Life & Health ✨

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estate

a person's net worth

the term insurance includes all of the following (by mail or any other means):

* solicitation * negotiations * sale (effectuation of a contract of insurance) * advising an individual concerning by coverage or claims

all of the following statements concerning workers compensation are correct EXCEPT

A worker receives benefits only if the work related injury was not his/her fault.

A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?

Immediate annuity

The two types of assignments are

absolute and collateral

group health insurance is characterized by all of the following except

adverse selection

An insurer is attempting to determine the insurability of an applicant and decides to obtain medical information from several different sources. Which entity must be notified of the investigation?

applicant

decline risk

applicants who are rejected

which of the following provisions is mandatory for health insurance policies

Physical examination and autopsy

If the annuitant dies during the accumulation period, who will receive the annuity benefits?

beneficiary

occupational coverage

benefits for illness, injury or disability resulting from accidents or sicknesses that occur on or off the job

which of the following must be included in all life insurance advertisements?

identity of the actual insurer

A man purchased a $90,000 annuity with a single premium, and began receiving payments 2 months after that. What type of annuity is it?

immediate

what are the benefits of workers compensation?

- medical benefits - income benefits - death benefits - rehabilitation benefits

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

Benefit payment amounts are not guaranteed.

which of the following is NOT true regarding workers compensation?

Benefits are offered by the insurer.

which of the following best describes the aleatory nature of an insurance contract

Exchange of unequal values

primary, secondary payor

For individuals eligible for Medicare coverage who continue to work, the employer's health plan would be primary coverage while Medicare would be secondary coverage

Issue age policy premiums increase in response to which of the following factors?

Increased benefits

Who makes up the Medical Information Bureau?

Insurers

which of the following is true regarding the annuity period

It may last for the lifetime of the annuitant

All of the following are true of an annuity owner except

The owner must be the party to receive benefits.

all of the following are true of key person insurance except

The plan is funded by permanent insurance only

an insurer receives an annual life insurance dividend check. what term best describes this arrangement?

cash option allows an insurer to send the policyholder an annual, no taxable dividend check.

life insurance

coverage on human lives

what is the effective date of coverage?

if the premium is not paid with the application, the agent must obtain the premium and a statement of continued good health at the time of policy delivery.

which of the following is an example of a produce being involved in an unfair trade practice of rebating?

telling a client that his first premium will be waived if he purchases the insurance policy today

an agent discovers his newest client was result of a referral. to show his thanks to the referring customer, the agent could

thank the customer!

the following are all causes for the insurance commissioner to suspend or imposed conditions upon the continuance of an agents license EXCEPT

the applicant has been shown to be a poor personal credit risk

principle

the face value of the policy

a health insurance policy lapses but is reinstated within an acceptable timeframe. how soon from the reinstatement date will coverage for accidents become effective?

immediately

tax deferred

income that is not subject to taxes immediately but that will later be subject to taxes.

What do individuals use to transfer their risk of loss to a larger group?

insurance

tax deductible

reduces taxable income, resulting in lower tax liability

disclosure

revealed information to help someone make an intelligent and educated decision

commissioner

the head of the state department

an agent receives an emergency cease and desist order for chronically misrepresenting his insurance policies. the agent knows that he did not commit the violations stated in the emergency cease and desist order. he wants to contest the charges in a court hearing which of the following is true?

the hearing must be held within 10 days of receiving a request, unless both parties agree to a later date.

which of the following is NOT covered under Plan A in medigap insurance?

the medicare part A deductible

an insurance agent wants for a client to replace her current annuities plan with another one. he presents the new one in an incomplete and dishonest way, which makes the new contract seem far more appealing than the original one. the policy owner ends up surrendering her original contract and replacing it with a new one. which term best describes what the agent did?

twisting

what type of misrepresentation persuaded an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?

twisting

an applicant properly notifies her insurer of a straightforward claim, but the insurer waits an exceedingly long time to process it. which of the below terms best describes the behavior of the insurer?

unfair claims settlement practice

If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?

unilateral

Conditional Receipt

used only when the applicant submits a prepaid application

Rollover

withdrawal of the money from one qualified plan and placing it into another plan

all of the following individuals may qualify for medicare health insurance benefits EXCEPT

• a retired person age 50

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

Mutual

Misrepresentation

false, misleading, or deceptive statements about policy terms or benefits

what are the state mandatory coverages for individual insurance?

* new born children of the insured - covered from the moment of birth * drug and alcohol addiction treatment

once a person meets the stringent requirements for disability benefits under social security, how lone is the waiting period before any benefits will be paid?

5 months

what does the commissioner of insurance do?

* regulates insurance carriers and issues insurance licenses * does not write laws * examines all authorized insurers

what are the required provisions for individual life insurance?

same as the NAIC mandatory and optional provisions

in all health care plans under the Affordable Care Act (ACA), how many essential benefit categories are there?

10

which of the following is NOT required to be stated in the outline of coverage provided with a long-term care policy?

Basic information about supplementary policies

Rebating

Offering benefits or services not specified in the policy

an insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy?

The insured is in an accident and incurs a large claim

Total Disability

defined differently under different policies

Unfair Discrimination

discrimination in rates, premiums charged, or benefits

which of the following best describes an insurance company that has been formed under the laws of this state

domestic

what statements best describes the free look provision

it allows the insured to return the policy within 10 days for a full refund of premiums if dissatisfied for any reason

what are the four elements of an insurance contract?

• Agreement (offer and acceptance) • consideration • competent parties • legal purpose

what are the life insurance policy comparison methods?

* interest - adjusted net cost method: time value of money * comparative interest rate method: rate of return

what are the types of licenses?

* individuals; resident and nonresident * temporary license- valid for 90 days; issued to maintain the existing business

company regulations

* certificate of authority * domestic/ foreign/ alien - location of incorporation * ownership: stock or mutual *avoid unfair trade practice or unfair claims settlements

credit life

* creditor is the owner and the beneficiary * borrowed pays the premium

certificate of insurance for group coverage

* evidence of coverage * must be given to all insureds

Required Provisions

* free- look period - 15 calendar days * grace period - one month * policy loans - after 3 full years in cash value policies * backdating - 6 months * legal action - within 2 years after loss * payment of claims - within 2 months of the claim

According to the Entire Contract provision, a policy must contain

A copy of the original application for insurance

which entity has the authority to grant a temporary life insurance agents license

Commissioner of Insurance only

a waiver of premium provision may be included with which kind of health insurance policy?

Disability Income

which of the following is not true regarding a certificate of authority?

It is issued to group insurance participants.

The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

Reduction of Premium

Federal Fair Credit Reporting Act

Regulates consumer reports

when would a misrepresentation on an insurance application be considered fraud ?

When it is intentional and material

In a replacement situation, all of the following must be considered EXCEPT

assets

the classification "small employer" means any person or firm that during the preceding year employed how many employees?

at least 2 no more than 50

managed care

attempts to contain coste by controlling participant behavior

the commissioner has the full power and authority to do all of the following except

draft insurance laws

rescind

remove or cancel

Insured

person covered by the insurance policy; may or may not be the policy owner

Which Universal Life option has a gradually increasing cash value & a level death benefit?

Option A

What is the primary source of information used for insurance underwriting?

The Application

Earned Income

salary, wages, or commissions; but not income from investments, unemployment benefits, and similar sources of income.

insurer (principal)

the company who issues an insurance policy

all of the following benefits are available under social security except?

welfare benefits

owners rights

* Designate and change a beneficiary * Make other changes without beneficiary consent

for how many days of skilled nursing facility care will medicare pay benefits?

100

which of the following is a feature of a disability buyout plan

A lump-sum benefit payment option

which type of care is NOT covered by medicare?

long term care

what are the 3 types of risks?

- standard - substandard - preferred

A producer agent must do all of the following except? -Disclose commissions earned from the sale of the policy. -Explain the policy provisions, riders, & exclusions. -Collect any premium due. -Explain the rating procedures if the policy is rated differently than applied for.

Disclose commissions earned from the sale of the policy.

An insurer received a report regarding a potential insured that includes the insured's financial status, hobbies, & habits. What type of report is that?

Inspection Report

Which of the following is a risk classification used by underwriters for life insurance? -Poor -Normal -Excellent -Standard

Standard

Which policy component decreases in decreasing term insurance?

Face amount

If an applicant for a life insurance policy & person to be insured by the policy are 2 different people, the underwriter would be concerned about:

Whether an insurable interest exists between the individuals.

beneficiary

a person who receives the benefits of an insurance policy.

what type of insurance would be used for a return of premium rider?

increasing term insurance. When added to a whole life policy it provides that at death prior to a given age, not only is the original face amount payable, but also all premiums previously paid are payable to the beneficiary.

the premium of a survivorship life policy compared with that of a joint life policy would be

lower

Standard Risk

person who is entitled to an insurance protection without extra special restrictions - average risk people

Vesting

the right of a participant in a retirement plan to retain part or all of the benefits

Which nonforfeiture option has the highest amount of insurance protection?

Extended term

Which of the following information about the applicant is not included on Part 1 of the application for insurance? -Occupation -Marital status -Medical background -Gender

Medical background

What is the term for the fee a policy owner must pay to the insurance company to maintain coverage?

Premium

if an insurance company offers Medicare supplement policies, it must offer which of the following plans?

plan A

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

Other-insured rider

an individual purchased a $100,000 joint life policy on himself and his wife. Eight years later, he died in a automobile accident. How much will his wife receive from the policy?

$100,000

what is the minimum percentage of a licensee's total volume of premiums in a calendar year that must come from business other than controlled business?

25%

the Patient Protection and Affordable Care Act mandates that insurers provide coverage for dependent children up to age of

26

to comply with fair credit reporting act, when must a producer notify an applicant that a credit report may be requested?

At the time of application

Buyer's Guide

A booklet that describes insurance policies and concepts, and provides general information to help an applicant make an informed decision.

which of the following individuals will be eligible for coverage on the Health Insurance Marketplace?

A permanent resident lawfully present in the U.S.

replacement

A practice of terminating an existing policy or letting it lapse, and obtaining a new one.

which of the following is TRUE about credit life insurance?

Creditor is the policyowner.

when an insured purchased her disability income policy, she misstated her age to the agent. she told the agent that she was 30 years old, when in fact, she was 37. if the policy contains the optional misstatement of age provision

Amounts payable under the policy will reflect the insured's correct age.

warranty

An absolutely true statement upon which the validity of the insurance policy depends.

All of the following are examples of third-party ownership of a life insurance policy EXCEPT?

An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan.

in Texas, how is the commissioner of insurance placed in office?

Appointed by the Governor for a term of 2 years

When must the policy summary for a life insurance policy be delivered to the policy owner?

At the time of policy delivery

An insured's premium increases as a result of her age. Which type of policy does she have?

Attained age

to be eligible for tax credits under the ACA, individuals must have income that is what percent of the Federal Poverty Level?

Between 100% and 400%

a small hardware store owner is involved in a car accident that renders him totally disabled for half a year. which type of insurance would help him pay for expenses of the company during the time of his disability

Business overhead expense policy

what document is required for an insurance company to transact insurance?

Certificate of Authority

what is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan?

Diagnostic and preventive care

In the Executive Bonus plan, who is the owner of the policy, and who pays the premium?

Executive is the owner and the Executive pays the premium.

At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called

Guaranteed insurability

Which of the following would be required to obtain a certificate of authority

HMO

which of the following statements is CORRECT concerning the relationship between medicare and HMOs?

HMOs may oh for services not covered by medicare

which of the following statements is correct concerning the relationship between medicare and HMOs?

HMOs may pay for services not covered by medicare

Preferred Risk

Individuals who meet certain requirements and qualify for lower premiums than the standard risk

what two elements are necessary for a life insurance contract to have a legal purpose?

Insurable interest and consent

What do individuals use to transfer their risk of loss to a larger group?

Insurance

which of the following is correct about a group health insurance policy?

It cannot exclude newborn children from coverage.

in a group health policy, a probationary period is intended for people who

Join the group after the effective date

which of the following documents must be provided to the policy owner or applicant during policy replacement?

Notice Regarding Replacement

During replacement of life insurance, a replacing insurer must do which of the following?

Obtain a list of all life insurance policies that will be replaced

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

Occasional nursing or rehabilitative care

what is another name for social security benefits?

Old-Age, Survivors, and Disability Insurance

a participating insurance policy may do which of the following?

Pay dividends to the policyowner

which of the following applies to partial disability benefits?

Payment is limited to a certain period of time

with respect to the consideration clause, which of the following would be considered consideration on the part of the applicant for insurance?

Payment of premium

Regarding the taxation of Business Overhead policies,

Premiums are deductible, benefits are taxed.

which of the following is correct concerning the taxation of premiums in a key person life insurance policy

Premiums are not tax deductible as a business expense.

Residual Disability

Provides benefits for loss of income when person returns to work after a total. disability, but cannot yet work at a pre- disability level

an insured pays $1,200 annually for her life insurance premium. the insured applies this years $300 worth of accumulated dividends to the next years premium, thus reducing it to $900. what option does this describe?

Reduction of Premium

An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this?

Reinstatement provision

A policy owner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policy owner should have her husband named as the

Revocable beneficiary

which of the following statements concerning a simplified employee pension plan (SEP) is incorrect?

SEPs are suitable for large companies

Equity Indexed Annuities

Seek higher returns

which of the following best details the underwriting process for life insurance?

Selection, classification, and rating of risked

Methods used to pay the death benefits to a beneficiary upon the insured's death are called

Settlement options

A provision found in insurance policies which prevents the insured from collecting twice for the same loss is called

Subrogation

The transfer of an insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses?

Subrogation

which of the following types of risk will result in the highest premium

Substandard risk

approved amount

The amount Medicare determines to be reasonable for a service that is covered under part B of Medicare.

Actual Charge

The amount a physician or supplier actually bills for a particular service or supply.

Under the ACA, health insurance can no longer be underwritten based on which of the following factors?

The applicant's health condition

excess charge

The difference between the Medicare approved amount for a service or supply and the actual charge.

An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true?

The group plan will not pay because the employee was injured at work.

Partial Disability

The inability to perform one or more work duties of a person's own occupation, or inability to work full-time.

an insured purchased a noncancellable health insurance policy 1 year ago. which of the following circumstances would NOT be a reason for the insurance company to cancel the policy?

The insured is in an accident and incurs a large claim

an insured purchased a noncancellable health insurance policy, 1 year ago. which of the following circumstances would NOT be a reason for the insurance company to cancel the policy?

The insured is in an accident and incurs a large claim

which is true about a spouse term rider?

The rider is usually level term insurance

which of the following is not true of life settlements

The seller must be terminally ill

An agent explains the details of a life insurance policy to a client. The agent does not realize, however, that the state has recently rewritten two of the provisions. As a result, the agent inadvertently misrepresents the policy, making it more attractive than it really is. What best describes this situation?

There is no misconduct

which of the following is true regarding optional benefits with long term care policies

They are available for an additional premium

which of the following statements is true concerning irrevocable beneficiaries

They can be changed only with the written consent of that beneficiary.

which of the following is true regarding Medicare supplement policies?

They must be guaranteed renewable

Why should the producer personally delivery the policy when the first premium has already been paid?

To help the insured understand all aspects of the contract.

what is the purpose of key person insurance

To minimize the risk of financial loss caused by the death of a key employee

a policyowner has a health insurance policy with his wife listed as the primary beneficiary. he would like to change the primary beneficiary to his sister. which of the following is true?

Unless the policy designated the current beneficiary as irrevocable, the policyowner can make the change at any time.

When is controlled business legal?

When the commissions from controlled business do not exceed the aggregate commissions on all the other business (specific limits may vary from state to state)

all of the following qualify for medicare part A except

anyone who is willing to pay a premium

In a group health policy, a probationary period is intended for people

Who joined the group after the effective date.

Affordable Care Act

a federal law that mandates increased preventive, educational, and community-based health care services, and that established the health insurance marketplace to make health coverage available to any uninsured individuals

when the policy owner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option?

a fixed amount

cash value

a policy's savings element or living benefit

surrender

early termination of a policy by the policyowner

An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any, would be paid by the secondary insurer?

$500

L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay?

$900 (deductible + 20% of the bill after the deductible [20% of $2,000])

Medicaid

- medical care for those whose income and resources are insufficient - federal and state aid

The premium charged for exercising the Guaranteed Insurability Rider is based upon the insured's

Attained age

all of the following are duties and responsibilities of producers at the time of application except

Change any incorrect statement on the application by personally initialing next to the corrected statement.

All of the following information about the applicant is identified in the General Information section of a life insurance application except? -Gender. -Occupation. -Education. -Age.

Education.

a married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. which policy is that?

Joint Life Policy

activities of daily living

The basic activities a person usually accomplishes during a normal day, such as eating, dressing, and bathing.

claimant

a person who submits a claim for payment of benefits

when transacting business in this state an insurer formed under the laws of another country is known as a/an

alien insurer

Regarding a PPO, which of the following is correct when selecting a primary care physician?

all of the above are correct

according to the provisions of the Patient Protection and Affordable Care Act, all of the following are required preventive care services EXCEPT

cervical cancer exams for all women starting at age 40

alexander has a policy with his ex wife as its beneficiary. what provision allows him to chan her the beneficiary to his new wife?

change of beneficiary

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to

insured

All advertisements are the responsibility of the

insurer

which of the following entities can legally bind coverage

insurer

In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?

insurer and insured

which of the following entities has the authority to make changes to an insurance policy?

insurer's executive officer

Medicare Part B

offered to anyone who's enrolled in part A coverage: - doctor services - outpatient hospital services - home health visits - other medicare and health services - prescription drugs (limited coverage) - outpatient treatment of mental illness - yearly "wellness" visit

where in the long term care policy must the insurer state the renewal provision?

on the first page

Nonoccupational Coverage

only covers claims that result from accidents or sicknesses occurring off the job

health insurance contracts are unilateral. what does that mean?

only one party makes a legally enforceable promise

if a person is compensated for a testimonial in an advertisement which of the following statements should be included in the advertisement?

paid endorsement

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?

$100,000

an insured purchased a 15 year level term life insurance policy with a face amount of $100,000. the policy contained an accidental death rider, offering a double indemnity benefit. the insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. what amount would his beneficiary receive as a settlement

$200,000

nonforfeiture law

* guarantees benefits that cannot be forfeited (lost) by the policyowner * 3 minimum nonforfeiture options: reduced paid-up, extended term, and shortened benefit period.

Medicare

- A federal program of health insurance for persons 65 years of age and older - have been entitled to social security disability income benefits for 2 years - have a permanent kidney failure

Workers Compensation

- A form of insurance paid by the employer providing cash benefits to workers injured or disabled in the course of employment. - suffer a work related injury or sickness - covered occupation

an insured purchased a monthly premium of $100 for her health insurance. what would be the duration of the grace period under her policy?

10 days

how long is the grace period in group policies?

31 days

what percentage of continuing education hours must be in a classroom setting?

50%

when delivering a policy, which of the following is an agent's responsibility?

Collect payment at time of delivery (if payment has not already been collected)

which of the following provisions states the insurers right to change premium amounts

Continuation Provisiona

which of the following is NOT an exclusion in medical expense insurance policies?

Coverage for dependents

Items stipulated in the contract that the insurer will not provide coverage for are found in the

Exclusions

in order for an insured under Medicare Part A to receive benefits for care in a skilled nursing facility, which of the following conditions must be met?

The insured must have first been hospitalized for 3 consecutive days.

all of the following statements concerning the use of life insurance as an executive bonus are correct except

The policy is owned by the company

which of the following CANNOT be included along with illustrations used to sell life insurance?

Vanishing premium information

A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of

coercion

forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as

coercion

the provision that provides for the sharing of expenses between the insured and the insurance company is

coinsurance

moral turpitude

conduct that is contrary to community standards of justice, honesty, and good morals

which of the following statements disability insurance policy ?

is renewable at the insured's option to a specified age

Children's riders attached to whole life policies are usually issued as what type of insurance?

term

cease and desist

to stop or discontinue

an advertisement must accurately represent which of the following?

* in insurer's assets * the insurers corporate structure * the insurer's financial standing

insurance guaranty association

* nonprofit * protects insureds against insolvent insurers * funded by member insurers * pays up to specified limits

Medicare Part D "donut hole"

- prescription drug benefit - optional coverage through private prescription plans that contract with medicare

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?

Authorized or admitted

A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?

Automatic premium loan

A man is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim?

Claim is denied if his policy contains the Illegal Occupation provision

the provision that states that both the printed contract and a copy of the application form the contract between the policyowner and the insurer is called the

Entire Contract

a guaranteed renewable disability insurance policy

Is renewable at the insureds option to a specified age

Carriers

Organizations that process claims that are submitted by doctors and suppliers under Medicare

Intermediaries

Organizations that process inpatient and outpatient claims on individuals by hospitals, skilled nursing facilities, home health agencies, hospices and certain other providers of health services.

a rider attached to a life insurance policy that provides coverage on the insureds family members is called the

Other-insured rider

all of the following are true regarding rebates EXCEPT

Rebates are allowed if it's in the best interest of the client.

An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of?

Rebating

which of the following is NOT covered under plan A in medigap insurance?

The Medicare Part A deductible

a husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouses coverage. if of one of them incurs hospital expenses, how will those expenses likely be paid?

The benefits will be coordinated

which of the following is NOT a feature of a guaranteed renewable provision?

The insurer can increase the policy premium on an individual basis

which of the following is true regarding elimination periods and the cost of coverage

The longer the elimination period, the lower the cost of coverage

all of the following are true of key person insurance EXCEPT

The plan is funded by permanent insurance only.

all of the following are true regarding the guaranteed insurability rider except

This rider is available to all insureds with no additional premium.

What is the purpose of the buyer's guide?

To allow the consumer to compare the costs of different policies.

The purpose of managed care health insurance plans is to

To control health insurance claims expenses

what is the purpose of coinsurance provisions

To help the insurance company to prevent overutilization of the policy

what is the purpose of insurance guaranty associations?

To protect policyowners, insureds and beneficiaries from financial losses caused by insolvent insurers

which of the following would best describe total disability?

a persons ability to work is significantly reduced or eliminated for the rest of her/his life

What is a trial close?

a questioning process to see how the prospect feels at a certain time

A typical Accidental Death & Dismemberment policy covers all of the following losses EXCEPT

a. Limb. b. Life. **c. Income. d. Eyesight.

in reference to the standard medicare supplement benefit plans, what does the term standard mean?

all providers will have the same coverage options and conditions for each plan

the insurer's are allowed to disclose the HIV-related test result to all of the following EXCEPT

another insurer

fraud

any misrepresentation of a material fact, made know king and with the intent to deceive ; an act of deceit or cheating

Pretax contribution

contribution made before federal and/or state taxes are deducted from earnings.

the purpose of managed care jálate insurance plans is to

control health insurance claims expenses

which of the following is a specific dollar amount or a percentage of the cost of care that must be paid by an HMO member?

copayment

what is the main difference between coinsurance and copayment?

copayment is the set dollar amount.

which of the following is used to compare the cost of one life insurance policy against another in order to guide prospective purchases to policies that are competitively priced?

cost comparison methods

A partnership buy-sell agreement in which each partner purchases insurance on the life of each of the other partners is called a

cross purchase plan

if the insured has the right to keep a long-term care insurance policy in force by making timely premium payments, and the insurer may not make any change to the policy or decline to renew it, the policy is

guaranteed renewable

any inducement offered to the insured in the sale of an insurance policy that at is not specified in the policy is an unlawful practice known as

rebating

which of the following insurers are owned by stockholders?

stock

taxable

subject to taxation, payable to state and federal government

hospice care is intended for

terminally ill

which of the following statements regarding the Change of Beneficiaries Provision is false?

the policy owner has the right to change beneficiaries in any case

which of the following is the best reason to purchase life insurance rather than annuities

to create an estate

what is the purpose of the life insurance guaranty association

to help protect policy owners and beneficiaries against financial loss caused by the insolvency of an insurance company

eligibility for affordable care act

* must be a U.S. citizen or national or be lawfully present in the united states * must live in the united states * cannot be currently incarcerated

Maintenance and duration of license

* must be renewed every 2 years * can be reinstated within a short period of time after lapse * continuing education - must be completed every reporting period * disciplinary actions: - suspension, revocation or refusal to renew license - cease and desist order - monetary penalties

viatical settlements

* third party contracts * viator receives a percentage of the policy's face amount * may be rescinded within 15 days of the payment

The usage of words or symbols that are similar to what entity is prohibited in life insurance advertisements?

federal government

Defamation

maliciously critical statements about a person or company.

exempt

not subject to an obligation

all of the following are covered by part A of medicare EXCEPT

physicians and surgeons services

An agent licensed in Texas is moving to kansas. which of the following applies?

the agent has 30 days to notify the department of insurance of the new address

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

the employer is the owner and beneficiary

What is the purpose of a conditional receipt?

It is intended to provide coverage on a date earlier than the date of the issuance of the policy.

What describes the specific information about a policy?

Policy Summary

what are the elements of a legal contract?

• agreement • consideration • competent parties • legal purpose

an insured purchased a 15-year level term life insurance policy with a face amount of $100,000. the policy contained an accidental death rider, offering a double indemnity benefit. the insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. what amount would his beneficiary receive as settlement?

$200,000 the beneficiary would most likely receive twice the face value of the policy, since his fatal injuries were caused by an accident and he died within the 90-day benefit limit stipulated in most policies.

what is the purpose of insurance

- transfers the risk of loss from an individual to an insurer. - based on principle of indemnity

The term "illustration" in a life insurance policy refers to:

A presentation of non-guaranteed elements of a policy.

premium

A specific sum of money paid by the insured to the insurance company in exchange for financial protection against loss.

What is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?

Buyer's Guide

All of the following are duties & responsibilities of producers at the time of application except? -Change any incorrect statement on the application by personally initialing next to the corrected statement. -Explain the nature & type of any receipt the producer is giving to the applicant. -Probe beyond the stated questions if the producer feels the applicant is misrepresenting or concealing information. -Check to make sure there are no unanswered questions on the application.

Change any incorrect statement on the application by personally initialing next to the corrected statement.

What report includes information regarding a person's credit, character, reputation, & habits?

Consumer Report

An individual has just borrowed $10,000 from his bank on a 5 year installment loan requiring monthly payments. What type of life insurance policy would be best suited for this situation?

Decreasing term

If a change needs to be made to the application for insurance, the agent may do all of the following except? -Erase the incorrect answer & record the correct answer. -Draw a line through the first answer, record the correct answer, & have the applicant initial the change. -Note on the application the reason for the change. -Destroy the application & complete a new one.

Erase the incorrect answer & record the correct answer.

During partial withdrawal from a universal life policy, which portion will be taxed?

Interest

In the underwriting process, it was determined that the applicant for life insurance is in poor health & has some dangerous habits. Which of the following is true concerning the policy premium? -The applicant's habits & health do not affect the premiums. -It will likely be lower because the applicant is a preferred risk. -It will likely be higher because the applicant is a substandard risk. -It will likely be the average premium issued to standard risks.

It will likely be higher because the applicant is a substandard risk.

which of the following statements about a suicide clause in a life insurance policy is TRUE?

Suicide is excluded for a specific period of years and covered thereafter.

upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. what does this mean?

The beneficiary will only receive payments of the interest earned on the death benefit.

An agent tries to sell insurance over the phone to an applicant who appears to be confused, but is eventually able to give enough information for the application to be competed. After the policy was issued, the agent talked to the insured's family, & they explained that the insured was recovering from a surgery & might have been under the influence of medication at the time of application. What could happen?

The policy may be voided if it can be proven that the applicant was not capable of making a buying decision at the time of application.

An agent & the applicant for a life insurance policy fill out & sign the application. However, the applicant does not wish to give the agent the initial premium, & no conditional receipt is issued. When will coverage begin?

When the agent delivers the policy, collects the initial premium, & the applicant completes an acceptable Statement of Good Health.

Gross Income

a person's income before taxes or other deductions

If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to

charge a higher premium.

Contracts that are prepared by one party & submitted to another party on a "take it or leave it" basis are classified as

contracts of adhesion.

Who must pay for the cost of a medical examination required in the process of underwriting?

insurer

lapse

policy termination due to nonpayment of premium

deferred

postpone until a future time

FIFO (first in, first out)

principle under which it is assumed that the funds paid into the policy first will be paid out first.

Face Amount

the amount of benefit stated in the life insurance policy

Attained Age

the insured's age at the time the policy is issued or renewed

who bears the investment risk on whole life?

the insurer

Mode

the more frequently premium is paid, the higher the premium.

Policyowner

the person entitled to exercise the rights and privileges in the policy

Which of the following policies would have an IRS required corridor or gap between the cash value & the death benefit? -Universal Life - Option A -Universal Life - Option B -Equity Indexed Universal Life -Variable Universal Life

Universal Life - Option A

If an insurer issued a policy based on the application that had unanswered questions, which of the following will be true? -The policy will be void. -The insurer may deny coverage later, because of the information missing on the application. -The application will be interpreted as if the insurer waived its right to have an answer on the application. -The policy will be interpreted as if the insured did not have an answer to the question.

The application will be interpreted as if the insurer waived its right to have an answer on the application.

which of the following is true regarding the annuity period?

It may last for the lifetime of the annuitant

insurers are classified according to their domicile. what are the 3 types of insurers?

domestic, foreign, alien

illustration

means a presentation or depiction that includes non guaranteed elements of a life insurance policy over a period of years.

Mode

the more frequently premium is paid; the higher the premium

group life

* termination and conversion rules * policy provisions: - incontestability period - 2 years - grace period - 31 days - misstatement of age - insurer ageists premium and benefits

group life insurance is a single policy written to provide coverage to members of a group. which of the following statements concerning group life is correct?

100% participation of members is required in noncontributory plans.

The Insurance Commissioner may examine the affairs of any insurer as often as necessary, but not less frequently than once every

5 years

If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following?

Adjust the benefit in accordance with the increased risk.

An insured in a group policy has misstated his age on the insurance application. As a result, the insurer will most likely

Adjust the premium

How can a new physician be added to the PPO's approved list?

Agree to follow the PPO standards and charge the appropriate fees.

The full premium was submitted with the application for life insurance, & the policy was issued 2 weeks later as requested. When does the policy coverage become effective?

As off the application date.

the insurance policy, together with the policy application and any added riders form what is known as

Entire Contract

an applicant is denied insurance because of information found on a consumer report. which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

Fair Credit Reporting Act

under the privacy rule for HIPAA, protected information includes all individually identifiable health information

Held or transmitted in any form

which of the following describes taxation of individual disability income insurance premiums and benefits?

Premiums are not tax deductible, and benefits are not taxable.

What would help prevent a universal life policy from lapsing?

Target premium

which of the following is NOT covered under Plan A in medigap insurance?

The Medicare Part A deductible

limiting charge

The maximum amount a physician may charge a medicare beneficiary for a covered service if the physician does not accept assignment

An absolute assignment is a:

a permanent transfer of ownership rights

Applicant/Proposed insured

a person applying for insurance

The provision in a health insurance policy that the insurer cannot refer to any document that is not contained in the contract is the

entire contract clause

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?

foreign

What provision in a life insurance policy extends coverage beyond the premium due date?

grace period

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as

legal actions

If a dental plan is integrated, it is combined with what type of plan?

medical

Twisting

misleading comparison of policies to persuade ins ted to cancel it switch policies

Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?

principal sum

Subrogation

process by which an insurer seeks recovery of the amount paid to the insured from a third party who amy gave caused the loss

according to the state nonforfeiture law for life insurance policies, insurers must offer at least one of the following nonforfeiture options EXCEPT

reduction of premium

In terms of parties to a contract, which does not describe competent party

the person must have completed secondary education

all of the following statements concerning the use of life insurance an an executive bonus are correct EXCEPT?

the policy is owned by the company

what is the purpose of the life insurance guaranty association?

to help protect policy owners and beneficiaries against financial loss caused by the insolvency of an insurance company

a medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as

usual, customary, and reasonable

agent regulation

* only one license of the same type is allowed per agent * must be licensed in the line of authority for which the agent transacts insurance. * avoid unfair trade practices

an individual covered under a group life insurance policy may convert the policy to any of the following EXCEPT

15 year level term

testimonials

statements or endorsements made by clients based on their experience with products or services

within how many days must an insured notify the insurer of a child's birth and pay any required fees?

31 days

a deductible is

a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits

Upon policy delivery, the producer may be required to obtain any of the following except? -Payment of premium. -Delivery receipt. -Signed waiver of premium. -Statement of good health.

Signed waiver of premium.

indemnity

a principle of reimbursement on which insurance is based; in the event of loss, an insurer reimburses the beneficiaries for the loss

who bears the investment risk on variable life?

the policy owner

what are the contract characteristics?

• adhesion - one party prepares the contract, the other party must accept it as is. • aleatory - exchange of unequal amounts. • conditional - certain conditions must be met. • unilateral - only one of the parties to the contract is legally bound to do anything.

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. What insurance principle has the insured violated?

Consideration

beneficiary

a person who receives the benefits of an insurance policy

LIFO (last in, first out)

principle applied to asset management in life insurance products, under which it is assumed that the funds paid into the policy last will be paid out first.

What is a definition of a unilateral contract?

One-sided; only one party makes an enforceable promise.

the dividend option in which the policy owner uses dividends to purchase a term policy for one year is referred to as the

One-year term option.

Substandard Risk

applicants are not acceptable at standard rates because of physical condition, personal or family history of disease, occupation, or dangerous habits.

what are the 3 key factors for life insurance?

- morality - interest - expense

The insured is also the policy owner of a whole life policy. What age must the insured attain in order to receive the policy's face amount?

100

The term "fixed" in a fixed annuity refers to all of the following EXCEPT

death benefit

When Y applied for insurance & paid the initial premium on Aug 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than standard. Y was killed in an automobile accident on Aug 22, before the policy was issued. In this case, the insurance company will

issue the policy anyway & pay the face value to the beneficiary.

Which of the following would be considered a non-medical insurance application? -An application submitted with the Agent's Report. -Any application for life insurance. -An application on which the medical information is completed by the applicant & the agent only. -An application that does not ask any questions about the applicant's medical history.

An application on which the medical information is completed by the applicant & the agent only.

social security benefits

- OASDI- old age, survivors, and cdisability insurance - provides disability income benefits - individuals must meet proper insured status, def of disability, and waiting period requirements

Coordination of Benefits (COB)

- avoid duplication of benefit payments and over insurance when an individual is covered under multiple group health insurance plans - established primary plan

what are the 5 basic characteristics of managed care plans?

- controlled access to providers - comprehensive case management - preventive care - risk sharing - high quality care

what are the requirements to qualify for disability benefits?

- individuals must have earned 40 work credits, 20 of which were earned in the 10 years before the disability - 5-month waiting period - benefits based on PIA

Medicare Part C (Medicare Advantage)

- requires enrollment in parts A & B - provided by an approved health maintenance organization or preferred provider organization

Medicare Part A (Hospital Insurance)

- when an individual first becomes eligible for medicare (starting 3 months before turning 65 & ending 3 months after 65 birthday) - general enrollment period- between jan 1- march 31st each year - special enrollment period - at any time during the year of the individual or her/his spouse is still employed and covered under a group health plan coverage: - impatient hospital care - skilled nursing facility - home health care - hospice care

a license may NOT be denied, suspended, or revoked if the licensee

submits and unsigned policy application

an employee is injured in a construction accident, rendering him unable to work for a year. which of the following plans would provide him with medical expense coverage and income assistance?

workers compensation

Insurance is the transfer of

risk.

how long is the incontestability period in group life insurance policies issued in Texas?

2 years

an insured has medicare part D coverage. upon reaching the initial benefit limit, what percentage of the prescription drug cost is the insured responsible for paying?

25%

the commissioner of insurance issues a cease and desist order to an agent. if the agent wishes to contest the charges in court, how many days after the order was issued does the agent have to make the request?

30 days

how long must producer maintain records of continuing education course completion

4 years

the insurance commissioner may examine the affairs of any insurer as often as necessary, but not less frequently than once every

5 years

a hospital indemnity policy will pay

A benefit for each day the insured is in a hospital.

which of the following does the Insuring Clause NOT specify?

A list of available doctors

which of the following is not required to be stated in the outline of coverage provided with a long term care policy

Basic information about supplementary policies

which of the following statements regarding business overhead expense policies is NOT true

Benefits are usually limited to six months.

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

Rates by class

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day

Elimination period

The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT

The insured's age at death

which of the following is NOT required on an illustration used in the sale of a life insurance policy?

The name of the primary and secondary beneficiaries

which provision states that the insurance company must pay Medical Expense claims immediately?

Time of Payment of Claims

Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain

a statement that is sufficiently clear to identify the insured and the nature of the claim

which of the following provisions states the insurer's right to change premium amounts?

continuation provision

dependent children benefits

eligible dependents - coverage may not be terminated if child is incapable of self support due to physical or mental handicap

if an insured is not required to pay a deductible, what kind of coverage does he/she have?

first dollar

which of following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization

fraternal benefit society

all of the following are mandatory life insurance policy provisions except

policy backdating

If the Commissioner/Superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?

Cease and desist order

which of the following will vary the length of the grace period in health insurance policies?

The mode of the premium payment

which of the following definitions would make it easier to qualify for total disability benefits?

The more liberal "own occupation"

which of the following is not true of life settlements?

The seller must be terminally ill

which of the following entities is not an insurer b an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization?

fraternal benefit society

how long is a newborn covered without notification to the insurer?

from the moment of birth, and the insurer must be notified within 31 days

an insurer devises an intimidation strategy in order to corner a large portion of the insurance market. which of the following describes this practice?

illegal

which of the following occupations would NOT directly help to qualify someone for the office of Commissioner of Insurance?

insurance agent

a guaranteed renewable health insurance policy allows the

policyholder to renew the policy to stated age, with the company having the right to increase premiums on the entire class.

company Y had 20 employees on that staff last year. Which of the following terms most precisely labels the company's group insurance classification?

small employer

which of the following terms describes the specified dollar amount behind which the insured no longer participates in the sharing of expenses?

stop-loss limit

an insurer advertises a health policy that is covered by the life and health insurance guaranty association. he advertisement includes a short list of benefits and approximate rates. the end of the advertisement includes statement that protection is provided by the guaranty association. which of the following is true?

mentioning the Guaranty Association in advertisements is considered to be unfair trade practice?

Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is

monthly

in an individual long term care insurance plan, the insured is able to deduct the premiums from taxes. what income taxation will be imposed on the benefits received?

no tax

if a person is compensated for a testimonial in an advertisement, which of the following statements should be included in be advertisement?

paid endorsement

all of the following are mandatory life insurance policy provisions EXCEPT

policy backdating

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500

When is the earliest a policy may go into effect?

When the application is signed & a check is given to the agent.

nonprofit organization

an organization that uses its surplus to fulfill its purpose instead of distributing the surplus to its owners or members.

Policy endowment

maturity date

agents ( producers) report

provides agents personal observations concerning the proposed insured

An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin 2 years after the annuity was purchased. What type of annuity is it?

Deferred


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