Exam

Annually Renewable Term

-Renews each year without proof of insurability -Premiums increase due to attained age

Medicare pays for all covered services during how many days in a skilled nursing facility?

20 days

managed care

A health care system whose goals are to provide cost effective quality care.

Roth IRA

A personal savings plan; contributions are not tax-deductible; earnings are tax-free

Graded Death Benefits

A policy where the full face value will not be paid until graded time has passed, according to policy terms (often 2 to 3 years) due to a substandard risk

Insurers that issue individual variable contracts in this state are required to mail the policyowner a statement of the investments. How often must they mail them?

Annually

What happens when a policy is surrendered for its cash value?

Coverage ends and the policy CANNOT be reinstated

Credit life insurance is usually issued at what type of policies?

Credit life insurance can be issued only as an individual or group term plan.

Which of the following is true regarding the insurance amount in a credit life policy?

Creditor can only insure the debtor for the amount owed.

Which of the following is TRUE about credit life insurance?

Creditor is the Policy owner

Which nonforfeiture option has the highest amount of insurance protection?

Extended Term

What nonforfeiture option is automatically selected by the company if not chosen by the policyowner?

Extended term

What does "level" refer to in level term insurance?

Face amount

Which option for universal life allows the beneficiary to collet both the death benefit and cash value upon the death of the insured?

Option B

which of the following describes taxation of individual disability income insurance premiums and benefits?

Premiums are not tax deductible, and benefits are not taxable.

Which of the following best details the underwriting process for life insurance?

Selection, classification and rating of risks.

Which of the following policies would be classified as traditional level premium contract?

Straight life

Which of the following riders is often used in business life insurance policies when the policyowner needs to change the insured under the policy?

Substitute insured rider

Which of the following is NOT a feature of a noncancellable policy?

The insurer may terminate the contract only at renewal for certain conditions

Which of the following statements are correct regarding a whole life policy?

The policy owner is entitled to policy loans

Which of the following is NOT true of life settlements?

The seller must be terminally ill.

When would a 20-pay whole life policy endow?

When the insured reaches age 100

The accidental death rider

Will pay 2 or 3 the face value amount

Credit life insurance

insurers the life of a debtor

Qualified plan

-approved by IRS for favorable tax treatment - tax deferred growth - must be permanent and have vesting requirements

Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days?

20 days

What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before a loss can be covered?

Probationary period

Director of Insurance

Usually appointed by governor, does not write, laws , examines all authorized insurers,

Accidental Death Benefit Rider

doubles the face amount of life insurance if death occurs as a result of an accident

The relation of earnings to insurance provision allows the insurance company to limit the insureds benefit to his/her average income over the last

24 months

Within what time frame after the effective date of coverage of an individual long-term care policy may an insurer exclude coverage of a loss related to a pre existing condition?

6 months

An insured will be allowed to reactive her lapse life insurance policy if action is taken within a certain period of time and proof of insurability is provided. Which policy provision allows this?

reinstatement provision, it allows a lapsed policy to be reinstated within 3 years by paying back premiums, with interest and proving insurability.

Which of the following best describes fixed period settlement options?

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

The purpose of the Missouri life and health guaranty association is to?

Help protect policy owners and beneficiaries against financial loss caused by the insolvency of an insurance company

Carry Over Provision

If the insured did not incur enough expenses during the year to meet the deductible, any expenses incurred during the last 3 months may be carried over to the next policy year to satisfy the new annual deductible

Option B

Under the option B the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases. At any period in time, the total death benefit will always be equal to the face amount of the policy plus the current amount of cash value.

Health Maintenance Organization (HMO)

an organization that provides comprehensive medical care to subscribers for a fixed fee

How often must an insurer who delivers variable life insurance policies in Missouri determine any changes in variable death benefits?

annually

A universal life insurance policy is best described as an

annually renewable term policy with a cash account

PKU

for children under age of 6, cant be more than 50% of costs, also may be subject to a maximum of not less than $5,000 per child covered

Annually renewable term policies provide a level death benefit that

increases annually

legal action

insured must wait 60 days after written proof of loss before bringing legal action against the company

Variable Life Insurance

life insurance in which the benefits are a function of the returns being generated on the investments selected by the policyholder

The following are dividend options

reduction of premium, paid-up additions, and accumulated at interest

Proof of Loss

A statement of facts about a loss for which the insured is making a claim. must be made within 90 days

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

Increases annually

Insurance Guaranty Association

An organization that protects policyholders and claimants in the case of an insurance company's impairment or insolvency. Insurance guarantee associations are legal entities whose members make guarantees and provide a mechanism to resolve claims.

Metal Levels

Bronze 60% Silver 70% Gold 80% Platinum 90%

In a disablity policy, the probationary period refers to the time.

During which illness-related disabilities are excluded from coverage

Which is true about the cash surrender nonforfeiture option

Funds exceeding the premium are taxable as ordinary income.

Which of the following best describes annually renewable term insurance?

It is a level term insurance.

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

Outpatient hospital treatment

An individual wants to purchase a life insurance policy. HIs agent ask if the transaction will involve replacing an existing life insurance policies. If the customer replies "yes" which of the following best describes the agents next steps?

The agent must provide a replacement notice to the applicant

Impairment Rider

Excludes coverage for a specific ailment or condition that otherwise would be covered (e.g., previous back injury)

Which nonforfeiture option provides coverage for the longest period of time?

Reduced paid up nonforfeiture option

In a life settlement contract who does the life settlement broker represent

The owner

What is the maximum age for qualifying for a catastrophic plan?

30

How long is an enrollment period for medicare supplement policies

6 months

The death protection component of Universal Life Insurance is always

Annually renewable term

A person who receives or collects money to be forwarded to the principal is said to have what kind of responsibility?

Fiduciary

Which is True about the cash surrender nonforfeiture option?

Funds exceeding the premium paid are taxable as ordinary income.

If a life policy allows the policy-owner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a?

Guaranteed insurability rider

Traditional IRA

Individual Retirement Account - A personal qualified retirement account through which eligible individuals accumulate tax-deferred income up to a certain amount each year, depending on the person's tax bracket.

Indexed Annuities

Interest rate tied to an index. Earn higher rate than fixed annuities, not as risky as variable annuities or mutual funds

Which of the following best describes a misrepresentation?

Issuing sales material with exaggerated statements about policy benefits

Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?

Paid-up option

When an insurer combines two periods of disability into one, the insured must have suffered a

Recurrent disability

A producer is helping a married couple determine the financial needs of their children in the event one or both of them should die prematurely, This is a personal use of life insurance known as

Survivorship protection

The interest credited option is

TAXABLE, whether or not the policyowner receives it.

Children riders attached to whole life policies are usually issued at what type of insurance?

Term

Credit life insurance is usually issued as what type of policies?

Term

Which of the following best describes annual renewable term insurance?

it is a level term insurance

When a health carrier uses retrospective review procedures, within how many days of receipt of information must the carrier make the determination?

30 working days

Which of the following is NOT true regarding Equity Indexed Annuities?

They earn lower interest rates than fixed annuities

Which provision states that the insurance company must pay medical expense claims immediately?

Time of Payment of Claims

A participating insurance policy may do which of the following?

pay dividends to the policy owner

Colorectal Screenings performed under individual and group health policies are required to be in compliance with the standards set by which of the following organizations?

American Cancer Society

The equity in an index annuity is linked to

An index like Standard and Poor's 500

Modified Endowment Contract (MEC)

An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.

A long term care insurance shoppers guide must be provided in the format developed by the?

NAIC

403(b) TSA

Non profit, organizations, church or school

Reduction of premium

The insurer uses the dividend to reduce the next year's premium

All of the following are TRUE statements regarding the accumulation at interest option except?

The interest is not taxable since it remains inside the insurance policy

Which of the following is NOT true regarding policy loans?

The money borrowed can be TAXABLE

Paid-Up Additions

the dividend is used to purchase a small amount of paid-up whole life insurance

Nonqualified Plan

A type of benefit plan that may discriminate, is not required to be filed with the IRS, and does not provide a current tax deduction for contributions.

No insurance policy form can be issued, delivered or used in this state unless it has been

Approved by the department of insurance.

Fair Credit Reporting Act

Act that protects privacy of background information and ensures that information supplied is accurate.

Reinstatement Provision

Applies to the timeframe that an insurer hasn't paid premium but wants the policy back. - You have 3-5 years to reinstate - proof of insurability and back premiums plus interest would have to be paid - If you havent heard back in 45 days, then the policy has been reinstated - policy premium is based on original age

fixed period installments

The annuitant selects the time period for the benefits, and the insurer determines how much each payment will be, based on the value of the account and future earnings projections. This option pays for a specified amount of time only, whether or not the annuitant is living.

What is the waiting period on a Waiver of Premium rider in life insurance policies?

6 months

The annual contribution limit of a Dependent Care Flexible Spending Account is set by

The IRS

USA Patriot Act

law passed due to 9/11 attacks; sought to prevent further terrorist attacks by allowing greater government access to electronic communications and other information; criticized by some as violating civil liberties

Keogh Plan

A federally-approved, tax-deferred savings program for self-employed people, allowing them to set money aside for their retirement.