Insurance Exam 2

When a Medicare Supplement policy is delivered, disclosure standards require that an ____ of coverage be provided to the insured

Outline

P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability?

P will still receive declared dividends

Which statement is true in regards to a policy loan?

Past-due interest on a policy loan is added to the total debt.

Who benefits in Investor-Originated Life Insurance when the insured dies?

Policyowner

Under federal tax laws, what is the tax treatment for an employer providing 50,000 of a contributory group Term Life plan to all its eligible employees?

Portion of the premiums paid for by the employer may be a tax deduction

The free look period in Iowa for individual health insurance policies is ___ days

Ten

Which of the following statements best describes what the Legal Actions provision of an Accident and Health policy requires?

An insured must wait at least 60 days after Proof of Los has been submitted before a lawsuit can be filed

Take it or leave is insurance policy basis

Contracts of Adhesion

Warranty

Guaranteed to be true

What is the maximum number of employees that an employer can have in order to start a simple retirement plan?

100

What is the maximum Social Security Disability benefit amount an insured can receive?

100 percent of insured's primary insurance amount

An insurer must provide an insured with claim forms within __ days after receiving notice of a loss.

15

K pays on a 20,000 20-year endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?

20,000 death benefit

The required free-look period in a Medicare Supplement policy is ___ days?

30

The grace period for group life policies is ___ days.

31

The waiting period for pre-existing conditions on Medicare Supplement policies is ___ months

6

Inflation protection is not required in a partnership long-term care policy if the individual is at least how old at issue?

76

An individual must submit an application for a producer's license within ___ days after successfully passing the state examination.

90

What does a Probationary Period provision become effective in a health insurance contract

At the policy's inception

How long does the coverage normally remain on a limited-pay life policy?

Age 100

A French insurance company conducting business in Iowa would be known in Iowa as an

Alien company

The Consideration clause in a life insurance contract contains what pertinent information?

Amount of premium payments and when they are due

Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deductible?

Carryover provision

As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?

Coercion

T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later. Assuming that T is an acceptable risk, what item is given to T?

Conditional receipt

An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet?

Consideration clause

A ____ is the signed document that starts the free-look period.

Delivery receipt

A characteristic of PPO would be

Discounted fees for the patient

What action should a producer take if the initial premium is not submitted with the application?

Forward the application to the insurer without the initial premium

In regards to representations or warranties, which of these statements is true?

If material to the risk, false representations will void a policy

An annuity promises that, if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an amount equal to the contract value has been paid. This type of annuity is called:

Installment Refund annuity

What is the initial requirement for an insured to become eligible for benefits under the Wavier of Premium provision?

Insured must be under a physician's care

The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called

Insuring Agreement

Which of the following statements about accumulated interest earned on dividends from an insurance policy is true?

It is taxed as ordinary income

Which of the following combination plans is designed to protect an insured from an unpaid mortgage balance upon premature death?

Joint Life

Which statement regarding the change of beneficiary provision is true?

The policyowner can change the beneficiary

The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is

Time Limit on Certain Defenses

J is a producer who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of?

Twisting

If a Medicare Supplement policy involves replacement, it must be verified on a question located

on the application

Which best identifies one in which the cash value may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors?

Universal Life

T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?

Life Annuity with Period Certain

The Accelerated Death Benefit provision in a life insurance policy is also known as?

Living Benefit

A policy that becomes a Modified Endowment Contract

Will lose many of its tax advantages

G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disable. This type of policy which best address this concern is

business overhead expense

Which type of renewability best describes a disability income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate for the overall risk class?

Guaranteed Renewable

A medical care provider which typically delivers health services at its own local medical facility is known as a

HMO

The Notice of Claims provision requires a policyowner to

Notify an insurer of a claim within a specified time

When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits?

Recurrent Disability

Which type of policy pays benefits to a policyholder covered under a hospital expense policy

Reimbursement