Health State Exam Questions

What kind of life policy either pays the face value upon the death of the insured or when the insured reaches 100? 1. Term life 2. Whole Life 3. Credit Life 4. Universal Life

Whole Life

How long does the coverage normally remain on a limited pay life policy? 1. age 65 2. age 100 3. when premium payments stop 4. at the discretion of the insurer

age 100

An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the 1. producer 2. applicant's spouse 3. national association of insurance commissioners (NAIC) 4. applicant's physician

applicants physician

which of these is NOT considered to be a cost connected with an individual's death? 1. funeral expenses 2. tax liability 3. business expenses 4.probate costs

business expenses

Which of the following policy features allows an insured to defer current health charges to the following year's deductible of the current year's deductible? 1. deferral provision 2. carryover provision 3. stop loss provision 4. corridor provision

carryover provision

The contestable clause allows an insurer to: 1. disallow a change of ownership throughout the contestable period 2. disallow a change of beneficiary during the contestable period 3. contest a claim at anytime if the cause of death was accidental 4. contest a claim during the contestable period

contest a claim during the contestable period

Insurance policies are offered on a "take it or leave it" basis, which make them: 1. conditional contracts 2. aleatory contracts 3. unilateral contracts 4. contract of adhesion

contract of adhesion

Credit life insurance is typically issued with which of the following types of coverage? 1. annual renewable term 2. decreasing term 3. individual whole life 4. group term

decreasing term

What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time? 1. modified whole life 2. 20-year paid up policy 3. endowment 4. decreasing term

decreasing term

A characteristic of Preferred Provider Organizations (PPO) would be: 1. discounted fees for the patient 2. not allowed to see-out-of-network physicians 3. Physicians are paid on a capitation basis 4. A primary care physician is required

discounted fees for the patient

T purchased a $100,000 single premium, Straight Life annuity 5 years ago. He has received monthly payments since the inception of the annuity. If T dies, the insurance company 1. does not have to make any further payments 2. must make full payments to the beneficiary 3. must make half-payments to the beneficiary 4. has the option to continue making payments based on what has already been paid out

does not have to make any further payments

D is the policy owner and insured for a $50,000 life insurance policy. The beneficiary is D's wife. D and his wife divorced and D remarries, transferring ownership of his policy to his new wife. If D dies without making any further changes, to whom will the policy proceeds be paid to? 1. ex-wife 2. current wife 3. estate 4. split equally between ex-wife and current wife

ex wife

Long Term care policies will usually pay for eligible benefits using which of the following methods? 1. delayed 2. fee for service 3. expense incurred 4. respite

expense incurred

A disability income policy that only the policyowner can terminate and which the ratees will never go up is considered to be 1. Optionally Renewable 2. Noncancellable 3. cancellable 4. Guaranteed Renewable

noncancellable

The Notice of Claims provision requires a policy owner to 1. provide proof of loss to an insurer within a specific time 2. notify an insurer of a claim within a specified time 3. wait 60 days after filing a claim to initiate a lawsuit against an insurer 4. notify their physician of a claim within a specified time

notify their physician of a claim within a specified time

In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy? 1. nonforfeiture 2. entire contract 3. insuring clause 4. owner's rights

owner's rights

J applies for an insurance policy. What BEST describes the particular terms of this policy? 1. AM best statement 2. policy summary 3. provisional page 4. buyer's guide

policy summary

Which of the following is not a type of agent authority? 1. express 2. implied 3. principal 4. apparent

principal

What is the consideration given by an insurer in the consideration clause of a life policy? 1. promise to never cancel coverage 2. promise to pay a death benefit to the named beneficiary 3. promise to not raise premiums 4. promise to accept an insured's assignment of benefits

promise to pay a death benefit to the named beneficiary

Which provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time? 1. reimbursement benefit 2. restoration of unused benefit 3. restoration of used benefit 4. medical offset benefit

restoration of used benefit

M has a Major Medical insurance policy with a $200 flat deductible and an 80% Co-insurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim? 1. 2000 2. 1760 3. 1600 4. 400

1600 (2200-200x80%=1600)

An insured must notify an insurer of a medical claim within ____ days after an accident. 1. 10 2. 20 3. 30 4. 40

20

J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value? 1. life paid up at age 70 2. 20 pay life 3. increasing term to age 65 4. straight life

20 pay life

J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy? 1. 0 2. 100,000 3. 25,000 4. 50,000

25,000

The individual most likely to buy a Medicare Supplement policy would be a(n) 1. unemployed 64-year-old female 2. 62-year-old male covered by Medicaid 3. 68-year-old male covered by medicare 4. uninsured 60-year-old male

68 year old male covered by medicare

A reimbursement policy pays what amount of covered Long-Term Care expenses 1. All expenses regardless of the policy limits 2. Actual covered expenses up to the daily maximum 3. A daily dollar amount regardless of the actual incurred expenses 4. The usual, customer and reasonable expenses regardless of the policy limits

Actual covered expenses up to the daily maximum

Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks? 1. Key Employer Disability 2. Disability Income 3. Business Overhead Expense 4. Worker's Compensation

Business Overhead Expense

Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this? 1. Guaranteed Insurability Rider 2. Additional coverage rider 3. Paid-up option rider 4. Extended insurability rider

Guaranteed Insurability Rider

Pre-hospitalization authorization is considered an example of 1. managed care 2. PPO care 3. Medicaid 4. Major Medical Insurance

managed care

G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is 1. Business overhead expense 2. disability income 3. Key employee life 4. contributory

Business Overhead expense

An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet? 1. Entire contract clause 2. MIB clause 3. Insuring clause 4. Consideration clause

Consideration clause

Under a trustee group life policy, who would be eligible for a certificate of coverage 1. Corporation 2. Employee 3. Employer 4. Labor Union

Employee

Which of the following types of organizations are prepaid group health plans, where members pay in advance for the services of participating physicians and hospitals that have agreements? 1. PPO 2. HMO 3. MEWA 4. POS

HMO

In regards to representations or warranties, which of these statements is TRUE? 1. Warranties are statements considered to be true to the best of the applicant's beliefs 2. If material to the risk, false representations will void a policy 3. Representations are statements guaranteed to be true in every respect 4. If material to the risk, false representations will NOT void a policy

If material to the risk, false representations will void a policy

A life insurance arrangement which circumvents insurable interest statutes is called: 1. a contract of adhesion 2. an indemnity contract 3. key person insurance 4. Investor Originated Life Insurance

Investor Originated Life Insurance

Which of the following are NOT managed care organizations? 1. Point of Service Plan (POS) 2. Preferred Provider Organization (PPO) 3. Medical Information Bureau (MIB) 4. Health Maintenance Organization (HMO)

MIB

When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits? 1. Residual Disability 2. Presumptive Disability 3. Recurrent Disability 4. Repeat Disability

Recurrent Disability

R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity? Residual Disability Recurrent Disability Presumptive Disability Occupational Disability

Residual Disability

Which of these would the Medical Information Bureau (MIB) identify? 1. Testing positive for marijuana use from a previous screening 2. Existing life insurance coverage with other carriers 3. Credit Scores 4. Primary Physician

Testing positive for marijuana use from a previous screening

The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is: 1. Grace Period 2. Physical Examination and Autopsy 3. Entire Contract 4. Time Limit on Certain Defenses

Time Limit on Certain Defenses

An underwriter determines that a life insurance applicant's risk should be reclassified due to a health issue. This policy may be issued with a(n): 1. extra premium 2. concealment clause 3. extended contestable period 4. exclusion for the medical condition

extra premium

Which Federal law allows an insurer to obtain an inspection report on a potential insured? 1. medical information Bureau Act 2. freedom of information act 3. fair credit reporting act 4. medical information act

fair credit reporting act

The reason for a business having a Business Overhead Expense Disability Plan is to cover: 1. the cost of providing group disability insurance to the employees 2. fixed business expenses 3. the owner's loss of income 4. all business-related expenses and salaries

fixed busines expenses

Under the individual health insurance policy, the time limit of certain defenses provision states that nonfraudulent misstatements first become incontestable two years 1. from the date the policy was issued 2. from the date the application was signed 3. from the date the initial premium was collected 4. from the date of the sales appointment

from the date the policy was issued

Which of these is considered a true statement regarding Medicaid? 1. funded by both state and federal governments 2. intended to e used by individuals age 65 or older 3. provides disability income benefits 4. Automatically covers those receiving Social Security disability benefits

funded by both state and federal governments

A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow? 1. extended-term rider 2. cost of living adjustment rider 3. guaranteed insurability option rider 4. waiver of premium rider

guaranteed insurability option rider

Which of the following statements about health reimbursement arrangements (HRA) is correct? 1. If the employee had a qualified medical leave from work, lost wages can be reimbursed 2. if the employee paid for qualified medical expenses, the reimbursements may be tax-free 3. Any unused amounts are added to employee's gross income 4. Health insurance premiums can be reimbursed to the employee

if the employee paid for qualified medical expenses, the reimbursements may be tax-free

T applied for a Disability Income policy and has a history of back injuries. The insurer issued the policy with a statement that excludes coverage for back injuries. This statement is called a(n) 1. Back exclusion 2. impairment rider 3. rating 4. encumbrance

impairment rider

All of the following statements regarding a Tax Sheltered Annuity (TSA) are true except: 1. income derived from the TSA is received income tax-free 2. TSA's are available to public school employees 3. contributions to the TSA are tax deductible 4. interest earned by TSA is tax deferred

income derived from the TSA is received income tax-free

A life insurance policy would be considered a wagering contract without? 1. insurable interest 2. premium payment 3. agent solicitation 4. constructive delivery

insurable interest

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT 1. fixed period 2. interest only 3. fixed amount 4. life income

interest only

A policy owner would like to change the beneficiary on a life insurance policy and make the change permanent. Which type of designation would fulfill this need? 1. revocable 2. contingent 3. irrevocable 4. primary

irrevocable

Which of the following BEST describes who a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition? 1. Double indemnity 2. Benefits are taxable 3. More restrictive 4. Less restrictive

less restrictive

In major medical expense policies what is the objective of a stop loss provision 1. limits an insurer's premium increases 2. limits an insurer's liability 3. limits an insured's out of pocket medical expenses 4. limits an insured coverage for pre existing conditions

limits an insured's out of pocket medical expenses

The Insuring Clause 1. specifies the additional time given to pay past-due premiums 2. states the scope and limits of the coverage 3. states the amount of premium to be collected 4. prohibits the insured from suing the insurer for at least 60 days after filing a written proof of loss

states the scope and limits of the coverage

Which of the following costs would a basic hospital/surgical policy likely cover? 1. Surgically removing a birthmark 2. care given at a nursing home 3. treating a wound from a soldier injured at war 4. lost income caused by a hospital stay

surgically removing a facial birthmark

Which statement regarding Change of Beneficiary provision is true? 1. the beneficiary can only be changed with the consent of the insurer 2. the policy owner can change the beneficiary 3. the insured can change the beneficiary 4. a beneficiary change is subject to underwriting procedures

the policy owner can change the beneficiary

K purchased a Life insurance policy in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much-higher premium is paid because of falling interest rates. This type of policy is known as a(n) _________ life policy. 1. whole 2. universal 3. graded 4. increasing

universal

What type of life insurance incorporates flexible premiums and an adjustable death benefit? 1. endowment policy 2. modified whole life 3. decreasing term 4. universal life

universal life

which type of policy contains a monthly mortality charge as well as a self-directed investment choices? 1. joint life 2. adjustable life 3. variable universal life 4. universal life

variable universal life

S owns a life insurance policy with cash values that fluctuate according to the underlying investment performance of common stocks. Which of these policies does S own? 1. endowment 2. variable term 3. variable whole life 4. joint life

variable whole life

At what point does an informal agreement become a binding contract? 1. when one party makes an invitation and the other makes an offer 2. when an offer is made by one party and the other party rejects the offer and makes a counter offer 3. when one party makes an offer and the other party accepts the offer 4. when consideration is provided by one of the parties to the contract

when consideration is provided by one of the parties to the contract

A return of Premium life insurance policy is: 1. a nonforfeiture option 2. whole life increasing term 3. interest-sensitive 4. variable life

whole life increasing term