work exam 3
a
A situation in which a person can only lose or have no change represents a. Pure risk. b. Speculative risk.
b
An insured has a major medical policy with a $500 deductible and a coinsurance clause of 80/20. If he incurs medical expenses of $4,000, the insurer would pay a. $3,200. b. $2800
a
Controlled business must not exceed what portion of a producer's transactions? a. 25% b. 50%
b
Medicaid provides all of the following benefits EXCEPT a. Family planning services. b. Income assistance for work-related injury.
a
The death protection component of Universal Life Insurance is always a. annually renewable term b. whole life
b
The paid-up addition option uses the dividend a. To reduce the next year's premium. b. To purchase a smaller amount of the same type of insurance as the original policy.
b
The policyowner of an Adjustable Life policy can increase premium payments and a. have a higher cash value interest rate b. have a limited pay policy
b
Tradition IRA owners must begin to withdraw funds a. By December 31 following the year in which they reach 59 ½. b. By April 1 following the year in which they reach 70 ½
b
What is the difference between the Medicare approved amount for a service or supply and the actual charge? a. coinsurance b. excess charge
a
Which clause allows both the insured and dentist to know in advance which benefits will be paid? a. precertification b. preadmission
b
Which nonforfeiture option provides coverage for the longest period of time? a.Paid-up option b. reduced paid-up
a
Which of the following is NOT a way to determine the interest rate in a Universal Life Policy? a. Estimate market conditions for the life of the policy b. Tie current interest rates to Treasury Bills
a
Which of the following is NOT the consideration in a policy? a. application given to a prospective insured b. something of value exchanged between parties
b
Which of the following is true regarding inpatient hospital care for HMO members? a. Inpatient hospital care is not part of HMO services. b.Care can be provided outside of the service area.
a
Which of the following products requires a securities license? a.Variable annuity b.Fixed annuity
a
Which of the following statements is NOT true concerning Medicaid? a.It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income. b. its a state program
a
Which option allows the insurer to retain policy proceeds and pay interest on the proceeds to the beneficiary at regular intervals, with guaranteed interest rates? a. Interest Only b. Fixed Interval
a
A 37-year-old owns a policy with a Guaranteed Insurability Rider. The policyowner would like to increase the benefit amount offered by the policy. What documentation will be required? a. no documentation b. proof of insurability
b
A LA insurance company ran an advertisment in June 08. When could the company discard the file on this advertisement? a. June 09 b. June 12
a
A man purchased a health policy to provide coverage on himself, his wife, and their two children. All of them would need to prove insurability EXCEPT a.Children born after the inception of the contract. b. The man's children existing at the time of the contract..
b
After the elimination period, a totally disabled insured qualified and started receiving benefits from his disability income policy that has a waiver of premium rider. What will most likely happen to the premiums paid into the policy during the elimination period? a. premiums will be waived b. premiums will be refunded
a
Rebating is an unfair trade practice and is regulated by law. All of the following would be considered to be rebating EXCEPT a. an agent uses misrepresentation to convice a person to cancel an existing policy and take a new policy from him b. an agent offers to share his commission with a policyholder
b
What type of insurance would be used for a Return of Premium rider? a. annually renewable term b. increasing term
a
Agent D submitted an application for life insurance on client A. No money was sent with the application. When Agent D attempted to deliver the policy, he discovered that A had suffered a heart attack since the application was taken. The agent should a. return the policy to the insurer b. Mail the policy to the address shown and enclose a statement for the premium.
b
Albert and Bryan are partners in a business. They purchase a Buy-sell agreement, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement? a. permanent insurance b. any form of life insurance
a
All of the following are true regarding insurance policy loans EXCEPT a. Policy loan can be made on policies that do not accumulate cash value. b. The policy will terminate if the loan plus interest equals or exceeds the cash value of the policy.
b
All of the following statements about Medicare supplement insurance policies are correct EXCEPT a.Medigap policies supplement Medicare benefits. b.Medigap policies cover the cost of extended nursing home care.
b
Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability? a. Partial disability b. residual disability
a
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. principal sum b. capital sum
a
Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending? a. unlimited b. 1 examination per week of the claim processing period
b
Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to a. Beneficiary of the death benefit b. the insured
b
Which of the following is NOT true regarding the Needs Approach method of determining the value of an individual's life? a. Coverage is based on the predicted needs of that family b. Need is predicted using the number of years until the insured's retirement.
a
where would the underwriter find relevant info not presented by the applicant but communicated by the producer? a. application b. policy summary
a
All of the following statements concerning dividends are true EXCEPT a. Dividend amounts are guaranteed in the policy. b. They stem from favorable underwriting experience.
a
An employee quits his job on May 15 and doesn't convert his Groupe Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen? a. insurer will pay the full death benefit to the beneficiary b. insurer will pay a reduced death benefit to the beneficiary
b
An insured has mistakenly failed to enroll in her husband's health plan. What would happen following a major health expense? a. Her insurance would become primary, and her husband's secondary b. Her insurance would pay up to its limit
a
An insured purchased an insurance policy 5 years ago. Last year she received a dividend check from the insurance company which was not taxable. This year she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? a. Mutual b. Reciprocal
a
An insured receives an annual life insurance dividend check. What term best describes this arrangement? a. Cash option b. accumulation at interest
a
In reference to the standard Medicare Supplement benefits plans, what does the term "standard" mean? a. All providers will have the same coverage options and conditions for each plan. b. All plans must include basic benefits A - L.
a
What is the special significance of a conditional receipt? a. it is intendd to provide coverage on a date earlier than the date of the issuance of the policy b. it guarantees the applicant that the policy will be issued in the amount applied for in the applcation
b
What provision in a life insurance policy would allow the insurer, after the death of the insured, to pay benefits to a person not named in the policy as beneficiary? a. Nonforfeiture clause b. facility of payment clause
b
When Ken purchased his health policy he was a window washer. He has since changed occupations and now manages a library. Upon notifying the insurer of his change of occupation, the insurer should a. Adjust the benefit in accordance with the decreased risk. b. cosider decreasing the premium
b
When benefits are paid directly to the insured under a health insurance policy, the policy provides benefits on what type of basis? a.Scheduled b. Reimbursement
a
Which of the following is NOT true regarding uniform mandatory provisions concerning claims? a. An insured must notify the insurer of a claim on forms prescribed by the insurer. b. If the insured is several days late in filing proof of loss form, the claim cannot be denied if the insured can show good cause.
b
Which of the following is an example of an agent's fiduciary responsibilities? a. Performing a review of the agent's client's coverage b. Promptly forwarding premiums to the insurance company
a
Which of the following statements is not true of a Combination Dental Plan? a. A combination plan is also known as the "Superimposed Plan". b. The combination plan covers diagnostic and preventive care on the usual, customary, and reasonable basis.
a
Who is responsible for making sure that agents are properly trained in the use of the suitability standards for LTC policies? a. insurer b. commissioner
b
Annually renewable term policies provide a level death benefit for a premium that a. Decreases annually. b. increases annually
b
How soon following the occurrence of a covered loss, or after the insurer becomes liable for periodic payments for income benefits, must an insured submit written proof of such loss to the insurance company? a. within 20 days b. Within 90 days or as soon as reasonably possible but not to exceed one year.
b
The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT a. no lifetime dollar limits b. individual tax deduction for premiums paid
b
Under a Key Person disability income policy, premium payments a. are made by the employee and are tax-free b. are made by the business and are tax-deductible
b
Andy and Amy, both 53 years of age, are married. Amy is covered under Andy's family health insurance plan at work. If Andy dies unexpectedly, which of the following is true regarding Amy's health coverage? a. The group coverage will terminate 90 days after Andy's death. Amy will now have to buy an individual policy and provide evidence of insurability. b. Amy will be given the option to continue her coverage under the group plan, but will have to pay premiums for her coverage.
b
Which of the following would be least likely to be considered a legitimate need that would be paid by insurance proceeds? a.Debt cancellation b. vacation travel expenses
b
In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT a.The amount of insurance. b. The type of investment.
a
Leo is receiving hospice care. His insurer will pay for painkillers but not for an operation to reduce the size of a tumor. What term best fits this arrangement? a. cost-containment b. limited coverage
a
The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over what period of time? a. 2 years b. 1 year
b
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? a. The insured must submit proof of loss to the Department of Insurance. b.The insured was in compliance with the policy requirements regarding claims.
a
A Medicare SELECT policy does all of the following EXCEPT a. Prohibit payment for regularly covered services if provided by non-network providers. b. Provide payment for full coverage under the policy for covered services not available through network providers.
b
55 year old Ricki has worked part-time for his new employer for 3 month now but has not been offered health insurance. What facort has limited Ricki's eligibility? a. age b. # of hours that he works per week
a
What company produces evaluations of insurer financial status often used by the Insurance Department? a. AM Best b. NAIC
b
When a group health insurance plan is terminated, how long is an extension of benefits provided for any totally disabled employee or dependent? a. 3 months b. 12 months
b
How is emergency care covered for a member of an HMO? a. A member of an HMO may receive care at any emergency facility, at the same cost as if in his/her own service area. b. A member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area.
a
When a replacement is involved, a replacing insurance company is responsible for all of the following EXCEPT a. Provide a copy of the Important Notice Regarding Replacement of Life Insurance to the applicant. b. Send the existing insurance company a written notice of replacement
a
Evaluating information that establishes adverse selection risk is the purpose of which stage of insurance? a. underwriting b. application
a
If an insured continually uses the automatic premium loan option to pay the policy premium, a. The policy will terminate when the cash value is reduced to nothing. b. The face amount of the policy will be reduced by the automatic premium loan amount.
b
Which of the following factors is NOT considered by an underwriter when determining the premium rates for an individual seeking insurance? a. medical history b. race
a
Which of the following is NOT true regarding the accumulation period of an annuity? a. It would not occur in a deferred annuity. b. It is the period during which the annuity payments earn interest.
b
Which of the following is the best reason to purchase life insurance rather than annuities? a. To liquidate a sum of money over a lifetime b. To create an estate
b
With the cash refund option, when the annuitant dies, what would the beneficiary receive? a. Cash refund of the amount paid into the annuity b. The refund of the original amount minus payments already made
b
an insured's disability income policy includes an additional monthly benefit rider. For how many years can the insured expect to receive payment from the insurer before Social Securty benefits begin? a. 3 years b. 1 year
b
an underwriter is reviewing the medical questions in the application and needs further information due to a medical situation the applicant had in the past. What will the underwriter require? a. statement of continured good health b. attending physician statement
