Insurance Ch.13

An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any, would be paid by the secondary insurer?

$500

Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to

10 years

How much time does the insurer have to pay the death benefit to the beneficiary of a life insurance policy after the receipt of proof of death?

2 months

Time Limit on Certain Defenses provision prohibits insurers from denying a claim due to misrepresentation, as long as the policy has been in force for at least

2 years

Every company possessing a certificate of authority must notify the Commissioner of the election or appointment of every new director or principal officer within

30 days

In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?

30 days

In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstate once the outstanding premium is paid?

45 days

What is the maximum age requirement for Indiana residents to be eligible for a Health Indiana Plan (HIP)?

64

Which of the following will NOT qualify for a limited lines producer license?

A person selling endowments

Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?

Aleatory

In which Medicare supplement policies are the core benefits found?

All plans

In insurance, an offer is usually made when

An applicant submits an application to the insurer

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 individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

Guaranteed insurability option

Most LTC plans have which of the following features?

Guaranteed renewability

Which of the following riders would NOT increase the premium for a policyowner?

Impairment rider

Which of the following types of licenses is most suitable for an individual who transacts insurance on behalf of an insurance company admitted to do business in Indiana?

Insurance Producer

Which of the following entities has the authority to make changes to an insurance policy?

Insurer's executive officer

Which of the following statements about the reinstatement provision is true?

It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.

The Commissioner's suitability for office is in part determined by the individual's

Knowledge of and skill in insurance

what is a definition of a unilateral contract?

One-sided: only one party makes an enforceable promise

Which of the following is true about the Commissioner of Insurance?

The Commissioner is authorized to participate in the NAIC

An insured purchased a noncancelable health insurance policy 1 year ago. which of the following circumstances would NOT be a reason for the insurance company to cancel the policy?

The insured is in an accident and incurs a large claim.

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 premium will be waived until she's 21

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 best defines target premium in a universal life policy?

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

All of the following are true regarding the guaranteed insurability rider EXCEPT

This rider is available to all insured with no additional premium.

An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?

Time of Payment of Claims

What is the purpose of coinsurance provisions?

To help the insurance company to prevent overutilization of the policy

What is the purpose of COBRA?

To provide continuation of coverage for terminated employees

Which of the following does the insuring clause NOT specify?

a list of available doctors

A deductible is

a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits

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

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

A universal life insurance policy is best described as an

annually renewable term policy with a cash value account

all admitted insurance companies in Indiana are subject to fiscal examinations by the Commissioner

at least every 5 years

In a relative value system of determining coverage for a given procedure, what term describes the total amount payable per point?

conversion factor

The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contracts is the

entire contract clause

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

face amount

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

During partial withdrawal from a universal life policy, which portion will be taxed?

interest

which of the following best describes a misrepresentation?

issuing sales material with exaggerated statements about policy benefits

What is the benefit of choosing extended term as a nonforfeiture?

it has the highest amount of insurance

Which of the following is TRUE regarding the accumulation period of an annuity?

it is a period during which the payments into the annuity grow tax deffered

Which of the following statements concerning Medicare Part B is correct?

it pays for the physician services, diagnostic tests, and physical therapy.

Which of the following is NOT true regarding the accumulation period of an annuity?

it would not occur in a deferred annuity

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

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

In a disability policy, the elimination period refers to the period between

the first day of disability and the day the insured starts receiving benefits

Which of the following will vary the length of the grace period in health insurance policies?

the mode of the premium payment