Insurance

all of the following are true regarding key person disability income insurance except

Premiums are tax deductible as a business expense

what is true about a spouse term rider

The rider is usually level term insurance

which of the following is not true regarding equity indexed annuities

They earn lower interest rates than fixed annuities.

a hospital indemnity policy will pay

a benefit for each day the insured is in a hospital

The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the

insuring clause

all of the following are nonforfeiture except

interest only

disability income coverage specifies that the policy covers the insured if he is unable to perform any job for which he is qualified. in this case total disability is defined as

Any occupation - more restrictive than other definitions.

To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?

At the time of application

An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)

Equity indexed annuity

who is the owner and who is the beneficiary on a key person life insurance policy

the employer is the owner and beneficiary

which of the following statements about a suicide clause in a life insurance policy is true

Suicide is excluded for a specific period of years and covered thereafter.

Nonforfeiture values guarantee which of the following for the policyowner?

That the cash value will not be lost

which is true regarding obtaining underwriting sources

The applicant must be informed of the sources contacted and how the information is being gathered.

which of the following is true about the requirements regarding HIV exams

The applicant must give prior informed written consent

all the following statements concerning an employer sponsored nonqualified retirement plan are true except

The employer can receive a current tax deduction for any contributions made to the plan

An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?

The insured may renew the policy for another 10 years, but at a higher premium rate.

When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled?

The insurer is considered to be notified since the notification to agent equals notification to the insurer.

what is the advantage of reinstating a policy instead of applying for a new one

The original age is used for premium determination

a married couple owns a permanent policy which cover both of their lives and pays the DB only upon the death of the first insured. which policy is that

joint life policy

a married couple owns a permanent policy which covers both their lives and pays the death benefit upon the death of the first insured which policy is that

joint life policy

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as

legal actions

all the following are true statemnets regarding the accumulation at interest option except

the interest is not taxable since it remains inside insurance policy

which of the following is true for both quity indexed annuities and fixed annuities

they have a guaranteed minimum interest rate

after filling a claim an insured tells the insurer that there is more than one insurance policy in force. the insurer sets aside the claim until it hears what the other company will pay. its classified as

unfair

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?

100,000

the Patient Protection and Affordable Care Act mandates that insurers provide coverage for dependent children up to age

26

if an insurance company offers medicare supplement policies it must offer which of the gollowing plans

A

To sell variable life insurance policies, an agent must receive all of the following EXCEPT

A SEC registration

which of the following individuals will be eligible for coverage on the health insurance marketplace

A permanent resident lawfully present in the U.S.

In respect to the consideration clause, which of the following is consideration on the part of the insurer?

Promising to pay in accordance with the contract terms

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

Reduced Paid-Up

which of the following is the closest term to an authorized insurer

admitted

the primary source of info used for insurance underwriting

application

temporary licenses issued in texas

expire 90 days

an insurance company is domiciled in montana and transact insurance in wyoming which term best describes the insurers classification in wyoming

foreign

what is not considered rebating

giving a client a $25 pen with insurer logo during insurance application process

as it pertains to group health insurance, COBRA stipulates

group coverage must be extended for terminated employees up to a certain period of time at the former employees expense

An HMO subscriber no longer meets plan eligibility requirements. When can the insurer cancel coverage?

immediately

which of the following riders will not increase the premium for a policyowner

impairment rider

what type of insurance would be used for a return of premium rider

increasing term

Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?

indemnity

in which location would skilled care most likely be provided

institutional setting

the medical info bureau MIB was created to protect

insurance companies from adverse selection by high risk person

which of the following is not a feature of a guaranteed renewable provision

insurer can increase policy premium on an individual basis

an insured is covered by a disability income policy that contains an accidental means clause the insured exits a bus by jumping down the steps and breaks an ankle. what coverage will apply co

no coverage will apply since the injury could have been foreseen

Bethany studies in England for a semester. While she is there, she is involved in a train accident that leaves her disabled. If Bethany owns a general disability policy, what will be the extent of benefits that she receives?

none

in health insurance if a doctore charges $50 more than what the insurance company considers usual customary and reasonable the extra cost

not covered

a ride attached to a life insurance policy that provides coverage on the insured family member is called

payor rider 95

all the following are covered by part A of medicare except

physician and surgeon service

according to the state nonforfeiture law for life insurance policies insurer must offer at least one of the following nonforfeiture options except

reduction of premium

An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?

revocable

which of the following would be considered a nonqualified retirement plan

split dollar plan

which of the following terms describes the specified dollar amount beyond which the insured no longer participates in the sharing of expenses

stop loss limit

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to

the insured

an employee is insured under her employer group life plan. if she terminates her group coverage which of the statements is incorrect

the insured may choose to convert to term or permanent individual coverage

all the following are true regarding a decreasing term policy except

the payable premium amount steadily declines throughout the duration of the contract

Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending?

unlimited

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

waiver of premium

which of the following is not covered under basic hospital expenses

surgeon fees

what is a foreign insurer

An insurer with a home office in another state

in texas the state continuing education requirements

consist of completing 24 hour of CE each biennium

which of the following provisions states the insurers right to change premium amounts

continuation provision

in the event of a loss after a notice of claim is submitted who is responsible for providing claims forms and to which party

insurer to insured

which is true about a policy assignment

it transfers rights of ownership from owner to another person

which statement is not true regarding straight life policy

its premium steadily decreases over time in response to growing cash value

An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage?

$102

what % of a company employee must take part in a noncontributory group life plan

100%

If an HMO policy is cancelled for nonpayment of the amounts due under the contract, how long of a notice must the insurer give the insured?

30 days

which of the following provides coverage on a first dollar basis

Basic expense

which of the following best describes fixed period settlement option

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

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option

A man is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim?

Claim is denied if his policy contains the Illegal Occupation provision

which of the following is not a characteristic or a service of an hmo plan

Contracting with insurance companies

which of the following is not an exclusion in medical expense insurance policies

Coverage for dependents

which of the following is not allowed in credit life insurance

Creditor requiring that a debtor buys insurance from a certain insurer

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

Fully insured status

which is true about the cash surrender nonforfeiture option

Funds exceeding the premium paid are taxable as ordinary income.

A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?

Immediate annuity

what is the main purpose of the seven pay test

It determines if the insurance policy is an MEC.

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

It has the highest amount of insurance protection

which of the following is not true regarding certificate of authority

It is issued to group insurance participants.

what is the term for how frequently a policyowner is required to pay policy premium

Mode

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

a guaranteed renewable health insurance policy allows the

Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

what is the purpose of a buyers guide

To allow the consumer to compare the costs of different policies

what is the purpose of COBRA

To provide continuation of coverage for terminated employees

The insured on a health policy only pays for medical costs related to accidents. which of the following types of policies doesthe insured have

accident only

which of the following is not covered under a long term care policy

acute care in hospital

an insured in a group policy has misstated his age on the insurance application. as a result the insurer will most likely

adjust the premium

what does liquidty refer to in a life insurance policy

cash values can be borrowed at any time

Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as

coercion

The usage of words or symbols that are similar to what entity is prohibited in life insurance advertisements?

federal government

if an insured is not required to pay a deductible what kind of coverage do he have

first dollar

if an insured is not required to pay a deductible what kind of coverage does he or she have

first dollar

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

fixed period

which of the following types of LTC if not provided in an institutional setting

home health care

which of the following is a feature of a disability buyout plan

lump sum benefit payment option

The corridor deductible derives its name from the fact that it is applied between the basic coverage and the

major medical coverage

which of the following is not covered under plan a in medigap insurance

medicare part a deductible

Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is

monthly

an applicant for a health insurance policy returns a completed application and check for premium she receives a conditional receipt two weeks later. wish had the insurer done

neither approved application nor policy issue

on participating insurance policy issued by a mutual insurance company dividends paid to policy holders are

non taxable since the IRS treats them as a return of a portion of the premium paid

L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay?

$900 (deductible + 20% of the bill after the deductible [20% of $2,000])

For group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense?

100%

an insurer must acknowledge receipt of a notice of claim within how many days

15

a client has a new individual disability income policy with a 20 day probationary period and a 30 day elimination period. 10 days later the client breaks his leg and is off work 45 days. how many days of disability benefits will the policy pay

15 days

what is the maximum penalty for habitual willful noncompliance with the fair credit reporting act

2500

the commissioner of insurance issues a cease and desist order to an agent. if the agent wishes to contest the charges in court how many days after the order was issued does the agent have to make the request

30 days

When a disabled dependent child reaches the age limit for coverage, how long does the policyowner have to provide proof of dependency in order for the dependent to remain covered under the policy?

31 days

within how many days must an insured notify the insurer of a child birth and pay required fee

31 days

what is the period of coverage for events such as death or divorce umder COBRA

36 months

An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?

9800

A Straight Life policy has what type of premium?

A level annual premium for the life of the insured

which of following does the insuring clause not specify

A list of available doctors

Who is a third-party owner?

A policyowner who is not the insured

When an annuity is written, whose life expectancy is taken into account?

Annuitant

when possible what should insurers strive to eliminate from illustrations

Footnotes and caveats

which of the following best describes a misrepresentation

Issuing sales material with exaggerated statements about policy benefits

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?

It is reduced to the amount of what the cash value would buy as a single premium

which of the following is incorrect concerning medicaid

It is solely a federally administered program

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?

Life income with period certain

Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?

Replacement rule

which of the following is an example of a producer being involved in an unfair trade practice of rebating

Telling a client that his first premium will be waived if he purchased the insurance policy today

which of the following would be a qualifying event as it relates to COBRA

Termination of employment due to downsizing

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

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

the paid-up addition option uses the dividend

To purchase a smaller amount of the same type of insurance as the original policy.

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT

Unearned premiums are retained by the insurance company.

When is the earliest a policy may go into effect?

When the application is signed and a check is given to the agent

the minimum interest rate on an equity indexed annuity is often based on

an indeed like standard and poor 500

all the following are examples of third party ownership of a life insurance policy EXCEPT

an insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan

which of the following products provide income for a specified period of years or life and protects a person against outliving their money

annuity

An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change?

applicant

Under the ACA, health insurance can no longer be underwritten based on which of the following factors?

applicants health condition

in TX, how is the commissioner of insurance places in office

appointed by governor for 2 years

in a replacement situation all of the gollowing must be considered except

assets

an insured premium increase as a result of her age. which type of policy does she have

attained age

what type of policy allows the insurance company to cancel a policy at any time

cancellable

according to the provisions of the patient protection and affordable care act all of the following preventive care services except

cervical cancer exams for all women starting at age 40

an insured and his wife are both involved in a head on collision the husband died instantly and the wife 15 days later. the company pays the DB to the estate of the insured. this indicates that the life insurance policy has what provision

common diaster

an insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. what contract characteristic does this describe

conditional

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 the term for the specific dollar amount that must be paid by an HMO member for a service

copayment

According to the entire contract provision, what document must be made part of the insurance policy?

copy of original application

which of the following is the best reason to purchase life insurance rather than annuities

create an estate

A partnership buy-sell agreement in which each partner purchases insurance on the life of each of the other partners is called a

cross purchase plan

If an insured changes his payment plan from monthly to annually, what happens to the total premium?

decreases

which of the following terms describes making fake statements about financial condition of any insurer that are intended to any person engaged in the business of insurance

defamation

this arrangement specifies who will purchase a disabled partner's interest on the event he or she becomes disabled

disability buyout

which of the following statements about occupational vs nonoccupational coverage is true

disability insurance can be written as either

all of the following could be considered rebates if offered to an insured in the sale of insurance except

dividends from a mutual insurer

who is the owner and who is the beneficiary in s key person life insurance policy

employer is owner and beneficiary

how long is a newborn covered without notification to the insurer

from moment of birth insurer must be notified within 31 days

How are HMO territories typically divided?

geographic areas

which of the following occupations would not directly help to qualify someone for the office of commissioner of insurance

insurance agent

the medical info bureau was created to protect

insurance companies from adverse selection by high risk person

Who bears all of the investment risk in a fixed annuity?

insurance company

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to

insured

a 40 year old man buys a whole life policy and named his wife as the only beneficiary. his wife dies 10 years later he never remarries and dies at 61 leaving 2 adult children. assuming he never changed the beneficiary the policy proceeds go to

insured estates

All advertisements are the responsibility of the

insurer

all of the following would be considered an insurance transaction except

obtaining insurance license

what is the major difference between a stock company and a mutual company

ownership

which of the following would accident only policy not cover

surgery to repair a wrist damaged by tendinitis

traditional ira contribution are

tax deductible

the interest owned on policy dividends is

taxable

children's rider attached to whole life policies are usually issued as what type of insurance

term

if an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness how will that the payable death benefit from the policy

the DB will be smaller

in a survivorship life policy when does the insurer pay the DB

upon the last death

which of the following is not a factor in determining qualification for social security disability benefit

workers occupation

the insuring clause of a disability policy usually states all the following except

The method of premium payment

group health insurance is characterized by all the following except

adverse selection

An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do?

ask her to sign a statement of good health

Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care?

attending physician

what document describes an insured medical history including diagnoses and treatments

attending physician statement

the DB in a variable universal life policy

depends on the performance of a separate acct

if the insured has the right to keep a long term care insurance policy in force by making timely premium payments and the insurer may not make any changes to the policy or decline to renew it the policy is

guaranteed renewable

which of the following types of LTC is NOT provides in an institutional setting

home heath care

Who must pay for the cost of a medical examination required in the process of underwriting?

insurer

which provision claims the insured duty to provide the insurer with reasonable notice in the event of loss

notice of claim

which provision concerns the insured duty to provide the insurer with reasonable notice in the event of a loss

notice of claim

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 types of insurance policies would perform the function of cash accumulation

whole life

which of the following is not a term for the period of time during which the annuitant or the beneficiary receives income

Depreciation period

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day

Elimination period

The policy owner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policy owner choose?

Interest only option

what is not a benefit of the POS plan

It allows guaranteed acceptance of all applicants.

what statement best describes the free look provision

It allows the insured to return the policy within 10 days and receive a full refund of premiums.

which of the following is true about the mandatory free look in a life insurance policy

It commences when the policy is delivered

what is the waiting period on a waiver of premium rider in life insurance

6 months

At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called

Guaranteed insurability

which of the following long term care benefits would provide coverage for care for functionally impaired adults on a less than 24 hour basis

adult day care

All other factors being equal, the least expensive first year premium payment is found in

annually renewable term

an individual licensed as an agent must notify the Texas Department of Insurance on a monthly basis of all the following except

any change in business name

To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?

at time of application

the provision that states that both the printed contract and a copy of the application form the contract between the policy owner and the insurer is called

entire contract

the legal process that gives insurer, after payment of loss, the right to seek recovery from a third party that was responsible for the lid is known as

subrogation

which of the following statements regarding the change of beneficiaries provision is false

the policy owner has the right to change beneficiaries in any case

which of the following statements is correct about a standard risk classification in the same age group in with similar lifestyles

standard risk are a majority of people

an insured has endured multiple surgeries and hospitalization for an illness during the summer months. her insurer no longer bills her for medical expenses. what term best describes the condition she had met

stop loss limit

A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

the insured's premiums will be waived until she is 21.

a temporary license holder can receive a commission from a sale made to all of the following except

the license holders sister in law

which of the following is not required on a illustration used in al the sale of a life insurance policy

the name of primary and secondary beneficiaries

which of the following best describes the annuity period

the period of time during which accumulated money is converted into income payments

If an insured continually uses the automatic premium loan option to pay the policy premium,

the policy will terminate when the cash value is reduced to nothing

an insurance agent wants for a client to replace the current annuities plan with another one. he presents the new one in an incomplete and dishonest way which makes the new contract seem far more appealing than the original one. the policyowmer ends up surrendering her original contract and replacing it with the new one. this is

twisting

An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?

10 days

an insured pays a monthly premium of $100 for her health insurance. what would be the duration of the grace period under her policy

10 days

Giving a client an inducement to a sale not stated in the policy is an unlawful practice known as

Rebating

An insured will be allowed to reactivate her lapsed 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

The legal process that gives the insurer, after payment of a loss, the right to seek recovery from a third party that was responsible for the loss is known as

Subrogation

which of the following is not a feature of a guaranteed renewable provision

The insurer can increase the policy premium on an individual basis

which of the following is not a feature of a noncancellable policy

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

in disability income insurance the time between the onset of an injury or sickness and when benefits begin is known as

elimination period

The HMO Act of 1973 required most employers to offer HMO coverage to their employees as an alternative to traditional health insurance.

employer no longer forced to offer hmo plans

an individual is purchasing a permanent life insurance policy with a face value of $25,000 . this is all he can afford right now but wanted additional coverage in future. which option should be included in policy

guaranteed insurability option

the premium of a survivorship life policy compared with that of a joint life policy would be

lower