Life & Health License Exam

Insurer employing a produced without procuring an appointment must pay the commissioner a penalty of $___ per offense. Each sale of a policy by that producer will constitute a separate offense but aggregate penalty cannot $_____ for a single unappointed producer

$25, $300

Adjustable Life Insurance

-Can assume the form of either term or permanent insurance -Policyowner may adjust the premium/premium-payment period, the face amount, and the coverage provided

Universal Life Option B

-Increasing death benefit -Cash value grows slower

Universal Life Option A

-Level death benefit

Variable Life

-Must have Life+Securities licenses to sell -Cash value goes to a separate account, policyowner gets to choose mutual funds to invest it in.

whole life insurance

-Permanent to age 100 -Lifetime protection -Has cash value

Annually Renewable Term

-Renews each year without proof of insurability -Premiums increase due to attained age

Term Insurance

-Termporary -Specific period of time -No cash value

Required grace period for life insurance policies

1 month

Policies without the "policyowner's right to cancel" in bold type allow for policyowner to return policy for a full refund within how much time

1 year

Producers must report any conviction, guilty plea, or plea of no contendere to felony or gross misdemeanor to commissioner within ___ days

10

How long do policyowners have to cancel life insurance policies and receive a full refund of premiums paid if they return the policy to the insurer and give written notice of cancellation within 10 days of purchase?

10 days

How long does a producer have to notify commissioner of a change of name/address

10 days

Individual health insurance policies free look period is

10 days

For how many days of skilled nursing care will Medicare pay benefits?

100

For group medical and dental expense insurance, what % of premium paid by the employer is deductible as a business expense

100%

Under the ACA, what % of preventative care must be covered without cost sharing

100%

If an insured employee selects COBRA coverage after the employment is terminated, how much premium will the insured have to pay?

100% of the premium paid by the employer and 2% processing fees

Penalty for a company transacting insurance business without a certificate of authority

100-1000$ per offense

Upon termination of a covered employee, employer must notify the employee of their right to continuation of coverage within how many days?

14 days

To appoint a producer as an agent, insurer must file notice with commissioner within ___ days from date the agency contract is executed

15

What 4 essential elements must insurance contracts have to be legally binding?

1: Agreement - offer and acceptance 2: Consideration - something of value 3: Competent Parties 4: Legal Purpose

If commissioner orders a hearing to be conducted, hearing must occur no sooner than ____ days from the date of the hearing notice

20

Investigative consumer reports cannot be made unless the consumer is advised in writing about the report within ___ days of the date the report was requested

3

Advertisements must remain on file and open to commissioners inspection for at least ___ years after they are used

3 years

Once an individual passed a licensing exam, for how many years are the results valid?

3 years

Maximum time limit to reinstate a lapsed policy

3 years after lapse

If insurer terminates producer's appointment, must notify commissioner within ___ days

30

Producers must report any administrative action taken against them in another jurisdiction or by another government agency to the commission within ___ days

30

Producers must report any criminal prosecutions against them in any jurisdiction within ___ days of the initial pretrial hearing date.

30

Upon receipt of the notice of appointment, commissioner will verify within ___ days that the producer is eligible for appointment

30

Free look period for LTC policies is

30 days

Commissioner must examine the affairs and conditions of all domestic insurers at least once every ___ years

5

If producer is determined ineligible for appointment, commissioner will notify the insurer within ___ 5 days of its determination

5

Once a person meets the stringent requirements for disability benefits under Social Security, how long is the waiting period before any benefits will be paid?

5 months

What is the maximum number of employees allowed in order for a group to qualify fir a guaranteed-issue group plan?

50

How long is an open enrollment period for Medicare Supplement Policies?

6 months

When commissioner determined a company is eligible to engage in the insurance business, commissioner will execute and deliver the certificate of authority within ____ days

60 days

To be entitled to have small employers health coverage issued on a guaranteed basis, how many eligible employees must participate in a health benefit plan

75%

Coverage for a hospital stay following a C-Section shall not be limited to less than

96 hours

Twisting

A form of misrepresentation in which an agent persuades an insured/owner to cancel, lapse, or switch policies, even when it's to the insured's disadvantage.

Medical Information Bureau (MIB)

A membership corporation owned by member insurance companies. Collects/maintains/makes available to insurance companies important information on applicants for life and health insurance. An applicant cannot be refused coverage solely because of information discovered through MIB.

Annuities are purchased to

Accumulate money and liquify an estate

Free Look Provision

Allows the policyowner a specified number of days from receipt to look over the policy and return for full refund of premium.

In insurance, what constitutes the offer

Applicant submitting application to the insurer

Consideration Provision

Both parties to a contract must provide some value, or consideration, in order for the contract to be valid. The consideration by insured is payment of premium. Consideration by insurer is promise to pay in accordance with terms of contract.

In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is

Broader in general

Automatic Premium Loan Provision

Commonly added at no charge to policies w/ cash value. Prevents unintentional lapse of a policy. If policyowner has not paid the premium by the end of the grace period, a loan against the policy cash value is automatically generated for the amount of premium due. If loan and interest are not repaid and insured dies, it will be subtracted from death benefit.

What must an individual do to sell/solicit/negotiate long term care insurance

Complete an 8 hour training course. 4 hours of training every 24 months thereafter

In a relative value system of determining coverage for a given procedure, what term describes the total amount payable per point?

Conversion Factor

What type of deductible is applied between basic coverage and major medical coverage?

Corridor Deductible

In credit life insurance, who is the policyowner and beneficiary, who is the insured

Creditor is policyowner and beneficiary. Debtor is the insured.

Which type if long-term care is provided mainly for the purposes of meeting insured's need for activities of daily living?

Custodial Care

Fair Credit Reporting Act

Establishes procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant, and properly used. Also protects consumers from inaccurate or obsolete personal or financial information.

Which nonforfeiture option has the highest amount of insurance protection?

Extended Term. Has the same face amount as the original policy but for shorter period of time

Life Settlement

Financial transaction in which the owner of a life insurance policy sells the policy for compensation. An absolute assignment of all the rights to the policy from the original policyowner to the new policyowner

Waiver of Premium Rider

If insured becomes totally disabled, premiums will be waved until insured can return to work. Kicks in after 6 months of total disability (first six month premium get refunded at that point)

Uniform Simultaneous Death Law

If the insured and the primary beneficiary died in the same accident and there is not enough evidence to show who died first, policy proceeds will be distributed as if the primary beneficiary died first.

Accidental Means Clause

If the insured meant to do whatever caused their injury, no coverage applies since the resulting injury should've been foreseen

Waiver of Premium w/ Disability Income

In the event of disability, the insurer will waive the premiums and pay a monthly income to insured. Amount paid is based on a % of the face amount of the policy.

Difference between consumer report and investigative consumer report

Investigative consumer report is obtained through an investigation and interviews with associates, friends, and neighbors

Misrepresentation

Issue, publish, or circulate any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, or payment of dividends. Also refers to verbal statements

In group health policies, a probationary period applies to employees who

Join the group after the effective date

Conservation

Legally acceptable attempt by an existing insurer to dissuade a current policyowner from the replacement if existing life insurance

Premium Mode

Manner or frequency that policyowner pays the policy premium.

An insured is covered under a Medicare policy that provides a list of network healthcare providers that the insured must use to receive coverage. In exchange for this limitation, the insured is offered a lower premium. Which type of Medicare policy does the insured own?

Medicare SELECT

Requirements to be eligible for health coverage on the marketplace

Must be US Citizen or national or be lawfully present in US. Must live in US. Cannot be currently incarcerated. Medicare recipients not eligible for coverage.

In credit life insurance, may a creditor require that a debtor have life insurance from a specific insurer

No

How long does temporary producer license last

No more than 180 days

In an individual long-term care insurance plan, the insured is able to deduct the premiums from taxes. What income taxation will be imposed on the benefits received?

No tax

Once a person becomes eligible for Medicare supplement plans, and during the open enrollment period, what is the insurance company obligated to do?

Offer supplement policy on a guaranteed issue basis

Policy Loan

Only found in policies w/ cash value (whole life) Policyowner is entitled to borrow an amount equal to available cash value. Any outstanding loans and accrued interest will be deduced from policy proceeds upon insureds death.

Defamation

Oral or written statement made intended to injure person engaged in insurance business. Also applies to statements that are maliciously critical of the financial condition of person/company

What medicare part covers outpatient hospital treatment

Part B

Small employer classification means?

Person actively engaged in a business that on at least 50% of its working days during the preceding year employed no more than 50 eligible employees

All individual or group accident and health policies must cover insured's adopted children on same basis as other dependents. Coverage begins on the adopted childs date of

Placement

Assignment

Policyowner of a life insurance policy has right to transfer partial or complete ownership of the policy to another person w/o the consent of the insurer. However, the owner must notify the insurer in writing of the assignment.

Decreasing Term

Premium stays level, but death benefit goes down over time

Under AD&D coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death

Principal Sum

Suicide Provision

Protects the insurers from individuals who purchase life insurance with the intention of committing suicide. If insured kills themselves w/in 2 years of policy issue date, insurer will only refund premium. After 2 years, will pay death proceeds to designated beneficiary.

Which section of a policy explains the rights and characteristics of the contract

Provisions

Which nonforfeiture option provides coverage for the longest period of time?

Reduced paid-up; provides protection until the insured reaches 100, but the face amount is reduced to what the cash would buy

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

Insuring Clause Provision

Sets forth the basic agreement between the insurer and the insured. States the insurers promise to pay death benefit upon insureds death. Defines who the parties to the contract are, how long coverage is in force, and type of loss insured against.

When the insured initiates the cancellation of a policy, the unearned premium will be refunded in a

Short rate basis

Entire Contract Provision

States that the policy itself, a copy of the application, and any riders/amendments make up the entire contract. No statements made before contract was written can be used to alter the contract.

Level Term Insurance

Term insurance where the death benefit and premium stay level

Increasing Term Insurance

Term life insurance in which the death benefit increases periodically over the policy's term.

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

The IRS

In order for an insured under Medicare Part A to receive benefits for care in a skilled nursing facility, which of the following conditions must be met?

The insured must have first been hospitalized for 3 consecutive days

What can vary the grace period in a health insurance policy?

The mode of the premium payment

The paid up addition option uses the dividend to:

To purchase a smaller amount of the same type of insurance as the original policy.

Premiums paid by self-employed sole proprietors or partners for medical expense insurance are

Totally tax deductible

Cafeteria Plan

Type of employee benefit plan that allows insureds to choose between different types of benefits

How long must former employees be allowed to continue coverage under a group health plan

Until they become covered or 18 months, whichever is earlier

Common Disaster Clause

When added to a policy, if insured and beneficiary die in same disaster (even if beneficiary outlives insured by a specified number of days) it is presumed that the beneficiary died first

Is the Physical Examination and Autopsy provision mandatory by law for health insurance policies

Yes

Is the worker being fully insured an eligibility requirement for Social Security Disability Income Benefits?

Yes. Benefits provided after 5 month waiting period.

Life income joint and survivor settlement option guarantees

income for 2 or more recipients until they die

Rebating

inducement offered in the sale of insurance products that is not specified in the policy's