final exam

A Hospital/Surgical Expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013?

$1,000

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?

$300,000

P purchases a $50,000 whole life insurance policy in 2005. One of the questions on the application ask if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary?

$50,000 minus any outstanding policy loans

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?

$7,000

G purchased a Family Income policy at age 40, The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income?

10 years

A temporary license may be issued for a MAXIMUM period of how many days?

180

What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be unable to perform to qualify for Long Term Care benefits?

2

An insured must notify an insurer of a medical claim within how many days after an accident?

20

The approved prelicensing course of study requirement for health insurance is

20 hours

One becomes eligible for Social Security disability benefits after having been disabled for

5 months

The individual most likely to buy a Medicare Supplement policy would be a(n)

68-year old male covered by Medicare

Tennessee insurance law specifically allows the Commissioner to issue a temporary license to which of the following individuals?

A surviving spouse of a deceased producer

P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount?

Accidental Death and Dismemberment provision

Which of the following statements describes what an Accident and Health policyowner may NOT do?

Adjust the premium payments

Insurable interest must exist at what time?

At the time of application

Defamation is BEST described as publishing or circulating which of the following types of information?

Brochures falsely criticizing the financial condition of an insurance company

N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as

Coinsurance

Which of the following reimburses its insureds for covered medical expenses?

Commercial insurers

If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?

Contributory

What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability?

Convertible Term

Which of the following BEST describes a Hospital Indemnity policy?

Coverage that replaces lost income due to hospitalization

A CEO's personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant?

Disability Income

Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy?

Discourages overutilization of the insurance coverage

The federal income tax treatment of employer-provided group health insurance can be accurately described as

Employee's coverage paid for by the employer is tax-deductible to the employer as a business expenditure

Which of these statements describe a Modified Endowment Contract (MEC)?

Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract

Long Term Care policies will usually pay for eligible benefits using which of the following methods?

Expense incurred

What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?

Family Maintenance Policy

P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase?

Family Maintenance policy

Which of these is considered a true statement regarding Medicaid?

Funded by both state and federal governments

Which type of provider is known for stressing preventative medical care?

Health Maintenance Organizations (HMO's)

Which of the following situations does a Critical Illness plan cover?

Leukemia

The health insurance program which is administered by each state and funded by both the federal and state governments is called

Medicaid

Which of these life products is NOT considered interest-sensitive?

Modified Whole Life

Which of the following characteristics are associated with a large group disability income policy?

No medical underwriting

J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?

Nonoccupational coverage

Which of the following actions by an insurance company or an agent is considered rebating?

Offering a prospect something of value that is not specified in a contract to induce the purchase of that contract

Which of these statements is INCORRECT regarding a Preferred Provider Organization (PPO)?

PPO's are NOT a type of managed care systems

M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take?

Pay face amount minus the past due premium

Which of these statements concerning an Individual Straight Life annuity is accurate?

Payments are made to an annuitant for life

A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the

Policy Loan provision

Which of the following best describes the particular terms of the policy being applied for?

Policy Summary

Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation?

Policy was returned within the free-look period, premium will be fully refunded

Which statement is true concerning a Variable Universal Life policy?

Policyowner controls where the investment will go and selects the amount of the premium payment

How does group insurance differ from individual insurance?

Premiums are lower

Which of these options can an individual use their medical flexible spending account to pay for?

Prescription drugs

What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive?

Primary Insurance Amount (PIA)

Which of these is NOT a type of agent authority?

Principal

K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?

Proceeds will be paid to K's estate if P dies within a specified time

When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits?

Recurrent Disability

Which of the following statements regarding a referral is INCORRECT?

Referral fees must be filed and approved with the Commissioner of Insurance

T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?

Request of the change will be refused

Which is an example of unfair discrimination?

Requiring an adult applicant for an insurance policy to reveal the name and occupation of a family member who is NOT to be covered by the policy

R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity?

Residual Disability

P is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period?

Sign an enrollment card

S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation?

Single Premium

Which action by an insurance producer is considered rebating?

Splitting commissions with a policyholder who has purchased additional coverage

Which of the following statements describes the purpose of the Insuring clause in Health and Accident policies?

States the scope and limits of the coverage

What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision?

Submit the claim in any form

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?

Subrogation

What type of life insurance are credit policies issued as?

Term

Which of the following statements regarding referral fees is CORRECT?

The Commissioner may establish by rule a maximum amount for each referral

Disclosure standards require that which of the following be delivered with a Medicare Supplement policy?

The Outline of Coverage

K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective?

The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured

J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?

The gross premium is higher on a monthly payment mode as compared to being paid annually

G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills?

The insured

Which statement regarding the Change of Beneficiary provision is true?

The policyowner can change the beneficiary

Which Accident and Health policy provision addresses preexisting conditions?

Time Limit on Certain Defenses

Which of the following policies requires a producer to leave a buyers guide with the applicant?

Universal Life

Which of the following BEST describes how pre-admission certifications are used?

Used to prevent nonessential medical costs

A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled?

Utilities and office rent

Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?

Variable Life

An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?

When the conditions of the receipt are met

When is the face amount of a Whole Life policy paid?

When the insured dies or at the policy's maturity date, whichever happens first

An insurance company formed under the laws of a state other than Tennessee is known in Tennessee as

a foreign company

An insurance company that is incorporated in New York and does business in Tennessee is defined in Tennessee as

a foreign insurer

It is a legitimate insurance marketing practice to obtain business from a competitor by all of the following means EXCEPT

agreeing to reduce commissions in order to obtain a sale

Which of the following is NOT an example of a producer's breach of fiduciary duty?

allowing premiums to be submitted electronically

The definition of a business entity includes

an association or a limited liability company

According to Tennessee insurance law, an "individual" is defined as a "person" and also includes

an individual's legal representative

A CORRECT statement about the regulatory authority of the Commissioner with respect to insurance producers is that the Commissioner may

establish guidelines for continuing education as a part of the producer license renewal procedure

Health insurance benefits NOT covered due to an act of war are

excluded by the insurer in the contract provisions

A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered EXCEPT for

experimental and investigative services

An insurance company that promises lower insurance rates than any other company in the country may be charged with

false advertising

What kind of special need would a policyowner require with an Adjustable Life insurance policy?

flexible premiums

which of the following health insurance policy provisions specifies the health care services a policy will cover?

insuring clause

If the Commissioner finds that a licensee has violated any Tennessee insurance statute, the Commissioner may suspend the producers license and

issue a fine of not more than $1,000 for each violation

credit life insurance is

issued in an amount not to exceed the amount of the loan

An insurance company may discriminate policy rates for

males and females

which of these statements concerning an individual disability income policy is true?

normally includes an elimination

All of the following would be considered fair marketing practices when an insurance company is trying to replace an existing insurance policy EXCEPT

reduce the cost by lowering the commission

Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called

representations

Which of the following services is NOT covered under a hospitalization expense policy?

surgeon's fees

if an insurance producer is engaging in financial planning they must identify

that they will earn a commission for the sale of an insurance product in addition to a fee for financial planning, if that is the case

The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is

the cost

According to Tennessee insurance law, while transacting insurance business, producers act as representatives of

the insurer

The Free-Look provision of any health policy begins the date

the policy is delivered to the insured

During the Grace Period, the benefits of an individual health policy will remain in force if

the premium is paid

The Consideration clause of an insurance contract includes

the schedule and amount of premium payments

The Commissioner must examine each domestic insurance company AT LEAST every

three years

An insurance producer may sell, solicit, or negotiate a contract of insurance

upon issuance of license