HEALTH AND ACCIDENT THREE
A Lump Sum payment for life insurance is: Select one: a. Not taxable b. Taxable c. Taxable if the employer paid the premiums d. Taxable over the premium payment amounts
a
A group long-term disability plan may contain all of the following features, EXCEPT: Select one: a. The benefit is not usually stated as a percent of income. b. The benefits will coordinate with Workers' Compensation benefits. c. Benefits will not be paid for on-the-job losses. d. Benefits will be coordinated with Social Security disability benefits.
a
A life insurance policy in Texas must contain all the following provisions, EXCEPT: Select one: a. Settlement b. Assignment c. Legal action d. Incontestability
a
A primary care physician in managed care acts as: Select one: a. A gatekeeper b. A staff model c. A concurrent reviewer d. An advisor
a
Adam was found to have used his license to procure insurance for relatives and it was also discovered that he was issuing rebates to insureds. What will probably happen to him? Select one: a. His license(s) will be suspended or revoked. b. He will go to prison. c. He will pay fines of up to $250,000. d. All of the above
a
All of the following are true regarding advertising of life insurance policies in Texas, EXCEPT: Select one: a. Agents are responsible for the form and content of advertisements. b. Advertisements must not be misleading. c. Advertisements must contain the premium rate. d. The full licensed name of the insurer must appear on the advertisement.
a
Bob signed an application for a $100,000 life insurance policy and paid the first premium on January 1. The agent issued an insurability receipt. A week later, the required medical examination proves Bob insurable. If Bob dies before the insurer approves the application: Select one: a. The coverage will be retroactively effective, the beneficiary will receive the full death benefit b. The coverage will be retroactively effective, but the policy will only pay $50,000. c. No coverage will be provided. d. No coverage will be provided, but the premium will be refunded.
a
In the state of Texas, when must newborn child coverage begin? Select one: a. From the moment of birth b. After the newborn is 48 hours old c. When the newborn is 1 week old d. When the newborn is 1 month old
a
Shane realizes that the client left off information about a prior illness. What should the he do? Select one: a. Tell the prospective client that a claim might be rejected later due to the omission. b. Assume the client will not make a claim until the incontestability period is over. c. Nothing, because the MIB will catch it d. The producer has no responsibility to report the incomplete information.
a
The agent notices he made a mistake in completing the application. He or she should: Select one: a. For a small change, he or she should fix the mistake, and then have the client initial the changes in his or her presence. b. He or she should start a new application, and fill it out on a phone call. c. Make the changes, and then initial them. d. Ignore the mistake and submit the application
a
The insurer discovers that Erica misstated her age on the health insurance policy application. What will the insurer do? Select one: a. Adjust the policy benefits b. Increase her premiums c. Decrease her premiums d. Void her policy
a
This type annuity benefit payments start within a year of purchase: Select one: a. Immediate b. Single c. Flexible d. Deferred
a
What type of contract is written by one party? Select one: a. Adhesion b. Aleatory c. Unilateral d. Conditional
a
A program that includes prehospitalization authorization is an example of: Select one: a. Major medical b. Managed care c. Social Security disability d. Workers' Compensation
b
After a loss, the insured must give a notice of claim within: Select one: a. 15 days b. 20 days c. 45 days d. 90 days
b
Businesses can deduct certain items as ordinary business expense, such as: Select one: a. Buy/sell agreements. b. Group insurance premiums. c. Employees portion of the group premium. d. Key employee.
b
Dylan and Bob own a small business and worry about their company if their star salesman becomes disabled. Which type of policy should they buy? Select one: a. Business overhead expense b. Key employee c. Workers' Compensation d. Business buy-out
b
If upon completion of a life insurance application the producer does not collect the initial premium, upon delivery he/she must: Select one: a. Retrieve the conditional receipt, collect the premium and a statement of good health. b. Collect a statement of good health and the initial premium. c. Collect the premium for a couple of months and a statement of good health. d. Provide a copy of the investigative report.
b
In a long-term care policy, pre-existing conditions must be covered after: Select one: a. 24 months from the effective date of coverage b. 6 months from the effective date of coverage c. 12 months from the effective date of coverage d. 18 months from the effective date of coverage
b
Pat's life insurance policy misstated that she was male, when she is in fact female. This fact was discovered after Pat's death, what is likely to happen as a result? Select one: a. The death benefit will be lowered. b. The death benefit will be increased. c. The premiums are refunded. d. None of the above
b
Physicians and outpatient coverage is provided by which part of Medicare? Select one: a. Part A b. Part B c. Part C d. Part D
b
Tim has a special savings medical plan whereby the funds do not rollover from year to year. This plan is a: Select one: a. HRA b. FSA c. Group health insurance d. HSA
b
What type group plan requires 75% participation? Select one: a. Noncontributory b. Contributory c. Contributing d. Consideration
b
Which of the following are commercial companies owned by policyholders? Select one: a. Stock insurers b. Mutual insurers c. Surplus insurers d. Government insurers
b
Which of the following is a common index that an equity-indexed life policy is linked? Select one: a. Consumer Price Index b. S&P 500 c. Gross Domestic Product d. Inflation
b
Who of the following might take out a credit life policy? Select one: a. A father who is hoping his son will be a professional ballplayer b. A car dealer who is financing someone's car c. A man who has paid cash for an expensive piece of electronics d. A husband whose wife has cancer
b
All of the following statements are correct about Group Life conversion privileges EXCEPT: Select one: a. All group life policies must include a conversion option. b. If a member's coverage is terminated, the member (and dependents) may convert to individual whole life. c. If a death occurs during the conversion period, there is no coverage. d. An extension of 15 days may be added to the conversion period, if the employee was not made aware of their conversion rights.
c
All of the following statements are correct about representations EXCEPT: Select one: a. They are part of the contract. b. They are not likely to result in a policy cancellation if they are not totally accurate. c. They are not part of the contract. d. They are considered to be correct to the best of the applicant's knowledge.
c
If an insurer uses what is considered fair and common for a geographic area to determine the coverage and benefits to pay for a surgery, it is called: Select one: a. Subrogation b. Concurrent review c. Usual, reasonable, and customary d. Relative value scale
c
Miranda has stopped paying her premiums, but a provision in her policy provides for continuation of coverage. What is that provision called? Select one: a. Consideration clause b. Insuring clause c. Nonforfeiture option d. Waiver of premium option
c
Preston tells the insurer to keep the dividend and use it to invest. He is using which dividend option? Select one: a. Paid-up addition b. Cash payment c. Accumulate at interest d. Reduction of premium
c
Variable whole life differs from ordinary whole life in that: Select one: a. The cash value is guaranteed. b. If the premium is not paid after the grace period, the policy uses the cash value to pay the premium. c. Variable whole life offers higher interest rates. d. Variable products are only regulated by the state insurance departments.
c
What method to determine the proper amount of life insurance uses age, net annual salary, number of working years remaining prior to retirement, expenses and the rate at which the value of the dollar is depreciating? Select one: a. Needs approach b. Estate conservation approach c. Human life value approach d. Lump-sum approach
c
What type of policy does not allow the insurer to change the premium or the coverage? Select one: a. Guaranteed renewable b. Optionally renewable c. Noncancelable d. Guaranteed insurability
c
Which of the following is not a way a Health Maintenance Organization (HMO) can be organized in Texas? Select one: a. Group model b. Staff model c. Dependent model d. Network
c
Which of the following statements regarding the waiver of premium rider for a life insurance policy is false? Select one: a. Premium payments are waived when the policyowner is disabled. b. The rider is void after the policyowner reaches a certain age, such as 65. c. All waived premiums must be repaid if the policyowner recovers from the disability. d. The policy is kept in force while premium payments are waived.
c
Raymond purchased a major medical policy and paid the initial premium to Malcolm, a producer, on November 5th. Malcolm received the policy from the insurer on November 8th and tried unsuccessfully to deliver it to Raymond. He was able to deliver the policy on November 10th. Raymond decided he did not want the policy and has 10 days from which of the following dates to return the policy to the company and obtain a full premium refund? Select one: a. November 5th b. November 8th c. November 10th d. November 20th
c The 10 day free look period begins on the date the policy is delivered, in this case, November 10th.
A bookkeeper with a disability policy changed jobs to work on an offshore oil platform and became disabled. His policy states that he has a $1,000 monthly benefit for a qualifying disability, but he receives $750.00 per month. His policy most likely has a: Select one: a. Residual disability clause b. Presumptive disability clause c. Own occupation definition d. Change of occupation provision
d
After breaking his leg, Oliver purchased a major medical policy and filed a claim for the treatment on his broken leg. The claim is denied due to: Select one: a. The insuring clause b. The consideration clause c. The entire contract clause d. The pre-existing clause
d
At what age does a qualified retirement plan require distributions? Select one: a. 60 b. 59 1/2 c. 65 d. 70 1/2
d
Diane, an applicant for a life insurance policy, is found to be a substandard risk. The insurer will most likely: Select one: a. Demand a medical examination. b. Deny the policy c. Lower its standards d. Charge a higher premium.
d
HIPAA's main benefit is: Select one: a. COBRA b. Maternity c. Coordination of benefits d. Portability
d
If the word, variable, is in the name of an insurance plan or annuity, it means that: Select one: a. It has multiple beneficiaries. b. It has variable payouts. c. It includes various types of plans. d. Investment in securities is involved.
d
The cash loan provision of a life insurance policy states that: Select one: a. Withdrawals or partial surrenders of policy cash value can be made; the policy specifies how much can be withdrawn and at what frequency. b. The insurer will automatically use the policy cash value to pay an overdue premium. c. Modifications to the policy must be made by an authorized officer of the insurer and attached to the policy. d. A policy loan in an amount up to the current cash value, less any existing indebtedness, may be made.
d
The producer is replacing a policy with another one from a different company; the producer needs to make sure it is not considered? Select one: a. Rebating b. Churning c. Discrimination d. Twisting
d
Tim was injured in an accident, how many days does he have to provide proof of loss? Select one: a. 7 days b. 15 days c. 45 days d. 90 days
d
Trusting agents to apply money received from clients in a responsible way is called: Select one: a. Commingling b. Nondiscrimination c. Monetary trust d. Fiduciary trust
d
Which managed care program has a larger service area, wider range of provider choices, no gatekeeper and coverage for emergency treatment outside of the provider list? Select one: a. HMO b. POS c. HSA d. PPO
d
Which of the following is Title 19, a public welfare program? Select one: a. Medigap b. Long-term care insurance c. Medicare d. Medicaid
d
Which of the following is not required for John to sell small employer health benefit plans? Select one: a. He must have completed an initial 8-hour certification course. b. He must have a life and accident and health license. c. He must complete 5 hours of continuing education for small employer health benefits every 2 years. d. He must be a member of the small business insurance association.
d
Which of the following is true about Key Person insurance? Select one: a. The company is the insured. b. The key person is the beneficiary. c. The key person purchases the policy. d. The company pays the premiums.
d
Which of the following is true about the payment of commissions in Texas? Select one: a. Renewal or other deferred commissions may be paid to unlicensed persons, so long as the person was licensed at the time of the sale, solicitation or negotiation. b. Licensed agents without an appointment from a particular insurance company may refer an application to another licensed agent with an appointment and share the commission. c. A temporary licensee may not obtain a commission on a sale made to a person who has a family, employment, or business relationship with the temporary licensee. d. All of the above
d
On his application for a life insurance policy, James writes that he is a smoker, age 34, and is in generally good health. One year after the policy is issued James is diagnosed with lung cancer. James did not indicate on his life insurance application that he had lung cancer. Which of the following best explains James' situation, and how the insurer will handle the situation? Select one: a. James' statements on the application were made to the best of his knowledge. The insurer will not void or cancel the policy. b. James has made a material representation and the insurer will void and cancel his policy. c. James has made a material misrepresentation and the insurer will void and cancel his policy, returning any premiums pro rata with interest. d. None of the above
a
Peyton has a basic hospital policy. It will pay for: Select one: a. Hospital visits b. Prescription drugs c. Doctor visits d. Outpatient care
a
Physical exams or autopsies are paid by the: Select one: a. Insurer b. It is taken out of the benefits. c. Insured d. The insurer and insured split it.
a
Shane and Casey bought a life policy in which both are insured. If it pays the death benefits after both die, it is a: Select one: a. Survivorship life b. Convertible term c. Guaranteed renewable d. Joint life
a
All of the following are changes that a policyowner can make to an adjustable life policy, EXCEPT: Select one: a. Raise or lower the premium, as income allows b. Change the insurer c. Change the face amount of the policy d. Change the premium-paying period
b
All of the following statements are incorrect regarding the reinstatement provision, EXCEPT: Select one: a. Sickness and accident are covered immediately upon reinstatement. b. Accidents are covered immediately upon reinstatement, and sicknesses are covered after a 10-day waiting period. c. Only accidents are covered under a reinstated policy. d. There is a 45-day waiting period for a policy to become effective once reinstated.
b
An annuity is a kind of contract uses periodic payments as a way to systematically liquidate assets. Which of the following is not true about annuities? Select one: a. The purchaser of the annuity pays the premiums. b. The annuitant has the right to name the beneficiary. c. The contract owner is not necessarily the annuitant. d. The accumulation phase is the pay-in period.
b
Angela is now 65 years old. The cash value of her 20-pay endowment at age 65 policy is equal to: Select one: a. The guaranteed cash value plus interest. b. The face amount of the policy. c. None of the above d. The sum of premiums paid plus interest and dividends.
b
What does a producer do at delivery if, he submits an application with a premium. After underwriting, the insurer sends back the policy, rated, with an impairment rider. Select one: a. Explain that the policy is rated. b. Explain the issue and collect an additional premium. c. Tell the applicant that they were declined. d. Nothing
b
What permits the insurance company to contest misrepresentation in the application during the first 2 policy years? Select one: a. Grace period provision b. Incontestability provision c. Time of payment of claims provision d. Legal action provision
b
What type of insurer is formed under the laws of a U.S. state other than Texas? Select one: a. Domestic b. Foreign c. Unincorporated d. Alien
b
Which of the following is an advantage of a renewable term policy? Select one: a. Renewable term policies usually have an age limit. b. Insured does not have to provide proof of insurability. c. Renewal is based on insured's attained age, so premium is higher. d. Renewable term policies never have an age limit.
b
Samson has a major medical policy that has a $1,000 deductible, a maximum out of pocket of $2,000 after the deductible, and an 80/20 coinsurance. If his medical bill was $20,000, what will he have to pay? Select one: a. $2,000 b. $3,000 c. $3,800 d. $4,800
b $3,000 ($1,000 deductible + $2,000 stop loss ) is what he'll pay. Note in all questions who is paying, the insured or insurer. The calculation is: $20,000 - $1,000 = $19,000 x .20 = $3,800 (coinsurance) + $1,000 (deductible) = $4,800. This is over the total deductible and stop loss so instead of $4,800, he'll pay $3,000. Note that the out of pocket is after the deductible.
Ron is a 30 years old who has a steady job and wants to set up a retirement plan. If he is concerned about inflation, he should consider a: Select one: a. Immediate annuity - single premium. b. Level premium fixed annuity. c. Flexible premium deferred annuity. d. Deferred annuity - single premium.
c
The clause that prevents the insurance company from acting unilaterally to change a policy is: Select one: a. Time limit for certain defenses b. The insuring clause c. The entire contract clause d. Incontestable clause
c
The highest total premium is a result of which premium payment mode? Select one: a. Annual b. Quarterly c. Monthly d. Semi annual
c
What gives the insurance company the right to assume rights of the insured in order to sue a responsible third party when damages are inflicted on the insured? Select one: a. Concealment b. Warranties c. Subrogation d. Utmost good faith
c
What happens if there is a misstatement of age on a life insurance policy? Select one: a. If the policy is less than 2 years in force, it is cancelled and all premiums are returned. b. If the policy is more than 2 years in force, the policy pays according to what is stated on the policy. c. The policy pays according to what the premiums paid would have bought for the correct age. d. The policy is always cancelled..
c
What licenses must insurance agents have to sell variable policies? Select one: a. Life insurance producer only b. Securities license only c. Life insurance producer and securities license d. Life insurance producer, securities license and liability license
c
What right of renewability guarantees both the premium and insurability? Select one: a. Guaranteed renewable b. Guaranteed insurability c. Noncancelable d. Optionally renewable
c
Which of the following best describes the Free Look period? Select one: a. The period of time between application and policy delivery where policy changes may be made. b. The period of time between application and policy delivery where the policy owner can add beneficiaries. c. The period of time after policy delivery where the policyowner can examine the policy. d. The period of time after policy delivery where the policyowner does not pay premiums.
c
Which of the following is required for a contributory plan? Select one: a. The employer pays all fees and premiums. b. 50% participation of eligible employees c. 75% participation of eligible employees d. 100% participation of eligible employees
c
An entire life insurance policy in Texas consists of: Select one: a. Policy only b. Policy and application c. Application only d. Policy, application and any attachments or riders
d
Which of the following is intended to be covered by health insurance? Select one: a. Accidental injury b. Illness c. Medical costs d. All of the above
d
Which of the following is not considered an unfair trade practice? Select one: a. Intimidation b. False advertising c. Defamation d. Joint advertising
d
Which of the following is true about the powers of the Commissioner? Select one: a. The Commissioner can regulate the business of insurance in the state. b. The Commissioner can administer Texas Workers' Compensation system. c. The Commissioner can deny, suspend or revoke insurance licenses. d. All of the above
d
Which of the following must happen before an HIV test is performed on an applicant? Select one: a. The Insurer must inform all non-entitled parties to the upcoming test. b. The insurer must inquire about the applicant's sexual orientation. c. The insurer must inform the state Department of Health of upcoming test. d. A consent form must be signed by the applicant prior to the test.
d
Who must consent to have an HIV lab test? Select one: a. Agents b. Underwriters c. Producers d. Subject of the test
d
Dylan is looking at buying a disability income policy, which would be the cheapest? Select one: a. Any occupation with 60-day elimination period b. Any occupation with 30-day elimination period c. Own occupation with a 30-day elimination period d. Own occupation with a 60-day elimination period
a
For tax purposes, how are individual life premiums treated? Select one: a. Not tax deductible b. Tax deductible over a certain dollar amount c. Tax deductible under certain conditions d. Tax deductible
a
Hospital coverage is provided by which part of Medicare? Select one: a. Part A b. Part B c. Part C d. Part D
a
How often is the Commissioner allowed to conduct an examination of an insurance company? Select one: a. As often as he deems necessary b. No more than once a month c. No more than once every 6 months d. No more than once a year
a
If an agent's appointment is terminated for cause, how much time does the agent have to inform the Commissioner? Select one: a. Immediately b. 7 days c. 14 days d. 30 days
a
In a POS plan, going to a doctor that is not approved will result in: Select one: a. Higher coinsurance b. Higher deductible c. Denied coverage d. A review
a
In order for insurable interest to be valid in an insurance contract it must exist: Select one: a. At the time that the application on a proposed insured is written. b. When the insured dies. c. When the policy is approved. d. When the underwriter gets the application for the policy.
a
Nursing home care is provided by which part of Medicare? Select one: a. Part A b. Part B c. Part C d. Part D
a
On June 25, an application is submitted with the initial premium, and on June 30 the insurer issues the policy standard. Due to it being close to a holiday, the agent doesn't deliver the policy until July 6. A conditional receipt was issued without a required medical exam. When is coverage effective? Select one: a. June 25 b. June 30 c. July 6 d. July 6, after the statement of good health is signed.
a
The stipulated amount of time that an insured has to make an overdue premium payment after the due date is called the: Select one: a. Grace period b. Give back period c. Guaranteed insurability period d. Free look period
a
What is likely to occur if the insured dies before the loan is repaid, according to the automatic premium loan provision? Select one: a. The outstanding balance of the loan and any interest on the loan are deducted from the benefit. b. The beneficiary pays the loan off. c. The insurance company writes the loan amount off. d. None of the above
a
When Barbara's brother died, his policy paid an amount over the face value of the policy. He probably had: Select one: a. An AD&D policy. b. A Survivorship policy. c. A Graded premium whole life policy. d. A Joint life policy.
a
Which of the following is NOT a nonforfeiture option that will protect the cash value of a permanent life insurance policy in the event of lapse? Select one: a. Waiver of Premium b. Shortened Benefit Period c. Cash d. Reduced, Paid Up Coverage
a
Which of the following is not a correct statement about equity-indexed annuities? Select one: a. A securities license is required to sell EIAs. b. The principal and interest are guaranteed. c. Earnings above the guaranteed rate are linked to the stock market. d. Earnings are also tied to the insurer's overall investment performance.
a
Which of the following is not true about the family income policy? Select one: a. It is issued on the entire family. b. It may be issued as term - added to a permanent life policy. c. It provides income payments if the breadwinner dies within the income period. d. It is a combination of whole life and decreasing term.
a
You may be able to keep your old group coverage for a specified amount of time after leaving an employer with: Select one: a. COBRA b. HIPAA c. Medicaid d. Medicare
a
What rider allows someone to purchase additional disability income insurance at a later date, regardless of insurability? Select one: a. A guaranteed insurability rider b. An impairment rider c. A waiver of premium rider d. A double indemnity rider
a The guaranteed insurability rider allows the insured to purchase additional disability income coverage at future dates regardless of insurability.
Monica has life insurance on her 10-year-old son. What rider will make sure that in the event she dies or becomes disabled that the policy will remain in force? Select one: a. Payor Rider b. Accelerated benefit rider c. Riders covering additional insureds d. Substitute insured rider
a The payor rider offers the protection for Monica to make sure that if she dies or becomes disabled before her son reaches a certain age, the policy premiums will be waived.
Dr. Jones and Dr. Smith own a veterinary clinic together and worry that if one of them becomes disabled the clinic will have financial problems. What type of policy should they consider buying? Select one: a. Key employee b. Disability buy-out c. Business overhead expense d. Individual disability
b
Harold was injured falling off a scaffold at work. Why was his claim denied under his employer's group disability plan? Select one: a. A group disability plan coordinates with Workers' Compensation. b. Workers' Compensation is the primary benefit provider in this case. c. Benefits are higher on Workers' Compensation. d. The employer's experience is better for Workers' Compensation that it is for the group disability plan.
b
How does Texas define chemical dependency? Select one: a. A psychological or physical dependence on or an addiction to a controlled substance or illegal drug. b. The abuse of, a psychological or physical dependence on, or an addiction to alcohol or a controlled substance c. The abuse of, a psychological or physical dependence on, or an addiction to an illegal drug or a controlled substance d. The abuse of or an addiction to alcohol or a controlled substance
b
How does an insurer verify the personal characteristics of an applicant? Select one: a. The insurer gets a credit report. b. The insurer gets an inspection report. c. The insurer does a health profile. d. The insurer checks with his employer about job performance.
b
How often must a group HMO have an open enrollment period? Select one: a. Once per month b. Once per year c. Twice per year d. Three times per year
b
If a potential insured does not attach his initial premium payment to the insurance application, he is making a legal: Select one: a. Offer b. Inquiry for an offer c. Counteroffer d. Contract
b
If an owner of a small company has a car crash and becomes disabled, which type of policy would pay the company's rent? Select one: a. Key employee b. Business overhead expense c. Individual disability d. Disability buy-out
b
If health insurance premiums are not tax-deductible, the benefits are: Select one: a. Only tax-free for disability income insurance. b. Tax-free, as long as they do not exceed the actual cost of medical expenses. c. Taxable as ordinary income. d. Always tax-free.
b
Insurance contracts are one-sided. Which of the following terms best describes this? Select one: a. Aleatory contract b. Unilateral contract c. Personal contract d. Conditional contract
b
Jason is naming his wife Patti as the beneficiary on his policy but he is retaining all rights of ownership. What type of beneficiary is Patti? Select one: a. Secondary beneficiary b. Revocable beneficiary c. Irrevocable beneficiary d. Tertiary beneficiary
b
Larrys mother is diagnosed with cancer, and she has less than a year to live. What rider or provision allows her to use her life insurance? Select one: a. Waiver of premium b. Accelerated benefits c. Cost of Living d. Early benefits
b
Which of the following statements is true about level term? Select one: a. Level term has a cash value component b. Level term can be issued for a specified number of years of until the insured reaches a certain age. c. Premiums can increase annually. d. All of the above
b Level term policies can be issued for a specified number of years, or until the insured reaches a certain age.
What part of the insurance contract contains the insurer's promise to pay benefits? Select one: a. Consideration clause b. Insuring clause c. Payment of claims d. Execution clause
b The insuring clause contains the insurers promise to pay benefits in the event of a covered loss.
A life insurance policyowner may assign what amount of the policy? Select one: a. None b. Half c. All d. An amount determined by the insurer
c
A policy on two or more lives that pays the death benefit after the second person dies is called: Select one: a. Term life b. Universal life c. Survivorship life d. Joint life
c
A producer must give a client during a replacement a Select one: a. Disclosure forms b. Notice of Insurance Regarding Rights c. Notice to Applicant Regarding Replacement of Life Insurance d. Notice of Duties
c
All of the following are types of third-party ownership EXCEPT: Select one: a. STOLI b. Viatical settlement c. APL d. IOLI
c
All of the following statements are true about Universal Life EXCEPT: Select one: a. Also known as flexible premium adjustable life. b. Policyholders can skip premium payments. c. Policyholders cannot change the face amount of the policy. d. It provides both death protection and cash value.
c
Both parents have health plans from work that covers their daughter. Which plan is primary? Select one: a. Mother b. The plans split the cost. c. The parent with the earliest birthday in the year is primary. d. Father
c
Caroline is a self-employed interior decorator that works from home. If she becomes unable to work, which policy would cover her? Select one: a. Workers' Compensation b. Business overhead expense policy c. Individual disability income policy d. Group disability income policy
c
Davis is not sure if he should try to return to work due to his disability. His insurer tells him that if he the disability happens again within 90 days it will be treated as a continuation. Which provision does he have? Select one: a. Waiver of premium b. Residual disability c. Recurrent disability d. Presumptive disability
c
How long is the grace period for health insurance policies with other than weekly or monthly-due premiums? Select one: a. 7 days b. 10 days c. 31 days d. 60 days
c
If more than one beneficiary is named, who is the second in line? Select one: a. Primary b. Irrevocable c. Contingent d. Revocable
c
Managed care (Medicare Advantage) expenses are provided by which part of Medicare? Select one: a. Part A b. Part B c. Part C d. Part D
c
Zoe Hart has a $45,000 life policy with a double indemnity AD&D rider. If she dies in a car crash after 7 months, what would her beneficiaries receive? Select one: a. $0.00 b. $45,000 c. $90,000 d. $135,000
c $90,000. An accidental death and dismemberment (AD&D) policy will pay the benefit if the cause of death is accidental.
Mr. Johnson committed suicide after the suicide clause expired on his life insurance policy. What is his insurer likely to do as a result? Select one: a. Pay half the death benefit b. Return all premiums to the beneficiary c. Pay the full death benefit d. Return all premiums plus interest to the beneficiary
c The insurance company will pay the death benefit if the insured commits suicide after the suicide clause lapses.
Spencer owns a major medical policy with 80/20 coinsurance and a $1,000 deductible. If he submits a claim for $15,000, how much will the insurer pay? Select one: a. $1,000 b. $3,800 c. $11,200 d. $15,000
c The insurer will pay $11,200. The math works out $15,000 - $1,000 = $14,000. Then $14,000 x .80 = $11,200. Notice the question is asking how much will the insurer pay. The correct answer is: $11,200
A health insurance policy that will not pay benefits unless confined to a hospital is known as a: Select one: a. Noncancellable contract b. Unilateral contract c. Contract of adhesion d. Conditional contract
d
An insurance application is not complete unless it has: Select one: a. A signature of an officer of the company. b. The signature of the physician who conducted the medical exam, and the medical records. c. Signature of the beneficiary or beneficiaries. d. The signature of the insured (unless not an adult), and the agent.
d
An insured must wait how many days after providing proof of loss to an insurance company before filing a legal suit against the company? Select one: a. 90 days b. 45 days c. 30 days d. 60 days
d
Becky allowed her insurance policy to lapse. In order to reinstate the policy she must: Select one: a. Pay past due premiums. b. Provide evidence of insurability. c. Pay back interest on her outstanding policy loan. d. All of the above.
d
Benjamin is the beneficiary of his uncle's life insurance policy. How much tax will he owe on the proceeds? Select one: a. They are tax-deferred. b. They are taxed at half his normal rate. c. They are taxed at a higher rate because it pushed him into a higher tax bracket. d. Nothing - they are not taxable.
d
Blake bought a life policy with a $500,000 face value and an AD&D rider that is triple indemnity. After 4 months, he is killed in an avalanche, what would the policy pay? Select one: a. $0.00 b. $500,000 c. $1,000,000 d. $1,500,000
d
Diane has recently been confined to a nursing home with a terminal illness. Which rider on a life policy will help her out in this situation? Select one: a. Return of premium rider b. Accidental death rider c. Consideration d. Accelerated benefit rider
d
Dylan can't utilize his health insurance unless he has a loss because his contract is: Select one: a. Unilateral b. Adhesion c. Aleatory d. Conditional
d
Dylan is worried about his health in the future. Which rider should he pick if you want to be able to add coverage in the future, without having to show proof of insurability: Select one: a. Waiver of premium b. Payor c. Consideration d. Guaranteed insurability
d
For how much time prior to open enrollment can a pre-existing condition be used to reject an applicant for a group HMO? Select one: a. 6 months b. 12 months c. 18 months d. Applicants cannot be rejected.
d
Health insurance applications require a signature from: Select one: a. The agent b. The insured c. The policyowner d. All of the above
d
Health insurance exclusions/restrictions exclude coverage for losses resulting from: Select one: a. Participation in a felony b. Self-inflicted injuries c. Act of war d. All of the above
d
If Jack let his insurance license expire, which of the following are his options to renew the expired license? Select one: a. If the license expired less than 90 days ago, he can submit the renewal application, fee and pay a late fee. b. If the license expired more than 90 days but less than a year ago, he can apply for a new license, pay any fees (including late fees), without taking the exam. c. If his license expired more than a year ago, he must retake the license exam, and submit an application for a new license. d. All of the above
d
If a person has both Medicare and a work plan, which payor is secondary? Select one: a. Work b. They will split the cost. c. He can pick. d. Medicare
d
In an insurance contract the insured pays premiums and the ______________ is the promise of the insurer to pay benefits. Select one: a. Assignment clause b. Incontestability clause c. Consideration clause d. Insuring clause
d
Nonforfeiture life insurance benefits are calculated using the nonforfeiture interest rate and: Select one: a. Morbidity table b. Benefits table c. Exclusions table d. Mortality table
d
The buyer's guide is usually given to the purchaser at the time of: Select one: a. Delivery b. Underwriting c. Point of sale d. Application
d
Transacting insurance includes which of the following? Select one: a. Sale b. Solicitation c. Negotiation d. All of the above
d
What part of the policy states the elements that comprise the contract? Select one: a. The insuring clause b. The options c. The ownership clause d. The entire contract
d
What type of policy allows the insured to pay the entire premium in one lump-sum? Select one: a. Variable universal life b. Economatic whole life c. Graded premium whole life d. Single premium whole life
d
Which of the following is NOT an Essential Health Benefit of the PPACA? Select one: a. Laboratory services b. Prescription drugs c. Substance use disorder services care d. Dental care
d
Which of the following statements regarding a straight life annuity is correct? Select one: a. Life expectancy does not factor into the underwriting process b. The payments are never taxed c. Only available to a select few employees in a retirement plan d. Provides payments for life to the annuitant
d
Which of the following statements regarding annual renewal term (ART) policies is false? Select one: a. ART premiums increase each time the policy is renewed. b. ART policies have a level face amount. c. ART usually has a maximum age after which policies are not renewable. d. ART is guaranteed renewable on an annual basis with proof of insurability.
d
Which of the following terms means inducing the purchase of insurance through force, threat, or undue pressure? Select one: a. Twisting b. Cold lead advertising c. Misrepresentation d. High pressure tactics
d
When Sally was given a substandard rating for her insurance as the result of a consumer report, the ___________ gives her the right to questions the source and validity of the information. Select one: a. Social Security Act b. MIB (Medical Information Bureau) c. State legislation d. Fair Credit Reporting Act
d The Fair Credit Reporting Act (Insurance Information and Privacy Protection Act), give her the right to question the source and validity of the information.
