Health Final exam

*Which of the following requires that an applicant for an individual Health Policy be notified of an investigation into his personal character, general reputation, and mode of living? Consumer Protection Agency Fair Labor Standards Board Insurance Information and Privacy Protection Act Civil Rights Act

Insurance Information and Privacy Protection Act

Which of these characteristics is consistent with a Straight Life policy? Owner can adjust both premium and death benefit Premiums are lower for the first five years, increase the sixth year, then levels off for the remaining length of the contract Owner has the option of converting to term insurance Premiums are payable for as long as there is insurance coverage in force

Premiums are payable for as long as there is insurance coverage in force

Under a Group Health Insurance Policy, continuation shall be available only to an employee who has been insured immediately prior to the date of termination for a period of AT LEAST 30 days 3 months 180 days 9 months

3 months

If a health insurance claim is not promptly paid, legal action may be taken against the insurer after 30 days from the date proof of loss is furnished 60 days from the date proof of loss is furnished 90 days from the date proof of loss is furnished 3 years from the date proof of loss is furnished

60 days from the date proof of loss is furnished

J purchased a Disability Income Policy that ONLY J can terminate and on which the rates will never increase above those illustrated in the policy. Which of the following types of policies did J purchase? Guaranteed Renewable Noncancelable Optionally Renewable Conditionally Renewable

A Disability Income Policy that only the policyowner can terminate and on which the rates will never increase is a Noncancelable policy.

Which of the following types of insurance is exempt from the Rules Governing Life Insurance and Annuity Replacements? Universal Life Adjustable Life Ten-Year Decreasing Term Life Credit Life

Credit Life

In a Disability Income policy, which of these clauses acts as a deductible? Elimination Period Waiver Period Deductible Period Probationary Period

Elimination Period

A Fraternal Benefit Society has each of the following characteristics EXCEPT Incorporated Without capital stock Exists For profit Exists for the benefit of its members

Exist for profit. Fraternal Benefit is a non profit entity.

T was treated for an ailment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterwards.How will the insurer likely consider this condition? Insurer will require a higher deductible for any claims resulting from this condition Insurer is required to initially cover this pre-existing condition Insurer will permanently exclude the condition from the policy Insurer will likely treat as a pre-existing condition which may not be covered for one year

Insurer will likely treat as a pre-existing condition which may not be covered for one year

Which of the following health insurance policy provisions specifies the health care services a policy will provide? Insuring clause Usual, Customary, and Reasonable clause Consideration clause Benefit clause

Insuring clause

P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA laws, which of the following statements is TRUE? She DOES need to provide evidence of insurability She does NOT need to provide evidence of insurability She will have up to 6 months to convert to an individual policy She will be paying exactly the same premium for the individual plan as she did the group plan

She does NOT need to provide evidence of insurability

Which of these life insurance riders allows the applicant to have excess coverage? Automatic Premium Loan rider Waiver of Premium rider Guarantee Insurability rider Term rider

Term Rider

*An annuity promises that, if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an amount equal to the contract value has been paid. This type of annuity is called An installment Refund annuity A Straight Life annuity A Cash Refund annuity A Joint Life annuity

An installment Refund annuity

*T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide? Income for a fixed period stated in the contract Income that cannot be outlived by the owner Inflation protection Tax-free income

Income that cannot be outlived by the owner

The Life and Health Insurance Guaranty Association becomes involved in an insurance company's affairs when the company enters a lawsuit against a claimant withdraws as an Association member becomes insolvent denies a claim

becomes insolvent

Variable Whole Life Insurance can be described as both an insurance and securities product an insurance product only a securities product only the insurance company assumes the investment risk

both an insurance and securities product

*A disability elimination period is best described as a time deductible dollar deductible eligibility period probation period

time deductible

*The Rules Governing Life Insurance and Annuity Replacements define replacement as cash surrendering an existing policy reducing the face value of an existing policy accepting a reduced paid-up policy exchanging an existing policy for a new policy

exchanging an existing policy for a new policy

*Continuation of coverage of a group Hospital, Surgical, and Major Medical Policy MUST include dental coverage vision care prescription drug benefits hospital expenses

hospital expenses

Credit Life insurance is issued in any amount at the discretion of the applicant used in the event of loss of income issued in an amount not to exceed the amount of the loan coverage that waives the premiums on a loan payment in the event of total disability

issued in an amount not to exceed the amount of the loan

*A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid mandatory income tax withholding on the transfer amount paying transfer fees paying trustee fees ever paying income taxes on the distributions

mandatory income tax withholding on the transfer amount

Which statement is TRUE regarding a Variable Whole Life policy? A minimum guaranteed Death benefit is provided It is a combination of an Endowment and a Increasing Term policy Its premiums and benefits are variable It has guaranteed dividends

A minimum guaranteed Death benefit is provided

A long-term care rider in a life insurance policy may trigger a benefit in the event of which of the following? Critical illness Terminal illness Inability of the insured to perform more than 2 Activities of Daily Living (ADL's) Double the face amount should the insured be confined to a nursing home

Inability of the insured to perform more than 2 Activities of Daily Living (ADL's)

Post-tax dollar contributions are found in 401K investments Traditional IRA investments SIMPLE investments Roth IRA investments

No income tax deductions can be taken for contributions made to a Roth, but the earnings on those contributions are entirely tax-free when they are withdrawn.

The Common Disaster clause provides that if both the insured and the named beneficiary were to die in a common accident, which of the following is true? This clause prevents the payment of proceeds to the insured's estate This clause provides the payment of proceeds to the beneficiary's estate The estate taxes in the insured's estate may be reduced The estate taxes in the beneficiary's estate may be reduced

The estate taxes in the beneficiary's estate may be reduced

Which of the following characteristics is CORRECT about Interest Sensitive Whole Life? There is a flexible premium payment There are no guaranteed minimum interest rates Mortality charges do not impact the investment amount Interest rates determine cash values

There is a flexible premium payment

Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? Modified Whole Life Variable Life Universal Life Adjustable Life

Variable Life

*Insurers organized under the laws of North Carolina are called guarantee associations domestic companies state carriers admitted companies

domestic companies