life and health 3

The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the a)Incontestability clause. b)Legal action against us clause. c)Entire contract clause. d)Time limit on certain defenses clause.

Entire contract clause.

A domestic insurer issuing variable contracts must establish one or more a)General accounts. b)Separate accounts. c)Liability accounts. d)Annuity accounts.

Separate accounts.

An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called a)Modified Endowment Contract (MEC). b)Level term life. c)Graded premium whole life. d)Single premium whole life.

Single premium whole life.

Which of the following terms describes the specified dollar amount beyond which the insured no longer participates in the sharing of expenses? a)First-dollar coverage b)Corridor deductible c)Stop-loss limit d)Out-of-pocket limit

Stop-loss limit

What is the typical deductible for basic surgical expense insurance? a)$0 b)$100 c)$200 d)$500

$0

What is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application? a)90 days after the effective policy date b)6 months after the effective policy date c)1 year after the effective policy date d)As long as the policy is in force

As long as the policy is in force

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to a)Purchase a term rider to attach to the policy. b)Pay back all premiums owed plus interest. c)Receive payments for a fixed amount. d)Purchase a single premium policy for a reduced face amount.

Purchase a single premium policy for a reduced face amount.

L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay? a)$900 (deductible + 20% of the bill after the deductible [20% of $2,000]) b)$500 (amount of deductible) c)$1,000 (deductible + 20% of the entire bill) d)$2,500 (the entire bill)

900 (deductible + 20% of the bill after the deductible [20% of $2,000])

A hospital indemnity policy will pay a)A benefit for each day the insured is in a hospital. b)Income lost while the insured is in the hospital. c)All expenses incurred by the stay in the hospital. d)Any expenses incurred by the stay in the hospital, minus coinsurance payments and deductibles.

A benefit for each day the insured is in a hospital.

An insured receives an annual life insurance dividend check. What term best describes this arrangement? a)Reduction of Premium b)Annual Dividend Provision c)Accumulation at Interest d)Cash option

Cash option

A producer who fails to segregate premium monies from his own personal funds is guilty of a)Larceny. b)Embezzlement. c)Theft. d)Commingling.

Commingling.

An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits? a)Full benefits for 2 years b)No benefits c)Full benefits d)Partial benefits

Full benefits

What is the official name for the Social Security program? a)Social Insurance Program b)Defined Benefit Retirement Insurance c)Qualified Pension Plan d)Old Age Survivors Disability Insurance

Old Age Survivors Disability Insurance

Hospital indemnity/hospital confinement indemnity policy will provide payment based on a)The premiums paid into the policy. b)The medical expense incurred. c)The number of days confined in a hospital. d)The type of illness.

The number of days confined in a hospital.

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a a)Nonforfeiture option. b)Guaranteed insurability rider. c)Paid-up additions option. d)Cost of living provision.

Guaranteed insurability rider.

A guaranteed renewable disability insurance policy a)Is renewable at the option of the insurer to a specified age of the insured. b)Is guaranteed to have a level premium for the life of the policy. c)Cannot be cancelled by the insured before age 65. d)Is renewable at the insured's option to a specified age.

Is renewable at the insured's option to a specified age.

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are a)Paid at a fixed rate every year. b)Taxable as ordinary income. c)Guaranteed. d)Not taxable since the IRS treats them as a return of a portion of the premium paid.

Not taxable since the IRS treats them as a return of a portion of the premium paid.

If a person is disabled at age 27 and meets Social Security's definition of total disability, how many work credits must he/she have earned to receive benefits? a)20 credits b)6 credits c)40 credits d)12 credits

12 credits

An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a(n) a)403(b) Plan (TSA). b)Keogh Plan. c)Roth IRA. d)SEP.

403(b) Plan (TSA).

All of the following are true about group disability Income insurance EXCEPT a)The waiting period starts at the onset of the injury or sickness. b)The longer the waiting period, the lower the premium. c)Coverage applies both on and off the job. d)Benefits are usually short term.

Coverage applies both on and off the job.

All of the following are dividend options EXCEPT a)Fixed-period installments. b)Accumulated at interest c)Reduction of premium. d)Paid-up additions.

Fixed-period installments.

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This would indicate that his policy was written with a 30-day a)Probationary period. b)Disability period. c)Elimination period. d)Blackout period.

Elimination period.

A guaranteed renewable health insurance policy allows the a)Policyholder to renew the policy to a stated age and guarantees the premium for the same period. b)Policy to be renewed at time of expiration, but the policy can be canceled for cause during the policy term. c)Insurer to renew the policy to a specified age. d)Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.

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

Which of the following individuals must have insurable interest in the insured? a)Underwriter b)Producer c)Policyowner d)Beneficiary

Policyowner

Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death? a)Refund of premiums b)Principal sum c)Capital sum d)Double the amount of the death benefit

Principal sum

Which of the following is NOT a feature of a guaranteed renewable provision? a)Coverage is not renewable beyond the insured's age 65. b)The insured's benefits cannot be reduced. c)The insurer can increase the policy premium on an individual basis. d)The insured has a unilateral right to renew the policy for the life of the contract.

The insurer can increase the policy premium on an individual basis.

When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees a)To charge a lower premium every year the policy is renewed. b)Not to change the premium rate for any reason. c)To renew the policy indefinitely. d)To renew the policy until the insured has reached age 65.

To renew the policy until the insured has reached age 65.

Social Security was created to provide all of the following benefits EXCEPT a)Unemployment income. b)Survivor's benefits. c)Disability income. d)Retirement income.

Unemployment income.

How soon from the reinstatement of a health insurance policy would a loss be covered? a)60 days b)7 days c)10 days d)30 days

10 days

For group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense? a)50% b)60% c)90% d)100%

100%

How many consecutive months of coverage (other than in an acute care unit of a hospital) must LTC insurance provide in this state?a)36 b)6 c)12 d)24

12

If an insured's cognitive impairment results in the lapse of a long-term care policy, how long from the policy lapse may the insured request reinstatement? a)30 days b)3 months c)5 months d)6 months

5 months

The term "illustration" in a life insurance policy refers to a)A presentation of nonguaranteed elements of a policy. b)A depiction of policy benefits and guarantees. c)Pictures accompanying a policy. d)Charts and graphs.

A presentation of nonguaranteed elements of a policy.

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business? a)Assumed b)Express c)Implied d)Apparent

Implied

Qualifications for soliciting, selling or negotiating a long-term care partnership policy include all of the following EXCEPT a)Obtaining a partnership policy license from the Commissioner. b)Being appointed. c)Completing an initial 8-hour training. d)Completing ongoing 4-hour training every 24 months.

Obtaining a partnership policy license from the Commissioner.

Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner? a)Entire Contract Clause b)Proof of Loss c)Payment of Claims d)Change of beneficiary

Payment of Claims

Which of the following is NOT true regarding Equity Indexed Annuities? a)They have guaranteed minimum interest rates. b)They are less risky than variable annuities. c)They earn lower interest rates than fixed annuities. d)The insurance company keeps a percentage of the returns.

They earn lower interest rates than fixed annuities.

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?a)Unidirectional b)Aleatory c)Conditional d)Unilateral

Unilateral

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? a)Collect a late payment fee b)Ask her to sign a statement of good health c)Offer her a secondary policy d)Ask the applicant to sign a statement that acknowledges that the policy had been delivered

Ask her to sign a statement of good health

If an insured worker has earned 40 quarters of coverage, the worker's status under Social Security disability is a)Fully insured. b)Partially insured. c)Correctly insured. d)Permanently insured.

Fully insured.

How does a member of an HMO see a specialist? a)The member is allowed to choose his or her own specialist. b)The primary care physician refers the member. c)The insurer chooses the specialist. d)HMOs do not cover specialists.

The primary care physician refers the member.

All of the following are differences between individual and group health insurance EXCEPT a)In individual policies, the individual selects coverage options, while in a group plan all employees are covered for the same coverage which is chosen by the employer. b)Individual coverage can be written on an occupational or nonoccupational basis; group plans cover only nonoccupational. c)Individual policies are renewable at the option of the insured, while group usually terminates when the individual leaves the group. d)Individual insurance does not require medical examinations, while group insurance does require medical examinations.

Individual insurance does not require medical examinations, while group insurance does require medical examinations.

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will a)Pay the policy proceeds up to an established limit. b)Not pay the policy proceeds under any circumstances. c)Automatically pay the policy proceeds. d)Pay the policy proceeds only if it would have issued the policy.

Pay the policy proceeds only if it would have issued the policy.

Which nonforfeiture option provides coverage for the longest period of time? a)Accumulated at interest b)Reduced paid-up c)Extended term d)Paid-up option

Reduced paid-up