Exam
Annually Renewable Term
-Renews each year without proof of insurability -Premiums increase due to attained age
Medicare pays for all covered services during how many days in a skilled nursing facility?
20 days
managed care
A health care system whose goals are to provide cost effective quality care.
Roth IRA
A personal savings plan; contributions are not tax-deductible; earnings are tax-free
Graded Death Benefits
A policy where the full face value will not be paid until graded time has passed, according to policy terms (often 2 to 3 years) due to a substandard risk
Insurers that issue individual variable contracts in this state are required to mail the policyowner a statement of the investments. How often must they mail them?
Annually
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy CANNOT be reinstated
Credit life insurance is usually issued at what type of policies?
Credit life insurance can be issued only as an individual or group term plan.
Which of the following is true regarding the insurance amount in a credit life policy?
Creditor can only insure the debtor for the amount owed.
Which of the following is TRUE about credit life insurance?
Creditor is the Policy owner
Which nonforfeiture option has the highest amount of insurance protection?
Extended Term
What nonforfeiture option is automatically selected by the company if not chosen by the policyowner?
Extended term
What does "level" refer to in level term insurance?
Face amount
Which option for universal life allows the beneficiary to collet both the death benefit and cash value upon the death of the insured?
Option B
which of the following describes taxation of individual disability income insurance premiums and benefits?
Premiums are not tax deductible, and benefits are not taxable.
Which of the following best details the underwriting process for life insurance?
Selection, classification and rating of risks.
Which of the following policies would be classified as traditional level premium contract?
Straight life
Which of the following riders is often used in business life insurance policies when the policyowner needs to change the insured under the policy?
Substitute insured rider
Which of the following is NOT a feature of a noncancellable policy?
The insurer may terminate the contract only at renewal for certain conditions
Which of the following statements are correct regarding a whole life policy?
The policy owner is entitled to policy loans
Which of the following is NOT true of life settlements?
The seller must be terminally ill.
When would a 20-pay whole life policy endow?
When the insured reaches age 100
The accidental death rider
Will pay 2 or 3 the face value amount
Credit life insurance
insurers the life of a debtor
Qualified plan
-approved by IRS for favorable tax treatment - tax deferred growth - must be permanent and have vesting requirements
Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days?
20 days
What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before a loss can be covered?
Probationary period
Director of Insurance
Usually appointed by governor, does not write, laws , examines all authorized insurers,
Accidental Death Benefit Rider
doubles the face amount of life insurance if death occurs as a result of an accident
The relation of earnings to insurance provision allows the insurance company to limit the insureds benefit to his/her average income over the last
24 months
Within what time frame after the effective date of coverage of an individual long-term care policy may an insurer exclude coverage of a loss related to a pre existing condition?
6 months
An insured will be allowed to reactive her lapse life insurance policy if action is taken within a certain period of time and proof of insurability is provided. Which policy provision allows this?
reinstatement provision, it allows a lapsed policy to be reinstated within 3 years by paying back premiums, with interest and proving insurability.
Which of the following best describes fixed period settlement options?
Both the principal and interest will be liquidated over a selected period of time.
The purpose of the Missouri life and health guaranty association is to?
Help protect policy owners and beneficiaries against financial loss caused by the insolvency of an insurance company
Carry Over Provision
If the insured did not incur enough expenses during the year to meet the deductible, any expenses incurred during the last 3 months may be carried over to the next policy year to satisfy the new annual deductible
Option B
Under the option B the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases. At any period in time, the total death benefit will always be equal to the face amount of the policy plus the current amount of cash value.
Health Maintenance Organization (HMO)
an organization that provides comprehensive medical care to subscribers for a fixed fee
How often must an insurer who delivers variable life insurance policies in Missouri determine any changes in variable death benefits?
annually
A universal life insurance policy is best described as an
annually renewable term policy with a cash account
PKU
for children under age of 6, cant be more than 50% of costs, also may be subject to a maximum of not less than $5,000 per child covered
Annually renewable term policies provide a level death benefit that
increases annually
legal action
insured must wait 60 days after written proof of loss before bringing legal action against the company
Variable Life Insurance
life insurance in which the benefits are a function of the returns being generated on the investments selected by the policyholder
The following are dividend options
reduction of premium, paid-up additions, and accumulated at interest
Proof of Loss
A statement of facts about a loss for which the insured is making a claim. must be made within 90 days
Annually renewable term policies provide a level death benefit for a premium that
Increases annually
Insurance Guaranty Association
An organization that protects policyholders and claimants in the case of an insurance company's impairment or insolvency. Insurance guarantee associations are legal entities whose members make guarantees and provide a mechanism to resolve claims.
Metal Levels
Bronze 60% Silver 70% Gold 80% Platinum 90%
In a disablity policy, the probationary period refers to the time.
During which illness-related disabilities are excluded from coverage
Which is true about the cash surrender nonforfeiture option
Funds exceeding the premium are taxable as ordinary income.
Which of the following best describes annually renewable term insurance?
It is a level term insurance.
Medicare Part A services do not include which of the following?
Outpatient hospital treatment
An individual wants to purchase a life insurance policy. HIs agent ask if the transaction will involve replacing an existing life insurance policies. If the customer replies "yes" which of the following best describes the agents next steps?
The agent must provide a replacement notice to the applicant
Impairment Rider
Excludes coverage for a specific ailment or condition that otherwise would be covered (e.g., previous back injury)
Which nonforfeiture option provides coverage for the longest period of time?
Reduced paid up nonforfeiture option
In a life settlement contract who does the life settlement broker represent
The owner
What is the maximum age for qualifying for a catastrophic plan?
30
How long is an enrollment period for medicare supplement policies
6 months
The death protection component of Universal Life Insurance is always
Annually renewable term
A person who receives or collects money to be forwarded to the principal is said to have what kind of responsibility?
Fiduciary
Which is True about the cash surrender nonforfeiture option?
Funds exceeding the premium paid are taxable as ordinary income.
If a life policy allows the policy-owner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a?
Guaranteed insurability rider
Traditional IRA
Individual Retirement Account - A personal qualified retirement account through which eligible individuals accumulate tax-deferred income up to a certain amount each year, depending on the person's tax bracket.
Indexed Annuities
Interest rate tied to an index. Earn higher rate than fixed annuities, not as risky as variable annuities or mutual funds
Which of the following best describes a misrepresentation?
Issuing sales material with exaggerated statements about policy benefits
Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?
Paid-up option
When an insurer combines two periods of disability into one, the insured must have suffered a
Recurrent disability
A producer is helping a married couple determine the financial needs of their children in the event one or both of them should die prematurely, This is a personal use of life insurance known as
Survivorship protection
The interest credited option is
TAXABLE, whether or not the policyowner receives it.
Children riders attached to whole life policies are usually issued at what type of insurance?
Term
Credit life insurance is usually issued as what type of policies?
Term
Which of the following best describes annual renewable term insurance?
it is a level term insurance
When a health carrier uses retrospective review procedures, within how many days of receipt of information must the carrier make the determination?
30 working days
Which of the following is NOT true regarding Equity Indexed Annuities?
They earn lower interest rates than fixed annuities
Which provision states that the insurance company must pay medical expense claims immediately?
Time of Payment of Claims
A participating insurance policy may do which of the following?
pay dividends to the policy owner
Colorectal Screenings performed under individual and group health policies are required to be in compliance with the standards set by which of the following organizations?
American Cancer Society
The equity in an index annuity is linked to
An index like Standard and Poor's 500
Modified Endowment Contract (MEC)
An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
A long term care insurance shoppers guide must be provided in the format developed by the?
NAIC
403(b) TSA
Non profit, organizations, church or school
Reduction of premium
The insurer uses the dividend to reduce the next year's premium
All of the following are TRUE statements regarding the accumulation at interest option except?
The interest is not taxable since it remains inside the insurance policy
Which of the following is NOT true regarding policy loans?
The money borrowed can be TAXABLE
Paid-Up Additions
the dividend is used to purchase a small amount of paid-up whole life insurance
Nonqualified Plan
A type of benefit plan that may discriminate, is not required to be filed with the IRS, and does not provide a current tax deduction for contributions.
No insurance policy form can be issued, delivered or used in this state unless it has been
Approved by the department of insurance.
Fair Credit Reporting Act
Act that protects privacy of background information and ensures that information supplied is accurate.
Reinstatement Provision
Applies to the timeframe that an insurer hasn't paid premium but wants the policy back. - You have 3-5 years to reinstate - proof of insurability and back premiums plus interest would have to be paid - If you havent heard back in 45 days, then the policy has been reinstated - policy premium is based on original age
fixed period installments
The annuitant selects the time period for the benefits, and the insurer determines how much each payment will be, based on the value of the account and future earnings projections. This option pays for a specified amount of time only, whether or not the annuitant is living.
What is the waiting period on a Waiver of Premium rider in life insurance policies?
6 months
The annual contribution limit of a Dependent Care Flexible Spending Account is set by
The IRS
USA Patriot Act
law passed due to 9/11 attacks; sought to prevent further terrorist attacks by allowing greater government access to electronic communications and other information; criticized by some as violating civil liberties
Keogh Plan
A federally-approved, tax-deferred savings program for self-employed people, allowing them to set money aside for their retirement.