Exam Fx - Life & Health

Following an injury, a policyowner covered under Medicare Parts A & B was treated by her physician on an outpatient basis. How much of her doctor's bill will she be required to pay out-of-pocket?

20% of covered charges above the deductible

If an applicant intends to replace any existing accident and sickness policy with a Medicare supplement policy, what must the agent furnish to the applicant?

A notice regarding replacement

Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as

Rebating

The violation of a cease and desist order may result in a fine of

$10,000

A noncontributory group disability income plan has a 30-day elimination period and offers benefits of $2,000 a month. If an employee is unable to work for 7 months due to a covered disability, the employee will receive

$12,000, all of which is taxable.

If a person is disabled at age 27 and meets Social Security's definition of total disability, how many work credits must he/she have earned to receive benefits?

12 credits

What is the waiting period on a Waiver of Premium rider in life insurance policies?

6 months

Which of the following would be considered an illegal inducement to purchase insurance?

Confirming future dividends in a life insurance proposal

What is the purpose of a conditional receipt?

It is intended to provide coverage on a date prior to the policy issue.

Who may contribute to a Keogh (HR-10) plan?

Self-employed plumber

Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?

Size of each installment

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

Skilled care.

If policyowners repeatedly replace policies from the same agent, this is most likely evidence that

The agent knew that replacement was intended in connection with the sale and intentionally violated the replacement regulation.

Which of the following is INCORRECT concerning a noncontributory group plan?

The employees receive individual policies.

A man works for Company A and his wife works for Company B. The spouses are covered by health plans through their respective companies that also cover the other spouse. If the husband files a claim,

The insurance through his company is primary.

When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled?

The insurer is considered to be notified since the notification to agent equals notification to the insurer.

If an insurance premium is paid by the policyowner to the agent, and the agent fails to remit that premium to the insurer, which of the following statements is true?

The policy will not lapse since payment to the agent is the same as a payment to the insurer.

If an insured continually uses the automatic premium loan option to pay the policy premium,

The policy will terminate when the cash value is reduced to nothing.

Which of the following statements regarding the Change of Beneficiaries Provision is false?

The policyowner has the right to change beneficiaries in any case.

Which of the following statements is TRUE concerning irrevocable beneficiaries?

They can be changed only with the written consent of that beneficiary.

Which of the following is NOT an exclusion in medical expense insurance policies?

coverage for dependents

What type of insurance would be used for a Return of Premium rider?

increasing term

Which of the following entities can legally bind coverage?

insurer

Which of the following is NOT a type of whole life insurance?

level term

Which of the following 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

With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance?

payment of premium

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 LEAST expensive first-year premium is found in which of the following policies?

Annually Renewable Term

A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called

Cost of living rider.

All of the following statements concerning Accidental Death and Dismemberment coverage are correct EXCEPT

Death benefits are paid only if death occurs within 24 hours of an accident.

What is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan?

Diagnostic and preventive care

In insurance transactions, fiduciary responsibility means

Handling insurer funds in a trust capacity.

Which of the following would be considered a nonqualified retirement plan?

Split-dollar plan

Regarding long-term care coverage, as the elimination period gets shorter, the premium

Increases

Annually renewable term policies provide a level death benefit for a premium that

Increases annually.

A life insurance policy has a legal purpose if both of which of the following elements exist?

Insurable interest and consent

Which of the following best describes the unfair trade practice of defamation?

Making derogatory oral statements about another insurer's financial condition

All of the following statements concerning Medicaid are correct EXCEPT

Medicaid is a state funded program that provides health care to persons over age 65, only.

Prior to purchasing a Medigap policy, a person must be enrolled in which of the following?

Parts A and B of Medicare

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

Who might receive dividends from a mutual insurer?

Policyholders

An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?

The old policy should stay in force until the new policy is issued.

Which of the following is NOT true regarding partial disability?

This is a form of insurance that covers part-time workers.

When may an insured deduct unreimbursed medical expenses paid under a long-term care policy?

When the expenses exceed a certain percentage of the insured's adjusted gross income

How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?

Within 90 days or as soon as reasonably possible, but not to exceed 1 year

If a person is compensated for a testimonial in an advertisement, which of the following statements should be included in the advertisement?

"Paid endorsement"

Which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss?

Notice of Claim

An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?

Revocable

If an insured is not required to pay a deductible, what kind of coverage does he/she have?

first dollar

In reference to the standard Medicare Supplement benefits plans, what does the term standard mean?

All providers will have the same coverage options and conditions for each plan.

While a claim is pending, an insurance company may require

An independent examination as often as reasonably required.

Which statement accurately describes the Change of Beneficiary provision?

Any policy that has a death benefit must also have a Change of Beneficiary provision.

What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided?

Application

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?

The beneficiary will only receive payments of the interest earned on the death benefit.

Which of the following best defines target premium in a universal life policy?

The recommended amount to keep the policy in force throughout its lifetime

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

The provision that states that both the printed contract and a copy of the application form the contract between the policyowner and the insurer is called the

entire contract

Long-term care insurance policies must cover which of the following?

Alzheimer's disease

Which of the following is TRUE regarding coverage for mammography in accident and sickness policies in this state?

An annual mammogram for women over age 50 must be included.

An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do?

Ask her to sign a statement of good health

What happens when a policy is surrendered for its cash value?

Coverage ends and the policy cannot be reinstated.

Which of the following entities has the authority to make changes to an insurance policy?

Insurer's executive officer

With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance?

Payment of premium

A guaranteed renewable health insurance policy allows the

Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.

L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay?

$900 (deductible + 20% of the bill after the deductible [20% of $2,000])

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This would indicate that his policy was written with a 30-day

elimination period

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

All of the following would be qualified as a dependent under a Dependent Care Flexible Spending Account, EXCEPT

Jeremy had to have both legs amputated, but has learned how to take care of himself and to get around in a wheelchair

What is the purpose of COBRA?

To provide continuation of coverage for terminated employees

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

Blanket

The act of trying to discourage a policyholder from dropping his/her existing policy is called

Conservation effort.

Insurers may change which of the following on a guaranteed renewable health insurance policy?

rates by class

An insured committed suicide one year after his life insurance policy was issued. The insurer will

refund the premiums paid

Workers Compensation benefits are regulated by which entity?

state government

The time limit of certain defenses provision prohibits insurers from denying a claim due to misrepresentation, as long as the policy has been in force for at least

2 years.

All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT

At distribution, all amounts received by the employee are tax free.

An insured has endured multiple surgeries and hospitalizations for an illness during the last few months. Her insurer no longer bills her for medical expenses. Which of the following allows for that?

stop-loss limit

All of the following are examples of third-party ownership of a life insurance policy EXCEPT

An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan.

Who elects the Commissioner of Insurance to office?

Registered voters

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

Required a premium increase each renewal.

If an agent fails to obtain an applicant's signature on the application, the agent must

Return the application to the applicant for a signature.

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

Transacting insurance

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

annuity certain

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT

conditions

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?

Foreign

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

1

Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray?

50/50

What document describes an insured's medical history, including diagnoses and treatments?

Attending Physician's Statement

Which of the following is NOT covered by Health Maintenance Organizations (HMOs)?

Elective services

In disability income insurance, the time between the onset of an injury or sickness and when benefits begin is known as the

Elimination period

Which statement is NOT true regarding a Straight Life policy?

Its premium steadily decreases over time, in response to its growing cash value.

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

death benefit

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

discrimination

An insured purchased a life policy in 2010 and died in 2020. The insurance company discovers at that time that the insured had misstated information about her insurance history on the application. What will the insurer do?

Pay the death benefit

At age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs?

adjustable life