Final Exam Insurance

A policyholder has a major medical plan with a 80%/20% coinsurance and a deductible of $75. If the insured has previously met her deductible and receives a bill for $175, how much will the insurer pay?

$140

An insured under a Major Medical expense plan with a zero deductible and 80/20 coinsurance provision files a $1,000 claim. How much of this claim is the insured responsible for?

$200

A producer may give an insurance applicant an article of merchandise having an invoice value of ____ or less.

$5

Kim has health insurance with a deductible of $500 and an 80/20 coinsurance. How much will she pay if she incurs a loss of $1,500?

$700

Amy has a group medical policy through her employer with a $500 deductible and a 90% coinsurance provision. She incurs $1,500 in covered health care services. How much will her group insurance carrier pay?

$900

XYZ Insurance Company receives satisfactory proof of loss for a claim. If XYZ does NOT pay the claim within 60 days of receipt, the insurer MUST pay simple interest of ___ per annum.

12%

Frank is shopping for a disability income policy. Which of the following would have the HIGHEST premium?

14 day waiting period / 10 year benefit period

A baby is born to a husband and wife covered under a family accident and health insurance policy. If the newborn is covered at birth, the first payment for the additional coverage would become due in ___ days.

31

Erica is 35 years old and owns an IRA. At what age can she begin to receive distributions without a tax penalty?

59 1/2

In an employer-sponsored contributory group Disability Income plan, the employer pays 60% of the premium and each employee pays 40% of the premium. Any income benefits paid are taxed to the employee at

60% of the benefit

An insurance producer license is required for which of the following?

A business entity soliciting insurance

Which of the following is INELIGIBLE to participate in a Section 125 Plan?

An S-Corp Owner with a greater than 2% share

In group health care, what is the purpose of the coordination of benefits provision?

Determines what is paid by the primary and secondary insurers in the event of a claim

Fraternal Benefit Society has each of the following characteristics EXCEPT

Exist for profit

Which of the following is considered to be an act of misrepresentation?

Falsifying the terms, benefits, advantages, or conditions of an insurance policy

Elizabeth is the beneficiary of a life insurance policy. She is receiving the death benefit in payments of $10,000 per month until the principal and interest has been paid out. Which option was chosen?

Fixed amount

An insurer would be committing Unfair Discrimination if coverage was denied based upon

Marital Status

Shirley has a Medigap policy, which is designed to pay costs associated with

Medicare Parts A and B

Which of the following does Medicare Part D cover?

Prescription Drugs

All of the following are functions of an insuring clause EXCEPT

Primarily describes the free-look period

A producer's license is required for all of these activities EXCEPT

Underwriting insurance

When does a life insurance policy typically become effective?

When initial premium is collected and policy is issued

A Universal Life policyowner must receive a notice of cash surrender value at LEAST every

Year

Fixed period settlement options are considered to be a form of a(n)

annuity

A new born must be covered under an existing health insurance policy

at the moment of birth

Field underwriting performed by the producer involves

completing the application and collecting initial premium

Intentional withholding of material facts that would affect an insurance policy's validity is called a(n)

concealment

A group Disability Income plan that pays tax-free benefits to covered employees is considered

fully contributory

Which of the following protects a policyowner from a misrepresentation caused by an innocent mistake?

incontestable clause

A foreign insurance company doing business in Michigan

is a company domiciled under the laws of another state

A guaranteed issue insurance policy has no

medical underwriting

A life insurance policy sold in Michigan may be contested by the insurer ONLY during the first ____ year(s) of the contract.

two

An insured has a stop-loss limit of $5,000, a deductible of $500, and an 80/20 coinsurance. The insured incurs $25,000 of covered losses. How much will the insured have to pay?

$5,000

If an employee contributes 50% toward the disability plan premium provided by an employer, what would be considered the taxable income of a $1,000 monthly disability benefit?

$500

Kathy pays a monthly premium on her health insurance policy. How long is her grace period?

10 Days

An individual applying for a Michigan resident producer license must have completed the required pre-licensing education within ___ months of license application.

12

For individual health insurance, coverage for pre-existing conditions may be excluded for up to ___ months after issuance of the policy

12

An insurer must furnish to a claimant forms for filing proof of loss within ___ days upon receiving a notice of claim.

15

To be eligible for small employer group coverage, an employee must work a MINIMUM of ___ hours in a typical week.

17.5

In Michigan, legal action can be taken for up to ___ year(s) against an insurer for failure to pay health insurance claims after proof of loss was submitted.

3

Michigan requires that a licensee complete __ hours of continuing education on the subject of ethics every reporting period.

3

A life insurance applicant in Michigan may backdate the application for up to ___ month(s).

6

In Michigan, legal action may be taken against an insurer for up to ___ years for failing to pay a life insurance claim after proof of loss was submitted.

6

Within how many days must a rollover be completed in order to avoid being taxed as current income?

60

In determining whether a pre-existing condition applies, the enrollee CANNOT have more than how many days' gap in health insurance?

63

Which of the following BEST describes a conditional insurance contract?

A contract that requires certain conditions or acts by the insured individual

A fee for service health insurance plan will normally cover

A disease

Which of the following employers is required to follow ERISA regulations?

A local electrical supply company with 12 employees

HIPAA considers which of the following as "individually identifiable health information"?

A person's health claim information

Under Michigan Law, which of the following would NOT be considered an illegal inducement?

A promotional item with the producer's name and address valued at $5.00

If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if the insured dies?

A prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at the correct age

A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called

A self-funded plan

Which of these is considered to be a Living Benefit option in a life insurance policy?

Accelerated death benefit

Which of the following is considered to be an alternative to a life settlement?

Accelerated death benefit rider

Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental?

Accidental bodily injury provision

Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue?

Accumulation at Interest Option

What amount will be paid under a policy where the insured misstated his/her age?

An amount the premium would have purchased at the correct age

Under which circumstance do consumer privacy regulations allow an insured's financial information be released?

An authorized agency makes a written request to the insurer during an insurance fraud investigation

Which of these is NOT considered to be a purpose of an annuity?

Annuities are intended to create an estate

Which of the following is included in the entire contract according to the entire contract provision?

Application

Which of these factors would an insurer consider when determining whether to accept a group life plan?

Average Age

XYZ Corp pays the tax-deductible insurance premiums for a key employee disability policy. Which of the following would be the appropriate tax consequence?

Benefits are fully taxable

With a scheduled dental policy, how are covered expenses paid?

Benefits are limited to a specific maximum dollar amount per procedure

Newborn coverage under health insurance policies MUST include coverage for

Birth abnormalities

Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled?

Business overhead expense policy

Insurable interest does NOT occur in which of the following relationships?

Business owner and business client

Ted has a health insurance plan that requires him to pay a specific sum out of pocket before any benefits are paid in a calendar year. Which of these does his health plan have?

Calendar-year deductible

Jonas is a whole life insurance policyowner and would like to add coverage for his two children. Which of the following products would allow him to accomplish this?

Child term rider

What would happen if a life insurance applicant is given a conditional receipt from an insurance agent and then dies the next day?

Claim will be paid if application is approved

Naming a contingent beneficiary as "all surviving children" is described by which term?

Class designation

Which of these is affected by the frequency of an insurance policy's premium payments?

Cost

In Michigan, a person providing insurance advice to a person or business for a fee is required to hold which license?

Counselor

Which of the following statements is NOT true regarding a Critical Illness Plan?

Coverage is limited to a single devastating disease

Nate's dependent son is physically handicapped, but not eligible for Medicare. How long may the son remain on Nate's health coverage after the age of 26?

Coverage remains with written proof of disability and dependency

Julie has a $100,000 30-year mortgage on her new home. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period?

Decreasing term insurance

A hospital or medical expense policy will typically cover dental treatment expenses under which circumstance?

Dental treatment is needed to repair an injury

A producer's insurance license may ONLY be revoked by the

Department of Insurance and Financial Services (DIFS)

Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Matt

Dies instantly from a car accident

Lisa has recently bought a fixed annuity. Which of these is considered to be a disadvantage of owning this type of annuity?

During periods of inflation, annuitants will experience a decrease in purchasing power of their payments

The _________ reserves the right to renew a small employer health plan.

Employer

The policyholder for a group health benefit plan is considered to be the

Employer

The limited period of time given to all members to sign up for a group health plan is called the

Enrollment period

What is the name of the provision which states that a copy of the application must be attached to the policy when issued?

Entire Contract

Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. What kind of policy is this?

Equity index whole life

Craig purchased a life insurance policy for enabling his heirs to pay estate taxes. What is this called?

Estate conversion

The taxable portion of each annuity payment is calculated using which method?

Exclusion Ratio

What does the word "level" in Level Term describe?

Face amount

Which of these riders will pay a death benefit if the insured's spouse dies?

Family term insurance rider

Which of these annuities require premium payments that vary from year to year?

Flexible premium deferred annuity

Paul the producer has provided a false statement in relation to an insurance claim. Which illegal act has been committed?

Fraud

How are annuities given favorable tax treatment?

Gains are taxed at distribution

A business will typically use which type of life insurance to cover their employees?

Group policy

Fixed annuities provide each of the following EXCEPT

Hedge against inflation

Which of the following is NOT included under a health benefit plan?

Hospital indemnity plan

What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allow an employee to do?

In the event of employment termination, group health insurance can be kept if the employee pays the premiums

Under which circumstance may a deferred insurance commission be paid to an individual?

Individual was a licensed producer at the time of the sale

Who is responsible for assembling the policy forms for insureds?

Insurance Carriers

Which of the following types of deductibles would apply a single deductible to both medical and dental insurance coverage?

Integrated deductible

An applicant's character and personal habits can be obtained for underwriting purposes from which source?

Investigative consumer report

What is the purpose for having an accelerated death benefit on a life insurance policy?

It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill

Which of the following statements is TRUE about Medicaid?

It is funded by federal, state, and local taxes

What happens to interest earned if the annuitant dies before the payout start date?

It is taxable

Which of the following statements regarding Group Disability Income insurance is TRUE?

It provides benefits for nonoccupational illnesses and injuries

Without a Section 125 Plan in place, what would happen to an employee's payroll contribution to an HSA?

It would be considered taxable income to the employee

A common exclusion with Vision plans is

LASIK surgery

How do insurers predict the increase of individual risks?

Law of large numbers

Insurance companies determine risk exposure by which of the following?

Law of large numbers and risk pooling

Which type of annuity stops all payments upon the death of the annuitant?

Life Annuity

Which of these is NOT considered to be a common life insurance nonforfeiture option?

Life income annuity

A life insurance policy that has premiums fully paid up within a stated time period is called

Limited payment insurance

The IRS states that a taxpayer's medical expenses that exceed 7.5% of their adjusted gross income is tax deductible. Which of the following may be considered a medical expense under this rule?

Long Term Care Insurance premiums

The IRS allows a taxpayer to deduct medical expenses that exceed 7.5% of their adjusted gross income. Which of the following is considered a tax deductible medical expense under this rule?

Long Term Care insurance premiums

Someone needing custodial care at home would require which type of coverage?

Long-term care

All of the following are examples of pure risk EXCEPT

Losing money at a casino

Which of the following is an example of the illegal act of defamation?

Making a statement that is false or maliciously critical of the financial condition of an insurer

All of these are considered key factors in underwriting life insurance EXCEPT

Marital status

An employer is issued a group medical insurance policy. This single contract is known as a(n)

Master Policy

All of these are considered sources of information that can assist an underwriter in determining whether or not to accept a risk EXCEPT

National Association of Insurance Underwriters

Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following statements is TRUE?

Net death benefit will be reduced if the loan is not repaid

What is the tax liability for employer contributions in Health Savings Accounts (HSA's)?

No tax payment needed

Disability Income plans which require that the insurer can NEVER change or alter premium rates are usually considered

Noncancellable

Which of these actions would NOT result in a producer's license revocation?

Not maintaining an adequate level of sales

What makes an insurance policy a unilateral contract?

Only the insurer is legally bound

Chris is an insured bricklayer who severed his left hand in an automobile accident. Although his primary duty cannot be performed, Chris is also a substitute high school teacher. He collects a full disability income check every month. How does his policy define total disability?

Own Occupation

Which of the following is NOT covered under Workers' Compensation?

Pain and suffering

Joe is a Medicare participant who receives his benefits through a Managed Health Care Plan. Which Medicare plan does he have?

Part C

An interest-sensitive life insurance policyowner may be able to withdraw the policy's cash value interest free. The provision that allows this is called

Partial Surrender

Which annuity payout option allows the policyowner to choose a pre-determined number of benefit payments?

Period certain

Which of the following would evidence ownership in a participating health insurance contract?

Policy Ownership

Which situation accurately describes a reduced paid-up nonforfeiture option?

Policy has a decreased face amount

Which of these is considered to be a document that describes the critical segments of a life insurance policy?

Policy summary

Variable life insurance and Universal life insurance are very similar. Which of these features are held exclusively by variable universal life insurance?

Policyowner has the right to select the investment which will provide the greatest return

Which of these describes the result of a modified endowment contract that failed to meet the seven-pay test?

Pre-death distributions are typically taxable

A person who is a nonsmoker, of average weight, and in excellent health would most likely be in which risk classification?

Preferred

Which of the following provides Medicare supplement policies?

Private insurance companies

All of the following are considered appropriate uses of life insurance for business purposes EXCEPT

Protecting the business by covering entry level employees with life insurance

Which of these is the BEST example of misrepresentation?

Providing incorrect, misleading, incomplete, or materially untrue information in a license application

Upon finding a producer guilty of forgery, the Commissioner may take all of the following actions EXCEPT?

Require the producer to notify his/her clients

Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death?

Results

A life insurance application may be backdated to

Save on premiums

Generally speaking, which three levels of care are Long-Term Care policies provided with?

Skilled nursing, intermediate, and custodial care

Typically, Long-Term Disability benefits are coordinated with which benefit plan?

Social Security

Which of the following is NOT a type of Medicare Advantage Plan?

Social Security Disability Income (SSDI)

All of the following are exempt from the 10% tax penalty for early qualified plan withdrawals EXCEPT

Stock Purchase

Which of the following actions is REQUIRED by a producer who is replacing an existing life insurance policy?

Submit to the replacing insurer a list of the policies to be replaced

Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation, or hobbies?

Substandard risk

Which of the following decisions would a Health Savings Account (HSA) owner NOT be able to make?

The amount contributed by the employer

Which of these statements regarding the annuitant is CORRECT?

The annuitant's life expectancy determines the annuity payments

James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount?

The death benefit paid will be what the premium would have purchased at the correct age

When calculating the amount of life insurance needed for an income earner, what has to be determined when using the Needs Approach?

The family's financial objectives if the income earner were to die or become disabled

In which of the following situations would the insurer be liable for a loss?

The insured suffered an injury as an innocent bystander during a bank robbery

Under a life insurance policy, what does the insuring clause state?

The insurer's obligation to pay a death benefit upon an approved death claim

Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true?

The policy may be paid up early by using policy dividends

What happens when an insurance policy is backdated?

The policy's effective date is earlier than the present

What is the purpose of the Medical Information Bureau (MIB)?

To help underwriters evaluate risk

Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this?

Universal Life policy

David submits a $500 claim for medical expenses. There is a past-due amount owed for insurance premiums of $200. As a result, the insurer only pays $300 for the claim. This deduction came as a result of which provision?

Unpaid provision

If an insured's unmarried child is incapable of self support because of a mental handicap, how long must this child be provided health coverage under the parent's policy?

Until policy termination with proof of incapacity

Which type of policy combines the flexibility of a universal life policy with investment choices?

Variable universal life policy

Which type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested?

Variable universal policy

What guarantees that the statements supplied by an insurance applicant are true?

Warranty

All of these statements concerning whole life insurance are false EXCEPT

When a whole life policy is surrendered, income taxes may be owed

Major Medical expense plans provide coverage for each of the following EXCEPT

Work-related injuries

The double indemnity provision in a life insurance policy pertains to an insured's death caused by a(n)

accident

All of these are common exclusions to a life insurance policy EXCEPT

accidental death

All of these are valid policy dividend options for a life insurance policyowner EXCEPT

accumulate without interest

In the Michigan Insurance Code, Chapter 45, insurance fraud defines financial loss as all of the following EXCEPT

additional premiums

A non-contributory health insurance plan helps the insurer avoid

adverse selection

Medical Expense Insurance would cover

an injury occurring at the insured's residence

Maria would like an annuity that provides a guaranteed accumulation or payout. The type of annuity she is seeking is called

annuity certain

A type of group that has a constitution and bylaws and has been organized for purposes other than obtaining insurance is called a(n)

association or labor group

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a terminated employee's benefits must

be the same and the premium cannot exceed 102%

A disability income policy can prevent an insured from earning a higher income than if he/she were working by utilizing

benefit limits

A disability policyowner is injured and becomes totally disabled. The benefits pay for 2 years, starting from the date of the injury. What is this time period called?

benefit period

An insured has a health plan that pays established amounts in accordance with a list of injuries, surgical procedures, or other losses. This list is called a

benefit schedule

Under a group life policy, the insurer will issue an individual _____ to the policyowner for delivery to each person insured.

certification

A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n)

collateral assignment

A Medicare Supplement Policy is

designed to fill in the gaps of Part A and Part B Medicare

A pharmacy benefit covers prescription drugs derived from a list called a(n)

drug formulary

A Medicare Supplement policy must NOT contain benefits which

duplicate Medicare benefits

Under group health insurance, a certificate of coverage is issued to the

employee

Under the Health Insurance Portability and Accountability Act (HIPAA), the employee's new Group Health Plan will verify Creditable Coverage so that the

employee's waiting period for coverage of a preexisting condition can be reduced under the new employer's health plan

In an employer-sponsored group accident and health plan, a master contract is issued to the

employer

A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT

fare-paying passenger

A Medicare supplement plan can be canceled by the insurer

for nonpayment of premiums

Underwriters can acquire information from all of the following sources EXCEPT

genetic testing

A health insurance policy that allows an insurer to change the policyowner's premiums, but NOT cancel the policy is called a(n)

guaranteed renewable policy

HMO plans are REQUIRED to provide

home health care

A proposed insured for a health insurance policy was treated for heart disease within the past year. When applying for health insurance, the heart disease treatment

indicates a preexisting condition

The conversion privilege under a group life plan allows an employee to convert to a(n)

individual plan upon employment termination

Which of these is NOT considered to be a nonforfeiture option in a whole life insurance policy?

interest only

According to HIPAA, when an insured individual leaves an employer and immediately begins working for a new company that offers group health insurance, the individual

is eligible for coverage upon hire

A person covered with an individual health plan

is issued a policy

When a decreasing term policy is purchased, it contains a decreasing death benefit and

level premiums

An insured was injured as an innocent bystander when someone committed a felony. The insurer is

liable for the loss

The reinstatement provision in a health insurance policy is

mandatory

Group health plans may deny participation based upon the

member' part-time employment status

Tara the producer is delivering a specified disease insurance policy to a new policyowner. Upon delivery, she may be expected to collect all of the following EXCEPT a(n)

modified application with a new signature

A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n)

nonforfeiture provision

A whole life policy option where extended term insurance is selected is called a(n)

nonforteire

A beneficiary change can occur

normally at any time during the policy term

A producer's fiduciary duty requires that

premiums are forwarded to the insurer on a timely basis

A health insurance policy will typically cover

preventative health services

Decreasing term life insurance is often used to

provide coverage for a home mortgage

An indemnity plan

provides the insured a specific dollar amount for services

Statements made by an insurance applicant on an application are considered to be

representations

An annuity is primarily used to provide

retirement income

A life insurance policyowner does NOT have the right to

revoke an absolute assignment

An endorsement found in an insurance plan which modifies the provisions of the policy is called a(n)

rider

An example of endodontic treatment is a

root canal

Term insurance is appropriate for someone who

seeks temporary protection and lower premiums

In an insurance contract, the applicant's "consideration" is the

statements made in the application and the premium

A(n) ______ company is owned exclusively by shareholders.

stock

The type of policy which pays on the death of the last person is called

survivorship life

What types of life insurance are normally used for key employee indemnification?

term, whole, and universal life insurance

This MANDATORY health policy provision states that the policy, including endorsements and attached papers, constitutes

the entire insurance contract between the parties

If an insured dies during the grace period with no premiums paid

the policy would be payable, minus the premium amount

The free-look provision gives the policyowner

the right to return the policy for a full refund within a specified number of days

According to the Taft-Hartley Act, group insurance premium payments made by an employer MUST be paid to the

trust

The act of _________ insurance does NOT require an individual to hold an insurance producer license.

underwriting

A life insurance policy that contains a guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate is called

universal life

A life insurance policy that is subject to a contract interest rate is referred to as

universal life

Craig submits a $500 claim for medical expenses. With a past due premium of $100, the insurer pays $400. Which of the Uniform Optional Provisions covers this situation?

unpaid premium

"Maximum benefits" refers to the

upper limit of the total lifetime benefits the insurance company will pay

An example of intimidation is

using threat or force to restrict fair trade in the transaction of insurance

A single premium cash value policy can be described as

a policy that is paid up after only one payment

A producer has allowed his/her license to lapse by failing to complete the required continuing education credits. The license may be reinstated by completing the requirement within ___ days of the renewal date.

90

Justin is receiving disability income benefits from a group policy paid for by his employer. How are these benefits treated for tax purposes?

Taxable income

A life insurance applicant in Michigan may backdate the applicant for up to ____ months

6

A common exclusion or limitation on a dental policy is

Endodontics

Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?

Guaranteed insurability rider

Tom has a rider on his disability income policy that guarantees the right to increase his benefits without a medical exam. What kind of rider is this?

Guaranteed insurability rider

Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits. Which of these benefit options would he choose?

Guaranteed lifetime withdrawal benefit

Low frequency diseases can be exclusively covered by what kind of health insurance policies?

Limited Policies

An insurer's ability to make unpredictable payouts to policyowners is called

Liquidity

The statement which best describes the relationship between the premiums of a whole life policy and the premium payment period is

The shorter the payment period, the higher the premium

Jennifer is required to pay a specific sum out of pocket before any benefits are paid in a year. Her health policy most likely contains a(n)

deductible

Sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of

100% of costs

Producer commissions may NOT be paid to

licensed producers not appointed by an insurer

A dread disease policy is considered to be a type of

limited health insurance policy

All of the following are qualifications for establishing a health savings account (HSA) EXCEPT

Enrolled in a health plan with a prescription drug benefit

Mark continues working after the age of 65 and is covered through his employer's group health plan. Which of the following statements is TRUE?

Medicare is the secondary payer

A clause that allows an insurer the right to terminate coverage at any anniversary date is called a(n)

Optional renewability clause

What is an insurance policy's grace period?

Period of time after the premium is due but the policy remains in force

Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. Which of these statements is true?

The face amount and premium will remain constant over the 10-year period

A renewable Term Life insurance policy allows the policyowner the right to renew the policy

without producing proof of insurability

The acceptance of a credit life application requires the submission of a certificate of insurance to the insured within ___ days.

30

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

Recording receipt and remittance of premiums due to the insurance company

Which of these would be the best example of a limited pay life insurance policy?

Whole life policy with premiums paid up after 20 years

Which of these is NOT a characteristic of the Accelerated Death Benefit option?

The benefit can be offered as a rider at a specific extra cost or may be at no cost

Bob and Tom start a business. Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12 months later. The policies continue in force with no change. Both partners are still married at the time of Bob's death. In this situation, who will receive Bob's policy proceeds?

Tom

The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as

Twisting

An example of an unfair claims settlement practice is

failing to promptly provide a reasonable explanation for the denial of claims

Index whole life insurance contains a securities component that acts as a(n)

hedge against inflation

Upon receiving a producer complaint, the Commissioner may immediately

issue a cease and desist order

The factor used most often when underwriting a disability income policy is

Annual Earnings

A waiver of premium rider allows an insured to waive premium payments if the insured is

Completely and permanently disabled

Which of the following would be considered a possible applicant and contract policyholder for group health benefits?

Employer

A Medicare Supplement policy issued in the state of Michigan is required to provide each of the following EXCEPT

It must include outpatient prescription drug coverage

Which requirement must be met by associations that seek group health coverage for its members?

Must have been formed for a legitimate purpose other than obtaining insurance

Which of these factors is NOT taken into consideration when determining the cost of a long-term care policy?

Personal Income

Coordination of Benefits regulation applies to all of the following plans EXCEPT

Preferred Provider Organization plan

Which of these BEST describes the illegal act of twisting?

Replacing an insurance policy from one insurer to another based on misrepresentation

In the state of Michigan, a licensed producer

Represents the insurer

Which of the following policies does NOT build cash value?

Term

Under which circumstance may a minor receive proceeds from a death benefit?

The minor must have an appointed guardian

An example of elective cosmetic surgery would be

removing excess fat from an insured's waistline

Long-Term Care policies may provide coverage for claims arising from

senile dementia