pt 2 life and health

Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which best addresses this concern is -Business Overhead Expense -Disability Income -Key Employee Life -Contributory

Business Overhead Expense

Which Accident and Health policy provision addresses preexisting conditions? -proof of loss -legal actions -time limit on certain defenses -payment of claimes

time limit on certain defenses

An insured owns an individual Disability Income policy with a 30-day Elimination Period for sickness and accidents and a monthly indemnity benefit of $500. If the insured is disabled for 3 1/2 months, what is the maximum amount he would receive for an approved claim? -$500 -$1,000 -$1,250 -$1,750

$1,250 (3.5 months - 1month elimination period = 2.5 months. 2.5 x $500 monthly indemnity)

What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy? -premiums may increase at time of renewal -premiums may increase at any time -policy may be renewed at the discretion of the insured -policy may be amended by insurer at any time

-premiums may increase at time of renewal

A Long-Term Care policy must offer a minimum benefit period of how many months? -12 -18 -24 -30

12

What is the minimum number of Activities of Daily Living (ADL) an insured must be unable to perform to qualify for Long Term Care benefits? -1 -2 -3 -4

2

S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations? -36 -18 -15 -6

36

Qualified Long-Term Care policies may take into consideration an applicant's pre-existing conditions for a maximum of not more than ____ month(s) prior to the effective date of coverage. -1 -6 -12 -24

6

G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disable. The type of policy which best addresses this concern is -Business Overhead Expense -Disability Income -Key Employee Life -Contributory

Business Overhead Expense

Which of the following are not managed care organizations? -Point-of-Service (POS) -Preferred Provider Organization (PPO) -Medical Information Bureau (MIB) -Health Maintenance Organization (HMO)

Medical Information Bureau (MIB)

The Consideration clause in a life insurance contract contains what pertinent information? -summary of benefits -offer and acceptance -entire contract -amount of premium payments and when they are due

amount of premium payments and when they are due

Which premium schedule results in the lowest cost to the policyowner? -semi-annual -monthly -quarterly -annual

annual

An agent may legally share commissions only with -an insured if the amount is less than $15 -an insured, with prior approval from the Commissioner of Insurance -another agent who has an appointment with a different insurance company -another agent who is license in the same line of insurance

another agent who is license in the same line of insurance

A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following? -guaranteed insurability rider -aviation exclusion -impairment rider -accidental death benefit rider

aviation exclusion

An applicant for an agent's license must meet which of the following requirements? -be honest, trustworthy, and reliable -be at least 17 years of age -have been a resident of Texas for at least 6 months -post a $100,000 Performance Bond

be honest, trustworthy, and reliable

A Health Reimbursement Arrangement must be established -with employee funding -with other employer-sponsored benefit plans -by the employer -only during specific open enrollment periods

by the employer

A Whole Life Insurance Policy endow when the -premium paid equals the death benefit -death proceeds are paid -cash value equals the death benefit -cash value plus dividends equal the death benefit

cash value equals the death benefit

P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim? -claim will be denied and policy terminated -claim will be partially paid -claim will be paid -claim will be denied

claim will be denied

A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was take 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim? -claim will be paid and coverage will remain in force -claim will be denied and coverage will remain in force -claim will be denied and coverage will be cancelled -claim will be denied, the coverage cancelled, and all premiums paid will be refunded

claim will be paid and coverage will remain in force

An agent who tells claimants that their rights may be impaired if they fail to complete a release form within a given period of time could be guilty of -defamation -rebating -coercion -discrimination

coercion

Insurance contracts are known as ___ because certain future conditions or acts must occur before any claims can be paid -consideration -unilateral -aleatory -conditional

conditional

All of the following statements about health coverage for newborns are correct except -coverage begins and benefits are payable from the moment of birth -coverage includes necessary care and treatment of congenital defects -coverage during the first year is limited to congenital defects -continued coverage after the first 31 days is dependent on notification

coverage includes necessary care and treatment of congenital defects

How are surrender charges deducted in a life policy with a rear-end loaded provision? -deducted from the death benefit -deducted when the policy is discontinued -deducted from policy's cash value -deducted when assigned to another policyowner

deducted when the policy is discontinued

Medicare Part A and Part B do not pay for -dental work -hospitalization -skilled nursing care -physical therapy

dental work

M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for? -Claim payment is equal to physician's actual charges -claim payment is negotiated between physician and patient -determined by the schedule of benefits from the hospital -determined by the terms of the policy

determined by the terms of the policy

How are Roth IRA distributions normally taxed? -10% penalty tax is applied -taxed as ordinary income -capital gains tax is applied -distributions are received tax-free

distributions are received tax-free

N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot? -misrepresentation -exclusion -collateral assignment -concealment

exclusion

An enrollee of a Health Maintenance Organization (HMO) may be cancelled or non renewed for which of the following reasons? -failure to pay for coverage -marriage to a person with a pre-existing condition -excessive use of health care benefits -refusing HMO advise to quit smoking

failure to pay for coverage

What kind of special need would a policyowner require with an Adjustable Life insurance policy? -level premiums -flexible premiums -flexible nonforfeiture options -level death benefits

flexible premiums

With a Basic Medical Expense policy, what does the hospitalization expense cover? -hospital room and board -hospital administration expenses -surgeon's fees -physician fees

hospital room and board

Which of these is not a reason for purchasing life insurance on the life of a minor? -if both parents were to die, it would provide death benefits to the child -provides funds for final expenses if the child were to die -provides living benefits for the child's college education -provides child with insurance now, in case the child becomes uninsurable later

if both parents were to die, it would provide death benefits to the child

W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices except a -flexible premium deferred annuity -variable annuity -immediate annuity -straight life annuity

immediate annuity

An agent must do which of the following during a sales presentation for a participating life insurance policy? -include a statement that dividends are not guaranteed -include a statement that dividends are guaranteed -explain the applicable Nonforfeiture values -explain the surrender cost indexes for 5 and 10 years

include a statement that dividends are not guaranteed

Information obtained from a phone conversation to the proposed insured can be found in which of these reports? -agent's report -MIB report -inspection report -attending physician's report

inspection report

Who makes the legally enforceable promises in a unilateral insurance policy? -beneficiary -insurance company -insured -applicant

insurance company

In a Life insurance contract, an insurance company's promise to pay stated benefits is called the -insuring clause -consideration clause -entire contract -owner's rights

insuring clause

A policyowner would like to change the beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy and make the change permanent. Which type of designation would fulfill this need? -revocable -contingent -irrevocable -primary

irrevocable

The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured -dies of natural causes -becomes critically ill -becomes chronically ill -is blinded in an accident

is blinded in an accident

K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable? -increasing -decreasing -adjustable -level

level

What kind of premium does a Whole Life policy have? -decreasing -adjustable -level -deferred

level

An agent must give a prospective insured an Outline of Coverage when taking an application for a -whole life policy -variable annuity -medicare supplement policy -term life policy

medicare supplement policy

Which of these is not considered to be a right given to a policyowner? -surrendering the policy's cash value -modify a provision in the insurance contract -assignment of ownership -change the beneficiary, if revocable

modify a provision in the insurance contract

According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options? -annually -semiannually -quarterly -monthly

monthly

Which of the following statement is correct about accelerated death benefits? -the full face amount is available as an accelerated benefit -those on Social Security disability automatically qualify for this benfit -this provision is usually provided with an increase in premium -must have a terminal illness to qualify

must have a terminal illness to qualify

Which of these statements concerning an individual Disability Income policy is true? -premiums are normally tax-deductible -age of the insured determines the amount of the benefits -normally includes an Elimination period -benefits are normally taxable

normally includes an Elimination period

S filed a written Proof of Loss for a Disability Income claim on Sept. 1. Teh insurance company did not respond to the claim. S can take legal action against the insurer beginning -sept. 21 -oct. 16 -nov. 1 -dec. 1

nov. 1

A certificate of authority does which of the following? -gives an agent authority to represent a specific insurance company -permits an agent to solicit insurance in Texas -permits a decreased agent's relative to act as an agent for a limited period of time -permits an insurance company to transact business in Texas

permits an insurance company to transact business in Texas

A level premium indicates -premium is fixed for a period stated in the contract, then becomes variable -premium can only be changed with the consent of the insurer -premium stays level until the policy's renewal date -premium is fixed for the entire duration of the contract

premium is fixed for the entire duration of the contract

A policyowner is able to choose the frequency of premium payments through what policy feature? -consideration -payor benefit -premium mode -assignment provision

premium mode

A Limited-Pay Life policy has -graded death benefits -no cash value -premium payments limited to a specified number of years -premium payments that are paid to age 100

premium payments limited to a specified number of years

What must the policyowner provide to the insurer for validation that a loss has occurred? -proof of coverage -proof of claim -proof of loss -proof of payment

proof of loss

The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called -reinstatement -grace period -automatic premium loan -waiver of premium

reinstatement

T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary? -request will be accepted only if in writing by the insured -change will be made only if premiums are paid current -change will be made immediately -request of the change will be refused

request of the change will be refused

Which of the following is an example of rebating? -returning a portion of a premium as inducement to purchase insurance -cancellation of an insurance policy without cause -sale of mass-marketed insurance products -offer of temporary insurance coverage

returning a portion of a premium as inducement to purchase insurance

Group life policies must include all of the following provisions except -ownership -beneficiary designation -conversion privilege -right to loan proceeds

right to loan proceeds

All of the following are defined as doing insurance business except -selling mutual funds -taking or receiving insurance applications -delivering an insurance contract to a Texas resident -indirectly acting as an insurance agent

selling mutual funds

Which mode of payment is not used by health insurance policies? -monthly premium -annual premium -single premium -semi-annual premium

single premium

What would the Medical Information Bureau (MIB) identify? -testing positive for marijuana use from a previous screening -existing life insurance coverage with other carriers -credit scores -primary physician

testing positive for marijuana use from a previous screening

An assignment of benefits of a Health Policy -transfers payments to someone other than the policyowner -is prohibited by state law -is allowed only on policies dates after 1992 -transfers rights from the company to the policyholder

transfers payments to someone other than the policyowner

Benefits for drug and alcohol treatment under a group health policy must include all of the following services except -treatment in a certifies facility -transportation to and from an outpatient facility -outpatient treatment through a public hospital or clinic -group therapy prescribed by a physician

transportation to and from an outpatient facility

Boycott, coercion, and intimidation that result in the unreasonable restraint of trade are prohibited under the Texas Insurance Code covering -rebating -false adverstising -discrimination -unfair methods of competition

unfair methods of competition

If an individual has an Accidental Death and Dismemberment policy and dies, an autopsy can be performed in all these situations exept -when the cause of death is unknown -when the state prohibits this by law -when consent for the autopsy is not obtained -when foul play was a contributing factor

when the state prohibits this by law

A life insurance policy that provides a policyowner with cash value along with a level face amount is called -whole life -level term -credit life -ordinary life

whole life