Final Exam Insurance
An insurance producer license is required for which of the following?
A business entity soliciting insurance
Which of the following is INELIGIBLE to participate in a Section 125 Plan?
An S-Corp Owner with a greater than 2% share
In group health care, what is the purpose of the coordination of benefits provision?
Determines what is paid by the primary and secondary insurers in the event of a claim
Fraternal Benefit Society has each of the following characteristics EXCEPT
Exist for profit
Which of the following is considered to be an act of misrepresentation?
Falsifying the terms, benefits, advantages, or conditions of an insurance policy
Elizabeth is the beneficiary of a life insurance policy. She is receiving the death benefit in payments of $10,000 per month until the principal and interest has been paid out. Which option was chosen?
Fixed amount
An insurer would be committing Unfair Discrimination if coverage was denied based upon
Marital Status
Shirley has a Medigap policy, which is designed to pay costs associated with
Medicare Parts A and B
Which of the following does Medicare Part D cover?
Prescription Drugs
All of the following are functions of an insuring clause EXCEPT
Primarily describes the free-look period
A producer's license is required for all of these activities EXCEPT
Underwriting insurance
When does a life insurance policy typically become effective?
When initial premium is collected and policy is issued
A Universal Life policyowner must receive a notice of cash surrender value at LEAST every
Year
Fixed period settlement options are considered to be a form of a(n)
annuity
A new born must be covered under an existing health insurance policy
at the moment of birth
Field underwriting performed by the producer involves
completing the application and collecting initial premium
Intentional withholding of material facts that would affect an insurance policy's validity is called a(n)
concealment
A group Disability Income plan that pays tax-free benefits to covered employees is considered
fully contributory
Which of the following protects a policyowner from a misrepresentation caused by an innocent mistake?
incontestable clause
A foreign insurance company doing business in Michigan
is a company domiciled under the laws of another state
A guaranteed issue insurance policy has no
medical underwriting
A life insurance policy sold in Michigan may be contested by the insurer ONLY during the first ____ year(s) of the contract.
two
An insured has a stop-loss limit of $5,000, a deductible of $500, and an 80/20 coinsurance. The insured incurs $25,000 of covered losses. How much will the insured have to pay?
$5,000
If an employee contributes 50% toward the disability plan premium provided by an employer, what would be considered the taxable income of a $1,000 monthly disability benefit?
$500
Kathy pays a monthly premium on her health insurance policy. How long is her grace period?
10 Days
An individual applying for a Michigan resident producer license must have completed the required pre-licensing education within ___ months of license application.
12
For individual health insurance, coverage for pre-existing conditions may be excluded for up to ___ months after issuance of the policy
12
An insurer must furnish to a claimant forms for filing proof of loss within ___ days upon receiving a notice of claim.
15
To be eligible for small employer group coverage, an employee must work a MINIMUM of ___ hours in a typical week.
17.5
In Michigan, legal action can be taken for up to ___ year(s) against an insurer for failure to pay health insurance claims after proof of loss was submitted.
3
Michigan requires that a licensee complete __ hours of continuing education on the subject of ethics every reporting period.
3
A life insurance applicant in Michigan may backdate the application for up to ___ month(s).
6
In Michigan, legal action may be taken against an insurer for up to ___ years for failing to pay a life insurance claim after proof of loss was submitted.
6
Within how many days must a rollover be completed in order to avoid being taxed as current income?
60
In determining whether a pre-existing condition applies, the enrollee CANNOT have more than how many days' gap in health insurance?
63
Which of the following BEST describes a conditional insurance contract?
A contract that requires certain conditions or acts by the insured individual
A fee for service health insurance plan will normally cover
A disease
Which of the following employers is required to follow ERISA regulations?
A local electrical supply company with 12 employees
HIPAA considers which of the following as "individually identifiable health information"?
A person's health claim information
Under Michigan Law, which of the following would NOT be considered an illegal inducement?
A promotional item with the producer's name and address valued at $5.00
If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if the insured dies?
A prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at the correct age
A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called
A self-funded plan
Which of these is considered to be a Living Benefit option in a life insurance policy?
Accelerated death benefit
Which of the following is considered to be an alternative to a life settlement?
Accelerated death benefit rider
Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental?
Accidental bodily injury provision
Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue?
Accumulation at Interest Option
What amount will be paid under a policy where the insured misstated his/her age?
An amount the premium would have purchased at the correct age
Under which circumstance do consumer privacy regulations allow an insured's financial information be released?
An authorized agency makes a written request to the insurer during an insurance fraud investigation
Which of these is NOT considered to be a purpose of an annuity?
Annuities are intended to create an estate
Which of the following is included in the entire contract according to the entire contract provision?
Application
Which of these factors would an insurer consider when determining whether to accept a group life plan?
Average Age
XYZ Corp pays the tax-deductible insurance premiums for a key employee disability policy. Which of the following would be the appropriate tax consequence?
Benefits are fully taxable
With a scheduled dental policy, how are covered expenses paid?
Benefits are limited to a specific maximum dollar amount per procedure
Newborn coverage under health insurance policies MUST include coverage for
Birth abnormalities
Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled?
Business overhead expense policy
Insurable interest does NOT occur in which of the following relationships?
Business owner and business client
Ted has a health insurance plan that requires him to pay a specific sum out of pocket before any benefits are paid in a calendar year. Which of these does his health plan have?
Calendar-year deductible
Jonas is a whole life insurance policyowner and would like to add coverage for his two children. Which of the following products would allow him to accomplish this?
Child term rider
What would happen if a life insurance applicant is given a conditional receipt from an insurance agent and then dies the next day?
Claim will be paid if application is approved
Naming a contingent beneficiary as "all surviving children" is described by which term?
Class designation
Which of these is affected by the frequency of an insurance policy's premium payments?
Cost
In Michigan, a person providing insurance advice to a person or business for a fee is required to hold which license?
Counselor
Which of the following statements is NOT true regarding a Critical Illness Plan?
Coverage is limited to a single devastating disease
Nate's dependent son is physically handicapped, but not eligible for Medicare. How long may the son remain on Nate's health coverage after the age of 26?
Coverage remains with written proof of disability and dependency
Julie has a $100,000 30-year mortgage on her new home. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period?
Decreasing term insurance
A hospital or medical expense policy will typically cover dental treatment expenses under which circumstance?
Dental treatment is needed to repair an injury
A producer's insurance license may ONLY be revoked by the
Department of Insurance and Financial Services (DIFS)
Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Matt
Dies instantly from a car accident
Lisa has recently bought a fixed annuity. Which of these is considered to be a disadvantage of owning this type of annuity?
During periods of inflation, annuitants will experience a decrease in purchasing power of their payments
The _________ reserves the right to renew a small employer health plan.
Employer
The policyholder for a group health benefit plan is considered to be the
Employer
The limited period of time given to all members to sign up for a group health plan is called the
Enrollment period
What is the name of the provision which states that a copy of the application must be attached to the policy when issued?
Entire Contract
Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. What kind of policy is this?
Equity index whole life
Craig purchased a life insurance policy for enabling his heirs to pay estate taxes. What is this called?
Estate conversion
The taxable portion of each annuity payment is calculated using which method?
Exclusion Ratio
What does the word "level" in Level Term describe?
Face amount
Which of these riders will pay a death benefit if the insured's spouse dies?
Family term insurance rider
Which of these annuities require premium payments that vary from year to year?
Flexible premium deferred annuity
Paul the producer has provided a false statement in relation to an insurance claim. Which illegal act has been committed?
Fraud
How are annuities given favorable tax treatment?
Gains are taxed at distribution
A business will typically use which type of life insurance to cover their employees?
Group policy
Fixed annuities provide each of the following EXCEPT
Hedge against inflation
Which of the following is NOT included under a health benefit plan?
Hospital indemnity plan
What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allow an employee to do?
In the event of employment termination, group health insurance can be kept if the employee pays the premiums
Under which circumstance may a deferred insurance commission be paid to an individual?
Individual was a licensed producer at the time of the sale
Who is responsible for assembling the policy forms for insureds?
Insurance Carriers
Which of the following types of deductibles would apply a single deductible to both medical and dental insurance coverage?
Integrated deductible
An applicant's character and personal habits can be obtained for underwriting purposes from which source?
Investigative consumer report
What is the purpose for having an accelerated death benefit on a life insurance policy?
It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill
Which of the following statements is TRUE about Medicaid?
It is funded by federal, state, and local taxes
What happens to interest earned if the annuitant dies before the payout start date?
It is taxable
Which of the following statements regarding Group Disability Income insurance is TRUE?
It provides benefits for nonoccupational illnesses and injuries
Without a Section 125 Plan in place, what would happen to an employee's payroll contribution to an HSA?
It would be considered taxable income to the employee
A common exclusion with Vision plans is
LASIK surgery
How do insurers predict the increase of individual risks?
Law of large numbers
Insurance companies determine risk exposure by which of the following?
Law of large numbers and risk pooling
Which type of annuity stops all payments upon the death of the annuitant?
Life Annuity
Which of these is NOT considered to be a common life insurance nonforfeiture option?
Life income annuity
A life insurance policy that has premiums fully paid up within a stated time period is called
Limited payment insurance
The IRS states that a taxpayer's medical expenses that exceed 7.5% of their adjusted gross income is tax deductible. Which of the following may be considered a medical expense under this rule?
Long Term Care Insurance premiums
The IRS allows a taxpayer to deduct medical expenses that exceed 7.5% of their adjusted gross income. Which of the following is considered a tax deductible medical expense under this rule?
Long Term Care insurance premiums
Someone needing custodial care at home would require which type of coverage?
Long-term care
All of the following are examples of pure risk EXCEPT
Losing money at a casino
Which of the following is an example of the illegal act of defamation?
Making a statement that is false or maliciously critical of the financial condition of an insurer
All of these are considered key factors in underwriting life insurance EXCEPT
Marital status
An employer is issued a group medical insurance policy. This single contract is known as a(n)
Master Policy
All of these are considered sources of information that can assist an underwriter in determining whether or not to accept a risk EXCEPT
National Association of Insurance Underwriters
Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following statements is TRUE?
Net death benefit will be reduced if the loan is not repaid
What is the tax liability for employer contributions in Health Savings Accounts (HSA's)?
No tax payment needed
Disability Income plans which require that the insurer can NEVER change or alter premium rates are usually considered
Noncancellable
Which of these actions would NOT result in a producer's license revocation?
Not maintaining an adequate level of sales
What makes an insurance policy a unilateral contract?
Only the insurer is legally bound
Chris is an insured bricklayer who severed his left hand in an automobile accident. Although his primary duty cannot be performed, Chris is also a substitute high school teacher. He collects a full disability income check every month. How does his policy define total disability?
Own Occupation
Which of the following is NOT covered under Workers' Compensation?
Pain and suffering
Joe is a Medicare participant who receives his benefits through a Managed Health Care Plan. Which Medicare plan does he have?
Part C
An interest-sensitive life insurance policyowner may be able to withdraw the policy's cash value interest free. The provision that allows this is called
Partial Surrender
Which annuity payout option allows the policyowner to choose a pre-determined number of benefit payments?
Period certain
Which of the following would evidence ownership in a participating health insurance contract?
Policy Ownership
Which situation accurately describes a reduced paid-up nonforfeiture option?
Policy has a decreased face amount
Which of these is considered to be a document that describes the critical segments of a life insurance policy?
Policy summary
Variable life insurance and Universal life insurance are very similar. Which of these features are held exclusively by variable universal life insurance?
Policyowner has the right to select the investment which will provide the greatest return
Which of these describes the result of a modified endowment contract that failed to meet the seven-pay test?
Pre-death distributions are typically taxable
A person who is a nonsmoker, of average weight, and in excellent health would most likely be in which risk classification?
Preferred
Which of the following provides Medicare supplement policies?
Private insurance companies
All of the following are considered appropriate uses of life insurance for business purposes EXCEPT
Protecting the business by covering entry level employees with life insurance
Which of these is the BEST example of misrepresentation?
Providing incorrect, misleading, incomplete, or materially untrue information in a license application
Upon finding a producer guilty of forgery, the Commissioner may take all of the following actions EXCEPT?
Require the producer to notify his/her clients
Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death?
Results
A life insurance application may be backdated to
Save on premiums
Generally speaking, which three levels of care are Long-Term Care policies provided with?
Skilled nursing, intermediate, and custodial care
Typically, Long-Term Disability benefits are coordinated with which benefit plan?
Social Security
Which of the following is NOT a type of Medicare Advantage Plan?
Social Security Disability Income (SSDI)
All of the following are exempt from the 10% tax penalty for early qualified plan withdrawals EXCEPT
Stock Purchase
Which of the following actions is REQUIRED by a producer who is replacing an existing life insurance policy?
Submit to the replacing insurer a list of the policies to be replaced
Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation, or hobbies?
Substandard risk
Which of the following decisions would a Health Savings Account (HSA) owner NOT be able to make?
The amount contributed by the employer
Which of these statements regarding the annuitant is CORRECT?
The annuitant's life expectancy determines the annuity payments
James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount?
The death benefit paid will be what the premium would have purchased at the correct age
When calculating the amount of life insurance needed for an income earner, what has to be determined when using the Needs Approach?
The family's financial objectives if the income earner were to die or become disabled
In which of the following situations would the insurer be liable for a loss?
The insured suffered an injury as an innocent bystander during a bank robbery
Under a life insurance policy, what does the insuring clause state?
The insurer's obligation to pay a death benefit upon an approved death claim
Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true?
The policy may be paid up early by using policy dividends
What happens when an insurance policy is backdated?
The policy's effective date is earlier than the present
What is the purpose of the Medical Information Bureau (MIB)?
To help underwriters evaluate risk
Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this?
Universal Life policy
David submits a $500 claim for medical expenses. There is a past-due amount owed for insurance premiums of $200. As a result, the insurer only pays $300 for the claim. This deduction came as a result of which provision?
Unpaid provision
If an insured's unmarried child is incapable of self support because of a mental handicap, how long must this child be provided health coverage under the parent's policy?
Until policy termination with proof of incapacity
Which type of policy combines the flexibility of a universal life policy with investment choices?
Variable universal life policy
Which type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested?
Variable universal policy
What guarantees that the statements supplied by an insurance applicant are true?
Warranty
All of these statements concerning whole life insurance are false EXCEPT
When a whole life policy is surrendered, income taxes may be owed
Major Medical expense plans provide coverage for each of the following EXCEPT
Work-related injuries
The double indemnity provision in a life insurance policy pertains to an insured's death caused by a(n)
accident
All of these are common exclusions to a life insurance policy EXCEPT
accidental death
All of these are valid policy dividend options for a life insurance policyowner EXCEPT
accumulate without interest
In the Michigan Insurance Code, Chapter 45, insurance fraud defines financial loss as all of the following EXCEPT
additional premiums
A non-contributory health insurance plan helps the insurer avoid
adverse selection
Medical Expense Insurance would cover
an injury occurring at the insured's residence
Maria would like an annuity that provides a guaranteed accumulation or payout. The type of annuity she is seeking is called
annuity certain
A type of group that has a constitution and bylaws and has been organized for purposes other than obtaining insurance is called a(n)
association or labor group
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a terminated employee's benefits must
be the same and the premium cannot exceed 102%
A disability income policy can prevent an insured from earning a higher income than if he/she were working by utilizing
benefit limits
A disability policyowner is injured and becomes totally disabled. The benefits pay for 2 years, starting from the date of the injury. What is this time period called?
benefit period
An insured has a health plan that pays established amounts in accordance with a list of injuries, surgical procedures, or other losses. This list is called a
benefit schedule
Under a group life policy, the insurer will issue an individual _____ to the policyowner for delivery to each person insured.
certification
A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n)
collateral assignment
A Medicare Supplement Policy is
designed to fill in the gaps of Part A and Part B Medicare
A pharmacy benefit covers prescription drugs derived from a list called a(n)
drug formulary
A Medicare Supplement policy must NOT contain benefits which
duplicate Medicare benefits
Under group health insurance, a certificate of coverage is issued to the
employee
Under the Health Insurance Portability and Accountability Act (HIPAA), the employee's new Group Health Plan will verify Creditable Coverage so that the
employee's waiting period for coverage of a preexisting condition can be reduced under the new employer's health plan
In an employer-sponsored group accident and health plan, a master contract is issued to the
employer
A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT
fare-paying passenger
A Medicare supplement plan can be canceled by the insurer
for nonpayment of premiums
Underwriters can acquire information from all of the following sources EXCEPT
genetic testing
A health insurance policy that allows an insurer to change the policyowner's premiums, but NOT cancel the policy is called a(n)
guaranteed renewable policy
HMO plans are REQUIRED to provide
home health care
A proposed insured for a health insurance policy was treated for heart disease within the past year. When applying for health insurance, the heart disease treatment
indicates a preexisting condition
The conversion privilege under a group life plan allows an employee to convert to a(n)
individual plan upon employment termination
Which of these is NOT considered to be a nonforfeiture option in a whole life insurance policy?
interest only
According to HIPAA, when an insured individual leaves an employer and immediately begins working for a new company that offers group health insurance, the individual
is eligible for coverage upon hire
A person covered with an individual health plan
is issued a policy
When a decreasing term policy is purchased, it contains a decreasing death benefit and
level premiums
An insured was injured as an innocent bystander when someone committed a felony. The insurer is
liable for the loss
The reinstatement provision in a health insurance policy is
mandatory
Group health plans may deny participation based upon the
member' part-time employment status
Tara the producer is delivering a specified disease insurance policy to a new policyowner. Upon delivery, she may be expected to collect all of the following EXCEPT a(n)
modified application with a new signature
A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n)
nonforfeiture provision
A whole life policy option where extended term insurance is selected is called a(n)
nonforteire
A beneficiary change can occur
normally at any time during the policy term
A producer's fiduciary duty requires that
premiums are forwarded to the insurer on a timely basis
A health insurance policy will typically cover
preventative health services
Decreasing term life insurance is often used to
provide coverage for a home mortgage
An indemnity plan
provides the insured a specific dollar amount for services
Statements made by an insurance applicant on an application are considered to be
representations
An annuity is primarily used to provide
retirement income
A life insurance policyowner does NOT have the right to
revoke an absolute assignment
An endorsement found in an insurance plan which modifies the provisions of the policy is called a(n)
rider
An example of endodontic treatment is a
root canal
Term insurance is appropriate for someone who
seeks temporary protection and lower premiums
In an insurance contract, the applicant's "consideration" is the
statements made in the application and the premium
A(n) ______ company is owned exclusively by shareholders.
stock
The type of policy which pays on the death of the last person is called
survivorship life
What types of life insurance are normally used for key employee indemnification?
term, whole, and universal life insurance
This MANDATORY health policy provision states that the policy, including endorsements and attached papers, constitutes
the entire insurance contract between the parties
If an insured dies during the grace period with no premiums paid
the policy would be payable, minus the premium amount
The free-look provision gives the policyowner
the right to return the policy for a full refund within a specified number of days
According to the Taft-Hartley Act, group insurance premium payments made by an employer MUST be paid to the
trust
The act of _________ insurance does NOT require an individual to hold an insurance producer license.
underwriting
A life insurance policy that contains a guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate is called
universal life
A life insurance policy that is subject to a contract interest rate is referred to as
universal life
Craig submits a $500 claim for medical expenses. With a past due premium of $100, the insurer pays $400. Which of the Uniform Optional Provisions covers this situation?
unpaid premium
"Maximum benefits" refers to the
upper limit of the total lifetime benefits the insurance company will pay
An example of intimidation is
using threat or force to restrict fair trade in the transaction of insurance
A single premium cash value policy can be described as
a policy that is paid up after only one payment
A producer has allowed his/her license to lapse by failing to complete the required continuing education credits. The license may be reinstated by completing the requirement within ___ days of the renewal date.
90
Justin is receiving disability income benefits from a group policy paid for by his employer. How are these benefits treated for tax purposes?
Taxable income
A life insurance applicant in Michigan may backdate the applicant for up to ____ months
6
A common exclusion or limitation on a dental policy is
Endodontics
Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?
Guaranteed insurability rider
Tom has a rider on his disability income policy that guarantees the right to increase his benefits without a medical exam. What kind of rider is this?
Guaranteed insurability rider
Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits. Which of these benefit options would he choose?
Guaranteed lifetime withdrawal benefit
Low frequency diseases can be exclusively covered by what kind of health insurance policies?
Limited Policies
An insurer's ability to make unpredictable payouts to policyowners is called
Liquidity
Which requirement must be met by associations that seek group health coverage for its members?
Must have been formed for a legitimate purpose other than obtaining insurance
The statement which best describes the relationship between the premiums of a whole life policy and the premium payment period is
The shorter the payment period, the higher the premium
Jennifer is required to pay a specific sum out of pocket before any benefits are paid in a year. Her health policy most likely contains a(n)
deductible
An example of elective cosmetic surgery would be
removing excess fat from an insured's waistline
Sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of
100% of costs
Producer commissions may NOT be paid to
licensed producers not appointed by an insurer
A dread disease policy is considered to be a type of
limited health insurance policy
All of the following are qualifications for establishing a health savings account (HSA) EXCEPT
Enrolled in a health plan with a prescription drug benefit
Mark continues working after the age of 65 and is covered through his employer's group health plan. Which of the following statements is TRUE?
Medicare is the secondary payer
A clause that allows an insurer the right to terminate coverage at any anniversary date is called a(n)
Optional renewability clause
What is an insurance policy's grace period?
Period of time after the premium is due but the policy remains in force
Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. Which of these statements is true?
The face amount and premium will remain constant over the 10-year period
A renewable Term Life insurance policy allows the policyowner the right to renew the policy
without producing proof of insurability
The acceptance of a credit life application requires the submission of a certificate of insurance to the insured within ___ days.
30
Which of the following is an example of a producer's Fiduciary duty?
Recording receipt and remittance of premiums due to the insurance company
Which of these would be the best example of a limited pay life insurance policy?
Whole life policy with premiums paid up after 20 years
A policyholder has a major medical plan with a 80%/20% coinsurance and a deductible of $75. If the insured has previously met her deductible and receives a bill for $175, how much will the insurer pay?
$140
An insured under a Major Medical expense plan with a zero deductible and 80/20 coinsurance provision files a $1,000 claim. How much of this claim is the insured responsible for?
$200
A producer may give an insurance applicant an article of merchandise having an invoice value of ____ or less.
$5
Kim has health insurance with a deductible of $500 and an 80/20 coinsurance. How much will she pay if she incurs a loss of $1,500?
$700
Amy has a group medical policy through her employer with a $500 deductible and a 90% coinsurance provision. She incurs $1,500 in covered health care services. How much will her group insurance carrier pay?
$900
XYZ Insurance Company receives satisfactory proof of loss for a claim. If XYZ does NOT pay the claim within 60 days of receipt, the insurer MUST pay simple interest of ___ per annum.
12%
Frank is shopping for a disability income policy. Which of the following would have the HIGHEST premium?
14 day waiting period / 10 year benefit period
A baby is born to a husband and wife covered under a family accident and health insurance policy. If the newborn is covered at birth, the first payment for the additional coverage would become due in ___ days.
31
Erica is 35 years old and owns an IRA. At what age can she begin to receive distributions without a tax penalty?
59 1/2
In an employer-sponsored contributory group Disability Income plan, the employer pays 60% of the premium and each employee pays 40% of the premium. Any income benefits paid are taxed to the employee at
60% of the benefit
A Medicare Supplement policy issued in the state of Michigan is required to provide each of the following EXCEPT
It must include outpatient prescription drug coverage
Which of these factors is NOT taken into consideration when determining the cost of a long-term care policy?
Personal Income
Coordination of Benefits regulation applies to all of the following plans EXCEPT
Preferred Provider Organization plan
Which of these BEST describes the illegal act of twisting?
Replacing an insurance policy from one insurer to another based on misrepresentation
In the state of Michigan, a licensed producer
Represents the insurer
Which of the following policies does NOT build cash value?
Term
Which of these is NOT a characteristic of the Accelerated Death Benefit option?
The benefit can be offered as a rider at a specific extra cost or may be at no cost
Under which circumstance may a minor receive proceeds from a death benefit?
The minor must have an appointed guardian
Bob and Tom start a business. Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12 months later. The policies continue in force with no change. Both partners are still married at the time of Bob's death. In this situation, who will receive Bob's policy proceeds?
Tom
The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as
Twisting
An example of an unfair claims settlement practice is
failing to promptly provide a reasonable explanation for the denial of claims
Index whole life insurance contains a securities component that acts as a(n)
hedge against inflation
Upon receiving a producer complaint, the Commissioner may immediately
issue a cease and desist order
Long-Term Care policies may provide coverage for claims arising from
senile dementia
The factor used most often when underwriting a disability income policy is
Annual Earnings
A waiver of premium rider allows an insured to waive premium payments if the insured is
Completely and permanently disabled
Which of the following would be considered a possible applicant and contract policyholder for group health benefits?
Employer