Aflac test #2
Comprehensive plan
A health insurance plan that covers all accidents and sicknesses that are not specifically excluded from the policy is referred to as a
Both subscriber and insured
A man bought an individual health insurance policy for himself. Which of the following roles does he now legally have?
Required a premium increase each renewal.
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy
Pay dividends to the policyowner
A participating insurance policy may do which of the following?
Disclose commissions earned from the sale of the policy
A producer agent must do all of the following when delivering a new policy to the insured EXCEPT
Survivor Protection
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
Other-insured rider
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
60%
According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan?
3 yrs
According to the Time Limit on Certain Defenses provision, non-fraudulent misstatements made on the health insurance application may not be used to deny a claim after the policy has been in force for
Monthly premium waiver and monthly income
After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?
Surrender Charge
After three years of making payments into a flexible premium deferred annuity, the owner decides to surrender the annuity. The insurer returns all the premium payments to the owner, except for a predetermined percentage. What is this percentage called?
Explaining to client the advantages of permanent insurance over term and suggesting changing policies
All of the following actions can be described as twisting EXCEPT
A reinstated policy provides immediate coverage for an illness
All of the following are correct about the required provisions of a health insurance policy EXCEPT
The plan is funded by permanent insurance only
All of the following are true of key person insurance EXCEPT
The rider is available to all insured with no additional premium
All of the following are true regarding the guaranteed insurability rider EXCEPT
Death Benefits are paid only if death occurs within 24hrs of accident
All of the following statements concerning Accidental Death and Dismemberment coverage are correct EXCEPT
Has at least 50 members
An association could buy group insurance for its members if it meets all of the following requirements EXCEPT
If the primary beneficiary predecreases the insured
An individual purchased a life insurance policy on his life naming his wife as primary beneficiary, and their daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?
500
An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any, would be paid by the secondary insurer?
Reduction of Premium
An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?
If the primary beneficiary predecreases the insured
An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?
Mutual
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
Gatekeeper
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
Inspection report
An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of a report is that?
Nonresident
An out-of-state producer wants to start selling insurance in this state. What type of license should the producer obtain?
Yes, but not unfairly
Are insurance company underwriters allowed to discriminate?
Presumptive disability
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?
False advertising
Circulating deceptive sales material to the public is what type of Unfair Trade Practice?
It is fully funded by Social Security taxes (FICA)
Concerning Medicare Part B, which statement is INCORRECT?
Applicants geographical location
Each of the following factors is a significant consideration in the underwriting of individual health insurance risks EXCEPT
As long as the policy is in force
How long does an insurer have to contest fraudulent misstatements made in a health insurance application?
75%
How many eligible employees must be included in a contributory plan?
Either the amount paid into the plan or the cash value of the plan, whichever is the lesser amount.
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
Decreases
If an insured changes his payment plan from monthly to annually, what happens to the total premium?
Nothing
If one takes Social Security retirement benefits at age 62, what needs to be done at age 65 to qualify for Medicare?
Adjust the benefit accordance with increased risk
If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following?
Any occupation
In disability income insurance, if an insured is considered disabled if they cannot perform any job they are suited for by prior education, training or experience, they fall under which definition of total disability?
for the first 2 years of disability
In disability income insurance, the own occupation definition of disability applies
Master Policy
In group insurance, what is the policy called?
All plans
In which Medicare supplemental policies are the core benefits found?
In an institutional setting
In which of the following locations would skilled care most likely be provided?
Reduction
Installing deadbolt locks on the doors of a home is an example of which method of handling risk?
Adhesion
Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe?
90 days
Licensees who are currently licensed, and have recently become residents of the state of Michigan may not have to complete any prelicensing education. To qualify for this exemption, they must apply to become resident licensees within a few days of establishing a legal residence within how many days?
It allows for up to 15 excess credit hours to be carried forward to the next reporting period
Michigan's continuing education requirement has each of the following characteristics EXCEPT
The cause of loss insured against
Peril is most easily defined as
Promptly forwarding premiums to the insurance company
Pertaining to insurance, what is the definition of a fiduciary responsibility?
Sleeping
Regarding long-term care policies, which of the following would NOT be included in activities of daily living?
in the preceding 12 months
The Commissioner may waive prelicensing requirements or examinations for someone who has been a licensed insurance producer
Blanket
The First Street Church plans to sponsor a summer camp for the youth of their congregation. They would like to purchase insurance that would pay benefits should one of the youth get injured while participating in the camp activities. The type of policy they would likely need is a/an
Producer commission schedules
The following areas are regulated by the Insurance Department EXCEPT
Entire Contract
The insurance policy, together with the policy application and any added riders form what is known as
Incontestability Clause
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the
Is defined as the frequency and the amount of the premium payment.
The mode of premium payment
To purchase a smaller amount of the same type of insurance as the original policy
The paid-up addition option uses the dividend
the death benefit can be increased by providing evidence of insurability
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
Control health insurance claims expenses
The purpose of managed care health insurance plans is to
A presentation of non guaranteed elements of a policy
The term "illustration" in a life insurance policy refers to
SEC regulation
To sell variable life insurance policies, an agent must receive all of the following EXCEPT
20%
Under a nonscheduled plan, what portion of the balance could an insured expect to pay for basic services?
The same face amount as in the whole life policy
Under an extended term nonforfeiture option, the policy cash value is converted to
prospective review
Under which provision can a physician submit claim information prior to providing treatment?
Premiums always stay the same
Underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT
One-sided, only one party makes an enforceable promise.
What is a definition of a unilateral contract?
it allows employers with low claims experience to get lower premiums
What is the benefit of experience rating?
Cash value
What limits the amount that a policyowner may borrow from a whole life insurance policy?
0%
What percentage of individually-owned disability income benefits is taxable?
Grace period
What required provision protects against unintentional lapse of the policy?
Experience rating
What type of group rating uses the actual experience of the group as a factor in developing the rates to be charged?
The insurance company's general account
When a fixed annuity owner pays pays a monthly annuity premium to the insurance company, where is this money placed?
Distributions are taxable
When contributions to an immediate annuity are made with before-tax dollars, which of the following is true of the distributions?
When the insured is unable to perform his/her job duties.
When does a person qualify to receive disability-related income?
Preferred Provider Organization (PPO)
When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called
At the time of application
When must insurable interest exist in a life insurance policy?
Adjust with the decreased risk
When the insured purchased his health policy he was a window washer. He has since changed occupations and now manages a library. If the insurer is notified of the insured's change of occupation, the insurer should
Discrimination
When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered
Option A
Which Universal Life option has a gradually increasing cash value and a level death benefit?
Issuing sales material with exaggerated statements about policy benefits
Which of the following best describes a misrepresentation?
It is level term insurance
Which of the following best describes annually renewable term insurance?
Taxes are deferred
Which of the following best describes taxation during the accumulation period of an annuity?
Making comparisons between different policies
Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?
It is a period during which the payments into the annuity grow tax deferred.
Which of the following is TRUE regarding the accumulation period of an annuity?
Warranty
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
Life Paid-up at Age 65
Which of the following is an example of a limited-pay life policy?
They may be subject to taxation if the premium was paid by the emplyer
Which of the following is true regarding benefits paid to disabled employees?
Care can be provided outside of the service area
Which of the following is true regarding inpatient hospital care for HMO members?
Pre-existing condition
Which of the following losses will be covered by a group medical expense policy?
Graded Premium Whole Life
Which of the following policies is characterized by a provision where the premiums are lower in the early years of the policy and increase over time to a point where they become level for the remainder of the policy?
HMO's may pay for services not covered by Medicare
Which of the following statements is CORRECT concerning the relationship between Medicare and HMOs?
It consists of 3 parts: Part A,B,C
Which of the following statements is NOT true concerning Medicaid?
Apparent
Which of the following types of agent authority is also called "perceived authority"?
Giving an applicant a $5 pen with the insurers logo during the application process
Which of the following would NOT be considered rebating?
1 million
Which of the following would be a typical maximum benefit offered by major medical plans?
Confirming future dividends in a life insurance proposal
Which of the following would be considered an illegal inducement to purchase insurance?
Medical information
Which part of an insurance application would contain information regarding the cause of death of the applicant's deceased relatives?
Notice of Claim
Which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss?
Single life
Which settlement option provides a single beneficiary with income for the rest of his/her life?
Insured cannot be randomly selected
Which statement regarding insurable risks is NOT correct?
An individual not covered by an employer-sponsored plan who has earned income
Who can make a fully deductible contribution to a traditional IRA?
the lending institution
Who is the beneficiary in a credit health policy?
