Weekend study set
What is the typical deductible for basic surgical expense insurance?
$0
In this state, what is the maximum fine for transacting insurance without a license?
$1,000
violation of a cease and desist order may result in a fine of
$10,000
Who is a third-party owner?
A policy owner who is not the insured
An agent selling variable annuities must be registered with
FINRA
Which of the following riders would NOT increase the premium for a policyowner?
Impairment rider The impairment rider excludes a specified condition from coverage, therefore, reducing benefits. An insurance company will not charge extra for a rider that reduces benefits
In which of the following locations would skilled care most likely be provided?
In an institutional setting
Part 2 of the application for life insurance provides questions regarding all of the following EXCEPT
Other insurance coverages
In a survivorship life policy, when does the insurer pay the death benefit?
Upon the last death
An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?
$100,000. In joint life policies, the death benefit is paid upon the first death only.
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 maximum monthly premium for COBRA coverage?
$102 The employer is permitted to collect a premium from the terminated employee at a rate of no more than 102% of the individual's group premium rate (in this scenario, 102% of $100 total premium is $102). The 2% charge is to cover the employer's administrative costs.
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?
$9,800 this scenario, the death occurred within the mandatory 30-day grace period. Past due premium would be subtracted from the face amount of the policy.
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 Dav?
$900 (deductible + 20% of the bill after the deductible [20% of $2,000])
Existing insurers must provide policyowners with a policy summary for the existing life insurance within how many days of receiving the written communication and replacement?
10 days
What is the minimum age for purchasing a life insurance policy in this state?
15
How often must the Commissioner of Insurance examine health maintenance organizations (HMOs) authorized to do business in this state?
3 years
how long are insurers required to maintain records pertaining to life insurance solicitation?
3 years
How long is the free-look period on a Medicare supplement policy?
30 days
If an agent changes his residence address, within how many days must the agent notify the Commissioner of the change?
30 days
Insurers must keep files of all advertisements used in Georgia for the minimum of how many years?
4 years
How long is an open enrollment period for Medicare supplement policies?
6 months
Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within
90 days of a loss
A willful violation of an agent's fiduciary responsibility that involved funds exceeding $1,000 will be considered
A felony
Group health insurance is characterized by all of the following
A master contract. Lower administrative costs. Conversion privilege. There is NO adverse selection!!
The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower-echelon employees. This plan would be funded with before-tax corporate dollars, and it does not meet government approval standards. This annuity plan is
A non-qualified annuity plan
If an applicant intends to replace any existing accident and sickness policy with a Medicare supplement policy, what must the agent furnish to the applicant?
A notice regarding replacement
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 sufficientlv clear to identify the insured and the nature of the claim.
In insurance, an offer is usuallv made when
An applicant submits an application to the insurer.
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
An unfair trade practice
an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
An unfair trade practice
The LEAST expensive first-year premium is found in which of the following policies?
Annually renewable term Annually renewable term is the purest form of term insurance. The death benefit remains level, but the premium increases each year with the insured's attained age. In decreasing policies, while the face amount decreases, the premium remains constant throughout the life of the contracts. In level term and increasing term policies, the premium also remains level for the term of the policy. Therefore, in the other types of level policies, the first-year premium would not be different from any other year.
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
As of the application date
An outline of coverage must be given to the applicant for a long-term care policy no later than
At the time of initial solicitation
What coverage, written in coniunction with hospital expense policies, covers surgeons' fees, anesthesiologist, and the operating room?
Basic Surgical Expense
If more than one family member covered under the same maior medical policy is inured in the same accident, the family only has to pay one deductible. This is due to the
Common accident provision
An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?
Conditional
An insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. This is called
Consideration "Consideration" is the value offered by the insured to the insurer, and vice versa. The insured makes accurate statements in the application and remits premium payments. In exchange, the insurer provides benefits as stipulated in the contract.
What characteristic makes whole life permanent protection?
Coverage until death or age 100
What is another name for interest-sensitive whole life insurance?
Current assumption life
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?
Depreciation period
If an insured is not required to pay a deductible, what kind of coverage does he/she have?
First dollar
insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?
Full benefits
Which one of the following is an eligibility requirement for Social Security disability income benefits?
Fully insured status
As it pertains to group health insurance, COBRA stipulates that
Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.
fiduciary responsibility means
Handling insurer funds in a trust capacity.
Life income joint and survivor settlement option guarantees
Income for 2 or more recipients until they die. The Life Income Joint and Survivor option guarantees an income for two or more recipients for the duration of their lives. Most contracts stipulate that the surviving partner will receive a reduced payment after the other dies, although some will continue to pay the same amount. There is no guarantee that all the life insurance proceeds will be paid out.
Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?
Insuring clause The insuring clause states that the insurer agrees to provide life insurance for the named insured which will be paid to a designated beneficiary when proof of loss is received by the insurer. It states the party to be covered by the policy and names of the beneficiary who will receive the policy proceeds in the event of the insured's death. If no beneficiary is named, the policy proceeds will be paid to the insured's estate.
In a group health policy, a probationary period is intended tor people who
Join the group after the effective date
Under workers compensation, which of the following benefits are NOT included?
Legal benefits- they aren't going to give you money to pay a lawyer to sue your own company (them)
Variable Whole Life insurance is based on what type of premium?
Level Fixed
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?
Level term
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Limited pay whole life
A woman's health insurance policy dictates which doctors she is allowed to see. Her health providers share an assumed risk for their patients and encourage preventive care. What best describes the health system that the woman is using?
Managed Care
Which of the following would provide an underwriter with information concerning an applicant's health history?
Medical Information Bureau
coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured's employment is called
No occupational coverage
Which Universal Life option has a gradually increasing cash value and a level death benefit?
Option A
Under which of the following organizations are the practicing providers compensated on a fee-for-service basis?
PPO
A participating insurance policy may do which of the following?
Pay dividends to the policyowner
Which of the following riders would NOT cause the Death Benefit to increase?
Payor Benefit Rider (this is for kids whose parents die. It keeps them on insurance)
insurance agent's responsibilities include all of the following
Perform professionally. c) Perform faithfully. d) Represent the insurer.
A guaranteed renewable health insurance policy allows the
Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.
A woman obtains health coverage through the Marketplace on October 1. Two weeks later she finds out that she is 3 months pregnant. Which of the following is true about coverage for pregnancy?
Pregnancy will be covered immediately
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of
Rebating
A nonresident agent is allowed to conduct insurance transactions in Georgia because his home state allows Georgia residents to transact insurance business in it. This is known as a/n
Reciprocity agreement
In the event of a loss, business overhead insurance will pay for
Rent
Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability?
Residual disability
An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?
Revocable
Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles?
Standard risk is representative of the majority of people.
All of the following are true about variable products
The cash value is not guaranteed. b) Policyowners bear the investment risk. d) The minimum death benefit is guaranteed. Insurers selling variable products invest their customer's monies in a separate account, which is very similar to a mutual fund. Since there is no guaranteed rate of return, customers must bear the investment risk.
The Commissioner of Insurance is
The chief officer of the Department of Insurance.
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
The customer's associates, friends, and neighbors provide the report's data.
Which statement accurately describes group disability income insurance?
The extent of benefits is determined by the insured's income.
An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand- written letter to the insurer. Which of the following would be true?
The insured was in compliance with the policy requirements regarding claims.
According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy
The insurer must provide the insured a written notice of the cancellation. c) Claims incurred before cancellation must be honored. d) An insurance company may cancel the policy at any time.
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
Which of the following is TRUE about nonforfeiture values?
They are required by state law to be included in the policy.
Which of the following statements is most correct concerning the changing of an irrevocable beneficiary?
They can be changed only with the written consent of that beneficiary.
Which provision stipulates that misstatements made in a health insurance application may not be used to deny a claim after the policy has been in force for 2 vears?
Time limit on certain defenses
When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees
To renew the policy until the insured has reached age 65.
In forming an insurance contract. when does acceptance usually occur?
When an insurer's underwriter approves coverage
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
All of the following are examples of transacting insurance in Georgia EXCEP
a) Making an insurance contract go into effect. c) Insurance solicitation. d) Preliminary insurance negotiations.
SIMPLE Plans require all of the following
a) No more than 100 employees. b) Employees must receive a minimum of $5,000 in annual compensation. A SIMPLE plan is available to small businesses that employ not more than 100 employees receiving at least $5,000 in compensation from the employer during the previous year.
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
a) Projected interest rates. b) Face amount of the policy. d) The beneficiary's life expectancy.
All of the following are true of an annuity owner
a) The owner is the party who may surrender the annuity. c) The owner pays the premiums on the annuity. d) The owner has the right to name the beneficiary.
All of the following statements concerning an employer sponsored nonqualified retirement plan are true
a) The plan is a legal method of accumulating money for retirement needs. b) The plan can discriminate as to who may participate. c) The plan is not approved for favorable tax treatment by the IRS.
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
b) Amounts payable under the policy will reflect the insured's correct age.
An insurer must screen all marketing plans to ensure that an advertisement does NOT use as the name of any kind of an annuity contract any phrase that
b) Does not include the word "annuity" unless accompanied by other clear language indicating it is an annuity.
All of the following are duties and responsibilities of producers at the time of application
b) Explain the nature and type of any receipt the producer is giving to the applicant. c) Probe beyond the stated questions if the producer feels the applicant is misrepresenting or concealing information. d) Check to make sure that there are no unanswered questions on the application. Any changes to information on an application must be initialed by the applicant.
An insured is covered by a disability income policy that contains an accidental means clause. The insured exits a bus by jumping down the steps and breaks an ankle What coverage will apply?
d) No coverage will apply, since the injury could have been foreseen.
Which of the following statements is INCORRECT?
d) Replacing insurance policies for the purpose of making commissions is legal. Churning is defined as replacing insurance policies for the sole purpose of making commissions, and it is illegal.
What type of premium do both Universal Life and Variable Universal Life policies have?
flexible
Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?
indemnity
Rebates are allowed if it is in the best interest of the client.
rebate is an illegal act which involves returning something of value to the client as an inducement to buy, such as the commission. Rebates are only allowed if specifically stated in the policy. Insurance dividends are not considered rebates as the IRS considers it as a return of overpaid premium.
Who elects the Commissioner of Insurance to office?
registered voters
Whenever agents submit applications to insurers, they must also submit statements, signed by the applicant and agent, disclosing the involvement or lack of involvement of
replacement
When is the earliest a policy may go into effect?
the application is signed and a check is given to the agent
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
An insured under a life insurance policy has been diagnosed with a terminal illness and has 6 months to live. The insured knows that his financial state will worsen even more with the upcoming medical expenses. What option could the insured utilize?
viatical settlement