Insurance Final Set 1
At what age is a nondisabled person first eligible for coverage under a Medicare Supplement policy? A nondisabled individual is first eligible for a Medicare Supplement policy at age 60 62 65 70 1/2
65
Which of the following types of care is typically not covered in a Long-Term Care policy? Acupuncture Skilled care Home Health care Custodial care
Acupuncture is a service typically not covered in a Long-Term Care policy.
Before an insurance company can issue a small employer group policy, it MUST: be authorized to write accident and health insurance in this state provide only group life insurance coverage in this state provide coverage only for employers of specified companies or organizations limit coverage to those individuals with specified diseases
Before an insurance company can issue a small employer group policy, it MUST be authorized to write accident and health insurance in this state.
What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision? File a lawsuit Submit the claim in any form Wait for the claim form to arrive Resubmit the request for a claim form
If forms are not furnished, the insured should submit the claim in any form, which must be accepted by the company as adequate proof of loss.
Which of the following would a Medicare Supplement policy cover? An individual under sixty-five years old and not disabled Allowable amounts under Medicare Part B Non-allowable amounts covered by Medicare Part A Services excluded by Medicare
A Medicare Supplement policy would cover allowable amounts under Medicare Part B.
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: Business Overhead Expense Disability Income Key Employee Life Contributory
A Business Overhead Expense policy's purpose is to cover certain overhead expenses that continue when the business owner is disabled.
A Medical Information Report (MIB) report may disclose which of the following: Prior preferred rating Prior use of marjuana Prior lapsing of policy Prior bankruptcy judgement
A Medical Information Report (MIB) may disclose lifestyle habits such as drugs, drinking, overeating and smoking.
What is considered to be a characteristic of an immediate annuity? Benefit payments start within one payment period of purchase Benefit payments start within 5 years of initial purchase Normally tied to a specific equity or stock index Periodical contributions begin immediately
An immediate annuity is designed to make its first benefit payment to the annuitant at one payment interval from the date of purchase.
On delivery of a policy, a signed statement of good health is typically requested if: A conditional receipt was given to the applicant The quarterly premium payment mode was selected The policy contains a guaranteed insurability rider The application was submitted without the initial premium
On delivery of a policy, a signed statement of good health is typically requested if the application was submitted without the initial premium.
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
Straight whole life provides permanent level protection with level premiums from the time the policy is issued until the insured's death (or age 100).
A producer is circulating incorrect information about the benefits of a policy. This producer may be found guilty of: misrepresentation sliding rebating coercion
A person who circulates inaccurate information about the benefits of a policy may be found guilty of misrepresentation.
A policy of adhesion can only be modified by whom? The agent The applicant The primary beneficiary The insurance company
A policy of adhesion is best described as a policy which only the insurance company can modify.
Which of the following would be considered misrepresentation by an insurance producer? Replacing an insurance policy with a better insurance policy Stating that dividends are guaranteed Representing more than one insurance company at the same time Requiring an applicant for insurance to make their premium payable to the insurance company
Stating that dividends are guaranteed is considered a misrepresentation.
K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true? Proceeds will be paid to P's estate Proceeds will be divided equally between K's and P's estate Proceeds will be payable to K's estate if P dies within a specified time The courts will decide who will receive death benefits
Under the Common Disaster provision, proceeds will be payable to K's estate if P dies within a specified time.
Disability policies do NOT normally pay for disabilities arising from which of the following? Accidents War Negligence Sickness
War.
Which of the following is NOT allowed in regards to a Medigap (Medicare Supplement) policy? Replacing a Medigap policy Issuing an additional Medigap policy to ensure no out-of-pocket exposure for the insured Issuing a Medigap policy to someone under age 65 Increasing premiums on an annual basis
"Issuing an additional Medigap policy to ensure no out-of-pocket exposure for the insured". Issuing an additional Medigap policy to ensure no out-of-pocket exposure for the insured is NOT allowed.
What is the purpose of a Policy Summary? It details the commissions earned by the agent It guarantees a policy will be issued It allows the consumer to compare the costs of different policies It highlights the critical parts of the policy issued
A Policy Summary highlights the critical parts of the policy issued and describes the coverages, riders, and exclusions.
A foreign insurance company CANNOT conduct business in Missouri without: approval of the NAIC a certificate of authority to transact business in Missouri a waiver from their home state reaching a minimum level of sales
A a certificate of authority to transact business in Missouri is required for a foreign insurer wishing to conduct business in Missouri.
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy? If the primary beneficiary is a minor at the time of the insured's death If the primary beneficiary dies before the insured If the insured died of accidental causes If the insured died of natural causes
A contingent beneficiary will receive the policy proceeds if the primary beneficiary dies before the insured's death.
A major medical policy typically: provides benefits for surgical expenses only, subject to policy limits contains more limitations than a Basic Hospital, Medical, or Surgical policy contains a 60-day Elimination period for losses due to accident provides benefits for reasonable and necessary medical expenses, subject to policy limits
A major medical policy provides benefits for reasonable and necessary medical expenses, subject to policy limits.
If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best desribes this policy is called: noncancellable conditionally renewable cancellable guaranteed renewable
A noncancellable policy is one which the insurance company cannot cancel and which premiums cannot be increased.
Whole Life insurance policies are contractually guaranteed to provide each of the following, EXCEPT: cash value that will ultimately replace the death benefit nonforfeiture benefit options premiums that remain fixed for the life of the policy partial withdrawal features beyond a surrender charge period
All of these are contractually guaranteed to be provided in a whole life insurance policy EXCEPT "partial withdrawal features beyond a surrender charge period".
Insureds in the same risk classification are being charged different premiums by an insurance company. This insurer is committing the illegal act of rebating coercion unfair discrimination defamation
An insurance company that charges different premiums for insureds in the same risk classification is guilty of unfair discrimination.
Michael the insurance producer is acting in a fiduciary capacity when conducting business with all of these principals EXCEPT: insurance companies the Director insureds applicants for insurance
An insurance producer acts in a fiduciary capacity when conducting routine business with all of these principals EXCEPT the Director.
Insurance policies are considered aleatory contracts because they are "take it or leave it" contracts both parties consent to the contract performance is conditioned upon a future occurrence the contract is voidable upon proof of fraud
Insurance contracts are aleatory. This means there is an element of chance and potential for unequal exchange of value or consideration for both parties. An aleatory contract is conditioned upon the occurrence of an event.
According to Missouri's rules on disclosure, a life insurance applicant is expected to be provided with: a Certificate of Coverage and Buyer's Guide a Summary Statement and Buyer's Guide a Buyer's Guide and Policy Summary a Written Comparison and Policy Summary
Missouri's rules on disclosure require an insurance company to provide a purchaser of life insurance with a Buyer's Guide and a Policy Summary.
What type of renewability guarantees premium rates and renewability? Optionally renewable Conditionally renewable Noncancellable Guaranteed renewable
Noncancellable
All of the following statements are true regarding a policy's Grace period, EXCEPT: Past due premiums are waived Policy loans may still be made Full coverage continues Grace period terms are stated in the policy
Premiums due are NOT waived during a policy's Grace period.
The Replacement of Life Insurance and Annuities regulation is designed to protect the interest of the: policyowner insurance company insurance producer Department of Insurance
Replacement regulation is designed to protect the interest of the policyowner, since it's usually not in their best interest to replace existing coverage.
Which mode of payment is NOT used by health insurance policies? Monthly premium Annual premium Single premium Semi-annual premium
Single Premium
Which of the following does Social Security NOT provide benefits for? Survivorship Dismemberment Disability Retirement
Social Security provides for all of these types of benefits EXCEPT dismemberment.
What is Old Age and Survivors Health Insurance (OASDHI) also known as? Medicare Social Security Medicaid FICA
Social Security, also known as Old Age, Survivors, and Disability Insurance (OASDI), was signed into law in 1935 by President Roosevelt as part of the Social Security Act.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to: continue group health benefits take out an individual health policy transfer their coverage to another insurer convert to disability coverage
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to continue group health benefits.
Which of the following is NOT included in the policy face? Free Look provision Name of the insured Name of the insurer Exclusions
The exclusions section is NOT included in the policy face (first page of an insurance policy).
A life insurance policy becomes incontestable after it has been in force for a MAXIMUM of : 1 year 2 years 3 years 4 years
The validity of the policy may not be contested (unless it's for nonpayment of premium or fraudulent misstatements by the applicant) after the policy has been in force for 2 years.
When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is: occupation income age medical condition
When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is income.
An agent takes an individual Disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to: issue the policy only when the initial premium check has cleared determine if the applicant is insurable by investigating family health history issue the policy on a standard basis determine if the applicant is an acceptable risk by completing standard underwriting procedures
With a conditional receipt, the insurance company will complete standard underwriting procedures before making a decision about whether to insure the applicant.
Continuing education (CE) providers must report to the Director a licensee's earned credit hours within 10 days of course completion 20 days of course completion 30 days of course completion 40 days of course completion
Within 30 days of the date a continuing education course is completed by a licensee, CE providers are required to notify the Director of the credit hours earned by the licensee in an electronic format that can be accessed at the department's website.
A producer has influenced an existing policyowner to convert an existing whole life policy to Reduced Paid-up insurance. The producer then sells the policyowner a new universal life policy. This transaction is called a(n): misrepresentation conversion replacement policy loan
Taking an existing whole life policy and converting it to reduced paid-up insurance while immediately taking out a new life policy is considered a form of replacement, which is a heavily regulated transaction.
The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured: dies of natural causes becomes critically ill becomes chronically ill is blinded in an accident
The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured is blinded in an accident.
An insurer may not transact insurance UNLESS authorized by the: state legislature Director of Insurance Attorney General Secretary of State
The Director of Insurance issues the certificate of authority necessary for an insurer to transact insurance in this state.
Which of the following statements BEST describes what the Legal Actions provision of an Accident and Health policy requires? An insured must settle a claim within 60 days after Proof of Loss is submitted An insured must wait at least 30 days after Proof of Loss has been submitted before a lawsuit can be filed An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed An insured must settle a claim within 30 days after Proof of Loss is submitted
The Legal Actions provision of an Accident & Health policy requires that the insurer settle a claim within 60 days after receipt of Proof of Loss.
What benefit does the Payor clause on a Juvenile Life policy provide? Allows payor to assign ownership in the event payor becomes disabled Allows payor to increase face amount without providing evidence of insurability Premiums are waived if juvenile becomes disabled Premiums are waived if payor becomes disabled
The Payor clause of a juvenile life policy provides a waiver of premiums if the payor becomes disabled.
T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? $1,000,000 $500,000 $250,000 $0
The mother receives $0 because T is still alive and the sole primary beneficiary, while the mother is still the contingent beneficiary.
What is the Suicide provision designed to do? decline an applicant who is contemplating suicide safeguard the insurer from an applicant who is contemplating suicide protect the insurer from ever paying a claim that results from suicide allows the insurer the option to pay a death benefit in the event of suicide
The purpose of a Suicide provision is to protect the insurer against the purchase of a policy in contemplation of suicide.
Health insurance policies in Missouri are REQUIRED to contain coverage for human leukocyte antigen testing for bone marrow transplant: on a voluntary basis when underwriting determines there is a propensity towards cancer in the proposed insured only when requested by the insured with each health insurance policy issued
Each health insurance carrier that issues policies in Missouri MUST provide coverage for human leukocyte antigen testing for bone marrow transplant with each health insurance policy issued.
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 is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called: Insuring Time Limit on Certain Defenses Grace Period Free-look
The Time Limit on Certain Defenses (Incontestability) provision limits the time during which the insurance company may challenge the validity of an insurance claim on the basis of a misstatement made on the insured's application.
A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed? The employee's family Company Y Company X The employee's estate
Company X. With Key Person Insurance, the company purchases, owns, pays the premiums and is the beneficiary of the life insurance policy on the key person.
S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy? Accelerated death benefit rider Return of premium rider Family income rider Term rider
In this situation, a return of premium rider was included on the policy.
Which of these is NOT considered to be an element of an insurance contract? the offer acceptance negotiating consideration
The elements of an insurance contract do not include negotiating.