Exam 4

What does a producer have the authority to do?

-Negotiate contracts of insurance -Sell insurance -Sell insurance contracts

What is NOT a feature of a health insurance plan purchased on the health insurance marketplace?

Dollar limits on essential benefits

Benefits for a Disability Income policy are based on which of the following?

Earnings of the insured

What is NOT a Medicaid qualifier?

Insurability

All of the following are features of a health insurance plan purchased on the health insurance marketplace

-Coverage for emergency services -Coverage for pre-existing conditions -Guaranteed renewability

Which type of authority is found in the agent's contract?

Express

What information does NOT need to be included on an application for life life insurance?

Health insurance policies in force

An insured undergoes a minor surgical procedure. The insurer owes the insured $500 in medical claims. However, the last premium of $200 due on the policy was never paid. How much should the insured receive in claims?

$300

In a noncontributory group policy

100% of eligible employees must participate

If a producer changes his or her residential address, the Insurance Department must be notified of the change within how many days?

30

When replacement is involved, how long must existing insurers maintain records of replacement notifications?

5 years

Who would benefit the most from a straight life immediate annuity?

A 60-year-old man who needs as much retirement income as possible

Who is Medicare NOT a health insurance program for?

Those with low income and low assets

Which of the following are considered activities of daily living in most long-term care policies?

Eating and dressing

The Omnibus Budget Reconciliation Act of 1990 requires

Large group health plans must provide primary coverage for disable individuals under age 65 who are not retired

On an Accidental Death and Dismemberment (AD&D) policy, the death benefit payable is known as the

Principal sum

According to the life insurance replacement regulations, which of the following would be an example of policy replacement?

A policy is reissued with a reduction in cash value

With respect to the entire contract clause in health policies, who has the authority to make changes to an existing policy?

Only an executive officer of the company

What happens to the face amount of a whole life policy if the insured reaches age 100?

The face amount is paid to the insured

An individual purchases a life insurance policy and lists his parents as the beneficiaries. He is able to change beneficiaries at any time. What type of beneficiary designation does the policy have?

Revocable

Which of the following is a daily nursing and rehabilitative care that can only be provided by medical personnel, under the direction of a physician?

Skilled care

What is NOT true about key-person insurance?

The death benefit is taxable to the business

What information needs to be included on an application for life insurance?

-The agent's statement, if applicable -Medical information about the applicant -Life insurance with other insurers

A policy matures and pays the face amount if the insured lives to a specified date. This best describes

An endowment policy

In order for an alumni association to be eligible to purchase group health insurance for its members, what statement does NOT have to be true

Has been active for five years minimum

A policyowner no longer needs a life insurance policy and agrees to sell it to a third party for more than its cash value. This type of transaction is called a

Life settlement

Which dividend option will increase the death benefit?

Paid-up additions

What is another term for a health insurance policy subscriber?

Participant

With Adjustable Life, what can the owner NOT change?

The insured

What is NOT true regarding term health coverage?

The owner may renew the policy for a specified term

What is the purpose of a benefit schedule?

To state what and how much is covered in the plan

Medicare is a health insurance program for all of the following individuals

-Those with permanent kidney failure -Those who have been on Social Security Disability for 2 years -Those 65 or over

Which of the following would be considered a violation of Life Insurance Advertising regulations?

Calling an insurance policy an investment plan

Under the mandatory uniform provision "Notice of Claim", written notice of a claim must be submitted to the insurer within what time parameters?

Within 20 days

Which of the following is true regarding term health coverage?

-The policy is issued for a specified period of time only -The policy expires at the end of the term -The policy could be written as accident only policy

The Commissioner of Insurance is appointed by which authority?

Governor

To purchase insurance, the policyowner must face the possibility of losing money or something of value in the event of loss. What is this concept called?

Insurable interest

The provision that sets forth the basic agreement between the insurer and the insured and states the insurer's promise to pay the death benefit upon the insured's death is called the

Insuring clause

An insurance company that is owned by the policyholders is called a

Mutual insurer

Upon the surrender of a life insurance policy, any cash value accumulated in excess of the premium payment is

Taxed as ordinary income

Carlos's health insurance policy pays benefits according to a list which indicates the amount that is payable under each type of covered treatment or procedure. Carlos's policy provides benefits on a

Scheduled basis

All of the following are true about key-person insurance

-The business is the applicant and the owner -The employee must give written consent by signing the application -The business is the beneficiary

All of the following are characteristics of group health insurance plans

-Employers may require the employees to contribute to the premium payments -The benefits under a group plan are more extensive than those under individual plans -The cost of insuring an individual is less than what would be charged for comparable benefits under an individual plan

Which of the following provides funding for the Alabama Life and Disability Insurance Guaranty Association?

Member insurers

What is NOT a characteristic of group health insurance?

The parties that hold a group health insurance contract are the employees and the employer

What is NOT true regarding the waiver of cost of insurance rider?

The rider expires when the insured reaches age 60

An adjustable life policy can assume the form of

Either term insurance or permanent insurance

J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose?

Fixed Amount

With Adjustable Life, the owner can change

-The premium -The length of time the coverage will last -The death benefit

What does a producer NOT have the authority to do?

Write insurance code

Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this policyowner select?

Joint and Survivor

An insured has a routine exam, blood work, and a follow-up appointment with a specialist. The insured receives a bill for each service provided. What type of plan does the insured have?

Fee for service

In order for an alumni association to be eligible to purchase group health insurance for its members, all of these statements must be true... When the association...

-Has a constitution, by-laws, and must hold at least annual meetings -Is organized for reasons other than buying insurance -Has at least 100 members

All of the following are true of group life insurance

-Premium rates are based upon the average age, gender, and purpose of the group -When the insured terminates membership in the group the coverage can be converted to whole life -Evidence of insurability is usually not required

What is a Medicaid qualifier?

-Age -Residency -Income level

A disability income policy has a waiting period of 7 days. If the insured is disabled for 15 days, how many days of benefits will the policy pay?

8 days

Which of the following insurance products are covered under solicitation regulations of the Insurance Code?

Whole Life

Contributions to Roth IRAs are

Not tax deductible

What is it called when a doctor accepts the Medicare approved amount?

Assignment

If a person qualifies for Social Security disability benefits after the 5 month elimination period, when will benefits begin?

Benefits begin at the beginning of the 6th month and are not retroactive to the beginning of the disability

The Human Life Value approach to determining Life Insurance needs is based upon which of the following ideas?

Loss of the breadwinner's income

A married couple purchase a life insurance policy on their newborn baby. They are concerned about what would happen to the policy if either one of them were unable to continue making the premium payments due to death or disability. Which policy rider should their agent recommend?

Payor benefit

If a life insurance company uses HIV testing as part of its underwriting, when must an applicant be notified of the procedure?

Prior to performance of the test

According to the Common Disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?

The primary beneficiary died before the insured

All of the following are true regarding the waiver of cost of insurance rider

-The rider cannot waive the cost of premiums that accumulate cash value -The rider waives insurance costs in the event the insured becomes disabled -The rider is only applicable to universal life policies

How often must insurers send policyowners status reports on policies that use illustrations?

Ever year

How often must organizations consult the National Do Not Call Registry?

Every 31 days

An applicant completes an application for a disability policy and pays the initial premium. The producer gives the applicant a conditional receipt. Insurance coverage for the applicant will become effective when

The insurance company accepts the risk