practice for Life & Health Final

Evan undergoes a minor surgical procedure. The insurer owes Evan $500 in medical claims benefits. He has not however paid his last premium of $200. How much should Evan receive in claims benefit?

$300

Klinger has a $5,000 life insurance policy issued by Life of Toledo in 1948. Klinger is drafted into the Army and sent to Korea where he dies in a helicopter crash in 1954. His policy does not contain the war clause exclusion or the accidental death benefit. How much will be paid by the insurer?

$5000

M. had a hospital visit resulting in a bill of $1500. He has a $500 deductible and 80/20 coinsurance. Assuming he has NOT met his deductible, how much will M. be responsible for?

$700

What is the total ANNUAL benefit for chemical dependency under a contract that covers illness, injury and death?

$8000

Kim owns a 20 pay life policy that was purchased at age 45. The cash value and face value will be equal at age

100

If an agent has one insurance license, Continuing Education (CE) must be completed in the following manner

Biennially 24 hours

licensee decides to terminate his residency in this state. Which of the following would be an appropriate action?

Delivering the license to the Commissioner within 30 days.

Which of the following would obtain a temporary license?

Executor of estate of resident agent

Which of the following types of insurance covers the whole family in a single contract?

Family Protection Policy

What best describes the surrender charge in a deferred annuity?

It is a rear end load

Which of the following is NOT true of a major medical health insurance policy?

It is designed to pay on a first-dollar basis

After reinstatement an individual health insurance loss will be covered right away if

The loss results from an accident

The purpose of the reinstatement provision is

To determine the process for reactivating coverage once a policy has lapsed

Once a life insurance policy is reinstated, the contestability period

Will apply for two years

All of the following would qualify as presumptive disability

a. Loss of two limbs b. Loss of hearing c. Loss of speech

The amount paid to the policy owner when a life insurance policy is surrendered is called the:

cash value

A Keogh (HR-10) is a type of retirement plan for

self employed professionals

An HMO that owns the hospital facilities and hires the staff would best be described as

staff model

Lilly is covered by a group major medical plan that is provided by her employer. Her employer contributes 75% of the premium and Lilly contributes the remaining 25%. If Lilly received a benefit from this policy in the amount of $1,000, how much of this benefit would be taxable income to Lilly?

$0

An insurer has just made the news because it is insolvent. Chris has had a $1,000,000 policy with the company for five years. If Chris were to die, what is the most that would be paid out by the Guarantee Association?

$300,000

B. purchased a $50,000 20-pay Life policy with the AD&D rider in 1999. He died of cancer 10 years later. How much benefit was paid to the beneficiary?

$50,000

K. and B. have a Family Plan. K is insured for $50,000 Whole Life and B. is insured for $25,000 with a Level Spouse Rider to age 65. B. dies at age 67. How much is paid out by the insurer?

0

An agent in North Carolina must report a change of residency within:

10 days

R. has a 20 year Family Income plan. He dies after 15 years. How many years of income benefits would go to the beneficiary?

5

Which of the following are included on Part I of the application for life insurance?

A.Applicant's address c. Applicant's gender d. Applicant's occupation

The administrator of a reciprocal insurer who tracks membership and collects premiums from the members is the

Attorney-in-fact

Before any action against an agent's license may be taken the agent must:

Be given the opportunity to be heard

An individual has just borrowed $10,000 from his bank on a 5-year note. The note is due in installments. What type of life insurance policy would be best suited to this situation?

Decreasing term

G. is on the way to the office to turn in an insurance application that he completed last night. He suddenly discovers that the applicant made out the check to the agent. What should the agent do?

Immediately return the check to the applicant

If an agent is guilty of commingling, the first thing the DOI will probably do is:

Issue a cease and desist order

An annuity that provides a lifetime income with a guaranteed return of principal regardless of whether the annuitant lives or dies is known as

Life with refund

An agent has just learned that his client is 5 years older than indicated on the policy application. The agent should

Notify the home office so the policy may be adjusted

The responsibility of making certain that an application for insurance is filled out completely, correctly and

The agent or producer

Which of the following will affect the length of the grace period in health insurance policies?

The mode of premium payment

A long term disability policy provides benefits for

The time specified in the contract

Which of the following is true about examination of agent records by the DOI?

They may be disclosed at any time

Under which of the following types of receipts is it that coverage begins immediately for a specified length of time even if the applicant is found later to be uninsurable?

Unconditional (binding) receipt

Agent Z takes an application for a policy and accepts a check for the first premium. The application and check are mailed to the insurer, who discovers the check is not signed. When will coverage for this policy go into effect?

When the policy is issued, delivered, and the premium is paid

Which of the following are correct concerning taxation of disability income benefits?

a. If premiums are paid by the individual, disability income benefits are tax-free b. If premiums are paid by the employer, disability income benefits are taxable income to the employee d. If premiums are paid by the employer, the premiums are tax-deductible by the employer

Which of the following are an essential element of an insurance contract?

a. Legal purpose c. Consideration d. Agreement (offer and acceptance)

All of the following are true about Universal Life

a. The insurance company deducts the cost of insurance on a monthly basis c. The contract will specify the deductions for policy expenses d. No premiums would be required as long as there is enough to cover the monthly deductions

All of the following are true about Universal Life pt. 2

a. The insurance company deducts the cost of insurance on a monthly basis c. The contract will specify the deductions for policy expenses d. The premiums are flexible within certain guidelines

All of the following statements are true about a Credit Life program

b. The amount of insurance permissible is limited per borrower c. Premiums are usually paid by the borrower d. Benefits are paid directly to the creditor

if an insured changes his payment plan from monthly mode to annual mode, what happens to the total premiums paid?

decreases

A waiver of premium provision may be included with which kind of health insurance policy?

disability income

What qualifies an individual to contribute to an IRA?

earned income

The period of time that a person must wait for disability benefits to begin after injury is the:

elimination period

.A major factor in determining insurance premiums is

expenses of the insurer

With a Juvenile Life policy, which provision waives premiums temporarily should the owner die or become disabled?

payor provision

Which policy feature would require underwriting?

reinstatement

Which of the following types of risk will result in the highest premium?

substandard risk

An insurer is attempting to determine insurability of an applicant and decides to obtain medical information from several different sources. Which entity must be notified of this investigation?

the applicant

the relation of earnings to insurance provision allows the insurance company to limit the insured benefits to his or her average income over the last

two years

What is the total LIFETIME benefit for chemical dependency under a contract that covers illness, injury and death?

$16,000

A life insurance policy was originally issued at age 35 as a Double Protection Policy. If the initial Death Benefit was $90,000, how much of the death benefit is permanent?

$45,000

A self-employed pension (HR-10) has maximum contribution limits of approximately

25% up to $50,000

Gilligan has a $10,000 whole life policy with $1,300 of cash value when he disappears in a storm. His insurer switches the policy to reduced paid-up insurance of $3,400. Five years later he perishes in the rescue attempt. How much life insurance benefit will go to his family?

3400

Which of the following statements is TRUE?

A guaranteed renewable policy is generally renewable as long as the policyowner makes timely premium payments, but premiums may increase on a class basis

If someone dies as the result of military activity, the claim is settled in the following manner

A return of all unearned premiums

The provision that prohibits the insurer from refusing to pay a claim after a specified time is the

Incontestability clause

Within the HMO concept, when a referral to a specialist is for necessary treatment, the referring physician is known as the

PCP or gatekeeper

Which of the following is a dividend option?

Paid up additions

All of the following are true for resident North Carolina agents

Pay taxes in North Carolina At least age 18 Pass the required exam

When considering the purchase of a whole life policy, the applicant asks the difference in cash accumulation between a 20 pay life policy and a straight life policy. Which of the following statements is correct?

The 20 pay life policy will accumulate cash value faster

Dusty has medical insurance coverage through two different providers, who cover the same expenses on an expense-incurred basis. Neither company knows in advance that Dusty has coverage from any other insurers. Dusty submits the claim to the insurers and each pays a proportionate share (one half) of the claim instead of the whole benefit. Which of the following is true?

The correct payment was made

When Grant's hours were reduced at work, he found that it was necessary to change his insurance policy from an annual premium payment of $500 to a quarterly premium payment of $132.50, which adds up to $530 for the entire year. This increase in total premium payout was necessary for the insurance company because

They do not have his premium to invest for a full year, and more expenses are incurred in collecting quarterly premiums

The Commissioner of Insurance can do all of the following

a. Examine insurers in person or through a representative b. Suspend an agent's license while an investigation is pending d. Issue administrative orders to carry out the insurance laws

Regarding uniform mandatory provisions concerning claims, all of the following are true

a. The insured is usually required to give notice of claim within 20 days b. If the insured is two years late in filing proof of loss the claim can be denied d. If the insured is several days late in filing proof of loss forms the claim cannot be denied if the insured can show good cause

Lee's insurer has made all of the decisions regarding the provisions included in her policy. She finds an objectionable provision and wants to negotiate it with her insurer, but is not allowed to do so. Her only options are to reject the policy because the policy is written on a "take it or leave it basis". Which contract element does this describe?

adhesion

All of the following statements concerning "dividends" are true

b. Lower insurance company costs generate higher dividends c. They stem from favorable underwriting experience d. Favorable investment results generate higher dividends

Which of the following provisions is optional for health insurance policies?

change of occupation

In a basic medical expense policy after the limits of the basic policy are exhausted, the insured must pay what kind of deductible?

corridor

he 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 action

In order to sell an equity-indexed life policy what is required by the agent?

life license only

An insurance plan where dental and medical deductibles are separate is called

nonintegrated

Discrimination between individuals of the same class in the amount of premiums or rates charged for any policy of insurance or in the benefits payable thereon, or in any of the terms or conditions of such policy or in any manner whatsoever is

prohibited by law

An insured has a thriving dental practice, and hasn't taken in new patients for years. While on a skiing trip, he falls and breaks his leg. He is out of work for almost 15 months. When he returns to work he is surprised to find his appointment book has blank spaces. He relaxes though, when he remembers that his brilliant insurance agent had included a special provision in the disability policy he bought five years ago that makes up the difference between what he was making before he got disabled and his income now. This provision is

residual income

Misrepresenting a policy to convince someone to replace it is called:

twisting

Which of the following is a statement that is guaranteed to be true, and if untrue may breach an insurance

warranty