exam 2nd 100

Which of the foHowing entities can legally bind coverage?

Insurer

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

$50,000

What is the minimum age for purchasing a life insurance policy in this state?

15

COBRA applies to employers with at least

20 employees

For how long are insurers required to maintain records pertaining to life insurance solicitation?

3 years

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

A paid-up nonforfeiture benefit will become effective as specified in the policy, unless the person entitled elects another available option within how many days after the due date of the premium in default?

60

Which of the following would be required to be licensed as an insurance producer?

A salaried employee who advertises and solicits insurance

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?

Adjust the benefit in accordance with the increased risk

In insurance, an-offer is usually made when

An applicant submits an application to the insurer

Which of the fokowing is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?

Annuity certain

The premium charged for exercising the Guaranteed Insurability Rider is based upon the insured's

Attained age

Which of the foHowing is NOT an enrollment period for Medicare Part A applicants?

Automatic enrollment

Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?

Automatic premium loan

The accelerated benefits provision will provide for an early payment of the death benefit when the insured

Becomes terminally ill

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 owner's business partner to accomplish a buyout

To legally transact insurance in this state, an insurer must obtain which of the following?

Certificate Authority

If more than one family member covered under the same major medical policy is injured in the same accident, the family only has to pay one deductible. This is due to the

Common accident provision

What is the main difference between coinsurance and copayments?

Copayment is a set dollar amount.

All of the following are advantages of an HMO or PPO for a Medicare recipient EXCEPT

Elective cosmetic procedures are covered

An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)

Equity indexed annuity

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 mode of premium payment

Is defined as the frequency and the amount of the premium payment.

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT

It is a life contingency option.

If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy?

It is only taxable if the cash value exceeds the amount paid for premiums.

The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called

Joint and survivor

Which of the fokowing terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?

Life expectancy

To sign up for a Medicare prescription drug plan, individuals must first be enrolled in

Medicare Part A

Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive

Nothing; the payments will cease.

In long-term care insurance, what type of care is provided with intermediate care?

Occasional nursing or rehabilitative care

Under a pure life annuity, an income is payable by the company

Only for the life of the annuitant

An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called

Paid-up additions

All of the following are examples of transacting insurance in Georgia EXCEPT

Placing advertisements for an insurer

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

Preferred Provider Organization (PPO)

All of the following statements regarding continuing education requirements in this state are true EXCEPT

Producers may repeat the same courses to meet the required CE hours for a licensing period.

An agent offers:his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of

Rebating

Which of the following statements is INCORRECT?

Replacing insurance policies for the purpose of making commissions is legal.

Which of the foHowing terms describes the specified dollar amount beyond which the insured no longer participates in the sharing of expenses?

Stop-loss limit

provision found in insurance policies which prevents the insured from collecting twice for the same loss is called

Subrogation

All of the following are unfair claims settlement practices EXCEPT

Suggesting negotiations in settling the claim

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

Surgery to repair a wrist damaged by tendonitis.

Which of the flowing would be a qualifying event as it relates to COBRA?

Termination of employment due to downsizing

Which of the following is NOT covered under Plan A in Medigap insurance?

The Medicare Part A deductible

An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy?

The capital amount in a lump sum

All of the following statements concerning an employer sponsored nonqualified retirement plan are true EXCEPT

The employer can receive a current tax deduction for any contributions made to the plan

Which statement is NOT true regarding underwriting group health insurance?

The group is assessed individually for insurability

In which of the following situations would Social Security Disability benefits NOT cease?

The individual's son gets a part-time job to help support the family

What is necessary in order to be eligible to receive benefits from a long-term care policy?

The insured must be unable to perform some activities of daily living

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT

The interest is not taxable since it remains inside the insurance policy.

policy with a 31-day grace period implies

The policy will not lapse for 31 days if the premium is not paid when due

Which of the fokowing best defines the "owner" as it pertains to life settlement contracts?

The policyowner of the life insurance policy

Which is true about a spouse term rider?

The rider is usually level term insurance

Under an extended term nonforfeiture option, the policy cash value is converted to

The same face amount as in the whole life policy

An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation?

They are tax deductible

Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?

Those who have been insured under the plan for at least 5 years

Which of the foHowing terms refers to the acts of soliciting insurance, making an insurance contract effective, and dealing with matters arising from that contract?

Transacting insurance

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT

Unearned premiums are retained by the insurance company.

If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about

Whether an insurable interest exists between the individuals

Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?

annuity certain

An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change?

applicant

Alexander has a policy with his ex-wife as its beneficiary. What provision allows him to change the beneficiary to his new wife?

change of beneficiary

An insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. This is called

consideration

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

consideration

Which of the fokowing statements is NOT true concerning Medicaid?

consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income.

The term "fixed" in a fixed annuity refers to all of the following EXCEPT

death benefit

If an insured changes the premium payment mode from monthly to annually, what happens to the total premium?

decreases

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?

foreign

A Health insurance policy lapses but is reinstated within an acceptable timeframe. How soon from the reinstatement date will coverage for accidents become effective?

immediately

What is the term for how frequently a policyowner is required to pay the policy premium?

mode

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?

mutual

How many pairs of glasses in a 12-month period will a vision expense insurance plan cover?

one

An agent license can be issued

only individuals

What form of the annuity settlement options provides payments to an annuitant for the rest of the annuitant's life and ceases at the annuitant's death?

pure life

Another name for a substandard risk classification is

rated

Whenever agents submit applications to insurers, they must also submit statements, signed by the applicant and agent, disclosing the involvement of

replacement

An insured buys a Medicare Supplement insurance policy from a new insurer; this policy will replace one provided to her by another insurer. Which of the following must provide her with a notice of replacement?

replacing insurer

It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability?

sexual orientation

All of the following long-term care coverages would allow an insured to receive care at home EXCEPT

skilled care

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty

twisting

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

Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending?

unlimited

The main difference between immediate and deferred annuities is

when the income payments begin