of the following statements is INCORRECT?
Replacing insurance policies for the purpose of making commissions is legal.
Which of the foHowing terms describes the specified dollar amount beyond which the insured no longer participates in the sharing of expenses?
Stop-loss limit
provision found in insurance policies which prevents the insured from collecting twice for the same loss is called
Subrogation
All of the following are unfair claims settlement practices EXCEPT
Suggesting negotiations in settling the claim
Which of the following would an accident-only policy NOT cover?
Surgery to repair a wrist damaged by tendonitis.
Which of the flowing would be a qualifying event as it relates to COBRA?
Termination of employment due to downsizing
Which of the following is NOT covered under Plan A in Medigap insurance?
The Medicare Part A deductible
An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy?
The capital amount in a lump sum
All of the following statements concerning an employer sponsored nonqualified retirement plan are true EXCEPT
The employer can receive a current tax deduction for any contributions made to the plan
Which statement is NOT true regarding underwriting group health insurance?
The group is assessed individually for insurability
In which of the following situations would Social Security Disability benefits NOT cease?
The individual's son gets a part-time job to help support the family
What is necessary in order to be eligible to receive benefits from a long-term care policy?
The insured must be unable to perform some activities of daily living
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT
The interest is not taxable since it remains inside the insurance policy.
policy with a 31-day grace period implies
The policy will not lapse for 31 days if the premium is not paid when due
Which of the fokowing best defines the "owner" as it pertains to life settlement contracts?
The policyowner of the life insurance policy
Which is true about a spouse term rider?
The rider is usually level term insurance
Under an extended term nonforfeiture option, the policy cash value is converted to
The same face amount as in the whole life policy
An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation?
They are tax deductible
Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?
Those who have been insured under the plan for at least 5 years
Which of the foHowing terms refers to the acts of soliciting insurance, making an insurance contract effective, and dealing with matters arising from that contract?
Transacting insurance
According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT
Unearned premiums are retained by the insurance company.
If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about
Whether an insurable interest exists between the individuals
Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?
annuity certain
An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change?
applicant
Alexander has a policy with his ex-wife as its beneficiary. What provision allows him to change the beneficiary to his new wife?
change of beneficiary
An insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. This is called
consideration
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?
consideration
Which of the fokowing statements is NOT true concerning Medicaid?
consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income.
The term "fixed" in a fixed annuity refers to all of the following EXCEPT
death benefit
If an insured changes the premium payment mode from monthly to annually, what happens to the total premium?
decreases
When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?
foreign
A Health insurance policy lapses but is reinstated within an acceptable timeframe. How soon from the reinstatement date will coverage for accidents become effective?
immediately
What is the term for how frequently a policyowner is required to pay the policy premium?
mode
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
mutual
How many pairs of glasses in a 12-month period will a vision expense insurance plan cover?
one
An agent license can be issued
only individuals
What form of the annuity settlement options provides payments to an annuitant for the rest of the annuitant's life and ceases at the annuitant's death?
pure life
Another name for a substandard risk classification is
rated
Whenever agents submit applications to insurers, they must also submit statements, signed by the applicant and agent, disclosing the involvement of
replacement
An insured buys a Medicare Supplement insurance policy from a new insurer; this policy will replace one provided to her by another insurer. Which of the following must provide her with a notice of replacement?
replacing insurer
It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability?
sexual orientation
All of the following long-term care coverages would allow an insured to receive care at home EXCEPT
skilled care
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty
twisting
In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?
unilateral
Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending?
unlimited
The main difference between immediate and deferred annuities is
when the income payments begin
