Georgia Life and Health Insurance

When life insurance proceeds are used to pay inheritance taxes and federal estate taxes, it is known as

Estate conservation Life insurance proceeds can be used to pay for a variety of expenses, including federal estate taxes and state inheritance taxes

An underwriter is reviewing an applicant with an extensive medical history. which of the following would give the underwriter a better understanding of how the applicant has been treated for various illnesses.

Attending Physicians Statement

Which of the following is not an indicator of a competent party

Business profession

COBRA (Consolidated Omnibus Budget Reconciliation Act)

Covers terminated employees and / or their dependents for up to 36 months after a qualifying event, it applies only to employers with 20 or more employees that maintain group health insurance plans for employees.

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

Decreases. Because the insurer would have the entire premium to invest for a full year, they would reduce the premium amount.

If an agent follows the rules and terms of his agent contract, he is exercising his

Express Authority Express authority is legitimate authority written into an agent contract

Adjust the benefit in accordance with the 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

the type of dental plan which is incorporated into a major medical expense plan is a/an

Integrated dental plan

If an insured is injured while committing an illegal act and his health policy contains the Illegal Occupation Provision, What percentage of the claim will be paid?

Nothing

when term insurance is added to the main policy to enhance the policy or provide added benefit or coverage, it is called

Term rider

All of the following are advantages of a qualified retirement plan except

The income at retirement is tax free In a qualified plan any amounts not previously taxed will be taxed when the funds are received

Which of the following would not be eligible for coverage under key person

The owner of a shop The owner is the principal, not a key person

All of the following are true of the survivorship life policy except

The premium is based on the age of each insured

in health insurance, what is coinsurance

a percentage of the cost of service that the insured and the insurer share

which of the following would not trigger the payment of accelerated death benefits

being permanently disabled Accelerated death benefits or living riders allow the early payment of some portion of the death benefit if the insured has conditions such as terminal illness, permanent institutionalization, or a life threatening medical condition that requires a dramatic medical intervention. Accelerated death benefit, however, does not cover disability.

A dentist is off work for 4 months due to a disability his dental assistant salary would be covered by

business overhead insurance

which of the following losses would likely be covered under the accidental death rider

death caused by a head on collision

Which of the following will not be included in the buyers guide

specific information about the policy

whose responsibility is it to ensure that the application for health insurance is complete and accurate

the agents

Core benefits are included in all medicare supplemental policies. which percentage of Part B coinsurance is required

20%

When an insurer tries to discourage a policyholder from dropping his / her existing policy, this is called

Conservation effort

An insurer mails an insurance policy to a new policyowner. When the insurer relinquishes control of the policy, the policy is considered

Delivered When the insurer relinguishes control of the policy by mailing it to the policy owner, the policy is considered to be legally delivered.

which of the following is a correct statement about annuities

Fixed annuities do not provide protection against inflation Fixed products provide protection against the risks associated with investing, since the insurance company bears the investments risk. They, however, do not provide protection against inflation, since the income (annuity) payments do not vary from one payment to the next.

The guaranteed purchase option is also referred to as the

Future increase option. The guaranteed purchase option is also referred to as the future increase option

When comparing a joint life policy or two individual life policies of the same amount on the same insureds, which condition is true?

Joint life has a lower premium than hte total of the two individual policies

With respect to the entire contract clause in health policies, who has the authority to make changes to an existing policy

Only an executive officer of the company

When may HIV-related test results be provided to the MIB?

Only if the individual is not identified

In order to reinstate a life insurance policy the insured must do all of the following EXCEPT

Pay next year's premium in advance

The ownership provision entitles the policy owner to do all of the following except

Set the premium rates. The insurer sets premium rates based upon underwriting considerations.

In life insurance, which of the following is not required to have an insurable interest in the insured

The beneficiary

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. Accidental Death and Dismemberment policies pay a capital amount (a percentage of the principal amount) for the loss of one limb or loss of sight in one eye. The principal amount is paid for death or often for the loss of 2 limbs or loss of sight in both eyes. Benefits are paid in a lump sum.

If an insured pays a health insurance premium each month, how long would the grace period be under the policy?

10 days

What documentation grants express authority to an agent?

Agent's contract with the principal. The principal grants authority to an agent through the agent's contract

In insurance an offer is usually made when

An applicant submits an application to the insurer.

All of the following health insurance disability benefits are income tax free EXCEPT

Employer-paid group disability. Employer-paid group disability benefits are income taxable

J is receiving fixed amount benefit payments from his late wifes insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. which settlement did J choose ?

Fixed Amount The fixed amount option pays a fixed, specified amount in installments until the proceeds (principal and interest) are exhausted. the recipient selects a specified fixed dollar amount to be paid until it is gone. if the beneficiary dies before the proceeds are exhausted, installments will continue to be paid to a contingent beneficiary until all proceeds have been paid out

The owner of a deferred annuity pays $100 in premium one month, and $130 the next month. Which of the following terms best describes this premium payment arrangement ?

Flexible Premium

Conditional Receipt

In Life and Health insurance, a Conditional Receipt provides that if premium accompanies the application, coverage shall be in force from the date of application (whether the policy has yet been issued or not) provided the insurance company would have issued the coverage on the basis of facts as revealed by the application and other usual sources of underwriting information. Remember, there is never any coverage unless the premium has been paid! When the agent receives the application and issues a conditional receipt, the insurer has not yet approved the application and issued the policy.

Rebating

giving an individual a premium reduction or some other financial advantage not stated in the policy as an inducement to purchase the policy

Dividends received on participating life insurance policies are

not taxable because they are a return of unused premiums

when the owner of a participating whole lfie policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used?

paid-up additions The paid up addition dividend option is used to purchase more paid up insurance each year, thereby increasing the death benefit

which of the following statements is incorrect?

the insurer does not have the right to conduct an autopsy

Under the mandatory uniform provision legal actions, an insured is prevented from bringing a suit against the insurer to recover on a health policy prior to

60 days after written proof of loss has been submitted

An applicant gives her agent a completed application and the initial premium. What can the agent issue her that acknowledges the initial premium payment?

Conditional receipt

A legally acceptable attempt by an existing insurer, or its agent, to continue existing life insurance in force when a Comparative Information Form has been received from a replacing insurer is called

Conservation

An applicant may challenge information discovered as a result of an investigative consumer report under which of the following acts

Fair credit reporting act

Which federal act defines rules pertaining to protected health information

HIPAA

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

The applicant

Who is the chief officer of the Georgia Department of Insurance

The commissioner of Insurance

All of the following statements about indexed whole life insurance policies are correct except

The death benefit is not gauranteed under this type of policy, the premium is fixed, and the deaht benefit is guaranteed

If the policy summary for a life insurance policy is not given when the application is taken, when must the policy summary be given to the policyowner

When the policy is delivered

Under a group health insurance plan, benefits may be extended to all of the following dependents except

a 27 year old married daughter who is attending college and lives with her parents

an insured purchased a health insurance policy with a renewability clause that states the policy is "guaranteed renewable" this means that as long as the required premiums are paid, the policy will continue until the insured

reaches age 65

which of the following types of care could be provided at a community center?

adult day care Adult day care is provided for functionally impaired adults on less than a 24 hour basis. it could be provided by a neighborhood recreation center or a community center. care includes transportation to and from the day care center, and a variety of health, social and related activities. Meals are usually included as a part of the service.

what happens to the copy of the application for health insurance once the policy is issued

it becomes part of the entire contact

If a policy includes a free look period of at least 10 days, the buyer's guide may be delivered to the applicant

with the policy. if a life insurance policy contains a free look period of at least 10 days, the buyer's guide can be delivered with the policy. if it doesn't, the buyer's guide must be delivered prior to accepting the initial premium.

Insureds have the right to do which of the following if they have NOT received the proper claim forms within 15 days of their notice to the insurer of a covered loss under a major medical policy?

submit the description in their own words on a plain sheet of paper

What is the maximum age that a disabled insured worker may receive social security benefits

65

Using misrepresentation to convince a person to cancel an existing policy and buy a new one is called

twisting

Total Disability

A person's ability to work is significantly reduced or eliminated for the rest of his/her life.

An insured and his spouse recently had a child. Which of the following riders would allow the couple to insure the child for a limited period of time at a specified amount?

Children's term rider

which of the following is true of level term insurance

it is temporary protection Level term insurance is temporary protection. it is likely renewable at certain interval (5 year, 10 year, etc) the polic has a maximum renewal age (possibly 80)

which of the following statements is true regarding an agents report during the policy application process?

It provides the agents personal observations concerning the proposed insured.

The "stop-loss" feature on a major medical policy is intended to

establish a maximum amount of out of pocket expense that an insured will have to pay for medical expense in a calendar year. A stop loss feature is a provision that gives the insured financial security by limiting the maximum amount that would have to be paid in deductibles and co payments during a calendar year.

which of the following is not true regarding a cancellable policy

insurer can increase the premium above what is stated in the policy if claims experience is greater than expected

An insurance company that is owned by the policyholders is called a

Mutual Insurer

All of the following are consideration in an insurance policy except

The cash value in a policy

if a basic medical insurance plans benefits are exhausted, what type of plan will then begin covering those losses?

supplementary major medical Supplementary major medical policies are used to supplement the coverage payable under a basic medical expense policy. after the basic policy pays, the supplemental major medical will provide coverage for expenses that were not covered by the basic policy, and the expenses that exceed the maximum. if the time limitation is used up in the basic policy, the supplemental coverage will provide coverage thereafter.

Automatic Premium Loan Provision

Authorizes insurer to automatically pay any premium in default at the end of the grace period and charge the amount so paid against the life insurance policy as a policy loan. Automatic premium provision is not required, but is commonly added to contracts with a cash value at no additional charge. This is a special type of loan that prevents the unintentional lapse of a policy due to nonpayment of premium.

in order for an alumni association to be eligible to purchase group health insurance for its members, all of these statements must be true except when the association

Has been active for five years minimum To be eligible to purchase group health insurance, an association must be organized for reasons other than buying insurance, must have at least 100 members, have a constitution, by-laws, and must hold at least annual meetings. at association group must have been active for a least 2 years.

Medicare supplement policies are designed primarily for reimbursement of expenses of persons eligible for medicare. Which of the following expenses are medicare supplement policies not designed to cover?

Home Care

All of the following would be different between qualified and non-qualified retirement plans

IRS approval requirements, taxation of withdrawals, and taxation of contributions.

which of the following terms refers to solicitation, negotiation, effectuation, or advising related to an insurance contract

Insurance transaction

In respect to the consideration clause, which of the following is consideration on the part of the insurer?

Promising to pay in accordance with the contract terms. The consideration clause requires the insurer to promise to pay in accordance to the terms stated in the contact

All of the following are characteristics of group health insurance plans except

The parties that hold a group health insurance contract are the employees and the employee The contract for coverage is between the employer and the insurance company. only one policy is issued (master policy) to the employer; covered employees receive a certificate of insurance.

A policy with a 31 day grace period implies

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

what si the purpose of the agents report in the application process

To provide additional information about the applicant to the underwriters

a man is an attorney when he applies for a health policy. He decides to become a professional bungee jumper. he files a claim. what should happen?

the insurance company will pay the claim according to the benefits available if the correct premium had been paid

A life insurance policy qualifies a modified endowment contract (mec) if the amount of premium paid exceeds the amount that would have provided paid-up insurance in how many years?

7 years If the policy's premium paid in its first 7 years exceed what would have been paid into a life policy with level annual premiums that would be paid up in 7 years, the policy fails the 7 pay test and becomes a MEC.

A viatical settlement is a transaction outside the life insurance company where the owner sells the life insurance policy for which of the following

A percentage of the face amount of the policy In a viatical settlement an insured with a reduced life expectancy sells his or her policy to a 3rd party for a percentage of the face amount

Long-Term care insurance is designed to provide coverage for at least

12 Months Long-term care insurance is any accident and sickness insurance policy designed to provide coverage for at least 12 months

Annuitant

A person who receives an annuity contract's distribution. While they don't have to be, the annuitant and annuity owner are often the same person. the annuitant is the person who receives benefits or payments for the annuity and for whom the annuity is written. since the annuitant's life expectancy is taken into consideration, the annuitant must be a natural person.

Under the affordable care act, when would pregnancy be considered a pre-existing condition.

Never All health insurance marketplace plans must cover pregnancy and childbirth, even if pregnancy begins before the coverage takes effect.

Health benefits will extend past the normal dependent child age limit because of mental retardation or a physical handicap and what other circumstance

chiefly dependent on the policy holder for support and maintenance All individual and group hospital and medical expense insurance policies that provide coverage for dependent child must generally terminate coverage for the children when they have reach the limiting age of dependence (age 26) coverage doesn't terminate for children who continue to be both incapable of employment because of a mental or physical handicap and chiefly dependent upon the policy holder for support and maintenance .

A claimant wants to bring a recovery action against an insurance company for a loss claimed under a policy. the action must be brought within how many years?

within 3 years. Some states require a provision limiting the time parameters in which a claimant may seek recovery form an insurer under a policy. Georgia requires legal actions to be brought forth sooner than 60 days and no later than 3 years after proof of loss.

When an employee terminates coverage under a group insurance policy, coverage continues in force for how many days?

An employee has 31 days under the conversion privilege to convert to an individual policy.

An employee dies having 6 quarters of coverage during the previous 13 quarter period. what status of coverage does the employee have under social security?

currently insured

An agent tells an insured that if he replaces his current insurance policy with a newer one, his dividends will be higher and his premiums will be slightly lower. the policy, however, would not offer either one of these things. What type of misrepresentation is being comitted?

Twisting

what is the most common name for a single policy that is designed to insure two or more lives with a standard premium, and that pays the death benefit upon the first death

joint life Joint life is a single policy that is designed to insure two or more lives. the death benefit is paid upon the first death only. survivor ship life (also referrered to as a second to die policy or last survivor policy) is much the same as joint life in that it insures two or more lives for a premium that is based on a joint age, and pays out at the second death.

Upon payment of a loss, the insured is obligated to surrender to the insurer the right ot sue a negligent third party. This is called

subrogation Claims should be paid once and by the liable party. the insurer pays the policy and has the right to try to be repaid by the party who actually made the loss occur.

The manner and/or frequency that the policy owner pays the policy premium is called

Premium mode

Which statement below is INCORRECT regarding the types of term insurance that fits best with the applicants needs

applicants who may require a larger death benefit in the future should buy convertible term insurance. e Convertible term converts to a cash value policy with the same death benefit but at a higher premium

Under the mandatory uniform provision Proof of Loss, the claimant must submit proof of loss within what time period after the loss?

90 days. The proof of loss provision limits the time within which the insured may file a written proof of loss. A proof of loss must be filed within 90 days of loss or, in the case of a continuing loss, within 90 days after the end a period for which the insurer is liable.

Insurance that would pay for hiring a replacement for an important employee who becomes disabled is called

Key employee disability insurance. The business is the contract holder and would receive benefits if a specified key employee became disabled.

A retail shop owner is insured under a business overhead expense policy that pays a maximum monthly benefit of $2500. His actual monthly expenses are $3000. If the owner becomes disabled, the monthly benefit payable to his policy will be

$2500

which of the following is provided by a skilled medical personnel to those who need occasional medical assistance or rehabilitative care?

Intermediate care

Which of the following best defines the unfair trade practice of rebating?

Offering an inducement of something of value not specified in the policy

An insured was seriously injured in a skiing accident that required him to be hospitalized for 5 weeks. his medical expense policy covered all of the following except

Loss of income while hospitalized - it will cover surgical expense, hospital room and board, and necessary medicine and medical supplies The insured would need disability income to cover lost wages.

If an insured dies, and it is discovered that the insured misstated his/her age or gender, the life insurance company will

Adjust the death benefit to what the premium would have purchased at the actual age or gender

Which of the following statements is not true regarding health insurance policy provisions?

All additional provisions written by insurers are cataloged by their respective states

An insured bought an insurance policy that requires him to pay $150 in premiums on the 15th of each month. He then takes an extended vacation and forgets to pay the premium. Ten days later, his policy is still in effect and has not lapsed. This is due to which provision?

Grace period. Grace period is a mandatory provision found in all lfie insurance policies that provides coverage for a period of time after the premium becomes past due

Accident-only policies

Policies that pay only in cases arising from an accident or injury.

A producer advises a policyholder that he should replace his life insurance policy with another , similar policy. the agent is advising this , however, for the sole purpose of earning a commission. what violation has the agent committed

churning

Which of the following is not a typical type of long-term care coverage

child day care

which of the following best describes a major medical expense policy

it provides catastrophic medical coverage beyond basic benefits on as usual, customary and reasonable basis

A married couple purchase a life insurance policy on their newborn baby. they are concerned about what would happen to the policy if either one of them were unable to continue making the premium payments due to death or disability. which policy rider should their agent recommend?

payor benefit

Two individuals of the same age, health status, and life expectancy apply for individual insurance coverage. when policies are issued by the same insurer, the premium rates are different based on the insured's race. what practice does this describe?

unfair discrimination

An equity indexed annuity will grow based upon

Performance of a recognized index An equity indexed annuity grows based upon a specific recognized index such as the dow jones or the standard and poor's 500

In contrasting stock insurers with mutual insurers, which statement is true?

Stock insurers are owned by the shareholders and issue nonparticipating policies Stock insurers are owned by their shareholders/stockholders. their policies are labeled nonparticipating since the insureds do not share in the divisible surplus (dividends)

With adjustable life, the owner can change all the following except

The insured. The mortality charge is determined by the actuary in the home office. The owner of the policy has no control over this mortality cost. They can change the death benefit , the premium, and the length of time the coverage will last.

A husband and wife both incur medical expenses that are attributed to a single major medical insurance deductible. Which type of deductible do they have in their policy?

Family With a family deductible, expenses for two or more family members can satisfy a common deductible in a given year, regardless of the amount of expenses incurred by other family members

The duties of an agent where replacement is involved include all of the following

submitting to the replacing insurer a copy of all soliciting material, submitting to the replacing insurer a statement signed by the applicant as to whether or not he has existing life insurance, and leaving a copy or original of all solicitation material used for presentation to the applicant. Most states have adopted the NAIC model act on the replacement of policies. Insurers are required to inform its agents fo the requirements of the regulation into all relevant agent-training manuals and institute procedures to confirm that the requirements of the regulation are met.

An insured has an individual disability income policy with a 30-day elimination period. He becomes disabled on June 1st for 15 days . When will he collect on his disability income payments?

He wont collect anything. The insured cannot collect anything because he did not satisfy the elimination period.

Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this policyowner select?

Joint and survivor Under the joint and survivor settlement option, payments will continue until the death of the last beneficiary.

Business Overhead Expense Insurance

A form of disability income coverage designed to pay necessary business overhead expenses, such as rent, utilities, and employee salaries are covered should the insured business owner become disabled.

what is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident

Common Disaster Clause The common disaster clause provision states that when an insured and beneficiary die in a common accident, and the beneficiary dies before or within a specific period of time after the insured, the insurer will proceed as if the insured outlived the beneficiary.

The presumptive disability provision assumes that the insured is totally disabled upon loss of all the following except

Feeling Should an insured suffer the loss of two limbs, sight, hearing, the insurer will assume that no improvements exist and the insured may not have to submit to periodic exam to prove continued disability.

Because of an injury, an insured has been unable to work for 7 months. when his life insurance premium came due, he was unable to pay, yet the policy remained in force. this policy includes

waiver of premium rider

Limited-Pay life

In limited-pay policies, the premiums for coverage will be completely paid-up well before age 100, usually after a specified number of years.

All of the following must sign an application for health insurance except the

Insurer. Health insurance applications require the signatures of the proposed insured, the policy owner (if different than the insured), and the agent or producer

What is the purpose of key person insurance

To cover decreased business revenues as a result of the death of a key employee

What is the purpose of the impairment rider in a health insurance policy

To exclude coverage for a specific impairment . The impairment rider may be attached to a contract for the purpose fo eliminating coverage for a specifically defined condition.

An individual is approaching retirement age and is concerned about having proper coverage. should he have to be placed in a long term care facility. his agent told him that long term care policies would provide necessary coverage at all of the following levels except

acute

Which of the following is not mandatory under the uniform provisions law as applied to accident and health policies ?

probationary period Probationary period is an optional provision

The guaranteed insurability rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following except

purchase of a new home