General Life Insurance Concepts
An insured has endured multiple surgeries and hospitalizations for an illness during the summer months. Her insurer no longer bills her for medical expenses. What term best describes the condition she has met?
Stop-Loss Limit
Which of the following types of risk will result in the highest premium?
Substandard risk
L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay?
$900 (deductible + 20% of the bill after the deductible [20% of $2,000])
If an insured receives accelerated death benefits, what is the least amount of the original death benefit that the beneficiary would receive after the insured's death?
0%
Who can make a fully deductible contribution to a traditional IRA?
An individual not covered by an employer-sponsored plan who has earned income
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 feature of a guaranteed renewable provision?
The insurer can increase the policy premium on an individual basis
An insured's long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged a $100 per day. How much will the insurance company pay?
120 a day
A partnership buy-sell agreement in which each partner purchases insurance on the life of each of the other partners is called a
Cross-purchase plan.
Which two terms are associated directly with the premium?
Level or flexible
Which of the following is NOT a feature of a noncancellable policy?
The insurer may terminate the contract only at renewal for certain conditions.
What is the purpose of coinsurance provisions?
To help the insurance company to prevent overutilization of the policy
An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?
$9,800
Which of the following would be an example of a limited accident and health insurance policy?
A dread disease policy
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
What document describes an insured's medical history, including diagnoses and treatments?
Attending Physician's Statement
Which of the following is NOT an essential element of an insurance contract?
Counteroffer
health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as
Critical illness.
Long-term care coverage may be available as any of the following options EXCEPT
Endorsement to a health policy.
What is the purpose of a conditional receipt?
It is intended to provide coverage on a date earlier than the date of the issuance of the policy.
All of the following statements concerning Medicaid are correct EXCEPT
Medicaid is a state funded program that provides health care to persons over age 65, only.
Which of the following applies to partial disability benefits?
Payment is limited to a certain period of time.
Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?
Payor Benefit
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
An absolute assignment is a
Transfer of all ownership rights in a policy.
If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?
Unilateral
The primary eligibility requirement for Medicaid benefits is based upon
need
In an individual long-term care insurance plan, the insured is able to deduct the premiums from taxes. What income taxation will be imposed on the benefits received?
no tax
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
In which of the following instances would the premium be tax deductible?
Premiums paid by an employer on a $30,000 group term life insurance plan for employees
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?
The date of medical exam
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT
The insured's age at death.
An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?
Fair Credit Reporting Act
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.
The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the
Entire contract clause.
A typical Accidental Death & Dismemberment policy covers all of the following losses EXCEPT
Income.
All of the following are Nonforfeiture options EXCEPT
Interest only
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must
Respond to the consumer's complaint.
Which of the following statements is correct regarding a whole life policy?
The policy owner is entitled to policy loans.
