Ins Exam: Stimulated Exam 2

An insurer must acknowledge receipt of a Notice of Claim within how many days?

15

Which of the following would NOT be considered a limited coverage policy? A. Cancer insurance B. Credit insurance C. Major medical expense insurance D. Accident insurance

Answer: C

Which of the following is a feature of a variable annuity?

Benefit payment amounts are not guaranteed

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

Coverage ends and the policy cannot be reinstated

What are the two components of a universal policy?

Insurance and cash account

Which of the following entities can legally bind coverage?

Insurer

Which of the following best describes the MIB?

It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance

If a settlement option is not chosen by the beneficiary or policy owner, which option will be used?

Lump sum

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

Occasional nursing or rehabilitative care

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

Rates by class

Which two terms are associated directly with the way an annuity is funded?

Single payment or periodic payment

A life insurance policy does not have a war clause. If the insured is killed during the time of war, what will the beneficiary receive from the policy?

The full death benefit

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

In the event of a loss, business overhead insurance will pay for

Rent

If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a

Settlement option

Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?

The employer is the owner and the beneficiary

In a disability policy, the elimination (or waiting) period refers to the period between

The first day of disability and the day the insured starts receiving benefits

What is the purpose of a disclosure statement in life insurance policies?

To explain features and benefits of a proposed policy to the consumer

How is emergency care covered for a member of an HMO?

A member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area

Which of the following is correct about a group health insurance policy? A. It cannot exclude newborn children from coverage B. It cannot exclude coverage for VA hospital treatment C. It cannot provide coverage for handicapped children D. It cannot exclude coverage from an occupational accident

Answer: A

All of the following could be considered rebates if offered in an insured in the sale of insurance EXCEPT: A. Stocks, securities, or bonds B. An offer to share in commissions generated by the sale C. Dividends from a mutual insurer D. An offer of employment

Answer: C policies specifies that the dividends might be paid

What is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application?

As long as the policy is in force

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option

Which of the following would be an example of a limited accident and health insurance policy?

A dread disease policy; limited risk policies cover specific illness or accidents

All of the following are to be included in the application for a certificate of authority to act as an HMO EXCEPT: A. Records of previous insurers B. A map of geographic area to be served C. A schedule of charges for the first 12 months D. Financial records of the organization applying

Answer: A Also included are a list of the names, addresses and official positions of those responsible for the applicant's affairs; a description of the quality assurance program, including peer review; a copy of the forms of evidence of coverage to be issued to enrollees; a description of complaint procedures to be used; and any information required by the commissioner

Which of the following is TRUE about nonforfeiture values? A. Policy owners do not have the authority to decide how to exercise nonforfeiture values B. They are required by state law to be included in the policy C. They are optional provisions D. A table showing nonforfeiture values for the next 10 years must be included in the policy

Answer: B Table showing values for the next 20 years must be included in the policy

All of the following are true about variable products EXCEPT: A. Policy owners bear the investment risk B. The premiums are invested in the insurer's general account C. The minimum death benefit is guaranteed D. The cash value is not guaranteed

Answer: B insurer's selling variable products invest their customer's monies in a separate account

Which of the following is NOT a feature of a guaranteed renewable provision? A. The insured has a unilateral right to renew the policy for the life of the contract B. Coverage is not renewable beyond the insured's age 65 C. The insured's benefits cannot be reduced D. The insurer can increase the policy premium on an individual basis

Answer: D