Health and Life Insurance Review

Alexander has a policy with his ex-wife as its beneficiary. What provision allows him to change the beneficiary to his new wife?

Change of beneficiary

Which of the following statements pertaining to Medicare Part A is correct?

Medicare Part A is automatically provided when an individual qualifies for Social Security benefits at age 65

An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in automobile accident. How much will his wife receive from the policy?

$100,000

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, which is currently $20,000. What would be the face amount of the new term policy?

$50,000

L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay?

$900 (deductible + 20% of the bill after the deductible [20% of $2,000])

In life policies issued in this state, insurers are permitted to charge interest during the policy grace period for the number of days elapsing before the premium is paid. What is the maximum annual interest rate?

8%

Which of the following would be an example of a limited accident and health insurance policy?

A dread disease policy

A Straight Life policy has what type of premium?

A level annual premium for the life of the insured

A deductible is

A specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits.

Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristics does this describe?

Adhesion

Licensed life insurance agents are expected to be familiar with the following laws?

All of the insurance laws and regulations

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

The premium charged for exercising the Guaranteed Insurability Rider is based upon the insured's

Attained age

What document describes an insured's medical history, including diagnoses and treatments?

Attending Physician's Statement

Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care?

Attending physician

As it pertains to group health insurance, COBRA stipulates that

Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense

All small employer group health plans, in order to comply with the requirements of the Florida Employee Health Care Access Act, must be issued on what basis?

Guaranteed issue

Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?

Life expectancy

All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?

Lower

All of the following statements describe a MEWA EXCEPT

MEWAs are groups of at least 3 employers

Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application?

Return the application to the applicant for completion

Which of the following would be considered a nonqualified retirement plan?

Split-dollar plan

What is the best way to change an application?

Start over with a fresh application

Which of the following policies would be classified as a traditional level premium contract?

Straight Life

Which of the following is true about the requirements regarding HIV exams?

The applicant must give prior informed written consent

All of the following are true about variable products EXCEPT

The premiums are invested in the insurer's general account

Which of the following best defines target premium in a universal life policy?

The recommended amount to keep the policy in force throughout its lifetime

Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?

Universal life

An insured under a life insurance policy has been diagnosed with a terminal illness and has 6 months to live. The insured knows that his financial state will worsen even more with the upcoming medical expenses. What option could the insured utilize?

Viatical settlement

When a group policy terminates, very individual insured under the policy will be entitled to have an individual policy if the insured has been insured by the group policy for at least how many years prior to policy termination?

5 years

Which of the following is true regarding the agent's appointments?

A person may hold several appointments at one time

How long must insurers maintain records of the information collected from senior consumers and other information used in making recommendations that were the basis for insurance transactions?

For 5 years after the insurance transaction is completed by the insurer

Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment?

Insurance Guaranty Associations

In a group health policy, a probationary period is intended for people who

Join the group after the effective date

An applicant for a health insurance policy returns a completed application for her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point?

Neither approved the application nor issued the policy

Which is true about a spouse term rider?

The rider is usually level term insurance

If a licensee changes his or her residence address, within how many days must the department be notified?

30

An agent has been convicted of a crime punishable by a 1-year imprisonment. Within how many days must the agent notify the department of insurance?

30 days

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

Regulations for annuity recommendations would apply when a consumer is at least what age?

65 years old

Which of the following would NOT be a violation of state insurance regulations?

Agent C uses her license to write only business other than controlled

How are state Insurance Guaranty Associations funded?

By their members - authorized insurers

Which of the following statements about occupational vs. nonoccupational coverage is TRUE?

Disability insurance can be written as occupational or nonoccupational.

What does the secondary notice provision protect?

Elderly insureds

All of the following actions can be described as twisting EXCEPT

Explaining to client the advantages of permanent insurance over term and suggesting changing policies

What phase begins after a new policy is delivered?

Free-look period

You did mot enroll in Medicare Part B when you first became eligible. Which of the following would all you another opportunity to enroll?

General enrollment period

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

Guaranteed insurability option

Which of the following is true about the premium on the children's rider in a life insurance policy?

It remains the same no matter how many children are added to the policy

An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?

Material misrepresentation

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

Other-insured rider

Prior to purchasing a Medigap policy, a person must be enrolled in which of the following?

Parts A and B of medicare

If an employer decides to change its life insurance policy to a similar one with a different insurer, which of the following describes the extent that replacement regulations will be exercised?

Replacement regulations will not apply in this situation

An agent's appointment has been denied. Which of the following is true?

State taxes may be refunded upon a written request

Which of the following terms describes the specified dollar amount beyond which the insured no longer participates in the sharing of expenses?

Stop-loss limit

Which of the following groups would most likely be covered under a blanket accident policy?

Students at a public school

Which of the following would provide an underwriter with information concerning an applicant's health history?

The Medical Information Bureau (MIB)

What are the 2 offices of the Financial Services Commission?

The Office of Financial Regulation and the Office of Insurance Regualtion

In a disability policy, the elimination (or waiting) period refers to the period between

The first day of disability and the day the insured starts receiving benefits

Which of the following is NOT a feature of a noncancellable policy?

The insurer may terminate the contract only at renewal for certain conditions

In terms of parties to a contract, which of the following does NOT describe a competent party?

The person must have at least completed secondary education

If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?

The policy will be interpreted as if the insurer waived its right to have an answer on the application

Which of the following best defines the "owner" as it pertains to life settlement contracts?

The policyowner of the life insurance policy

If a life insurer holds the proceeds of any policy it issues, which of the following is true?

The proceeds may be exempt from any creditor's claims against a beneficiary other than the policy owner

All of the following are true regarding the guaranteed insurability rider EXCEPT

This rider is available to all insureds with no additional premium

Why should the producer personally deliver the policy when the first premium has already been paid?

To help the insured understand all aspects of the contract

The paid-up addition option uses the dividend

To purchase a smaller amount of the same type of insurance as the original policy.

Long-term care policies require that in addition to the applicant at least one person must be designated in the policy. What is the role of that designated person?

To receive notice of policy lapse or termination

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT

Unearned premiums are retained by the insurance company

In individual health insurance coverage, the insurer must cover a newborn from the moment of birth, and if additional premium payment is required, how many days should be allowed for payment?

Within 30 days of birth

All advertisements are the responsibility of the

insurer

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?

Family term rider

Annually renewable term policies provide a level death benefit for a premium that

Increases annually

No insurance policy form can be issued, delivered, or used in this state unless it has been

Filed with and approved by the Office of Insurance Regulation.

Which of the following was designed to ensure continued access to affordable health insurance coverage for employees of small employers, their dependents, and other qualified beneficiaries not currently protected by COBRA?

Florida Health Insurance Coverage Continuation Act

The mode of premium payment

Is defined as the frequency and the amount of the premium payment.

If a person accumulates more continuing education hours than is necessary to fulfill the requirements of the 2 year period which of the following will occur?

The extra hours may be continued into the next period

What is the main difference between coinsurance and copayments?

Copayment is a set dollar amount

The provision that provides for the sharing of expenses between the insured and the insurance company is

Coinsurance

Which of the following is NOT true of a major-medical health insurance policy?

It is designed to pay on a first dollar of expense basis

A producer who fails to segregate premium monies from his own personal funds is guilty of

Commingling

Which of the following best details the underwriting process for life insurance?

Selection, classification, and rating of risks

An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?

She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.

When an HMO knowingly makes any misleading representations, incomplete or fraudulent comparisons for the purpose of including any person to lapse, forfeit, surrender or convert any insurance policy or contract with another insurance company of HMO, they are in violation of the unfair trade practice of

Twisting

Which of the following types of insurance policies would perform the function of cash accumulation?

Whole life

The two types of assignments are

absolute and collateral

Who must pay for the cost of a medical examination required in the process of underwriting?

Insurer

Which of the following is another term for the accumulation term for the accumulation period of an annuity?

Pay-in period

A long-term care shopper's guide must be presented at what point?

Prior to the time of application

In long-term care insurance, what type pf care is provided with intermediate care?

Occasional nursing or rehabilitative care

Which of the following determines the cash value of a variable life policy?

The performance of the policy portfolio

Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray?

50/50

All of the following statements concerning Accidental Death and Dismemberment coverage are correct EXCEPT

Death benefits are paid only if death occurs within 24 hours of an accident

Which of the following is NOT a responsibility of the Office of Insurance Regulation?

Enacting new insurance laws

Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is

Monthly

Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?

Principal sum

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

Issue the policy anyway and pay the face value to the beneficiary

An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?

10 days

The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?

2 years

Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain

A statement that is sufficiently clear to identify the insured and the nature of the claim

Kevin and Nancy are married; Kevin is the primary breadwinner and has a health insurance policy that covers both him and his wife. Nancy has an illness that requires significant medical attention. Kevin and Nancy decide to legally separate, which means that Nancy will no longer be eligible for health insurance coverage under Kevin. Which of the following options would be best for Nancy at this point?

COBRA

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day

Elimination period

The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the

Entire contract clause

If a change needs to be made to the application for insurance, the agent may do all of the following EXCEPT

Erase the incorrect answer and record the correct answer.

What provision in an insurance policy extends coverage beyond the premium due date?

Grace period

In which of the following locations would skilled care most likely be provided?

In an institutional setting

A typical Accidental Death & Dismemberment policy covers all of the following losses EXCEPT

Income

Life income joint and survivor settlement option guarantees

Income for 2 or more recipients until they die

What is the term for how frequently a policyowner is required to pay the policy premium?

Mode

With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance?

Payment of premium

Which of the following will be included in a policy summary?

Premium amounts and surrender values

Before a customer's agent delivers his policy, the insurer makes a last-minute change to the policy. The agent informs the customer of this change, and he accepts it. What must the agent do now?

The agent should ask the customer to sign a statement acknowledging that he is aware of the change

The period of time immediately following a disability during which benefits are not payable is

The elimination period.

An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?

The insurer will pay the full death benefit from the group policy to the beneficiary

Under an extended term nonforfeiture option, the policy cash value is converted to

The same face amount as in the whole life policy

An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?

Time of Payment of Claims