Insurance Test

The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the

Insuring clause.

R has a life insurance policy that specifically excludes his death from being covered should it occur in an act of war. Where must this be spelled out in the policy?

On the face of the policy

What is the typical deductible for basic surgical expense insurance?

$0

A health insurance policy that covers a family member of the insured must also offer coverage for child health supervision services until what age?

12

If a policyholder declines the nonforfeiture benefit, what must the insurer provide to the client upon the lapse of the policy?

A contingent benefit

Which of the following is NOT required on an application for a variable life insurance policy?

A statement explaining the use of separate accounts in variable insurance

What is required of an insurer should an insured commit suicide prior to one year elapsing under a life insurance policy?

All paid premiums must be returned.

Long-term care insurance policies must cover which of the following?

Alzheimer's disease

In insurance, an offer is usually made when

An applicant submits an application to the insurer.

A man is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim?

Claim is denied if his policy contains the Illegal Occupation provision.

A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 life insurance policy to secure the loan. Which provision makes this possible?

Collateral assignment

Which of the following types of insurance policies is most commonly used in credit life insurance?

Decreasing term

This arrangement specifies who will purchase a disabled partner's interest in the event he or she becomes disabled.

Disability buyout

A producer may accept a commission for a Medicare supplement policy

If the commission for the first year does not exceed double the commission for the second year.

Which of the following entities has the authority to make changes to an insurance policy?

Insurer's executive officer

The Missouri Life and Health Insurance Guaranty Association was created to protect all of the following EXCEPT

Insurers.

In a group health policy, a probationary period is intended for people who

Join the group after the effective date.

In long-term care insurance, what type of care is provided with intermediate care?

Occasional nursing or rehabilitative care

How many pairs of glasses in a 12-month period will a vision expense insurance plan cover?

One

Which Universal Life option has a gradually increasing cash value and a level death benefit?

Option A

Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application?

Return the application to the applicant for completion

Variable life insurance policies, as well as any riders, endorsements and other documents attached to them, must be approved by

The Director

When a group health policy is being replaced with another group health policy, what will happen with the ongoing claims?

They will be covered regardless of pre-existing conditions.

What is the name of the insured who enters into a viatical settlement?

Viator

Which of the following types of policies will provide permanent protection?

Whole life

When can a Long-Term Care policy deny a claim for losses incurred because of a pre-existing condition?

Within 6 months of the effective date of coverage

Which of the following is NOT a factor in determining qualifications for Social Security disability benefits?

Worker's occupation

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?

$100,000

An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any, would be paid by the secondary insurer?

$500

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

3 days

All individual health policies issued in the state of Missouri which provide coverage for hospital treatment must also provide coverage for treatment of alcoholism, which may be limited to how many days?

30

In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?

45 days

To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?

6 credits

Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within

90 days of a loss.

If the owner of a whole life policy who is also the insured dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary?

A full death benefit

Which of the following products will protect an individual from outliving their money?

Annuity

A life insurance policy used to fund an agreement that contractually establishes the intent of someone to purchase a business upon the insured business owner's death is a

Buy-sell agreement.

Which types of insurance companies marketing long-term care insurance coverage must establish procedures to assure that any comparison of policies by its agents will be fair and accurate?

Every company is required to establish marketing procedures.

Which of the following statements is true regarding LTC insurance?

Every policy must offer nonforfeiture benefits to the applicant.

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

Fair Credit Reporting Act

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

Fixed period

Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid

For 20 years or until death, whichever occurs first.

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

Guaranteed insurability option

Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information

Held or transmitted in any form.

When would a misrepresentation on the insurance application be considered fraud?

If it is intentional and material

Which of the following is INCORRECT concerning taxation of disability income benefits?

If paid by the individual, the premiums are tax deductible.

Stranger-originated life insurance policies are in direct opposition to the principle of

Insurable interest.

Under workers compensation, which of the following benefits are NOT included?

Legal benefits

Under the Affordable Care Act, which classification applies to health plans based on the amount of covered costs?

Metal level classification

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

Option B

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

Other-insured rider.

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident, and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

Pay a reduced death benefit

Underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT

Premiums always stay the same.

Which of the following is correct regarding the taxation of group medical expense premiums and benefits?

Premiums are tax deductible and benefits are not taxed.

A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

Proof of insurability is not required.

It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability?

Sexual orientation

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

Signed waiver of premium.

Which of the following riders is often used in business life insurance policies when the policyowner needs to change the insured under the policy?

Substitute insured rider

Which of the following would an accident-only policy NOT cover?

Surgery to repair a wrist damaged by tendonitis.

Credit life insurance is usually issued as what type of policies?

Term life

The annual contribution limit of a Dependent Care Flexible Spending Account is set by

The IRS.

When does credit life insurance coverage take effect?

The date the debtor becomes obligated to the creditor

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to

The insured.

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT

The interest is not taxable since it remains inside the insurance policy.

Which of the following will vary the length of the grace period in health insurance policies?

The mode of the premium payment

Hospital indemnity/hospital confinement indemnity policy will provide payment based on

The number of days confined in a hospital.

In a life settlement contract, whom does the life settlement broker represent?

The owner

All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT

The policy is owned by the company.

Which of the following statements regarding the Change of Beneficiaries Provision is false?

The policyowner has the right to change beneficiaries in any case.

Which of the following best defines target premium in a universal life policy?

The recommended amount to keep the policy in force throughout its lifetime

Which is true about a spouse term rider?

The rider is usually level term insurance.

An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?

$100,000

An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage?

$102

How long is the free look period on a Medicare supplement policy?

30 days

If a health carrier providing prescription drug coverage makes any deletions in its health benefit plan's prescription drug formulary, within how many days of the deletion

30 days

Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death?

A minor son of the insured

Which of the following persons is required to hold a producer license?

A person who negotiates insurance contracts

Which of the following premium payment modes will incur the lowest overall payment?

Annual

Insurers that issue individual variable contracts in this state are required to mail the policyowner a statement of the investments. How often must they mail the statement?

Annually

In an annuity, the accumulated money is converted into a stream of income during which time period?

Annuitization period

Which statement accurately describes the Change of Beneficiary provision?

Any policy that has a death benefit must also have a Change of Beneficiary provision.

No insurance policy form can be issued, delivered, or used in this state unless it has been

Approved by the Department of Insurance.

An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do?

Ask her to sign a statement of good health

Which of the following is NOT an enrollment period for Medicare Part A applicants?

Automatic enrollment

G is a commercial airline pilot who also flies his own twin piper aircraft for recreational purposes. What type of provision in a life insurance policy prevents his life from being covered under the policy should he die in a recreational plane crash?

Aviation Exclusion Cause

Which of the following best describes fixed-period settlement option?

Both the principal and interest will be liquidated over a selected period of time.

What must a health carrier do within 72 hours of receiving a request for an expedited review?

Notify the requesting enrollee of the carrier's determination

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

Common Disaster

Which of the following would be considered an illegal inducement to purchase insurance?

Confirming future dividends in a life insurance proposal

The act of trying to discourage a policyholder from dropping his/her existing policy is called

Conservation effort.

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the

Consideration Clause.

Which of the following includes information regarding a person's credit, character, reputation, and habits?

Consumer report

All of the following are true about group disability Income insurance EXCEPT

Coverage applies both on and off the job.

What happens when a policy is surrendered for its cash value?

Coverage ends and the policy cannot be reinstated.

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of

Defamation.

Which of the following is considered a qualifying event under COBRA?

Divorce

All of the following information about the applicant is identified in the General Information section of a life insurance application EXCEPT

Education.

The Director, or his designated examiner, may examine the conduct of any insurance company operating in Missouri. The Director must conduct a financial examination of every insurer licensed in Missouri at least

Every five years.

All of the following are among the Director's broad powers EXCEPT

Have interest in insurance companies regulated by the Department.

Which of the following is NOT true regarding a Certificate of Authority?

It is issued to group insurance participants.

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?

It is reduced to the amount of what the cash value would buy as a single premium.

A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?

Joint Life Policy

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as

Legal actions.

The Director can revoke an insurance producer license for any of the following causes, EXCEPT

Licensee is charged with bank robbery.

Which of the following best describes the unfair trade practice of defamation?

Making derogatory oral statements about another insurer's financial condition

Which of the following is NOT true regarding policy loans?

Money borrowed from the cash value is taxable.

Regarding the free-look provision, the insurance company

Must allow the policyowner to return the policy for a full refund.

An insurance producer license contains all of the following information EXCEPT

Name of the insurer(s) represented by the licensee.

Which of the following is another term for the accumulation period of an annuity?

Pay-in period

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

Payor Benefit

A guaranteed renewable health insurance policy allows the

Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.

An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?

Revocable

Which of the following would qualify as a competent party in an insurance contract?

The applicant has a prior felony conviction.

A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then

The benefit is received tax free.

If a company has transacted insurance in this state without a Certificate of Authority, which of the following is true of its obligations for the policies sold?

The company can still be liable for its policies in any court of this state.

An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?

The date of medical exam

An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy?

The insured is in an accident and incurs a large claim.

An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true?

The insured was in compliance with the policy requirements regarding claims.

Assignability provision in a life insurance policy relates to

The insured's right to designate a new beneficiary.

What must contain a notice of the graded death benefit in a life insurance policy with graded death benefits?

The policy application

Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner?

Third-party ownership

What is the purpose of the insurability provision in group life policies issued in this state?

To allow the insurer to require proof of insurability from individual insured

What is the purpose of coinsurance provisions?

To help the insurance company to prevent overutilization of the policy

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT

Unearned premiums are retained by the insurance company.

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral