Combo with GA Life/Health Ins Exam Questions and 1 other
what is not a dividends option ?
a fixed period installment
the policyowner of an adjustable life policy can increase premium payments and....
have a limited pay policy
what are the two types of beneficiary's ?
primary, which has first claim to the proceeds and contingent which has second claim in the event that the primary beneficiary dies before the insured.
what's the initial period of time specified in a disability income policy that must pass after the policy is in force before a loss can be covered ?
probationary period
what is H.M.O. ?
provide benefits in the form of services rather than reimbursement. also provides both the financing and patient care for its members.
stop and loss insurance
provide coverage for employer who self fund or self insure their employee's health insurance. here, the employer is the one insured. the pre-establish limit at which the stop and loss goes in effect is the deductible
what is guaranteed to the policyowner through nonforfeiture values ?
the cash value in a policy belongs to the insured even if the policy lapses or is surrender
The duties of a managing general agent may include all of the following EXCEPT
Altering policies.
what is a gatekeeper P.P.O. ?
can be choose be member to lower out of pocket cost
"LTC" may be sold in all various ways, "except"
endorsement to health policy
If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following?
Adjust the benefit in accordance with the increased risk.
what is a penalty for transacting insurance without a license ?
$1,000
what's the penalty for transacting insurance without a proper license?
$1,000
What is the maximum amount that the Nevada Life & Health Insurance Guaranty Association may be obligated to pay - with respect to disability insurance for 1 life?
$300,000
what does "level" refers to in "level term insurance "
Face amount
What are the 2 types of Flexible Spending Accounts?
Health care accounts and Dependent care accounts
An insured committed suicide 6 months after his life insurance policy was issued. The insurer will
Refund the premiums paid. If the insured commits suicide within a certain period of time following the policy effective date, the insurer's liability is limited to a refund of premium.
Which of the following is INCORRECT regarding HIPAA's creditable coverage?
The 12 months of creditable coverage must all come from the same employer.
what is miscellaneous hospital expenses ?
can be expressed as a multiple of the room and board charge or a flat amount
period of time
coverage is a term health policy which is not renewable
impairment rider
eliminates coverage for an specific pre-existing condition
what is a policy rider that delete coverage ?
exclusions
sickness
a disease contracted after the policy has been in force for 30 days
whats is primary care physician ?
a limited number the physician that are approved also call gatekeeper
what would best describe total disability ?
a person's ability to work is significantly reduced or eliminated for the rest of his life
what's the purpose of a disclosure statement in life insurance policies ?
help consumers make more informed decisions
what type of "LTC" care is not provided in an intitutional setting ?
home health care
what is the insuring clause ?
is the basic agreement between the insurer and the insured. it states the insurer's promise to pay the death benefit upon the insured's death.
what is totally disability ?
is the insured's inability to perform the duties of his own occupation for the first two years
what is the premium mode ?
is the manner or frequency that the policyowner pays for the premium, could be annual, semmi-annual, quarterly or monthly, been the last one the most expensive.
which statement is correct concerning the COBRA act of 1985
it covers terminated employee's and dependants for up to 36 months after a qualifying event
what is true regarding a term health policy
it is nonrenewable
which non-forfeiture option provides coverage for the longest period of time ?
reduced paid-up option
what option for Universal Life allows the beneficiary to collect the death benefit and cash value upon the death of the insured ?
option B
what would be a typical deductible for "basic surgical expense insurance"
$0
limited contribution to F.S.A. is
$5,000 and is a family limit....
the two types of assignment are
absolute and collateral
most policies will pay the accident death benefits as long is caused by the accident that occurs within
90 days
Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within
90 days of a loss.
an insurer that holds a "certificate of authority" in the state in which transacts business is considered...
and authorized insurer
In a basic expense policy, after the limits of the basic policy are exhausted, the insured must pay what kind of deductible?
Corridor
What amount of care is provided in LTC's intermediate care?
Daily care by medical personnel
All of the following are dividend options EXCEPT
Fixed period installments.
Which of the following is NOT a feature of a noncancellable policy?
The insurer may terminate the contract only at renewal for certain conditions.
according to the fair credit reporting act, all of the following would be considered negative info about a consumer, "except" ?
A)late payments *B)poor credit history is the exception C)prior arrests D)tax delinquencies
if a life insurance develops cash value faster than a seven-paywhole life contract, it's a
modified endowment contract
Lucy has a major medical policy with a $500 deductible and 80/20 coinsurance. Lucy is hospitalized and sustains a $2,500 bill. What is the maximum amount that Lucy will have to pay? a) $900 (deductible + 20% of the bill after the deductible [20% of $2,000]). b) $500 (amount of deductible). c) $1,000 (deductible + 20% of the entire bill). d) $2,500 (the entire bill).
a) $900 (deductible + 20% of the bill after the deductible [20% of $2,000]). d) $2,500 (the entire bill). Lucy would first pay the $500 deductible; out of the remaining $2,000, the insurer will pay 80% ($1,600) and the insured will pay 20% ($400).
Julie pays for her life ins annually. She has collected a nontaxable dividend check. Julie decided she would use the dividends to pay next premium. What option allows her to do this? a) Reduction of Premium option b) Dividend-to-Premium option c) Accumulation at interest d) Cash option
a) Reduction of Premium option The Reduction of Premium option allows the policyholder to apply dividends toward the next year's premium. The dividend is subtracted from the premium amount, yielding the new premium due for the next year.
A claimant wants to bring a recovery action against an insurance company for a loss claimed under a policy. The action must be brought a) Only within 60 days. b) Within 2 years. c) Within 3 years. d) Immediately.
c) Within 3 years. Some states require a provision limiting the time parameters in which a claimant may seek recovery from an insurer under a policy. Gerogia requires legal actions to be brought forth no sooner than 60 days and no later than 3 years after proof of loss.
for the purpose of determining its financial condition, fulfillment of its contractual obligations and compliance with nevada law, the commissioner will examine affairs of each insurer as often as deemed necessary. each domestic insurer must be examined at least
every 5 years
a participating insurance policy may....
pay dividends to policyowners
julie pays for her life insurance annually. until now she has collected an non-taxable dividend check each year. julie has decided that she would rather use the dividends to help pay for her next premium, what option would allow her to do this ?
reduction of premium option
a license agent in utha want to become a nonresident agent in nevada in the same line of insurance, considering that all requirements are met, what is more likely to happen ?
the division will waive education and examination requirements
the limits of a health reimbursement account are set by....
the employer
*for how long must agents reatin copies of notices and sales proposals for the life insurance appplication ?
3 years
what is P.O.S. or point of service ?
a combination of h.m.o. and p.p.o. a different choice can made every time. however, a member copay, coinsurance and deductibles may be much higher, just like the p.p.o.
a deductible is
a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits
what is emergency care and hospital services in H.M.O. ?
can be provided in or out of service are as long is an emergency or for treatment of mental disorders, alcohol abuse, drug abuse.
claim forms
must be suplied by insurer within 15 days
what is interest only ?
the insurance company retains the policy proceeds and pays interest on the proceeds to the recipient at regular intervals. this is considered a temporary option since the proceed are retain until are paid in a lump sum.
the sole beneficiary of a life insurance policy dies before the insured, if the policyowner fails to change the beneficiary before the insured's dead, the proceeds of the policy will go to...
the insured's estate
what type of individual may act as a producer without a license?
an insurer company president who is solely responsible for the administration of the company
Which of the following is NOT a feature of a noncancelable policy? a) The insurer may terminate the contract only at renewal for certain conditions. b) The premiums cannot be increased beyond the amount stated in the policy. c) The guarantee to renew coverage usually applies until the insured reaches certain age. d) The insured has the right to renew the policy for the life of the contract.
a) The insurer may terminate the contract only at renewal for certain conditions. The insurance company cannot cancel a noncancelable policy, nor can the premium be increased beyond what is stated in the policy. The insured has the right to renew the policy for the life of the contract; however, the guarantee to renew coverage usually only applies until the insured reaches age 65.
*in order to pay for administrative expenses the "Nevada Insurance Guaranty Association may charge assessments of its members insurers. what is the maximum amount that the Association charge for this assessments ?
$100
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. What would be the face value of the new term policy?
$50,000
*in Nevada, in the event of death or disability of a licesed agent, the commissioner may authorize the issuance of a temporary license to an individual that is otherwise qualified, for a period of up to....
180 days
what is medical expense insurance ?
3 basic coverages, hospital, medical and surgical. they are first -dollar coverages. unlike mejor medicel policies they do not require a deductible
within how many days of requesting an "investigative consumer report" must an insurer notify the consumer in writting that the report will take place..
3 days
once the person meets the stringent requirements for disability benefits, how long is the waiting period under "social security", before any benefits will be paid ?
5 months
in order to qualify for conversion from a group life policy to an individual policy of the same coverage , a person must have been insured under the group plan for how many years...
5 years
The minimum number of credits required for partially insured status is
6
The minimum number of credits required for partially insured status is
6 . To be considered partially insured, an individual must have earned 6 credits during the last 13-quarter period.
regarding the concept of creditable coverage, the number of days of coverage spent under the group plan, will be used to reduce the 12-month waiting period for pre-existing conditions coverage, if the employee does not have a break in coverage of more than....
63 days
once the deductible is met for "medicare part D" the plan will pay for what percentage of prescription drug cost ?
75 %
the duty of an agent where replacement is involved include...
A)leaving a copy or original of all solicitation material used for presentation to the applicant B)submitting to the replacing insurer a copy of all soliciting material C)submitting to the replacing insurer a statement signed by applicant as to whether or not has existing life insurance *D)all of the above is the answer
How can a new physician be added to the PPO's approved list?
Agree to follow the PPO standards and charge the appropriate fees.
A Universal Life Insurance policy is best described as
An Annually Renewable Term policy with a cash value account.
All of the following are dividend options EXCEPT
Fixed period installments. Fixed period installments option is not one of the dividend options.
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
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.
An insured purchases a policy in 2000 and dies in 2005. The insurance company discovers at that time that the insured concealed information during the application process. What can they do?
Pay the death benefit. The incontestability clause prevents an insurer from denying a claim due to statements in an application after the policy has been in force for 2 years, even on the basis of a material misstatement of facts or concealment of a material fact.
Which of the following provisions is mandatory for health insurance policies?
Physical examination and autopsy
Which nonforfeiture option provides coverage for the longest period of time?
Reduced paid-up. The reduced paid-up nonforfeiture option would provide protection until the insured reaches 100, but the face amount is reduced to what the cash would buy.
what is accidental death and accidental death and dismemberment ?
accidental death pays multiple of face amount if death is result of and specified accident, double or triple indemnity. death must occur between 90 days of accident. and A.D.D. pays the principal for death and a capital, which is half , for dismemberment
what would "not" be an exclusion in a long-term policy ?
alzheimer's disease
other medical and health serices
ambulance transport, home dialysis, supplies, support services, oral surgery, lab tests and x rays
dental expense
an important feature is the inclusion of diagnostic and preventive care
what is settlement options ?
are the methods used to pay the death benefit to a beneficiary upon the insured's death or to pay the endowment benefit if the insured lives to endwoment date. beneficiary can only change the settlement option if the policyowner did not choose one at the time insured's death
how long does an insurer have to contest fraudulent misstatements made in a health insurance application ?
as long as the policy is in force
what is nonforfeiture options ?
because permanent life insurance have cash value, certain guarantees are a must and cannot be forfeited by policyowner. cash surrender value, reduced paid-up insurance and extended term
outpatient treatement of mental illness
but 45% coinsurance
Teresa pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy? a) 60 days b) 7 days c) 10 days d) 31 days
c) 10 days The grace period is seven days if paid weekly, 10 days if paid monthly, 31 days for all other modes.
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the a) Insuring clause. b) Misstatement of Age clause. c) Incontestability clause. d) Reinstatement clause.
c) Incontestability clause. If an insurer wishes to contest any statements on an application, they must do so within the first two years.
Which is INCORRECT concerning an MSA? a) If there is a balance at year end, employee can let it earn interest or withdraw the amount (as taxable income). b) The employee can use funds from the MSA to cover health ins deductibles during the year. c) MSAs are only available to group of 250+ employees.
c) Medical savings accounts are only available to group of 250 or more employees. Medical savings accounts are only available to groups of 50 or fewer.
A.D.D. accidental death and dismemberment
can be a rider or separate policy. it could be principal sum for accidental death or capital sum for dismemberment. could be limited risk, which defines specific risk or special risk which cover unusual type of risk.
when both parties in a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is
conditional
when kent purchased his health policy he was a window washer. he has since change occupation and now manages a library. upon notifying the insurer of the change of occupation, the insurer should....
consider decreasing the premium
H.S.A. accounts
contributions are tax deductible and designed to help save for qualified health expenses that spouses and dependents may incur. to qualify, the individual must be covered by a high deductible health plan, no covered by other helth insurance, not elegible for medicare and not be calimed as a dependent. h.s.a. money can be used for other expenses but must pay taxes plus a 10% penalty if before 65. after 65 only taxes
A Medicare Supplement policy must provide coverage for pre-existing conditions after the policy has been in force for a) 1 year b) 2 years c) 90 days d) 6 months
d) 6 months Pre-existing conditions must be covered after a policy has been in force for 6 months.
What is a material misrepresentation? a) Any misstatement made by an applicant for insurance b) Any misstatement by the producer c) Concealment d) A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company
d) A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company A material misrepresentation is a statement that, if discovered, would after the underwriting decision of the insurance company.
Which of the following would NOT be an exclusion in a long-term care policy? a) Treatment payable by Medicare b) Alcoholism c) A pre-existing condition d) Alzheimer's disease
d) Alzheimer's disease While normally mental and nervous disorders or disease are excluded in long-term care policies, Alzheimer's disease is not. The rest are all possible exclusions.
Brandon is rendered 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? a) Business Expense Policy b) Employer's Disability Provision c) Business Disability Policy d) Business Overhead Expense Policy
d) Business Overhead Expense Policy Business Overhead Expense (BOE) insurance is sold to small business owners for the purpose of reimbursing the policyholder for various business overhead expenses during a period of total disability. Benefit payments are typically limited to one of two years. Expenses such as rent, utilities, and employee salaries are covered. The employer's actual salary and profits are not compensated under this provision.
Carol is insured under her employer's group life insurance plan at her place of employment. All of the following statements about her coverage are true EXCEPT a) Carol would not need to prove insurability for a conversion policy. b) If Carol quits, she may, within 31 days, request that her coverage be converted to an individual policy. c) Should Carol convert her coverage, the premium will be based upon her attained age. d) Carol could choose what type of insurance her conversion policy provided (Term or Permanent).
d) Carol could choose what type of insurance her conversion policy provided (Term or Permanent). When group coverage is converted to an individual policy, the insurer will determine the type of coverage, (usually permanent insurance).
An insured receives an annual life insurance dividend check. What term best describes this arrangement? a) Reduction of Premium b) Annual Dividend Provision c) Accumulation at Interest d) Cash option
d) Cash option The cash option allows an insurer to send the policyholder an annual, nontaxable dividend check.
Which nonforfeiture option has the highest amount of insurance protection? a) Conversion b) Decreasing Term c) Reduced Paid-up d) Extended Term
d) Extended Term The Extended Term nonforfeiture option has the same face amount as the original policy, but for a shorter period of time.
An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company? a) Consumer Privacy Act b) Conditional Receipt c) Disclosure Rule d) Fair Credit Reporting Act
d) Fair Credit Reporting Act The Fair Credit Reporting Act governs what information can be collected and how the information can be used.
Which of the following is true regarding a term health policy? a) It is conditionally renewable. b) It is guaranteed renewable. c) It is noncancelable. d) It is nonrenewable.
d) It is nonrenewable. In term health policies, the owner has no rights of renewal. He or she must purchase another policy.
Which of the following LTC Coverages would NOT encourage an insured to receive care at home? a) Respite Care b) Home Health Care c) Adult Day Care d) Residential Care
d) Residential Care Respite care, home health care, and adult day care are all coverages used to reduce the necessity of admission into a care facility.
a waiver of premium provision may be included with which kind of health insurance policy?
disability income
H.I.P.A.A. elegibility
employers can not discriminate based in health factors like, health status, medical conditions, claim experience, medical history, etc. to convert from group plan to an individual plan must be 18, been covered by a group plan, have use any cobra, not elegible for medicare or medicaid, not have other health insurance and apply within 63 days of loosing coverage. pre-existing condition for 6 months won't be covered and can impose a 12 waiting period on pre-existing conditions or 18 months if late enrollee. is also guranteed renewability
what is health reimbursement account H.R.A. ?
funds set aside by employers to reimburse employee's for quelified medical expenses. not a taxable employee benefit, employer contribution are tax deductible, balances can be roll-over, allows employer to reduce health plan costs by coupling the h.r.a. with high deductibles. no statutory limits, they are all set by employer
annuity method of payment
immediate, the one purchased with a single payment and payments start within one year and deffered. where payments begin sometime after one year. this annuity could be funded by one lump sum or through periodic payments
what is referral physician ?
in order to see an specialist must be refer first by the gatekeeper
probationary period
is period of time that must lapse before coverage goes in effect
benefit period
lenght of time over which the monthly disability benefit payment will last
all others factors been equal, what would the premium be like in a "survivorship life" policy as compared to the premium in a "joint life"
lower
universal life premium can be
minimum just to keep the policy in force or target where a recommended amount must be paid to keep the policy in force thruoghout its lifetime
on it's advertisement, a company claims that it has funds in its possession that are, in fact, no available for the payment of losses of claims. the company is guilty of...
misrepresentation
under an individual disability policy, the minimum schedule of time in which claim payments must be made to an insured is
monthly
what type of insurance company is an incorporated insurer without capital stock or shares ?
mutual insurer
what is owners rights ?
naming and changing the beneficiary, receiving the policy living benefits, selecting benefits payment options and assigning the policy.
universal life
or flexible premium universal life where policyowner has the lfexibility to increase or decrease the premium, may even skeep a premium if they have sufficient cash valueat the time.
*a "participating life insurance policy may ?
pay dividends to the policy owner
medicare part a
pays for, inpatient hospital care, nursing facility, home healt care and hospice care. must be 65 or 65 with spouse benefits or lees than 65 but disable for 24 months or renal disease or has A.L.S. enrollment could be initial, general or special
which "renewability provision" are you most likely to see on a travel accident policy ?
period of time
grace period
period of time after the payment due date that the policy still be in force. 7 days for weekly, 10 days for monthly and 31 days for yearly
what is the grace period ?
period of time after the premium due date , that the policyowner has to pay the premium before the policy lapses.
what provides specific information about the products that an insurer is offering and must be left with a prospective insured at the time of the application ?
policy summary
term convertible insurance
policyowner can convert to a permanent policy without insurability proof. premium will be based in current age
social security benefits
provides disability income for proper insured people and meet the definition of disability and waiting period.
what is "not" provided by an HMO
reimbursement
coinsurance
sharing expenses between insured and insurance company. could be 80-20. 50-50. etc. to limit out of pocket amount is the stop and loss limit where after certain amount, insurance company covers 100%
guaranteed renewable
similar to noncancellable but here the insurer can increase the premiums. expires at 65
carol is insured under her employer's group life insurance plan at her place of employment, what is "not" true about her coverage ?
that Carol could choose what type of insurance her conversion policy provided. (term or permanent) when you go from group to individual, the insurer will determine the type of coverage, which is usually permanent insurance
what is "not" correct about the required provisions of a health insurance policy ?
that a reinstated policy provides immediate coverage for an illness
what is "not" a feature of a non-cancelable policy ?
that the insurer may terminate the contract only at renewal for certain conditions
what is "not" true regarding a decreasing term policy ?
that the payable premium amount steadily declines throughout the duration of the contract
what is "not" a characteristic of a Universal Life policy.....
that the planned premium pays for mortality charges and expenses and any excess is returned to the policyowner
is incorrect regarding whole life insurance ...
that the policy loans are tax-deductible
what is true of the "fair credit reporting act"
that the purpose of the act is to protect the consumer's right to privacy by making certain that underwriting data is confidential, accurate, relevant and properly used
what is "not" true regarding the guaranteed insurability rider is....
that the rider is available to all insured
ron joins the PPO that is provided by his employer. if ron decides to go to a physician who is not a PPO provider, what would happens ?
the PPO will pay reduced benefits
an agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information, who must then initial the change ?
the applicant
in insurance, an offer is usually made when....
the application is submitted
life insurance benefits for minors must be places in the hands of either a guardian or a trustee. alhought the guardian may or may not be accountable for
the assets
whats is reduce paid-up insurance ?
the cash value is used by the insurer as a single premium to purchase a comlpletely paid-up permanent policy that has a reduced face amount
proof of loss
the claimant must submit proof of loss whitin 90 days but not exceed 1 year
which of the following entities ultimately determines if an advertisement is deceptive or confusing ?
the commisioner
jim is covered by a high deductible plan. he makes regular contibutions to his HSA. how are those contributions treated in regards to taxation ?
the contributions are Tax-Deductible
injury
the damage to the body that is unexpected or unintended
what is incorrect concerning a "noncontributory" group plan ?
the employee's receive individual policies
who determines the elegibility and contributions limits in an H.R.A. ?
the employer determines both
what statement accurately describes "group disability income" insurance ?
the extent of benefits offered is determined by the insured's income
high deductible health plans h.d.h.p. and related savings accounts h.s.a.
this plan have high deductible and out of pocket limits but with reduce premiums
what is automatic premium loan ?
this type of loan prevents from the unintentional lapse of a policy due to non payment.
norma jean is joining a group insurance plan, in order to avoid proving insurability, she must...
join during the enrollment period
which Universal Life option has a gradually increasing cash value and a level death benefit ?
option A
Should an employee of an employer with fewer than 20 employees voluntarily terminate his/her employment, they would be eligible to continue their coverage under the group health policy for how many months?
0 months. The Continuation of Coverage provision of group health insurance does not apply to those employees who voluntarily leave employment.
* in order to provide the funds necessary to carry out the duties of the Nevada Life& Helath Insurance Guaranty Association members insurers must pay an assessment, after written notice is provided how soon must the insurers pay these assessments ?
30 days
How many days after the death of an insured does an insurer have to pay group life insurance policy benefits?
30 days
how many hours of approved continued education within a 3 year period are required ?
30 hours
after a person's employment is terminated, it's possible to obtain individual health insurance, after loosing the group health coverage provided by the employer, which of the following is "not" true ?
A) the employee can convert from group to individual withing 31 days of termination B)the premium of the individual health policy can be higher than the original policy *C)by law, the new individual policy must provide the same benefits as the group insurance policy, that is not true.
*which of the following must be obtained by someone who intends to function as an administrator ?
A)admisnistrator license B)limited lines producer license C)certificate of registration is the right answer D)certificate of authority
Disability income coverage specifies that the policy covers the insured if he is unable to perform any job for which he is qualified. In this case, total disability is defined as
Any occupation - more restrictive than other definitions.
Employees actively at work on the date coverage is transferred to another insurance carrier are
Automatically covered and exempt from any probationary period.
Which of the following is NOT an exclusion in medical expense insurance policies?
Chiropractic care
Sara has battled a chronic orthopedic condition for most of her life. The only way that she can obtain individual health insurance at a reasonable cost is by allowing the insurer to exclude her condition from coverage. What is the name of this rider?
Impairment Rider
An insured owns a 20-year Return of Premium term life policy. If the insured is still alive after 20 years, the premiums will be refunded
In full as non-taxable income.
Under an extended term insurance policy, the policy cash value is converted to
The same face amount as in the whole life policy. Under this option the insurer uses the policy cash value to convert to term insurance for the same face amount as the former permanent policy.
Regarding Medicare "select" policies, what are restricted network provisions?
They condition the payment of benefits.
unversal life has two death benefits options
a, which is a level death benefits and b, which is an increasing death benefit
what are the two types of policy assignments ?
absolute, when permanent and total transfer of ownership and collateral when only partial rights are involved
who must notify the replacement company of a policy that is been replaced ?
agent
dread disease or limited risk
are benefits for an specific desease, such as cancer, etc. benefits are paid in a fixed dollar mount
misstatement of age
benefits would be adjusted to correct age
key employee
contract owned by the business, premium is paid by the business and is also the beneficiary. benefit is collected tax-free
option b
death benefits includes the annual increase in cash value so the death benefit increases each year by the amount that cash value increases
option a
death benefits remains level, while the sach value increases. the death benefit increases at a later point is to comply with the I.R.S. corridor or gap
flexible spending account qualifying for dependants ?
dependant under 13, spouse that physically or mentally can't care of herself and a dependant that is mentally challange
individual disability income insurance
designed to replace lost income. could be individual or through an employer
medicaid
federal and state program for low income people. to qualify one's must be poor
H.I.P.A.A. definition
health insurance portability and accountability act, ensures portability of group insurance coverage. also regulates protection for group by limiting pre-existing exclusions, discrimination and opportunities in a new plan. and for individuals guaranteeing acces to individual policies and renewability.
insuring clause
identifies the insured, insurance company, kind of loss that is covered
which rider would not increase the premium for a policyowner ?
impairment rider
usual, reasonable and customary charges
means the insurer will pay an amount for a given procedure based in the average of that procedure in that geographic area
what is policy loan ?
option is only found in policies that contain cash value. policy will not lapsewith outstanding loans unless the amount and accrued interest exceeds the cash value. also the insurer must give a 30 day written notice to policyowner before policy laspes. this loans can take up to six months to be approved unless is to pay policy premiums
what is a basic medical expense coverage
provides coverage for nonsurgical services a physician provides. limites to patients confined in a hospital. could also cover emergency, maternity, mental disorders, hospice care, outpatient care and nurse's expenses
insurance is the transfer of
risk
business overhead expense
sold to small business who must pay overhead expenses following the desability of the owner. has an elimination period of 15 to 30 days and payments limited to a max of two years. premiums are tax deductible but benefits taxable
what is H.M.O. preventive care ?
they reduce the cost by utilizing preventive care, free annual check ups and free immunization to members
what is minor beneficiarys ?
this proceeds will be paid to the minor's guardian, trustee or as directed by a court.
social security rider or social insurance supplement is
used to supplement or replace benefits that might be payable under social security disability. could be to cover the benefits before the 5 months waiting period, or insured has been denied coverage or when the amount is less than the aount payable under the rider, only the difference will be paid.
what is waiver of premium ?
waive the premium of the policy if the insured becomes totally disable. has a 6 months waiting period and expires at 65
the intentional and voluntary surrendering of a known right or privilege in a contract is known as ....
waiver
what is open panel ?
when a phisician retain the right to also treat patients who are not members. they are not considered P.P.O. employee's
what is acceleration of endowment ?
requires the insurer to first accumulate the dividends at interest and then the accumulated amount is used to either shorten the endowment period or convert the whole life policy intoan endowment
copayment
set dollar amount that the insured will pay each time certain medical services are used
an insured is covered under a medicare policy, that provides a list of network healthcare providers that he must use in order to receive coverage. in exchange for the inconvenience, he is offered a lower premium, which type of "medicare" policy does he own ?
"Select"
sherman owns a general disability policy and is injured during a war, rendering him "disabled". what will be the extent of benefits he will receive ?
$0, "general disabilities policies not cover losses caused by war, military service, inentionally self-inflected injuries,overseas residence or injuries suffered while commiting or attemting to commit a felony"
quincy's has a $1,000 H.R.A. account. he incurred $750 in medical expenses the first year of the plan and $1,200 in the second year. what is the maximum amount Quincy is entitled to recover for this expenses under the plan ?
$1,950
The Probationary Period is
A specified period of time that a person joining a group has to wait before becoming eligible for coverage.
which of the following types of insurance companies is an incorporated insurer without capital stock or shares ?
A)reciprocal insurer B)stock insurer C)mutual insurer is the right answer D)fraternal insurer
A Universal Life Insurance policy is best described as
An Annually Renewable Term policy with a cash value account. A universal policy has two components: an insurance component and a cash account. The insurance component (or the death protection) of a universal life policy is always annual renewable term insurance
Contracts that are prepared by one party and submitted to the other party on a "take it or leave it" basis are classified as
Contracts of adhesion. Insurance policies are written by the insurer and submitted to the insured on a "take it or leave it" basis. The insured does not have any input into the contract, but simply adheres to the contract.
Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service?
Copayment
Q was treated for hypertension prior to applying for a major medical policy. As the producer who is writing the replacing policy, what should you tell Q?
His hypertension may be considered a pre-existing condition, and may not be covered under his new policy.
Which of the following is considered a qualifying event under COBRA?
Divorce. Other qualifying events include the voluntary termination of employment; an employee's change from full time to part time; or the death of the employee.
What required provision protects against unintentional lapse of the policy?
Grace period. The grace period is the period of time after the premium due date that the policyowner has to pay the premium before the policy lapses (usually 30 or 31 days). The purpose of the grace period provision is to protect the policyholder against an unintentional lapse of the
Another name for a Keogh Plan is
HR 10.
An insured owns a 20-year Return of Premium term life policy. If the insured is still alive after 20 years, the premiums will be refunded
In full as non-taxable income. Since the amount returned equals the amount paid in, the returned premiums are not taxable.
Withdrawals from an IRA taken before the participant reaches age 59 1/2 are subject to
Income taxation and a penalty. If funds are withdrawn from an IRA before the participant reaches age 59 1/2, the funds are subject to both income taxation and a penalty.
Which clause is said to be the "heart of the policy", containing the company's promise to pay?
Insuring Clause
What is the name of a clause that is included in a policy that limits or eliminates the death benefit if the insured dies as a result of war or while serving in the military?
Military service or war. There are two different types of exclusions that may be used by life insurers that limit the death benefit if the insured dies as a result of war or while serving in the military. The status clause excludes all causes of death while the insured is on active duty in the military. The results clause only excludes the death benefit if the insured is killed as a result of an act of war.
A producer who omits a statement which may mislead or deceive the persons addressed has committed
Misrepresentation. Making false or misleading statements with the intent to defraud another is misrepresentation.
Regarding the free-look provision, the insurance company
Must notify the insured of their rights.
An insured purchases a policy in 2000 and dies in 2005. The insurance company discovers at that time that the insured concealed information during the application process. What can they do?
Pay the death benefit
Jim is covered by a high deductible health plan. He makes regular contributions to this H.S.A. How are those contributions treated in regards to taxation?
The contributions are tax-deductible
Which of the following is NOT true regarding the death benefit in a variable whole life policy?
The death benefit does not change. Under a variable life policy, the death benefit may increase or decrease over the life of the policy depending on the investment performance of the separate account. However, the death benefit cannot decrease below the initial face amount of the policy, and in that sense it is guaranteed.
what is fixed period ?
a specific period of years is selected and equal installments are paid to the recipient. not guarantee payment for life, but entire principal will be distributed
universal life components are
an insurance component which is always an annually renewable term and a cash account
blood
all but the first 3 pints per year
whats is relative value ?
each surgical procedure will be assigned a number of pointst that are relative to the number of points assigned to the maximum benefit. the conevrsion factor represents the total amount payable per point
pete is hopitalized with back injury. upon checking his "disability income policy", he learns that he will not be elegible for benefits for at least 30 days. this would indicate that his policy was probably written with a 30 day ?
elimination period
what is flexible spending account ?
employee is allow to deposit certain amount from paycheck before paying income taxes.they are subject to maximum amounts and use or loose rule. it could be health care account or dependent care account. this accounts are exempt of all taxes forms
cobra
for 20 or more employee's. qualifying events are, voluntary termination, termination of emplyment other than missconduct, emplyment status change, from full to part time. coverage extended up to 18 months. must excercise extension within 60 days of separation. for employee's death, divorce or legal separation is 36 months for the dependants
change of beneficiary
irrevocable or revocable
annuities
is a contract that provides income for an specific period of years or life. may protect a person from outliving his own money. they are not life insurance but rather a way of accumulating money. annuities don't pay any death benefits and probably payment stop with the death of the annuitant
the following would not qualified as a dependent under a "dependent care flexible spending account...
jeremy had to have both legs amputated, but has learned how to take care of himself and get around in a wheelchair
what two terms are associated directly with the premium ?
level or flexible
what are the policyowner responsabilities?
pay the policy premium and must have an insurable interest in the insured at the time of application of the insurance
which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner ?
payment of claims
what rider would "not" cause the "death benefit" to increase ?
payor benefit rider
is a false statement that in a modified endowment contract (MEC)....
the policyowner can receive contributions at any time without been penalized
what is life income with period certain options ?
the recipient is provided with a combo of lifetime income and guaranteed installment period. if recipient dies, the beneficiary fro the reminder of the guarantee period.
what best defines target premium in a universal policy ?
the recommended amount to keep the policy en force throughout it's lifetime
under the extended term insurance policy, the policy cash value is converted to
the same face amount as in the whole life policy
teresa pays a monthly premium of $100 for her health insurance. what would be the duration of the "grace period"under her policy ?
10 days
which of the following is "not" a feature of a non-cancellable policy ?
A)the insurer has the right to renew the policy for the life of the contract *B)the insurer may terminate the contract only at renewal for certain conditions, is not a feature C)the premiums can not be increased beyond the amount stated in the policy D)the guarantee to renew coverage ussually applies until the insured reaches certain age
Which is NOT true about uniform mandatory provisions for claims? a) Insured must give notice within 20 days. b) Insured is 2 years late in filing proof of loss, claim can be denied. c) Insured must notify insurer of claim on forms from insurer.
c) An insured must notify the insurer of a claim on forms prescribed by the insurer. If forms are not furnished, written proof of the occurrence, nature of the loss, and extent of loss must be submitted to the insurer.
Which type of beneficiary is changeable at any point? a) Both Irrevocable and Revocable b) Tertiary c) Irrevocable d) Revocable
d) Revocable Revocable beneficiaries can be changed at any point. Irrevocable beneficiaries must give permission to the policyowner in order for the beneficiary to be changed.
what entity has the authority to make changes to an insurance policy ?
insurer's executive officer
donald purchase a life insurance from company. the agent told him that depending upon the company's investements and expense factor the cash value could be more or less than those show in the policy at issue time. donald policy is..
interest-sensitive whole life
a married couple owns a permanent policy which covers both of their lives and pays the face amount of the policy upon the death of the first. wich policy is that ?
joint life policy
when a replecement is involved, a replacing insurance company is "not" reponsible for....
providing a copy of the important notice regarding replacement of life insurance to the applicant
which LTC coverage, would "not" encourage an insured to receive care at home ?
residential care
Which life policy is designed to provide the policyowner a hedge against the effects of inflation? a) Modified life b) Variable life c) Ordinary life d) Graded premium whole life
b) Variable life Because variable life policies invest in the insurer's separate accounts and allow the policyowner to choose specific investment strategies, the interest rates will fluctuate depending upon the performance of the investments. The policy value, therefore, should reflect the effects of inflation up the economy.
the provisions which prevents the insured, from bringing any legal action against the company for the last 60 days after proof of loss, is known as
legal actions
A medical expense policy establishes amount of benefit paid based on charges which fall within standard range of fees for a specific procedure by a doctor in that geographic area is known as a) Gatekeepers. b) Usual, customary and reasonable. c) Relative-value schedule. d) Benefit schedule.
b) Usual, customary and reasonable. The usual, customary and reasonable approach for determining insurance benefits is based upon the fees normally charged for specific procedures in the geographic location where the services are provided.
Which of the following statements regarding Business Overhead Expense policies is NOT true? a) Benefits are usually limited to six months. b) Premiums paid for BOE are tax-deductible. c) Any benefits received are taxable to the business. d) Leased equipment expenses are covered by the plan.
a) Benefits are usually limited to six months. Business Overhead Expense (BOE) insurance is sold to small business owners for the purpose of reimbursing the policyholder for business overhead expenses during a period of total disability. Premiums are tax-deductible for a business, but any benefits received are not tax-deductible. Overhead expenses, including equipment and employee salaries, are covered by the plan. Salaries and profits of the employer are not protected.
which rider available in disability income insurance, will provide benefits above the base policy amount ?
multiple indemnity rider
if an employer who employs lees than 20 employee's mantains a group health insurance policy which cover those employee's, the policy must contain a provision which permits an employee who is terminated involuntarily, for other than gross misconduct, to continue identical coverage for....
18 months
HIPPAA or health unsurance portability and accountability act, applies to groups of
2 or more
what is supplemental mejor medical policies ?
afetr basic policy pays, the supplemental will provide coverage, the insured must pay a corridor decuctible.
what is children term rider ?
allows children of insured to be added to the coverage for a limited period and amount. usually expires when reach 18 or 21. is also an option to convert to a permanent policy without insurability
what is term riders ?
allows for an additional amount of temporary insurance
carry over provision
allows the insured to carry over the last 3 months expenses to next year's policy
what is guaranteed insurability ?
allows the insured to purchase additonal coverage at specific future dates, usually every 3 years or events without proof of insurability. expires at 40
what is "not" true regarding uniform mandatory provisions concerning claims ?
an insured must notify the insurer of a claim on forms prescribed by the insurer
all others factors been equal, the least expensive firs-year premium payment is found in......
annually renewable term
*which bob purchase a policy to provide coverage on himself, his wife linda, and their two children, john and kristen. all of them would need to prove insurability "EXCEPT"
any children born to them after the inception of the contract
physical examination and autopsy
at insurer's expense as much as neccessary
association group
at least 100 members, active for 2 years, have a constitution , by laws and hold a yearly meeting. may be contributory or non. has a master contract and issues certificates of insurance to his members
All the following are Nonforfeiture options EXCEPT a) Reduced paid-up b) Interest only c) Cash surrender d) Extended term
b) Interest only Nonforfeiture values include cash surrender, extended term and reduced paid-up. Interest only is a settlement option.
qualifications for disability
before 24, 6 credits and 3 years prior. 24 to 31 years and 12 credits and after 31years from 20 to 40 depending on age. 5 months waiting period. payment will be based in on person P.I.A. or personal insurance amount
group disability income policy
benefits based on percentage of worker's income, max benfit period of 26 weeks, benefit 50% to a 100% of incomeemployee must have worked 30 to 90 days before elegible, are supplemetal to workers compensation and limited coverage to nonocupational disabilities
what is consideration ?
both parties to a contract must provide consideration in order to be valid. the consideration given by the insured is the premiums and the statements made in the application. by the insurer is promise to pay in accordance with the terms of the contract.
in comparison to a policy that uses the "accidental means" definition, a policy that uses the "accidental bodily injury definition would provide a coverage that is......
broader in general
*what is true regarding insurance company appointment for a broker ?
brokers "do not need to be appointed"
the purpose of a managed care health insurance plan is to
control health insurance claims expenses
HMO and PPO for a Medicare recipient does not cover....
cosmetic surgery
time of payment claims
could be 60, 45 or 30 days. however disability income must be paid not less than monthly
what is basic hospital expense coverage ?
cover hospital room and board and miscellaneous expenses, such as x rays, medicines, etc when insured is in the hospital and specified a dollar amount per day and a maximum number of days
group insurance definition
coverage must be incidental to the group. it could be employer-sponsored or association-sponsored. insurability not required.
pre-existing conditions
coverage will not apply within a certain amount of time before application
hospice care
covers docotrs, nurses, medical appliances and supplies
which of the following "LTC" coverages would encourage an insured to receive care at home ?
custodial care facility, respite care and home health care
time limit on certain defenses
no statement or misstatement, except fraud, can be denied if policy has in force for 2 years. also applies for pre-existing conditions
what is "not" an optional provision in individual health insurance policies ?
notice of claim
which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of loss ?
notice of claims
what is H.M.O. limited service area ?
offer services to those in a specific geographic areas.
prescriptions drugs
only medicines that are administered in a hospital outpatient department
medicare part c
or medicare advantage must be in part a and b. medical services except emergencies. also provides special health care for specific groups of people. a medicare private fee for services plan is part of advantage
medicare supplement policies
or medigap are issued by private insurance , designed to fill the gaps in medicare. under obra, may not discriminate. open enrollment is up to 6 months where first sign up for part b
a brain surgeon has an accident and develops tremors in her right arm. what disability income policy definition of total disability will cover her for all losses ?
own occupation - less restrictive than other definitions
what are dividens and dividens options ?
paid only in participating policies. dividens are a return in excess premiums and for that reason they are not taxable to the policyowner. they can not be guaranteed.
critical illness
pays a lump sum to the insured upon diagnose of critical illness
free look
period to look over the policy and return it if not satisfied. applies from delivery date
what is correct concerning the taxation of a Key Person life insurance policy premiums and death benefits ?
permiums are not deductible as a business expense and the death benefit is not taxable to the company
what is a P.P.O. ?
physician are paid a fee for service. members can use any physician or facility.
what is cash surrender ?
policyowner surrendersthe policy for a current cash value. if cash value exceeds premiums paid, the excess is taxable as ordinary income. a surrender charge may be charged by insurer.
in what instance would the premium be tax-deductible...
premiums paid by the employer on a $30,000 group term life insurance plan for employee's
an insured is covered under a Medicare policy that provides a list of network healthcare providers that he must use (except in emergency situations) in order to receive coverage in exchange for this inconvenience, he is offered a lower premium. which type of Medicare policy does he own ?
select
method of funding annuities
single payment, periodic payment and flexible premium
benefits periods for individually short-term disability policies will usually continue from...
six months to two years
L.T.C. level of cares
skilled cared that can only be provided by medical personnel, intermediate care is nursing and rehabilitation services in a 24 hours bases, custodial care is assisting in eating , dressing, etcby nonmedical personnel, home health care is provided by skilled nursing in one's home, home convalescent care provided by attending physician in one's home, residential care is provided in a retirement community, adult day care is provided for functionally impaired adults in less than a 24 hours bases and respite care which is designed to provide relief to the family caregiver
vision & hearing plans
some employers offer eye examinations, eyeglasses or hearing aids on a limited basis.
pre-authorization
some health policies require prior approval before some medical procedures, etc
deductible
specific dollar amount that the insured must pay before the insurance pay policy benefits. could be annual, individual, family, flat, integrated, etc. time deductible is elimination period.
recurrent disability
specified period of time that must lapse between 2 illnesses
payment of claims
specified to whom the proceeds are to be paid to
presumptive disability
specifies the conditions that will automatically qualify for full desability benefits, provides a benefit for dismemberment
exclusions
spicify what the insurer will not pay. maternity, mental disorders, substance abuse
an insurer is helping a married couple determine their children needs, assets and liabilities, in the even both spouses should die, what is the term most closely associated with this ?
survivor protection
an insurer is helping a married couple determine their children's needs, assets, and liabilities in the event that one or both of the spouses should die. what's the term most closely associated with this ?
survivor protection
skilled nursing facility
up to a 100 days, follow by 3 days inpatient hospitalfor related illness
what is payor benefit ?
use with juvenile policies. if the payor become disable for 6 months or dies, the insurer will waive the premiums until the minor reaches a certain age , such as 21. also used when the owner and the insured are two different people
what is the suicide clause ?
usually stipulates a period of time during which the death benefit will not be paid if insured commits suicide
elimination period
waiting period to the insured from onset of the disability until the benefit payment commence. is a deductible in days instead of dollars. range from 30 to a 180 days, longer elimination translates in lower premium
what is third party ownership ?
when the policyowner and the insured are not the same person
what is common disaster clause ?
which is provided under the uniform simultaneous death law, will asume that the primary beneficiary died first in a common disaster where the insurer and primary beneficiary where involved. an specific time period of 30, 60 or 90 days must occur in order to follow this provision
All of the following are true of Key Employee life insurance EXCEPT a) The death benefit is free from income taxes. b) The key employee has premiums deducted from his salary. c) The business is the owner and beneficiary of the policy. d) The key employee is the insured.
b) The key employee has premiums deducted from his salary. The business pays the premiums that are not deductible, but the death benefit is free from income taxes.
an applicant is discussing his options for "Medicare supplement coverage" with his agent. He is 65 years and has just enrolled in "Medicare part A and part B". what is the insurance company obligated to do ?
offer the supplement policy on a guaranteed basis
Sam has a life insurance policy from a participating company and receives "quarterly dividends". he instructed the company to apply his dividends to the policy, to increase the death benefit. The dividend option that he has chosen is called ...
paid-up options
todd has been informed that he has an hernia which requires repair. he researches the cost and learns his insurance will cover 200 points worth of surgical expenses. each point represents $10, which it means $2,000 of his surgery be covered by his plan. what system is todd insurance company is using ?
relative value
a man decides to purchase a $100,000 annually renewable term insurance life policy to provide additional protection until his children finished college, he discovered that this policy
required a premium increase at each renewal
an agent tries to sell insurance to an applicant who appears to be confused but is eventually able to give enough info for the applicationto be completed. after the policy was issued the agent talked to the insured's family and they explained that the insured was recovering from a surgery and might have been under the influence of meds at the time of application. what happen then ?
the policy may be voided if it can be proven that the applicant was not capable of making a buying decision at the time of the application
After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true? a) The employee can convert from group to individual insurance within 31 days of termination. b) The premium of the individual health insurance policy can be higher than the original policy. c) By law, the new, individual policy must provide the same benefits as the group insurance policy. d) Continuation of group coverage need not include dental, vision, or prescription drug benefits.
c) By law, the new, individual policy must provide the same benefits as the group insurance policy. Terminated employees have 31 days to convert to an individual health insurance policy, without having to provide proof of insurability. The insurer can adjust the new, individual health policy's premium as it sees fit, as long as coverage is provided. The new policy could offer lesser benefits than the original group health policy.
The cash value under a MEC accumulates a) On an income-taxable basis. b) On a post-tax basis. c) On a tax-deferred basis. d) On a LIFO basis.
c) On a tax-deferred basis. The cash value of a Modified Endowment Contract accumulates on a tax-deferred basis. Taxation occurs only when any of the cash value is distributed to the policyowner (i.e., withdrawals and surrenders).
Who does the sub-agent represents? a) The company b) The insured c) The agent d) The counselor
c) The agent An agent represents the company. A sub-agent represents the agent. A sub-agent cannot take or sign an application. A counselor receives a fee for advice, and can maintain a dual license as an agent and counselor.
existing insurers must provide policyowners with a policy summary for the existing life insurance within how many days of receiving the written communication of replacement ?
20 days
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy? a) It is reduced to the amount of what the cash value would buy as a single premium. b) It is increased when extra premiums are paid. c) It decreases over the term of the policy. d) It remains the same as the original policy, regardless of any discrepancies in value.
a) It is reduced to the amount of what the cash value would buy as a single premium. In a reduced paid-up policy, the original policy's cash value is used as single premium to pay for a permanent policy with a reduced face amount from the original, hence the name. The new policy accumulates in cash value until its maturity or the insured's death.
disability income coverage specifies that the policy covers the insured if he is unable to perform any job for which he is qualified. in this case, total disability is define as....
any ocupation..more restrictive than other definitions
A claiment wants to bring a recovery action against an insurance company for a loss claimed under a policy. The action must be brought a) Within 2 years. b) Within 3 years. c) Immediately. d) Only within 60 days.
b) Within 3 years. Some states require a provision limiting the time parameters in which a claimant may seek recovery from an insurer under a policy. Georgia requires legal action to be brought forth no sooner than 60 days and no later than 3 years after proof of loss.
Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within a) 30 days of a loss. b) 60 days of a loss. c) 90 days of a loss. d) 20 days of a loss.
c) 90 days of a loss. Under the Uniform Required Provisions, proof of loss under a health insurance policy normally should be filed within 90 days of a loss.
In disability income coverage the policy covers the insured if he is unable to perform any job for which he is qualified. Total disability is defined as a) Own occupation - more restrictive b) Own occupation - less restrictive c) Any occupation - more restrictive d) Any occupation - less restrictive
c) Any occupation - more restrictive than other definitions. If total disability is defined as any occupation, it means the coverage will apply only if the insured cannot find any means of income whatsoever. This is more strict than own occupation, where a person merely has to prove that they cannot perform the job for which they were previously trained.
An insurance contract must contain all of the following to be considered legally binding EXCEPT a) Consideration b) Competent parties. c) Beneficiary's consent d) Offer and Acceptance
c) Beneficiary's consent The four essential elements of all legal contracts are offer and acceptance; consideration; competent parties; and legal purpose.
Because an insurance policy is a contract between the insurer and the insured, it must conform to the state laws governing contracts which require all of the following elements EXCEPT a) Legal purpose. b) Offer and acceptance. c) Conditions. d) Competent parties.
c) Conditions. Conditions are part of the policy structure. Consideration is an essential part of a contract.
an adjustable life policyowner can....
change the coverage period
An insured needs extraordinary medical care and sells his policy to a viatical settlement company. This is an example of a) A collateral assignment b) An assigned premium c) An insurable interest d) An absolute assignment
d) An absolute assignment Absolute assignment involves transferring all rights of ownership to another person or entity, which is what happens in a viatical settlement.
Describe the deductible in a comprehensive major medical policy? a) There is no deductible, the insurer pays coinsurance only. b) Comprehensive major medical have deductibles on all benefits. c) Comprehensive major medical do not have deductibles. d) Policies have a corridor deductible.
d) Most policies have a corridor deductible. Most comprehensive major medical policies have corridor deductibles. The plan will provide first-dollar coverage for basic medical benefits, but a deductible may be applied to the major medical benefits.
Ron joins PPO provided by his employer. If Ron goes to a physician who is not a PPO provider, what will happen? a) PPO won't pay.. b) Ron will pay a higher deductible. c) The PPO will pay the same benefits as if Ron had seen a PPO physician. d) The PPO will pay reduced benefits.
d) The PPO will pay reduced benefits. Ron's health insurance will not pay the full amount charged by the non-PPO doctor.
when a life insurance policy is cancelled and the insured selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has the face amount of ?
equal to the original policy, for as long of a period of time that the cash value will purchase
a "medical expense policy" that establishes the amount of benefit paid base upon the prevailing charges, which fall withing the "standard" range of fees, normally charged by specific procedure by a doctor of a similar training and experience and that geographic area is known as ?
usual, customary and reasonable
in forming an insurance contract, when does acceptance usually occurs ?
when insurer approves a prepaid application
how many consecutive months of coverage(other than in an acute care unit of a hospital) does LTC insurance cover in Nevada ?
24 months
which report will provide the underwriter with the information about a consumer's credit ?
consumers report
an individual has just been diagnosed with a quickly-spreading fatal form of cancer, his oncologist predicts that he will live for 5 months. he applies for individual life insurance. what risk classification will he most likely receive ?
declined
doctor services
no matter where in the U.S.
what is "respite" care ?
"relief" for a major care giver
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. What would be the face value of the new term policy?
$50,000 . The face of the term policy would be the same as the face amount provided under the whole life policy
what is H.M.O. copayment ?
is an specific part of the cost to be paid by the member
a statements concerning Medicare part B says..
it pays for physician services, diagnostic test and physical therapy
when an employee covered under a health reimbursment account changes employer, the HRA ?
stays with the employer
what is true regarding underwriting for a person with HIV ?
the person may be declined
what's the purpose of the buyer's guide ?
to allow the consumer to compare the costs of differents policies
if a person is 27 years old and meets "social security definition of "total disability" how many work credits must have earned to receive benefits ?
12 credits
the commissioner must reasonable notice to all interested parties as to the time, place and purpose of a hearing within the minimum of how many days of the hearing ?
20 days
*how many concecutives months of coverage (other than in acute care unit of a hospital) does TLC insurance cover in Nevada ?
24 months
When a disabled dependent child reaches the age limit for coverage, how long does the policyowner have to provide proof of dependency in order for the dependent to remain covered under the policy?
31 days
ray has an individual major medical policy that requires a co-insurance payment. Ray very rarely visits the physician and would prefer to pay the lowest premium possible. Which co-insurance arrangement would be best for Ray ?
50-50
A premature distribution from a Roth IRA made before the individual reaches age 59½ is subject to a 10% penalty tax unless the distribution was for
A first-time home purchase.
All of the following are correct about the required provisions of a health insurance policy EXCEPT
A reinstated policy provides immediate coverage for an illness.
*which of the following will "not"qualified for a limited lines producer license ?
A)a person selling credit life insurance only *B)a person selling annuities will not qualify C)a person selling rental car insurance D)a person selling travel baggage insurance
which of the following is "not" an allowable exclusion of Medicare supplemental insurance ?
A)dental treatment B)hearing aids C)emotional disorders *D)all of the above are allowable exclusion and that is the right answer
after a person's emplyoment is terminated, it is possible to abtain individual health insurance after loosing the group health coverage provided by the employer, which is "Not true "
A)the employee can convert from group to individual withing 31 days of termination B)the premium of the individual health insurance policy can be higher than the original policy *C) that by law, the new individual policy must provide the same benefits as the group insurance policy is "not true" D)non of the above,
Who can make a fully deductible contribution to a traditional IRA?
An individual not covered by an employer-sponsored plan whose earned income is below a required limit
What is available to employers of all sizes?
H.R.A.'s or Health Reimbursement Accounts
What is NOT a benefit of a POS plan?
It allows guaranteed acceptance of all applicants.
Which of the following statements concerning Medicare Part B is correct?
It pays for physician services, diagnostic tests, and physical therapy.
Which rider, available in disability income insurance, will provide benefits above the base policy amount?
Multiple indemnity rider
What is FALSE, regarding the process of completing and signing an application?
Only the insured is required to sign the application.
Which health insurance provision describes the insured's right to cancel coverage?
Renewal provision
A primary beneficiary discovers upon the death of her uncle that he chose the interest only option. What does this mean?
The beneficiary will only receive payments of the interest earned on the death benefit. With the Interest Only Option, the insurance company retains the policy proceeds and pays interest on the proceeds to the recipient (beneficiary) at regular intervals (monthly, quarterly, semiannually, or annually).
All of the following are characteristics of a Universal Life policy EXCEPT
The planned premium pays for mortality charges and expenses and any excess is returned to the policyowner.
Under an extended term insurance policy, the policy cash value is converted to
The same face amount as in the whole life policy
annuities periods
accumulation period, is where the annuitant makes payments and the pay-out period is where the accumulated sum is converted into an stream of income payments to the annuitant
cancelable
allows the insurer to cancel the policy at any time ar at end of policy period. proper notice the cancellation must by issued and refund any unearned premiums
guaranty insurability rider
allows the insurer to purchase additional amounts of disability income coverage without insurability, expires at 50
what is reinstatement ?
allows the lapsed policy to be back in force, ussualy the limit is 3 years after it lapsed. policyowner may be required to pay back owned premiums, interest and any outstanding loans and interest. the benefit is that it willbe restored at the insured's issue age
term renewable insurance
allows the policycowner the renew at expiration day without insurability proof. premium will be based in current age
disability income coverages specifies that the policy covers the insured if he is unable to perform any jobwhich he is qualified. in this case, total disability is defined as
any ocupations - more restrictive than other definitions
what is policy riders ?
are added to the basic life insurance in order to add, modify or delete policy provision. must be attached to a policy and generally require payment of additional premium
redcutions
are decrease of benefits for a time period, like, sering military, resides in foreing country, etc
index annuities
are fixed annuities that invest on an aggresive basis for higher returns. has a guaranteed minimum interest rate and is tie to Santdard and Poor's 500. normally, insurance companies reserve the initial returns for themselves an pay the excess to the annuitant
home health visits
as long is recommended by the insured's doctor and the insured is elegible
what are the options policyowners have for taking their dividens ?
cash, usually annually. application to reduce premiums, where the insurer uses the dividens to reduce the next year's premium and accumulation at interest wherethe insurer keeps the dividensi in an account where accumulates interest. can take the dividends at any time. although the dividends are not taxable, the interest are
multiple indemnity
certain benefits are double or tripled when death of insured was due to specific circunstances. death must occur in 90 to 100 days from time of accident
optional provisions
change of accupation, where the insurer is allow to adjust benefits if insured changes jobs. more hazardous benefits may reduce the benefits or less hazardous may reduce the premium. also illegal ocupations, where benefits may be denied if insured is injured during illegal acts
when an insurance company or agent advertises health insurance products to the public, the advertisement must include......
clear identification of the insurer
variable universal life
combo of universal and variable life. i tprovides policyowners with flexible premiums. adjustable death benefits and the policyowner decides where the net premiums will be invested. cash value is not guaranteed and the death benefit is not fixed
which of the following provisions give an employee the right to exchange group insurance for an individual policy withing 60 days from termination of employment ?
conversion provision
mortality figures are normally developed by studying and interpreting statistics...
developed by the deaths of millions of persons over long period of time...
what is paid-up additions ?
dividends are used to purchase a single premium premium policy in addition to the face amount of the permanent policy. each additional premium will increase the death benefit of the original policy
what is closed panel ?
doctors are considered amployee's and can only treat members.
annuity method of grow
fixed, where the annuitant knows exactly the amount of each payment will receive, may be eroded by inflation or variable, where the value of the investment account may be subjet to variation. premium are deposited in a separate account. then converted to annuity units, the income is then paid to the annuitant based in the value of the annuity units. this type serves as an hedge against inflation. variable annuity require security and life insurance and to be registered with the F.I.N.R.A.
outpatient hospital services
for diagnosis and treatment, emergency room, etc
what is an elegibility requirement for "social security disability income benefits"
fully insured status
if toms's policy allows him to make periodic additions to the face amount at standard rates, without proving insurability, his policy includes a.....
guaranteed insurability option
medigap plan
guaranteed renewable, insurer must use same format, definitions, etc in all plans and 30 days free look. can not restrict coverage on pre-existing for more than 6 months
what is paid-up ooption ?
if the insured has a continuous premium whole life policy, where premiums are paid to 100, with this option will pay up the policy early
priscilla won the state lottery, the state will send her a check each month for the next 25 years. what type of investment are they likely to use to provide these benefits ?
immediate annuity
what is return of premium ?
implemented by using increasing term insurance. when added to a whole life, provides that a death prior to a certain age, will not only pay the original face amount but also will pay an amount equal to all premiums paid. expires at 60
what is waiver of premiums with disability income ?
in the event of disability the insurer will waive the policy premiums and pay a monthly income to the insured. is normally a percentage of the policy face amount.
waiver of premium
in the event of permanent or total disability, permiums will be waived for disability duration. to qualify, must be totally disable for 3 to 6 months and waiting period is also 3 to 6 months . expires at 65
definition of disability
inability to work as a result of a medical or mental impairment that is expected to result in death or last for at least 12 months
group conversions
individual can convert group to individual insurance without proof of insurability if is between 31 days of termination, it may have limitation in pre-existing conditions but will expire in two years
what are the two components of a universal policy
insurance and cash account
the policyowner may change the complete or partial ownership of the policy without changing the
insured or amount of coverage
right of renewability
insured rigths to cancel or renew coverage
non-cancelable
insurer can not cancel nor the premium can be increased beyond what is stated in the policy
what is one year term option ?
insurer uses dividends to purchase additional insurance in the form of one year term insurance, that increases the overall policy death benefit.
interest-sensitive whole life
is a fixed premium whole life that provides guaranteed death benefitas to age 100. it credits the cash value with the current interest rate comparable to money markets. also a minimum rate of interest.
recurrent disability
is a period of time, usually 3 to 6 monthsduring which a recurrence of an injury will be considered a continuation of a prior disability
what is beneficiary desigantions ?
is a person or interest to which the policy proceeds will be paid upon the death of the insured. this person does not have to have an insurable interest in the insured
what is H.M.O. prepaid basis ?
is a prepaid medical plan
what is misstatement of age and gender ?
is a provision that allows the insurer to adjust the policy at any time due the misstatement of age and gender.
what is L.T.C. coverage ?
is a rider that provide payment of part of the death benefit in order to take care of the insured's health care expenses. this reduce the face value of the policy
joint life
is a single policy to insure two or more lifes. could be term or permanent insurance. most common form is joint group life where the premiums is based on an average age between the insured's and that the death benefit is paid upon the first death only.
what is free look ?
is a specified number of days from receipt to look over the policy and if dessatisfied, return it for a full refund
medicare select
is a supplemental policy that contains restricted netowrk provisions, that conditions the payment of benefits in part or as a whole on the use of network providers
term life definition
is a temporary protection for a specific time period. if insured die during the term, the policy pays the death benefit to the beneficiary, if policy expires or is canceled prior indured's death, nothing is to be paid and there is no cash value or living benefits. is renewable, convertible or both
return of premiums
is an inceasing term insurance that pays an additional death benefit to the beneficiary equal to the amount of premiums paid
reinstatement
is automatic if insurer accepts the policy premium. accident are cover right away but sickness after 10 days
level insurance types
is base in how the face amount changes during the policy. level, decreasing and increasing
benefit limitations in disability income policies
is based in the percentage of the insured past earnings, it's about 66% of average earning for 2 years preceding the disability
what is spouse term rider ?
is coverage for a limited time and specific amount. expires at 65
limited-paid whole life
is designed so that the premiums for coverage will be completely paid up well before 100. premiums are much higher here.
annually renewable term
is level but the premium increases annually according to the attained age.
survivorship life
is much the same as joint life with the difference that the death benefits are paid on the last death, resulting in much lower premiums
medicare part d
is optional, provides 75 % of prescription cost until a benefit cost is reached, then a donut hole occurs. catastrophic coverage is up to 95 %
equity indexed whole life
is that the cash value is dependent upon the performance of the equity index although minimum cash value is guaranteed. premiums are fixed and death benefits are guaranteed
straigth life
is the basic whole life policy where policyowner pays the premiums from the policy issue till death or 100
an agent offer his clients free ticket to the superbowl game in exchange for the purchase of an insurance policy. the agent is guilty of ?
rebating
annuitant
is the person who receives benefits or payments from the annuity, who's life expectancy is taken in consideration. although annuities can by own by a trustee or corporation, the annuitant must be a natural person. they have nonforfeiture values which may be witdrawn prior annuitization date. annuities can be used for any purpose that requires a steady stream of income at some future point.
permanent life insurance
is various forms of life insurance that build cash value and remain in effect the entire life of the insured or unitl 100
variable whole life
it does not have the same guarantees of pricipal and interes that are found in whole life policies. the main difference is that the policyowner may alocate the premiums into a sub-account that is held by the insurance company, called, separate account . here death benefit and cash value is not guaranteed, however the death benefit cannot decrease below the initial face amount. premium is fixed and will not change for the policy life. because it involves investments accounts, security license and life insurance license is required
single premium whole life
it has level death benefits to age 100 and a one time time lump sum payment. it generates immediate cash and most companies will require a minimum premium for policy maintance.
decreasing term insurance
it has level premium and death benefit that decreases each year over policy duration. use for mortgages or other debts. can be conertible but not renewable since the death benefit is $0 at the end of the policy term.
increasing term insurance
it has level premiums and death benefits that increases every year over duration of the policy term. used by insurance companies to fund certain riders, like refund on premiums
what is true of a children's rider added to an insured's permanent life insurance policy
it is "term coverage" that's convertible to "permanent insurance" at or prior to the child reaching the maximum coverage age
what is H.M.O. limited choice of providers ?
it limit the cost by only providing care from physicians that meet their standards at a prenegotiated price
ajustable life
it offers the best of both words, term and permanent coverage. premium and coverage is determine by the insured and can be change at any time for, period of protection and increase or decrease permium, paying period and face amount. also can be converted from term to whole life and viceversa, however may required proof of insurability. cash value develops when premium amount are more than the policy cost
whats is nonfamily insureds ?
it's not permited to additional insured, but instead allows for the change of insureds, subject to insurability
what are the two types of premium ?
level, where the premium remains the same for the duration of the contract and flexible where the policyowner pay more or less than the planned premium. for example the universal life
legal actions
limits of time where the insured , may seek recovery from insurer. must wait 60 days but no more than 3 years after proof of loss
medicare part b
medical and other supplies not covered by part a. is optional and must be declined for anyone who has part a. no maximum out of pocket limit on the 20% coinsurance
annuities are classified by
method used of funding, annuity payment, date of annuity payment begin and underlying investment configuration of the annuity
the commissioner denied an application for insurance license and notified the applicant. what is true regarding a hearing regarding this...
must be held within 30 days of the request
home health care
no limit in home visits, part time skilled nurse, physical and speech terapy
medicare has the following parts
part a, hospital insurance. part b, medical insurance, part c, health care services and part d, prescription coverage
what is basic surgical expense coverage ?
pay for the cost of surgeon's services in or out of the hospital.
what is fixed amount ?
pays a fixed, specified amount in installments unitl the proceeds are exhausted
L.T.C. exclusions
pre-existing conditions, mentl and nervous disorders, alcoholism and drugs, illness caused by war, criminal activities, attempted siucide and treatment paid by goverment such a medicare, workers comp, etc
an insurer wants to obtain information from investigators regarding an insured. what must the insure do in order to legally acquire this information ?
present the insured with a "disclosure authorization notice"
what is incontestability ?
prevents the insurer from denying a claim due to statements in the application after the policy has been in force for two years. does not apply in nonpayment of premiums, age, sex and identity.
L.T.C. definition
provide coverage for individuals who are no longer able to live and independant lifestyle. elimination period is 30 days. benefit period is up to 5 years. payment is specific dollar amount per day. most are guaranteed renewable but premiums may increase. could be an individual or group contract
what is accelerated benefit ?
provides for an early payment of part of the policy death benefit if insured is diagnosed with a terminal illness that will result in death within 2 years or has other qualifying conditions
whole life insurance
provides lifetime protection and includes a savings element or cash value. this policies endow at the insured 100 birthday, which means the cash value is equal to the face amount of the policy at age 100. 3 types of whole life, straight life, limited -pay life and single premium life.
what is life income ?
provides the recipient with an income that connot outlive. installment are guaranteed for as long as the recipient lives
what is the different types of beneficiary designations ?
revocable, in which the policyowner may do any changes to the policy and irrevocable where in order to do certain changes, the policyowner needs written consent from the beneficiary
the minimum number of person to be insured under a group health insurance plan is establish by
state laws
what statement about H.R.A.'s is true ?
the account allows roll-overs of unused balances at the end of the year at the employer's discretion
optionally renewable
the insurer may cancel for any reason. renewablity is an insurer option. if renew the policy may also increse the premium.. may not renewal due to claims experience
conditionally renewable
the insurer may terminate the contract only at renewal for certain conditions
what is extended term ?
the insurer uses the policy cash value to convert to term insurance for the same face amount as the former permanent policy. if nonforfeiture option has been choosen, the insurer implement this one
what would make it easier to qualify for total disability benefits
the more liberal - own occupation
level term insurance
the most common, death benefit stays level throughout the policy life
what contitutes the entire contract ?
the policy, copy of application, along with any riders and amendments
entire contract
the policy, copy of signed application and any attached riders or amendments constitutes the entire contract. only the executive officer of a company can make changes
who would "not" be elegible to establish a "keogh" retirement plan ?
the president and employee of a corporation
business disability buy out policy
this agreement will specify who will purchase a disable partner's interest and legally obligates that person to purchase such interest upon disability. elimination period could be 1 or 2 years. premiums are not tax deductible but the benefits are tax free. usually in a lump sum.
uniform individual accident and sickness policy provisions law
this law establish the provisionsto be included in all individual health insurance. it defines the rights and duties of policyolders and insurers
what is life income joint and survivor /
this option guarantees an income for two or more recipientsfor as long as they live. could be joint and 1/2 survivor or joint and 2/3 survivor in which the survivor recipient receives 1/2 or 2/3 of the income when both where alive
what is mejor medial policies ?
this policies offer a broad range of coverage. this policies usually carry deductibles, coinsurance requirements and large benefits maximums/
wich provision states that the insurance company must pay "medical expense" claims immediately?
time of payment of claims
what is "not" the purpose of H.I.P.A.A. ?
to provide immediate coverage to new employees who had been previously covered for 18 months
what are exclusions ?
type of risk the policy will not cover. aviation, hazardous occupation and hobbies and war or military service. this last one could be a status clause which excludes of types of death where active in the military or results clause which only excludes if killed in war.
a life insurance policyowner has the flexibility to increase the amount of premium and then decrease it at a later date . the person is also allowed to skip premiums payments, provided that there's enough cash value in the policy to cover the premium amount. this is....
universal life
notice of claim
unsured's duty to provide notice between 20 days of loss
what is in the first page of the policy ?
unsuring clause, who the parties to the contract are, the premium to be paid, for how long the coverage is in force and the death benefit.
inpatient nursing facility
up to 90 days in hospital, first 60 no deductible.
