Alabama Life & Health (ExamFX Simulation - attempt 2)

conditions or situations that increase the probability of an insured loss occurring

Hazards

according to OBRA, what is the minimum number of employees required to constitute a large group?

100

What is the earliest legal age a person can be licensed as an insurance producer?

18

Which of the following documents delivered to the policyowner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years?

A policy summary

Most health insurance policies exclude all of the following except

Accidental Injury

under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?

Cash Surrender

what term is used to describe when the medical caregiver provides services to only members or subscribers of a health organization, and contractually is not allowed to treat other patients

Closed Panel

which of the following is a requirement that must be satisfied before an applicant can receive an insurance producer license in Alabama

Complete prelicensing classroom instruction, unless otherwise exempt by the Commissioner

What is the difference between the Medicare approved amount for a service or supply and the actual charge?

Excess Charge

Annually renewable term policies provide a level death benefit for a premium that

Increases annually

Which of the following entities must approve all Medicare supplement advertisements?

Insurance Commissioner or Director

Using a class designation for beneficiaries means

Naming beneficiaries as a group

The primary eligibility requirement for Medicaid benefits is based upon

Need

medical savings accounts are only available to groups of how many employees

No more than 50

what part of the internal revenue code allows an owner of a life insurance policy or annuity to exchange or replace their current contract with another contract without creating adverse tax consequences?

Section 1035 Policy Exchange

Which two terms are associated directly with the way an annuity is funded?

Single payment or periodic payments

All of the following are beneficiary designations except

Specified

Which of the following are responsible for making premium payment in an HMO plan?

Subscribers

The owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producer say?

The policyowner can specify the way proceeds are split in the policy

All of the following are true about variable products EXCEPT:

The premiums are invested in the insurer's general account

Evaluating information that establishes adverse selection risk is the purpose of which stage of insurance?

Underwriting

An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?

When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health

which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?

automatic premium loan

All other factors being equal, which of the following lists from the largest annual premium to the smallest annual premium?

20-year endowment, 20-pay life, 20-year level term, 20-year decreasing term

How many days before delivery must an annuity contract be filed with, and approved by, the Commissioner?

30 days

How long does a temporary producers license last?

6 months

What documentation grants express authority to an agent

Agents contract with the principal

Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy?

An individual who was previously covered by group health insurance for 6 months is eligible

If an insurer meets the states's financial requirements and is approved to transact business in the state, it is considered what type of insurer?

Authorized

A business entity acting as an insurance producer is required to do all of the following except

Be a publicly owned company

A man is still employed at age 65 and is now eligible for Medicare. He wants to know what health insurance coverage he is eligible to receive. Which of the following options are available to him?

Both group and health medicare

Which of the following best describes fixed period settlement options?

Both the principal and interest will be liquidated over a selected period of time.

Which of the following statements concerning buy-sell agreements is true?

Buy-sell agreements are normally funded with a life insurance policy.

when an insured makes truthful statements on the application for insurance and pays the required premium it is known as which of the following?

Consideration

Which of the following is NOT a characteristic or a service of an HMO plan?

Contracting with insurance companies

The purpose of managed care health insurance plans is to

Control health insurance claims expenses

which of the following are the authorities that an agent can hold?

Express authority and Implied Authority

Which nonforfeiture option has the highest amount of insurance protection?

Extended Term

Which of the following is a feature of a single premium immediate annuity?

Income payments start within one year

Which of the following statements regarding HIV testing for insurance purposes is NOT true?

Insurers are barred from requesting HIV testing.

The insurer may suspect that a moral hazard exists if the policyholder

Is not honest about his health on an application for insurance

The reduction, decrease, or disappearance of value of the person or property insured in a policy is known as what?

Loss

Which of the following is the basis for a claim against an insurance policy?

Loss

In franchise insurance, premiums are usually

Lower than individual policies, but higher than group policies.

An insured purchased a life policy in 2010 and died in 2017. The insurance company discovers at that time that the insured had concealed information during the application process. What can they do?

Pay the death benefit

A tornado that destroys property would be an example of what?

Peril

When a person steps off the street car and trips and breaks their ankle, the injury is considered to be

Sudden and Unforeseen

in insurance an offer is usually made when

The completed application is submitted

In a defined contribution plan

The contribution is known and the benefit is unknown.

Which of the following best describes the tax advantage of a qualified retirement plan?

The earnings in the plan accumulate tax deferred

An association could buy group insurance for its members if it meets all of the following requirements EXCEPT

The group has to have at least 50 memebers

An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?

The old policy should stay in force until the new policy is issued

Which of the following best defines target premium in a universal life policy?

The recommended amount that keep the policy in force throughout its lifetime

In insurance policies, contract ambiguities are automatically ruled in favor of the insured.

The right to determine the wording of a policy

Which state has jurisdiction over a group policy that covers individuals that reside in more than one state?

The state in which the policy was delivered

Which of the following entities has the authority to make changes to an insurance policy?

insurer's executive officer

An individual buys a flexible premium deferred life annuity with 20 year period certain. What would his beneficiary receive if he died 5 years after beginning the annuity phase?

payments for 15 years

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Concealment

All of the following are lines of insurance that may be transacted under a life and accident/health producer license except

Consequential loss insurance

Which of the following is NOT a cost-saving service in a medical plan?

Denial of Coverage

A policy which covers medical costs related to a specific condition is called a

Dread Disease Policy

another term to describe no deductible is

First-Dollar Basis

Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premium must be paid for what time period?

For 20 years or until the insured's death, whichever occurs first.

Which one of the following is an eligibility requirement for social security disability income benefits?

Fully insured status

An insured has a Modified Endowment Contract. He wants to withdraw some money in order to pay medical bills. Which of the following is true?

He will have to pay a penalty is he is younger than 59 1/2

What is the benefit of experience rating?

It allows employers with low claims experience to get lower premiums.

Which of the following is true regarding the spendthrift clause in life insurance policies?

It can protect the policy proceeds from creditors of the beneficiary.

What is the other term for the cash payment settlement option?

Lump Sum

An insured stated on her application for life insurance that she never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. What would explain the reason a detah benefit claim is denied?

Material Misrepresentation

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums.

All of the following are characteristics of a Group Life Insurance Plan EXCEPT?

There is a requirement to prove insurability on the part of the participants.

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

Universal Life - Option A

All of the following benefits are available under Social Security EXCEPT?

Welfare benefits

when a life insurance was issued, the policyowner designated a primary and a contingent beneficiary. several years later, both the insured and the primary died in the same car accident, and it was impossible to determine who died first. which of the following would receive the death benefit?

insured's contingent beneficiary

what is the benefit of choosing extended term as a nonforfeiture option?

it has the highest amount of insurance protection

Which of the following named beneficiaries would not be able to receive the death benefit directly from the insurer in the event of the insured's death?

minor son of the insured

an insured is involved in a car accident. in addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive presumptive disability payments?

no benefits

which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

payor benefit

All of the following are marketing arrangements used by insurers except

reinsurance system

Which of the following statements about group life is correct?

the cost of coverage is based on the ratio of men and women in the group

workers compensation insurance covers a worker's medical expenses resulting from work-related sickness or injuries and covers loss of income from

work-related disabilities

What is another name for Social Security benefits?

Old-Age, Survivors, and Disability Insurance

A rider attached to a life insurance policy that provides coverage in the insured family members is called the

Other insured rider

An insured has a Level Term Life Insurance policy that is guaranteed renewable and also includes a reentry provision. The reentry provision would allow the insured to renew the policy and

Pay a lower renewal premium by proving insurability

If the policy owner, the insured and the beneficiary under a life insurance policy are three different people, who had the ownership rights?

Policyowner

insurance that would pay for hiring a replacement for an important employee who becomes disabled is called

Key employee disability insurance

What type of whole life insurance policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in subsequent years the premiums are higher than those of a straight whole life policy?

Modified life policies

Which of the following statements is NOT true concerning Medicaid?

It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income.

Which of the following statements concerning Medicare Part B is correct?

It pays for physician services, diagnostic test, and physical therapy

Which of the following is true about the premium on the children's rider in a life insurance policy?

It remains the same no matter how many children are added to the policy: it is based on an average number of children.

twin brothers are starting a new business. they know it will take years to build the business to the point that they can pay off debt incurred in starting the business. what type of insurance would be the most affordable and still provide a death benefit should one of them die?

Joint Life

An insured is covered under a Medicare policy that provides a list of network health care 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

A producer has become disabled. In order to keep his business going, what may his designee do?

Obtain a temporary license

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the

One-year term option

Which of the following provisions would not be found in Term Life Insurance

Policy Loan

Which of the following is NOT among the goals of a Medicare Supplement application?

Presuming the applicant is eligible for Medicaid, based on the nature of the policy

Under a disability income policy, the insurer does not pay a monthly benefit that is equal to the insured's previous income. The reason for paying a benefit amount that is less than the insured's income is to

Prevent overutilization and malingering.

the failure of an authorized insurer to file its annual financial statement with the commissioner when due may result in any of the following actions by the commissioner except

Requesting an audit

When an insured under a life insurance policy died, the designate beneficiary received the face amount of the policy as well as a refund of all the premiums paid. Which rider is attached to the policy?

Return of premium

An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true?

The group plan will not pay because the employee was injured at work

A married couple owns a permanent policy which covers both of their lives and pays the face amount of the policy only upon the death of the first. Which policy is that

Joint Life Policy

If an agent fails to obtain an applicant's signature on the application, the agent must.

Return the application to the applicant for a signature

A policy owner who is also the insured wants to name her husband the beneficiary of her life policy. She also wishes to retain in all of her rights of ownership. The policy owners should have her husband named as the

Revocable beneficiary

Which of the following would be a typical maximum benefit offered by major medical plans?

$1 million

When the insurer stipulates the time period for payment of claims, how soon must the insurer pay a death benefits claim after receiving the proof of death?

2 months. A provision on a settlement upon proof of death mandates that a settlement must be made no later than 2 months after the receipt of proof of death.