Comprehensive exam 2

If Mary is 30 years old and buys a 15 Pay Life policy, how old will Mary be when she stops paying premiums?

45

A qualified Long-Term Care Policy may exclude losses incurred from preexisting conditions for no longer than ______ months from the effective date of coverage.

6

What is the name of the rider that requires that the premium payor become totally and permanently disabled before it will pay a claim?

Payor benefit (waiver of payors premium)

Which of the following statements regarding coverage for emergency care under the Affordable Care Act is correct?

Plans must do so regardless of network affiliation without requiring prior approval

All of the following regarding policy loans are true, except:

Policy loans are taxable if the policy remains in effect and the amount borrowed exceeds the premiums paid

Guaranteed renewable means:

Renewable with adjustable premiums, by classification only

Examples of preventive care include all of the following, except:

Restricting travel to within 5 miles of home

Life insurance that does not require a medical exam is known as:

Simplified issue

Which of the following plans is for employees of non profits and schools?

TSAs

Louise purchased a disability policy when her salary was $4,000 a month. Later, she lost that job and her salary was reduced to $2,000 a month. Three years ago, she became self-employed and now receives $3,500 a month. The maximum disability benefit she might expect will be based on which salary amount?

$3500

Ted owns a $50,000 Whole Life Policy. At age 47, he decides to stop paying premiums on his policy when it has $15,000 of cash value and exercise the Extended Term Option. Ted's term benefit will be:

$50,000 Extended term option uses the present cash value of the policy upon its lapse to automatically buy a single premium term policy of the same face amount for a specified number of years and days listed in the policy's nonforfeiture table.

There are ______ different 'Metal Plans' offered through the health insurance exchanges.

4

A public school teacher may contribute part of his or her income into a ____ plan and defer income taxes on not only the contribution but also the growth in the plan.

403(b)

An annuity that is purchased with contributions made as often and in whatever amounts the owner wishes, subject only to the insurers minimums and maximums, is called:

A Flexible Premium Annuity

___________ is/are not considered material to the policy issuance.

Age and/or gender

What type of Long-Term Care policy can be renewable and convertible, and can also be purchased at lower rates than for individual coverage?

An Employer Group Policy

Which product, offered by insurers, allows an individual's savings to be distributed to him periodically over his entire life, regardless of how long he lives?

Annuities

A systematic distribution of accumulated funds, either over ones life, or specified period, is the decision of a(an):

Annuitization option

The technical name of the person who makes a policy assignment is the:

Assignor

The cash received by the policy owner when he/she terminated the policy is known as what?

Cash surrender

An insured goes to the bank for a business start-up loan. Asking for more security, the bank agrees to accept a(n) __________ on a permanent life insurance policy owned by the customer.

Collateral assignment

What is the correct term for intentionally withholding facts that, if disclosed, would change the insurers underwriting or rating decision?

Concealment

In a legal sense, an insurance premium is the insureds _______.

Consideration

Term life insurance will not pay out a death claim in which of the following situations?

Death after the term expires

The MIB obtains its information from which of the following?

Insurers

Which of the following has the primary responsibility of determining acceptable risks?

Underwriter

A person making application for themselves or another to be insured under an insurance policy is called the:

applicant

The current rate of interest paid to the cash value account of a universal life policy consists of

guaranteed interest plus excess interest

The Needs Analysis Approach always assumes the death of the insured to be:

immediate

Generally, an individual is eligible to enroll in Medicare at age

65

The MIB is used in the underwriting of all of the following types of insurance, except:

Auto and homeowners

Which provision allows an insurer to borrow from the cash value of a policy in order to pay premiums due and preventive a lapse in coverage?

Automatic Premium Loan

This type of policy covers the treatment and care of the insureds teeth

Dental expense

Which event does not cause termination of continuing coverage by COBRA?

Premium payments are made in a timely manner

The entire contract typically consists of all of the following, except:

A copy of the cancelled check and receipt

A personalized computer-generated illustration detailing premiums, cash values, interest rates, and surrender values is called _______.

A policy summary

A consumer investigation report is not completed by ____________.

A producer

An Errors & Omissions policy primarily covers the liability of:

A producer or agency

To be included in an employer-sponsored group plan, an employee must be employed full time by any of the following, exceot

A silent partner

Which of the following best describes a viatical settlement?

A terminally ill insured/owner sells his or her policy to a third party for much needed cash

With Joint Life Insurance policies, the premium is based on the:

Average age of both insureds

Which of the following is NOT an example of a prohibited practice?

Backdating Is the age of an insured by no more than 6 months to save age is not an example of a prohibited practice

All of the following are ways consumers can insure themselves with ''minimum essential coverage' without having to pay a penalty under the Affordable Care Act, except:

Be self insured

Which of the following statements is accurate concerning the changing of an irrevocable beneficiary?

Beneficiary may be changed only with the written consent of the present beneficiary. Once an irrevocable beneficiary has been declared by the owner of the policy, the only way that the irrevocable beneficiary can then be changed is only with the irrevocable beneficiary's prior written consent. An irrevocable beneficiary has a vested interest in the policy benefits.

With Long-Term Care Insurance coverage, the longer the _________is, the higher the premium is.

Benefit period

__________ is a form of whole life in which the insurance company can change the premiums or interest rate being credited to the account based on current money market rates.

Current Assumption Whole life

Which of the following is false in regards to a variable whole life's death benefit?

Death benefits are recalculated monthly

Sean has a home with a mortgage. He needs life insurance to protect his family but also wants to leave them without a mortgage payment if he dies. Ideally which of the following riders should he acquire?

Decreasing term rider Are ideally suited to cover the balance of an outstanding mortage

Insurance companies writing disability income generally have an occupational classification system based on considerations of all of the following, except:

Earning potential

All of the following are underwriting criteria taken into account by the insurer in the underwriting of individual insurance cases, except:

Education level completed

The ______ date is the date on which the insurance coverage ends

Expiration

A producer gathers information about the applicant for the insurer in order to avoid adverse selection. This is considered to be:

Field underwriting

The McCarran - Ferguson act of 1945

Gave states the authority to regulate insurance

The area of the dentistry profession dealing primarily with maintaining the functional use of natural teeth, is called:

General dentistry

A person may contribute to a Traditional IRA if they _________.

Have taxable income

All of the following qualify for Medicare Part A EXCEPT

Healthy individuals who are under age 65 and not covered by Social Security, but are willing to pay the Part A premium

Ultimately it is up to the ______ to determine if the proposed insured is an acceptable risk

Home office underwriter

Which rider would eliminate coverage for a preexisting condition?

Impairment Rider

Burt named Liz as his beneficiary; however, he did not choose a Settlement Option. At the time of his death, who determines the option to be used to receive the benefits?

Liz the beneficiary determines which option she would like to have

A basic medical plan provides a specified dollar limit per medical procedure as stated in the policy. This specified amount is the:

Maximum benefit the policy will pay for that procedure

The death benefit of a variable life policy

May go up or down but will never fall below the face amount of the policy

Which of the following will cover the cost of inpatient blood transfusions after the first 3 pints?

Medicare Part A

With _______, the patient must pay 20% of covered charges plus the deductible.

Medicare Part B

When employers who self-fund their employee benefits form a larger group in order to offer health insurance benefits to each employer's workers, it is called a (an):

Multiple Employer Welfare Association (MEWA)

Common exclusions in accident and health insurance policies include all of the following, except:

Newborn infant

What is a material misstatement?

One which would have caused the insurer to not issue the policy had it been known

Which of the following types of life insurance is the most common out of all life coverage in force in the United States?

Ordinary

Which of the following is not covered with Medicare Part A?

Outpatient hospital care

Which of the following policies is eligible for policy dividends?

Participating

Accidental injury is a:

Sudden, unexpected and unforeseen event

The provision which denies the beneficiary the right to commute, alienate, or assign his/her interest in the policy proceeds is:

The Spendthrift Clause

All of the following are true regarding credit life, except

The amount of coverage can exceed the debt

In which of the following circumstances is an annuity's tax deferral benefit lost?

The annuity is owned by a corporation

Each of the following are characteristics of a Current Assumption Whole Life insurance policy, except:

The death benefit is not guaranteed

All of the following are true regarding industrial life insurance, except:

The grace period is 1 week

What is the risk to the purchaser in a viatical settlement transaction?

The insured does not die within the time period anticipated

All of the following can determine the death benefit settlement option, except:

The insurer

If the producer discovers that the applicant is not in good health at the time of policy delivery, what should the next step be?

The policy should be returned to the insurer, or the producer may deliver the policy only after the insurer grants permission

If a client owns an equity indexed product, what happens if the market falls in value by a large amount?

The policy's values can never be impaired due to negative index performance

All of the following are true of a substandard risk, except:

The premium would be discounted

Which of the following pertaining to most LTC policies is true?

They are issued guaranteed renewable

All of the following are true about indeterminate premium whole life policies, except:

They are like participating whole life Indeterminate premium whole life policies are like nonparticipating whole life plans of insurance, except it provides for adjustable premiums.

Which statement is FALSE regarding Nonforfeiture Options?

They are used when the insured lives to the endowment date of the policy or at the insured's deaths

Which of the following policies allow for a partial withdrawal or partial surrender?

Universal Life

All of the following are examples of an absolute assignment, except:

Using a Life Insurance policy as collateral for a loan

What is the purpose of nonforfeiture values?

Without them, any cash values would be retained by the insurer when the policy lapses due to non payment of premium

Term insurance differs from permanent insurance in that term:

builds no cash value and pays a death benefit only

If the insured dies while the _______ period is in effect, the death benefit paid is the face amount, minus the premiums due.

grace

Most group life insurance has a(n) ______ term death benefit.

level

Any employee-paid group life insurance premiums are __________.

not tax deductible

Life insurance benefits are usually paid _________, unless another mode of settlement has been selected.

In a lump sum

Which of the following is NOT one of the essential elements of any legal contract?

Indemnity

Which of the following Annuities can it be said that it has 'upside potential, but no downside risk' when it comes to the stock market overall?

Indexed

Debit life insurance is classified as which of the following?

Industrial

Which of the following is true of coverage for Autism?

Insurers cannot terminate coverage due to an Autism diagnosis

A payor benefit rider is used to keep what type of policy in force?

Jumping Juvenile policy

Individuals who do not enroll during the initial enrollment period are considered _______ enrollees.

Late

The purchase of a policy from a terminally ill insured by a third party who becomes the new owner is considered a __________.

Viatical settlement

In a viatical settlement, the life insurance policyowner is referred to as the ______.

Viator

Increases in insurance protection to keep a Current Assumption policy from endowing is provided:

Without evidence of insurability