Life, Accident, and Health
Which statement regarding a Key Employee Life policy is NOT true?
The beneficiary is named by the key employee
The provision in a health insurance policy that interrupts premiums being paid to the insurer while the insured is disabled is called the
Waiver of Premium
An agent soliciting insurance policies in North Carolina MUST be
appointed by an authorized insurer in North Carolina
A Nonforfeiture clause gives the policyowner
guaranteed values even if the policy has lapsed
An agent who solicits applications for life insurance in North Carolina is considered to represent the
insurance company
A license may be denied, suspended, or revoked if the licensee
is found guilty of misrepresentation
One role of the Life and Health Guaranty Association is to
maintain public confidence in the promises of insurers
A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid
mandatory income tax withholding on the transfer amount
A Health Insurance Policy Applicant unintentionally fails to list a previous visit to a neurologist. If the policy is issued and the insurer later decides to contest the policy, it must do so
within 2 years from the date of issue
A Health Insurance Policy applicant unintentionally fails to list a previous visit to a neurologist. If the policy is issued and the insurer later decides to contest the policy, it must do so
within 2 years from the date of issue
a terminated employee must have been covered for at LEAST ___ month(s) under a Group Health Insurance policy immediately prior to termination in order to be eligible for continuation of coverage
3 months
An insurance applicant was recently denied insurance coverage. The applicant is requesting access from the insurer to recorded personal information regarding this decision. Under the Information and Privacy Protection Act, the insurer MUST make the information available within_____ business days
30
According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid?
31 days
An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision?
31 days
Which of the following statements describes what an Accident and Health policy owner may NOT do?
Adjust the premium payments
Which of these is an example of twisting?
An agent misrepresents a policy to induce a policy owner to surrender an existing policy
All of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT:
Bilateral
Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deductible?
Carryover provision
S is covered by a whole life policy. Which insurance product can cover his children?
Child term rider
N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take?
Claim will be denied
When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?
Conversion provision
Which of the following types of insurance is exempt from the Rules Governing Life Insurance and Annuity Replacements
Credit Life
________ could have claim to vatical settlement proceeds
Creditors
A combination of whole life and ______ Term insurance is referred to as a Family Income Policy
Decreasing Term
Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require?
Each partner must own a policy the other partners
The federal income tax treatment of employer-provided group Medical Expense insurance can be accurately described as:
Employee's premiums paid by the employer is tax-deductible to the employer as a business expenditure
A group life insurance policy can be converted to an individual whole life policy under which circumstances?
Employment termination
What provision in a life insurance policy states that the application is considered part of the contract?
Entire Contract Provision
which of the following is an important underwriting principle of group life insurance
Everyone must be covered in the group
Which of the following is NOT included in the policy face?
Exclusions
This type of deductible provision waives the deductible for all family members after some of them have satisfied individual deductibles within the same year:
Family maximum deductible
The reason for a business having a Business Overhead Expense Disability Plan is to cover
Fixed business expenses
Which of these is considered a true statement regarding Medicaid?
Funded by both state and federal governments
Which of the following provisions specifies how long a policy owner's health coverage will remain in effect if the policy owner does not pay the premium when it is due
Grace Period
Which of the following MUST be included with the continuation of coverage of a group Hospital, Surgical, and Major Medical policy?
Hospital expenses
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?
If the primary beneficiary dies before the insured
Information obtained from a phone conversation to the proposed insured can be found in which of these reports?
Inspection report
If an insurance applicant is being investigated into his/her personal character and mode of living, the applicant MUST be notified of this investigation. Which of the following makes this a requirement?
Insurance Information and Privacy Protection Act
Which of the following is NOT regulated by the Insurance Information and Privacy Protection Act?
Insurance regulators
A policy owner's rights are limited under which beneficiary designation?
Irrevocable
What kind of Accidental Death and Dismemberment (AD&D) insurance beneficiary requires his/her consent when a change of beneficiary is made?
Irrevocable beneficiary
If a blank insurance contract application is signed by an agent, the agent
Is guilty of a misdemeanor
what is the purpose of a Policy Summary?
It highlights the critical parts of the policy issued
Which of these are NOT an example of a Nonforfeiture option?
Life Income
Life insurance that covers an insured's whole life with level premiums paid over a limited time is called:
Limited Pay Life
In Major Medical Expense policies, what is the objective of a Stop Loss provision?
Limits an insured's out-of-pocket medical expenses
Under the Affordable Care Act (ACA), health coverage is provided for dependents up to the age of
26
A variable annuity has which of the following characteristics?
underlying equity investments
Which of these options can an individual use their medical flexible spending account to pay for?
Prescription drugs
What is the purpose of the Time of Payment Of Claims provision?
Prevents delayed claim payments made by the insurer
Chemical dependency treatment under a Group Health policy MUST include (over the life of the contract) a minimum benefit of
$16,000
K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
$20,000 death benefit
An individual has a Major Medical policy with a $5,000 deductible and an 80/20 coinsurance clause. How much with the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred?
$7000 $5,000 + 20% of the remaining bill= $7,000
An Accident/Health policyholder has ________ days to return the policy and receive a full refund on premiums
10 days
A group health policy's approved premium rate is guaranteed by the insurer for an initial period of a LEAST _____ months
12 months
A group health policy's approved premium rate is guaranteed by the insurer for an initial period of at LEAST ______ months
12 months
A proof of loss is required to be submitted within ________ days after the date of loss
180
A life insurance contract may NOT be voided by the insurance company beginning ______ year(s) after the policy's issue date.
2 years
Death benefits for suicide must be paid if the life policy has been enforce for at LEAST
2 years
North Carolina insurance law specifically allows the Commissioner of Insurance to issue a temporary license to which of the following individuals?
A surviving spouse of a deceased agent
What is North Carolinas definition of Life insurance replacement ?
A transaction in which a new policy is bought and an old policy is terminated
Which of the following types of policies pays a benefit if the insured goes blind?
AD&D
All are true statements regarding the underwriting process, EXCEPT
AIDS and HIV virus exams can be conducted in a discriminatory fashion
P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount?
Accidental Death and Dismemberment clause
Which of these is NOT an element of Life insurance premiums?
Morbidity rate
In the event of a replacement , what MUST be given to the insurance applicant at the time of application?
Notice Regarding Replacement
Generally, how long is a benefit period for a Major Medical Expense Plan?
One Year
Which statement is TRUE in regards to a policy loan?
Past-due interest on a policy loan is added to the total debt
On a life insurance policy, who is qualified to change the beneficiary designation
Policy owner
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
When an existing life insurance policy is terminated so that a new life insurance policy can be purchased, this transaction
Replacement
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
S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy?
Return of premium rider
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
P is a producer who notices 5 questions on a life application were not answered. What actions should P take?
Set up a meeting with the applicant to answer the remaining questions
Which of these actions is NOT considered an act of rebating?
Sharing commissions with other licensed and appointed agents
P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA benefits, which of the following statements is TRUE?
She DOES need to provide evidence of insurability
Which of the following is an effort to influence a person to buy an insurance product from you?
Soliciting
Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?
Split-Dollar
Which of the following costs would a Basic Hospital/Surgical policy likely cover?
Surgically removing a facial birthmark
G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills?
The insured
Which of the following is considered an element of a Variable Life Policy?
Underlying equity investment
What typer of life insurance incorporates flexible premiums and an adjustable death benefit?
Universal
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
Universal Life
Which of the following Life insurance policies combine term insurance with an investment element?
Universal Life
R becomes disabled and owns an individual Disability Income policy. When is R eligible to receive disability benefits?
Upon satisfying the elimination period requirement
A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled?
Utilities and office rent
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
Variable Life
Disability policies do NOT normally pay for disabilities arising from which fo the following?
WAR
If a dispute arises over an insurance contract, the agent who sold the policy is considered to represent the
company
Non-occupational disability coverage is designed for:
employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers Compensation
filing a false insurance claim in North Carolina is considered a(n)
felony
The commissioner of Insurance has notified an insurer that an Individual Health Policy form does not comply with North Carolina laws. the insurer may
not issue the form in connection with any new application
An example of unfair discrimination would be
offering different terms of coverage for different policyowners having the same risk classification
An applicant may NOT be refused insurance coverage due to
race
Which of the following services is NOT included under hospitalization expense coverage?
surgical fees
a level premium indicates:
the premium is fixed for the entire duration of the contract
An individual who purchases a Life annuity is given protection against:
the risk of living longer than expected
Essential Benefits without annual and lifetime limits are required on any health policy purchased
through the Federal Marketplace
