Final #1

How many days of skilled nursing are covered 100% by Medicare?

20

Jim has a major medical policy with a $1,000 deductible, 80/20 co-insurance and a $10,000 stop loss. He has a hospital stay that results in him receiving a bill for $7,500. How much will Jim have to pay?

2300

What is the dependent child age limit?

26

Which document describes and insured's medical history, including diagnosis and treatments?

Attending Physician Statement.

The owner makes changes to his life insurance policy without letting the beneficiary know. How is this accomplished?

Beneficiaries are set up as revocable

Joe and his wife would like to buy one policy to cover both of their lives. Their agent tells them they could do either a Joint Life or a Joint and Survivor policy. Joe wants to know which one is the most cost effective.

Joint and Survivor will be less expensive

Non-Resident agents are

Licensed to sell across state lines

Proof of Loss forms must be provided __________________

Within 15 days

If a claimant is to bring a recovery action against an insurance company for a loss claimed under a policy, the action must be brought

Within 2 year.

Insurance contracts are unilateral in nature, meaning...

Only one of the parties is legally bound

Which disability benefit will help make up for a loss of earnings after recovering from a total disability?

Residual Disability

A Hospital Indemnity policy will provide payment based on...

The number of days confined in a hospital.

Which example below would result in the lowest premium?

30 day elimination/ 5 year benefit period

Jim pays his health insurance premium quarterly. What is the length of his grace period?

31 days

Joe's son turns 18 and Joe wants his son to start paying for a policy so he transfers all rights over to him. What has Joe done?

Absolute Assignment

All of these are requirements to qualify for Social Security Disability except...

Being disabled for 12 months

Jim has an AD&D policy. Jim gets in a car wreck and loses sight in one eye. How much will he receive from the policy?

Capital amount in a lump sum

If an applicant completes an application for insurance and gives the producer a check for the first premium, the producer should give the applicant a:

Conditional Receipt

What decreases in Decreasing Term insurance?

Death benefit

Long Term Care policies can exclude all of the following, except_____________

Dementia

Which of the following is false about the Partial disability benefit?

It will pay for up to 12 months

What is it called when an applicant makes an untruethful statement on their application?

Misrepresentation

An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would

Pay the claim.

Insurance is the transfer of...

Risk

Which of the following statements are true?

The commissioner must examine the records of HMOs every 3 years

What type of information is NOT included in a certificate of insurance?

The cost the company is paying for monthly premiums

Life insurance becomes effective when:

All the conditions in the conditional receipt have been satisfied

What is the only thing that can cause the premium to go up in an issue age policy?

An increase in benefits

Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within

90 days of a loss

Joe's employer pays for all of his employees group life insurance. What are the participation requirements?

100%

An agent renewing their license must complete how many hours of ethics?

2

What is the maximum time period for COBRA?

36 months

There are 2 distinct periods in an annuity, what are they?

Accumulation and Annuitization

All of these are true about a life settlement, except___________

Insured must be terminally ill

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option

Under which non-forfeiture option does the company pay the surrender value and have no further obligations to the policyowner?

Cash surrender

What is the specific cost of care that must be paid by an HMO member?

Co-payment

The provision that provides for the sharing of expenses between the insured and the insurance company is

Coinsurance.

A prospect's statements made in the application for insurance constitute a part of which of the following?

Consideration Clause

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the

Consideration Clause.

Joe's employer pays 50% of the premium for all of his employees group life insurance. This is considered to be a____________

Contributory

A Buy-Sell agreement in which each partner purchases insurance on the life of each of the other partners is called...

Cross-Purchase Plan.

In a group health policy, a probationary period is intended for people who

Join the group after the effective date.

Which of the following is true of dividends in a participating policy?

Dividends are considered a return of premium and therefore are not taxable

All of these are duties of the commissioner, except_______________

Drafting insurance laws

The provision that states that both the printed contract and a copy of the application form the contract between the policyowner and the insurer is called the

Entire contract.

Which of the following is not considered to be a policy replacement?

Exercising the convertibility option at the end of your term

What type of policy covering 2 people, would pay a death benefit after the first person dies?

Joint Life

An applicant has been denied coverage because of information in a consumer report. Which federal legislation may protect the consumer if the information was inaccurate?

Fair Credit Reporting Act

Which law requires that the applicant be notified before a consumer report is ordered?

Fair Credit Reporting Act (FCRA)

What type of license do you have to have to sell a variable universal life policy?

Federal securities license and state life license

All of these are possible penalties for violating the Texas Insurance Code, except________

Fine $100,000

If a beneficiary want a guarantee that benefits paid fro the principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should they select?

Fixed Period.

Joe didn't list a beneficiary on his life insurance policy. When he died it became part of his estate. What are the tax consequences?

Fully taxable

Joe has a health policy. He lied on his application about having had a heart attack a few years back. 5 years later, he is hospitalized after a heart attack. How is his claim handled.

Insurer can deny the claim

Which answer is true about the premium payment on a variable whole life policy?

It has a fixed premium

Which of the following statements about a Conditional Receipt is true?

It is an interim Insuring Agreement

Which of the following is true when the insurer issues a 'rated' policy:

It is considered to be a counteroffer

Which of the following is not true of a major medical policy?

It is designed to pay on a first dollar basis.

Which of the following in not true of a certificate of authority?

It is issued to group participants.

Which of the following is true about the premium on the children's rider in a life insurance policy?

It remains the same no matter how many children are added to the policy.

What type of statement on an application could effect the way an underwriter looks at an applicant for coverage?

Material misrepresentation

All of the following are correct about Medicaid, except...

Medicaid is a state funded program that provides health care to persons over age 65, only.

What is the term for how frequently a policyowner is required to pay the policy premium?

Mode

Joe has received a check from his insurance company each year for the last 4 years without having to pay any taxes on that money. This year he did not get one. His insurance company is considered to be...

Mutual

Joe received a non-taxable dividend check from his insurer last year but did not receive one this year. What type of insurer does he have?

Mutual

An insured is in a car accident. He permanently loses the use of his leg and is blinded in one eye. Under the Presumptive Disability Provision, to what extent will he receive benefits?

None.

When are the number of annuity units determined in a Variable annuity?

On the date of the initial payout

Where in the long-term care policy must the insurer state the renewal provision?

On the first page

If a person is compensated for a testimonial in an advertisement, which of the following statements should be included in the advertisement?

Paid endorsement

If an insurer wants to know how insurable an applicant is today, they should order a...

Paramedical Exam

Inpatient hospital treatment is covered under what part of Medicare?

Part A

Joe received a non-taxable dividend check from his insurer last year but did not receive one this year. What type of insurer does he have?

Participating

Which of the following provisions is mandatory for health insurance policies?

Physical examination and autopsy

Which term best describes an HMO?

Preventive care

Which health insurance provision describes the insured's right to cancel coverage?

Renewal provision

What is a statement that is believed to be true to the best of the applicant's knowledge

Representation

An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?

Revocable

Who might receive dividends from a stock insurance company?

Shareholders

Which term best describes when an insured is no longer billed for their medical expenses?

Stop Loss

Which of the following riders is often used in business life insurance policies when the policyowner needs to change the insured?

Substitute insured rider

The Fair Credit Reporting Act requires that:

The applicant be advised, in advance, that a consumer report may be ordered

When giving a client a conditional receipt, which of the following is true?

The coverage will begin at earliest as of the date of application or when the client passes a physical, whichever is later

If an applicant for insurance is issued a conditional receipt and dies the next day, what happens?

The insurer will pay a benefit as long as they would have approved them anyway

If an application for Life insurance is not complete:

The insurer will return it to the producer

Which of the following is true regarding elimination periods and the cost of coverage?

The longer the elimination period, the lower the cost of coverage

The insuring clause of a disability policy usually states all of the following EXCEPT

The method of premium payment.

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

This rider is available to all insureds with no additional premium

Which provision states that disability claims must be paid at least monthly?

Time of Payment of Claims

Joe is wanting to replace his client's current policy. Joe tells his client that his current policy benefits are not very good and that the policy Joe wants him to take have the best benefits money can buy. Joe would be guilty of _______________

Twisting

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.

Which permanent policy must maintain a required IRS corridor between the cash value and the death benefit?

Universal life when Option A death benefit is chosen

All of these are characteristics of managed care plans, except________________

Unlimited choice of providers

What type of policy has a hedge against inflation?

Variable

How soon after a health policy is reinstated will illnesses be covered?

10 days

How many hours of CE must be completed in a classroom?

12

How are the doctors compensated in an HMO?

A capitated basis

Which provision prevents the insurer from referencing any document not contained in the contract if you have to go to court?

Entire Contract

Which is true about a spouse term rider?

The rider is usually level term insurance

Upon the submission of a death claim under a life insurance policy, when should the insurer pay the policy benefit?

Within 2 months

How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?

Within 90 days or as soon as reasonably possible, but not to exceed 1 year

Joe purchases a single premium immediate annuity. When does the payout begin?

Within the first 12 months

An insurer is going to do an investigative consumer report on the applicant. The applicant would like to know more information. How many days do they have to get that to them?

5

If an agent's license gets suspended or revoked, they cannot reapply for ________ years

5

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new policy?

50000

An insured must provide proof of loss within ______________

90 Days

B has a major medical policy with a $500 deductible and 80/20 coinsurance. B is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay?

A$900 (deductible + 20% of the bill after the deductible [20% of $2,000])

Insurance contracts are issued on a "take it or leave it" basis. This makes them contracts of...

Adhesion

ABC insurer is doing business Utah but is incorporated in Wyoming. They are considered to be _______________

Admitted

Joe took out a policy on his daughter. Joe became disabled in a car accident. His daughter's policy has the Payor Benefit Rider included. What does this mean for his daughter?

After Joe has been disabled for 6 months, the premiums will be waived on her policy until she is age 21

How is the commissioner of insurance put into office?

Appointed by the governor for a 2 year term ending Feb 1st of every odd year

What is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application?

As long as the policy is in force

In order to comply with Fair Credit Reporting Act, at which of the following times must a producer notify an applicant that a credit report may be requested?

At time of application

The premium charged for exercising the Guaranteed Insurability Rider is based upon the insured's

Attained age.

To be eligible for tax credits under the ACA, individuals must have income that is what percent of the Federal Pverty Level?

Between 100% and 400%

A Key Person insurance policy can pay for which of the following?

Cost of training a replacement

Which of the following is not covered by an HMO?

Elective, cosmetic services

Items stipulated in the contract that the insurer will not provide coverage for are found in the

Exclusions.

The language written in the agency contract between the insurer and the agent contains what is known as the...

Express Authority

A person selling Variable annuities must be registered with...

FINRA

All of the following are linked to high deductible health plans, except____________

FSA

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

Guaranteed insurability rider

If an insured uses the Renewable Provision in his term policy, his premiums for his new policy will be based on what?

His attained age

Joe purchases a $100k life insurance policy with the Accidental Death Rider, paying double indemnity. His policy does not contain a war clause. 1 year after purchasing the policy, Joe gets deployed to the Middle East. After being there for a week, Joe is killed in an automobile accident. How does the insurer handle paying out of the death benefit?

His beneficiary will receive $200k

When are health expenses tax deductible?

If you are a sole proprietor

What do individuals use to transfer their risk to a larger group?

Insurance

Which of the following is correct about a group health insurance policy?

It cannot exclude newborn children from coverage

Jim's favorite doctor is not a member of his PPO network. Jim wants to see his doctor. How does the PPO handle his visit?

Jim's benefits will be reduced

Which policy would be the most cost effective for 2 business partners starting a new business?

Joint Life

Joe's agent delivered his policy on June 1st. Underwriting began on the policy on May 1st. Joe had a paramedical exam on May 15th and the policy was issued on May 20th. When does the free look begin?

June 1st

Joe's employer pays for all of his employees group life insurance. This is considered to be a____________

Non-Contributory

All of these are considered limited coverage policies except...

Point of Service plan

A guaranteed renewable health insurance policy allows the

Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.

Jim is hospitalized with pneumonia and is hospitalized. After looking at his disability policy, he realizes that certain losses will not be covered for the first 30 days. Jim's policy contains a 30 day_____________

Probationary period

Which period in a disability policy is not applied to accidents or injuries?

Probationary period

A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

Proof of insurability is not required

Which of the following would be considered an unfair trade practice?

Stating that dividends are guaranteed in a policy

The purpose of the Life, Accident, Health and Hospital Service Guarantee Association is to __________________

Step in and protect policyholders if an insurer files for bankruptcy

Joe participates in a non-contributory group disability plan. If Joe becomes disabled, how is the benefit received taxed?

Taxed as ordinary income

After completing an application on Joe and collecting the first month's premium, you set up for his paramedical exam to be done in 2 days. A week later the company issued his policy and 3 days later, you delivered the policy. What is the effective date of coverage?

The date of the medical exam

Insured K's health insurance policy year begins in January. His policy contains a carry-over provision. In November, he has a small claim which is less than his deductible. Which of the following is true?

The insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible.

Which one of these things will not put your license at risk?

Unintentionally misrepresenting laws that have recently updated

Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending?

Unlimited

Which policy contains a separate account?

Variable Universal Life

If an insured has been diagnosed with a terminal illness and they need some money to pay for their upcoming medical expenses, which of the following would be appropriate for them?

Viatical Settlement

The most expensive mode of health insurance premium is_____________

Weekly

Put these health insurance premium modes in order from most expensive to least expensive.

Weekly, monthly, quarterly, annual

When would a death benefit not go directly to someone?

When it is a minor

Insurable Interest must exist...

When policy ownership is transferred

Medicaid is a ________ expense program

state and federal