test exam one

the _____ must provide an insured with proper disclosure concerning the replacement of a life insurance policy

prodcer

A(n)_____ license may be issued in cases where a producer has become disabled or dies, requiring a replacement to service the producer's business

temporary

what type of life insurance gives the greatest amount of coverage for a limited period of time

term life

which of the following statements is correct about the insurance commissioner's authority to examine the business records of a producer?

the commissioner may examine them whenever it's deemed necessary

what is the underlying concept regarding level premiums

the early years are charged more than what is needed

What statement regarding the underwriting process is true

the original application is the primary source of information used in the underwriting process

an individual who purchases a life annuity is given protection against

the risk of living longer than expected

T is an employee covered under a Group Life policy. If T's employment is terminated, the conversion privilege gives T the right to convert

to an individual policy upon employment termination

which of the following phrases refers to the fees charged by a healthcare professional

usual, customary, and reasonable expenses

What type of annuity has a cash value that is based upon the performance of it's underlying investment funds?

variable

what kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100

whole life

Long-term Care policies sold in Indiana may exclude coverage for preexisting conditions for

6 months

N, age 50, recently bought an annuity that will pay a guaranteed $2,000/ month at age 70 for life. What type of annuity did N purchase?

Fixed deferred

L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will

adjust the death benefit to a reduced amount

An insurance company that has qualified and received a certificate of Authority from the Department of Insurance to sell insurance in this state is considered to be a(n) ____ insurer

admitted

how long does the coverage normally remain on a limited-pay life policy

age 100

In a viatical settlement, how much does the policyowner receive for a life insurance policy?

amount less than the death benefit

the consideration clause in a life insurance contract contains what pertinent indormation

amount of premium payments and when they are due

when an insurance application is taken by a producer, which of these statements is true?

any changes made on the application require the applicant's initials

before a life insurance policy is issued, which of these components of the contract is required?

applicant's signature on application

which of these is considered to be a right given to a policyowner?

assignment of ownership

when does a Probationary Period provision become effective in a health insurance contract?

at the policy's inception

variable whole life insurance can be described as

both an insurance and securities product

G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is

business overhead expense

which statement about a whole life policy is correct?

cash value may be borrowed against

A policy loan is made possible by which of these life insurance policy features?

cash value provision

which of these is considered to be a right given to a policyowner

change the beneficiary, if revocable

which rider provides coverage for a child under a parent's life insurance policy?

child term rider

what does the indiana life and health insurance guaranty association provide?

claim payments of admitted, insolvent insurance companies

Additional coverage can be added to a whole life policy by adding a(n)

decreasing term rider

a group life insurance policy can be converted to an individual whole life policy under which circumstance?

employment termination

which of the following policy provisions prohibits an insurance company from incorporating external documents into an insurance policy?

entire contact

which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract?

entire contract

which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself?

entire contract provision

the commissioner is appointed by the

governor

which of the following is a requirement to be eligible for a group health policy?

group must be formed for a purpose other than obtaining insurance

basic medical expense insurance

has lower benefit limits than major medical insurance

who makes the legally enforceable promises in a unilateral insurance policy?

insurance company

which of these types of coverage is best described as a short term medical policy?

interim coverage

A policy owner's rights are limited under which beneficiary designation?

irrevocable

what is a warranty

is a statement guaranteed to be true

defamation occurs when a producer makes a false statement intended to

malign another insurer

Which of the following BEST describes how a Preferred Provider Organization (PPO) is less restrictive than a Health Maintenance Organization (HMO)?

more physicians to choose from

Which of the following statements is CORRECT about accelerated death benefits?

must have a terminal illness to qualify

which of these statements concerning an individual disability income policy is TRUE?

normally includes an elimination period

T is an insurance license applicant who intends to primarily engage in insurance transactions on himself and his family. If the insurance Department is made aware of this, T will most likely

not be issued a license

which of the following provisions guarantees that premiums will be waived if a juvenile life policyowner becomes disabled?

payor clause

a father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?

payor provision

In Indiana, which of the following MUST be delivered to a policyowner upon the sale of an individual life insurance policy?

policy summary and buyer's guide

which statement concerning settlement option is true

proceeds can be administered by the insurance company

when does the free-look provision for health insurance begin?

date the policy is delivered to the insured

An example of rebating would be

returning a portion of a premium as inducement to purchase insurance

which of the following statements BEST describes dental care indemnity coverage?

services are reimbursed after insurer receives the invoice

the insuring clause

states the scope and limits of the coverage

P purchases a $50,000 whole life insurance policy in 2005. One of the questions on the application asks if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary?

$50,000 minus any outstanding policy loans

Indiana's Long Term Care Partnership Program requires a Producer to have

15 hours of additional education after they receive their license

the indiana children's health insurance program (CHIP) provides children of need with health benefits until the child reaches age ____ or becomes financially ineligible, whichever is earlier

19

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

2

a potential client, age 40, would like to purchase a whole life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?

20-pay life accumulates cash value faster than straight life

an insurer that terminates a producer's appointment must notify the commissioner within ___ days of the date of termination

30

what kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies

Family maintenance policy

On January 8, an applicant filled out an application for a life insurance policy but did not include the initial premium. The insurance company approved the application on January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective?

January 26

according to Indiana's Mammography Coverage statute, which of these benefits are considered mandatory in every Medical Expense Policy?

One mammogram every year for women aged 40 and older

which of these nonforfeiture options continue a build-up of cash value?

Reduced Paid-up

P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy?

an immediate annuity

Medicare Part C is

available to those who are enrolled in Medicare Part A and Part B

the coordination of benefits (COB) provision exsits in order to

avoid duplication of benefit payments

S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT

beneficiary's age

what is considered to be a characteristic of an immediate annuity?

benefit payments start within one payment period of purchase

how do life insurance companies handle cases where the insured commits suicide within the contract's stated contestable period?

claims are denied under the suicide clause of the policy

as a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?

coercion

this type of deductible provision states that should more than one family member be involved in a common accident, or suffer the same illness, only one individual deductible amount shall be applied

common accident deductible

a key employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves company X and begins working for company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed?

company X

which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?

conversion

which of these actions does NOT constitute life insurance policy replacement?

covert term coverage to whole life policy

a characteristic of preferred Provider Organizations (PPOs) would be

discounted fees for the patient

what kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years

family maintenance policy

how would a contingent beneficiary receive the policy proceeds in an accidental death and dismemberment (AD&D) policy?

if the primary beneficiary dies before the insured

the type of annuity that can be purchased with one monetary deposit is called a(n)

immediate annuity

a 55 year old recently received a $30,000 distribution from a previous employer's 401K plan, minus 6,000 withholding. which federal taxes apply if none of the funds were rolled over?

income taxes plus a 10% Penalty on $30,000

T, age 70, withdarws cash from a profit-sharing plan and purchases a straight life annuity. what will this transaction provide

income that cannot be outlived by the owner

which statement concerning settlement option is true

increased proceeds can be provided through accumulation of interest

the accidental death and dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured

is blinded in an accident

which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE?

it is taxed as ordinary income

Life insurance coverage will frequently contain an accelerated benefits rider attached to the policy. what would be considered a "qualifying event" under these riders

medical condition resulting in a significantly- shortened lifespan

all of these statements concerning settlement options are true, EXCET

only the beneficiary may select

M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take?

pay face amount minus the past due premium

which of the following combination plans is designed to protect an insured from an unpaid mortgage balance upon premature death?

point life

which of the following statements about a guaranteed renewable health insurance policy is CORRECT?

premiums normally increase at time of renewal

consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine

probability of making timely premium payments

K is the insured and P is the Sole beneficiary on an accidental death and dismemberment (AD&D) insurance policy. Both are involved in a fatal accident where K dies before P. Under the common disaster provision, which K dies before P. Under the Common Disaster

proceeds will be paid to P's estate

which statement concerning settlement option is true

rapid depletion of proceeds can be avoided

when a person returns to work after a period of total disability but cannot earn as mush as he or she did before the disability, this situation is called which of the following?

residual disability

which provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time?

restoration of used benefit

which factors are taken into consideration when an insurance company determines the premium rate for a whole life policy on an applicant?

risk classification

which of these terms accurately defines an underwriter's assessment of information on a life insurance application?

risk classification

what does a 401(K) plan generally provide its participants?

salary-deferral contribution

which of these factors does NOT influence an applicant's need for life insurance?

self-maintenance expenses

What statement regarding the underwriting process is true

signed consent from the applicant must be provided in order to test for AIDS and HIV virus

which mode of payment is NOT used by health insurance policies?

single premium

which of the following services is NOT covered under a hospitalization expense policy?

surgeon's fees

which of the following costs would a basic hospital /surgical policy likely cover?

surgically removing a facial birthmark

Which of these are considered to be a right given to a policyowner

surrendering the policy's cash value

What statement regarding the underwriting process is true

the cost of any examination is paid for by the insurer

Life insurance immediately creates an estate upon the death of an insured. which of the following policies is characterized by a guaranteed minimum death benefit?

variable life

which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling?

variable life

S is a life insurance policyowner who enters into a written agreement to received immediate cash in exchange for the sale and transfer of her life insurance policy. This agreement is referred to as a(n)

viatical settlement

an agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. when will the policy become effective

when the conditions of the receipt are met

when is the face amount of a whole life policy paid?

when the insured dies or at the policy's maturity date, whichever happens first

a policy that becomes a modified endowment contract (MEC)

will lose many of its tax advantages