Life and Health Exam

When reduced-paid-up nonforfeiture option is chosen, what happens to the face amount of the policy?

It is reduced to the amount of what the cash value would buy as a single premium

In long term care insurance, what typeof care is provided with intermediate care?

Occasional nursing or rehabilitative care

Which of the following is not a physician?

Optometrist

When the public purchases annuities they are attempting to address the risk of-

Outliving the money they saved for retirement

Which of the following would an accident only policy NOT cover?

Surgery to repair a wrist damaged by tendonitis

A father owns a life insurance policy for his 15 y/o daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

The insurance premiums will be waived until she is 21

In the life insurance planning process, the "blackout period" is considered-

The period of time when surviving spouse does not receive any social security benefits. (Begins when the youngest child turns 16 and ends when your surviving spouse turns 60)

From the items listed below, choose the characteristics not found in the HMOs "gatekeeper" system.

There is no provision whatsoever for services to be covered without the OK of the gatekeeper

Beth wants to buy more life insurance through her current policy. She calls you, her agent, and asks your opinion. You know Beth has guaranteed insurability rider on the policy. She can buy more insurance:

Without the need to prove insurability Ono her life at specific ages

Which of the following is true regard to health insurance policy is paid annually, semi annually, or quarterly, what is the minimum period required?

30 or 31 days

FMLA provides for what minimum amount of paid leave?

0 weeks paid

How many consecutive months of coverage (other than in an acute care unit of hospital) must LTC insurance provide in this state?

12 months

A hospital confinement or indemnity insurance policy pays-

A daily dollar benefit for each day the insured is confined to a hospital

There are four basic classes of insurance. All of the selections listed below are regarded as ordinary insurance, except-

A group life insurance

Select a statement that best describes a multiple employer trusts-

A group of small businesses that band together in order to qualify for insurance benefits

Preferred Provider Organization(PPOs) were an offshoot of the HMO system. Which of the following statement is false about PPOs? - A PPO will pay the benefit unless a member chooses a ppo approved doctor - If a member sees a doctor that is not PPO approved there is no reduction in the payment of services - PPOs compensate doctors through a system called Capitation, no fee for service

ALL FALSE

Viatical/Life settlements are accomplished through the use of

Absolute assignments

A measure for rating individuals needs for long term care benefits is called?

Activities of Daily Living

Which of the following is not a feature of a major medical insurance policy?

Capitation

Which of the following statements regarding business overhead expense policies is NOT true ?

Benefits are usually limited to 6 months

A small business owner is the insured under a disability policy that funds a buy-sell agreement. If the owner dies or becomes disabled, the policy would provide which of the following?

Cash to the owners business partner to accomplish a buyout

Employees that have a group life or health insurance policies covering them are required to be issued-

Certificate of insurance

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

Common Disaster

Long term care coverage ma be available as any of the following options EXCEPT-

Endorsement to a health policy

Most LTC plans have which of the following features?

Guaranteed Renewability

Which is true about spouse term rider?

The rider is usually level term insurance

A family life insurance policy that provides coverage for children may be converted to permanent insurance for the children, but evidence of insurability is required-

FALSE, they may convert without any proof

The federal act that mandates that a credit reporting company responds to a consumer complaint when a company credit report inaccurately reflects information about the consumer is known as-

Fair Credit Reporting Act

If the beneficiary wants to 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

Jennifer has reached a time in her life where she wishes to begin receiving payments from her tax-differed annuity her agent has suggested she take the money by means of the "life income with 10 years certain" option. When she does, the insurer will make payments-

For at least 120 months or the remainder of her life

The insurer can change the premium assuming it is changed for all insureds in a class. However, the company cannot refuse to renew the policy, or cancel it. This is a/an ______ policy.

Guaranteed Renewable

Which of the following types of LTC is NOT provided in an institutional setting?

Home health care

Which of the following is correct about a third party administrator?

It is an independent company that provides administrative services for companies self funded plans

Which is true regarding HMO coverage?

It is divided into geographic territories

Employers that have a group life or health policies for they employees are required to be issued a

Master policy

The entire contract provision consist of which of the following?

POLICY AND APPLICATION

Who can request changes in premium payments, face values, loans, and policy plans?

Policyowner

An absolute assignment is a-

Transfer of all ownership rights in a policy.

An annuity which may be used to help fun retirement in a few years maintains a "separate account." The owner purchases "accumulation units." This is called a ___annuity.

Variable

When an insured becomes totally and permanently disabled, her condition triggers a provision that keeps the policy in force even though the insured stop making premium payments. This is a/an-

Waiver of premiums

When is insurability interest required to exist with a life insurance policy?

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

A policy available to business owners that provides payment for normal business expenses in the event that the owner is disabled is called-

Business overhead expense

The best description of a hazard is a/an-

Condition that may increase the chance that a loss may occur

Oscar owns a whole life policy that he's been paying into for many years. He would like to continue having life insurance and he can afford to make the premium payments, but needs about 30% of the cash for a couple of years. What would be the best course of action for Oscar to take?

Continue making the premium payments to keep his contract in force and borrow from cash value.

When premiums paid into a universal life insurance policy, insurers must Mae certain adjustments to the cash value. The company will assure the current premium is paid, and -

Deduct for expenses and mortality costs, then ass current interest

From the descriptions below, identify which is a term policy?

Each year the premium increases as the insured grows older. After several years the coverage and premium end simultaneously. Cash value is not created.

Items stipulated in the contract that the insurer will not provide coverage for are found in the-

Exclusions Clause

David has been named an irrevocable beneficiary in a life insurance policy. David, therefore-

Has vested rights to the policy process that, unless he gives consent, cannot be effected by the policy owner not any creditors.

Arnold and Bertha are married and work for different firms. Arnold has group health insurance through his company that also insures bertha. Likewise Bertha has group health insurance also covering Arnold. Select the correct statement below about how benefits are affected by the coordination of benefits provision in both plans.

If bertha files a medical claim Arnolds company is considered secondary

Which of the following is true about the premium on the children's rider in a life insurance policy?

It remains the same no matter how many children are added to the policy

A disability is issued nd premiums are paid on an annual basis on the 1st of January. At the first anniversary, the insureds decides they do not want to renew the policy and they do not pay the premium. On the 8th day after the premium due date, the insured submits a clan for medical expenses. How will the company respond to the claim?

It will be paid because the loss occurred within the grace period

If no other selection is made, which of the following settlement options becomes the default or automatic mode of settlement for the death benefit of a life insurance?

Lump sum in cash

Sam's insurance policy pays a dividend. The agent that sold sam the policy refers to the shareholders of the companies "participating," there fore it is a/an insurer-

Mutual Insurance

Assuming Continued Education(CE) requirements have been met, how is the life agents license renewed?

Pay the renewal billing notice the department sends out 90 days before the renewal date.

Which of the following is true about a service provider as it related to health insurance?

Payments are made directly to the provider.

Patrick has been diligent in investing money for his retirement, He has managed to put $100,000 after tax money into a tax-differed annuity. Now he is ready to take it out, and the insurance company that issued the annuity says his guaranteed payment is $8,000 a year for the remainder of his life. This means he can expect a total amount of $200,000 back over his life. How much of each years annuity payment is taxable?

Principal: 100,000 (already been taxed) / Expected return: 200,000 = 1/2 every payment 8000 / 1/2 = 4000

A couple owns a life insurance policy with a children's term rider. Their daughter is reaching the maximum age of depended coverage, she will have to concert 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

In the event of a loss, business overhead insurance will pay for-

Rent

Variable life insurance policies and variable life annuities are primarily governed by which agency?

Securities and Exchange Commission (SEC)

Jamie, an office manager, fell off a horse while visiting her mother on vacation. This rendered her completely paralyzed. Now after a year the doctors feel she will not recover from her injuries. Choose from the selection below the program from which Jamie will be able to collect liability income benefits-

Social Security

Sam's insurance policy does not pay dividends. The agent that sold Sam the policy referee to the policy that the company offers as "non-participating," therefore it is a/an insurer-

Stock Insurance

Children's riders attached to whole life policies are usually issued as what type of insurance?

Term

Choose from the following selections the best description of a premium:

The amount an insured pays for each unit of coverage. $7 for every $1000 of coverage is an example.

If a life insurance policy has an irrevocable beneficiary designation-

The beneficiary can only be changed with written permission of the beneficiary.

Identify the statement that is true about contributory group life insurance-

The employee will contribute to the premium payments

All of the following are true regarding a policy owner that ceases making premium payments on a 10-pay life policy and selects the extended term insurance option, except-

The extended term policy will reflect the same cash value as the original policy

Frequently, juvenile life policies contain payor of premiums is disabled or dies, and the juvenile has yet to reach a specific age-

The premiums will be paid by the insurer until the child reached the age of 21

Survivorship or Second to die policies-

are effectively used to cover the costs of estate taxed - are issued of 1 million in most cases - reflect substantially lower premium when compared to buying a separate policy

" The inability to perform the duties of any occupation for which one is suited by reason of education, training experience, or prior economic status." This definition of total disability in a disability income policy is considered:

1. An "any occupation" definition 2. More restrictive

The Family Medical Leave Act (FMLA) provides for what minimum amount of unpaid leave?

12 weeks of unpaid leave

Most policies will pay the accident death benefit as long as the death is caused by the accident and occurs within-

90 days

Of all of the items listed below, which are requirements for a life and disability insurance- - The applicant must have a good general reputation and good business reputation - Must be at least 18 y/o -Must have thorough knowledge of life and disability insurances

All are required

Julie is a licensed insurance salesperson who represents the Silver Dollar Insurance Company. If you were to look at the front door of her office you would see a sign that reads: SILVER DOLLAR INSURANCE COMPANY Julie Insurance Agency. If Julie performs acts that are NOT specifically named in the written contract she had with Silver Dollar she is exercising her ______ authority. b.) If she performs acts that are specifically named in the written contract she has with Silver Dollar, she is exercising her ______authority.

a) Implied (not in writing) b) Express (in writing)

A non medical application:

means we MAY do a medical

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

If the father is disabled for more than 6 months

Which type of a hospital policy pays a fixed amount each day that the insured is in the hospital?

Indemnity

Underwriting a group health insurance plan that is paid for by the employer required all of the following EXCEPT

Individual members of the group may select the level of benefits for their own coverage

Which of the following supports the Medical Information Bureau (MIB)?

Insurance companies - MIB is the organization insurance companies pay in order to be able to see ones medical background

Select from the following choices below the best description of a speculative risk?

Involving the possibility of a gain in addition to the uncertainty of a loss

What would be an advantage to naming a contingent(or secondary) beneficiary in a life insurance policy?

It determines who receives policy benefits if the primary beneficiary is deceased

Which of the following is true of a children's rider added to an insureds permanent insurance policy?

It is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age.

All of the following are reasons for an individual to purchase personal life insurance, except-

To cover a buy/sell agreement (buy/sell are for business use, NOT personal)

Why would a business use a key person life insurance policy?

To protect the company from the financial consequences of the death of a Vice President.

A policy owner makes the last premium payment of $250,000 non-par whole life policy today. The owners 70 y/o. When will the cash value reach $250,000?

When he reaches age 100

Ben is a life agent who would like to do with business with Rock Solid Insurance Company but he doesn't have an appointment to sell their policies. Assuming Rock Solid does not require exclusive representation, can ben submit an application to them from a prospect?

Yes, and if the insurer approves the application they must appoint ben within 14 days.

Can an individual who belongs to a POS plan use as an out-of-network physician?

Yes, and they may use any preferred physician, even if not a part of HMO