Final Exam Review 2

Life insurance that covers an insured's whole life with level premiums paid over a limited time is called

Limited pay life

Which of the following characteristics is CORRECT about Interest Sensitive Whole Life?

There is a flexible premium payment

The definition of a business entity includes

an association or limited liability company

A company can be held responsible for any act of boycott, coercion, or intimidation by its producer if the company

approves or acquiesces to such act

Group/voluntary long-term care policy premiums are typically deducted from the employee's income and

are less costly as compared to individual long term care coverage

In a qualified retirement plan, the yearly contributions to an employee's account

are restricted to maximum levels set by the IRS

A major medical policy typically

provides benefits for reasonable and necessary medical expenses, subject to policy limits

What percent of personal life insurance premiums is usually deductible for federal income tax purposes?

0%

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

45 days

S is covered by a whole life policy. Which insurance product can cover his children?

Child term rider

The Universal Life Policy is called an unbundled Life Policy because the policyholder can see the expense charges, the interest earned, and the

Cost of insurance

Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?

Decreasing term

When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the

Entire Contract provision

T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take?

increase her policy's coverage amount

Medicare

is a hospital and medical expense insurance program

Which of these is NOT relevant when determining the amount of personal life insurance needed?

local unemployment rate

On an Accidental Death and Dismemberment (AD&D) insurance policy, who is qualified to change the beneficiary designation?

policyowner

When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following?

residual disability

What would the Medical Information Bureau (MIB) identify?

testing positive for marijuana use from a previous screening

The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is

the cost

Which of the following statements regarding a Tax Sheltered Annuity (TSA) is INCORRECT

the income from the TSA is received income tax-free

According to Tennessee insurance law, while transacting insurance business, producers act as representatives of

the insurer

The Free-Look provision of any health policy begins the date

the policy is delivered to the insured

When is the face amount paid under a Joint Life and Survivor policy?

upon death of the first insured

The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the

waiver of premium

Which action by an insurance producer is considered rebating?

Splitting commissions with a policyholder who has purchased additional coverage

Defamation is BEST described as publishing or circulating which of the following types of information?

brochures falsely criticizing the financial condition of an insurance company

Which rider provides coverage for a child under a parent's life insurance policy?

child term rider

P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim?

claim will be denied

Which of the following BEST desscribes a Hospital Indemnity policy?

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

What is the purpose of the U.S.A. Patriot Act?

detect and deter terrorism

Which of the following does Social Security NOT provide benefits for?

dismemberment

The Commissioner does NOT have the power to

incarcerate a producer

Which of the following statements about a group Accident and Health policy issued to an employer in Tennessee is CORRECT?

A policy must be issued to the employer, and a certificate must be issued to each employee

B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what will the policy pay B's beneficiary?

$300,000

T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?

$50,000

Which of the following policy provisions prohibits an insurance company from incorporating external documents into an insurance policy?

Entire contract

Which of the following statements regarding a referral is INCORRECT?

Referral fees must be filed and approved with the Commissioner of Insurance

Which is an example of unfair discrimination?

Requiring an adult applicant for an insurance policy to reveal the name and occupation of a family member who is NOT to be covered by the policy

Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?

Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company

In Tennessee, a Long-Term Care policy must be renewable in which of the following ways?

Guaranteed renewable

Which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT?

If the employee paid for qualified medical expenses, the reimbursements may be tax-free

A long-term care rider in a life insurance policy may trigger a benefit in the event of which of the following?

Inability of the insured to perform more than 2 Activities of Daily Living (ADL's)

Information obtained from a phone conversation to the proposed insured can be found in which of these reports?

Inspection Report

Which of the following statements is CORRECT about accelerated death benefits?

Must have a terminal illness to qualify

Which of these is NOT considered to be a right given to a policyowner?

Modify a provision in the insurance contract

Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation?

Policy was returned within the free-look period, premium will be fully refunded

Which of the following must be included on the Policy Summary when a life insurance application is completed?

Premium cost for basic coverage applied for

Which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT?

Premiums normally increase at time of renewal

K is the insured and P is the sole beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?

Proceeds will be paid to P's estate