insurance test
A Hospital/Surgical Expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013?
1,000
An insurer must provide an insured with claim forms within __ days after receiving notice of a loss.
15
a temporary agent's license issued by the commissioner of insurance is valid for up to how many days?
90
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 of the following is considered to be the time period after a Health Policy is issued, during which no benefits are provided for illness?
Probationary Period
Which provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time?
Restoration of used benefit
the insuring clause
States the scope and limits of the coverage
which of these is an element of a variable life policy
a fixed, level premium
Which provision is NOT a requirement in a group life policy?
accidental
A policy owner may generate taxable income from which of the following dividend options
accumulation at interest
a reimbursment policy pays what amount of covered long term care expense
actual covered expenses up to the daily maximum
in health insurance policies a wavier of premium provision keeps the coverage in force without premium payments
after an insured has become totally disabled as defined in the policy
which of the following statements is correct regarding the tax treatment of a lump sum payment paid to a life insurance policy's primary beneficiary
all proceeds are income tac free in the year they are received
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 loss has been submitted before a lawsuit can be filed
group life insurance policies are generally written as
annually renewable term
When does a Guaranteed Insurability Rider allow the insured to buy additional coverage?
at future dates specified in the contract with no evidence of insurability required
in order to establish a health reimbursement arrangement it must
be established by the employer
the difference between group insurance and blanket health policies is
blanket health policies do not issue certificates
Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?
business owner becoming disabled
the guarantee of insurability option provides along term care policyowner the ability to
cancel the policy at anytime
Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?
collateral assignment
T is given a receipt After completing a life insurance application and paying the initial premium. Under this situation, T's coverage is
conditional ,depending on the insurers underwriting guidelines
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
What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?
conversion
which of the following best describes a hospital indemnity policy
coverage that pays a stated amount per day of a covered hospitalization
The Combination of Whole Life and _____ Term insurance is referred to as a Family Income Policy
decreasing
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?
decreasing term
F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?
decreasing term policy
How are surrender charges deducted in a life policy with a rear-end loaded provision?
deducted when the policy is discontinued
how are surrender charges deducted in a life policy with a rear end loaded provision
deducted when the policy is discontinued
M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?
determined by the terms of the policy
What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?
dread disease insurance
in a disability income policy which of these clauses acts as a deductible
elimination period
which of these statements is incorrect regarding the federal income tax treatment of life insurance
entire cash surrender value is taxable
which of the following is an important underwriting principle of group life insurance
everyone must be covered in the group
which of these statements describe a modified endowment contract
exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract
D owns a Whole Life policy that was purchased 10 years ago. If the premium payments suddenly stop and D takes no additional action, which Nonforfeiture Option will the insurer likely proceed with?
extended term
All of these are characteristics of an Adjustable Life policy EXCEPT
face amount can be adjusted using policy dividends
what is considered a valid reason for small businesses to insure the lives of its major shareholders?
fund a buy-sell agreement
which of the these is considered a true statement regarding Medicaid
funded by both state and federal government
S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a
high deductible health plan
which of the following will a long term care plan typically provide benefits for
home health care
in regards to representations or warranties which of these statements is true
if material to the risk false representations will void a policy
which of the following statements about health reimbursement arrangements is correct
if the employee paid for qualified medical expenses, the reimbursement may be tax free
T applied for a Disability Income policy and has a history of back injuries. The insurer issued the policy with a statement that excludes coverage for back injuries. This statement is called a(n)
impairment rider
all of the following statements regarding a tax sheltered annuity are true except
income derived from the tsa is received income tax free
When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have
insurable interest in the proposed insured
in a key employee life insurance policy the third party owner can be all of the following except
insured
which of the following health insurance policy provisions specifics the health care services a policy will provide
insuring clause
which of the following claims are typically excluded from medical expense policies
intentionally self inflicted injuries
which of the following actions will an insurance company most likely not take if an applicant who has diabetes applies for a disability income policy
issue the policy with an altered time of payment of claims provision
credit life insurance is
issued in an amount not to exceed the amount of the loan
which statement regarding third party ownership of a life insurance policy is true
it is used extensively in estate planning as well as business circumstances
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
life income
which of the following types of health coverage frequently uses a deductible
major medical policy
An employer that offers a qualified retirement plan to its employees is eligible to
make tax deductible contributions to the plan
Under a Guaranteed Renewable health insurance policy, the insurer
may cancel the policy for nonpayment only
which type of policy is stated to be overfunded as stated by IRS guidelines
modified endowment contract
which of these life products is not considered interest sensitive
modified whole life
a disability income policy that only the policy owner can terminate and which the rates will never go up is considered to be
noncancelable
When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld?
none
J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?
nonoccupational coverage
which of the following best describes a short term medical expense policy
nonrenewable
in an individual retirement account rollover contributions are
not limited by dollar amount
if a corporation pays the premium on a group life policy for its employees the corporation is required to report how much additional taxable income for each employee
nothing
which of these is considered a mandatory provision
payment of claims
which of the following provision guarantees that premiums will be waived if a juvenile life policy owner becomes disabled
payor clause
which of the following provisions guarantees that premiums will be waived if a juvenile life policy owner becomes disabled
payor clause
A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?
payor provision
which of these describes a participating insurance policy?
policyowners are entitled to receive dividends
which statement is correct regarding the premium payment schedule for whole life policies
premiums are payable throughout the insureds lifetime/ coverage lasts until death of the insured
which of these statements accurately describes the waiver of premium provision in an accident and health policy
premiums are waived after the insured has been totally disabled for a specified time period
which of these statements accurately describes the wavier of premium provision in an accident and health policy
premiums are waived after the insured has been totally disabled for a specified time period
which of the following actions is not possible with a universal life policy
premiums may be applied as a credit against income tax
what is considered to be a characteristic of a conditionally renewable health insurance policy
premiums may increase at time of renewal
The Coordination of Benefits provision
prevents an insured covered by two health plans from making a profit on a covered loss
what is the purpose of the time of payment of claims provision
prevents delayed claim payments made by the insurer
what determines the full amount of social security retirement benefits a qualified individual is entitled to receive
primary insurance amount
K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?
proceeds will be paid to P''S estate
what is the consideration given by an insurer in the consideration clause of life policy
promise to pay a death benefit to a named beneficiary
which of the following is an example of a nonforfeiture option
reduced paid up option
which of these factors does not influence an applicant need for life insurance
self maintenance expenses
Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?
split dollar plan
which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party
subrogation
which of the following costs would a basic hospital surgical policy likely cover
surgically removing a facial birthmark
A contract owner terminates an annuity before the income payment period begins. The owner will then receive
the current contract surrender value
J chooses a monthly premium payment mode on his whole life insurance policy. which of these statments is correct
the gross premium is higher on a monthly payment mode as compared to being paid annually
Upon policy delivery, a signed good health statement is requested from the applicant. Why would this be necessary?
the initial payment was not submitted with the application
which of the following statements best defines usual, customary, and reasonable ucr charges?
the maximum amount considered elgible for reimbursement by an insurance comapny under a health plan
all of these statements about equity life insurance are correct except
the premiums can be lowered or raised based on investment performance
A disability elimination period is best described as a
time deductible
What is the elimination period of an individual disability policy?
time period a disabled person must wait before benefits are paid
R becomes disabled and owns an individual Disability Income policy. When is R eligible to receive disability benefits?
upon satisfying the elimination period requirement
a what annuity pays benefits based on units rather than stated dollar amounts
variable
life insurance immediately creates an estate upon the death of an insured which of the following policies is characterized by a guaranteed minimum death benefit
variable life
When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?
void the policy only if it is discovered during the contestable period and proven to be material
the provision in a group health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective fate is refereed to as the
waiting period
What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?
waiver of premium rider
what kind of life policy either pays the face value upon death of the insured or when the insured reaches age 100
whole life
If a 10-Year Term Life policy contains a Renewability provision, the policy will renew
without evidence of insurability