Connecticut Life and Health Insurance Exam

An example of an Unfair Claims Settlement Practice is

Failing to promptly investigate and settle legitimate claims.

What is another term used for a "pure" life annuity?

Life Income. A "pure" life annuity (also known as "life income") provides the highest monthly income benefit. Upon the death of the annuitant, however, all remaining funds are lost to the insurer.

Which of the following financial products creates an instant estate, no matter when the date of death?

Life Insurance. Life insurance creates an instant estate, regardless of when death occurs.

All of these are common limiting factors with dental insurance EXCEPT for

Limit placed on number of teeth that may be treated annually. All of these are typical limiting factors with dental plans except for the number of teeth that can be treated annually.

When a producer submits an application that discloses personal information regarding the applicant, who supplies the privacy notice?

Producer.

Security laws passed by Congress are enforced by which Federal agency?

Security and Exchange Commission. The Security and Exchange Commission enforces the security laws enacted by Congress.

Social Security disability income requirements state that in order to become fully insured on a permanent basis, you must have worked in a covered occupation for

40 quarters

What is a a "functional assessment" for long-term care benefits?

A review of the insured's ability to perform the activities of daily living. A "functional assessment" determines the insured's ability to perform the activities of daily living (ADLs)

In Connecticut, continuing education courses must be approved by the

Commissioner.

How long is individual medical expense insurance normally written for?

1 year.

A policyowner pays the first annual premium for a $50,000 life insurance policy and dies one month after the policy effective date. Which of these statements is normally true?

Beneficiary receives $50,000 income tax-free.

Which of the following best describes the tax treatment of medical expense policies for the self-employed?

100% of medical expense plan premiums are tax deductible.

A life insurance policy provision that has the ability to reduce the death benefit is called the

Accelerated (living) benefit. Whatever amount is withdrawn from an accelerated benefit will be deducted from the face amount when death occurs.

A reciprocal insurer typically has an administrator who manages the premiums collected from the group's members. This administrator is called a(n)

Attorney-in-fact. The administrator of a reciprocal insurer who manages the premiums collected from the group's members is called an attorney-in-fact.

What is the federal income tax liability of a death benefit paid from a health insurance policy to a named beneficiary?

Benefits are not taxable. Will not likely be applied to death benefits paid to the beneficiary of an insured under a health insurance company.

An accident and health insurance policy defines an injury as "bodily injury by accidental means". For an injury to be covered on this policy, what is required?

Both the cause and resultant injury must be accidental. Accidental means is a requirement of an accident based policy that the cause of the mishap must be accidental for any claim to be payable.

Which of these is NOT considered to be a cost connected with an individual's death?

Business expenses. All of these are considered to be costs associated with an individuals death EXCEPT business expenses.

A consultant derives their income from which source?

Clients

An accident and health insurance policy's premium requirements are set forth in which of the following provisions?

Consideration clause.

A consumer who has been recently denied insurance, credit, or employment based on an unfavorable consumer report MUST be advised as such, Which of the following does this statute originate from?

Fair Credit Reporting Act. A consumer being investigated must be advised of any denial based on an unfavorable report.

Which tax is normally associated with an individual's death?

Federal estate tax.

Who is required to notify the producer in the event of appointment termination?

Insurer. The insurer is responsible for reporting an producer's termination of appointment.

An insurance policy may be issued with a preferred insurance premium in all of these situations EXCEPT

Living in a rural area. Where an applicant lives is not a factor in determining preferred rates.

Which of the following would prevent a person from obtaining a Connecticut resident producer license?

Residing in a state outside of Connecticut. You must be a resident of Connecticut.

A group health certificate for coverage issued in Connecticut MUST contain a(n)

Summary of policy features and benefits.

Which of the following is the BEST candidate for a temporary insurance license?

The executor of the estate of a deceased licensed producer. My be issued without examination.

What determines how much an annuitant is paid for a variable annuity?

The market value variations of the securities backing it. The amount of each variable annuity benefit paid to an annuitant varies according to the market value of the securities backing it.

A(n)________________ insurer is incorporated and formed in Connecticut

domestic. In CT, a domestic insurance company is defined as a company that is incorporated and formed in CT.

A life annuity feature which provides benefit payments for a minimum number of years, no matter when the annuitant die, is called

period certain.

What type of employee welfare plans are not subject to ERISA regulations?

Church plans. Exempt from ERISA regulations

When using the approach for life insurance planning, a lump sum may be created to provide for all of the following EXCEPT

"Employee benefits". The needs approach to personal life insurance planning may involve creating a lump sum to provide for all of these EXCEPT employee benefits.

After conducting a hearing, the Commissioner is empowered to issue a cease and desist order. A violation of such an order is punishable by a monetary fine not to exceed

$50,000. Anyone who violates a final cease and desist order will be subject to license suspension or revocation, and a fine up to $50,000 for each violation.

Nonqualified medical expense distributions from a Health Savings Account (HSA) have a tax penalty of

20%. Nonqualified HSA withdrawals are subject to income taxes and a 20% penalty.

Which of the following describes coverage for the Medicare Part B coinsurance?

A Medicare Supplement core benefit.

According to the Affordable Care Act (ACA), dependent children may remain on their parents plan until what age?

Age 26. Under the Affordable Care Act (ACA), parents can insure their dependent adult children up to their 26th birthday.

A television advertisement features a health insurance product that is endorsed by a specific group. In this advertisement,

Any control by the insurer over this group must be disclosed. If a group endorses a health insurance plan product in an advertisement, the public must be made aware of any control by the insurer over the group.

An accident and health insurer has just received written proof of loss from one of its insureds. The insured must now wait 60 days before

Bringing legal action against the insurer. In accident and health insurance, 60 days must pass after written proof of loss has been received by an insurer before the insured can bring legal action against the insurer.

Medical costs in birthing centers are lowered by using

Certified nurse midwives. Birthing centers reduce medical costs through the use of certified nurse midwives.

A producer recently replaced an existing Medicare Supplement policy with a new policy. The producer's compensation for the new policy

CANNOT exceed the renewal commission of the original policy.

A group health plan covers employees in Connecticut, Massachusetts, and Rhode Island. The state regulatory jurisdiction established for this plan does NOT affect which plan aspect?

COBRA continuation of coverage. All of these aspects may be affected EXCEPT for "COBRA continuation coverage".

For employees covered in multiple states under a group health plan, jurisdiction rules cannot alter

COBRA laws. COBRA is a federal law and cannot be altered by any state jurisdiction.

A source of supplemental income for a life insurance policyowner can be derived from the

Cash value. Cash value may be used as a source to supplement a policyowner's income.

Which of the following is generally a form of group credit life insurance?

Decreasing term insurance

Which statement about group life insurance is INCORRECT?

Each participant requires evidence of insurability. Evidence of insurability is NOT normally required of each participant in group life insurance.

Terry suffers an injury at his workplace which is covered by workers compensation. Terry also has a medical expense insurance policy. Under medical expense insurance policies, losses that are covered by workers compensation are typically

Excluded from coverage. Under medical expense insurance policies, losses that are covered by workers compensation are generally excluded from coverage.

An annuitant is paid $495 per month until the contract value is exhausted at some undetermined date in the future. Which type of annuity payout option is this?

Fixed amount. Under the fixed amount option, the annuitant receives a fixed payment until the contract value is exhausted, regardless of when that will be. If the annuitant dies before the contract is depleted, the beneficiary receives the remainder.

Which of the following contracts offer deferred taxation, flexible payments, a guaranteed interest rate, and death benefits equal to the cash value?

Flexible premium fixed annuity. Offers flexible deposits, deferred taxation, a guaranteed minimum interest rate, and death benefits equal to the cash value.

What is the name of the rider that provides an additional purchase option in a life insurance policy?

Guaranteed insurability rider. An additional purchase option in a life insurance policy is also known as a guaranteed insurability rider.

Which of the following health plans pay benefits on a pre-paid service basis ?

Health Maintenance Organizations (HMO's) are contracted on a pre-paid service basis, NOT a fee-for-service or reimbursement basis. They offer a wide range of health care services for member subscribers. For a fixed periodic premium, the subscriber is entitled to medical services of certain physicians and hospitals contracted that work with the HMO. HMO's are pre-paid medical service plans.

A medical fee schedule shows the amount an insurer will pay for a given procedure. This amount is considered to be the

Highest amount payable. The amount shown for a given medical procedure in a medical fee schedule usually indicates the highest amount payable to reimburse a physician and/or other providers.

Some standard Medicare Supplement policies include which benefit?

Hospice care

Which life insurance clause prohibits an insurance company from questioning the validity of the contract after a stated period of time has passed?

Incontestable clause. The incontestable clause prohibits the insurer from questioning the validity of the contract after a stated period of time has passed.

Which of the following statements regarding hospital pre-admission authorization is NOT true?

It encourages weekend admission. All of these statements about hospital pre-admission authorization are true EXCEPT "it encourages weekend admission.

The initial premium for a life insurance policy is typically paid in what way?

It is typically obtained by the producer and forwarded to the insurer. The initial premium is usually collected by the producer and sent to the insurer.

After the initial enrollment period for Medicare Part B has expired, when may an individual purchase again?

January through March of the year

A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid

Mandatory income tax withholding on the amount transferred. There is no federal tax withholding involved in a transfer of funds from one qualified plan into another. Rollovers, however, involve a 20% withholding. Once the rollover takes place to the new custodian, the remainder of the distribution is made.

Which of the following relationships demonstrates insurable interest in the absence of economic interest ?

Marriage partners. Insurable interest may exist in marriage partners while absent of the economic interest.

Medicare Part A coinsurance payments are covered by

Medicare Supplement Plan A. Medicare Part A coinsurance payments are covered by Medicare Supplement Plan A.

Which individual would be best suited for Medicare Supplement insurance?

Medicare enrollee. Medicare Supplement insurance is designed for individuals who are enrolled in Medicare.

All of the following are covered under most dental plans EXCEPT for

Mouth cancer. Dental expense insurance typically provides benefit payments for all of these EXCEPT oral cancer.

James the producer has sold a life insurance contract to a client without using an illustration, even though his insurer offers one. For this particular transaction, the applicant

Must sign a statement that no illustration was provided.

During the sale of a life insurance policy, a producer may provide an incomplete illustration

Never. In the sale of a life insurance policy, it is never permissible for a producer to provide an incomplete illustration.

Jerome is covered by a disability income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?

Nonoccupational coverage.

Most prepaid dental plans cover

Oral examinations. Oral examinations are covered in most prepaid dental plans.

Patrick purchased a long-term care policy. He has a health condition for which medical treatment was recommended by a physician within 6 months prior to the policy's effective date. This condition is called a(n)

Pre-existing condition.

What typically changes at the re-entry option date found in some term life policies?

Premium. A re-entry option gives the insured the opportunity to provide evidence of insurability at the end of the term to qualify to renew the policy at a lower premium.

What is the name of the period of time during which a new employee is ineligible for group Health insurance coverage?

Probationary period.

A handicapped child is covered under an individual health policy. If continuation of coverage is needed beyond the policy's age limit, which of the following is required?

Proof of incapacity and dependency upon reaching the age limit. In Connecticut, continuation of medical plan coverage for a handicapped child beyond the age limit stated in the policy may require proof of the child's incapacity and dependency upon reaching the age limit.

How do benefit payments fluctuate over time in a variable life annuity?

Reflects changes in the market value of assets in a separate account.

Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?

Reimbursement.

Laura is a new employee and will be obtaining non-contributory group Major Medical insurance from her employee. Which of the following actions must she take during the open enrollment period?

Sign an enrollment card. A new employee must sign an enrollment card during the open enrollment period.

How does the cost for a survivorship life policy compare to the cost of combining two separate individual life insurance policies?

Survivorship life policy is lower. Compared to the combined premium for separate life insurance policies on two individuals, the premium for a survivorship life policy is lower.

Under a key person disability income policy, benefits will be received as

Tax-free income to the business. Benefits are received by the business tax-free because the premium paid is not tax-deductible.

To secure authority for soliciting insurance products in the State of Connecticut, an insurance company must secure a certificate of authority from

The Connecticut Insurance Commissioner. An insurance company must secure a certificate of authority from the Commissioner before transacting insurance in this state.

If one producer provides a referral to another producer which results in the sale of an insurance contract, who will likely be paid a commission?

The commission will likely be shared between the two producers. Sharing of commissions is allowed between producers licensed in the same line of insurance.

When disability buy-sell insurance benefits exceed a partner's cost basis, which of the following is correct?

The full amount is non-taxable to the partner. Policy proceeds from disability buy-sell insurance are normally received tax-free.

Which of the following is true regarding a person receiving a waiver of premium benefit?

The insured must be disabled for a period of time. (In order to qualify for the waiver of premium benefit)

The reason for backdating a policy is

To obtain a premium rate based on an earlier age. The purpose of backdating a life insurance policy is to use premiums based on an earlier age.

Which of the following BEST describes a "partial disability"?

Unable to perform one or more job duties.

At what point are death proceeds paid in a joint life insurance policy?

When the first insured dies. A joint life policy covers two or more lives and provides for the payment of the proceeds at the death of the first among those insured, at which time the policy terminates.

An individual who purchases a modified life insurance policy expects

an improvement in future income.

A producer MUST notify the Commissioner for

conducting business under an assumed name.

All of these are considered features of whole life insurance EXCEPT

initial premium is lower than for an equivalent amount of term insurance. The initial cost of whole life insurance is actually HIGHER than the equivalent amount of term insurance.

The health insurance premiums paid for by each partner in a partnership is considered to be

100% tax deductible. In a business partnership.

A producer sold a life insurance policy but did NOT provide the applicant with a basic illustration. In this situation, the insurer is REQUIRED to provide the applicant with a policy summary no later than the

Policy delivery date.

Purchasing insurance is an example of risk

Transference. Purchasing insurance is an example of risk transference.

A producer has indicated to a potential client that the proposed life insurance is covered by the Connecticut Life and Health Insurance Guaranty Association. This action taken by the producer is

"Prohibited by law". Pointing out to a prospective client that the life insurance policy you are presenting is covered by the Connecticut Life and Health Guaranty Association is prohibited by law.

When does the producer give a premium receipt for a life insurance application?

"When the initial premium has been paid with the application". A premium receipt is given to an applicant when the initial premium is paid with the application .

An Individual is insured under a major medical plan with a $1,000,000 lifetimes benefit. The plan has a $500 deductible and an 80% coinsurance. If the insured suffers a $50,000 medical expense during the calendar year, what is the remaining lifetime benefit?

$960,000. $50,000 - $500 deductible = $50,000. $50,000 x 80% = $40,000. $1,000,000 lifetime benefit - $40,000= $960,000 remaining.

The free look period provided in a life insurance policy is usually

10 days. Life insurance policies must provide a minimum free look period of 10 days upon policy delivery. This allows the policyowner time to decide whether or not to keep it. If the policyowner decides not to keep the policy within the 10 days allowed, a full refund will be given.

A producer must complete____credit hours of continuing education for each licensing period.

24 hours. All insurance agents must successfully complete 24 credit hours of continuing education every 2 years, prior to license renewal. Three of those hours must be in ethics.

How long do most states allow an insurance company to delay the payment of a cash surrender under the Delayed Payment provision?

6 months. Most states allow insurers to delay payment of cash surrender values for up to 6 months after policyowners request payment. This provision is a proactive measure for companies should an economic crisis arise, but such delays are rarely invoked.

In long-term care insurance, what is an "ADL"?

Activities of daily living

Which of the following statements accurately describes the "time limit on certain defenses"?

After a stated period of time, claims cannot be denied due to material misrepresentation on the application. Time limit on certain defense provision limits the time an insurer can void a contract or deny a claim for material misrepresentation on the application.

Which of the following situations would allow funds to be deposited into a rollover IRA?

An employee quits her job and receives $50,000 from her qualified plan.

A description of a qualified plan's insurance contract may be found in which ERISA reporting form?

Annual return/report (Form 5500). Form 5500 is a disclosure document that employee benefit plans use to satisfy annual reporting requirements under ERISA.

An insured has been ordered by the court to provide a child's health insurance. Upon this order, the insurer must allow the enrollment of this child

At any time with no open enrollment restrictions.

When does a family health policy's coverage for a newborn child begin?

At the moment of birth. If additional children are born to the family, the health insurance policy must cover the children at the moment of birth.

When does the insured stop making payments under a thirty-payment whole life policy?

At the time of death or 30 years after the policy's inception, whichever comes first. Stops paying premiums.

Which of these is NOT considered a Federal punishment for unfair and deceptive insurance practices?

Community service. Under federal law, punishment for unfair and deceptive insurance practices may include a fine, , imprisonment and license revocation but not community service.

Which of the following does NOT involve a life settlement transaction?

Converting term life coverage to whole life insurance. the business of life settlements includes all of these except "Converting term life coverage to whole life insurance.

Which of the following would permit an insurer to delay a covered disability policy claim?

Elimination period. The elimination period is the time immediately following the start of a disability when benefits are not payable.

Which parties are directly involved in a group accident and health insurance contract?

Employer and insurer. The contract for coverage in a group health plan is between the insurance company and the employer.

An officer for a corporation takes out numerous unsecured loans from the company's qualified retirement plan. Which of these rules is the plan in violation of?

Exclusive benefit rule. The assets held in a company's qualified retirement plan must be maintained for the exclusive benefit of the employees and their beneficiaries.

Which life insurance settlement option pays a stated monthly benefit until both principal and interest are exhausted?

Fixed amount installment option. The fixed amount installment option pays a predetermined amount of income at specific intervals until the proceeds and any interest earned are exhausted.

Joe is a life insurance policyowner who has failed to pay interest on his policy loan. What will result from this nonpayment?

Loan amount is increased to reflect the amount of interest due. When an interest payment is not made, the policy loan is increased to reflect the amount of interest due.

John bought a deferred annuity on Mary. John amends the contract years later to name Tom as the recipient of the proceeds if Mary dies. Who is the annuitant for this contract?

Mary. In this situation, Mary is the annuitant because that is where the proceeds of the annuity will be directed.

Karen is considering replacing her individual accident and health insurance policy with another individual policy. She has had issues in the past with her gall bladder that would be considered a pre-existing condition. How will a pre-existing conditions exclusion affect Karen's new insurance contract?

May reduce her benefits. The pre-existing conditions exclusion may reduce the insured's benefits because the new policy may not cover the same health conditions.

Medicare Supplement insurance requires an individual to be at least how old for open enrollment?

No minimum age.

How are the premiums for an individually-owned disability income policy treated for tax purposes?

Not tax-deductable at all. Premiums for individually-owned disability income policy are not tax-deductable at all.

Which of these statements accurately portrays an adjustable life insurance policy?

Policy can alternate between forms of term and whole life insurance. Adjustable life insurance allows the policyowner to adjust the policy's face amount, premium, and type of protection without having to complete a new application or exchange policies. Example: converting a term policy to whole life or vice versa.

Which statement regarding an adjustable life insurance policy is NOT true?

Policy loans are not permitted. If the adjustable life policy has cash value, the policyowner is permitted to take out a policy loan.

The standard provisions of an accident and health insurance policy may require that the

Policy, endorsements, and attached papers constitute the "entire contract"

Home health care benefits typically do NOT include coverage for

Prescription medication. Home health care benefits usually include coverage for all of these except prescription drugs.

Which of these is NOT a standard provision in qualified long-term care policies sold in Connecticut?

Prior hospitalization. Not a required provision for long-term care policies.

When must a producer provide disclosure about information practices to an applicant?

Prior to or at the time of signing the application

How are qualified Roth IRA distributions normally treated for tax purposes?

Received income tax-free. Qualified distributions are received income tax-free in a Roth IRA.

Which of the following describes the act of insuring a risk against possible loss?

Risk transfer

Which of the following does a Medicare Advantage enrollee typically pay for?

Small co-pay per visit or per service. In addition to the premium.

An individual in Connecticut who charges a fee for giving advice on an insurance policy must be licensed as a consultant if the advice is given to

The policyholder. An individual in Connecticut who charges a fee for giving advice on an insurance policy must be licensed as a consultant if the advice is given to the policyholder.

During the application process, a statement made by an applicant that becomes part of the contract is considered to be a(n)

Warranty. a statement made by the applicant that is guaranteed to be true in every respect and becomes part of the contract.

A policyowner is permitted to take out a policy loan on a whole life policy at what point?

When the policy has a cash value. A policy loan can be obtained from a whole life insurance policy once it has accrued a cash value.

Which of the following is NOT a valid reason for an insurer to contest a life insurance policy during the policy's first two years of existence?

Misstatement of age. During the first two years a life insurance policy is in force, the insurer may contest a policy for all of these reasons EXCEPT misstatement of age in the application.

In Connecticut, the Human Immunodeficiency Virus (HIV) consent form

Must disclose who will be receiving a copy of the test results. CT law requires the (HIV) consent form to disclose the types of individuals or organizations that may receive a copy of the test results.

Which statement is true regarding hospital preadmission certification for emergency situations?

Notification is required to be given after insured is admitted to the hospital. Hospital preadmission certification typically requires notification to be given after the patient is admitted to the hospital for an emergency situation. For nonemergency situations, notification is to be given BEFORE admission.

An insurer may NOT refuse the renewal of a small employer health insurance plan because of

Overuse of medical services. Not a valid reason for denying the renewal of a small employer health insurance plan.

Which statement best describes a single premium whole life policy?

Paid-up policy that offers lifetime protection. A single premium whole life policy provides protection for life as a paid-up policy.

How is the insured protected if a payor benefit rider is attached to the life insurance policy?

Premium payments are waived in the event the premium payor dies or becomes disabled.

Which of these statements is NOT a characteristic of the law of large numbers?

Rates can be calculated to compensate for losses. The law of large numbers states that larger groups provide better loss predictions. The higher the exposure, the more likely the event can be predicted.

The inability to perform SOME of the duties of one's own occupation is known as a

Residual disability.

Which of the following would most likely purchase an immediate annuity?

Retiree having a lump sum to invest.

A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a

Risk retention group. A group-owned insurer whose primary activity consists of assuming and spreading the liability risks of its members is called a risk retention group.

Which of these situations would NOT potentially involve a prison sentence under Federal law?

Selling insurance with a nonresident license. Selling insurance with a nonresident license is not a Federal violation.

Which of the following would NOT have a restricted ability to enter into a contract?

Small employer. Small employers do not have a restricted ability to enter in a contract.

If an individual would like to enroll in Medicare or seek public information about Medicare, which federal agency handles this?

Social Security Administration. Handles enrollment for Medicare program and provides information about medicare to the public.

Kelly purchases a health insurance policy issued on a conditionally renewable basis. The insurance company has a right to refuse renewal of the policy for

Specific reasons stated in the contract. If an individual health contract is issued on a conditionally renewable basis, the insurer has a right to refuse renewal for specific reasons stated in the contract only.

XYZ Corp gives money to an employee to purchase a life insurance policy and allows the employee to select the beneficiary. What kind of plan is this?

Split-dollar. A split-dollar plan is an arrangement where an employee and an employee share in the cost of purchasing a life insurance policy on the employee. The employee is also allowed to name the beneficiary.

In regards to technology and the ACA, which of the following statements is correct?

States which operate with an Exchange must offer an internet-based-portal

Which of the following incidents would NOT be covered by an Accidental Death and Dismemberment policy?

Suicide. Suicide is not covered by AD&D policies.

Which of these is a true statement regarding survivor benefits under a qualified retirement plan?

Survivor benefits can only be waived with the written consent of a married employee's spouse.

Which of the following must clearly be illustrated in ALL sales material for market value adjusted annuities ?

The market value adjustment can be either upward or downward. Sales material used in the marketing of market value adjusted annuities in Connecticut must clearly illustrate that the market value can be either upward or downward.

Life settlement brokers are NOT allowed to

Complete transactions prior to being approved for a license. Life settlement brokers need to be licensed before conducting any life settlement transactions. the exception to this would be certain eligible financial professionals.

Major Medical policies are typically characterized by which of the following?

Flat deductible. Major Medical policies are typically characterized by flat deductibles.

Ricks owns a variable universal life policy and chooses a variable death benefit option. What will typically happen to the death benefit as a result of this selection?

Fluctuate with changes in the cash account. When a variable universal life policyowner selects a variable death benefit option, the death benefit generally will fluctuate with changes in the cash account.

An annuity contract may be returned for a full refund during the

Free look period. The period during which a buyer may return an annuity contract for a full refund is called the "free look period".

A producer's license may only be suspended or revoked if the producer

Has been afforded a right to a hearing. No existing insurance license will be revoked until the license has been afforded a right to a hearing on the charges

A life insurance beneficiary died after receiving only six payments under the policy's life income settlement option. What happens with the remaining balance of the death proceeds?

Kept by the insurance company. Under the life income settlement option, the beneficiary is able to have the benefits converted into an annuity which is based upon the individual's life expectancy and payable as long as the beneficiary is still alive.

Laura added a children's rider to her life insurance policy. What type of coverage was added?

Level term. Is provided by adding a children's rider to the life insurance policy.

Why do insurers require a minimum number of employees participate in a group insurance plan?

Minimize adverse selection. The larger the group to be insured, the more predictable will be the expected losses from the group.

Which of the following is considered to be an unfair claims settlement practice?

Misrepresenting pertinent policy provisions relating to coverage after a loss. This is an unfair claims settlement practice.