xcel final exam
a promotional advertising item is not considered a rebate unless it has a value equal to or less than what amount?
$25
An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses?
$3,000
in texas, how long must a policy be in force before an insurance company must pay death benefits for suicide
2 years
an insured must notify an insurer of a medical claim within ___ days after an accident
20
Insurers may request a hearing within ___ if their policy is rejected
20 days
an individual participant personally received eligible rollover fund from a profit-sharing plan. what is the income tax withholding requirement for this transaction
20% is withheld for income taxes
Every 12-months after the initial enrollment period, an HMO must hold an open enrollment period of
31 days
In Texas, an individual life insurance policy is REQUIRED to have a grace period of
31 days
which of these arrangements allows one to bypass insurable interest laws?
Investor-Originated Life Insurance
What does Medicare Part A and B cover?
Part A covers hospitalization; Part B covers doctor's services
an example of false advertising would be
an insurer exaggerating its dividends in a magazine advertisement
an applicants medical information received from the MIB may be furnished to the
applicants physician
At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid?
at the time of the application
when an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee covered under which of the following plan
contributory
which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due
grace period
A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow?
guaranteed insurability option rider
a nonforfeiture clause gives the policyowner
guaranteed values even if the policy has lapsed
which of the following will a long term care plan typically provide benefits for
home health care
Under a Basic Medical Expense policy, what does the hospitalization expense portion cover?
hospital room and board
in regards to representations or warranties, which of these statements is true
if material to the risk, false representations will void a policy
K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n)
installment refund annuity
Who makes the legally enforceable promises in a unilateral contract?
insurance company
who makers the legally enforceable promises in a unilateral insurance policy
insurance company
what type of life policy covers two lives and pays the face amount after the first one dies
joint life policy
during a sales presentation for a participating life insurance policy an agent must
make a prospect understand that dividends are not guaranteed
which of these factors do not play a role in the underwriting of a life insurance policY
marital status
the health insurance program which is administered by each state and funded by both the federal and state governments is called
medicaid
which of the following are not managed care organizations
medical information bureau (MIB)
which of the following best describes a short-term medical expense policy
nonrenewable
which statement is true regarding a minor beneficiary
normally, a guardian is required to be appointed in the beneficiary clause of contract
the notice of claims provision requires a policyowner to
notify an insurer of a claim within a specified time
which tax would ira participant be subjected to on distributions received prior to age 591/2
ordinary income tax and 10 tax pentalty withdrawal
which statement is true in regards to a policy loan?
past due interest on a policy loan is added to the total debt
which action will a life insurance company most likely take if an insured dies and it is discovered that the insured's age was misstated on the application
pay an amount the premiums would have purchased at the insured's actual age
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
how does group insurance differ from individual insurance
premiums are lower
which of these statements accurately describes the waiver of premium provision in an accident and health policy
premiums are waived after the insured has been totally disabled for a specified time period
what is the purpose of the time of payment of claims provision
prevents delayed claims payments made by the insurer
which of these is not a type of agent authority
principal
an example of rebating would be
returning a portion of a premium as inducement to purchase insurance
with optionally renewable health policies the insurer may
review the policy annually and determine whether or not to renew it
which of the following is not a required provision in group life policies
right to loan
A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take?
send a notice to the MIB that the applicant was declined
to terminate an agents appointment an insurance company must
send termination notice to the texas department of insurance
what type of life insurance incorporates flexible premiums and an adjustable death benefit
universal life
M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?
45 days
an insurer may normally delay the payment of a cash value loan or surrender value up to
6 months
how long can a cash surrender value payment be deferred by the insurance company under the nonforfeiture law
6 months
K's whole life insurance policy lapsed two months ago due to nonpayment. She would now like to reinstate the policy. All of these statements are correct about the policy's reinstatement EXCEPT
K will forfeit the right to use the automatic loan provison upon reinstatement
what is monetary penalty for willfully violating a cease-and-desist order
a fine up to $500 per day
A qualified profit-sharing plan is designed to
allow employees to participate in the profits of the company
an insurer is not required to provider information on fraudulent claims if requested by
an insured
which of the following statements best describes what the legal ac
an insured must wait at least 60 days after proof of loss has been submitted before a lawsuit can be filed
P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take?
beneficiary will be paid the death benefit
the difference between group insurance and blanket health policies is
blanket health policies do not issue certificates
under an interest sensitive whole life policy
cash values are determined by interest rates
N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take?
claim will be denied
B, an insurance agent, tells his clients that their rights may be impaired if they fail to complete a release form within a given period of time. B may be found guilty of
coercion
On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take?
collect initial premium along with a signed health statement
which of the following reimburses its insureds for covered medical expenses
commercial insurers
which of the following is not included in a life insurance illustration
company's mortality table
An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet?
consideration clause - a health insurance contract is valid only if the insured provides consideration in the form of the full minimum premium and the statements made in the application.
An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be
converted to an individual permanent policy at an individual rate
a universal life policy is sometimes referred to as an unbundled life policy because the owned can see the interest earned, expense charges, and the
cost of insurance
which of the following statements about health coverage for newborns is not true?
coverage is limited to only congenital defect
which of the following best describes a hospital indemnity policy
coverage that pays a stated amount per day of a covered hospitalization
S is the policyowner of a Major Medical policy. The premiums are paid monthly and due on the 1st of each month. S fails to make September's payment and is hospitalized October 15th. When S files the claim for this hospitalization, the insurer will likely:
deny the claim
which of these statements is incorrect regarding the federal income tax treatment of life insurance
entire cash surrender value is taxable
an underwriter determines that a life insurance applicant's risk should be reclassified due to a health issue. this policy may be issued with a(n):
extra premium
what is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained
fair credit reporting act
This type of deductible provision waives the deductible for all family members after some of them have satisfied individual deductibles within the same year:
family maximum deductible
an insurance company organized under new york laws and licensed to do business in texas is considered an
foreign company
credit life insurance is
insurance issued on a debtor to cover outstanding loan balances
If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?
insureds contingent beneficiary
variable annuities may invest in each of the following, EXCEPT:
insurer's corporate business account
which of the following health insurance policy provisions specifies the health care services a policy will provide
insuring clause
a domestic insurance company in texas is considered a company that
is incorporated and formed in texas
When a life insurance policy exceeds certain IRS table values, the result would create which of the following?
modified endowment contract
when will a hearing be held after a notice of hearing, alleging participation in an unfair or deceptive act, is served to a licensee or insurer by the Commissioner
no sooner than 6 days
An insured covered by Accidental Death and Dismemberment (AD&D) insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary?
proceeds will go to the contingent beneficiary
what is the consideration given by an insurer in the consideration clause of a life policy
promise to pay a death benefit to a named beneficiary
the legal actions provision of an insurance contract is designed to do all of the following EXCEPT
protect the producer
All of these are considered sources of underwriting information about an applicant EXCEPT
rating services
S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation?
single premium
K has inherited a large sum of money. K purchases an annuity with this sum on July 1, and starts receiving payments August 1. These payments will continue for as long as she and her spouse lives. Which type of annuity did K purchase?
single premium immediate joint with survivor annuity
What kind of life insurance product covers children under their parent's policy?
term rider
the investment gains from a Universal Life Policy usually go toward
the cash value
all of these statements about the commissioner of insurance are true except
the commissioner must be elected - the governor appoints the Commissioner to a two-year term
whole life insurance is sometimes referred to as straight life. what does the word straight indicate when using this phrase
the duration of premium payments
an individual who purchases a life annuity is given protection against
the risk of living longer than expected
How does a typical Variable Life Policy investment account grow?
through mutual funds, stocks, and bonds
T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called
time limit on certain defenses
why would the insurance commissioner examine the records of an insurance company
to determine the solvency of the company
ABC insurance company is actively engaging in boycott, coercion, and intimidation that results in the unreasonable restraint of trade. ABC is committing a prohibited act under Texas Insurance laws covering
unfair methods of competition
K purchased a Life insurance policy in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much-higher premium is paid because of falling interest rates. This type of policy is known as a(n) _________ life policy.
universal
S, age 40, is looking to buy a Life Insurance policy that will allow for increases or decreases in coverage as his needs change. The policy best suited for S would be
universal life
a __ life policy offers the owner investment in products such as money-market funds, long-term bonds and equities
variable
which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options
variable life - a life insurance policy that has a level premium but allows the policyowner to choose from a selection of investment options is known as Variable life
what is required for an agent whose license has been revoked
wait at least 5 years before applying for a new license
what is required for an agent whose license has been revoked?
wait at least five years before applying for a new license
What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?
waiver of premium rider
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 insurance - it is designed to mature at age 100
