Missouri Life and Health Insurance Final Exam

Information obtained from a phone conversation to the proposed insured can be found in which of these reports?

inspection report

Which of these individuals may NOT be compensated from an insurance company?

a licensed producer not appointed by the company

When a group accident and health policy is issued to an employer

a policy is issued to the employer and a certificate is issued to each employee

What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?

conversion

Which of the following BEST describes a Hospital Indemnity policy?

coverage that pays a stated amount per day of a covered hospitalization

Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?

ordinary income tax and a 10% tax penalty for early withdrawals

In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy?

owner's rights

Whole Life insurance policies are contractually guaranteed to provide each of the following, EXCEPT?

partial withdrawals features beyond a surrender charge period

On a life insurance policy, who is qualified to change the beneficiary designation?

policyowner

Which of these statements regarding health cover for physically handicapped dependents is FALSE?

the dependent must have been over ten years of age when the handicap was incurred

Which of these is a TRUE statement regarding the regulatory authority of the Director?

the director may establish guidelines for continuing education

The advantage of reinstating an original life policy is?

the premiums are based on a younger age

After a life insurance policy has been in force for more than _____ years, it becomes incontestable.

2

Insurers may request a hearing within if their policy is rejected?

20 days

What type of policy would offer a 40 year old the quickest accumulation of cash value?

20 pay life

Within days after a policy delivery, a Medicare Supplement policy can be returned for 100%premium refund?

30

The clause identifies which losses resulting from an accident or sickness are insured by the policy?

insured

E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to?

F

Taking receipt of premiums and holding them for the insurance company is an example of

Fiduciary responsibility

In Missouri, a health insurance policy that is not exempt from state-mandated benefits must cover childhood immunizations and shall not charge any deductible or copayment. The EXCEPTION to this would be?

HMO's that exclude coverage to subscribers who obtain services by a non-participation provider

What is being delivered during a policy delivery?

Insurance contract to the proposed insured

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 laws, which of the following statements is TRUE?

She DOES need to provide evidence of insurability

When making a recommendation to a consumer to purchase an annuity, the producer must make reasonable efforts to obtain suitability information. Suitability information includes?

age, annual income, financial experience

Which of the following statements is CORRECT regarding tax treatment of a lump sum payment paid to a life insurance policy's primary beneficiary?

all proceeds are income tax free in the year they are received

Which type of contract liquidates an estate through recurrent payments?

annuity

When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered a red flag for a(n)

anti-money laundering violation

A health insurance policy application may ONLY be altered with the written consent of the?

applicant

Which of the following medical expenses does Cancer insurance NOT cover?

arthritis

When does a Probationary Period provision become effective in a health insurance contract?

at the policy's inception

Medicare Part C is?

available to those that are enrolled in Medicare Part A and Part B

An applicant for a nonresident producer license MUST ?

be a producer in good standing in their home state

Variable Whole Life Insurance can be described as

both an insurance and securities product

What statement about whole life policy is true?

cash value may be borrowed against

Medicare Part A and Part B do NOT pay for

dental work

M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate?

earned but unpaid benefits

In a disability income policy, which of these clauses acts as a deductible?

elimination period

Which of the following statements is correct regarding an employer/employee group health plan?

employer receives master policy and employees receive certificates

Which of these statements is INCORRECT regarding federal income tax treatment of life insurance?

entire cash surrender is taxable

A producer does not have the authority to change a policy or waive any or its provisions. The health provision that best describes this statement is called the?

entire contract

Which of the following provisions prohibits an insurance company from incorporating external documents into an insurance policy?

entire contract

The section of an insurance contract which limit coverage are called

exclusions

An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the ?

insurer dates the policy

The accidental death and dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured

is blinded in an accident

Which statement regarding third party ownership of a life insurance policy is true?

it is used extensively in estate planning as well as business circumstances

An insured's inability to perform two or more activities of daily living may trigger which type of policy rider?

long term care

Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies?

long term care

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

In order to terminate a producer's, the insurer MUST?

send notice of termination to the Director

An immediate annuity consist of?

single premium

Which of the following BEST describes a warranty?

statement guaranteed to be true

The suicide provision for life policies would apply to?

subsequent increase in benefits

Which of the following statements about the classification of applicants is INCORRECT?

substandard applicants are never denied by underwriters

Which of the following statements about accumulated interested earned on dividends from an insurance policy is TRUE?

taxed as ordinary income

In Missouri, an A&H policy that is paid on a monthly basis requires a grace period of at LEAST ?

ten days

Which of these is a TRUE statement regarding how Missouri law recognizes an association eligible for group coverage?

the association must NOT have not been the organized for the purpose of obtaining insurance

Which of the following is NOT a required provision in a group life policy?

accidental death and dismemberment

When an employee is terminated, how long does this employee have to convert group life coverage to an individual plan?

31 days

Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits?

5 months

Health policies that contain coverage for low protein modified food products for treatment of PKU or any inherited disease of amino and organic acids require a coinsurance NOT to exceed of the cost of formula or food products?

50%

A nondisabled individual is first eligible for Medicare Supplement policy at age?

65

The health insurance program which is administered by each state and funded by both federal and sate governments is called?

Medicaid

A Term Life rider offers the insured

additional life coverage

S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company did not respond to the claim. S can take legal action against the insurer beginning

November 1

The insuring clause

States the scope and limits of the coverage

A foreign insurance company CANNOT conduct business in Missouri without?

a certificate of authority to transact business in Missouri

A disability income policyowner recently submitted a claim for a chronic neck pain that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of the application. How will the insurer handle this claim?

claim will be paid and coverage will remain in force

In Missouri, which of these is considered Unfair Trade Practice?

coercion

Chemical dependency coverage is required in which type of policy?

comprehensive major medical

What type of group plan involves employees sharing the cost?

contributory plan

Which of the following is a requirement for obtaining a resident producer license in Missouri

pay a $100 license fee

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 with the "free look" period, premium will be fully refunded

Whose interest is being protected by the enactment of " The Replacement of Life Insurance and Annuities" regulation?

policyowner

A Limited-Pay Life policy has

premium payments limited to a specified number of years

Who signs a "Notice Regarding Replacement" form when the application is taken for a new life insurance policy that replaces an existing one?

producer and applicant

Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?

reimbursement

K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation?

reinstatement

T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?

request of the change will be refused

Which provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time?

restoration of used benefit

Which of the following policies is characterized by a flexible premium and death benefit and allows policyowner control of the investment aspect of the plan?

variable universal life

Which of the following may NOT be issued after the Director of Insurance finds an insurance code violation committed by a licensee?

warrant for arrest

What must a producer sign when an existing life insurance policy is being reissued with a reduction in cash value?

notice regarding replacement

Under Missouri law, when one group health plan's contract replaces an existing group health plan with similar benefits?

the succeeding carrier shall give credit for the satisfaction of any deductibles or waiting periods satisfied or partially satisfied under the prior carrier's plan

A disability elimination period is best described as a?

time deductible

The Director of Insurance is authorized?

to enforce state laws relating to insurance

The reason for backdating a policy is?

to obtain a premium rate based on an earlier age

A policy that becomes a Modified Endowment Contract (MEC)

will lose many of its tax advantages

Prior to a producer's license being revoked, a hearing must be held. Prior to this hearing, the director of insurance is REQUIRED to give?

written notice to the producer

Under an Individual Health Insurance policy, the Time Limit of Certain Defenses provision states that nonfraudulent misstatements firs become incontestable two years

from the date the policy was issued

Coverage for human leukocyte antigen testing for bone marrow transplantation is REQUIRED to be provided in all

group comprehensive health policies

What is the required renewability status of all Medicare supplement policies?

guaranteed renewable

S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a

high deductible health plan

T sends proof of loss to her insurer for an acceptable medical expense claim under her individual health insurance policy. Upon receipt, the insurer must pay the benefits?

immediately

At the age of 45, an individual withdraws $50,000 from his Qualified Profit-Sharing Plan and then deposits this amount into a personal savings account. This action would result in

income tax and a 10% penalty assessed upon funds withdrawn from the qualified plan

When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the

entire contract provision

S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product would S be advised to purchase?

equity index insurance

Which entity issues Medicare Supplement insurance?

insurance companies

Who makes the legally enforceable promises in a unilateral contract?

insurance company

A producer is circulating incorrect information about the benefits of a policy. This producer may be found guilty of?

misrepresentation

Convincing a prospective insured to buy an insurance policy based on exaggerations is called

misrepresentation

can be defined as "making an unfair comparison of two insurance policies"?

misrepresentation