Life an health insurance pt2
In Indiana controlled business is
Limited to 25% of a producer's annual commission income
A business entity may be licensed as an insurance producer if
an employee who hold a producer's license is designated as a compliance officer
Which nonforfeiture option provides coverage for the longest period of time?
reduced paid up
All of the following long-term care coverages would allow an insured to receive care at home EXCEPT
skilled care
Which of the following statements is correct regarding a whole life policy?
the policyowner is entitled to policy loans
which of the following is true regarding optional benefits with long-term care policies?
they are available for an additional premium
A brain surgeon has an accident and develops tremors in her right arm. Which disability income policy definition of total disability will cover her for all losses?
"Own occupation" - less restrictive than other definitions
Which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members?
term rider
If an Indiana family has a low level of income and cannot afford health insurance, what program could help?
the Indiana children's health insurance program
To qualify for group health insurance coverage with a small employer, the employee must work how many hours a week?
30
In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?
5
Under the Affordable Care Act, a special enrollment period allows an individual to enroll in a qualified health plan within how many days of a qualifying event?
60 days
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?
No coverage will apply, since the injury could have been foreseen.
A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?
Proof of insurability is not required
What is the purpose of a disclosure statement in life insurance policies?
To explain features and benefits of a proposed policy to the consumer
If an insurance company offers Medicare supplement policies, it must offer which of the following plans?
a
Which type of life insurance policy generates immediate cash value?
single premium
Which of the following is NOT correct regarding examination of companies?
the commissioner must examine all alien companies
Which of the following best describes what the annuity period is?
the period of time during which accumulated money is converted into income payments
An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A and Part B. What is the insurance company obligated to do?
Offer the supplement policy on a guaranteed issue basis
All of the following are characteristics of group life insurance EXCEPT
Premiums are determined by the age, sex and occupation of each individual certificate holder
Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?
Presumptive disability
Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?
Principal sum
Under Rule 24, Life Insurance Solicitation, producer's duties include all of the following EXCEPT
Providing the applicant with a signed copy of the Important Notice Regarding Replacement.
Which of the following is NOT covered under a long-term care policy?
Acute care in a hospial
A business entity may be licensed as an insurance producer if
An employee who holds a producer's license is designated as a compliance officer.
In Indiana all of the following may act as insurance consultants EXCEPT
An individual who holds both the producer's and consultant's license.
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.
How is the Commissioner selected for the office?
Appointed by the Governor
the provision that provides for the sharing of expenses between the insured and the insurance company is
Coinsurance
Which of the following is NOT a characteristic or a service of an HMO plan?
Contracting with insurance companies
this arrangement specifies who will purchase a disabled partner's interest in the event he or she becomes disabled
Disability buyout
What are the 2 types of Flexible Spending Accounts?
Health Care Accounts and Dependent Care Accounts
What are the two components of universal policy
Insurance and cash account
Which health insurance provision describes the insured's right to cancel coverage?
Renewal provision
All of the following employees may use a 403(b) plan for their retirement EXCEPT
The CEO of a private corporation.
All of the following entities regulate variable life policies EXCEPT
The Guaranty Association.
Which is NOT true about beneficiary designations?
The beneficiary must have insurable interest in the insured.
In a life settlement contract, whom does the life settlement broker represent?
The owner
All of the following are true of an annuity owner EXCEPT
The owner must be the party to receive benefits.
Which of the following would NOT be considered rebating?
giving a client a $20 pen with the insurer's logo during the insurance application process
Which of the following policy components contains the company's promise to pay?
insuring clause
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])
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.
A producer has completed all of his continuing education hours, but his license has just lapsed. Within what timeframe must the producer reinstate his license if he wants to avoid taking an exam to regain his licensed status?
12 months
How long is a free-look period for replacement of policies?
20 day
A licensed producer must inform the Commissioner of a change of name within
30 days.
Which of the following terms describes the specified dollar amount beyond which the insured no longer participates in sharing of expenses?
Corridor deductible
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of
Misrepresentation
Which of the following types of license is most suitable for an individual or corporation that, for compensation, acts or aids in any manner in soliciting applications for a policy of insurance on behalf of an insurance company admitted to do business in Indiana?
Insurance producer
In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?
Insurer to the insured
According to the Life Insurance Advertising Rule 13, all of the following statements are correct EXCEPT
Only written presentations by the producers are considered advertising.
A producer licensed in another state wants to become a non-resident producer in Indiana. The other state gives the same privileges to Indiana producers as it does to its own producers. Indiana, therefore, extends the licensing privileges to the prospective producer of the other state. What is this called?
Reciprocity
You know that your client is currently insured under a life policy, but you are making a sale presentation to that client for a new life policy. You must provide the client with the Important Notice Regarding the Replacement of Life Insurance and a copy of the sale proposal under all of the following situations EXCEPT
The client is converting from an existing term policy to whole life.
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.
All of the following cases show when a Small Employer Medical plan cannot be renewable EXCEPT
When the employer chooses to renew the plan.
When transacting business in this state an insurer formed under the laws of another country is known as a/an
alien insurer
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
an unfair trade practice
If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's
ancestry
A Universal Life Insurance policy is best described as a/an
annually renewable term policy with a cash value account
A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?
automatic premium loan
Which of the following is NOT specified under Rule 39, AIDS & HIV Underwriting?
benefits triggers
Social Security disability definition includes all of the following EXCEPT
disability expected to last for a least 6 months
Which of the following is true regarding elimination periods and the cost of coverage?
elimination periods have no effect on the cost of coverage
all of the following violations may result in an agent's imprisonment EXCEPT
failing to report to the department a criminal prosecution taken against the agent in another jurisdiction
Both Universal Life and Variable Universal Life have a
flexible premium
Which of the following is TRUE of a qualified plan?
it has a tax benefit for both employer and employee
What is the purpose of a conditional receipt?
it is intended to provide coverage on a date prior to the policy issue
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
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
The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the
one year term option
Don has both a basic expense and a major medical policy. He is injured in an accident, which requires several major surgeries. This quickly exhausts Don's basic expense policy. What must Don do before his major medical policy can pick up where the basic expense policy left off?
pay a special deductible on his major medical policy
which of the following applies to partial disability benefits?
payment is limited to a certain period of time
which of the following describes taxation of individual disability income insurance premiums and benefits
premiums are not tax deductible, and benefits are not taxable
Which of the following would be in violation of producer's duties under rule 24, Life Insurance Solicitation?
producer referring to him/herself as financial consultant
Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability?
residual disability
All of the following statements about equity index annuities are correct EXCEPT
the annuitant receives a fixed amount of return
Which of the following would qualify as a competent party in an insurance contract?
the applicant has a prior felony conviction
Which of the following is true about the requirements regarding HIV exams?
the applicant must give prior informed written consent
State law specifically prohibits using illegal inducements in the marketing of insurance. All of the following would be considered illegal inducements EXCEPT
Inviting prospective clients to the grand opening of the company's new office.
Who is responsible for issuing a certificate of authority?
the commissioner
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
If a producer allowed his or her license to lapse, which of the following would NOT be true?
the producer must take a written examination within 12 months of the lapse of the license to be reinstated
Which of the following is TRUE for both equity indexed annuities and fixed annuities?
they have a guaranteed minimum interest rate
All of the following are requirements for life insurance illustrations EXCEPT
they must be part of the contract
The paid-up addition option uses the dividend
to purchase a smaller amount of the same type of insurance as the original policy
A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as
Usual, customary and reasonable.
When can a Long-Term Care policy deny a claim for losses incurred because of a pre-existing condition?
within 6 months of the effective date of coverage
An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of
a STOLI policy
The Commissioner must be notified in all of the following circumstances EXCEPT
a change of the producer's business phone number
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.
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.
Which of the following would be considered an unfair claims settlement practice?
advising the insured that if the claim goes to arbitration, the insured would probably receive less than what currently being offered
what is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident
common disaster clause
Which of the following would NOT be considered an unfair and deceptive practice?
controlled business
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
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
Which of the following is true regarding elimination periods and the cost of coverage?
the longer the elimination period, the lower the cost of coverage
All of the following are general requirements of a qualified plan EXCEPT
the plan must provide an offset for social security benefits
Every small employer carrier must actively offer to small employers at least how many health benefit plans?
2 plans
The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over the last
24 months.
what is the period of coverage for events such as death or divorce under COBRA?
36 months
A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as
critical illness
In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?
unilateral
COBRA applies to employers with at least
20 employees
Under workers compensation, which of the following benefits are NOT included?
Legal benefits
Which two terms are associated directly with the premium?
Level or flexible
According to the Life Insurance Replacement Regulation, Rule 16.1, replacement of life insurance is defined as a process in which
a new policy is bought and an old policy is converted to a reduced paid up policy
Under Rule 24, Life Insurance Solicitation, producer's duties include all of the following EXCEPT
providing the applicant with a signed copy of the important notice regarding replacement
If a firm has 35 employees that are actively engaged in business on at least 50% of its working days during the preceding calendar year, what is its classification?
small employer
Which of the following is an example of liquidity in a life insurance contract?
the cash value available to the policy owner
