Life and Health Practice Exam 3

Regarding an Agent's report during the policy application process, which of the following statements is TRUE?

It provides the agent's observation about the proposed insured

Which of the following is the general enrollment period for Medicare part b?

January 1 through March 31

Which condition is true when comparing a Joint life policy to two individual life policies of the same amount on the same insureds?

Joint life has a lower premium than the total of the two individual policies

If a business wants to ensure it can cover losses due to the disability of its top employee, the business should get which type of insurance?

Key person disability income

For a contract to be enforceable by law, the purpose of the contract must be

Legal and not against public policy

In an individual health insurance policy all of the following are excluded from coverage EXCEPT

Mental Illness

In the event an annuities dies during the accumulation period, and there is a beneficiary named in the annuity, the insurer would pay annuity benefits to the

Named beneficiary

The reduction of premium option uses the dividend to reduce

Next year's premium

Dividends received on participating life insurance policies are

Not taxable because they are a return of unused premiums

When can HIV related test results be provided to the MIB?

Only if the person is not identified

What does it mean when insurance contracts are unilateral?

Only one party makes a promise

What is the purpose of a buy-sell agreement?

To allow the business buyout in case of the owner's death

What is the purpose of key person insurance?

To cover decreased business revenues as a result of the death of a key employee

In a health insurance policy, what is the purpose of the impairment rider?

To exclude coverage for a specific impairment

In the application process, what is the purpose of the Agent's Report?

To give additional information about the applicant to the underwriters

What is the purpose of a policy's benefit schedule?

To state what and how much is covered in the plan

Which of the following is NOT usually an excluded cause of disability in an individual disability income policy?

Complications from pregnancy

An applicant gives her agent a completed application and the initial premium. What can the agent issue her that acknowledges the initial premium payment?

Conditional receipt

Which of the following is NOT correct concerning an insurance policy's consideration clause?

Consideration must be equal on the part of both the insurance provider and the insured

When a whole life is surrendered for a reduced paid up policy, the new policy's cash value will

Continue to increase

In an HMO, what is the purpose of the gatekeeper?

Controlling costs

HMO members pay a small fee when they see their primary care physician. This fee is called a

Copay

An insurance policy is required to have all of the following to be valid EXCEPT

Countersignature

How long would the grace period be under a policy if the insured pays a monthly health insurance premium?

10 days

In a non contributory group policy

100% of eligible employees must participate

A coffee shop owner is insured under a business overhead expense policy that pays a maximum monthly benefit of $2,500. Her actual monthly expenses are $3,000. If the owner becomes disabled, the monthly benefit payable under her policy will be

$2,500

According to the Time Limit on Certain Defenses provision, statements, or misstatements made made in the application at the time of issue cannot be used to deny a claim after the policy has been effective for a minimum of how many years?

2 years

Policy loan requests, except for loan requests for payment of due premiums, may be deferred for a period of up to

6 months

Under the mandatory uniform provision Proof of Loss, the claimant must submit proof of loss within what time period after the loss?

90 days

A viatical settlement is a transaction outside the life insurance provider where the owner sells the life insurance policy for which of the following?

A percentage of the policy's face amount

What guarantees that the information explained in the insurance contract is true?

A warranty

Due to an injury, an insured has been unable to work for eight months. When her life insurance premium came due, she could not pay yet the policy remained in force. The policy includes

A wavier of premium rider

Which of the following statements is NOT true regarding health insurance policy provisions?

All addition provisions written by insurance providers are cataloged by their respective states

All of the following could qualify as a group to obtain group health insurance EXCEPT

An association of 35 people

Which of the following premium modes would result in the lowest overall premium?

Annual

Which of the following signifies the individual upon whose life the annuity income amount is calculated?

Annuitant

An underwriter is reviewing an applicant with an extensive medical history. Which of the following would provide the underwriter a better understanding of the applicant's treatments for the various illnesses?

Attending Physician's Statement

Which provision can be added to a permanent life insurance policy, at no cost, to ensure that the policy will not lapse if there is cash value?

Automatic premium loan option

The corridor deductible applies between

Basic and major medical coverage

Which of the following would NOT trigger the payment of Accelerated Death Benefits?

Being permanently disabled

Answers to questions is an insurance application are called representations and as such they are

Believed to be true to the best of the applicant's knowledge

A dentist has been off work for four months because of a disability. His dental assistant's salary would be paid by

Business Overhead Insurance

Which of the following is NOT an indicator of a competent party?

Business profession

An insured and his spouse recently had a child. Which of the following riders would allow the couple to insure the child for a limited period of time at a specified amount?

Children's term rider

When filling out an insurance application, the applicant makes a mistake. What can the applicant do to correct the error if a new application is unavailable?

Cross out the incorrect answer, write the correct one beside it and initial the new answer

A major medical expense policy would exclude coverage for all of the following treatments EXCEPT

Drug addiction

An adjustable life policy can assume the form of

Either term insurance or permanent insurance

The uniform provision law that prevents an insurance provider from altering its agreement with a policy holder by referring to documents or other items not found in the policy is called the

Entire Contract provision

The stop loss feature on a majors medical policy intends to

Establish a maximum out of pocket cost that an insured will have to pay for medical expenses in a calendar year

An annuity owner receives the same guaranteed payment every month. What type of annuity is it?

Fixed

At what point is an automatic premium loan generated?

Following the grace period

The guaranteed purchase option is also known as the

Future increase option

Which federal act defines rules regarding protected health information?

HIPPA

An insured was diagnosed two years ago with kidney cancer. He was treated with surgeries and chemotherapy and is now in remission. He also has a 30 year smoking history. The insured is now healthy enough to work and has recently secured a full time job. Which describes the health insurance that he will most likely receive?

He would be covered under his employer's group health insurance plan without higher premiums

When an insured reinstated their major medical policy, they were involved in an accident that required hospitalization. Upon reinstatement of the policy, when would this accident be covered?

Immediately

Medicare is a health insurance program for all the following EXCEPT

Individuals with low assets and low income

To buy insurance, the policy owner must face the prospect of losing money or something of value in the event of loss. What is this concept called?

Insurable interest

Which of the following is the primary source of information that an insurance provider uses to evaluate an insured's risk for life insurance?

Insurance application

All of the following are required to sign an application for health insurance EXCEPT the

Insurer

Jacki reviews an agreement on the first page of her policy which contains a list of losses that her insurance provider will cover. What is the name of this agreement?

Insuring Clause

When the policy is issued, what happens to the copy of the application for health insurance?

It becomes part of the entire contract

Which of the following best describes a Major Medical Expense policy?

It delivers catastrophic medial coverage beyond basic benefits on a usual, customary, and reasonable basis

Regarding an ordinary life policy all of the following statements are true EXCEPT

It does not have a guaranteed death benefit

Ellen is covered under a health plan provided by her employer. She was told that her insurance would pay most of the covered expenses if she chose to see a provider on her plan's list. If Ellen chose to be treated by a provider that is not on the list her portion of the bill would be greater Ellen is covered under a/an

PPO Plan

Which of the following dividend options is being used when owner of a participating whole life policy uses the dividend to provide more life insurance coverage?

Paid up additions

Which of the following is the consideration on the part of an insurance provider?

Paying a claim

An Equity Indexed Annuity will grow based upon

Performance of a recognized index

The amount and the frequency of the premium payment are known as

Premium mode

What is the primary purpose of the Coordination of Benefits provision in group insurance?

Prevent over insurance

Medicare Part A services do NOT include which of the following?

Private duty nursing

Jake's retirement plan meets all federal requirements and entitles him to certain tax benefits as the plan owner. What term best describes Jake's retirement plan?

Qualified

A person buys a life insurance policy and list his parents as the beneficiaries. He can change beneficiaries at any time. The policy has what type of beneficiary designation?

Revocable

Variable insurance and variable annuities are regulated by

SEC, FINRA, and Department of Insurance

An agent delivers a life policy. He explains a policy change was made and asks the applicant to sign a statement acknowledging the changes were explained. The agent says the premium has not been paid and must be paid before the policy goes into effect. He collects a Statement of Good Health, relinquishes the policy, and leaves. What did he do wrong?

She left the policy with the insured without collecting the premium

An insured has an individual disability income policy with a 30 day elimination period. She becomes disabled on June 1 for 15 days. When will she collect on her disability income payments?

She won't collect anything

What is the meaning behind a contract of adhesion?

Since the insured does not take part in preparing the conduct any ambiguities would be resolved in the insured's favor

A whole life policy that will generate immediate cash value is a

Single premium policy

Which of the following forms of care are daily nursing and rehabilitative care that can only be delivered by medical personnel under the direction of a physician?

Skilled care

Under a major medical policy, policy owners have the right to do which of the following if they have NOT received the necessary claim forms within 15 days of their notice to the insurance provider of the covered loss?

Submit the description in their own words on a plain sheet of paper

Upon payment of a loss the insured is obligated to surrender the right to sure a negligent third party to the insurance provider. This is known as

Subrogation

If the benefits of a basic medical insurance plan are exhausted, what type of plan will begin covering those losses?

Supplementary major medical

A life insurance policy can provide which of the following?

Survivor protection

Which of the following statements about the Medical Information Bureau is correct?

The Medical Information Bureau assists underwriters in evaluating and classifying risks.

Who is obligated to ensure that every question is answered and all necessary signatures are collected on the application?

The agent

Whose responsibility is it to ensure that the application for health insurance is accurate and complete?

The agent's

An insurer is trying to determine an applicant's insurability and decides to obtain medical information from several different sources. Which of the following has to be notified of the investigation?

The applicant

Life insurance creates an immediate estate. Which of the following statements best explains this?

The face value of the policy is payable to the beneficiary upon the insured's death

In a health insurance policy, which entity has the option of including optional provisions?

The insurance provider

Which of the following statements is INCORRECT?

The insurance provider does not have the right to conduct an autopsy

Under the Payment of Claims provision, to whom will the insured's benefits be paid if the insured is deceased?

The insured's primary beneficiary

Which of the following is NOT true concerning a no cancelable policy?

The insurer can increase the premium above what is stated in the policy if claims experience is greater than expected

As it pertains to life settlements the term owner means

The owner of the original life policy

Regarding the premium in a 10 year level premium policy, which of the following is TRUE?

The premium will remain level for ten years

According to the Common Disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?

The primary beneficiary died before the insured

The guaranteed insurability rider allows the owner to by additional amounts of life insurance without proof of insurability at all of the following EXCEPT

The purchase of a new home

Regarding the definition of total disability which of the following statements is INCORRECT?

Total disability is the inability to perform partial duties of any occupation fro which an individual is suited because of education, training, or experience

When an insured's membership is a group is terminated the insured can convert to

Whole life without proof of insurability

Under the mandatory uniform provision Notice of Claim provision policy owners must submit written notice of a claim to the insurance provider within what time parameters?

Within 20 days

An employee that becomes ineligible for group coverage due to termination of employment or a change in status must exercise an extension of benefits under COBRA

Within 60 days

If an insured is not entirely satisfied with an issued policy, the insured may return it to the insurance company and receive a refund of the entire premium paid at which of the following times?

Within ten days of when the policy was delivered