Life and Health Practice Exam 3
Regarding an Agent's report during the policy application process, which of the following statements is TRUE?
It provides the agent's observation about the proposed insured
Which of the following is the general enrollment period for Medicare part b?
January 1 through March 31
Which condition is true when comparing a Joint life policy to two individual life policies of the same amount on the same insureds?
Joint life has a lower premium than the total of the two individual policies
If a business wants to ensure it can cover losses due to the disability of its top employee, the business should get which type of insurance?
Key person disability income
For a contract to be enforceable by law, the purpose of the contract must be
Legal and not against public policy
In an individual health insurance policy all of the following are excluded from coverage EXCEPT
Mental Illness
In the event an annuities dies during the accumulation period, and there is a beneficiary named in the annuity, the insurer would pay annuity benefits to the
Named beneficiary
The reduction of premium option uses the dividend to reduce
Next year's premium
Dividends received on participating life insurance policies are
Not taxable because they are a return of unused premiums
When can HIV related test results be provided to the MIB?
Only if the person is not identified
What does it mean when insurance contracts are unilateral?
Only one party makes a promise
What is the purpose of a buy-sell agreement?
To allow the business buyout in case of the owner's death
What is the purpose of key person insurance?
To cover decreased business revenues as a result of the death of a key employee
In a health insurance policy, what is the purpose of the impairment rider?
To exclude coverage for a specific impairment
In the application process, what is the purpose of the Agent's Report?
To give additional information about the applicant to the underwriters
What is the purpose of a policy's benefit schedule?
To state what and how much is covered in the plan
Which of the following is NOT usually an excluded cause of disability in an individual disability income policy?
Complications from pregnancy
An applicant gives her agent a completed application and the initial premium. What can the agent issue her that acknowledges the initial premium payment?
Conditional receipt
Which of the following is NOT correct concerning an insurance policy's consideration clause?
Consideration must be equal on the part of both the insurance provider and the insured
When a whole life is surrendered for a reduced paid up policy, the new policy's cash value will
Continue to increase
In an HMO, what is the purpose of the gatekeeper?
Controlling costs
HMO members pay a small fee when they see their primary care physician. This fee is called a
Copay
An insurance policy is required to have all of the following to be valid EXCEPT
Countersignature
How long would the grace period be under a policy if the insured pays a monthly health insurance premium?
10 days
In a non contributory group policy
100% of eligible employees must participate
A coffee shop owner is insured under a business overhead expense policy that pays a maximum monthly benefit of $2,500. Her actual monthly expenses are $3,000. If the owner becomes disabled, the monthly benefit payable under her policy will be
$2,500
According to the Time Limit on Certain Defenses provision, statements, or misstatements made made in the application at the time of issue cannot be used to deny a claim after the policy has been effective for a minimum of how many years?
2 years
Policy loan requests, except for loan requests for payment of due premiums, may be deferred for a period of up to
6 months
Under the mandatory uniform provision Proof of Loss, the claimant must submit proof of loss within what time period after the loss?
90 days
A viatical settlement is a transaction outside the life insurance provider where the owner sells the life insurance policy for which of the following?
A percentage of the policy's face amount
What guarantees that the information explained in the insurance contract is true?
A warranty
Due to an injury, an insured has been unable to work for eight months. When her life insurance premium came due, she could not pay yet the policy remained in force. The policy includes
A wavier of premium rider
Which of the following statements is NOT true regarding health insurance policy provisions?
All addition provisions written by insurance providers are cataloged by their respective states
All of the following could qualify as a group to obtain group health insurance EXCEPT
An association of 35 people
Which of the following premium modes would result in the lowest overall premium?
Annual
Which of the following signifies the individual upon whose life the annuity income amount is calculated?
Annuitant
An underwriter is reviewing an applicant with an extensive medical history. Which of the following would provide the underwriter a better understanding of the applicant's treatments for the various illnesses?
Attending Physician's Statement
Which provision can be added to a permanent life insurance policy, at no cost, to ensure that the policy will not lapse if there is cash value?
Automatic premium loan option
The corridor deductible applies between
Basic and major medical coverage
Which of the following would NOT trigger the payment of Accelerated Death Benefits?
Being permanently disabled
Answers to questions is an insurance application are called representations and as such they are
Believed to be true to the best of the applicant's knowledge
A dentist has been off work for four months because of a disability. His dental assistant's salary would be paid by
Business Overhead Insurance
Which of the following is NOT an indicator of a competent party?
Business profession
An insured and his spouse recently had a child. Which of the following riders would allow the couple to insure the child for a limited period of time at a specified amount?
Children's term rider
When filling out an insurance application, the applicant makes a mistake. What can the applicant do to correct the error if a new application is unavailable?
Cross out the incorrect answer, write the correct one beside it and initial the new answer
A major medical expense policy would exclude coverage for all of the following treatments EXCEPT
Drug addiction
An adjustable life policy can assume the form of
Either term insurance or permanent insurance
The uniform provision law that prevents an insurance provider from altering its agreement with a policy holder by referring to documents or other items not found in the policy is called the
Entire Contract provision
The stop loss feature on a majors medical policy intends to
Establish a maximum out of pocket cost that an insured will have to pay for medical expenses in a calendar year
An annuity owner receives the same guaranteed payment every month. What type of annuity is it?
Fixed
At what point is an automatic premium loan generated?
Following the grace period
The guaranteed purchase option is also known as the
Future increase option
Which federal act defines rules regarding protected health information?
HIPPA
An insured was diagnosed two years ago with kidney cancer. He was treated with surgeries and chemotherapy and is now in remission. He also has a 30 year smoking history. The insured is now healthy enough to work and has recently secured a full time job. Which describes the health insurance that he will most likely receive?
He would be covered under his employer's group health insurance plan without higher premiums
When an insured reinstated their major medical policy, they were involved in an accident that required hospitalization. Upon reinstatement of the policy, when would this accident be covered?
Immediately
Medicare is a health insurance program for all the following EXCEPT
Individuals with low assets and low income
To buy insurance, the policy owner must face the prospect of losing money or something of value in the event of loss. What is this concept called?
Insurable interest
Which of the following is the primary source of information that an insurance provider uses to evaluate an insured's risk for life insurance?
Insurance application
All of the following are required to sign an application for health insurance EXCEPT the
Insurer
Jacki reviews an agreement on the first page of her policy which contains a list of losses that her insurance provider will cover. What is the name of this agreement?
Insuring Clause
When the policy is issued, what happens to the copy of the application for health insurance?
It becomes part of the entire contract
Which of the following best describes a Major Medical Expense policy?
It delivers catastrophic medial coverage beyond basic benefits on a usual, customary, and reasonable basis
Regarding an ordinary life policy all of the following statements are true EXCEPT
It does not have a guaranteed death benefit
Ellen is covered under a health plan provided by her employer. She was told that her insurance would pay most of the covered expenses if she chose to see a provider on her plan's list. If Ellen chose to be treated by a provider that is not on the list her portion of the bill would be greater Ellen is covered under a/an
PPO Plan
Which of the following dividend options is being used when owner of a participating whole life policy uses the dividend to provide more life insurance coverage?
Paid up additions
Which of the following is the consideration on the part of an insurance provider?
Paying a claim
An Equity Indexed Annuity will grow based upon
Performance of a recognized index
The amount and the frequency of the premium payment are known as
Premium mode
What is the primary purpose of the Coordination of Benefits provision in group insurance?
Prevent over insurance
Medicare Part A services do NOT include which of the following?
Private duty nursing
Jake's retirement plan meets all federal requirements and entitles him to certain tax benefits as the plan owner. What term best describes Jake's retirement plan?
Qualified
A person buys a life insurance policy and list his parents as the beneficiaries. He can change beneficiaries at any time. The policy has what type of beneficiary designation?
Revocable
Variable insurance and variable annuities are regulated by
SEC, FINRA, and Department of Insurance
An agent delivers a life policy. He explains a policy change was made and asks the applicant to sign a statement acknowledging the changes were explained. The agent says the premium has not been paid and must be paid before the policy goes into effect. He collects a Statement of Good Health, relinquishes the policy, and leaves. What did he do wrong?
She left the policy with the insured without collecting the premium
An insured has an individual disability income policy with a 30 day elimination period. She becomes disabled on June 1 for 15 days. When will she collect on her disability income payments?
She won't collect anything
What is the meaning behind a contract of adhesion?
Since the insured does not take part in preparing the conduct any ambiguities would be resolved in the insured's favor
A whole life policy that will generate immediate cash value is a
Single premium policy
Which of the following forms of care are daily nursing and rehabilitative care that can only be delivered by medical personnel under the direction of a physician?
Skilled care
Under a major medical policy, policy owners have the right to do which of the following if they have NOT received the necessary claim forms within 15 days of their notice to the insurance provider of the covered loss?
Submit the description in their own words on a plain sheet of paper
Upon payment of a loss the insured is obligated to surrender the right to sure a negligent third party to the insurance provider. This is known as
Subrogation
If the benefits of a basic medical insurance plan are exhausted, what type of plan will begin covering those losses?
Supplementary major medical
A life insurance policy can provide which of the following?
Survivor protection
Which of the following statements about the Medical Information Bureau is correct?
The Medical Information Bureau assists underwriters in evaluating and classifying risks.
Who is obligated to ensure that every question is answered and all necessary signatures are collected on the application?
The agent
Whose responsibility is it to ensure that the application for health insurance is accurate and complete?
The agent's
An insurer is trying to determine an applicant's insurability and decides to obtain medical information from several different sources. Which of the following has to be notified of the investigation?
The applicant
Life insurance creates an immediate estate. Which of the following statements best explains this?
The face value of the policy is payable to the beneficiary upon the insured's death
In a health insurance policy, which entity has the option of including optional provisions?
The insurance provider
Which of the following statements is INCORRECT?
The insurance provider does not have the right to conduct an autopsy
Under the Payment of Claims provision, to whom will the insured's benefits be paid if the insured is deceased?
The insured's primary beneficiary
Which of the following is NOT true concerning a no cancelable policy?
The insurer can increase the premium above what is stated in the policy if claims experience is greater than expected
As it pertains to life settlements the term owner means
The owner of the original life policy
Regarding the premium in a 10 year level premium policy, which of the following is TRUE?
The premium will remain level for ten years
According to the Common Disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?
The primary beneficiary died before the insured
The guaranteed insurability rider allows the owner to by additional amounts of life insurance without proof of insurability at all of the following EXCEPT
The purchase of a new home
Regarding the definition of total disability which of the following statements is INCORRECT?
Total disability is the inability to perform partial duties of any occupation fro which an individual is suited because of education, training, or experience
When an insured's membership is a group is terminated the insured can convert to
Whole life without proof of insurability
Under the mandatory uniform provision Notice of Claim provision policy owners must submit written notice of a claim to the insurance provider within what time parameters?
Within 20 days
An employee that becomes ineligible for group coverage due to termination of employment or a change in status must exercise an extension of benefits under COBRA
Within 60 days
If an insured is not entirely satisfied with an issued policy, the insured may return it to the insurance company and receive a refund of the entire premium paid at which of the following times?
Within ten days of when the policy was delivered