Insurance review test

An insured has a major medical policy with a $100 deductible and 80/20 coinsurance. The claim is $2,000. What will the insured pay

$480

The penalty for early withdrawals from an IRA or other qualified retirement plan is

10% of the amount withdrawn

What is the maximum number of days of skilled nursing facility care for which Medicare will pay

100 days

the time limit on certain defenses provision is usually how long in most states

2 years

Naomi is killed in an automobile accident before she is able to pay the $150 annual premium on her $30,000-accident policy. under the policy's unpaid premium provision, her beneficiary will receive a check for

29,850

a guaranteed insurability rider offers the insured the option to purchase additional life insurance at

3 year intervals

Julia has a disability income policy with a residual disability rider. she experiences a total disability and receives the policy's full monthly benefits of 2,000 for 6 months she recovers partially and is able to return to work part time but her regular income is reduced by 40 percent due to her residual disability what will her insurer pay

40 percent of her policy's monthly benefit

the maximum requirement for fully insured statues under social security

40 quarters of coverage

what allows employees to elect to reduce their current salaries by deferring amount into a retirement plan

401 (k)

in a contributory plan, when the premium is paid by both the sponsor and the insured, what percentage of eligible employees must participate in the plan

75%

written proof of loss must be provided to the insurer within

90 days

Marco does not indicate a specific settlement option with his life insurance policy. How will the death benefits be distributed to Anita, his beneficiary

Anita will receive the benefits in a lump sum

what type of insurance is designed to provide broad coverage for medical expenses

Major medical insurance

Which standard nonforfeiture option would use a whole life policy's surrender value to purchase a paid-up policy with a smaller face amount of insurance that the original policy

Reduced paid-up insurance

Who is responsible for examining an insurer's financial books and records

State department of insurance

which type of life insurance policy allows the policyowner the ability to increase or decrease the death benefit, enjoy flexible premiums, and take withdrawal and loans against the cash value account

Universal life policy

which of the following types of life insurance polices was designed to combine the protection features of traditional life insurance with the cash value growth potential of securities

Variable life policy

a business overhead expense (BOE) policy

Will pay rent, taxes. and employee salaries while the owner is disabled

an insurer license to transact insurance business in the state is called what

a certificate of authority

What meet Social Security definition of totally and permanently disabled

a person is unable to perform the duties of any occupation

an additional insured rider provides term insurance for what

a spouse or immediate family member

Brenda owns an insurance agency. If Brenda should suddenly die, what might be granted to her husband, Alan, to allow him the time needs to get affairs in order to sell the business.

a temporary license

A voluntary relinquishment of a known right is called

a waiver

transferring total ownership of a life insurance policy may be accomplished what way

absolute assignment

the 2 major phases of an annuity are

accumulation and annutilization

what would not eligible for Medicare

an individual with liver failure

what describes of unfair discrimination

an insure refuses to issue a policy to a male applicant who works in the theater industry because he is assumed to be at high risk of HIV

what is not a factor used to determine the payout if an annuity

annuitant's state of residence

Jeremy has an insurance company logo on his car and hands out bottles of water, shirts, and hats with the insurer's logo events. Based on Jermey's actions, this is an example of

apparent authority

A licensed insurance producer that transact business on behalf of an insurer must be

appointed by an insurer

Insurable interest in a life policy must exist

at the time the policy is written, but not at the time of death

a company that is approved by the states department of insurance to transact insurance business in a state is what

authorized insurer

to prevent the lapse of a whole life insurance policy at the end of the grace period, cash value will be used by the insurer to pay the premium what is this called

automatic premium loan

STOLI transaction are what

banned in most states

Ramon purchases an individual disability policy. what will happen

benefits are generally income tax free as long as they are not more than the actual expenses

the entire contract in a health insurance policy does not include this

buyers guide

under to NAIC Uniform Health Insurance Policy Provision Law, what is considered an optional provision

cancellation

Long life Insurance Company insures substandard risks. What will it use to compensate for the higher death rates it expects?

charge increased premiums for substandard risks

forcing a person to buy insurance through a particular company or products is

coercion

an intentional failure to disclose known facts is

concealment

how does the "insurance with other insures" provision prevent the insured from collecting twice on the same loss?

each insure will pay a proportionate share of any claim.

optional health insurance policy provision

earning to insurance, misstatement of age, illegal occupations

correct about a qualified plan

employees have 100% vested interest in benefits made from their own contributions.

if an insurer promotes an insurance products it does not or will not sell, this is known as

false advertising

what is the settlement option of a life policy that provides periodic payment of a specified amount as long as the proceeds plus interest last

faxed-amount settlement option

a person in a position of trust and confidence who handles the affairs and funds of others is what

fiduciary

what type of annuity offers a guaranteed interest rate during accumulation and guaranteed payments after annuitization

fixed annuity

Group underwriting criteria includes what

flow of members through the group, size of the group, and composition of the group

what describes an insurance company that has been organized in any state other than the state of its home office

foregin

An insured returned a policy one week after it was issued and receives a full refund of premium paid. what provision did the insured use

free look

One of the differences between group and individual disability income insurance plans is

group benefits are typically states as a percentage of the employees compensation

what must an individual have in order to establish a health savings account (HSA)

high-deductible Health Plan (HDHP)

Thomas submits a claim and proof of loss for medical expenses covered by his major medical policy. According to the time of payment of claims provisions, how soon must the company pay the claim.

immediately

after a life insurance policy has been in effect for two years, the insurer is prevented from rescinding the contract. the policy has become what

incontestable

Which provision includes the insurance company's promise to pay the claim

insuring agreement

If the policyowner must for get permission from the beneficiary before being able to change the benefiacry, what type of beneficary does the policy have

irrevocable

A short-term medical Expenses policy

is not renewable

concerning the elimination period under a disability income policy is what

it can be thought of as a time deductible

an insured has a disability income policy with a change of occupation provision. The insured changes occupations to a less hazardous occupation without informing the insurance company. How will the insurance company handle a claim

it will prorate the benefit and refund the premium

the optional provision "other insurance will this insurer" is designed to

limit the risk with any one individual insured by a company

a principle function of annuities is to

liquidate a principle sum

During the accumulation period, the owner

may make additional premium payments or deposits

When underwriting a life policy, which industry source of medical information about proposed insured do insurer often use

medical information bureau

Medigap policies

must have a 30-day free-look period

Ira fund may be invested in what

mutual funds, flexible premium annuities, brokerage account

The most favorable renewability provision for the insured is

non-cancelable

what is the usual federal income tax treatment of individual life insurance

non-deductibility of premiums, non-taxable death benefits

what of a total disability is most favorable to the insured

own occupation

Medicare Part D provides coverage for what

prescription drugs

In an HMO, the role of the gatekeeper is performed by the insured's

primary Physician

most states have guaranty associations or guaranty pools. their purpose is to

protect policy owners of insurer who have become insolvent

Misstatement of age in an insurance contract

results in the policy benefit being adjusted according to the correct age of the insured, it dies not void the contract

to renew a producer's license, the producer must what

satisfy the states continuing education requirement

nursing and rehabilitative care that is required daily and can be performed only by skilled medical practitioners on a doctors orders is what

skilled nursing care

a medical expense policy's coinsurance provision

specifies the percentage of costs that will be paid by the insured and the insurer

Carol wants her annuity settlement to pay her the highest monthly income amount, What payout option should she choose

straight life option

Obtaining information from the applicant to determine whether an insurance or annuity product is appropriate is what

suitability

Group health insurance premiums paid by the employer are

tax deductible as a business expense

benefits to employees for group accident, health, and dental coverage are

tax free to the extent that they do not exceed actual expenses

Accelerated death benefits are

tax-exempt

the federal law requiring insurance companies to adopt and monitor anti-money laundering program is

the USA PATRIOT Act

Don's whole life policy allow him to take a policy loan up the cash value of the policy. If Don dies before the policy loan has been repaid

the amount he borrowed plus interest charges will be deducted from the policy's death benefit

Julias semiannual premium on her health insurance policy was sue August 1. She forgot to pay the premium and suffers a lost-on August 22, for which she files a claim. How will the insurer hand the situation?

the claim will be paid, but the premium amount due will be deducted from the benefits paid.

Who is responsible for enforcing state insurance laws and regulations

the commissioner, director, or superintendent

The expense that must be incurred before major medical benefits begin to be paid is

the deductible

The maximum out of pocket cost for an insured is equal

the deductible plus an insured coinsurance percentage times the stop-less limit

The waiting period before payments begin in a disability policy is called

the elimination period

with regard to disability income contracts. what best describes partial disability

the inability to perform one or more important duties of the insureds occupation

What is the insurer's liability if total benefits from all disability income coverage for the same loss exceed the insured's monthly earning at the time of disability

the insurer will pay the proportionate amount of benefits that the insured's earning bear to the total benefits

information about an applicants character, general reputation, personal habits, and lifestyle would be included in

the investigate consumer report

a distinguishing feature of a stock insurer is that

the issued policies are called non-participating policies

what is not in order for a nonresident to be granted a nonresident insurance license

the licensing exam must be taken in both the producers home state and nonresident state

Concerning a group life insurance policy, the person responsible for applying for the policy, maintaining the policy, and paying the premium is known as what

the master policyowner

What is a term life insurance policy

the policy has a face amount of 100,000, every 5 years the premium increases, and at the end of 20 years the policy terminates with no cash value

with a life insurance policy, insurable interest must exist between

the policyowner and insured

with a conditional life insurance receipt, coverage may become effective as early as the date

the receipt is given to the applicant, if the applicant is approved as a standard risk

Daniel, the insured under a 100,000 life insurance policy, dies during the grace period. What would happen if the premium on the policy had NOT been paid

the unpaid premium would be deducted from the death benefit paid to the beneficiary

Lee wants to make sure that his policy stays in force in the event he is permanently and totally disabled and unable to make premium payments. What ruder should Lee Purchase

waiver of premium rider

what affects the deductibility of contributions made to a traditional IRA

whether or not the IRA owner participates in a qualified employer plan

is medical part B voluntary

yes