Insurance Review
Jeremy, a producer, is proposing a life policy to a new client. When must he inform the client of their rights under the FCRA?
When he completes the application.
Eligibility for the payment of long-term care benefits may not be more restrictive than requiring a deficiency in the ability to perform not more than how many activities of daily living?
3 ADL's
To be eligible for group insurance, an association must have existed for at least how many years?
5 years
If an insured borrows against their life insurance policy, what is the maximum fixed rate that can be charged?
8%
Long-term care must provide:
Guaranteed insurability
What right of renewability does not guarantee insurability, allowing the insurer to cancel on certain dates?
Optionally renewable (not conditionally renewable)
What is the insurer's obligation if an insured commits suicide 4 years after the policy inception date?
Pay the death benefit.
What is HIPAA's most important aspect?
Portability
Amelia has a nonqualified annuity that is paid out of her paycheck. It will be paid:
Post tax
How much time does a replacing insurer have to inform the previous insurer of the replacement transaction?
5 business days
Insurers are required to maintain a file of all advertisements for how many years after their last use?
5 years
Cindy has always paid her health insurance premium quarterly. She recently changed the payment period to weekly. What will the grace period be on the new cycle?
7 days (grace period changes by mode of premium)
What is the minimum time required for the basis of a long-term policy?
12 consecutive months
How often do appointments have to be renewed?
Annually
How much time does a licensee have to notify the Commissioner of Insurance of any change of residential, mailing, or business address?
30 days
How much time does an insurer have to notify the Commissioner of Insurance of an appointment?
30 days
When does an insurer have to report a termination of an appointment to the Commissioner of Insurance?
30 days (only newborns and group policy terminations are 31 days)
How many days does someone have after termination of their group policy to make their first premium payment on the converted policy?
31 (Only newborns and group policy terminations)
Lump sums are taxable/not taxable:
not taxable
A converted individual policy can be issued with a face amount up to what percentage of that provided by the group policy?
100%
Claims forms must be given to a claimant within:
15 days
If an applicant is found guilty of material misrepresentation on an application, how long does the insurer have to contest the policy?
2 years from the effective date of the policy
How many days does an insured have to file a notice of claim?
20 days
The cheapest premium payment mode would be on a policy that is paid:
Annually
On April 9, an application is submitted without the initial premium. The insurer requires a medical exam, and it is completed on April 14. On April 18, the insurer issued the policy, and the producer delivers it on April 21. When is coverage effective?
April 21, after the statement of good health is signed, and the initial premium is paid.
How many days does an insured have to provide proof of loss?
90 days
What may an insurer not require to reinstate a health policy?
A reinstatement application fee
Mark, a producer, took an application for a life policy from Barbara, but neglected to collect the initial premium. When he delivers the policy to Barbara he must collect the initial premium and also
A signed statement of good health
How many hours of continuing education for more than 1 line of authority must insurance agents complete every 2 years?
24 Hours
How much time does a business entity have to inform the Commissioner of Insurance of their assumed name?
30 days
In order to continue coverage for a newborn in health policies, when must notification to the insurer be made?
31 Days
If an agent creates an advertisement, who is responsible for its content?
Agent
Which of the following could be used to prevent a lapse in the payment of life insurance premiums?
Automatic premium loan
The provision that will prevent a whole life policy from lapsing is:
Automatic premium loan (not Waiver of premium)
With what receipt is coverage assured, even if the person is later proved to be uninsurable, until the insurer formally rejects the application?
Binding
Which of the following is not a change that a policyowner can make to an adjustable life policy?
Change the named insured
Most medical expense plans have coinsurance. All of the following are false about coinsurance EXCEPT:
Coinsurance is useful in controlling overutilization of benefits.
The provision that determines who becomes the beneficiary if the insured and primary beneficiary both die in the same accident:
Common disaster
When a person buys insurance, the insurer is obligated to pay uncertain benefits in the future which are called:
Conditional (not aleatory)
Nick has a policy that the insurer can cancel when he turns 65. Which type of policy is it?
Conditionally renewable
Annuity suitability rules apply to which of the following?
Conversion of a group annuity to an individual annuity
What are the two most common adjustments made during a month with a universal life insurance policy?
Cost of death protection deducted and current interest rate credited
On December 6, an application for life insurance is submitted with the initial premium. On December 23 the insurer issues the policy. Due to it being Christmas, the agent doesn't deliver the policy until December 28. A conditional receipt was issued without a required medical exam. When is coverage effective?
December 6th
What kind of term policy would a man with limited resources most likely purchase to make sure that his wife and children are secure in their home if he dies while the children are young and in school?
Decreasing term
The policy summary is usually given to the purchaser at the time of:
Delivery
Jeff and Mike own an architect firm with 20 employees and worry about the company if one of them becomes permanently disabled. What type of policy should they buy?
Disability Buy-out
The type policy agents buy to protect themselves if they give incorrect advice or didnt advise a client about an important issue is a:
E&O (Errors and Omissions)
The ____________ requires an applicant be notified in writing that the insurer could request an investigative consumer report may be made on them.
Fair Credit Reporting Act
One required duty of a replacing agent is to inform an applicant of the:
Free-look period
Which of the following is not a benefit of the Social Security program?
Group health insurance benefit
What type of policy does not allow the insurer to change the coverage, but allows the insurer to change the premiums by class?
Guaranteed renewable
Are "Cancelable" and "non cancelable" types of policies?
HELL NAH
What federal act protects the coverage of individuals and their families when they change or lose their jobs?
HIPAA (not COBRA, COBRA makes things more affordable)
Capitation is used in:
HMO's
When an insured dies, the settlement option provision:
How the proceeds are handled
An insured became disabled in February of 2014. She had bought a disability income policy in October of 2012. Her disability was due to a condition that existed prior to October 2012 but was not excluded from her policy. The insurer will:
Pay the claim in full
While investigating a claim, the insurer discovers the claimant had not included her full medical history on the application. The claims results from a condition that existed 4 years ago. The insurer will:
Pay the claim in full
How must an agent or insurance institution inform an applicant of an adverse underwriting decision?
In writing
Which of the following is not true about an increasing term policy?
Increases occur randomly
A replacing agent has all the following duties, EXCEPT:
Inform existing insurer of the replacement (Still must inform applicant of free look period)
When does coverage becomes effective in a health policy?
Initial payment is paid and policy is delivered
Insurance replacement regulations are designed to protect:
Insureds
Which of the following statements is true about the return of premium rider?
It is an increasing term rider that matches the total premium input.
A policy on two or more lives that pays the death benefit after the first person dies is called:
Joint life
Vision plans are considered:
Limited Plans
No Medicare supplement insurance policy may contain benefits that duplicate benefits that are already provided by:
Medicare
Which of the following types of policy cannot be third-party ownership?
Modified life
The Probationary Period of a group health policy can be defined as:
New hire waiting period prior to eligibility for group health policy.
Barbara allows her comprehensive major medical plan to lapse. If her policy is reinstated on March 20th and she contracts mononucleosis on March 29th, what benefits will she receive?
None. (There is a 10-day waiting period for sickness, but accident is covered immediately)
On October 13, an application is submitted with the initial premium, and on October 21 the insurer issues the policy standard. Due to a family emergency, the agent doesnt deliver the policy until October 27. A conditional receipt was issued without a required medical exam. When is coverage effective?
October 13th
What long-term care partnership policy document outlines the requirements and benefits of the policy?
Partnership program notice
The Commissioner has all of the following powers in Virginia, EXCEPT:
Prosecuting insurance crimes
Medicare Supplement policies are primarily designed to:
Provide additional benefits beyond those provided by Medicare
Nick's life policy lapsed, which Nonforfeiture option would allow the insurer to use the cash value to buy a whole life policy?
Reduced paid-up
Dylan tells the insurer to keep the dividend and apply it to his next premium. He is using which dividend option?
Reduction of premium
Errors & Omissions are most likely to occur during:
Replacement
An insured's policy has a maximum of $2,000 in out-of-pocket expenses, then the insurer will cover 100%. This is called:
Stop-loss
Sandra needs more protection than she can afford right now due to her limited financial resources. Her needs can be met by a:
Term Policy
Someone who buys the death benefits for a life insurance policy from someone who has a life-threatening illness is a:
Viatical settlement provider
What happens to a death benefit if it is determined that an applicant stated their age was younger than their actual age?
The death benefit would lower, and premiums would not change
Which of the following is true about the Waiver of Premium provision in a life policy?
The disability must be total and permanent.
Greg, a teacher, has a disability income policy with the change of occupation provision. Greg quits his and becomes an oilfield worker. What would happen to Greg's policy if he becomes disabled after the job change?
The insurance company would pay the amount of disability income benefits that the premium purchased would have covered for Greg's more hazardous occupation.
In most Disability Income policies, the Elimination Period applies:
To each disability separately.
Policy loans are:
not taxable
a Consideration clause which states:
that the applicant pays the initial premium