Exam FX - Life & Health

The violation of a cease and desist order may result in a fine of

$10,000

The time limit of certain defenses provision prohibits insurers from denying a claim due to misrepresentation, as long as the policy has been in force for at least

2 years

To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?

6 credits

Who is a third-party owner?

A policyowner who is not the insured

All of the following are correct about the required provisions of a health insurance policy EXCEPT

A reinstated policy provides immediate coverage for an illness.

Which of the following is true regarding inpatient hospital care for HMO members?

Care can be provided outside of the service area.

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?

Equal to the original policy for as long as the cash values will purchase.

In insurance transactions, fiduciary responsibility means

Handling insurer funds in a trust capacity.

The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT

Individual tax deduction for premiums paid.

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

Issue the policy anyway and pay the face value to the beneficiary.

An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point?

Neither approved the application nor issued the policy

When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called

Preferred Provider Organization (PPO).

The duties of an agent where replacement is involved include all of the following EXCEPT

Splitting the commission with the agent who originally sold the policy being replaced.

Which of the following would an accident-only policy NOT cover?

Surgery to repair a wrist damaged by tendonitis.

Which of the following would provide an underwriter with information concerning an applicant's health history?

The Medical Information Bureau

Which of the following is NOT covered under Plan A in Medigap insurance?

The Medicare Part A deductible

An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy?

The insured is in an accident and incurs a large claim.

Which of the following best describes the "first-dollar coverage" principle in basic medical insurance?

The insured is not required to pay a deductible.

All of the following are true regarding a decreasing term policy EXCEPT

The payable premium amount steadily declines throughout the duration of the contract.

All of the following are general requirements of a qualified plan EXCEPT

The plan must provide an offset for social security benefits.

Which provision stipulates that misstatements made in a health insurance application may not be used to deny a claim after the policy has been in force for 2 years?

Time limit on certain defenses

The paid-up addition option uses the dividend

To purchase a smaller amount of the same type of insurance as the original policy.

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT

Unearned premiums are retained by the insurance company.

A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as

Usual, customary and reasonable.

The two types of assignments are

absolute and collateral

Which of the following is another term for an authorized insurer?

admitted

An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change?

applicant

In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is

broader in general

If an agent advises a policyholder to replace an insurance policy but only does so for the purpose of making commissions, the agent has committed an act of

churning

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

common disaster

Which of the following is NOT an exclusion in medical expense insurance policies?

coverage for dependents

A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as

critical illness

What is another name for interest-sensitive whole life insurance?

current assumption life

If an agent advises a policyholder to replace an insurance policy but only does so for the purpose of making commissions, the agent has committed an act of

elimination period

Which of the following best describes the aleatory nature of an insurance contract?

exchange of unequal values

Who must pay for the cost of a medical examination required in the process of underwriting?

insurer

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as

legal actions

Which of the following is NOT a type of whole life insurance?

level term

If one takes Social Security retirement benefits at age 62, what needs to be done at age 65 to qualify for Medicare?

nothing

An agent license can be issued

only to individual

Which of the following has the right to convert the existing term coverage to permanent insurance?

policyowner

Which of the following would basic medical expense coverage NOT cover?

surgeon's services

Which of the following is called a "second-to-die" policy?

survivorship life

Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?

twisting

An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?

universal life

Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?

universal life

Which of the following terms will be permissible in describing a life insurance policy in company advertisements?

variable plan