Final Exam - Life and Health
J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and receives a bill for $10,000, J would pay
$3,600
S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?
$50,000
An individual has a major medical policy with a $5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred?
$7,000
Premature IRA distributions are assessed a penalty tax of
10%
All of the following statements about traditional individual retirement accounts are false expect
10% penalty is applied to withdrawals before age 59 1/2
A 15 year mortgage is best protected by what kind of policy
15-year decreasing term
What is the minimum number of activities of daily living an insured must be unable to perform to qualify for Long Term Care benefits?
2
Producers must complete ________ hours of continuing education every two years to keep their license active
24
A producer must notify the Commissioner within ________ days of a felony conviction
30
Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits?
5
How lone does an individual have to "rollover" finds from an IRA or qualified plan
60 days
The individual most likely to buy a Medicare Supplement policy would be a(n):
68-year old male covered by Medicare
Eligible employees must be added to group health coverage NO LATER than how many days after their first day of employment?
90
Which of the following is NOT a required provision in a group life policy?
Accidental Death and Dismemberment (AD&D)
Which of the following is a requirement to attain a nonresident producer license in Indiana?
Be licensed as a producer in the producer's state of domicile
Whose life is covered on a life insurance policy that contains a payor benefit clause?
Child
What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?
Dread disease insurance
What is the purpose of the Indiana Life and Health Insurance Guaranty Association
Ensures that claims filed against insolvent insurance companies will be paid
What is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained
Fair Credit Reporting Act
The payments on Q's annuity are no less than $250 quarterly. Which of the following annuities does Q own?
Flexible Installment Deferred
The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the:
Initial deductible
During the course of an insurance transaction, who does the producer legally represent?
Insurance company
The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n):
Insuring agreement
Medicare part C is:
available to those who are enrolled in Medicare Part A and Part B
P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take?
beneficiary will be paid the death benefit
The guarantee of insurability option provides a long-term care policyowner the ability to
buy additional coverage at a later date
A Major Medical policy which requires an insurer to pay only part of a loss while the balance is paid by the insured
coinsurance
Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid.
conditional
K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?
conditional
Which of the following consists of an offer, acceptance, consideration?
contract
Which of these require an offer, acceptance, and consideration
contract
Which provision allows the policy owner to change a term life policy to a permanent one without providing proof of good health?
conversion
S is the policyowner of a Major Medical policy. The premiums are paid monthly and due on the 1st of each month. S fails to make September's payment and is hospitalized October 15th. When S files the claim for this hospitalization, the insurer will likely:
deny the claim
An example of an unfair claims settlement practice is
denying an insured's claim without indicating the basis of denial
An agent takes an individual Disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to
determine if the applicant is an acceptable risk by completing standard underwriting procedures
A group life insurance policy can be converted to an individual whole life policy under which circumstance?
employment termination
With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's
gross income at time of purchase
Which of the following is a requirement to be eligible for a group life policy in Indiana
group must be formed for a purpose other than obtaining insurance
Which of the following will a long term care plan typically provide benefits for?
home health care
In regards to representations or warranties, which of these statements is true
if material to the risk, false representations will void a policy
During the course of an insurance transaction, who does the producer legally represent
insurance company
B receives yearly dividends and interest from a participating life insurance policy. Which of these should B include as gross income for federal income tax purposes?
interest only
An insured's inability to perform two or more activities of daily living may trigger which type of policy rider?
long term care
Defamation occurs when a producer makes a false statement intended to
malign another insurer
Maternity coverage is required in which type of policy?
medical expense policy
Which of the following statements is correct about accelerated death benefits
must have a terminal illness to qualify
Which of these is NOT considered to be an element of an insurance contact
negotiating
If a new medicare supplement policy involves the replacement of existing coverage, it must be verified on a question located:
on the application
Whole Life insurance policies are contractually guaranteed to provide each of the following, EXCEPT:
partial withdrawal feature beyond a surrender charge period
Which of these statements concerning an individual straight life annuity is accurate
payments are made to an annuitant for life
Life insurance replacement regulation protects the interests of
policyowner
On a life insurance policy, who is qualified to change the beneficiary designation?
policyowner
The ___________ is authorized to assign a Life Insurance policy as collateral for a loan
policyowner
Who has the right to change a revocable beneficiary?
policyowner
Which of these describe a participating insurance policy?
policyowners are entitled to receive dividends
Which of these options can an individual use their medical flexible spending account to pay for?
prescription drugs
The Coordination of Benefits provision
prevents an insured covered by two health plans from making a profit on a covered loss
A primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy. Which of the following will occur when the insured dies?
proceeds will go to the contingent beneficiary
An individual who in any manner sells, solicits, or negotiates insurance on behalf of insurance companies for compensation is an insurance:
producer
Which of the following is NOT a reason for the Commissioner to revoke a producer's license
producer is insolvent
When an existing life insurance policy is terminated so that a new life insurance policy can be purchased, this transaction is called:
replacement
An immediate annuity consists of a
single premium
What advantage does the renewability feature give to a term policy
the insured may extend the coverage period
An individual who purchases a life annuity is given protection against
the risk of living longer than expected
Why would the commissioner examine the records of an insurance company
to determine the solvency of the company
An example of an Unfair Claims Settlement Practice is:
turning down a claim without providing the basis of denial
A producer who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out has committed:
twisting
Periodic health claim payments MUST be made at least
weekly
Under a Small Group Health plan, babies are covered
at birth
What must a producer sign when an existing life insurance policy is being reissued with a reduction in cash value?
Notice Regarding Replacement
Marketing procedures for Long-term care and Medicare Supplement policies should ensure that
Policy comparisons are fair and accurate
Which of these do NOT constitute policy delivery?
Policy issued with a rating
Which Long Term Care insurance statement is true?
Pre-existing conditions must be covered after the coverage has been in force for six months
Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?
Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company
C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most?
The cost
What type of reinsurance contract involves two companies automatically sharing their risk exposure?
Treaty
The Cash value in a(n) _____ life policy may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors.
Universal
Which of these is considered a statement that is assured to be true in every respect
Warranty
What is Indiana's definition of Life insurance replacement
a transaction in which a new policy is bought and an old policy is terminated
Which of the following medical expenses does cancer insurance not cover
arthritis
