Ins Exam: Stimulated Exam 2
An insurer must acknowledge receipt of a Notice of Claim within how many days?
15
Which of the following would NOT be considered a limited coverage policy? A. Cancer insurance B. Credit insurance C. Major medical expense insurance D. Accident insurance
Answer: C
Which of the following is a feature of a variable annuity?
Benefit payment amounts are not guaranteed
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated
What are the two components of a universal policy?
Insurance and cash account
Which of the following entities can legally bind coverage?
Insurer
Which of the following best describes the MIB?
It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance
If a settlement option is not chosen by the beneficiary or policy owner, which option will be used?
Lump sum
In long-term care insurance, what type of care is provided with intermediate care?
Occasional nursing or rehabilitative care
Insurers may change which of the following on a guaranteed renewable health insurance policy?
Rates by class
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payment
A life insurance policy does not have a war clause. If the insured is killed during the time of war, what will the beneficiary receive from the policy?
The full death benefit
In forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage
In the event of a loss, business overhead insurance will pay for
Rent
If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a
Settlement option
Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?
The employer is the owner and the beneficiary
In a disability policy, the elimination (or waiting) period refers to the period between
The first day of disability and the day the insured starts receiving benefits
What is the purpose of a disclosure statement in life insurance policies?
To explain features and benefits of a proposed policy to the consumer
How is emergency care covered for a member of an HMO?
A member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area
Which of the following is correct about a group health insurance policy? A. It cannot exclude newborn children from coverage B. It cannot exclude coverage for VA hospital treatment C. It cannot provide coverage for handicapped children D. It cannot exclude coverage from an occupational accident
Answer: A
All of the following could be considered rebates if offered in an insured in the sale of insurance EXCEPT: A. Stocks, securities, or bonds B. An offer to share in commissions generated by the sale C. Dividends from a mutual insurer D. An offer of employment
Answer: C policies specifies that the dividends might be paid
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
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Cash option
Which of the following would be an example of a limited accident and health insurance policy?
A dread disease policy; limited risk policies cover specific illness or accidents
All of the following are to be included in the application for a certificate of authority to act as an HMO EXCEPT: A. Records of previous insurers B. A map of geographic area to be served C. A schedule of charges for the first 12 months D. Financial records of the organization applying
Answer: A Also included are a list of the names, addresses and official positions of those responsible for the applicant's affairs; a description of the quality assurance program, including peer review; a copy of the forms of evidence of coverage to be issued to enrollees; a description of complaint procedures to be used; and any information required by the commissioner
Which of the following is TRUE about nonforfeiture values? A. Policy owners do not have the authority to decide how to exercise nonforfeiture values B. They are required by state law to be included in the policy C. They are optional provisions D. A table showing nonforfeiture values for the next 10 years must be included in the policy
Answer: B Table showing values for the next 20 years must be included in the policy
All of the following are true about variable products EXCEPT: A. Policy owners bear the investment risk B. The premiums are invested in the insurer's general account C. The minimum death benefit is guaranteed D. The cash value is not guaranteed
Answer: B insurer's selling variable products invest their customer's monies in a separate account
Which of the following is NOT a feature of a guaranteed renewable provision? A. The insured has a unilateral right to renew the policy for the life of the contract B. Coverage is not renewable beyond the insured's age 65 C. The insured's benefits cannot be reduced D. The insurer can increase the policy premium on an individual basis
Answer: D