xcel final exam

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a promotional advertising item is not considered a rebate unless it has a value equal to or less than what amount?

$25

An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses?

$3,000

in texas, how long must a policy be in force before an insurance company must pay death benefits for suicide

2 years

an insured must notify an insurer of a medical claim within ___ days after an accident

20

Insurers may request a hearing within ___ if their policy is rejected

20 days

an individual participant personally received eligible rollover fund from a profit-sharing plan. what is the income tax withholding requirement for this transaction

20% is withheld for income taxes

Every 12-months after the initial enrollment period, an HMO must hold an open enrollment period of

31 days

In Texas, an individual life insurance policy is REQUIRED to have a grace period of

31 days

which of these arrangements allows one to bypass insurable interest laws?

Investor-Originated Life Insurance

What does Medicare Part A and B cover?

Part A covers hospitalization; Part B covers doctor's services

an example of false advertising would be

an insurer exaggerating its dividends in a magazine advertisement

an applicants medical information received from the MIB may be furnished to the

applicants physician

At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid?

at the time of the application

when an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee covered under which of the following plan

contributory

which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due

grace period

A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow?

guaranteed insurability option rider

a nonforfeiture clause gives the policyowner

guaranteed values even if the policy has lapsed

which of the following will a long term care plan typically provide benefits for

home health care

Under a Basic Medical Expense policy, what does the hospitalization expense portion cover?

hospital room and board

in regards to representations or warranties, which of these statements is true

if material to the risk, false representations will void a policy

K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n)

installment refund annuity

Who makes the legally enforceable promises in a unilateral contract?

insurance company

who makers the legally enforceable promises in a unilateral insurance policy

insurance company

what type of life policy covers two lives and pays the face amount after the first one dies

joint life policy

during a sales presentation for a participating life insurance policy an agent must

make a prospect understand that dividends are not guaranteed

which of these factors do not play a role in the underwriting of a life insurance policY

marital status

the health insurance program which is administered by each state and funded by both the federal and state governments is called

medicaid

which of the following are not managed care organizations

medical information bureau (MIB)

which of the following best describes a short-term medical expense policy

nonrenewable

which statement is true regarding a minor beneficiary

normally, a guardian is required to be appointed in the beneficiary clause of contract

the notice of claims provision requires a policyowner to

notify an insurer of a claim within a specified time

which tax would ira participant be subjected to on distributions received prior to age 591/2

ordinary income tax and 10 tax pentalty withdrawal

which statement is true in regards to a policy loan?

past due interest on a policy loan is added to the total debt

which action will a life insurance company most likely take if an insured dies and it is discovered that the insured's age was misstated on the application

pay an amount the premiums would have purchased at the insured's actual age

M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take?

pay face amount minus the past due premium

how does group insurance differ from individual insurance

premiums are lower

which of these statements accurately describes the waiver of premium provision in an accident and health policy

premiums are waived after the insured has been totally disabled for a specified time period

what is the purpose of the time of payment of claims provision

prevents delayed claims payments made by the insurer

which of these is not a type of agent authority

principal

an example of rebating would be

returning a portion of a premium as inducement to purchase insurance

with optionally renewable health policies the insurer may

review the policy annually and determine whether or not to renew it

which of the following is not a required provision in group life policies

right to loan

A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take?

send a notice to the MIB that the applicant was declined

to terminate an agents appointment an insurance company must

send termination notice to the texas department of insurance

what type of life insurance incorporates flexible premiums and an adjustable death benefit

universal life

M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?

45 days

an insurer may normally delay the payment of a cash value loan or surrender value up to

6 months

how long can a cash surrender value payment be deferred by the insurance company under the nonforfeiture law

6 months

K's whole life insurance policy lapsed two months ago due to nonpayment. She would now like to reinstate the policy. All of these statements are correct about the policy's reinstatement EXCEPT

K will forfeit the right to use the automatic loan provison upon reinstatement

what is monetary penalty for willfully violating a cease-and-desist order

a fine up to $500 per day

A qualified profit-sharing plan is designed to

allow employees to participate in the profits of the company

an insurer is not required to provider information on fraudulent claims if requested by

an insured

which of the following statements best describes what the legal ac

an insured must wait at least 60 days after proof of loss has been submitted before a lawsuit can be filed

P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take?

beneficiary will be paid the death benefit

the difference between group insurance and blanket health policies is

blanket health policies do not issue certificates

under an interest sensitive whole life policy

cash values are determined by interest rates

N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take?

claim will be denied

B, an insurance agent, tells his clients that their rights may be impaired if they fail to complete a release form within a given period of time. B may be found guilty of

coercion

On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take?

collect initial premium along with a signed health statement

which of the following reimburses its insureds for covered medical expenses

commercial insurers

which of the following is not included in a life insurance illustration

company's mortality table

An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet?

consideration clause - a health insurance contract is valid only if the insured provides consideration in the form of the full minimum premium and the statements made in the application.

An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be

converted to an individual permanent policy at an individual rate

a universal life policy is sometimes referred to as an unbundled life policy because the owned can see the interest earned, expense charges, and the

cost of insurance

which of the following statements about health coverage for newborns is not true?

coverage is limited to only congenital defect

which of the following best describes a hospital indemnity policy

coverage that pays a stated amount per day of a covered hospitalization

S is the policyowner of a Major Medical policy. The premiums are paid monthly and due on the 1st of each month. S fails to make September's payment and is hospitalized October 15th. When S files the claim for this hospitalization, the insurer will likely:

deny the claim

which of these statements is incorrect regarding the federal income tax treatment of life insurance

entire cash surrender value is taxable

an underwriter determines that a life insurance applicant's risk should be reclassified due to a health issue. this policy may be issued with a(n):

extra premium

what is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained

fair credit reporting act

This type of deductible provision waives the deductible for all family members after some of them have satisfied individual deductibles within the same year:

family maximum deductible

an insurance company organized under new york laws and licensed to do business in texas is considered an

foreign company

credit life insurance is

insurance issued on a debtor to cover outstanding loan balances

If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?

insureds contingent beneficiary

variable annuities may invest in each of the following, EXCEPT:

insurer's corporate business account

which of the following health insurance policy provisions specifies the health care services a policy will provide

insuring clause

a domestic insurance company in texas is considered a company that

is incorporated and formed in texas

When a life insurance policy exceeds certain IRS table values, the result would create which of the following?

modified endowment contract

when will a hearing be held after a notice of hearing, alleging participation in an unfair or deceptive act, is served to a licensee or insurer by the Commissioner

no sooner than 6 days

An insured covered by Accidental Death and Dismemberment (AD&D) insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary?

proceeds will go to the contingent beneficiary

what is the consideration given by an insurer in the consideration clause of a life policy

promise to pay a death benefit to a named beneficiary

the legal actions provision of an insurance contract is designed to do all of the following EXCEPT

protect the producer

All of these are considered sources of underwriting information about an applicant EXCEPT

rating services

S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation?

single premium

K has inherited a large sum of money. K purchases an annuity with this sum on July 1, and starts receiving payments August 1. These payments will continue for as long as she and her spouse lives. Which type of annuity did K purchase?

single premium immediate joint with survivor annuity

What kind of life insurance product covers children under their parent's policy?

term rider

the investment gains from a Universal Life Policy usually go toward

the cash value

all of these statements about the commissioner of insurance are true except

the commissioner must be elected - the governor appoints the Commissioner to a two-year term

whole life insurance is sometimes referred to as straight life. what does the word straight indicate when using this phrase

the duration of premium payments

an individual who purchases a life annuity is given protection against

the risk of living longer than expected

How does a typical Variable Life Policy investment account grow?

through mutual funds, stocks, and bonds

T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called

time limit on certain defenses

why would the insurance commissioner examine the records of an insurance company

to determine the solvency of the company

ABC insurance company is actively engaging in boycott, coercion, and intimidation that results in the unreasonable restraint of trade. ABC is committing a prohibited act under Texas Insurance laws covering

unfair methods of competition

K purchased a Life insurance policy in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much-higher premium is paid because of falling interest rates. This type of policy is known as a(n) _________ life policy.

universal

S, age 40, is looking to buy a Life Insurance policy that will allow for increases or decreases in coverage as his needs change. The policy best suited for S would be

universal life

a __ life policy offers the owner investment in products such as money-market funds, long-term bonds and equities

variable

which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options

variable life - a life insurance policy that has a level premium but allows the policyowner to choose from a selection of investment options is known as Variable life

what is required for an agent whose license has been revoked

wait at least 5 years before applying for a new license

what is required for an agent whose license has been revoked?

wait at least five years before applying for a new license

What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?

waiver of premium rider

what kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100

whole life insurance - it is designed to mature at age 100


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