Life + Health insurance Test

What is the maximum penalty for violating the Fair Credit Reporting Act?

$2,500

How many days must an existing insurer provide policy owners with a policy summary?

10 days

For how many days of skilled nursing facility care will Medicare pay benefits?

100

Every small employer carrier shall, as a condition of transacting business in this state with small employers, actively offer to small employers at the basic

2

How often does the agent's insurance license expire?

2 years

How long should a replacing insurer maintain a replacement register regarding the policy for the next regular examination by the Insurance Department?

3 years

A Licensed broker who participates in a national insurance association may get, from the Commissioner, how many continuing education credits?

4

How long should insurers keep advertisements on file?

4 years

The maximum amount than can be contributed to an MSA is what percentage of the family deductible for those with family coverage?

75%

US Armed Forces reservists called to active duty after August 21, 1990, who were covered under a disability policy provided by their employers duty if they apply within how many days of discharge?

90 days

What do individuals use to transfer their risk of loss to a larger group? A) Insurance B) Exposure C) Indemnity D) Insurable Interest

A) Insurance

a sudden, unplanned and unexpected event, not under the control of the insured, resulting in injury or damage that is neither expected nor intended.

Accident

Under HIPPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy?

An individual who was previously covered by group health insurance for 6 months is eligible

Which of the following hospice expenses would NOT be covered in a cost-containment setting?

Antibiotics

What is Apparent authority?

Appearance or the assumption of the authority grants the agent more powers to assist the client

What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided?

Application

When must an insurance company present an outline of coverage to a person?

At the time of application

Insurable interest in the property covered in a policy must be proven

At time of loss

In terms of Social Security, what is the interval spanning between the day when the youngest child of a family turns 16 and before the surviving spouse?

Blackout Period

Which of the following accurately compares business and personal life insurance?

Both create an immediate payment upon the death of the insured.

Generic publication that explains insurance in general terms, to help with decision making

Buyer's Guide

What is the term for the fee a policy owner must pay to the insurance company to maintain coverage? A) Commission B) Benefit C) Premium D) Installment

C) Premium

What is the purpose of a disclosure statement in life insurance policies? A) To help consumers compare policy prices. B) To protect agents and insurers against against lawsuits. C) To explain features & benefits of a proposed policy to the consumer. D) To obtain important underwriting information from the applicant.

C) To explain features & benefits of a proposed policy to the consumer

The act of voluntarily giving up insurance by the insured is called

Cancellation

What is the term for replacing insurance policies for the purpose of making commissions?

Churning

hazards and may increase the chance of a loss occurring.

Conditions

Most insurers issue health insurance policies for delivery in many state. Because each state regulates and mandate the requirement for policy each state, the insurer attaches

Conformity with State Statutes provision

The gatekeeper of an HMO helps to

Control specialist costs.

Which of the following would most directly affect purchasing power of benefits paid on fixed annuity?

Economic inflation

What type of insurance protects producers when they are sued for professional negligence in their duties and are sued by insureds as a result?

Errors and Omissions

Which of the following is an example of a non-qualified retirement plan?

Executive bonus plan

Who is the owner of the policy and who pays the premium in an Executive Bonus Plan?

Executive is the owner and the Executive pays the premium

Even though "sickness" is a peril covered by a health insurance policy, coverage may be limited or excluded because of all of the following EXCEPT

Exemptions periods.

T/F: A signed waiver of premium is somthing that can be collected/obtained from the applicant

F: Waiver or prem is a rider that can be added to the policy, but not collected from the applicant

Which act require that a company supply an applicant with the name & address of the consumer reporting company?

Fair Credit Reporting Act

The 3 elements of insurable risk are:

Financial, blood, and business

An organization that, in addition to other activities, provides a formal insurance plan to its members is classified as a

Fraternal insurer

Universal Life Option B includes the annual increase in cash value, the death benefit under this option

Gradually increase each year by the amount that the cash value increases.

are conditions or situations that increase the probability of an insured loss occurring.

Hazards

When would misrepresentation be considered fraud?

If it is intentional and material

(reimbursement) is a provision in an insurance policy that states that in the event of loss, an insured or a beneficiary is permitted to collect only to the extent of the financial loss, and is not allowed to gain financially because of the existence of an insurance contract.

Indemnity

Ken has a life insurance policy with a face amount of $500. He pays a premium each week to the agent who sold him the policy. What kind of policy?

Industrial life

the insured would incur a financial loss if the insured property was damaged.

Insurable interest

transfers the risk of loss from an individual or business entity to an insurance company, which in turn spreads the costs of unexpected losses to many individuals.

Insurance

5 years

Insurer examinations must occur no less frequently than every

Which of the following is NOT true regarding the accumulation period of an annuity?

It would not occur in a deferred annuity.

For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become

Larger

Which law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated?

Law of large numbers

state that the larger the number of people with a similar exposure to loss, the more predictable actual loss will be.

Law of large numbers

Insurance is a contract by which one seeks to protect another from

Loss

All of the following statements describe a MEWA EXCEPT

MEWAs are groups of at least 3 employers.

Which of the following programs expands individual public assistance programs for people with insufficient income and resources?

Medicaid

hazards refer to those applicants that may lie on an application for insurance, or in the past, have submitted fraudulent claims against an insurer.

Moral hazard

hazard refers to an increase in the hazard presented by a risk, arising from the insured's indifference to loss because of the existence of insurance.

Morale hazard

Life insurance illustrations

Must - Identify non guaranteed values -differentiate guaranteed & projected amount -Only be used as approved

In a long-term care policy, pre-existing condition limitations

Must appear as a separate paragraph and be clearly labeled.

An insured carries a property policy on her home in the amount of $250,000. A bank is shown as the mortgagor in the policy. Last month the insured made her final mortgage payment, but did not remove the bank from the policy. In the event of a covered loss to her home, how much will the bank receive?

Nothing

A tornado that destroys property would be an example of which of the following?

Peril

are the causes of loss insured against in an insurance policy.

Perils

those arising from the material, structural, or operational features of the risk, apart from the persons owning or managing it.

Physical hazard

Hazards are classified as

Physical, moral, and morale

Which individuals must have insurable interest in the insured?

Policyowner

Which of the following is NOT among the goals of a Medicare Supplement application?

Presuming the applicant is eligible for Medicaid, based on the nature of the policy

When an insured dies, who has first claim to the death proceeds of the insured life insurance policy?

Primary beneficiary

Which of the following would not be a violation of Louisiana insurance Regulations?

Producer C uses her license to write uncontrolled business only

Who is allowed to make changes to the application?

Producer, with the applicant's initials

A Medicare SELECT policy does all of the following EXCEPT

Prohibit payment for regularly covered services if provided by non-network providers.

direct loss also includes other damage where the insured peril was the

Proximate cause of loss

A situation in which a person can only lose or have no change represents

Pure risk

refers to situations that can only result in a loss or no change.

Pure risk

The risk of loss may be classified as

Pure risk and speculative risk

What is another name for substandard risk classification?

Rated

Which rule would apply if an agent knows an applicant is going to cash in an old policy and use funds to purchase new insurance?

Replacement rule

In case of a loss, the indemnity provision in insurance policies

Restores an insured person to the same financial state as before the loss

is the uncertainty or chance of a loss occurring.

Risk

What is rebating?

Special offers or favors, outside of the contract

Events in which a person has both the chance of winning or losing are classified as

Speculative risk

involves the opportunity for either loss or gain.

Speculative risk

What is material misrepresentation?

Statement by the applicant that would affect the underwriting decision, if discovered.

What is a warranty in insurance?

Statement guaranteed to be true

The transfer of an insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses?

Subrogation

is the insurer's legal right to seek damages from third parties, after it has reimbursed the insured for the loss.

Subrogation

All of the following are unfair claims settlement practices EXCEPT

Suggesting negotiations in settling the claim

Which of the following best describes taxation during the accumulation period of an annuity?

Taxes are deferred

Which of the following is NOT covered under a "core" policy, Plan A in Medigap insurance?

The Medicare Part A deductible

A corporation is the owner and beneficiary od the key person disability policy. If the corporation collects the policy benefit, then

The amount received is tax-free.

All of the following are ways in which a Major Medical policy premium is determined EXCEPT

The average age of the group

Peril is most easily defined as

The cause of loss insured against

What is speculative risk?

The chance of gain or loss and is not insurable

The insured has violated the contract without the knowledge of the mortgage holder. After a loss

The insured cannot collect but the mortgage holder will still be paid

All of the following are true regarding the guaranteed insurability rider EXCEPT

This rider is available to all insured

What is the significance of a conditional receipt?

To provide coverage on an earlier date than the policy

What type of insurance would the following acts be: -Solicitation -Preliminary insurance negotiations -Execution of insurance contracts -Transactions of matters arising out of the contracts

Transacting insurance

What is Conservation effort?

Trying to discourage a policyholder to drop an existing policy

What term is used for tricking policyholders by using fraudulent comparisons of policies to persuade the insured to switch or take out another policy with another insurer?

Twisting

How long will a life annuity with an installment refund pay?

Until the balance of the initial premium is paid out in continued payments to the beneficiary after the annuitants dies.

When does the policy begin, if the initial premium is not paid?

When the agent delivers the policy -Collects the initial premium -Applicant completes an acceptable Statement of Good Health

With respect to the business of insurance, a hazard is

any condition or exposure that increases the possibility of loss

losses caused by continuous or repeated exposure to conditions resulting in injury to persons or damage to property that is neither intended nor expected.

occurrence

Which of the following is true regarding optional benefits with long-term care policies?

they are available for an additional premium