FINAL EXAM

Sue's hospital bill is $4,500. Her major medical policy has a $500 deductible and then it pays 80% of the remaining bill. The policy also has a maximum out-of-pocket of $2,000. How much of the total bill will the insurance company pay?

$3,200

What is the maximum percentage of a debt that can be insured by credit insurance?

100%

After receiving notice of a claim, the insurer has a maximum of how many days to provide claims forms?

15 days

The insurer has a maximum of how many days after receiving notice of a claim to provide claims forms?

15 days

Licensees must complete how many hours of continuing education each licensing period?

24 hours

An insurer that terminates an insurance business relationship with a producer must notify the Insurance Commissioner within?

30 days

Licensees must inform the Insurance Commissioner of a change of address within?

30 days

How much time does a new mother have to inform her insurer of a newborn's birth?

31 days

in Delaware, group health insurance must provide benefits or coverage for a mammogram every year for women starting at what age?

50 yrs old

At what age would a qualified retirement plan distribution be premature?

59

In the event of default in any premium payment, the insurer will grant a paid-up nonforfeiture benefit after how many days?

60 days

A decreasing term life policy would be the most appropriate for?

A 41 year old lawyer who wants a policy to pay his mortgage if he dies

Which of the following must happen before an HIV test is performed on an applicant?

A consent form must be signed by the applicant prior to the test.

Errors & Omissions are most likely to occur during?

A replacement

Life insurance death benefits that can be accessed tax-free when the insured is still alive are called?

Accelerated benefits

If an applicant misstates their age on an insurance application, what does the insurer do when it is discovered at claim time?

Adjust the claim benefits to reflect what he would have been entitled to if his real age had been given.

During replacement, whose duty is to obtain a detailed list of all existing life insurance and/or annuities to be replaced?

Agent

Which of the following groups is NOT eligible for group life insurance?

Amateur sports teams

Cindy has a new medical plan that provides both health care services and health care insurance. She is covered by?

An HMO (Health Maintenance Organization)

All of the following guidelines must be adhered to when an applicant is requested to take an AIDS- related test in connection with an application for insurance, EXCEPT?

An insurer who fails to issue a policy on an applicant due to the results of HIV testing will notify the applicant in writing of an adverse underwriting decision based upon the results.

The cheapest premium payment mode would be on a policy that is paid?

Annually

The Commissioner may examine, as often as he deems advisable, the accounts, records, documents and transactions pertaining to the insurance affairs of?

Any person having the exclusive or dominant right to manage or control an insurer b. Any insurance agent, solicitor, broker, general agent, adjuster, insurance representative c. Any person who is engaged in the promotion, formation or financing of an insurer

The type of insurance in which licensure is sought is the line of?

Authority

Which of the following could be used to prevent a lapse in the payment of life insurance premiums?

Automatic premium loan

Which of the following is NOT covered by a group health insurance plan?

Breast enlargement surgery

Which of the following is correct concerning representations?

Carla has represented that the information she has furnished is true to the best of her knowledge.

What does each person receive that is insured under a group life insurance policy?

Certificate

Requiring a property owner to purchase their insurance from an agent specified by the lender is called?

Coercion of a debtor

If the Commissioner believes that someone engaged in the insurance business in Delaware is engaged in an unfair method of competition, who conducts a hearing?

Commissioner

What type of policy allows an insurer to cancel a policy if certain circumstances stated in the contract happen?

Conditionally renewable

The policyowner's obligation to pay the premium is the?

Consideration clause

What should the insured do if the insurer fails to send the correct forms, under the Claims Forms provision of a health policy?

Create their own form on which to submit the claim.

The entity in Delaware that protects consumers from insolvent insurers is the?

Delaware Life and Health Insurance Guaranty Association

The fact that the application is part of the policy is stated in?

Entire Contract

comprehensive major medical health policies typically have an Eligible Expenses provision that specifies coverage for all but?

Experimental services

Becky is a 31 years old and knows she needs to start a retirement plan. She currently works in a bakery and is worried about how inflation would affect her retirement plan. Which annuity would be a good fit for her needs?

Flexible premium deferred annuity

Who initiates independent inquiries and conducts investigations when it is believed that an act of insurance fraud has been committed in Delaware?

Fraud Prevention Bureau

All individual and group health insurance policies will provide health insurance benefits for a newly born child of the insured or subscriber

From the moment of birth

kim's policy remained in force for a certain number of days even though she forgot to pay the premium. The provision that allows this is called?

Grace period provision

A long-term care insurance policy must be?

Guaranteed renewable

Long-term care plans are written as?

Guaranteed renewable

What right of renewability guarantees insurability, but does not guarantee premiums?

Guaranteed renewable

How soon are accidents covered for a reinstated health policy?

Immediately

sally is a self-employed software programmer that works from home. If she becomes unable to work due to a disability, which type of policy would pay her rent?

Individual disability income policy

The Guaranty Association Act provides protection when a member insurer is found to be?

Insolvent

A producer acting as an agent represents the?

Insurer

What is the advantage of a payor benefit rider?

It provides a temporary waiver of premium if the person paying the premium dies

on january 3, an application is submitted without the initial premium. The insurer requires a medical exam, and it is completed on January 15. On January 20, the insurer issued the policy standard, and the producer delivers it on January 22. When is coverage effective?

January 22, after the statement of good health is signed, and the initial premium is paid.

What type policy would pay the death benefits after the first person dies, if it covers two or more lives?

Joint Life

John was formerly an agent for an insurance company and still has their sales brochures, applications and other marketing materials. John's possession of these materials can be construed as?

Lingering implied authority

A health policy will usually exclude losses related to all of the following, EXCEPT?

Losses from an auto accident when the insured was at fault

over-funded life insurance policies where the proceeds are subject to taxation are called?

MECs

The Commissioner of Insurance has all of the following duties, EXCEPT?

Make insurance laws

1f Dan pays his health insurance premium quarterly and fails to make payment on April 1, his grace period will expire?

May 1

Which of the following provisions for individual health insurance policies is optional?

Misstatement of age

Samson has a policy that allows the insurer to cancel the policy at any date specified in the contract, and to raise his premiums. Which type of policy is it?

Optionally renewable

Which of the following offers the broadest service area and broadest selection of providers?

PPO

An insured became disabled in February of 2014. She had bought a disability income policy in October of 2012. Her disability was due to a condition that existed prior to October 2012 but was not excluded from her policy. The insurer will?

Pay the claim in full.

Mr. Jones, the insured, committed suicide after the expiration of the suicide clause in his life insurance policy. The insurer is obligated to?

Pay the death benefit

If an applicant states their age is 30 on an application for life insurance, when they were actually 37, what is the insurer likely to do?

Pay the death benefit based on the applicant's actual age.

Which of the following statements is not true about the tax liabilities for individual life insurance policies?

Policy loans are taxable as income.

Who has the right to change the beneficiary on a life policy?

Policyowner

Mr. Johnson is looking at Medicare Supplement policies. These policies are designed primarily to?

Provide benefits not covered by Medicare.

Dylan tells the insurer to keep the dividend and apply it to his next premium. He is using which dividend option?

Reduction of premium

The purpose of the Delaware Consumer Credit Insurance Model Act is to promote the public welfare by?

Regulating consumer credit insurance

amie has a renewable term policy. Which of the following is not an incorrect statement about this type of policy?

Renewability is the insurer's option

Gregory recently purchased a one-year term insurance policy. At the end of the year, he can purchase an identical policy without having to show proof of insurability. Why type of policy did he purchase?

Renewable term

When Jason filled out his application his statements had to be, what? to be considered legal?

Representations

An insured has returned to work after a disability, but is unable to perform all of his previous duties. Which of the following definitions would cover his permanent partial disability?

Residual disability

The beneficiary designation that allows the policy to be changed without the beneficiary's consent?

Revocable

The manner in which the proceeds of a life policy are handled are specified in what provision?

Settlement options

Which type of life policy would best suit someone who retires in good health with a large amount of cash, whose investment goals are conservative?

Single premium whole life insurance

The producer realizes that the prospective client omitted information about a prior illness. What should the producer do?

Tell the prospective client that a claim might be rejected later due to the omission.

Jeff has limited financial resources, but finds himself in a position where he needs a good deal of protection. A what would probably best suit his needs at this time?

Term policy

Life insurance applications require a signature from?

The agent The insured The policyowner

What is the biggest source of information used in underwriting?

The application

The premium for the group life insurance for dependents must be paid from funds contributed by?

The employer or the covered person

With a Guaranteed Insurability rider on a Disability Income policy, the?

The insured can buy additional disability income coverage without proving evidence of insurability.

According to the Physical Examination and Autopsy provision, who is responsible for paying the cost of examining the insured?

The insurer

An insurance application is not complete unless it has?

The signature of the insured (unless not an adult), and the agent.

What happens to a spouse's coverage if an insured dies and was covered by a noncancellable policy?

The spouse will become the insured.

What is the latest the term of any consumer credit insurance can end?

The termination date of the debt

How does the IRS treat disability income benefits when the employer pays the policy premiums?

They are fully taxable.

in most Disability Income policies, the Elimination Period applies:

To each disability separately

Coercion and intimidation are examples of?

Unfair trade practices

Investment risk is completely taken by the policyowner is what type policy?

Variable Universal Life

If the cash values of an annuity are invested in securities, it is a?

Variable annuity

Sam works for large corporation and is eligible for both his companyI's health plan and Medicare. Which plan would be primary?

Work

Which of the following is not one of the elements required to make a contract legal?

ambiguities

Richard is thinking about transferring some of the ownership rights of his policy to his brother Randy. What term is used for this type of transfer?

assignment

paul has a basic medical policy. It will pay for?

doctor visits

What type of premiums payment can employers deduct as an ordinary business expense?

group

A program that includes prehospitalization authorization is an example of?

managed care

What approach calculates the amount of money a family needs immediately upon the death of the insured to pay for their expenses and basic necessities?

needs

Barbara allows her comprehensive major medical plan to lapse. If her policy is reinstated on March 20th and she contracts mononucleosis on March 29th, what benefits will she receive?

none

Which of the following factors does not influence the amount that an individual receives as monthly income under Social Security?

sex

phil and Sarah bought a life policy in which both are insured. Sarah dies before Phil. If the policy pays the death benefit after Phil dies, it is a?

survivorship life

Which of the following is an improper form of policy replacement?

twisting

What contract term means only one party to a contract's promises are legally enforceable?

unilateral

To determine the coverage and benefits to pay for a surgery based on what is considered fair and common for an area is?

usual, reasonable, customary