insurance

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?

Decreasing term policy

A characteristic of Preferred Provider Organizations (PPOs) would be:

Discounted fees for the patient

Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy?

Discourages overutilization of the insurance coverage

Which of these are NOT an example of a Nonforfeiture option?

Life Income

What type of life insurance are credit policies issued as?

Term

Inducing or attempting to induce any insured person through misrepresentation to lapse, forfeit, or surrender insurance is

twisting

N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase?

Fixed Deferred

In a Life insurance contract, an insurance company's promise to pay stated benefits is called the

Insuring clause

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT

Interest Only

Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy?

Issue the policy with an altered Time of Payment of Claims provision

Which of the following are NOT managed care organizations?

Medical Information Bureau (MIB

Replacement regulations apply to which of the following types of contracts?

Ordinary Life

Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured?

PPO

The underwriting process involves all of these EXCEPT for

Policy loan

What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive?

Primary Insurance Amount (PIA

Which of these Nonforfeiture Options continue a build-up of cash value?

Reduced Paid-Up

J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?

Reinstatement provision

A life insurance policy that provides a policyowner with cash value along with a level face amount is called

Whole life

The incontestable clause allows an insurer to

contest a claim during the contestable period

All of these are characteristics of an Adjustable Life policy EXCEPT

face amount can be adjusted using policy dividends

All of the following statements about health coverage for physically handicapped dependents of insureds are correct EXCEPT that the dependent must

have been over ten years of age when the handicap was incurred

Under the Unfair Trade Practice law, agents may be found guilty of defamation if they make a false statement that is intended to

malign another insurance company

M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the

policy proceeds

Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?

policyowner

All of the following actions are considered rebating EXCEPT

sharing commissions with other licensed and appointed agents

Which plan is intended to be used by a sole proprietor and the employees of that business?

"Keogh Plan". A Keogh Plan may be used by a sole proprietor only if the employees of the business are included.

An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a

$25,000 individual whole life policy

Term insurance has which of the following characteristics?

Expires at the end of the policy period

What type of policy would offer a 40-year old the quickest accumulation of cash value?

20-pay life

All of the following statements about Major Medical benefits are true EXCEPT

Benefits have no maximum limit

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?

Consideration clause

What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?

Decreasing term

Under a trustee group life policy, who would be eligible for a certificate of coverage?

Employee

Which of these is NOT a characteristic of a Health Reimbursement Arrangement (HRA)?

Employee funds the HRA entirely

Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance?

Entire cash surrender value is taxable

Which statement regarding a Key Employee Life policy is NOT true?

The beneficiary is named by the key employee

What is the underlying concept regarding level premiums?

The early years are charged more than what is needed

Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges?

The maximum amount considered eligible for reimbursement by an insurance company under a health plan

A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as

Variable Life

Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling?

Variable Life

Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?

Variable Universal Life

When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?

Void the policy only if it is discovered during the Contestable period and proven to be material

A policyowner is allowed to pay premiums more than once a year under which provision?

Mode of Premium

The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n)

Accidental Death and Dismemberment rider (AD&D)

The difference between group insurance and blanket health policies is

Blanket health policies do not issue certificates

S is covered by a whole life policy. Which insurance product can cover his children?

Child term rider

Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE?

Evidence of insurability is required when the option is exercised

Which type of provider is known for stressing preventative medical care?

Health Maintenance Organizations (HMO's)

Which of the following statements is CORRECT about A & H advertisements?

Insurance companies are responsible for the accuracy of testimonials

All of these statements concerning Settlement Options are true EXCEPT

Only the beneficiary may select

Which of these characteristics is consistent with a Straight Life policy?

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

All of these statements about Equity Indexed Life Insurance are correct EXCEPT

The premiums can be lowered or raised, based on investment performance

The provision in a health insurance policy that interrupts premiums being paid to the insurer while the insured is disabled is called the

Waiver of Premium

M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate?

earned, but unpaid benefits

An insurance company that publishes misleading information about insurance coverage may be found guilty of

false advertising

M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT

free-look period has expired