Insurance Test (study guide)

the key employees name the beneficiary

All these statements concerning a Key Employee Life policy is true, EXCEPT:

principle sum

An Accidental Death and dismemberment policy will pay the ____ upon the loss of two of the insured's primary parts

insurance company

An insurance producer represents the:

rebating

An insurance producer who offers a potential client something of value as an incentive to purchase insurance is engaging in:

face amount of the policy

An insured owns a policy which includes a disability income rider. The disability benefit amount paid to the insured is based on the

aleatory contract

An insurer pays a large claim for medical expenses after the insured has only made one premium payment. This is an example of a

upon the insured's death or reaching the age 100

At what point does a whole life policy pay the face amount?

revocable beneficiary

Barbara has the right to change the beneficiary designation on her life insurance policy. Barbara's beneficiary is a

59 ½

Beginning at what age can the IRA owner start making withdrawals and Not be subjected to a tax penalty?

Tax deductible to the employer/nontaxable to the employee

How are employer- paid premiums for employee group health insurance normally treated for tax purposes?

3 years

How long must a producer keep complete records pertaining to his/her insurance transactions?

12

Julio, the insurance producer, has allowed his license to lapse. He would like to reinstate his license without retaking a relicense course or passing a written examination. To do this, Julio must reinstate the license within__ from the renewal date

medicare suuplement

Katherine is a retiree and was recently hospitalized for 10 days. Which type of insurance policy would best cover her excess hospital expenses?

20

The Notice of claim Provision states that the insured notify the insurance company within___ days of a claim

expressed authority

The agreement between a producer and the insurance company specifies the authority given to a producer to act on the behalf of the insurer. This is called

premiums

What is the applicant's consideration in an insurance contract?

stop-loss limit

When medical expenses reach a certain dollar amount, the insured is no longer responsible for sharing the cost expenses. The insurance company then pays 100 percent of the covered expenses. This major medical policy provision is called a

a monthly income for as long as insured remains totally and completely disabled

Typically, a disability income rider will pay

distributed according to state law

When an estate is named beneficiary to a life insurance policy, the policy proceeds are:

When the risk accepted for insurance has a HIGHER likelihood of experiencing loss than an average group

When does "adverse selection" exist?

state government

Which entity is responsible for most regulations imposed on the insurance industry?

they require a 20-day free look

Which is NOT true regarding Medicare Supplement polices?

reduce paid-up insurance

Which of the following dividends options allows the continuation of cash value accumulation

education level

Which of the following is NOT a factor typically used by insurers to classify risk?

policy dividends

Which of the following is NOT guaranteed by a whole life policy

extended term

Which of the following is considered the automatic Nonforfeiture Option that is most insures will use?

endows at age 100 and paid up at a stand time

Which of these statements accurately portray a whole life policy?

Waiver of premium

Which provision allows a disability income policy to remain in force without further payments when the insured has become totally and permanently disabled?

permanent insurance

Which type pf life insurance policy combines insurance protection with an accumulation of cash value?

69- year old female covered by Medicare

Who would most likely own a Medicare Supplement policy?

one party writes the contract and the other party must accept the contract as written

Why are insurance contracts said to be contracts of adhesion?

the premium increases at renewal

With Renewable Term Insurance

level premium

With term life insurance, which of the following types pf premium remains the same for the entire policy period

age

Medicare eligibility is typically based on:

representatives

Regarding a life insurance policy or annuity contract, all statements made on the application are:

30 days

The minimum grace period for a life insurance policy sold in Alabama is

- HMO, PPO, or traditional insurer

Medicare Advantage (Medicare Part C) allows utilization of benefits through a

the annuitant's payout period selection

The monthly benefit of Annuity Certain is determined by

guaranteed renewable

. A Long-Term Care (LTC) policy has a minimum renewability level of:

convertible term

. which type of term policy allows the policyowner to snitch to permanent insurance?

business overhead expense insurance

A business owner has disability coverage that covers business expenses (other than income, the cost of capital goods, and other specified expenses). What kind of disability coverage is this?

portion of the policy proceeds to the assignee

A collateral assignment allows a policyowner to assign

Employee

A departing employee has decided to continue his group coverage through COBRA. Who pays the premium in this situation?

physical or mental disability

A dependent child can receive continuation of coverage under the parents' policy for which of the following conditions?

10 days

A disability policy Alabama that is paid on a monthly basis is required to have a grace period of:

noncancelable policy

A disability policy that must be renewed, cannot be cancelled until age 65, and may not have an increase in premium for any reason is called a

usually pay short-term benefits of less than 2 years in duration

A group disability income policy will:

- joint and survivor life annuity

A husband and wife are receiving annuity payments. When the husband dies, the wife still receives annuity payment for life. What kind of annuity is this?

2

A long Term Care insured must be unable to perform a minimum of __ activities of daily living to receive benefits

the reduce paid-up coverage amount minus $5,250

A policy owner with a 100,000$ whole life policy has a cash value of $10,000. There is an outstanding loan for 5,000$ and a past-due premium of $250. If the policy owner chooses the reduced paid-up option and then later dies, what will the beneficiary receive?

Negotiated fee-for-service

A preferred Provider Organization (PPO) contract typically uses which payment arrangement?

keogh plan

A retirement plan intended for a sole proprietor and his/her employees would be a

a premium that is higher than for a normal risk

A substandard or special class risk typically results in;

Waives the premiums when the policyowner becomes totally disabled

A waiver of premium:

must be licensed as insurance producers

According to the Alabama law, agents of Health Maintenance Organization (HMO)

future income option

At certain ages or dates, an insured can increase the stated benefit (within limits) under their disability income policy, regardless of health. Which policy rider BEST describes this?

a hospital or surgeon

Benefits under health insurance policy may (with the insured's written request) be payable to:

Marie's plan is primary and Don's is secondary

Don and Marie are married, and each have a Major plan provided by their employers. Don was born in August of 1969 and Marie was born March of1976. For their two dependent children,

conditional

Ed has an insurance policy with an insurance company. Before Ed's policy will pay a claim, certain events must occur. Because of this, an insurance policy is:

have a higher total outlay of dollars for the coverage for that year

If the insurance premiums are paid more frequently than annually, the policyowner can expect to:

three times the amount of the commission paid

In Alabama, an insurer who violates state laws for payment of insurance commissions may be fined up to:

Non-participating polices

Insurance polices issued by companies which are owned by stockholders and do not pay dividends are known as:

participating polices

Insurance policies issued by companies which allow their policy owners to participate in the favorable experience of the company through payment of dividends are known as:

guaranteed issue

Jackie has just enrolled in Medicare Part B for the first time. He cannot be refused or rated for a Medicare supplement policy if he applies for coverage within 6 months of enrolling in part B which is this requirement called?

equity indexed life

Paula has an insurance policy that has guaranteed minimum cash value, a guaranteed death benefit, fixed premiums, and grows at a rate reflected by a selective fund index. Which type of life policy fits this description?

the accumulated cash value (10,000 less interest)

Rick owns a $100,000 life insurance policy with a cash value of 10,000. How much can he borrow up to?

conditional receipt

Rodney applies for an insurance policy and pays the first premium. The receipt given for the first premium is called a

absolute assignment

Ron turned over all rights in his policy over to an assignee. This is called:

resume paying premiums again

Shawn has a waiver or premium rider on his life insurance policy. He becomes disabled for 3 years, during which the insurance company waives $3000 in premiums. When Shawn recovers, he must:

uses the $10,000 to buy term insurance of the same face amount as her original policy

Susan owns a life insurance policy that has accumulated $10,000 in cash value in which she no longer pays its premiums. If she elects to take the extended term option, which of these actions would she take?

coverage when the insured is riding in certain kinds of air travel

The aviation exclusion:

general agency system

The life and health insurance marketing system utilizing non-employee agents that represent just one insurance company and are often paid an allowance to cover office expenses and staffing Is the:

the transfer of risk

The objective of insurance is:

without proof of insurability

The option to convert term life insurance to permanent form of coverage can normally be executed:

the blackout periods

The period during which surviving spouse does not qualify for social security or retirement benefits is called

monthly

The premium payment mode which results in the highest total premium is:

settlement options

The proceeds of a life insurance policy can be paid in a form other than lump-sum payment. These forms of payment are called:

individual retirement account

a retirement plan that can be started by an employee, even of another plan is in existence, is called a

a contract

a written agreement that involves two or more parties and consideration is:

blanket policy

all students attending a large college would most likely be covered by which type of health policy?

a certificate is issued to everyone covered by the group life insurance

what is a certificate of insurance?

15

what is the minimum age requirement for a minor in Alabama to purchase a life insurance policy

100 percent

what percentage of eligible employees must be covered by noncontributory group insurance plans?

100 percent

what will the insurance company pay once the stop-loss exceeded on a major medical policy?

income is paid until the principle amount decreases to zero

which of the following does NOT describe a life income settlement option?