insurance license
insurance companies that are organized in countries outside the United States are referred to as:
alien
common exclusions to continuation of group coverage include:
all of the above
J owns a business and has a Group Life policy covering her employees. J decides to cancel the policy by letting it lapse on the renewal date. What action must be taken?
all of the employees must be notified of the cancellation either by the insurance company or through j
the amount of monthly disability benefits payable under social security is affected by which of the following factors?
amount of the benefits available from other sources
What does the insuring agreement in a Life insurance contract establish?
an insurer's basic promise
Which premium schedule results in the lowest cost to the policyowner?
annual
Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company?
annuity
Which type of contract liquidates an estate through recurrent payments?
annuity
T cash surrenders a recently-issued whole life policy. He also requests that the proceeds be payable to an unrelated third party. T would likely be red-flagged for violation of
anti-money laundering rules
which of the following medical expenses does cancer insurance NOT cover?
arthritis
What action will an insurer take if an interest payment on a policy loan is not made on time?
automatically add the amount of interest due to the loan balance
Medicare part c is
available to those who are enrolled in Medicare Part A and Part B
the coordination of benefits (COB) provision exists in order to:
avoid duplications of benefit payments
group health plans typically contain a coordination of benefits (COB) provision. This provision's purpose is to
avoid the duplication of benefit payments
Who is NOT required to sign a life insurance application?
beneficiary
T is receiving $3,000/month from a Disability Income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable?
benefits are taxable to t
all of the following statements about major medical benefits are true, EXCEPT:
benefits have no maximum limit
Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?
business owner becoming disabled
As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?
coercion
On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take?
collect initial premium along with a signed health statement
A key employee policy is taken out by company x on its vice president. Ten years later, this employee leaves company x and begins working for company y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed?
company x
which of the following correctly explains the actions a agent should take if a customer wants to apply for an insurance policy?
complete the application and review the information with the customer prior to obtaining the customers signature, then send the application off to the insurance company
a ______ sells insurance advice for a fee
consultant
The consolidated omnibus budget reconciliation act (COBRA) gives workers (and their families) whose employment has been terminated the right to:
continue group health benefits
If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?
contributory
what type of group insurance plan involves employees sharing the cost?
contributory plan
which of the following features of a group term life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability?
conversion privilege
D the agent met with a prospect and ended up selling an insurance policy. While filling out the insurance application, D makes a mistake. In this situation, D MUST
correct the information and have the prospect initial the change
a universal life policy is sometimes referred to as an unbundle life policy bc the owner can see the interest earned, expense charges and the
cost of insurance
Which of the following BEST describes a hospital indemnity policy?
coverage that pays a stated amount per day of a covered hospitalization
when does the free-look provision for health insurance begin?
date the policy is delivered to the insured
additional coverage can be added to a whole life policy by adding a
decreasing term rider
How are surrender charges deducted in a life policy with a rear-end loaded provision?
deducted when the policy is discontinued
a 45 year-old women won $100,000 in a scratch-off lottery ticket, she purchased an annuity that will pay her $1,500 per month beginning at age 60. which of these annuities did this women purchase?
deferred fixed annuity
An agent takes an individual Disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to
determine if the applicant is an acceptable risk by completing standard underwriting procedures
M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?
determined by the terms of the policy
K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income?
disability income
which of the following does social security NOT provide benefits for?
dismemberment
What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?
dread disease insurance
M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate?
earned, but unpaid benefits
in a disability income policy, which of these clauses acts as a deductible?
elimination period
under trustee group life policy, who would be eligible for a certificate of coverage?
employee
a group life insurance policy can be converted to an individual whole life policy under which circumstance?
employment termination
Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract?
entire contract
When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the
entire contract provision
how often must the commissioner examine each domestic insurance company?
every 5 years
which of the following is an important underwriting principle of group life insurance?
everyone must be covered in the group
Health insurance benefits NOT covered due to an act of war are
excluded by the insurer in the contract provisions
N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot?
exclusion
The sections of an insurance contract which limit coverage are called:
exclusions
Which Federal law allows an insurer to obtain an inspection report on a potential insured?
fair credit reporting act
what is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained?
fair trade reporting act
What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?
family maintenance policy
which of the following employees may NOT be excluded from group life plan?
full-time employees after the probationary period
which of these is considered a true statement regarding Medicaid?
funded by both state and federal governments
a life insurance application may be rejected on the basis of all of these factors EXCEPT
gender
which of the following is a standard provision of the conversion privileges in a group life policy?
group life coverage can be converted to an individual policy at regular rates on an attained-age basis
which of the following is a requirement to be eligible for a group life policy in Indiana?
group must be formed for a purpose other than obtaining insurance
Which requirement must be met for an association to be eligible for a group life plan?
group was formed for a purpose other than acquiring insurance
under the patient protection and affordable care act (PPACA), consumers have access to health coverage that is:
guaranteed available and renewable
Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?
guaranteed insurability rider
Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate for the overall risk class?
guaranteed renewable
J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a preset price. What type of plan does J belong to?
health maintenance organization
S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a
high-deductible health plan
Variable Life products require a producer to
hold a Life Insurance license and a Securities license
Which of the following will a long term care plan typically provide benefits for?
home health care
Under a Basic Medical Expense policy, what does the hospitalization expense portion cover?
hospital room and board
In life insurance, the needs approach is used mostly to establish:
how much life insurance a client should apply for
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?
if the primary beneficiary dies before the insured
the type of annuity that can be purchased with one monetary deposit is called a
immediate annuity
when must insurable interest exist for a life insurance contact to be valid?
inception of the contract
all of the following statements regarding a tax sheltered annuity (TSA) are true EXCEPT
income derived from the TSA is received income tax-free
At the age of 45, an individual withdraws $50,000 from his qualified profit-sharing plan and then deposits this amount into a personal savings account. This action would result in:
income tax and a 10% penalty assessed upon funds withdrawn from the qualified plan
T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take?
increase her policy's coverage amount
Which of these retirement plans can be started by an employee, even if another plan is in existence?
individual retirement account (IRA)
a life insurance policy would be considered a wagering contract without
insurable interest
what is the initial requirement for an insured to become eligible for benefits under the waiver of premium provision?
insured must be under a physician's care
Which of these needs is satisfied by Adjustable Life insurance?
insured's need for flexible premiums
Variable annuities may invest premiums in each of the following, EXCEPT:
insurer's corporate business account
The _______ clause identifies which losses resulting from an accident or sickness are insured by the policy
insuring
Which of the following health insurance policy provisions specifies the health care services a policy will provide?
insuring clause
Quarterly premium payments increase the annual cost of insurance because
interest to the insurer is decreased while the administrative costs are increased
J was reviewing her Health Insurance policy and noticed the phrase "This policy will only pay for a semi-private room". This phrase is considered to be a(n)
internal limit
which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a disability income policy?
issue the policy with an altered time of payment of claims provision
dividends paid from a life insurance policy are
issued by the insurer
K is an insured under a life insurance policy owned by a third party. Which of these statements is true?
k has no ownership rights
how do insurers predict the increase of individual risks?
law of large numbers
the probability of loss becoming more predictable is attributed to
law of large numbers
STOLI has been found to be in violation of which of the following contractual elements?
legal purpose
T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?
less than $5,000 per month benefit regardless of the cause
K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?
level
T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?
life annuity with period certain
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
life income
which of the following is NOT a limited benefit plan?
life insurance policy
a whole life insurance policyowner does not wish to continue making premium payments. which of the following enables the policyowner to sell the policy for more than its cash value?
life settlement contract
Kathy has a family Health insurance policy where any dependent children she has are removed from the policy once they have reached a certain age. This policy is known as:
limiting age
In major medical expense policies, what is the objective of a stop loss provision?
limits an insured's out-of-pocket medical expenses
An insurance company would MOST likely pay benefits under an accidental death and dismemberment policy for which of the following losses?
loss of eyesight due to an accidental injury
Dental care coverage is designed to cover the costs of all of the following EXCEPT:
loss of income
which of these is an element of a single premium annuity?
lump-sum payment
The individual health insurance policy that offers the broadest protection is a ______ ______ policy
major medical
Pre-hospitalization authorization is considered an example of
managed care
life insurance coverage will frequently contain an accelerated benefits rider attached to the policy. what would be considered a "qualifying event" under these riders?
medical condition resulting in a significantly shortened lifespan
WHich of the following are NOT managed care organizations?
medical information bureau (MIB)
Which Unfair Competition Practice involves a producer suggesting that an insurance policy is like a share of stock?
misrepresentation
life insurance
money for a death
heath insurance
money for injury
Property Insurance
money for property
According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options?
monthly
which of these is NOT an element of life insurance premiums?
morbidity rate
which of these is NOT considered to be an element of an insurance contract?
negotiating
What type of renewability guarantees premium rates and renewability?
noncancellable
P is a producer who is licensed in Indiana, but a resident of Michigan. In Indiana, P is considered to be a(n) ________ producer.
nonresident
which statement is true regarding a minor beneficiary?
normally, a guardian is required to be appointed in the beneficiary clause of the contract
a licensed business entity acting as an insurance producer must:
notify the department of insurance of any fictitious name used
Generally, how long is a benefit period for a Major Medical Expense Plan?
one year
Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent
only if the child is incapable of employment and chiefly dependent on the policyowner
deductibles are used in health policies to lower:
overuse of medical services
P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to
p only
all the following statements are true regarding a policy's grace period, EXCEPT:
past due premiums are waived
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
The benefits under a disability buy-out policy are:
payable to the company or another shareholder
a father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?
payer provision
Which life insurance rider typically appears on a Juvenile life insurance policy?
payor benefit rider
the cause of a loss is referred to as a
peril
contracts of life insurance are NOT?
personal contracts
XYZ Corp was issued a group health policy for its employees. Under this plan a
policy must be issued to XYZ
When an employee is terminated, which statement about a group term life conversion is true?
policy proceeds will be paid if the employee dies during the conversion period
which of these describe participating insurance policy?
policyowners are entitled to receive dividends
which of the following is a requirement for a risk to be considered insurable?
predictability of loss
to be classified as a small employer, an employer must employ:
2-50 employees
An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?
20% is withheld for income taxes
a producer must complete _____ hours of continuation education biennially to maintain the license
24
under the affordable care act (ACA) health coverage is provided for dependents up to the age of
26
An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision?
31
in the event of employment termination, a person covered by a group policy also has the right to convert such coverage to an individual policy within ______ days without proving insurability
31
According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid?
31 days
V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable?
4 months
M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?
45 days
a policyowner is able to choose the frequency of premium payments through what policy feature?
premium mode
An example of false advertising would be
An insurer exaggerating its dividends in a magazine advertisement
An existing life insurance policy is being replaced by a new one. A notice of replacement must be provided by the ________ to be signed by the applicant.
producer
which of the following actions by a producer would NOT result in a license suspension or revocation?
producer represents more than one insurance company
what is consideration given by an insurer in the consideration clause of a life policy?
promise to pay a death benefit to a named beneficiary
What must the policyowner provide to the insurer for validation that a loss has occurred?
proof of loss
which of these correctly describes the purpose of the Indiana comprehensive health insurance plan?
provides high risk insurance coverage for people who are uninsurable
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
X owns a Disability Income policy. X recently suffered a disability which was due to the same cause as a previous disability. These disabilities both occurred over a four-month span. Which of the following provisions allows X's second disability to be covered without a new elimination period?
recurrent disability
Which of these Nonforfeiture Options continue a build-up of cash value?
reduced paid-up
which of the following is an example of a nonforfeiture option?
reduced paid-up option
Which of the following situations does a critical illness plan cover?
Leukemia
An employer that offers a qualified retirement plan to its employees is eligible to
Make tax-deductible contributions to the plan
Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the
Marital deduction
If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?
Medicare Supplement
An applicant MUST receive an Outline of Coverage when an application is taken for a(n)
Medicare supplement policy
which of these statements is INCORRECT regarding a preferred provider organization (PPO)?
PPO's are NOT a type of managed care systems
what does Medicare parts A and B cover?
Part A covers hospitalization; Part B covers doctor's services
which of these do NOT constitute policy delivery?
Policy issued with a rating
J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?
reinstatement provision
when an existing life insurance policy is terminated so that a new life insurance policy can be purchased, this transaction is referred to as:
replacement
according to Indiana law, group life insurance conversion privileges must NOT:
require evidence of insurability
the stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called?
reserves
When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following?
residual disability
Which provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time?
restoration of used benefit
a _____ rider may be used to include coverage for children under their parents' life insurance policy
term
What kind of life insurance product covers children under their parent's policy?
term rider
a contract owner terminates an annuity before the income payment period begins. the owner will then receive
the current contract surrender value
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act?
upon completion of the application
a term life insurance policy matures:
upon the insured's death during the term of the policy
Which of the following best describes how pre-admission certification is used?
used to prevent nonessential medical costs
in order to sell a _________ life policy, a producer is required to register with the financial industry regulatory authority (FINRA).
variable
Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling?
variable life
a ______ ________ life policy combines investment choices with a form of term coverage
variable universal
S owns a life insurance policy with cash values that fluctuate according to the underlying investment performance of common stocks. Which of these policies does S own?
variable whole life
The provision in health insurance policy that suspends premiums being paid to the insurer while the insured in disabled is called the:
waiver of premium
What type of rider would be added to an accident and health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?
waiver of premium rider
the part of a life insurance policy guaranteed to be true is called a
warranty
which of these is considered a statement that is assured to be true in every respect?
warranty
T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?
$0
An insured owns an individual Disability Income policy with a 30-day Elimination Period for sickness and accidents and a monthly indemnity benefit of $500. If the insured is disabled for 3 1/2 months, what is the MAXIMUM amount he would receive for an approved claim?
$1,250
N is covered under an individual Disability policy with a 30-day Elimination period and a monthly benefit of $500. N is totally disabled for 3 1/2 months. N's total benefit received on this claim is
$1,250
J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?
$25,000
J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and receives a bill for $10,000, J would pay
$3,600
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
T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?
$50.000
______ of personal life insurance premiums is usually deductible for federal income tax purposes
0%
Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to file for Social Security disability benefits?
5
An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age?
59 1/2
Qualified Long-Term Care policies may take into consideration an applicant's pre-existing conditions for a maximum of not more than __ month(s) prior to the effective date of coverage.
6
long-term care policies sold in Indiana may exclude coverage for pre-existing conditions for
6 months
How long does individual have to "rollover" funds from an IRA or qualified plan?
60 days
An employee requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee?
Distribution is subjected to federal income tax withholding
How are Roth IRA distributions normally taxed?
Distributions are received tax-free
Two partners own equal shares in a business worth a total of $1,000,000. If they both commit to the purchase of a life insurance policy that will fund a Buy-Sell Agreement, which of the following is TRUE?
Each partner owns a $500,000 policy on their partner's life
All of these are characteristics of a health reimbursement arrangement (HRA) EXCEPT
HRA is entirely funded by the employee
A sole proprietor may use this plan ONLY if the employees of this business are included.
Keogh pension plan
Which Long Term Care insurance statement is true?
Pre-existing conditions must be covered after the coverage has been in force for six months
B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of
additional whole life coverage at specified times
a contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of?
adhesion
which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary?
all proceeds are income tax free in the year they are received
to be eligible for social security disability benefits, an employee must be unable to perform:
any occupation
Any changes made on an insurance application requires the initials of whom?
applicant
Before a life insurance policy is issued, which of these components of the contract is required?
applicant's signature on application
In a qualified retirement plan, the yearly contributions to an employee's account:
are restricted to maximum levels set by the IRS
The guarantee of insurability option provides a long term care policyowner the ability to:
buy additional coverage at a later date
which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deductible?
carryover provision
Company XYZ offers a group Term Life insurance plan to its employees. What does each employee covered under this plan receive?
certificate of insurance
a company that owns a life insurance policy on one of its key employees may do all of the following except?
change policy interest rate
what does the Indiana life and health insurance guaranty association provide?
claim payments of admitted insolvent insurance companies
How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period?
claims are denied under the suicide clause of the policy
Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid.
conditional
what kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of taht 30 years?
family maintenance policy
Taking receipt of premiums and holding them for the insurance company is an example of
fiduciary responsibility
what action should a producer take if the initial premium is NOT submitted with the application?
forward the application to the insured without the initial premium
An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?
full face amount minus any past due premiums
Medicare part B does NOT cover
inpatient hospital services
Information obtained from a phone conversation to the proposed insured can be found in which of these reports?
inspection report
K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n)
installment refund annuity
Casualty Insurance
losses or damages caused by insurance
J is issued a Life Insurance policy with a death benefit of $100,000. She pays $600 per year in premium for the first 5 years. The premium then increases to $900 per year in the sixth year, and remains level thereafter. The policy's death benefit also remains at $100,000. Which type of Life Insurance policy is this?
modified premium life
K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?
modified whole life
which of these is NOT considered to be a right given to a policyowner?
modify a provision in the insurance contract
a limited-pay life policy has:
premium payments limited to a specified number of years
which of the following statements about a guaranteed renewable health insurance policy is CORRECT?
premiums normally increase at time of renewal
Which of these options can an individual use their medical flexible spending account to pay for?
prescription drugs
which of these is NOT a type of agent authority?
principal
Which of the following is considered to be the time period after a health policy is issued, during which no benefits are provided for illness?
probationary period
a $20,000 life insurance policy application is completed, however the producer does not collect the initial premium. at what point does the coverage go into effect?
when the applicant receives the policy and pays the initial premium
at what point does a whole life insurance policy endow?
when the cash value equals the death benefit
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
what kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?
whole life
a return of premium life insurance policy is:
whole life and increasing term
which of the following plans is NOT required to meet minimum essential coverage (MEC) standards under the affordable care act (ACA)?
workers compensation
there are 2 parties to an insurance contact
the insured and the insurer
the advantage of reinstating an original life policy is
the premiums are based on a younger age
Medicare is intended for all of the following groups EXCEPT
those enrolled as a full-time student
essential benefits without annual and lifetime limits are required on any health policy purchased
through the federal marketplace
which of the following is NOT included in an annuity contact?
AD&D rider
All are true statements regarding the underwriting process, EXCEPT:
AIDS and HIV virus exams can be conducted in a discriminatory fashion
which of the following types of care is typically not covered in a long-term care policy?
Acupuncture
which of these statements concerning an individual disability income policy is TRUE?
Normally includes an elimination period
Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured?
PPO
what does a 401 (k) plan generally provide its participants?
Salary-deferral contributions
What does a Guaranteed Insurability rider provide a Disability Income policyowner?
The ability to periodically increase the amount of coverage without evidence of insurability
Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges?
The maximum amount considered eligible for reimbursement by an insurance company under a health plan
All students attending a large university could be covered by
a blanket policy
which of these is an element of a variable life policy?
a fixed, level premium
which statement is true regarding a variable whole life policy?
a minimum guaranteed death benefit is provided
which of the following statements about noncontributory employee group life insurance is FALSE?
a minimum number of employees is required to participate
what is Indiana's definition of life insurance replacement?
a transaction in which a new policy is brought and an old policy is terminated
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 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
C was injured while deep sea diving and requires a hospital stay. C has a Major Medical policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000?
$720
the 4 essential elements contained in every contract to be legally valid and binding
- offer and acceptance - consideration - legal purpose - competent parties
Premature IRA distributions are assessed a penalty tax of
10%
What is maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan?
100
What is the maximum social security disability benefit amount an insured can receive?
100% of the insured's primary insurance amount (PIA)
An insurer must provide an insured with claim forms within __ days after receiving notice of a loss.
15
Indiana's Long Term Care Partnership Program requires a Producer to have:
15 hours of additional education after they receive their license
how many days is a temporary producer's license valid?
180
the Indiana children's health insurance program (CHIP) provides children of need with health benefits until the child reaches age _____ or becomes financially ineligible, whichever is earlier
19
what year was the McCarran Fergoson act enacted?
1945
The individual most likely to buy a Medicare supplement policy would be a
68-year old male covered by Medicare
What is Medicare?
A hospital and medical expense insurance program
in health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments
After an insured has become totally disabled as defined in the policy
which of the following statements is true about most blue cross/blue shield organizations?
They are nonprofit organizations
what is Indiana's definition of life insurance replacement?
a transaction in which a new policy is brought, and an old policy is terminated
Which provision is NOT a requirement in a group life policy?
accidental
At what point may a producer sell insurance for an insurer?
after being properly appointed by the insurer
Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?
return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company
An example of rebating would be
returning a portion of a premium as inducement to purchase insurance
With Optionally Renewable Health policies, the insurer may
review the policy annually and determine whether or not to renew it
J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used?
revocable
M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?
revocable
a _______ beneficiary may be changed by the policyowner WITHOUT the consent of the beneficiary
revocable
A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take?
send a notice to the MIB that the applicant was declined
Typically a life insurance death benefit is paid by a lump-sum payment. A(n) __________ option is a method of distributing a Life Insurance policy's death benefit OTHER than by a lump sum payment.
settlement
P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA laws, which of the following statements is TRUE?
she DOES need to provide evidence of insurability
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
Upon delivery of a rated life insurance policy, the Producer must obtain each of the following EXCEPT
signed HIPAA disclosure
which mode of payments is NOT used by health insurance policies?
single premium
What is Old Age and Survivors Health Insurance (OASDHI) also known as?
social security
The percentage of an individual's primary insurance amount (PIA) determines the benefits paid in which of the following programs?
social security disability income
Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?
split-dollar plan
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
which of the following statements about the classification of applicants is INCORRECT?
substandard applicants are never declined by underwriters
Which of the following services is NOT included under hospitalization expense coverage?
surgical fees
which of the following costs would a basic hospital/surgical policy likely cover?
surgically removing a facial birthmark
what type of life policy covers two people and pays upon the death of the last insured?
survivorship
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
what is the underlying concept regarding level premiums?
the early years are charged more than what is needed
which of the following statements is correct regarding an employer/employee group health plan?
the employer receives a master policy and the employees receive certificates
a noncontributory group term life plan is characterized by:
the entire cost of the plan is paid for by the employer
a policy of adhesion can only be modified by whom?
the insurance company
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
A disability elimination period is best described as a:
time deductible
T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called
time limit on certain defenses
the policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is:
time limit on certain defenses
group life policies in Indiana are required to contain a conversion privilege that allows for conversion:
to an individual policy for a stated period of time
B the producer sold an insurance contract to a client. B has engaged in
transacting insurance
An example of an unfair claims settlement practice is
turning down a claim without providing the basis of denial
J is a producer who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of?
twisting
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?
unilateral
the cash value in a _________ life policy may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors.
universal
how long does an insurance company appointment remain in force?
until terminated
