Insurance Exam Part 2
A "reimbursement policy" pays what amount of covered long term care expenses?
Actual covered expenses up to the daily maximum
Under a Long Term Care policy, which benefit would be typically excluded or limited?
Alcohol rehabilitation
Which of the following is a characteristic of a variable annuity?
Underlying equity investments
A Hospital Surgical Expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013?
$1,000
In Indiana, the MAX fine that the commissioner can impose on a producer or company who violates a cease and desist order is ______ per violation
$25,000
The Indiana children's health program (CHIP) provides children of need with health benefits until the child reaches age _____ or becomes financially ineligible, whichever is earlier
19
Which of the following requires insurers to disclose when can applicant's consumer or credit history is being investigated
1970- Fair Credit Reporting Act
In Indiana, what is the maximum percentage of controlled businesses a producer may produce over a twelve month period?
25%
ABC insurance company fails to pay death proceeds after satisfactory proof of loss was submitted. ABC must then begin paying interest on the death proceeds after ______days of receiving proof of loss
30
Qualified long term care policies may take into consideration an applicants pre existing conditions for a maximum of not more than _____ months prior to the effective date of coverage
6
C was injured while deep sea diving and requires a hospital stay. C has a major medical policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000
720
What is Indiana's definition of life insurance replacement
A transaction in which a new policy is bought and an old is terminated
What is a true statement regarding the underwriting process?
AIDS and HIV virus exams can be conducted in a discriminatory fashion
An insurer is not required to provide information on fraudulent claims if requested by
An insured
When can a policy owner change a revocable beneficiary
Anytime
S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT
Beneficiary's age
What type of policy would pay an employees salary if the employer was injured in a bicycle accident and out of work for six weeks?
Business overhead expense
What permits an insurance company to transact business in Indiana
Certificate of authority
What does Indiana life and health insurance guaranty association provide?
Claim payments of admitted, insolvent insurance companies
Which of these actions is taken when a policy owner uses a life insurance policy as a collateral for a bank loans
Collateral assignment
What correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?
Complete the application and review the information with the customer prior to obtaining the customers signature, then send the application off to the insurance company
P, age 50, purchased an annuity that P will fund with $500/month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?
Defered
Which of the following policy provisions prohibits an insurance company from incorporating external documents into an insurance policy?
Entire contract
How often must the commissioner examine each domestic insurance company
Every 5 years
What is an important underwriting principle of group life insurance
Everyone must be covered in the group
Long term care policies will usually pay for eligible benefits using which method?
Expense incurred
After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?
File written proof of loss
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
An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?
Full face amount minus any past due premiums
What type of renewability beat describes a disability income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate of the overall risk class?
Guaranteed renewable
Which type of provider is known for stressing preventative medical care?
Health Maintenance Organizations (HMO's)
A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over
Income plus 10% penalty tax on 30,000
During the course of an insurance business transaction who does the producer legal represent
Insurance company
During the course of an insurance transaction who does the producer legally represent
Insurance company
If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?
Insured's contingent beneficiary
A policy owners rights are limited under which beneficiary designattion
Irrevocable
What is correct about Indiana life and health insurance guaranty association
It protects Indiana insurance policy owners in the event an insurance company becomes insolvent
What is NOT a limited benefit plan?
Life insurance policies
An insurance company would most likely pay benefits under an accidental death and dismemberment policy for which of the following losses
Loss of eyesight due to an accidental injury
Life insurance coverage will frequently contain an accelerated benefits rider attached to the policy. What would be considered a "qualifying event" under these riders?
Medical condition resulting in a significantly shortened lifespan
If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?
Medicare Supplement
What provides funding for the Indiana life and health insurance guaranty association?
Member company assessments
Which unfair completion practice involves a producer suggesting that an insurance policy is like a share of stock?
Misrepresentation
What is a statements that is incorrect regarding a preferred provider organization? (PPO)
PPO's are NOT a type of managed care systems
Who elects the governing body of a mutual insurance company?
Policyholders
What is true about Long Term Care insurance
Pre existing conditions must be covered after the coverage has been in force for six months
According to Indiana law, which party is responsible for determining the appropriateness of a long term policy presented to a potential applicant
Producer
What is NOT a reason for the commissioner to revoke a producers license
Producer is insolvent
What correctly describes the purpose of the Indiana comprehensive health insurance plan?
Provides high risk insurance coverage for people who are uninsurable
The stated amount or percent of liquid assists that an insurer must have on hand that will satisfy future obligations to its policyholders is called
Reserves
An example of rebating would be
Returning a portion of a premium as inducement to purchase insurance
P is a producer who notices 5 questions on a life application we're not answered. What actions should P take?
Set up a meeting with the applicant to answer the remaining questions
Which of these life insurance riders allows the applicant to have excess coverage?
Term rider
What statement BEST defines usual, customary, and reasonable (UCR) charges?
The maximum amount considered eligible for reimbursement by an insurance company under a health plan
P's individual health policy is now in the grace period. P's coverage will remain in force if:
The premium is paid
In order for a domestic, foreign, or alien insurance company to conduct business, it must be authorized by whom?
The state where they are conducting business
The common disaster clause provides that if both the insured and the sole named beneficiary were to die in a common accident, what is true?
This clause provides the payment of proceeds to the insured's estate
T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and therefore, disputing the claims validity. The provision that limits the time period during which the company may distribute a claim's validity is called:
Time Limit on Certain Defenses
A(n) life policy offers the owner investment in products such as money-market funds, long term bonds and equities
Variable
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
What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?
Waiver of premium rider
What type of insurance offers permanent life coverage with premiums that are payable for life?
Whole life
Information obtained from a phone conversation to the proposed insured can be found in which of these reports
inspection report
A policy of adhesion can only be modified by whom?
insurance company
A major medical policy typically:
provides benefits for reasonable and necessary medical expenses, subject to policy limits
A level premium indicates
the premium is fixed for the entire duration of the contract
The consideration clause of an insurance contract includes
the schedule and amount of premium payments
The reason for backdating a policy is
to obtain a premium rate based on an earlier age