Life Insurance Test

An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75 for the total monthly cost of $100. IF the employee leaves the company, what would be his max monthly premium for COBRA. coverage?

$102

cobra length of coverage

* 18 months - After qualifying event * 36 months - for dependents after events such as death of the employee, divorce or legal separation

Preferred Provider Organizations (PPO)

-group of physicians and hospitals that contract to provide medical care services at a reduced fee -members can use any physician they choose, but are encouraged to use approved physicians who have previously agreed upon fees

cobra qualifying events

1. voluntary termination of employment 2. termination of employment for reasoning other than misconduct 3. employment status changed from full time to part time

what is the period of coverage for events such as death or divorce under COBRA?

36 months

an insured owns a 50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently 20,000. What would be the face amount of the new term policy?

50,000

for how long is an insurance company allowed to defer policy loan requests?

6 months

An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?

9800

basic hospital expense coverage

Covers hospital room and board, and miscellaneous expenses, such as lab and x-ray charges and medicines while insured is confined to a hospital.

probationary period

Period after the policy starts during which benefits won't be paid for illness-related disabilities

Health Maintenance Organizations (HMOs)

Preventive care, limited service area/choice of providers, copayments, prepaid basis

basic medical expense coverage

Provides coverage for nonsurgical physician's services. Also can be purchased to cover emergency accident benefits, maternity benefits, mental and nervous disorders, hospice care, home health care, outpatient care, and nurses' expenses

which of the following named beneficiaries would not be able to receive the death benefit directly from the insurer in the event of the insured's' death?

a minor son of the insured

What is the term used for an applicant's written request tot an insurer for the company to issue a contract, based on the information provided?

application

major medical policies coverage

comprehensive, catastrophic, benefits for injury/illness

HDHP - high deductible health plan

features higher annual deductibles and out of pocket limits than traditional health plans (lower premiums)

an individual is purchasing a permanent life insurance policy with a face value of 25,000. While this Is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

guaranteed insurability option

which of the following settlement options in life insurance is known as straight life?

life income

benefit limitations

maximum benefits an insurer is willing to accept for an indiv. risk based on percentage of insured's past earnings

which of the following explains the policyowners right to change beneficiaries, choose options, and receive proceeds of a policy?

owner's rights

Social insurance supplement (SIS) or social security riders

supplement or replace benefits payable under social security disability

type types of major medical policies

supplemental and comprehensive

short-term medical (limited benefit plan)

temporary coverage for people in transition

group insurance underwriting

• Every eligible member of group must be covered regardless of physical condition, age, sex, or occupation • Cost varies by ratio of males to females and the average age of the group • Evidence of insurability generally not required

accidental death and dismemberment coverage

• Only pays for accidental losses • Is considered a pure form of accident insurance • Principal sum paid for accidental death • Capital sum (percentage of the principal sum) paid for dismemberment

recurrent disability

Specifies period of time during with the recurrence of an injury or illness will be considered a continuation of a prior disability

which is NOT a characteristic of group health insurance?

a policy is issued to each insured individual

dread disease policy (limited benefit plan)

a variety of benefits for a specific disease such as cancer policy or heart disease policy

which of the following individuals is eligible for a Health Savings Account?

allison is insured by a High Deductible Health Plan (HDHP)

long-term care insurance policies must cover which of the following?

alzheimers

An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do?

ask her to sign a statement of good health

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

assets

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

occasional visits by which of the following medical professionals will NOT be covered under LTCs home health care?

attending physician

what document describes an insured's medical history, including diagnoses and treatments?

attending physician's statement

long term care policies

available as individual policies, group policies, or as riders to life insurance policies

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

custodial care

care for a person's activities of daily living provided in an institutional setting or in the patient's home

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

collect payment at time of delivery

point of service plans

combo of HMO and PPO plans not locked ino one plan; allowed to choose depending on need for medical service

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

common disaster

accident (limited benefit plan)

coverage for disability, medical care, death or dismemberment resulting from an accident

reason for long term care policies

coverage for indiviuals who require living assistance at home/nursing home facility

basic surgical expense coverage

covers cost of surgeons services, whether the surgery is performed in or out of the hospital

key person disability

covers the potential loss of business income and the expense of hiring an training a replacement for a key person business owns the contract, pays the premium, and is the beneficiary

dental plans (limited benefit plan)

covers the treatment, care and prevention of dental disease and injury to the insured's teeth

skilled care

daily nursing and rehab care provided by medical personnel

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

diagnostic and preventative care

which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?

disability buy-sell

employer-sponsored plan (limited benefit plan)

employer-provided group coverage; employees must meet service requirements and work full time

types of basic group insurance

employer-sponsored and association sponsored

The HMO Act of 1973 required employers to offer an HMO plan as an alternative tot regular health plans if the company had more than 25 employees. How has this plan since changed?

employers are no longer forced to offer HMO plans

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

entire contract

All of the following are dividend options except

fixed period installments

flexible spending account (FSA)

funded by salary reduction and employer contributions - fsa benefits are subject to annual maximum and "use or lose" rule

What required provision protects against unintentional policy lapse?

grace period

basic group insurance

group formed for a purpose other than obtaining group health insurance

is long term care renewable?

guaranteed renewable, but insurers may increase premiums

before an agent delivers a policy, the insurer makes a last-minute change to the policy. THe agent informs the insured of this change, and he accepts it. In response, the agent must...

have the insured sign a statement acknowledging that he is aware of the change

under the Privacy Rules for HIPAA, protected information includes all individually identifiable health information

held or transmitted in any form

HSA - health savings account

indiv. covered by a high deductible health plan can make a tax-deductible contribution to HSA, use to pay for out of pocket medical expenses

which of the following entities can legally bind coverage?

insurer

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

insurer

which of the following statements is NOT correct concerning the COBRA Act of 1985

it requires all employers, regardless of the numbere or age of employees, to provide extended group health coverage

Benefit period

length of time monthly disability benefit payments last

length of long term care coverage

must provide at least 12 months of consecutive coverage in a setting other than an acute care unit of a hospital

An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point?

neither approved the application nor issued the policy when the agent receives the application and issues a conditional receipt, the insurer has not yet approved the application and issued the policy

An insured purchased a disability income policy with a 10 year benefit period. The policy stated a 20 day probationary period for illness. If the insured is hospitalized with an illness 2 weeks after the policy was issued,, how much will the policy pay?

nothing, illness is not covered during the first 20 days of the contract

intermediate care

occasional nursin or rehab care provided for stable conditions that require daily medical assistance on a less frequent basis than skilled nursing care

How many pairs of glasses in a 12 mo period will a vision expense insurance plan cover

one

which of the following riders would NOT cause the Death Benefit to increase?

payor benefit rider

critical illness (limited benefit plan)

pays a lump sum to the insured upon diagnosis and survival of a critical illness

Misc hospital expenses

pays for other misc. expenses associated with a hospital stay (multiple of the room and board charge or as a flat amount)

underwriting a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT

premiums always stay the same

under the accidental death and dismembership coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?

principal sum

home convalescent care

provided by a long term care facility, a home health care agency or a hospital in the insured's home under a planned program est. by his/her attending physician

home health care

provided by registered nurses, licensed practical nurses, licensed vocational nurses, or community based org. like hospice in ones home

hospital indemnity (limited benefit plan)

provides a specific amount on a daily, weekly or monthly basis while the insured is confined to a hospital

adult day care

provides for functionally impaired adults on less than 24 hr basis

respite care

provides relief to the family caregiver, adult day centers may also provide this type of relief

business overhead expense policy

reimburses small business owners for overhead expenses incurred while the business owner is totally disabled

disability income insurance

replaces lost income in the event of a disability

which of the following special policies covers unusual risks that are NOT normally included under accidental death and dismemberment coverage?

special risk policy

presumptive disability

specifies condition that qualify insured for full disability benefits

business disability buyout policy

specifies who will purchase a business partners interest in case of disability

what is the best way to change an application?

start over with a fresh application

If an applicant does not receive a copy of the new insurance policy, who would be held responsible?

the agent

Whose responsibility is it to determine all of the questions on an application have been answered?

the agent

if an applicant does not receive a copy of the new insurance policy, who would be held responsible?

the agent

An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that charge?

the applicant

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

the applicant

Which is true regarding obtaining underwriting sources?

the applicant must be informed of the sources contacted and how the information is being gathered

which of the following is true about the requirements regarding HIV exams?

the applicant must give prior informed written consent

the period of time immediately following a disability during which benefits are not payable is

the elimination period

Which of the following entities can legally being coverage?

the insurer

An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?

the old policy should stay in force until the new policy is issued

On a health insurance application, a signature is required from all of the following individuals EXCEPT

the spouse of the policyowner

vision/hearing plans (limited benefit plan)

type of group health insurance that covers eye exams and eyeglasses, or hearing aids on a limited basis

elimination period

waiting period that lasts from the onset of disability until benefit payments starts