review 45
If a group life insurance plan sponsor pays 100% of the premiums, what % of the groups eligible members must participate? 25% of the group 100% of the group 50% of the group 75% of the group
100% of the group
A diability buy-out insurance policy typically has an elimination period of: 18-24 months 12 months less than 90 days 90 days - 6 months
18-24 months
Endowment contracts issued today no longer qualify as life insurance (for tax purposes), but those issued before what date were grandfathered and still retain favorable life insurance taxation? 1986 1996 1976 2006
1986
When a person starts receiving Social Security disability benefits, what happens to disability benefits paid by a social insurance supplement (SIS) rider? Benefits provided by the SIS rider may continue for no more than six months. Benefits provided by the SIS rider may continue or be reduced. Benefits provided by the SIS rider end or are reduced. Benefits provided by the SIS rider stop immediately.
Benefits provided by the SIS rider end or are reduced.
All the following statements regarding a life insurance policy's cost-of-living (COL) rider are correct EXCEPT: The policy's death benefit amount can increase without requiring the insured to prove insurability. COL riders are best suited for universal life insurance policies. COL riders are commonly tied to the consumer price index (CPI). The maximum death benefit increase is usually limited to about 5 percent annually.
COL riders are best suited for universal life insurance policies.
All of the following statements regarding the use of deferred annuities in retirement planning are correct, EXCEPT: Federal tax law permits the use of deferred annuities with qualified retirement plans such as IRAs, SEPs, or 403(b) plans. There are both group as well as individual annuity contracts that make it possible for employers as well as individuals to use them for a retirement plan. Earnings grow on a tax-free basis only when a deferred annuity is used to fund a qualified retirement plan. Depending on the type of qualified plan (and the rules of the plan), the premiums may be tax deductible by the plan owner or sponsor.
Earnings grow on a tax-free basis only when a deferred annuity is used to fund a qualified retirement plan.
All the following statements regarding prepaid tuition plans are correct EXCEPT: Prepaid tuition plans allow parents to lock in the cost of today's tuition, even if inflation or tuition increases. Prepaid tuition plans are typically open to both state residents and non-residents. Prepaid tuition plans typically limit a child's choice of colleges to in-state schools. Amounts contributed to prepaid tuition plans are available tax free when used to pay for qualified tuition costs.
Prepaid tuition plans are typically open to both state residents and non-residents.
Cindy and Rich each bought a $100,000 universal life insurance policy from the same insurer, each with a ten-year surrender charge schedule. In year two, Cindy withdrew $5,000 from her policy. Rich withdrew $5,000 from his policy in year five. Which one of the following statements is most likely correct? neither will pay a surrender charge Rich will have a lower surrender charge Cindy and rich will pay the same Cindy will have a lower surrender charge
Rich will have a lower surrender charge
All the following statements about children's term riders on life insurance policies are correct, EXCEPT: A children's term insurance rider provides a modest amount of coverage Children's term riders often are issued for a specified amount A children's term rider can be issued for a specified percentage of the primary insured parent's base policy The modest amount of coverage in a children's term rider reflects the small amount parents are willing to pay for children's insurance.
The modest amount of coverage in a children's term rider reflects the small amount parents are willing to pay for children's insurance.
With respect to group health insurance plan sponsors and participants, which of the following is correct? The plan sponsor owns the plan and pays its premiums, and the individual group members are the insureds. The plan sponsor owns the plan. The individual group members are the insureds and pay the premiums. The employer sponsors the plan, the insurer owns it, and the individual insureds pay the through payroll deductions. The plan sponsor is the insurer, the insured is the employer, and the individual employees are plan participants who pay the premium.
The plan sponsor owns the plan and pays its premiums, and the individual group members are the insureds.
Which is correct about the purpose of medicare supplement policies? They pay routine medical costs of persons eligible for Medicare They only provide funds to pay Medicare deductibles and coinsurance They help pay for hospital, medical, and surgical costs as well as provide funds for deductibles and coinsurance
They help pay for hospital, medical, and surgical costs as well as provide funds for deductibles and coinsurance
All the following statements about endowment contracts are correct EXCEPT: If the policy endows while the insured is still alive, the policyowner gets a specified sum as a living benefit. They are designed to build cash values quickly. They receive preferential income tax treatment. Policies endow well before age 120, usually at age 65.
They receive preferential income tax treatment.
Which is not among an agent's responsibilities to an applicant? recommending insurance products that are suitable for the customer's needs disclosing all important information about a proposed policy helping write an applicant's insurance policy replacing an insurance policy only when it benefits the applicant
helping write an applicant's insurance policy
structured settlements most commonly use?
immediate fixed annuities
Beth buys a long-term care insurance policy and chooses several riders for additional protection. Which feature does her policy automatically include? guarantee of insurability inflation protection return of premium
inflation protection
Fred's wife was the primary beneficiary of his $750,000 life insurance policy. She received payments of approximately $900 a month during her life, and at her death, their son received a lump-sum payment equal to $750,000. Which of the following death benefit settlement options does this best describe? lump-sum payment fixed amount option interest-only option fixed period option
interest-only option
Unlike supplemental, major medical plan, a comprehensive major medical plan? offers limited coverage is not combined with other medical expense insurance has low benefit limits
is not combined with other medical expense insurance
Which one of the following is right regarding the interest rate used to illustrate nonguaranteed values in a life insurance policy illustration? it can be no greater than 3% it is left to the agents discretion it must be approved by the commissioner it must be based on the insurers actual historical experience
it must be based on the insurers actual historical experience
From an insured's perspective, which of the following is the preferred definition of total disability? own occupation any occupation presumptive disability all occupation
own occupation
The purpose of the social insurance supplement (SIS) rider on a disability income (DI) policy is to: duplicate Social Security disabilty benefits help the insured qaulify for Social Security disability benefits pay additional benefits if the insured cannot qualify for social security disability benefits pay additional monthly benefits until social security disability benefits begin
pay additional monthly benefits until social security disability benefits begin
The amount of benefits that a disabled person can expect to receive from Social Security is based on which of the following? primary insurance amount at the time the disability occurred amount of FICA taxes paid into the Social Security program a flat amount declared by Congress each year earnings in the calendar year before the disability occurred
primary insurance amount at the time the disability occurred
Emily postpones buying a life insurance policy, believing that her family will use its savings to pay her final expenses if she dies prematurely. Which method is she using to deal with risk? retention avoidance reduction transfer
retention
Julia has decided to surrender her $250,000 whole life policy, which has a $31,000 cash value. If she elects the extended term nonforfeiture option, Julia will receive a term policy with a face value equal to what amount? $31,000 $219,000 $250,000 $281,000
$250K
For a 30-year-old insured, which of the following life insurance policies of the same face amount would lead to the fastest buildup of cash value? level term life straight whole life 20-pay life life-paid-up-at-65
20-pay life
After it issues an insurance policy, how long does the insurance company have to void the policy due to fraud in the application? 6 months 12 months 18 months 24 months
24 months
The Patient Protection and Affordable Care Act (PPACA) , also called the Affordable Care Act (ACA), recognizes how many 'metal levels' of coverage? 1 2 4 6
4
Individual long-term care policies are usually available to applicants between the ages of: 65 and 85 40 and 65 30 and 59 1/2 40 and 85
40 and 85
Which statement is correct about the types of insurance sales systems? Captive agents may represent any number of insurance companies. Direct response companies sell insurance to consumers without the use of a licensed producer. General agencies sell insurance only through independent brokers. To sell for another insurer, independent brokers must get permission from the primary company they represent
Direct response companies sell insurance to consumers without the use of a licensed producer.
Janet, age 62, plans to quit her job and apply for Social Security retirement benefits this year. Which of the following statements is correct if Janet claims retirement benefits before she reaches her full retirement age? Retiring before the full retirement age would have no impact on her monthly benefit. Janet's monthly benefit will be reduced, but only until she reaches full retirement age. Janet's benefits will be permanently reduced. Janet cannot begin receiving Social Security retirement benefits at age 62.
Janet's benefits will be permanently reduced.
once annuitized income payments begin, which of the following statements is correct? The annuitant can change the settlement option before the first payment is distributed The settlement option cannot be changed the annuitant can change the settlement option at any time
The annuitant can change the settlement option before the first payment is distributed
Medicare Part B benefts exclude covergae for? Vaccinations Phyiscal, speech, and occupational therapy outpatient diagnostic tests
Vaccinations
Two months after buying a single premium life insurance policy, Norton kills himself. As a result, what will Norton's family receive from Norton's life insurance policy? nothing a return of premiums paid a return of the premiums paid, plus interest the policy's full death benefit
a return of the premiums paid, plus interest
What is the free-look period dependent on? age of the applicant the type of policy issued the length of days
age of the applicant
life insurance settlement options are best described as which of the following? alernative ways that a policy owner or beneficiary can chose to receive life insurance policy proceeds alernative ways that a life insurance company can be forced to pay a contested death benefit claim alernative ways that a life insurance company may choose to pay out a policys death benefit
alernative ways that a policy owner or beneficiary can chose to receive life insurance policy proceeds
For a life insurance Policy, when must insurable interest exist? at time of claim at the inception of the policy before the application for insurance is made
at the inception of the policy
According to California's Insurance Information and Privacy Protection Act, under what circumstance(s) does an insurer have to obtain authorization to release personal information? when determining a person's eligibility for an insurance benefit or payment in the course of detecting criminal activity in connection with an insurance transaction to inform a person of a medical problem of which he or she may not be aware before disclosing privileged information about a person
before disclosing privileged information about a person
In an insurance transaction, who gives consideration? only the applicant no one both the applicant and insurer only the insurer
both the applicant and insurer
Which of the following health insurance principles underlie the 'other insurance with this insurer' and the 'other insurance with other insurer(s)' provision of a disability income insurance policy? adverse selection insurable interest subrogation coordination of benefits
coordination of benefits
The main purpose for errors and omissions insurance (E&O) is to: provide legal protection to the producer who is charged with willfully engaging in an unfair trade practice allow the producer to be less diligent in complying with insurance sales disclosure requirements cover damages that arise due to services a producer non-willfully failed to render pay for an insurance company executive to meet with a policyowner to correct an error made by the producer during the sales process
cover damages that arise due to services a producer non-willfully failed to render
Which of the following arrangements best suits a life insurance applicant's goal of keeping the policy out of his or her estate? designate the insured's estate to be the owner of the policy designate the insured to be the owner of the policy designate the insurance company to be the owner of the policy designate an irrevocable trust to be the owner of the policy
designate an irrevocable trust to be the owner of the policy
The Excalibur Insurance Company, Domiciled in Iowa, transacts business legally in Nebraska, In nebraska Excalibur is an? alien Insurance Co domestic Insurance Co foreign Insurance Co
foreign Insurance Co
Variable annuity contract charges and fees are paid: out of pocket by the contract owner from premium payment deductions only from subaccount deductions only from premium payment and subaccount deductions
from premium payment and subaccount deductions
Insurers are usually least concerned about the risk of adverse selection when considering health insurance applications for? groups families individuals sole proprietors
groups
In a fixed life insurance policy, who assumes the risk of investing the premiums? policyowner someone named by the policyowner insurer state insurance commissioner
insurer
A policyowner can access the cash value of many life insurance policies through withdrawals, loans, or policy surrender. Which of the following terms describes the ability to easily convert life insurance into cash? liquidity convertibility transferability accessibility
liquidity
Actuaries calculate net life insurance premiums based on which of the following? Interest and expense assumptions mortality and interest assumptions mortality and expsense assumptions morbidity and interest assumptions
mortality and interest assumptions
The federal Risk Retention Act of 1986 contains guidelines for which of the following entities? risk retention groups surplus lines insurance companies Fraternal insurance companies reinsurance companies
risk retention groups
what is another name for the annuitization phase of an annuity contract? the ownership stage the payout stage the conservation stage the accumulation stage
the accumulation stage
what correctly describes the relationship, if any, between the application and the insurance contract?
the application is part of the entire contract
Whther a variable annuitys monthly income rises, fans, or stays level depends largely on which of the following? the assumed interest rate selected by the contract owner the annuity settlement option selected by the annuity owner 2000 CSO Mortality Table
the assumed interest rate selected by the contract owner
Besides select policy anniversary dates, a life insurance guaranteed insurability rider usually permits special alternative option dates that typically include all the following, EXCEPT a birth of the policyowner's child the policyowners marriage the policyowner's adoption of a child the policyowners loss of a job
the policyowners loss of a job
Individual long-term care insurance policies are generally available to persons in which of the following age groups? those between the ages of 30 and 65 those between the ages of 40 and 85 those between the ages of 20 and 60 those between the ages of 55 and 70
those between the ages of 40 and 85
When choosing a health care provider, from a PPO and managing out-of-pocket expenses, the insured can? use a network provider for the lowest cost, or use a non-network provider for more flexibility use a network provider to avoid UCR charges for the area use a network provider at a higher out of pocket cost
use a network provider for the lowest cost, or use a non-network provider for more flexibility
which of the following statements about Medicare supplement policies in California is correct? A medicare supplement policy must conform to the standard coverages set by the NAIC Medicare supplement policy can exclude a pre-existing condition for more than 6 months before the policys effective date
A medicare supplement policy must conform to the standard coverages set by the NAIC
How does a tort differ from a contract? A Tort creates a legal relationship between parties A tort arises through the violation of others rights or breach of duties owed to them a tort arises by agreement between the parties
A tort arises through the violation of others rights or breach of duties owed to them
An insured's estate can be a beneficiary. However, what is the main disadvantage of that arrangement? The Insured has no control over who ultimately gets the insurance benefits The executor will have to sell assets to pay the estates expsenses It places the policy benefits into the estate where they are subject to creditors and estate taxes The life insurance funds will be subject to final expenses and outstandind debts
It places the policy benefits into the estate where they are subject to creditors and estate taxes
Why would a basic medical expense policy not be a good form of coverage for a person who visits his doctor very often? It has a high deductible. It covers accidental injuries only. It primarily covers hospital-related expenses. It is only available on a group basis.
It primarily covers hospital-related expenses.
Four shareholders of ABC Corporation, who each own a $1,000,000 interest in the company, enter into a stock redemption agreement funded with life insurance. If one shareholder dies six months later, all the following statements are correct EXCEPT: The insurer will pay the $1,000,000 death benefit from the deceased owner's policy to ABC Corporation. This is a form of entity-purchase buy-sell plan. Each of the surviving shareholders will then own a one-third share of ABC Corporation. The three remaining shareholders will buy the deceased owner's interest from his estate.
The three remaining shareholders will buy the deceased owner's interest from his estate.
ABC Insurance Company is domiciled in Delaware and does business in Ohio. Which of the following is correct about ABC? ABC is a domestic insurer in Delaware and an alien insurer in Ohio. ABC is a domestic insurer in Delaware and a foreign insurer in Ohio. ABC is a domestic insurer in Ohio. ABC is a foreign insurer in Delaware.
ABC is a domestic insurer in Delaware and a foreign insurer in Ohio.
Which of the following is NOT a requirement for employer-sponsored group life insurance? All eligible employees must be given the opportunity to participate. If employee contributions are required, then at least 75 percent of eligible employees must elect to participate. All employees must be insurable. Plans may be contributory or noncontributory.
All employees must be insurable.
as tax incentives to set up a qualified employer retirement plan, all the following statements are correct EXCEPT: Employee contributions are made with pre-tax dollars Benefit Distributions are taxed only if withdrawn prior to retirement and are tax free if distributed at retirement employer contributions are not taxable to the employee when made
Benefit Distributions are taxed only if withdrawn prior to retirement and are tax free if distributed at retirement
Which statement about profit sharing plans is correct? It is a type of defined benefit plan Bothe the employer and employee contribute to the plan Contribution limits for profit-sharif plans are the same as those that apply to all defined contribution plans
Contribution limits for profit-sharif plans are the same as those that apply to all defined contribution plans
All of the following statements about health savings accounts (HSAs) are correct, EXCEPT: Health savings accounts are available on either an individual or a group basis. If an employer offers an HSA, employees must first have a high-deductible, high-cost insurance plan and set up an HSA account. Group HSAs must be entirely employee-funded. Employers cannot discriminate in any way when making HSA contributions.
Group HSAs must be entirely employee-funded.
Which of the following statements is correct regarding coverage for experimental medical treatment in California? Insurers can deny coverage. Insurers must provide coverage in all cases. Insurers must provide coverage to terminally ill insureds. Insurers can exclude coverage for nonterminally ill insureds.
Insurers can deny coverage
By definition, which of the following statements is correct regarding an insurer that does not meet the state's paid-in capital requirement? It has not been admitted to transact insurance in California. It has not invested its premium deposits in the manner required by the CIC. It has required asset levels that are less than its expense levels. It has premium receipts that are less than required asset levels.
It has required asset levels that are less than its expense levels
What statement is true about the Fair Credit reporting Act? It prohbits applicants from disputing consumer credit reports It requires insurers to notify applicants when a consumer report has been requested it prohibits the sharing of consumer credit info among insurers
It requires insurers to notify applicants when a consumer report has been requested
Which statement about Medicare is correct? Like Social Security, it is funded by payroll taxes. It is a state health insurance program for those who are at least 65 years old. It was signed into law by President John Kennedy in 1961. It consists of Original Medicare and Medicare Supplements.
Like Social Security, it is funded by payroll taxes.
In what way is a profit-sharing plan unique among defined contribution plans? There is a limit on contributions. A participant's retirement benefit depends on the amount of contributions made on his or her behalf. The employer is the sole contributor. Contributions are directed to a participant's individual account.
The employer is the sole contributor.
Under a health insurance contract's consideration clause, which of the following best describes the insurance company's consideration when issuing a health insurance policy? The insurance company's consideration is the promise to pay a benefit if the insured continues to pay the premiums. The insurance company's consideration is the promise to pay a benefit if a stated future event occurs. The insurance company's consideration is the payment of a benefit if the insured suffers a loss. The insurance company's consideration is the payment of benefits at the end of the consideration period.
The insurance company's consideration is the promise to pay a benefit if a stated future event occurs
What happens if a person submits an insurance app without the premium? The insurer must make an offer to the applicant the insurer must make a counter offer The applicant made an offer to the insurer
The insurer must make an offer to the applicant
All the following statements regarding childrens term riders in life insurance are correct except: The insurer must write seperate riders for each child in the family The coverage for any covered child normally ends when he or she reaches a certain age
The insurer must write seperate riders for each child in the family
Which is NOT a disadvantage of a basic medical expense policy? The policy has a high deductible. The policy offers limited coverage. Reimbursements may be inadequate. Premiums are expensive.
The policy has a high deductible.
Whic of the follwoing best explains the basic level premium concept of ordinary whole life insurance? The death benefit is decreased to offset the rising cost of insurance with age The steady reduction of the policys net amount at risk offsets the cost of pure insurance that rises with age funds are withdrawn from the policy cash value in the later years to pay the rising cost of pure insurance
The steady reduction of the policys net amount at risk offsets the cost of pure insurance that rises with age
Jerry owns a life insurance policy with premiums payable directly to the insurer's home office. However, for the past five years Jerry has sent his payments to his agent, who then forwards them to the insurer. The insurer had accepted this arrangement but then tries to cancel Jerry's policy when it learns he had died while the premium was being forwarded by the agent. The insurer will probably not be able to cancel the policy in this case because of which of the following legal principles? misrepresentation estoppel fraud waiver
estoppel
LTC insurance policies commonly define benefits as: lump sum payments total annual payments flat daily amounts flat monthly amounts
flat daily amounts
which of the following statements is correct about the HMO claims process? because the HMO is centrally managed the insured needs file claims forms members make a copayment only when the HMO bills them members do not need to submit claim forms for services provided within the network
members do not need to submit claim forms for services provided within the network
After a disability income policy has been issued , what period of time must pass before the insured may file a claim for benefits? benefit period exclusionary period probationary period elmination period
probationary period
An agent's apparent authority is defined by: the supervising agent's instructions the home office directives the customer's perceptions the agent's beliefs
the customer's perceptions
Each application for health insurance requires the signature of which party? the proposed insured only the producer only any adults to be covered by the policy only the proposed insured, the producer, and all adults to be covered by the policy
the proposed insured, the producer, and all adults to be covered by the policy
A primary insurer is the insurer that? transfers its loss exposure to another insurer in a reinsurance transaction. writes only one line of coverage. accepts ceding business and assumes a part of another insurer's loss exposure. is domiciled in California but is certified to transact insurance in other states.
transfers its loss exposure to another insurer in a reinsurance transaction.
what is the term for voluntarily giving up a known right? estoppel waiver conditional voidable
waiver
The life insurance policy rider that makes the insurance company pay the policy premiums if the insured becomes totally disabled is called a(n): return of premium rider disability income rider waiver of premium rider payor benefit rider
waiver of premium rider
Statements that are guaranteed to be true are known as: warranties representations petitions declarations
warranties
Ann is the beneficiary of an annuity owned by Jim. Jim intended to annuitize the contract at retirement but died shortly before retiring and selecting a payout option. What benefits will Ann receive from the annuity? Ann will receive the annuity's accumulated value and may select a payout option. Ann's right to any funds will be based on the income payout option that Jim selected. Ann will receive income for life. Ann will receive the contract's funds in a lump sum.
Ann will receive the annuity's accumulated value and may select a payout option.
Benefits paid under Ken's qualified long-term care policy up to a daily limit are not taxed. What must happen for Ken to receive these amounts tax free? He must be employed. He must be under a doctor's care. He must be diagnosed as chronically ill. He must be receiving treatment for a recurring medical condition.
He must be diagnosed as chronically ill.
Which of the following statements is correct regarding an insurer that cancels a policy based on medical information it requests and receives after the policy was issued? It has followed acceptable underwriting standards. It must offer the insured another policy at the same rate. It has engaged in post-claims underwriting. It must give the insured a 10-day notice of the cancelation, during which time any valid claim the insured submits must be honored.
It has engaged in post-claims underwriting.
How is increasing term life insurance normally sold? as a cost-of-living rider on a permanent life insurance policy as a permanent insurance policy as an endorsement as a modified endowment contract
as a cost-of-living rider on a permanent life insurance policy
Which of the following types of business health insurance would serve the needs of two business owners who want to fund their buy-sell plan in the event one of them becomes totally disabled? business overhead expense insurance key person disability insurance long-term care insurance disability buy-out insurance
disability buy-out insurance
if rick withdrals funds from his universal life insurance policy, what will be the immediate effect on the polcys death benefit? it will not charge as long as rick repays the amount withdrawn it will be reduced by the amount of the withdrawl it will not change as a result of the withdrawl
it will be reduced by the amount of the withdrawl
An insurer may classify a life insurance applicant as a "substandard risk" for all of the following reasons, EXCEPT: poor health bad habits low-paying job high numbers of early major illnesses in the family
low-paying job
Laura was injured and incurred $1,000 in medical bills. Even though she was not disabled and did not lose any income, her disability income policy paid for these expenses. What provision does her policy have? nondisabling injury provision rehabilitation provision relation-to-earnings provision elimination period
nondisabling injury provision
The death benefit of an indexed annuity is equal to: a fixed amount specified in the contract the contract's accumulated indexed interest rate value the contract's guaranteed minimum interest rate value the higher of the contract's accumulated index value or the guaranteed minimum interest rate value
the higher of the contract's accumulated index value or the guaranteed minimum interest rate value
The basic agreement between the insured and the company, stating the company's promise to pay the policy's face amount (the death benefit) to the named beneficiary, is contained in which one of following parts of the life insurance policy? the incontestability clause the entire contract provision the insuring clause the application
the insuring clause
Which of the following health insurance policy provisions requires the insurer to pay claims immediately after receiving proper proof of loss? the time payment of claims provision the proof of loss provision the optional provisions the change of beneficiary provision
the time payment of claims provision
Which one of the following most accurately describes the income tax treatment of life insurance death benefits received by a terminally ill insured under the accelerated benefits rider? they are generally income tax free they are taxable in the year the benefit is received they are tax deferred until the insured dies, at which point they are taxable
they are generally income tax free
The intoxicants and narcotics provision lets an insurer deny a claim if? a loss results from intoxication or use of non-prescribed narcotics a loss results from negligence the insured is arrested while driving under the influence
a loss results from intoxication or use of non-prescribed narcotics
Mary, a currently insured worker under social security, recently died. Her 85-yr old widowed mother, who was finacially dependent on Mary, would be entitled to ?
a monthly benefit of 82.5% of marys IPA
All the following statements regarding tax-free Section 1035 exchanges are correct EXCEPT: A 1035 exchange is not considered a policy replacement for regulatory purposes. A modified endowment contract (MEC) exchanged for a new life insurance policy will result in the new policy being a MEC. A nonqualified annuity cannot be exchanged for a qualified annuity. An annuity can be exchanged for a tax-qualified long-term care insurance policy.
A 1035 exchange is not considered a policy replacement for regulatory purposes.
Which statement does NOT describe the conditions, limitations, and restrictions imposed upon the care received through an HMO? The HMO controls when, where, and how the member can receive treatment. Hospitalization and surgery must be pre-approved by the HMO if it is to cover the cost of the stay or surgery. If a member is outside the HMO's service area, the member must contact the HMO within one hour of receiving treatment. In an emergency, a member may be excused from getting prior approval for treatment.
If a member is outside the HMO's service area, the member must contact the HMO within one hour of receiving treatment.
Which of the following statements about the net premium for a life insurance policy is NOT correct? It reflects two of the three premium factors: mortality and interest. It is the amount charged to the policyowner. For a single premium policy, the net premium is called the net single premium. For a flexible premium policy, the net premium is called the net level premium.
It is the amount charged to the policyowner.
Which of the following statements is correct regarding an insurer that picks up and assumes coverage for a discontinued employer group medical insurance policy within 60 days of the discontinuance? It may select among the employees who will and who will not be covered under the new policy. It must offer the exact same coverage as the discontinued policy. It may not charge a higher rate than that of the discontinued policy. It may not impose its pre-existing exclusion provision upon those who were covered under the discontinued policy.
It may not impose its pre-existing exclusion provision upon those who were covered under the discontinued policy.
Liam owns a life insurance policy on his own life and names his wife, Anne, as the irrevocable beneficiary. If Liam wants to take out a policy loan on this policy, which of the following statements is correct? As the policyowner, Liam is free to take out a policy loan at any time. Liam can take a loan only after first replacing Anne with a revocable beneficiary. Liam can take a loan only with Anne's consent. Liam will never be able to take out a policy loan on this policy.
Liam can take a loan only with Anne's consent.
What happens if the amount of retirement benefits that a family receives based on the earnings of a single worker exceeds the maximum family retirement benefit? The family must pay income tax on the excess benefits. The family must pay a 10 percent excise tax on the excess benefits. The family must return the excess benefits. The total benefits payable to a spouse and children are reduced proportionately.
The total benefits payable to a spouse and children are reduced proportionately.
What action is available to claimants who are denied payment of an insurance claim by an insurer? They may appeal to the California Department of Insurance. They must be given a refund of their premiums. They must take the matter to court to reverse the insurer's decision. They may submit an alternate claim to the California Insurance Guarantee Association.
They may appeal to the California Department of Insurance.
If Ken becomes eligible (by a medical reason) for payments under his life insurance long-term care rider, he must be certified as unable to perform which of the following? at least two activities of daily living for at least 90 days any activity of daily living for at least 30 days at least five activities of daily living for at least 60 days any activities of daily living for at least 30 days
at least two activities of daily living for at least 90 days
In California, all of the following are considered transacting insurance for which a license is required EXCEPT: determining premium rates for specific classes of insureds soliciting applications for insurance effecting and placing insurance contracts paying an insurance claim
determining premium rates for specific classes of insureds
Which statement is correct about residual benefit payments? benefits usually end when the income loss is above 20 % of pre-disability earnings the insured must lose at least 20% of pre-disability income before benefits begin. Residual beenfits are calculated annually
the insured must lose at least 20% of pre-disability income before benefits begin.
ndividual and group health insurance policies both can include a probationary period. When used in an individual health insurance policy, what is a probationary period? the period that must pass between the policy's effective date and the time when benefits are payable the period that must pass between the application and the time the initial premium is paid the period that must pass between the policy's issue date and the time premiums are payable the period that must pass between the policy application date and the acceptance of the risk by the insurer
the period that must pass between the policy's effective date and the time when benefits are payable
A family life insurance policy provides: whole life insurance coverage for both parents whole life on the primary insured and term life insurance coverage on the spouse and each child to age 21 term life insurance coverage on every family member under a single policy whole life insurance coverage on every family member under a single policy
whole life on the primary insured and term life insurance coverage on the spouse and each child to age 21