Insurance EXAM

Which of the following is NOT mandatory under the Uniform Provisions Law as applied to accident and health policies? a. Change of Occupation b. Time Limit on Certain Defenses c. Physical Examination of Autopsy d. Entire Contract

Change of Occupation Change of Occupation is an optional provision

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option? a. Paid up additions b. Cash surrender value c. Reduced paid up d. Extended term

Extended Term The automatic nonforfeiture option is extended term.

Which dividend option will increase the death benefit? a. Extended term b. Reduced paid-up c. Paid-up additions d. Accumulation

Paid-up addition Paid-up additions option uses the dividend to purchase small amounts of the same type of insurance as the original policy. The additional insurance is paid-up by the dividend

An insured had a heart attack while jogging, but is expected to return to work in approximately 6 weeks. The insured's Disability Income policy will a. Replace a percentage of his lost income b. Cover injuries only c. Not pay d. Pay a lump-sum benefit

Replace a percentage of his lost income Disability income insurance covers income only, not medical expenses

All life and health policies must provide a clear and conspicuous disclaimer regarding the Insurance Guaranty Association on the face page of the policy. This disclaimer must do all of the following EXCEPT a. State that the insurer and its agents are protected by the Guaranty Association in case of

State that the insurer and its agents are protected by the Guaranty Association in case of

A whole life policy is surrendered for a reduced-paid up policy. The cash value of the new policy will a. Reduce the pre-surrender value b. Continue to increase c. Remain the Same d. Decrease over time

Continue to increase The new policy continues to build its own cash value and will remain in force until the insured's death or maturity

All of the following are mandatory provisions for group health insurance policies EXCEPT a. A provision stating that the insurer is required to issue a certificate of insurance b. A provision explaining the time limit on certain defenses. c. A provision including pre-existing conditions d. A provision explaining the conditions for policy termination

A provision including pre-existing conditions Conditions for policy termination, insurance certificate of insurance and time limit on certain defense are required provisions for group health insurance policies along with many others. Group health plans may not impose any pre-existing condition exclusions.

A new insured is looking through her life insurance policy for the description of the policy's graded death benefits where would this information be located within the policy? a. Back of the policy only b. Face and the back of the policy c. Policies and Provisions Section d. Face of the policy only

Face and back of the policy The policy must contain a brief description of the graded death benefit feature on the face and back page

When may HIV-related test results be provided to the MIB? a. When given authorization by the patient b. Only when the test results are negative c. Only if the individual is not identified d. Under all circumstances

Only if the individual is not identified Insurance companies must maintain strict confidentiality regarding HIV-related test results or diagnoses. Test results may not be provided to the MIB if the individual is identified.

The guaranteed purchase option is also referred to as the a. Multiple indemnity rider b. Impairment rider c. Evidence of insurability rider d. Future increase option

Future increase option The guaranteed purchase option is also referred to as the future increase option

Whose responsibility is it to ensure that the application for health insurance is complete and accurate?? a. The underwriter's b. The applicant's c. The agent's d. The policyowner's

The Agent's As a field underwriter, the agent must ensure that the applications are complete and accurate

The policyowner has an option to pledge the life insurance policy as collateral for a bank loan. This is called a. A unilateral agreement b. An absolute assignment c. A collateral assignment d. An insurance pledge

A collateral assignment With a collateral assignment, the policy is pledged as collateral to pay the balance of a loan at the insured's death. The balance of the death benefit is paid to the beneficiary.

In order for a business partner to be eligible for a Keogh plan, he/she must work full-time and own at least how much of the business? a. 50% b. 10% c. 25% d. 33%

10% To be covered under a Keogh retirement plan, the person must be self-employed or a partner working part or full-time who owns at least 10% of the business

All health insurance policies issued in this state must provide coverage for maternity services. How many hours of inpatient care must be provided to a mother after vaginal delivery a. At least 24 b. At least 36 c. At least 48 d. At least 96

At least 48 48 for vaginal, 96 for Caesarian section

Which statement best describes agreement as it relates to insurance contracts? a. Each party must offer something of value. b. One party accepts the exact terms of the other party's offer. c. The intent of the contract must be legally acceptable to both parties d. All parties must be capable of entering into a contract

One party accepts the exact terms of the other party's offer In insurance contracts, there must be a definite offer by one party, and this offer must be accepted in its exact terms by the other party. Agreement includes both an offer and its acceptance.

Which of the following is a provision found in life insurance policies? a. Payor benefit b. Reinstatement c. Return of premium d. Guaranteed insurability

Reinstatement Reinstatement is the only policy provision, the rest are policy riders

According to the "Common Disaster" clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed? a. The primary beneficiary died before the insured b. The deaths occurred at the same time c. The of the primary beneficiary and the contingent beneficiary split benefits equally.

The primary beneficiary dies before the insured According to the "Common Disaster" clause, if it cannot be determined who died first, the insured or the primary beneficiary

Which of the following services will NOT be provided by an HMO a. Emergency b. Inpatient hospital care outside the service area c. Unlimited coverage for treatment for drug rehabilitation d. Treatment of mental disorders

Unlimited coverage for treatment for drug rehabilitation Emergency care must be provided for the member in or out of the HMO's service area. The HMO also provides the member with inpatient hospital care, in or out of the service area. The services may be limited for treatment of mental, emotional or nervous disorders, including alcohol or drug rehabilitation or treatment

Which of the following is NOT true regarding a grace period provision for group policies? a. Grace period allows the applicant to pay the first premium within 30 days b. During the grace period the insurer may require the payment of pro rate premium. c. Policy continues in force during a grace period d. A required grace period is 31 days.

Grace period allows the applicant to pay the first premium within 30 days Grace period provision states that policyholders are entitled to a grace period of 31 days for the payment of any premium except the first. The policy will continue in force, but the insurer may require the payment of a pro rate premium during the grace period.

When may HIV-related test results be provided to the MIB? a. When given authorization by the patient b. Only when the test results are negative c. Only if the individual is not identified d. Under all circumstances

Only if the individual is not identified Insurance companies must maintain strict confidentiality regarding HIV-related test results or diagnoses. Test results may not be provided to the MIB if the individual is identified

A Major Medical Expense policy would exclude coverage for all of the follow treatments EXCEPT a. Dental care b. Cosmetic surgery c. Drug addiction d. Eye refractions.

Drug Addiction Treatment for drug and alcohol addiction is provided on a limited basis

Which of the following scenarios would require that an insured is provided with a conversion option from group to individual health insurance coverage? a. The group policy was terminated. b. The insured had continuous coverage under the policy c. The insured employer was terminated. d. The insured failed to pay premium payments on time.

The insured had continuous coverage under the policy A converted policy does not need to be made available to an employee if their termination occurred for one of the following reasons.

An insured recently discovered that the interest rate on his policy loan once again increased. Legally speaking, which of the following is the shortest amount of time that could have passed since the last change in the insured's interest rate a. 3 months b. 6 months c. 12 months d. 1 month

3 months The maximum rate for each policy must be determined at regular intervals at least once a year, but not more frequently than once every 3 months.

According to the Time Limit on Certain Defenses provision statements or misstatements made in the application at the time of issue cannot be used to deny a claim after the policy has been in force for a minimum of how many years? a. 1 year b. 2 years c. 3 years d. 5 years

2 years The Time Limit on Certain Defenses provision is similar to the incontestability provision found in life insurance policies. No statement or mistatement

What does Basic Medical Expense cover? a. All office visits, under any circumstances b. Surgery c. Nonsurgical services a physician provides d. X-ray charges

Nonsurgical services a physician provides Basic Medical Expense Coverage is often referred to as Basic Physicians Nonsurgical Expense Coverage because it provides coverage for nonsurgical services a physician provides. The benefits, however, are usually limited to visits to patients confined in the hospital. Some policies will also pay for office visits. There is no deductible with benefits, but coverage is usually limited to a number of visits per day, limits per visit, or limits per hospital stay.

If an insured dies, and it is discovered that the insured misstated his/her age or gender, the life insurance company will a. Deny all claims because of the misrepresentation b. Adjust the back premiums for the proper age or gender. c. Adjust the death benefit to what the premium would have purchased at the actual age or gender Pay the face amount specified at the time of policy issue.

Adjust the death benefit to what the premium would have purchased at the actual age or gender If the applicant has misstated his or her age or gender on the application, the insurer, in the event of a claim, is allowed under this provision to adjust the benefits to an amount that the premium at the correct age or gender would have otherwise purchased.

In which of the following scenarios would a producer be allowed to obtain insurance through an unauthorized insurer? a. if there are no authorized insurers for a specific type of coverage in this state b. if the insurer needs to investigate insurance claims c. Under no circumstances d. If the producer has no knowledge that company is unauthorized

if there are no authorized insurers for a specific type of coverage in this state Unauthorized insurers can only conduct business in a state through licensed excess and surplus lines brokers. It is the producer's responsibility to confirm, prior to transacting insurance with an insurer, that the company is authorized

A variable life policyholder who owns a scheduled premium policy experiences many months of negative returns in the policy's subaccounts. In regards to the minimum death benefit. a. It will be equal or greater than the initial face amount b. It may be reduced to zero c. Cash values will be used to pay the death benefit d. It will be lower than the initial face amount.

It will be equal or greater than the initial face amount Scheduled premium policies in Missouri must have a minimum death benefit that is at least equal to the initial face amount

Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this policyowner select? a. Fixed-period installment b. Life income c. Joint and Survivor d. Fixed-amount installments

Joint and Survivor Under the Joint and Survivor settlement option, payments will continue until the death of the last beneficiary.

Which of the following is NOT true regarding a noncancellable policy? a. The guarantee to renew coverage usually only applies until the insured reaches age 65 b. Insured has the unilateral right to renew the policy for the life of the contract, and may discontinue payment premiums to cancel it. c. Insurer can increase the premium above what is stated in the policy if claims experience is greater than expected d. Insurer cannot cancel the policy

Insurer can increase the premium above what is stated in the policy if claims experience is greater than expected The insurance company cannot cancel a noncancellable policy, nor can the premium be increased beyond what is stated in the policy. The insured has the unilateral right to renew the policy for the life of the contract, but, in effect, may cancel the policy at any time by discontinuing premium payments.

Key person insurance can provide protection for all of the following economic losses to a business EXCEPT a. Provide deferred compensation retirement benefit if the insured key person survives to retirement b. Fund the expenses of finding a suitable replacement following the death of an employee c. Fund the cost of training a current employee to perform the duties of a deceased employee d. Pay the death benefit to the estate of the insured.

Pay the death benefit to the estate of the insured The business, not the family or estate of the insured, is the policyowner, premium payor, and the beneficiary

What does the application of contract of adhesion mean? a. The insurer may go to another for representation. b. It makes sure that the insured does not get more than the value of the loss. c. Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured. d. The holder of the contract has the ultimate power of promise.

Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured. The insurer prepares the policy and submits it to the insured on a take-it-or-leave-it basis. Because the insured does not have input in drafting the policy but simply adhered to the terms of the policy, the policy is classified as a contract of adhesion. Any uncertain terms in the policy will be interpreted in favor the of the insured.

An insured commits suicide 18 months after obtaining a life insurance policy. How does this affect the policy's death benefits the insurance company must pay? a. The insurance company will pay full death benefits b. The insurance company will not pay benefit. Suicide is specifically excluded from coverage in life insurance policies. c. The insurance company is limited to paying only 50% of the death benefits d. The insurance company will not have to pay death benefits. However, the insurer will have to issue a prompt refund of any paid premiums.

The insurance company will pay full death benefits Life insurance policies issued in the state of Missouri may exclude or restrict the liability of death as a result of suicide, but only if the suicide was committed within 1 year from the date of the policy issue. If the suicide occurs within 1 year of the date of policy issue, the insurer will not have to refund any paid premiums

A veteran of a foreign war is issued an individual long-term care policy in March. In October, he is admitted to a nursing home for a liver condition that was first diagnosed 11 years ago. Which of the following is true regarding the veteran's policy coverage? a. None of the care will be covered. Excluded coverage extends to the time of the diagnosed. b. The care will be covered. No exclusions are allowed for veterans of foreign wars. c. The care will be covered. The loss occurred after the six months of coverage d. None of the care will be covered. All pre-existing conditions are excluded

The care will be covered. The loss occurred after the six months of coverage No individual long-term care insurance policy may exclude coverage for losses resulting from pre-existing conditions after six months of coverage

Which of the following are NOT assignability provisions relating to the assignment of ownership by a person under a group life policy? a. The right to have an individual policy b. The right to pay premiums c. The right to assign additional riders d. The right to designate a beneficiary

The right to assign additional riders Assignability provisions relate to assignments of ownership by a person insured under a group life policy including the right to designate a beneficiary, to have an individual policy and the pay premium

Which of the following is NOT a Medicaid qualifier? a. Insurability b. Income level c. Age d. Residency

Insurability Medicaid is a program operated by the State, with some Federal funding, to provide medical care for those in need. To qualify for Medicaid, a person must be poor or become poor, be a U.S. citizen or permanent resident alien, and must meet other qualifiers, some of which are blind, disabled, pregnant, over 65, or caring for children receiving welfare benefits.

In addition to participation requirements, how does an insurer guard against adverse selection when underwriting group health? a. By obtaining MIB reports on each enrollee b. By imposing case management provisions c. By requiring that the insurance be incidental to the group d. By having each enrollee undergo a paramedical examination

By requiring that the insurance be incidental to the group The group must form for a reason other than buying group insurance

A license approved to teach a continuing education course may a. not receive any continuing education credit to apply towards his/her license b. Receive twice the number of approved credit hours as given to the others taking the course c. Receive one-have the number of approved credit hours as given to the others taking the course d. Receive continuing education the same as those taking the course

Receive continuation education the same as those taking the course A licensee teaching an approved course may receive the same credit hours as other taking the course, however, the credit for the same course may be taken only once per two-year period

Which of the following scenarios would require that an insured is provided with a conversion option from group individual LTC coverage? a. The group policy was terminated b. The insured had continuous coverage under the policy c. The insured employer was terminated d. The insured failed to pay premium payments on time

The insured had continuous coverage under the policy A converted policy does not need to be made available to an employee, if their termination occurred for one of the following reasons; the individual failed to make timely payments, was not continuously covered under the group policy, and for similar benefits under any group policy it replaced - for 3 months prior to such a termination; the group policy was terminated or an employer's participation was terminated, and similar coverage replaced that insurance within 31 days of such termination

All of the following are characteristics of group health insurance plans EXCEPT a. Employers may require the employees to contribute to the premium payments b. The benefits under a group plan are more extensive than those under individual plans c. The parties that hold a group health insurance contract are the employees and the employer. d. The cost of insuring an individual is less that would be charged for comparable benefits under an individual plan.

The parties that hold a group health insurance contract are the employees and the employer. The contract for coverage is between the employer and the insurance company. Only one policy is issued (master policy) to the employer, covered employees receive a certificate of insurance

What is the purpose of a benefit schedule? a. To include the average charge for procedures. b. To provide the dates for the payment of benefits. c. To list the insured's copayment and deductibles. d. To state what and how much is covered in the plan

To state what and how much is covered in the plan Some medical Expense insurance plans contain a benefit schedule, which very specifically states exactly what is covered in the plan and for how much.

All of the following are excluded from coverage in an individual health insurance policy EXCEPT a. Purely cosmetic surgery b. Treatment received in a government hospital c. Mental illness d. Experimental procedures.

Mental Illness Mental illness is covered, with some limitations

Which of the following is true regarding copayment and coinsurance for services provided by a physical therapist under a health benefit plan? a. They must be the same as the services of the primary care physician. b. They can be higher than regular copayments under the policy c. They are a flat amount established by the insurer d. They are not allowed

They must be the same as the services of the primary care physician. Heath carriers cannot change a copayment or coinsurance for the services of a physical therapist that is greater than the copayment or coinsurance percentage charged for that services of a primary care physician for an office visit.

What is a specific requirement regarding the number of employees in a SIMPLE plan? a. No more than 2 employees b. No more than 100 employees c. At least 100 employees d. between 2 and 50 employees

No more than 100 employees A SIMPLE plan is available to small businesses that employ no more than 100 employees, receiving at least $,5000 in compensation for the employer during the previous year

All of the following information needs to be included on an application for life insurance EXCEPT a. Health insurance policies in force b. Life insurance with other insurers c. The agent's statement, if applicable d. Medical information about the applicant

Health insurance policies in force The information about the applicant's health insurance policies is not material to a life insurance contract.

An applicant giver her agent a complete application and the initial premium. What can the agent issue her that ackhowledges the initial premium payment? a. Conditional Receipt b. Provisional Receipt c. Advanced Premium Receipt d. Premium Receipt

Conditional Receipt When an applicant pays the initial premium before the application is approved and the policy is issued, a conditional receipt can be issued in order to acknowledge the payment. Coverage will not begin, however, until the policy has been issued.

Outlines of coverage, delivered upon a Medicare supplement policy application, must include all of the following EXCEPT a. Statement of the renewal provisions b. Statement identifying the outline as a summary of the policy c. Copy of the Insurability clause d. Description of the benefits and coverage.

Copy of the Insurability clause Outlines of coverage are provided for complete disclosure of this sale of Medicare supplement policies

To purchase insurance, the policyowner must face the possibility of losing money or something of value in the event of loss. What is the concept called? a. Insurable interest b. Indemnity c. Exposure d. Pure loss

Insurable Interest To purchase insurance, the policyowner must face the possibility of losing money or something of value in the event of loss. This is called insurable interest

Which of the following is the primary source of information that an insurer used to evaluate an insured's risk for life insurance? a. The law of large number b. Agent's Report c. Insurance application d. Risk analysis

Insurance Application Insurance application is the data-gathering tool utilized in evaluating an individual risk.

Which of the following used to be called Medicare + Choice Plans? a. Original Medicare Plan b. Medicare Advantage Plans c. Medical Insurance d. Medicare Supplement Plans

Medicare Advantage Plans A Medicare Advantage Plan is a Medicare program that gives the patient more choices among health plans. Everyone has Medicare Parts A and B is eligible, except those who have End-Stage Renal Disease (unless certain exceptions apply). Medicare Advantage Plans used to be called Medicare + Choice plans

What is the purpose of requiring licenses for persons who transact insurance? a. Protect insurance companies from incompetent insurance producers b. Protect the general public c. Be able to collect commissions d. Generate income for the Department of Insurance

Protect the general public In order to protect the general public, persons involved in the transaction of insurance must meet certain standards in terms of knowledge of insurance and of character, and must be licensed.

What happens to the face amount of a whole life policy if the insured reaches the age of 100? a. It is paid to the insured's estate and the policy is terminated. b. It is paid to the beneficiary in full. c. The cash value and the face amount are paid to the insured. d. The face amount is paid to the insured.

The face amount is paid to the insured Whole life insurance provides protection for the entire lifetime of the insured. If the insured lives to the age of 100, the company pays the face amount of the policy to the policyowner (usually the insured)

Which of the following scenarios would NOT allow the insurer to contest the validity of a life insurance policy? a. Two and a half years after the policy was issued, the insured stopped paying premiums b. The insurer determined the policyowner uninsurable 2 years after the policy was issued c. A material misrepresentation on the part of the applicant was discovered 1 year after the policy issue date d. A fraudulent misstatement on the application was discovered by the insurer after 3 years of policy issue date.

The insurer determined the policyowner uninsurable 2 years after the policy was issued The validity of the policy may not be contested, unless it's for nonpayment of premium or fraudulent misstatements by the applicant after the policy has been in force for 2 years

Which of the following is a requirement for replacement of health policies? a. The old policy must stay in force until the new policy is issued b. Policies must overlap to cover pre-existing conditions c. Replacements in health insurance are not allowed. d. The old policy must be cancelled before the new policy can be issued.

The old policy must stay in force until the new policy is issued The agent must make sure that the current policy is not cancelled before the new policy is issued.

What is the purpose of the impairment rider in a health insurance policy? a. To identify pre-existing conditions. b. To exclude coverage for a specific impairment c. To cover impairments that otherwise could not be covered d. To provide disability coverage

To exclude coverage for a specific impairment The impairment rider may be attached to a contract for the purpose of eliminating coverage for a specifically defined condition

If an insured is not entirely satisfied with a policy issued the insured may return it to the insurance company and receive a refund of the entire premium paid at which of the following times a. Within 10 days of when the insurer received the first premium b. Within 10 days of when the policy was delivered c. Before any claims had been filed on the policy d. Within 10 days of when the policy was issued

Within 10 days of when the policy was delivered The free look period begins at the time the policy is delivered

Following a covered loss, the Time Payments of Claims Provision requires that an insurance company pay disability income benefits no less frequently than a. Annually b. Weekly c. Monthly d. Semi-annually

Monthly This mandatory provision establishes that disability income benefits be paid no less frequently than monthly.

Under the mandatory uniform provision "Notice of Claim", written notice of a claim must be submitted to the insurer within what time parameters? a. Within 10 days b. Within 20 days c. Within 30 days d. Within 60 days

Within 20 days This mandatory provision requires the insured to give the insurer, or its agent, written notice of a claim within 20 days of the loss or as soon as reasonably possible if the nature of disability is such that the insured is legally incapacitated, this requirement is waived.

A non-Medicaid health carrier plan issued in this state must provide coverage for early intervention services for children of what age? a. From birth to age 3 b. From birth to age 5 c. Ages 2 to 6 d. No more than 3 months after birth

From birth to age 3 Health-carrier or health benefit plans (other than Medicaid plans) must provide coverage for early intervention services delivered by specialists licensed by the state of Missouri for children from birth to age 3

Medicare is a health insurance program for all the following individuals EXCEPT a. Those with permanent kidney failure b. Those who have been on Social Security Disability for 2 years c. Those with low income and low assets. d. Those 65 or over

Those with low income and low assets Medicare is a federal program for those over 65, those that have been on Social Security for 2 years, and those with permanent kidney failure. Assets and income have nothing to do with Medicare eligibility