Health and Life Insurance Test Questions for LA

If the first premium was not paid at the time of application, what must the producer also collect? A) Medical records B) Results from the paramedic's visit C) A signed statement of good health D) Referrals

C) A signed statement of good health When the producer delivers the policy, the first premium must be collected, if it was not given when the application was being completed. The producer must also get a signed statement of good health, which attests that the applicant's health is the same as when he applied for the policy.

When an employee's coverage terminates under a group health policy, the employee has the option to elect continuation within A) 60 days B) 45 days C) 30 days D) 10 days

A) 60 days After an individual has received the eligibility notice for COBRA continuation from the employer, the option to elect coverage expires 60 days from the date of receipt.

For a beneficiary to receive accidental death benefits, the death of the insured generally must occur within how many days following the accident? A) 90 days B) 30 days C) 60 days D) 45 days

A) 90 days For a beneficiary to receive accidental death benefits, the death of the insured generally must occur within 90 days following an accident.

Which of the following types of annuity payout options guarantees, as a minimum, the payout of the entire annuity principal amount? A) Cash refund B) Pure life C) Period certain D) Joint and full survivor option

A) Cash refund Of these options, only the cash refund payout guarantees that the entire annuity principal will be paid out to the annuitant or beneficiary. A pure life option and a period certain option guarantee payments for a certain period of time, during which the principal may or may not be fully liquidated.

Which of the following statements pertaining to life insurance premiums is NOT correct? A) The expense factor in premium ratemaking frequently is referred to as loading. B) For an insurance company, the costs of doing business must be reflected in its premiums. C) An insurance company invests the premium money it collects to earn interest. D) The interest factor is a premium charge based on assumed lost earnings after claims.

D) The interest factor is a premium charge based on assumed lost earnings after claims. The premium factors include the insurer's operating costs, also called loading; the mortality charge; and a credit for the insurer's use of the premiums until a claim occurs.

Which of the following statements regarding the elimination period in a long-term care policy is NOT true? A) The insured selects the length of the elimination period. B) The elimination period can be considered a time deductible. C) The longer the elimination period, the lower the premium. D) The longer the elimination period, the higher the premium.

D) The longer the elimination period, the higher the premium. To make the policy premium more affordable, the insured may select a longer elimination period. This period acts as a time deductible: care must be received for a specified number of days before the benefits begin to pay for the expenses.

A single plan that covers the employees of two or more unrelated employers is called A) a combined risk plan (CRP) B) a multiple administrative plan (MAP) C) a multiple employer trust (MET) D) a multiple employer welfare arrangement (MEWA)

D) a multiple employer welfare arrangement (MEWA) A MEWA is a plan that is established for the purpose of providing benefits such as health insurance to the employees of two or more employers.

Basic hospital expense insurance provides coverage for all of the following EXCEPT A) hospital room and board B) anesthesia and use of the operating room and supplies C) drugs and x-rays D) physician services

D) physician services Physicians' services are not covered under a basic hospital expense policy, even in the case of surgery. The cost for a physician is covered under a basic surgical expense or basic physician's (nonsurgical) expense policy.

Variable life insurance policies are regulated by A) the Securities and Exchange Commission (SEC) B) the Financial Industry Regulatory Authority (FINRA) C) the states D) the SEC, FINRA, and the states

D) the SEC, FINRA, and the states Because of the securities element of variable life products, these policies are regulated by the SEC and FINRA in addition to traditional state regulation, which applies to all insurance policies. Variable life products may only be offered by properly licensed representatives of a broker-dealer.

Morris is a licensed insurance agent. His principal is A) the National Association of Insurance Commissioners B) the applicant C) the state insurance department D) the insurer

D) the insurer The insurer appoints licensed agents to act on its behalf. Therefore, Morris would be the agent of the insurance company that appointed him.

Luis has 3 individual health insurance policies and is concerned that the benefits may overlap. What will happen in the event he makes a claim for coverage under all 3 policies? A) If 1 insurer covers the risk, it will pay the claim and any premiums that apply to any excess will be returned to Luis. B) If 2 or more insurers cover the same risk, there is a presumption of fraud. All policies will be canceled and all premiums will be refunded. C) If the claim is made after the policies have been in force for at least 2 years, the insurer is obligated to pay all claims and pay any excess premiums directly to Luis or his beneficiary, regardless of the number of insurers covering the risk. D) If 2 insurers cover the same risk, they will divide claims equally and refund any excess premiums to Luis.

A) If 1 insurer covers the risk, it will pay the claim and any premiums that apply to any excess will be returned to Luis. Regardless of the number of insurers involved or how long the policies have been in force; the insurers will refund excess premiums to the insured. If 1 insurer covers the risk, the insurer will either pay up to a specified maximum or pay benefits under the policy elected by the insured. The payment that applies will be determined by the other insurance with this insurer provision that is included in the insurer's policy. If 2 insurers cover the risk, benefits will be prorated. They will not be divided equally.

Which of the following is usually included in an individual health insurance contract? A) Injuries due to accidents B) Losses associated with pre-existing conditions C) Situations involving deliberate acts of the insured, such as self-inflicted injuries D) Losses that are covered by workers' compensation

A) Injuries due to accidents Individual health insurance contracts normally contain certain exclusions and coverage suspensions. These include losses associated with pre-existing conditions (to protect the insurer against adverse selection); losses associated with deliberate acts of the insured, such as suicide and self-inflicted injuries; losses associated with excessive risk, such as hazardous occupations; and losses covered by other types of insurance (to prevent duplication of benefits).

Which of the following statements pertaining to inspection reports and credit reports on life insurance applicants is NOT correct? A) Inspection reports only require consumer notification when they are conducted. B) Applicants with unfavorable credit ratings, a history of moral hazard, or both are poor prospects for life insurance. C) Information contained in inspection reports is usually obtained through interviews with employers, neighbors, and associates of the proposed insured. D) Consumers must be notified and give their consent to an inspection report.

A) Inspection reports only require consumer notification when they are conducted. Insurance companies usually obtain inspection reports from several knowledgeable sources on applicants who apply for large amounts of life insurance. An applicant's poor credit rating can mean unreliable premium payments, causing the insurance company to lose money.

Carlos and Jenna both work to support their family. To provide the same amount of life insurance protection in the event either dies, they should consider purchasing which of the following plans? A) Joint life B) Family maintenance C) Family D) Juvenile

A) Joint life A joint life policy is 1 policy that covers 2 people. Using some type of permanent insurance, it pays the death benefit when the first insured dies. The survivor then has the option of purchasing a single individual policy without evidence of insurability.

Which of the following scenarios regarding individual retirement accounts (IRAs) is NOT correct? A) Peter is currently employed, but his spouse, Karina, is not. Since Karina has no earned income that she can contribute to a traditional IRA, Peter can set up a joint IRA account for the two of them. B) Ben, age 72, has a traditional IR If he does not take at least the minimum required distribution for the current year, a 50% excise tax will be assessed on the amount that should have been withdrawn. C) Walter is 60. He may take a distribution from his traditional IRA without having to worry about an early withdrawal penalty. D) June has accumulated $30,000 in her traditional IR At age 55, she withdraws $2,500 to take a vacation. She will have to include the $2,500 in her taxable income for the year and pay a $250 penalty.

A) Peter is currently employed, but his spouse, Karina, is not. Since Karina has no earned income that she can contribute to a traditional IRA, Peter can set up a joint IRA account for the two of them. For married couples, an individual IRA account must be set up for each person, even if only 1 spouse is working. Separate IRA accounts could be set up for Peter and Karina, but not a joint account. All of the other answer choices involve correct scenarios.

Which of the following statements regarding policy delivery is NOT true? A) The agent may hold on to the policy for safekeeping without showing it to the policyowner. B) The insurer may mail the policy to the policyowner in some states. C) The agent is often required to obtain a dated receipt from the policyowner to verify delivery. D) The agent should explain the policy provisions, riders, and exclusions to the policyowner.

A) The agent may hold on to the policy for safekeeping without showing it to the policyowner. The agent is usually required to make a face-to-face delivery of the policy to the policyowner and to collect a signed receipt to verify the delivery was made. This practice provides an opportunity for the agent to review the policy, including provisions, riders, and exclusions, with the policyowner.

Which of the following differentiates a variable life product from a conventional life product? A) The fact that the product has a separate account which is distinct from the general account B) The lack of an assignment provision C) The fact that the product was purchased through a direct response mailing D) The fact that performance is guaranteed to provide a stable rate of returns

A) The fact that the product has a separate account which is distinct from the general account Unlike conventional life insurance, which is classified as a fixed product with a specific (guaranteed) benefit, variable life products provide insurance and benefits that vary according to the investment experience of their underlying accounts. These underlying accounts, which are separate accounts the insurer establishes and maintains, are typically are made up of equities such as stocks, the values of which rise and fall and cannot be guaranteed. A purchaser of a variable life policy incurs a degree of risk not associated with a fixed whole life policy.

A nonprofit organization with a representative form of government and an elected officer that sells life insurance only to its members would be considered A) a fraternal benefit society B) a risk retention group C) a home service insurer D) a service insurer

A) a fraternal benefit society To be characterized as a fraternal benefit society, the organization must have a lodge system that may include charitable work. Insurance programs are operated under a special section of the state code, and fraternals receive some income tax advantages.

Under an installment refund settlement option, if the primary beneficiary dies, the secondary beneficiary will receive A) the same income payments until the total amount paid out to both beneficiaries equals the original amount of proceeds B) half of the remaining proceeds C) the same income payments for a fixed number of years D) a lump-sum payment

A) the same income payments until the total amount paid out to both beneficiaries equals the original amount of proceeds Under an installment refund settlement option, if the primary beneficiary dies, the secondary beneficiary will receive the same income payments until the total amount paid out to both beneficiaries equals the original amount of proceeds.

Mark has worked for the past 20 years as a construction worker. However, 7 months ago he injured his back and has not been able to work since. Which of the following statements is CORRECT? A) Mark will be eligible for Social Security disability benefits after satisfying a waiting period of 10 consecutive months, during which he must be disabled. B) Mark will be eligible to receive Social Security disability benefits paid retroactively for as long as 6 months (excluding the waiting period). C) Mark will be eligible for Social Security disability benefits if he unable to engage in any substantial gainful work and his disability is expected to last at least 12 months. D) Mark is not eligible for Social Security disability benefits.

C) Mark will be eligible for Social Security disability benefits if he unable to engage in any substantial gainful work and his disability is expected to last at least 12 months. To be eligible for Social Security disability benefits, Mark must be unable to engage in any substantial gainful work. In addition, the disability must be expected to last at least 12 months or to result in his earlier death. Benefits begin only after he has satisfied a waiting period of 5 consecutive months, during which he must be disabled. Benefits may be paid retroactively for as long as 12 months (excluding the waiting period) preceding the date an application for benefits is filed.

Life insurance policies issued to an employer must cover at least how many employees at the date of issue? A) Four employees. B) Two employees. C) One employee. D) Three employees.

C) One employee Group life insurance policies may cover one or more employees or members at the date of issue. However, policies covering borrower groups must add ten new insureds to the group each year.

Which of the following factors is NOT used to calculate each payment with the fixed period option? A) The amount of the death benefit B) The length of the chosen period C) The chosen payment amount D) A guaranteed interest rate

C) The chosen payment amount The chosen payment amount is a factor for the fixed amount settlement option, not the fixed period option.

What type of beneficiary on a life policy can only be changed with the written consent of that individual beneficiary? A) Contractual B) Irrevocable C) Primary D) Revocable

B) Irrevocable If a beneficiary is named irrevocably, the policyowner has given up her right to change that beneficiary, unless that beneficiary has provided written consent to do so.

A domestic insurer must be examined by the Commissioner at least once every: A) year after the first year of organization. B) six months after the first year of organization. C) five years after the sixth year of organization. D) five years after the first year of organization.

C) five years after the sixth year of organization. The Commissioner must examine domestic insurers once every six months for the first three years after organization and once every year for the fourth through sixth years after organization. Thereafter, the Commissioner must examine domestic insurers at least once every five years.

Premium payment amounts can be all of the following EXCEPT A) flexible B) graded C) static D) level

C) static Premium payment amounts can be level, graded, flexible, or single payment.

Natasha has paid $200 of her annual deductible through her employer's group health insurance policy. She recently went to the dermatologist and received a billing statement for $2,000. A week after her appointment, her employer replaces the group health plan with a different insurer, what will Natasha owe the dermatologist? A) $0 B) $1,500 C) $1,800 D) $2,000

C) $1,800 When a group health insurance policy is replaced by another plan, the new insurer will allow deductibles paid under the old plan to count toward the new plan requirements. Since Natasha has only paid $200 toward her deductible, she will owe the difference between the medical expense and her deductible ($2,000 - $200= $1,800.)

According to the disability insurance time limit on certain defenses provision, how long after the date of a policy's issue can innocent misstatements on an application be used to void a claim? A) 1 year B) 5 years C) 2 years D) For the life of the policy

C) 2 years When a policy has been in effect for 2 years, the insurer may not void the policy or deny a claim on the basis of a misstatement on the application, in the absence of fraud.

Which of the following provisions must be included in an individual accident and health insurance policy? A) Change of occupation B) Misstatement of age C) 2-year time limit on certain defenses D) Coverage of newborns

C) 2-year time limit on certain defenses One of the 12 mandatory provisions that each individual accident and health insurance policy must include is a 2-year limit on certain defenses of the insurer. Misstatement of age and change in occupation are 2 of the 11 optional provisions that may be included. Provisions regarding newborn coverage can vary by state and may be required, but this is not 1 of the 12 mandatory provisions adopted under the Uniform Individual Accident and Sickness Policy Provisions Law.

A disabled worker's unmarried dependent child, who is younger than 18, is eligible for monthly benefits equal to how much of the worker's primary insurance amount (PIA)? A) 25% B) 100% C) 50% D) 75%

C) 50% A disabled worker's unmarried dependent child who is younger than 18, or who is disabled before reaching age 22, is eligible for monthly benefits equal to 50% of the worker's PIA.

Tom is covered under Medicare Part A. He spends 1 week in the hospital for some minor surgery and returns home on July 10. It was his first hospital stay in years. Which of the following statements regarding his Medicare coverage is CORRECT? A) Medicare Part A will not cover Tom's hospital expenses because he was not hospitalized for 10 consecutive days. B) Medicare Part A will pay benefits, but Tom must make a daily co-payment. C) After Tom pays the deductible, Medicare Part A will pay 80% of all covered charges. D) After Tom pays the deductible, Medicare Part A will pay 100% of all covered charges.

D) After Tom pays the deductible, Medicare Part A will pay 100% of all covered charges. Medicare Part A pays 100% of covered services for the first 60 days of hospitalization after the deductible is paid.

What kind of policy will protect an insurance agent against liability arising out of acts committed in her professional capacity? A) General liability B) Contractual liability C) Indemnity D) Errors and omissions

D) Errors and omissions Under errors and omissions (E&O) insurance, the insurer agrees to pay for claims arising out of the errors and omissions of the insured agent. It is a professional liability insurance policy.

Which of the following provides for an enhanced death benefit on a universal life policy? A) The corridor B) Option A C) The cost basis D) Option B

D) Option B Option B (or option 2) allows the cash value in the account to be added to the death benefit. For example, if a $100,000 policy has $25,000 of cash value, the beneficiary will receive $125,000.

Ralph owns a $50,000 nonparticipating whole life policy. Its cash value has accumulated to $15,000, and he has paid a total of $9,500 in premiums. If he surrenders the policy for its cash value, how will it be taxed? A) Ralph will receive the $15,000 as taxable income. B) Ralph will receive $5,500 tax-free; the $9,500 balance is taxable as income. C) Ralph will receive the $15,000 tax-free. D) Ralph will receive $9,500 tax-free; the $5,500 balance is taxable as income.

D) Ralph will receive $9,500 tax-free; the $5,500 balance is taxable as income. A policyowner is allowed to receive tax-free an amount equal to what he paid into the policy over the years in the form of premiums. Any gains are taxable.

Of the following, which statement best describes a 10-year renewable term life insurance policy? A) A 10-year renewable term is a policy in which the premium and face amount increase at the end of each 10-year period. B) A 10-year renewable term is a policy in which both the premium and face amount remain level for the term of the policy. C) A 10-year renewable term is a policy with a fixed face amount and a premium that increases at each 10-year renewal period. D) A 10-year renewable term is a policy with a level premium and a corresponding decreasing face amount.

C) A 10-year renewable term is a policy with a fixed face amount and a premium that increases at each 10-year renewal period. A 10-year renewable term life insurance policy has a fixed face amount that remains the same during the term of coverage period. As the name implies, the policy can be renewed at the end of each designated 10-year policy period. The policy can typically be renewed for a specified number of years or up to a term period that corresponds with a specified age, at which time coverage ceases. The premium remains level during each designated 10-year policy period, and then increases with the renewal of each new 10-year policy period.

Which of the following would be a source of instant liquidity upon the death of an estate owner? A) Debts payable to the estate B) Bank certificates of deposits C) A life insurance policy on the estate owner's life, payable to the estate D) A home

C) A life insurance policy on the estate owner's life, payable to the estate The term instant liquidity refers to property that is readily convertible into cash without loss or cash itself. In this example, the only asset that would provide instant liquidity would be the life insurance policy.

Which of the following is an example of replacement? A) A new policy issued by the same insurer. B) An employer changes its group life insurance carrier. C) A new policy that causes an existing life insurance policy to be surrendered. D) A credit life insurance policy that causes an existing credit life insurance policy to be forfeited.

C) A new policy that causes an existing life insurance policy to be surrendered. Replacement refers to any transaction in which the purchase of new life insurance or a new annuity (with the knowledge of the proposing producer or insurer) will cause an existing life insurance policy or annuity to be surrendered, lapsed, forfeited, or otherwise terminated.

Self-insurance is A) practiced by organizations that establish reserves to protect themselves against loss B) available through the federal government C) illegal in many states D) insurance written by an insurer on itself

A) practiced by organizations that establish reserves to protect themselves against loss Self-insurance is a legitimate method of insuring loss by establishing one's own reserve of funds.

Cal, age 57, owns a whole life insurance policy with a $750,000 face amount that was paid for with a single premium of $100,000. The current cash value is $125,000. If he were to borrow $30,000 from this policy today, which of the following choices best describes the tax treatment this transaction will receive? A) The first $5,000 of the loan is tax-free, and the remaining $25,000 is subject to income taxation. B) $25,000 of the loan is subject to income taxation plus an additional 10% penalty tax. C) The first $25,000 of the loan is tax-free, but the remaining $5,000 is subject to income taxation. D) The loan is income tax-free.

B) $25,000 of the loan is subject to income taxation plus an additional 10% penalty tax. This policy is a modified endowment contract (MEC), evidenced by the fact that it was paid for with a single premium. Accordingly, all withdrawals, including loans, above the cost basis (the total amount of premium paid in) are subject to income taxation and, if the owner is under age 59½, an additional 10% penalty.

A Notice to Applicant must be issued to the consumer no later than A) 3 days after the policy has been issued B) 3 days after paying the initial premium C) 3 days after completing the application D) 3 days after the report was requested

D) 3 days after the report was requested A Notice to Applicant must be issued to all applicants for life or health coverage. It notifies the applicant that a report regarding past credit history and previous insurance requests has been ordered. An agent must leave this notice with the applicant no later than 3 days after the report is requested.

Josie has been totally disabled for 2 years. During that time, the insurance company has paid all premiums (a total of $1,200) on her $25,000 life policy, which has a waiver of premium clause. If Josie dies now, the insurance company will pay a death benefit of A) $25,000 B) $23,800 C) $23,300 D) $12,500

A) $25,000 The waiver of premium rider only waives the policyowner's responsibility of paying the life policy premiums if she suffers a disability and is unable to work after 90 days. The waiver of premium only waives the policyowner's responsibility to pay; it does not accelerate any portion of the death benefit to the insured. Therefore, Josie's life policy pays its death benefit of $25,000.

Tom has a $50,000 whole life policy. If he continues to pay the required premiums and lives to age 100, he will receive A) $50,000 as an endowment B) double the face amount, or $100,000 C) the cash surrender value, a sum less than $50,000 D) nothing, because he outlived the term of the contract

A) $50,000 as an endowment By design, a whole life policy endows for its face amount at age 100. That means that when the policyowner is 100 years old, the cash value of the policy equals the face amount of the policy. At that point, the insurance is canceled, and the insured receives the face amount as an endowment.

Which of the following is NOT a standard life insurance policy nonforfeiture option? A) 1-year term insurance option B) Cash surrender option C) Reduced paid-up (permanent) insurance option D) Extended term insurance option

A) 1-year term insurance option Policyowners have 3 nonforfeiture options from which to choose: cash surrender, reduced paid-up insurance, and extended term insurance. The cash surrender option allows a policyowner to request an immediate cash payment of the cash value when the policy is surrendered. The reduced paid-up option lets the policyowner take a paid-up policy for a reduced face amount of insurance. The policyowner may also use the policy's cash value to buy a term insurance policy in an amount equal to the original policy's face value, for as long a period as the cash value will buy, by selecting the extended term option.

Under the required claim forms provision of a health insurance policy, an insurer must furnish the claim form to the insured within how many days after receiving a notice of claim? A) 15 days B) 30 days C) 10 days D) 21 days

A) 15 days Under the required claim forms provision of a health insurance policy, an insurer must furnish its claim form to the insured within 15 days after receiving a notice of claim. Otherwise, the claimant may submit the proof of loss in any form that explains the occurrence, character, and extent of the loss.

Jorge would like to purchase a life insurance policy that offers level premiums from the time the policy is issued until his death. He also wants a policy that combines death protection with a savings element that can eventually be used for retirement purposes. Jorge should consider purchasing which of the following plans? A) A straight whole life insurance policy B) A 30-year term life insurance policy C) A single premium whole life insurance policy D) A family maintenance policy

A) A straight whole life insurance policy Jorge should consider purchasing a straight whole life insurance policy, which provides permanent level protection with level premiums from the time the policy is issued until his death (or age 100). It also includes a cash value element, which can be used for retirement purposes.

After a proof of loss is submitted, legal action may be taken to recover on an individual health insurance policy only during what time period? A) Between 60 days and 3 years B) Between 30 days and 1 year C) Between 30 and 60 days D) Between 30 days and 10 years

A) Between 60 days and 3 years The statute of limitations stipulates that lawsuits may not be initiated to recover on the policy for 60 days after a written proof of loss has been submitted to the insurer and that lawsuits may not be initiated beyond 3 years after the time the written proof of loss was required.

Who administers all provisions of the Louisiana Insurance Code? A) Department of Insurance and the Commissioner of Insurance. B) Federal insurance association. C) Louisiana legislature. D) Insurance brokers.

A) Department of Insurance and the Commissioner of Insurance. The Department of Insurance and the Commissioner of Insurance are responsible for administering Louisiana's Insurance Code.

Who performs the Commissioner's duties in the Commissioner's absence? A) Deputy commissioner. B) Governor. C) Director of the Insurance Advisory Board. D) Chairman of the board of the Department of Insurance.

A) Deputy commissioner. The Commissioner appoints a deputy commissioner to help run the Department of Insurance and act as a substitute when the Commissioner is absent or unable to perform his duties.

Which of the following statements regarding the tax treatment of distributions from an individually owned, nonqualified, deferred annuity is NOT correct? A) If the distribution is the result of the annuity contract owner's death, the cash value payable to the beneficiary is income tax-free. B) If the contract owner is younger than age 59½, a partial surrender may be subject to a 10% penalty in addition to ordinary income taxation. C) If the contract owner makes a partial surrender, the amount withdrawn is treated first as a taxable distribution of gain (LIFO). D) An owner of a deferred annuity who annuitizes the contract will receive the basis tax-free.

A) If the distribution is the result of the annuity contract owner's death, the cash value payable to the beneficiary is income tax-free. There are no tax-free death benefits associated with annuities, as there are with life insurance. The portion of the cash value death benefit that constitutes gain is subject to income taxation whenever distributed.

How does an insurer treat benefits that are payable for expenses incurred when the company accepted the risk without being notified of other existing coverage for the same risk? A) It prorates them. B) It eliminates them. C) It estimates them. D) It deducts them.

A) It prorates them. Benefits payable for expenses incurred are prorated in cases where the company accepted the risk without being notified of other existing coverage. This limits overinsurance and is known as the insurance with other insurers provision.

When meeting with an applicant for health insurance, an insurance producer notices a pack of cigarettes in the applicant's shirt pocket, even though the applicant says he has been a nonsmoker for 10 years. Which of the following statements best describes the producer's responsibility? A) The producer should provide an agent's report to the insurer explaining what she observed. B) The producer should insist that the applicant change his response to the question on the application. C) The producer should change the answer on the application after the appointment. D) The producer should ignore the fact, since it is the insurer's responsibility to identify this information.

A) The producer should provide an agent's report to the insurer explaining what she observed. A producer's responsibility as a field underwriter is to observe situations that may not be detected by the home office underwriting department and report these findings to the insurer. Asking an applicant to reconsider an answer to a question on the application is allowable, but it is up to the judgment of the producer. She is not obligated to do so. It is illegal for a producer to change a response on a signed application without the applicant's consent.

Miguel works for a mutual insurance company that was formed to handle the insurance needs of lawyers. The type of company that Miguel works for is called A) a risk retention group B) a fraternal benefit society C) a reciprocal insurer D) a reinsurer

A) a risk retention group A risk retention group is a mutual insurance company formed to insure people in the same business, occupation, or profession, such as pharmacists, dentists, lawyers, or engineers. Risk retention groups tend to handle commercial liability exposures. Reinsurers, in contrast, insure other insurers, while the policyholders themselves insure the risks of other policyholders in a reciprocal insurer. Fraternal benefit societies are noted for their social, charitable, and benevolent activities and have memberships based on religious, national, or ethnic affiliations.

Murt Enterprises wants to build 3 new casinos in Illinois. It is possible the necessary insurance coverages will be placed through A) a surplus lines company B) an admitted carrier C) a federal insurer D) a domestic insurer

A) a surplus lines company Surplus lines companies write insurance that standard insurance companies have declined because a risk has atypical underwriting conditions, needs more coverage than an admitted insurer will assume, or requires forms or rates that are not filed in that state.

Insurers must offer applicants eligible for accident and health insurance policies a provision guaranteeing that, as long as the premiums are paid, the policy will not be canceled and none of its terms will be changed until: A) age 65. B) the next policy anniversary. C) the end of the insurance term. D) their health changes.

A) age 65. All insurers authorized to issue individual health and accident insurance policies in Louisiana must offer eligible applicants, at an additional cost, a provision that guarantees to the insured that the policy may not be canceled nor may any terms be changed up to age 65 as long as the insured pays the premiums.

The core policy (Plan A) developed by NAIC as a standard Medicare supplement policy includes all of the following EXCEPT A) coverage for the Medicare Part A deductible B) coverage for the Part A coinsurance amounts C) coverage for the first 3 pints of blood each year D) coverage for the 20% Part B coinsurance amounts for Medicare-approved services

A) coverage for the Medicare Part A deductible The Medicare Plan A supplement policy does not provide coverage for the Medicare Part A deductible. All the other answer choices are included in the core benefits that all Medicare supplement policies must provide, including Medicare Plan A supplement policies.

A policyowner has the right to return a Medicare supplement policy within how many days of its delivery and have the premium refunded if not satisfied? A) 35 days. B) 30 days. C) 10 days. D) 20 days.

B) 30 days. Medicare supplement policies must have a notice prominently printed on the first page stating that the policyowner has the right to return the policy within 30 days of its delivery and have the premium refunded if, after examining the policy, the insured is not satisfied for any reason.

Patricia has a health insurance policy for which she pays a semiannual premium. If the premium is due on July 1, her grace period will end in A) 20 days B) 31 days C) 7 days D) 60 days

B) 31 days A semiannual premium policy usually has a 31-day grace period in which the policyowner can pay the premium due. For policies with weekly premium payments, the grace period is 7 days, and policies with monthly premiums have 10-day grace periods.

Backdating of life insurance policy applications is allowed if the polices are not backdated earlier than: A) 3 months from the time the policy was applied for. B) 6 months from the time the policy was applied for. C) 12 months from the time the policy was applied for. D) 24 months from the time the policy was applied for.

B) 6 months from the time the policy was applied for. Life insurance policies cannot be issued or delivered in Louisiana if they claim to be issued or take effect more than 6 months before the original application for insurance was made, if backdating reduces the premium due below what would be payable as determined by the insured's nearest birthday at the time the application was made.

A qualified long-term care insurance policy must contain which of the following requirements? A) Coverage for drug and alcohol dependency B) Guaranteed renewability C) A probationary period of no longer than 180 days D) Coverage for conditions that result from war

B) Guaranteed renewability As a result of the 1996 Health Insurance Portability and Accountability Act (HIPAA), all long-term care policies sold today must be guaranteed renewable. The insurer cannot cancel the policy and must renew coverage each year, as long as the insured pays the premiums.

Medicare Plans K and L are characterized by which of the following features? A) Lower co-payments B) Higher coinsurance contributions C) No annual deductible D) No annual limit on annual out-of-pocket expenditures

B) Higher coinsurance contributions Medicare Plans K and L require higher co-payments and coinsurance contributions from Medicare beneficiaries. They also have a limit on annual out-of-pocket expenditures incurred by the policyholders. However, once the out-of-pocket limit on annual expenditures is reached, the policy covers 100% of all cost sharing under Medicare Parts A and B for the balance of the calendar year.

Ted is disabled and is eligible to receive $1,200 in benefits through his disability policy. He is also covered for benefits under Social Security, with a primary insurance amount (PIA) of $750. Under which circumstances will he receive a total of $1,950 a month? A) If his spouse is not eligible to receive disability Social Security benefits B) If he is unable to do work of any kind C) If his individual policy pays benefits under a percent-of-earnings formula D) If his disability is expected to last at least 9 months

B) If he is unable to do work of any kind Under Social Security, being covered does not mean Ted is automatically eligible for benefits, only that he is participating in the system. Ted must be unable to engage in any gainful employment. If his individual disability income policy has a percent-of-earnings provision, his benefits will be reduced by his Social Security benefits. Also, to qualify for Social Security, his disability must be expected to last at least 12 months or end in death or total blindness.

Thomas, an insured, submits a claim and a proof of loss for medical expenses covered by his major medical policy. According to the time of payment of claims provision, how soon must the company pay the claim? A) Within 90 days B) Immediately C) Within 30 days D) Within 150 days

B) Immediately According to the time payment of claims provision of a major medical policy, the company must pay the claim immediately.

What is the purpose of the Fair Credit Reporting Act? A) It protects credit companies during the course of their investigations. B) It requires consumer report agencies to adopt reasonable procedures when exchanging credit information. C) It guarantees that credit reports will remain confidential and not accessible to businesses that do not sell insurance. D) It prohibits insurance companies from obtaining reports on applicants from investigative agencies.

B) It requires consumer report agencies to adopt reasonable procedures when exchanging credit information. The Fair Credit Reporting Act is a federal law that ensures confidential, fair, and accurate reporting of information about consumers, including applicants for insurance. It does not preclude insurance companies from obtaining outside reports; however, it allows consumers to request the disclosure of information contained in these reports.

Which of the following terms relates to disability income insurance? A) Service basis B) Residual basis C) Coinsurance D) First dollar

B) Residual basis Disability income insurance contracts may be written on a residual basis, which means that they will provide benefits for loss of earnings without regard for occupational status and even if the insured is able to return to work on a full-time basis. The benefit is payable if the insured's earnings are reduced by a specified percentage below her pre-disability earnings.

Which of the following statements pertaining to the Medical Information Bureau (MIB) is NOT correct? A) The purpose of the MIB is to help prevent fraud and to serve as a reliable source of important medical information about insurance applicants. B) The MIB is organized and supported by private hospitals. C) Applicants for life insurance must be informed in writing that the insurer may make a report on their health to the MIB. D) Applicants must sign authorization forms for information from the MIB files to be given to a member company.

B) The MIB is organized and supported by private hospitals. The Medical Information Bureau (MIB) is a nonprofit central information agency established to aid in the underwriting process. Its purpose is to provide medical information regarding applicants for insurance. Private hospitals do not have access to the MIB, nor do they fund it.

If total disability (loss-of-time) benefits from all disability income coverage for the same loss exceed the insured's monthly earnings at the time of disability, what is the insurer's liability to the insured? A) The insurer must pay the total benefits as specified in the policy. B) The insurer must pay the proportionate amount of benefits that the insured's earnings bear to the total benefits. C) The insurer can reduce the benefits payable by half. D) The insurer can cancel the policy, claiming overinsurance.

B) The insurer must pay the proportionate amount of benefits that the insured's earnings bear to the total benefits. If total disability (loss-of-time) benefits from all disability income coverage for the same loss exceed the insured's monthly earnings at the time of disability, the insurer is liable for that proportionate amount of benefits as the insured's earnings bear to the total benefits. Total indemnities must be the lesser of $200 or total benefits under applicable coverage.

If a resident producer in Louisiana applies for a resident license in another state, what will happen to the resident license in Louisiana? A) The producer may keep the Louisiana license for 60 days. B) The producer will lose the license. C) The producer may hold both licenses. D) The producer may keep both licenses if he promises to sell insurance under only one authority at a time.

B) The producer will lose the license. A person who receives a resident producer license in Louisiana will lose the license if he also has a license, or applies for a resident license, in any other state.

Which of the following statements regarding the lifetime reserve of hospital coverage for Medicare patients is CORRECT? A) If a patient exhausts the reserve, she must pay a higher co-payment. B) The reserve does not renew with a new benefit period. C) Tapping into the reserve results in a lower daily co-payment. D) The reserve may be replenished if the patient reenters a hospital after a benefit period ends and pays a new deductible.

B) The reserve does not renew with a new benefit period. The lifetime reserve is an additional 60 days of coverage on top of the 90-day benefit period Medicare provides for hospitalization. A patient who is hospitalized for longer than 90 days can tap into the 60-day reserve. This reserve is a onetime benefit; it is not replenished with a new benefit period. Tapping into the reserve will require a higher co-payment from the patient. If a patient is hospitalized beyond the 60th lifetime reserve day, thus exhausting the reserve, she will be responsible for all hospital charges.

Which of the following statements regarding deferred annuities is NOT correct? A) They typically have a surrender charge that is assessed with contract surrender during the first 2 to 12 years or more. Typically up to 10% of the contract value can be withdrawn free of surrender charge in any 1 year. B) They generally permit contract owners to withdraw a specified percentage annually, tax-free and without a surrender charge. C) The owner is not required to annuitize the contract. D) They may be funded with a single premium payment or with periodic premium payments.

B) They generally permit contract owners to withdraw a specified percentage annually, tax-free and without a surrender charge. Surrender charge-free withdrawals are generally permitted up to a specified percentage. (A common percentage is 10%.) Although these free withdrawals may escape the contract's surrender charge, they are subject to income taxation. If the contract owner is younger than age 59½, the tax may include a 10% penalty.

A Medicare supplement policy that contains restricted network provisions is known as A) an HMO B) a Medicare SELECT policy C) a long-term care policy D) an individual health policy

B) a Medicare SELECT policy A Medicare select policy or Medicare select certificate mean, respectively, a Medicare supplement policy or certificate that contains restricted network provisions.

A group of individuals who agree to share each other's losses is known as A) a service organization B) a reciprocal group C) a reinsurer D) a mixed group

B) a reciprocal group A reciprocal insurer or reciprocal exchange is a group of individuals (subscribers) who agree to indemnify each other for their losses. The exchange of these agreements is made through an attorney-in-fact common to all subscribers.

A stop-loss feature in a major medical policy specifies the maximum A) benefit amount the policy provides each year B) amount the insured must pay toward covered expenses C) benefit amount the policy provides in a lifetime D) amount the insured must pay in premiums

B) amount the insured must pay toward covered expenses To provide a safeguard for insureds, many major medical policies contain a stop-loss feature that limits the insured's out-of-pocket expenses. This means the insured is no longer required to pay coinsurance once expenses have reached a specific limit.

All of the following benefits are available under Medicare EXCEPT A) skilled nursing care following a hospital stay of at least 3 days B) custodial care C) home health care visits for a speech therapist D) hospital expenses

B) custodial care Medicare provides benefits for hospital stays, skilled nursing, and home health care visits under Part A.

All of the following are required provisions of individual accident and health insurance policies issued in Louisiana EXCEPT: A) change of beneficiary. B) misstatement of age. C) entire contract. D) time limit on certain defenses.

B) misstatement of age. The misstatement of age provision is an optional provision that states that if the insured's age has been misstated, any benefits will be paid based on the coverage the premium would have purchased at the correct age.

Individuals claiming a need for Medicaid must prove that they cannot pay for their own nursing home care. In addition, the potential recipient must A) be a long-term care insurance policyowner B) need the type of care that is provided only in a nursing home C) be receiving Social Security D) be at least 70 years old

B) need the type of care that is provided only in a nursing home To qualify for Medicaid nursing home benefits, an individual must be at least 65 years old, blind, or disabled; be a U.S. citizen or permanent resident alien; need the type of care that is provided only in a nursing home; and meet certain asset and income tests.

As a cost-containment method in medical plans, all of the following are examples of case management provisions EXCEPT A) concurrent review B) reduction provision C) second surgical opinion D) precertification provision

B) reduction provision Though it is one of the other health insurance provisions, the reduction provision does not fall under the category of case management provisions. All of the other answer choices are examples of case management provisions.

The Department of Insurance's Section of Insurance Fraud can take all of the following actions EXCEPT: A) conduct background criminal checks on all applicants for insurance licenses. B) report violations to the appropriate licensing agency and prosecute insurance fraud cases. C) investigate anyone who is violating Louisiana's insurance laws. D) collect evidence to help with fraud investigations.

B) report violations to the appropriate licensing agency and prosecute insurance fraud cases. The Department of Insurance's Section of Insurance Fraud conducts investigations and background criminal checks on all applicants for insurance licenses or certificates of authority. It can also investigate anyone it believes is violating Louisiana's insurance laws. If the insurance fraud section finds that the insurance laws have been violated, it must report such allegations to the appropriate licensing agency and the prosecutor having jurisdiction. The section does not prosecute the cases.

With an optionally renewable policy, the insurance company reserves the right to A) increase the premium on a policy if benefits paid to an insured exceed a stated amount B) terminate coverage at any policy anniversary date or premium due date C) modify the coverage if claims filed by the insured exceed an amount specified in the policy D) cancel the policy at any time with 5 days' notice

B) terminate coverage at any policy anniversary date or premium due date With an optionally renewable policy, the company reserves the right to terminate coverage at any policy anniversary date or premium due date, but it may not exercise this right between these dates.

According to the National Association of Insurance Commissioners' standardized model Medicare supplement policy, insurers must offer coverage for all of the following core benefits EXCEPT A) coverage under Medicare Parts A and B for the first 3 pints of blood or equivalent (unless replaced according to federal regulations) B) the Medicare Part A deductible C) Medicare Part A-eligible hospital expenses not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period D) the coinsurance amount of Medicare Part B-eligible expenses, regardless of hospital confinement, subject to the Medicare Part B deductible

B) the Medicare Part A deductible All Medicare supplement policies must provide certain core benefits, including coverage for Medicare Part A-eligible hospital expenses not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period, the coinsurance amount of Medicare Part B-eligible expenses, and coverage under Medicare Parts A and B for the first 3 pints of blood. Although Plan A does not provide coverage for the Medicare Part A deductible, other Medicare supplement policies (Plans B through J) cover this deductible.

All of the following statements about Medicare supplement policies are correct EXCEPT: A) they cannot terminate a spouse's coverage solely because of an event that terminates the insured's coverage, other than nonpayment of premiums. B) they may indemnify against losses resulting from sickness on a different basis than losses resulting from accidents. C) benefits must be adjusted automatically to coincide with changes in Medicare deductibles and copayments. D) they cannot cancel or refuse to renew a policy for any reason other than material misrepresentation or nonpayment of premiums.

B) they may indemnify against losses resulting from sickness on a different basis than losses resulting from accidents. A Medicare supplement policy may not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents (accidents and illnesses must be treated equally).

Individuals who choose not to purchase qualifying health care coverage A) will be fined a minimum of $5,000 B) will pay a tax penalty C) will be denied access to doctors D) will serve jail time

B) will pay a tax penalty The Affordable Care Act states that all U.S. citizens and legal residents must have qualifying health care coverage either through their employer or individually. Those who do not purchase health care coverage will pay a penalty tax.

Which of the following statements regarding current assumption whole life insurance is NOT correct? A) Premium adjustments are usually made on an annual basis. B) It is also known as interest-sensitive whole life. C) During a period of relatively high interest rates the premiums could be increased. D) During a period of relatively high interest rates the premiums could be reduced.

C) During a period of relatively high interest rates the premiums could be increased. Current assumption whole life policies, also known as interest-sensitive whole life, offer flexible premium payments that are tied into current interest rate fluctuations. Depending on interest rate fluctuation, the insurer reserves the right to increase or decrease the premium within a certain range. During periods of low interest rates, premiums could be increased. During periods of high interest rates, premiums could be reduced. Premium adjustments are typically made on an annual basis.

Which of the following is considered to be controlled business? A) Selling only one company's insurance policies. B) Choosing not to market to people younger than age 30. C) Selling most of the insurance policies to family members. D) Selling only term life insurance policies.

C) Selling most of the insurance policies to family members. The Department of Insurance will not license persons who plan to earn more than 25% of their commissions in any year from controlled business. Controlled business is insurance covering the licensee, the licensee's immediate family or employer, or a corporation of which the licensee or a member of his immediate family is an officer or shareholder.

Which of the following items is NOT typically covered under a medical expense policy's miscellaneous expense benefit? A) Laboratory fees B) Use of the operating room C) Surgeon's fees D) X-rays

C) Surgeon's fees The miscellaneous expense benefit covers hospital "extras," such as x-rays, laboratory fees, and use of the operating room. It does not cover a surgeon's fees, which would be covered under a surgical expense policy.

If an insured does not exercise the option to increase coverage under a guaranteed insurability rider, what is the result? A) The insurer automatically increases the coverage, per the amount stated in the option. B) The premiums on the underlying policy are lowered proportionately because no increase in insurance coverage was purchased. C) The coverage will not change and the option automatically expires. D) The policy is canceled.

C) The coverage will not change and the option automatically expires. When no purchase is made under a guaranteed insurability option, the option for that particular age expires automatically. There is no change in the underlying policy. Normally, the insured will have 90 days in which to exercise an optional purchase.

Which of the following statements regarding executive bonus plans is NOT correct? A) The bonus is included in the employee's gross income. B) The employer may alternatively use the bonus to pay the premiums on a life insurance policy covering the employee's life. C) The employer becomes the policyowner of the insurance policy. D) An executive bonus plan is a nonqualified employee benefit arrangement in which an employer pays a bonus to a particular employee.

C) The employer becomes the policyowner of the insurance policy. An executive bonus plan, or Section 162 bonus plan, is a nonqualified employee benefit arrangement in which an employer pays a bonus to a particular employee. The bonus is tax deductible to the employer. The employee in turn uses the bonus to pay the premiums on a life insurance policy covering her life. The employee is the owner of the policy, and the bonus is included in the employee's gross income. When the employee dies, the beneficiary named in the policy receives the death proceeds free of tax.

Helen has just taken out a modified whole life policy. Which of the following statements is CORRECT? A) The face amount will be lower during the next few years and then be increased to a higher, constant level. B) The face amount will be higher during the next few years and then remain constant at a lower level. C) The premium will be lower during the next few years and then be increased to a higher, constant level. D) The premium will be higher during the next few years and then remain constant at a lower level.

C) The premium will be lower during the next few years and then be increased to a higher, constant level. The modified whole life policy is issued with a level premium payable during the first few (usually 5) years that is lower than the normal whole life policy rates. The premium increases and is higher than normal thereafter.

A policyowner stops paying premiums on a whole life policy with an accidental death benefit and exchanges the policy for extended term insurance. Which of the following statements pertaining to this situation is NOT correct? A) The policyowner will have continued protection for a limited period of time. B) There will be no accidental death benefit with the new policy. C) The term policy will have a reduced face value. D) The term policy has no cash value.

C) The term policy will have a reduced face value. When a policyowner stops paying premiums on a whole life policy with an accidental death benefit and exchanges the policy for extended term insurance, the policy's cash surrender value is used to purchase an amount of term insurance equal to the original policy's face amount. The term insurance will last as long as the cash value is sufficient to pay premiums. An accidental death benefit would not be included.

Applications to the Commissioner for a certificate of authority must include all of the following EXCEPT: A) a copy of each officer's oath of office. B) a statement listing the identity of company owners and their percentage of ownership. C) a list of all potential customers in Louisiana. D) a copy of the corporate bylaws.

C) a list of all potential customers in Louisiana. Applications for a certificate of authority must include, among other things, a copy of the insurer's corporate bylaws, a statement listing the identity of company owners and their ownership percentage, and a copy of each officer's oath of office. An insurer is not required to provide a list of all potential customers in its application.

An insurance company that is owned by its policyowners, who share the insurer's divisible surplus in the form of participating policy dividends, is known as A) a reciprocal insurance company B) a reinsurance company C) a mutual insurance company D) a stock insurance company

C) a mutual insurance company A mutual insurance company is an incorporated entity owned by its policyowners. Many of these companies sell participating policies that share the divisible surplus of the insurer with the policyowners in the form of policy dividends.

When a policyowner cannot exercise her rights of ownership without the policy beneficiary's consent, the beneficiary is designated A) contractual B) primary C) irrevocable D) vested

C) irrevocable If a policyowner names an irrevocable beneficiary, the policyowner gives up her right to change that beneficiary, and unless otherwise specified in the policy, the owner cannot take any action that would affect the right of that beneficiary to receive the full amount of the insurance at the insured's death. This includes taking out a policy loan or surrendering the policy.

If an individual life insurance policy contains a spendthrift provision, the policy can prohibit the beneficiary from taking all of the following actions EXCEPT A) borrowing against the policy B) exchanging the policy C) receiving equal installment payments under the policy D) surrendering the policy for cash

C) receiving equal installment payments under the policy A life insurance policy with a spendthrift provision can prohibit the beneficiary from exchanging, surrendering, and borrowing against the policy. To ensure that the beneficiary does not spend all the proceeds at once, the policy will specify that proceeds are to be paid to the beneficiary in equal installments during the beneficiary's lifetime.

With regard to a breadwinner's death, the blackout period generally can be defined as A) a time when life insurance is rarely needed B) the period from the surviving spouse's retirement to his death C) the period that begins when the youngest child is 16 and ends when the surviving parent turns 60 D) the period during which the children are living at home and are dependent

C) the period that begins when the youngest child is 16 and ends when the surviving parent turns 60 The blackout period is the period during which no Social Security benefits are payable to a surviving spouse. This period begins when the youngest child reaches age 16 and continues until the surviving parent reaches the earliest retirement age at 60.

The party to whom the life insurance policy cash values belong is A) the insured B) the beneficiary C) the policyowner D) the insurer

C) the policyowner The accumulation that builds over the life of a policy is referred to as the policy's cash value. It belongs to the policyowner, who may or may not be the insured.

For a waiver of premium rider to become operative, the insured must be A) chronically ill B) partially disabled C) totally disabled D) terminally ill

C) totally disabled An insured must be totally disabled for a waiver of premium rider to become operative. The policyowner does not have to pay premiums as long as the disability continues. Instead, the insurer continues to pay all premiums that become due while the insured is disabled to the age listed in the policy.

Which of the following statements about immediate annuities is NOT correct? A) They have relatively short accumulation periods. B) The first benefit payment is typically made 1 month from the purchase date. C) They can only be funded with a single payment. D) The income flow must be fixed rather than variable.

D) The income flow must be fixed rather than variable. The income flow from immediate annuities can be either fixed or variable. With a fixed immediate annuity, the annuitant is guaranteed an income flow without risk of market fluctuations affecting the amount of income. With a variable immediate annuity, the investment risk is transferred to the annuitant. This means that once an income stream is created, the payments can increase or decrease depending on the performance of the underlying investments.

An incorporated insurer whose governing body is elected by the policyowners is A) a reciprocal insurer B) a combination insurer C) a stock company D) a mutual company

D) a mutual company An incorporated insurance company that does not have permanent capital stock is a mutual insurer. The policyowners own the company and elect its governing body. A stock insurer, on the other hand, is an incorporated insurance company with its capital divided into shares of stock owned by the stockholders. A combined stock and mutual insurer is also an incorporated insurance company; its capital is divided into shares owned by the stockholders. However, both the stockholders and policyowners control the company.

An insurer of an insurer is known as A) a mixed group B) a reciprocal C) a service organization D) a reinsurer

D) a reinsurer A reinsurer insures part of the life insurance underwritten by another life insurance company to reduce the potentially large loss of the other company.

A corporation or other limited liability association that assumes and spreads the liability exposure for any of its group members is called A) a mutual insurer B) a stock insurer C) a reciprocal insurer D) a risk retention group

D) a risk retention group A risk retention group is a corporation or other limited liability association that assumes and spreads the liability exposure for any of its group members. All members of a risk retention group have an ownership interest in the group and must be in businesses that expose them to similar liabilities.

Durwood is hospitalized with leukemia and, upon checking his disability income policy, learns that he will not be eligible for benefits for at least 60 days. His policy probably has a 60-day A) benefit period B) probationary period C) disability period D) elimination period

D) elimination period An elimination period is the time following an illness or disability during which benefits are not payable.

If a group health policy terminates, the policy may be converted to another health insurance policy if the group member: A) has been covered under the group policy for at least 6 months. B) pays the appropriate premium within 90 days after receiving notification of eligibility for conversion. C) shows evidence of insurability. D) makes a written application within 31 days after receiving notification of eligibility for conversion.

D) makes a written application within 31 days after receiving notification of eligibility for conversion If a group health and accident policy terminates, group members have the right to convert to another policy if the participant has been continuously insured under the group policy for at least three months and makes written application to convert within 31 days after being notified of eligibility for conversion. The group member must also pay the appropriate premium within the same 31-day period. Evidence of insurability is not required.