grand slam

An insurer mails an insurance policy to a new policyowner. When the insurer relinquishes control of the policy, the policy is considered

Delivered

Which of the followingis NOT a standard exclusion in life insurance policies

Disability Exclusions are policy provisions, which exclude certain types of risks. Aviation, hazardous occupation, and war and military services are most common exclusions. Disability is not a common exlusion.

An annuity would normally be purchased by an individual who wants to

Provide income for retirement The main purpose of an annuity is to liquidate an estate and provide income for retirement. Life insurance creates an estate and provides a death benefit to the beneficiaries

During policy replacement, the replacing insurer must notify existing insurers within what time period

5 business days When a replacement is being recommended by an agent, a replacing insurer has a duty to notify any existing insurer within 5 business days that a replacement may be n order for an existing policy and mail a copy of the illustration or policy summary for the replacement policy

Which is true about a spouse term rider? a) Coverage is allowed for an unlimited time. b) The rider is decreasing term insurance. c) Coverage is allowed up to age 75. d) The rider is level term insurance.

d) The rider is level term insurance. The spouse term rider allows a spouse to be added for coverage. It is available for a limited amount of time, typically expiring at age 65. A spouse term rider (just like any other insured rider) is usually level term insurance

Life insurance companies in Virginia may include as part of the policy provisions an accelerate benefits clause which provides for payment of benefits during the lifetime of the insured. Generally, benefits may be paid out to insured parties who are unable to perform how many activities of daily living?

2 Impairment in at least 2 activities of daily living would qualify an insured for benefits under an accelerated benefits program.

Which of the following describes the relationship between a capital sum and a principal sum?

Capital sums are percentage of principal sums

Continuing education must be completed

Even-numbered years Proof of CE completion must be provided by December 31 of every even numbered year or the license will be terminated.

How does an employee retain coverage so that there would be no pre-exisitng condition limitation under a new medical plan?

The employee must have had coverage in the old group immediately prior to joining the new group with more than 12 months of creditable coverage

All of the following could qualify as a group for the purpose of purchasing group health insurance EXCEPT

An association of 35 people Group insurance may be issued to employer, employee, or other group that are together for a purpose other than purchasing insurance.

An agent holding which of the following types of license will be required to complete 24 hours of continuing education?

health and casualty Any agent who holds one type of license must complete 16 hours of continuing education. Any agent who holds more than one type of licenses must complete 24 hours of CE.

If an agent changes his or her residential address, the Commission must be notified of the change within how many days?

30 Every agent licensed in Virginia must report a change of residential or business name or address in writing to the Commission within 30 days.

In health insurance, what is coinsurance

A percentage of the cost of service that the insured and the insurer share After the insured meets the deductible required by the policy, the insured and the insurer split the cost of additional expenses, up to a certain limit. This amount, the coinsurance, is presented as a percentage

An individual receives a lump-sum inheritance. He'd like to use the money to create a lifetime income since he'll be retiring soon. He purschase an annuity and wishes to receive payments beginning in 2 months. What did he buy?

Single premium immediate annuity An annuitization in 12 months or less from the effective date is an immediate annuity. A single premium annuity involves depositing one premium payment.

A Medicare supplement must have a "free look" provision of at least

30 daays.

When may HIV-related test results be provided to the MIB?

Only if the individual is not identified Insurance companies must maintain strict confidentiality regarding HIV-related test results or diagnoses. Test results may not be provided to the MIB if the individual is identified.

Which of the following is a consideration on the part of an insurer?

Paying a claim The binding force in a ny contract is a consideration. Consideration on the part of the insured is the payment of premiums and the health representations made in the application. Consideration on the part of the insurer is the promise to pay in the event of loss.

An insured needs ongoing treatment for a diabetic condition. under PPACA, which of the following is correct?

The condition must be covered under the insured's plan Under PPACA chronic conditions, like diabetes, must be covered as an essential service under the plan. Lifetime or annual treatment dollar limits are not allowed.

A Major Medical Expense policy would exclude coverage for all of the following treatments EXCEPT

Drug addiction Treatment for drug and alcohol addiction is provided on a limited basis.

Under which of the following conditions would life insurance proceeds be taxable by the federal government?

If there is a transfer for value If life insurance proceeds are collected in a lump-sum payment, they are generally not subject to federal taxation. If the benefit payment results in a trasnfer for value( if the policy is sold to another person) it may not be exempt from taxation. Transfer for value rules do not apply when a policy is collaterally assigned to a lender.

What effect will the long-term care rider have on the death benefit of a life insurance policy?

Reduce the death benefit on a one-for-one basis As with living needs rider, payment of LTC benefits will reduce the amounts payable to the beneficiary upon the insured's death

Where are premiums from fixed annuities invested?

A general account A fixed annuity is characterized by a general account into which the purchase payments (premiums) are invested

Which of the following terms relate to disability income insurance?

Residual benefit A residual benefit amount is based on the proportion of income actually lost due to a business interruption caused by the insured's disability.

An insured wanted to take out a policy loan of his life insurance contract to pay for his family vacation. Which of the following is true concerning such policy loan features in a life policy?

The insurer must notify the insured of the initial interest rate as part of the loan process on his first loan The insurer will notify the policyholder of the initial interest rate at the time of the first policy loan and of any change in interest rate at least annually.

Variable insurance and variable annuities are regulated by

SEC, FINRA and Departments of Insurance Variable products are governed at the national level by the SEC and the FINRA, and at the state level by the Department of Insurance

The benefits from a business overhead expense insurance policy

Are limited to covered expenses and are taxable to the business The benefits from a BOE policy are usually limited to covered expenses incurred or the maximum monthly benefit stated in the policy, and are taxable to the business as received

In addition to participation requirement, how does an insurer guard against adverse selection from underwriting group health?

By requiring that the insurance be incident to the group The group must form for a reason other than buying group insurance.

Mike is the owner of a deferred annuity. He pays $100 in premium on the first day of the month. Which of the following terms best describe his premium payment arrangement

Level Periodic payment annuities can be either level (The annuitant/owner pays a fixed installment), or the payments can be flexible. (The amount and frequency of each installment varies)

Which of the following best describes the term adverse selection?

More persons with higher exposure to loss seeking insurance than those with average exposure to loss Adverse selection is the insuring of risks that are a poorer class (more prone to losses) than the average risk.

What is the purpose of the impairment rider in a health insurance policy?

To exclude coverage for a specific impairment The impairment rider may be attached to a contract for the purpose of eliminating coverage for a specifically defined conidtion

If an insured is not entirely satisfied with a policy issued, the insured may return it to the insurance company and receive a refund of the entire premium paid, at which of the following time?

Within 10 days of when the policy was delivered. The free look period begins at the time the policy is delivered

Which of the following named beneficiaries would not be able to receive the death benefit directly from the insurer in the event of the insureds' death? a) Wilma, the former wife of the deceased b) William, Jr., minor son of the insured c) Fred, a business partner of the insured d) Flossie, the present wife of the deceased

b) William, Jr., minor son of the insured Because a minor does not have the legal capacity to release the insurer from further obligation, benefits normally have to be passed through a

All of the following are characteristics of a Universal Life policy EXCEPT a) The cash account accumulates on a tax-deferred basis. b) Universal Life is a combination of term insurance and a separate savings account joined in a single contract. c) The planned premium pays for mortality charges and expenses and any excess is returned to the policyowner. d) The insurance company reserves the right to adjust the mortality charges and/or interest rate.

c) The planned premium pays for mortality charges and expenses and any excess is returned to the policyowner. Any premium amounts not required to pay for mortality and expenses, create the cash account.

An employee dies having 6 quarters of coverage during the previous 13-quarter period. What status of coverage does the employee have under Social Security?

Currently insured Before becoming fully insured, workers may achieve the status of currently insured (or partially insured), and by that qualify for certain benefits. An individual is considered partially insured if he has earned 6 credits ( or quarters of coverage) during the 13-quarter period with the quarter in which the insured dies or becomes disabled

An agent delivers a life policy. he explain a policy change was made and asks the applicant to sign a statement acknowledging the changes were explained. The agent says the premium has not been paid and must be paid before the policy goes into effect. He collects a Statement of Good Health, and relinquishes the policy, and leaves. What did he do wrong?

He left the policy with the insured without collecting the premium.

An insured has an individual disability income policy with a 30-day elimination period. He comes disabled on june 1st for 15 days. When will he collect on his disability income payments?

He wont collect anything The insured cannot collect anything because he did not satisfy the elimination preiod.

An insurer can decide to not renew an Optionally Renewable policy

On premium due dates Optional Renewability policies allow the insurer to cancel the policy for any reason whatsoever. Policies can only be cancelled on the policy anniversary or premium due date (renewal date). If the insurer elects to renew coverage, it can also increase the policy premium.

Which of the following would NOT trigger the payment of Accelerate Death Benefits?

Being permanently disabled Accelerated death benefits or living riders allow the early payment of some portion of the death benefit if the insured has conditions such as terminal illness, permanent instituionalization, or a life-threatening medical condition that requires a dramatic medical intervention. Accelered death benefit however, does not cover disability.

All of the following are characteristics of group health insurance except

The parties that hold a group health insurance contract are the employees and the employer The contract for coverage is between the employer and the insurance company. Only one policy is issued (master policy) to the employer; covered employees receive a certificate of insurance.

An insurer moved into a new hour 10 days ago. How many more days does he have to report the address change to the Commission?

20 Every agent licensed in Virginia must report a change of residential or business name or address in writing to the Commission within 30 days

All individual life insurance policies, excepting extended term policies, must have a provision which allows for which of the following, in regards to policy loans?

A maximum fixed interest rate of 8%, or an adjustable interest rate establish by the insurer In addition to a provision that allows a policyholder to borrow up to the surrender value amount after the policy has been in force for 3 years, each individual policy must also provide for either a maximum interest rate of 8% per year, or an adjustable interest rate established by the insurers as permitted by law

The guaranteed purchase option is also referred to as the

Future increase option

In Virginia, a small employer must have a minimum of

2 employees A small employers employs an average of at least two but not more than 50 employees on business days during the preceding calendar year and who employs at least two employees on the first day of the plan year.

How many hours of continuing education would need to be completed by an agent holding a Life, Health, Property, and casualty license?

24

Which of the following statements is INCORRECT concerning Modified Endowment Contracts (MECS)? A) A primary purpose of the regulations governing MEC's was to reduce incentives for the use of life insurance as a short-term investment vehicle. B) A distribution from an MEC may be subject to a 10% penalty if withdrawn prior to 59.5 C) An MEC must always pass the 7-pay test D) A life insurance policy failing the 7-pay test is classified as an MEC

C) An MEC must always pass the 7-pay test Life insurance contract must pass the 7-pay test; otherwise, they become classified as Modified Endowment Contracts, and policy loans or withdrawals will be subject to taxation as provided by the regulation. If investment funds are withdrawn or borrowed prio to age 59.g, they will also be subject to a 10% penalty.

A whole life policy is surrendered for a reduced-paid up. The cash value in the new policy will

Continue to increase The new reduced policy continues to build its own cash value and will remain in force until death or maturity.

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?

Extended Term

What happens to an insurance application after the policy is issued?

It becomes part of the contract

One condition placed on group life coverage provided through a group credit life plan is

The plan coverage may only cover the remaining balance on the account A creditor providing credit life insurance to the debtors of the creditor can only market insurance coverage to the extent that such a debtor maintains an account balance.

The Waiver of Cost rider is found in what type of insurance? a) Whole Life b) Joint and Survivor c) Juvenile Life

d) Universal Life The Waiver of Cost rider is found in Universal Life policies. If the insured becomes disabled, the Waiver of Cost rider allows the cost of insurance to be waived, with the exception of premium costs required to accumulate cash value.

Alex was snowboarding in Colorado and suffered a broken leg and collar-bone. He was taken to the local ER and had the medical staff repair the breaks and give him a prescription for pain. What must Alex's HMO do in this case?

Provide coverage for all of the treatment that Alex received. HMOs are required to provide emergency care services on a 24 hours basis to members including telephone access to a physician or licensed healthcare provider who can refer or direct a member for prompt medical care in cases where there is an immediate, urgent need or medical emergency.

The Commission may examine all of the following EXCEPT

A life insurance applicant, who at any time held a producers license The Commission may examine any person having a contract or right to manage or control and licensed insurer, any person holding a controlled amount of shares of capital stock or policyholder proxies of any domestic insurer, any person engaged or assisting in the formation of a domestic insurer, or any person seeking a license to transact any insurance business in Virginia. The Commissioner's authority does not extend to applicants for insurance policies.

Among people in the same class and life expectancy, which of the following factors can be used to influence premium rates?

Occupation Discrimination in rates, premiums, policy benefits, etc., for persons within the same class or with the same life expectancy is illegal. No discrimination may be made on the basis of marital status of an individual, race, color, national origin, creed, or ancestry unless the distinction is made for a business purpose or required by law.

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

Within 20 days This mandatory provision requires the insured to giver the insurer, or its agent, written noitce of a claim within 20 days of the loss or as soon as reasonably possible. If the nature of disabiilty is such that the insured is legally incapacitated, this requirement is waived.

Under which condition would an employee's group medical benefits be exempt from income taxes? a) An employee's group medical benefits are never exempt from taxation as income. b) When the premiums and other unreimbursed medical expenses exceed 6.5% of the employee's adjusted gross income c) When the premiums and other unreimbursed medical expenses exceed 7.5% of the employee's adjusted gross income d) An employee's group medical benefits are generally exempt from taxation as income.

d) An employee's group medical benefits are generally exempt from taxation as income. Group medical and dental benefits are received tax-free to employees. Also, premiums paid by the employer are deductible as business expenses.

Which entity has the option of include optional provisions in a health insurance policy?

The insurer

Following a covered loss, the Time Payment of Claims Provision requires that an Insurance company pay disability income benefits no less frequently than

Monthly

An insured falls down a flight of stairs and sustains a neck injury that renders him severely disabled. The insureds owns a whole life policy. is it possible for the policy to include a Waiver of COst rider, and if so, what insurance costs would be waived?

No it is not possible for this waiver to be included The waiver of cost rider is found in Universal Life policies. In this example, the insured has a Whole Life policy, making him ineligible.

Long term care policies must provided to their policyowners all of the following features EXCEPT

Be incontestable after 6 months LTC policies are generally incontestable after 2 years except for case of material misrepresentation or fraud

Which of the following is NOT true regarding a deferred annuity?

Income payments begin within 1 year from the date of purchase Deferred annuity benefit payments begin sometime after one year after the contract was purchase.

The Guaranteed Insurability Rider allows the owner to purcahse additional amounts of life insurance without proof of insurability at all of the following EXCEPT

Purchase of a new home The rider allows the owner to purchase additional amounts of i nsurance without proof of insurability at marriage, birth of a child, and/or every 3 years or so between the ages of 25 and 40.

All of the following are rules regarding accident and sickness policies EXCEPT

The policy must be renewable under any circumstances Policies must have provision for renewal; however, renewal is not renewable under any circumstances. For those that limit renewal, the terms of the coverage must be clearly stated on the first page of the policy

Which of the following statements is INCORRECT regarding the definition of total disability?

Total disability is the inability to perform partial duties of any occupation for which a person is suited by reason of education, training or experience. Total disability is defined differently under some disability income policies. Some policies use a relatively strict definition such as the any occupation definition, similar to Social Security. Other insurer have adopted a more liberal definition.