Licensing Exam
In Indiana what is the most the insurance guaranty association will pay for net cash surrender
$100,000
What is a domestic insurer
(Home Office in the state it was founded) Incorporated in this state
What is the business in key person insurance
- Applicant - Policy owner - Premium payer - Beneficiary
Taxation rules for Roth IRAs
- Contributions are not tax deductible - Excess contributions are subject to a 6% tax penalty
What is not covered by medicare
- long-term care/nursing home - dentures & dental care - eyeglasses - hearing aids
What is free look period for a Viatical Contract
-30 days from date of contract execution -15 days from the receipt of the first check
What was rule 38.1 created to do
-Allow group health insurance plans -Establish the order for payment of claims - Provide the authority for the orderly transfer of info -Reduce duplication benefits - Reduce delays on claims
what is the annuity income based on
-Amount of premium paid or cash value accumulated - frequency of payment - interest rate -Annuity age and gender
What are illegal inducements
-Any special favor or advantage in dividends or benefits -Any stocks, bonds, securities or accrued dividends -Anything of value not specified in the contract
Sources of underwriting
-Application -Agent reports -Investigative consumer report -Federal credit reporting act -Medical Examinations - Medical Information Bureau
What is commonly grouped into Medical Expense Insurance
-Basic Hospital -Surgical and medical policies -Major medical policies
What must be considered in a replacement situation
-Benefits -Limitations -Exclusions
Characteristics of a non qualified plan
-Can discriminate -Tax deferred - Excess over cost is taxed
What conditions do medically specific questions have to follow
-Cannot be directed toward determining the applicants sexual orientation -
What are different non forfeited options
-Cash surrender value - Reduced paid- up insurance -Extended term
What coverages do major medical expense policys cover
-Comprehensive coverage for hospital expenses - Catastrophic events -Benefit for prolonged injury or illness
How can a non resident person receive a non resident producer license in Indiana
-Currently licensed in their home state -Submitted proper request and paid the fees - Sent commissioner a copy of the license application -Resides in a home state that awards non resident producers licenses to residents of Indiana
How do you become a resident producer in Indiana
-Either live in Indiana -Complete pre licensing - Pass proper exam
What are the goals of the Indiana childrens health insurance program
-Ensure access to primary and preventive centers -Improve access to all necessary health services - Provide medical care in a cost effective manner
During reinstatement what do you need to provide
-Evidence of insurability -Pay back all premiums plus interest - Repay all outstanding loans and interest
What 2 features distinguish group insurance from individual insurance
-Evidence of insurability is not required -Participants under the plan do not receive a policy because they do not own or control policy
To sell variable life insurance policies what must an agent receive?
-FINRA registration - A securities license - A life insurance license
What features do variable universal life insurance policies include?
-Flexible premium that can be increased or decreased - Increasing or decreasing amount of insurance - Cash withdrawals or policy loans
What do HMOs offer?
-Free annual check ups - free or low cost immunizations
What are the features of a fixed annuity
-Guaranteed minimum rate of interest - Income statements that do not vary - Guaranteed dollar amount for each payment by insurance agency
What are the 3 medical expense basic coverages
-Hospital -Surgical -Medical
When can a license be issued to a business entity
-Is trustworthy -Pays all required fees - designates a license provider -Has not committed any acts that are grounds for probation, suspension or revocation
What are the duties of the producer in Indiana
-Life -Variable life -Accident and health or sickness -Property -Casualty -Personal lines -Title -Credit
Most common use for a policy involving a third party ownership
-Minor in which the parent owns the policy -Business situations
What rights does the policy owner have
-Naming and changing the beneficiary - Receiving the policy's living benefits -Selecting benefit payment options -Assigning the policy
other names for annuity period
-Pay-out period -Liquidation period - annuitization period
Characteristics of a qualified retirement plan
-Permanent -Approved by the IRS -Have a vesting requirement -Formally written and communicated to the employees
Examples of a beneficiary
-Person/ Class of persons - Estate or institution - Foundation/ Charity -Trustee of a committee
Limited Pay and Single Premium Whole Life
-Premium paying period is shorter -Cash value still equals face amount at age 100 -20 pay life will be paid up in 20 years Pay life -Life Paid up at age 65, will be paid up at 65 Life paid -A single premium policy will have an immediate cash value
What does the home office underwriting department look at
-Present physical condition - Present occupation -Past medical history
What are the important responsibilities of field underwriters during the underwriting process?
-Proper solicitation of applicants - Helping prevent adverse selection - Completing the application - Obtaining required signatures - Collecting the initial premium - Delivering the policy
What are the dividend options?
-Reduction of premium - Paid- up additions - Accumulated at interest
What are variable contracts regulated by
-Securities and exchange commission (SEC) - Financial Industry Regulatory association (FINRA) -Insurance department as an insurance product
How does one be covered under the Keogh retirement plan
-Self employed working full or part time - own at least 10% of the business
What are the levels of care
-Skilled care -Intermediate care -Custodial Care - Home health care -Home convalescent care - Adult day care -Respite care
What do basic surgical expense coverage cover
-Surgeons fees -anesthesiologist -operating room when it is not covered by misc.
Taxation rules for contributions to traditional IRAs
-Tax deductible for the year - must be made in "cash" in order to be deductible -Excess contributions are taxed at 6%
What are the conditions to qualify for accelerated benefit
-Terminal illness -Medical condition with extraordinary medical attention -Medical condition that can limit insureds lifetime -In ability to perform daily activities -Permanent institutionalization
Which limited lines of insurance in Indiana do not require an exam
-Travel -Title -Credit -Crop -Self storage
How often are the specified dates for guaranteed insurability
-Typically every 3 years -Or events like child birth or marriage -Without evidence of insurability -For an additional premium
3 main characteristics of variable annuity
-Underlying investment -Interest rate - License requirements
What does the insuring clause define
-Who the parties are - How long the coverage is - Type of loss insured
Most common exclusions
-aviation -hazardous occupation -war and military service
5 characteristics of managed care
-controlled access of providers -comprehensive case management - preventive care -Risk sharing -High quality care
What is insurable interest?
-face a significant emotional, financial or other type of loss that will negatively impact you upon the insured's death. -Facing the possibility of losing money or something of value
What does basic medical expense coverage cover
-office visits -visits per day -limit per visit -limit per hospital stay
Who is eligible for a temporary license
-producers spouse -court appointed representative -Individual designated by producer
How does an insurance company get a certificate
-submit a sound plan of operation -General character of company and directors are of reason promise
How is one eligible to enroll in the Indiana children's health insurance program
-under age of 19 - resident of Indiana -family member with income between 150-250% of federal income property level -Childs family must agree to pay
What miscellaneous hospital expenses are included in basic hospital expense coverage
-x ray charges -Medicines -use of operating supplies
How many pair of glasses in a 12 month period will vision expense insurance cover
1
Women at risk (Under 40) are covered how many mammogram screenings each year
1
What are the benefit payments limited to for business overhead expenses
1-2 years
What are the 3 illegal activities that can create a monopoly
1. Boycott 2. coercion 3. Intimidation
How does a PPO defer from an HMO
1. Do not provide care on a prepaid basis 2. subscribers are not required to use physicians or facilities that have contracts with PPOs
3 basic types of term insurance
1. Level 2. Increasing 3. Decreasing
What are the workers compensation benefits (4)
1. Medical benefits 2. Income benefits 3. Death benefits 4. Rehabilitation benefits
What are the 3 basic forms of whole life insurance
1. Ordinary whole life 2. Limited pay life and single premium life 3. Single premium whole life
When does a valid insurable interest exist?
1. Policy owners own life 2. Life of a family member 3. Life of a business partner
What are the other violations of the Unfair Competition law
1. Restraining trade 2. monopolizing 3. Lending institution
What is included in an insurance transaction?(4)
1. Solicitation 2. Negotiation 3. Sale 4. Advising an individual concerning coverage
2 common types of major medical policies
1. Supplemental major medical policies 2. Comprehensive major medical polices
What are the different policy options policy owners have
1.Non forfeiture options 2. Dividend options 3. Settlement options
Grace period for monthly premiums
10 days
How many years will any licensed person spend in jail if they knowingly make false material representations
10 years
How much of a business should a partner own to be eligible for the keogh plan
10%
What is the probationary period
10-30 days, from policy issue date during which benefits will not be paid for illness related disabilities
How many days of skilled nursing facility will Medicare pay benefits for
100 days
For group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense?
100%
what percent of eligible employees does an insurer require be included in the plan (Non contributory)
100%
How long does a producer have to renew his license after finishing all of the required education and allows his license to lapse
12 months
In Indiana what timeframe must a producer reinstate his license after lapsing in order to avoid taking the exam again
12 months
elimination period of business overhead expenses
15-30
What is the minimum age requirement for an insurance producer in Indiana
18
In Indiana how often are renewal fees due and how much are they
2 years and $40
How long do group plans for long term disability pay
2 years or longer
How many days in a facility will medicare pay full benefits for
20 days
What is the free look period for replacement policies
20 days
What does the patient under Medicare part B pay
20% of covered charges above the deductible
In order to renew an Indiana resident producer license what must a producer complete every 2 years
24 credit hours
How long is a consultants license valid for
24 months
How many of the 24 credits must be an ethics course
3
What is the penalty for any renewal fee received after the expiration date of the license
3 times the unpaid renewal fee
What is the maximum time to reinstate a policy after lapse
3 years
What is the maximum age for qualifying for a catastrophic plan
30
Within how many days will an insured be able to return the policy for a full premium refund in individual long term care
30
What is the free look period for policies issued as a result of direct solicitation
30 days
When you appoint a new director or principal officer, how many days do you have to submit to the Indiana insurance commissioner
30 days
Under a small employer, how many hours must an employee work to qualify for group health insurance
30 hours
How long is a grace period typically
30-31 days
Grace period for all other modes
31 days
if an additional premium is required to cover the insureds new born how many days are allowed for the payment
31 days after birth
How long does an employee have to exercise the conversion policy
31 days after termination
Period of time under COBRA for events such as death or divorce under COBRA
36 months
What is the number of credits required for fully insured status for social security disability benefits
40
Under social security disability benefits how long does a person have to wait before benefits are paid
5 months
What is the minimum number of credits required for a partially insured status for social security disability benefits
6
How long is an insurance company allowed to defer policy loan requests
6 months
How long is open enrollment period for Medicare supplement policies?
6 months
How long is the waiting period for waiver of premium
6 months
waiting period on waiver premium rider in life insurance
6 months
Benefit period for short term disability policies
6 months to 2 years
When can an insured not bring a suit against insurer to recover a health policy
60 days after written proof of loss
how long must an insured wait under the legal actions provision
60 days, but no later than 3 years
under PPACA rules what percent of health care costs will be covered under a bronze plan
60%
what is the maximum age requirement for Indiana residents to be eligible for a health Indiana plan
64 years old
What age can individuals make withdrawals from a health savings account without being penalized
65
When does spouse term rider expire
65 years old
When does the waiver of premium expire
65 years old
Grace period for weekly premium policies
7 days
under PPACA rules what percent of health care costs will be covered under a silver plan
70%
When must the owner of a traditional IRA start receiving distributions
72 years old
what percent of eligible employees does an insurer require be included in the plan (Contributory)
75'%
Insurers marketing long term care products must complete how many hours of continuing education during the first 2 years of a 4 year renewal
8 hours
What is the maximum interest rate on a policy loan
8%
under PPACA rules what percent of health care costs will be covered under a gold plan
80%
under PPACA rules what percent of health care costs will be covered under a platinum plan
90%
What must licensees inform the commissioner of?
A change of business, address, legal or alias name and email address
Unilateral Contract
A contract that results when an offer can be accepted only by the offeree's performance. (insured has no legally binding promises, insurer is legally bound and has to pay for losses covered by policy)
What happens if the insured dies during a conversion period
A death benefit equal to the face amount of individual insurance is paid by group policy
Misrepresentation
A false statement or lie that can render the contract void.
What does a person who knowingly tries to defraud an insurance company be found guilty of in Indiana
A felony
What type of premium does variable universal life have?
A flexible premium
What is the preferred provider organization
A group of physicians and hospitals that contract with employers, insurers or third party organizations to provide medical care services at a reduced fee
A Straight Life policy has what type of premium?
A level annual premium for the life of the insured
How much face value do Viators get
A percentage from the person who purchased the policy
What is a viatical settlement provider
A person other than a viator who enters in a viatical settlement contract
What is a life settlement provider
A person who enters into a life settlement contract with the owner
What is a qualified retirement plan
A plan which is eligible for favorable tax treatment
What describes specific information about a policy
A policy summary
What is replacement?
A practice of terminating an existing policy or letting it lapse, and obtaining a new one.
What is an admitted or authorized insurer in Indiana
A qualified insurance company that has received its certificate of authority
Suitability meaning
A requirement to determine if an insurance product is appropriate for a customer
What is a Roth IRA?
A retirement account where contributions are NOT tax deductible
What does other insured rider mean
A rider that is attached to a life insurance policy that provides coverage on an insureds family
Material Misrepresentation
A statement that, if discovered, would alter the underwriting decision of the insurance company.
How does a relative value approach work
A surgical procedure is assigned points relative to the maximum coverage allowed for a given surgery
Decreasing Term
A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.
What is the elimination period
A waiting period imposed on the insured from the onset of disability until benefit payments begin.
What are the 2 types of policy assignment
Absolute and collateral assignment
What is rule 48?
Accelerated death benefits
What is rule 18 in Indiana
Accident and sickness insurance advertising
What do variable premiums purchase?
Accumulation units in the fund
What is a rider
Added to the policy to modify provisions
Which long term care benefit provides coverage for functionally impaired adults on a less than 24 hour basis
Adult Day care
If a death benefit is not paid out in a timely manner when does the interest begin to accure
After 30 days from the date the death benefit is due
Contract law
Agreement between 2 or more parties that is enforceable by law
Which medical supplemental policies are the core benefit plans found
All of the plans (A-D)
What is a viatical statement
Allow someone living with a life threatening condition to sell their life insurance policy and use the proceeds when they are needed
What is guaranteed insurability
Allowed the insured to purchase future coverage at specified dates
What is the children's term rider
Allows children of the insured to be added to coverage for a specified amount of time
What happens when pure insurance decreases
Allows for a greater cash value in the older years
What are options?
Allows insured and insurers ways to invest or distribute a sum of money available in a life policy
What is the free look provision?
Allows policy owner 10 days from receipt to look over policy and if they are unhappy they can return for a full refunded premium
Face amount meaning
Amount of benefit stated stated in the life insurance policy
What protects an individual from outliving their money
An annuity
What is a nonadmitted or nonauthorized insurer?
An insurance company that has not applied, or has applied and been denied, for a Certificate of Authority and may not transact insurance.
What is a foreign insurer
An insurer with a home office in another state or any US major territories
what premium payment mode will incur the lowest overall payment
Annual
What is the insurance component of a universal life policy always
Annually renewable term
What is group insurance written as
Annually renewable term insurance
Parties of annuities
Annuitant, beneficiary, owner
What does life settlement mean
Any financial transaction in which the owner of a life insurance policy sells a life insurance policy to a third party for some form of compensation
Who can contribute to Traditional IRA and Roth IRAs
Anybody with an earned income
primary criteria of underwriting
Applicants health (Past and current), occupation, lifestyle, hobbies and habits
If the premium is not collected until the policy is delivered what must the agent do
Ask them to sign a statement of good faith
Examples of Material Misrepresentation
Assets. Medical Info, dangerous hobbies and alcohol or drug use
When does insurable interest need to exist by?
At the time of the application
What is the document that describes the insureds medical history, includes diagnoses and treatments
Attending physicians statement
How is a joint life premium paid
Based on joint average age
What provides coverage on a first dollar basis
Basic expense
What does not have to be required in the outline of coverage provided with a long term care policy
Basic information about supplemental policies
straight life insurance
Basic whole life insurance with a level face amount and fixed premiums payable over the insureds entire life
Why is an insurable interest not required for beneficiaries?
Because their well being is dependent of the insured
Competent parties
Being of legal age (18), Mentally capable, and not on drugs or alcohol
What does triple indemnity mean
Benefit is triple the amount
What does double indemnity mean
Benefit is twice the face amount
What is the affect on death benefit by using the accelerated benefits rider
Benefits payable at death will be reduced by that amount, plus the amount of earnings lost by the insurance company from interest income
What happens if the insured misstated his or her age or gender
Benefits under the policy would be adjusted to what the premium paid would have been
Required Signatures on the Application
Both the agent and the proposed insured (usually the applicant) must sign the application.
Who must sign the notice regarding replacement?
Both the applicant and agent
What type of coverage does accidental bodily injury have?
Broader
What is the generic consumer publication that explains life insurance in general terms
Buyers guide
How are variable life insurance policies regulated
By both the state and federal government
How can an insurance company terminate a producers authority to transact
By cancelling the relationship between the company and the producer
How is the Indiana insurance commissioner appointed
By the governor and can also be removed by the governor
What is a flexible premium
Can increase or decrease premium during policy period
What is surrendering
Cancellation of the policy
What is custodial care
Care for meeting personal needs like eating, dressing or bathing
How do you plan for survivor protection?
Careful examination of current assets and liabilities
What is reduced by a surrender
Cash value and death benefit
What does liquidity refer to in a life insurance policy
Cash value can be borrowed
Who is medicare administered by
Centers for Medicare and Medicaid Services (CMS)
What is non forfeiture options
Certain guarantees are built into the policy that cannot be forfeited by the policy owner
In group insurance what is given to the individual insureds
Certificate of insurance
What happens if you transact business without a certificate of authority
Commissioner may impose a 25,000 civil penalty on director responsible
Most common type of receipt
Conditional receipt
What is presumptive disability
Conditions that automatically qualify the insured for full disability benefits
What does COBRA mean
Consolidated Omnibus Budget Reconciliation Act
If an underwriter requests more info these reports will fall into what 2 categories
Consumer and investigative consumer reports
What is buy-sell agreements
Contractually establish the intent of someone else to purchase the business upon the insureds death and sets a value on a business
Liquidation of an estate meaning
Converting a persons net worth into a cash flow
What is a conditional receipt?
Coverage begins as of the date of the receipt if the application is approved, including approval of the policy type, coverage amount and premium rate. 1. If approved, the insured does not have to wait for the policy to actually be issued and delivered for the coverage to begin. 2. This is the type of receipt normally provided when the initial premium is paid at the time of application.
What is a critical illness policy
Covers multiple illnesses
What is dental expense plans
Covers treatment and care/ prevention of dental disease and injury to an insured teeth
Reason to buy life insurance over an annuity
Creates an estate
What do interest sensitive whole life policies do?
Credit the cash value with current interest rates
What is skilled care
Daily nursing and rehabilitative care that can only be provided by medical personnel under the direction of a physician
What is an annually renewable term?
Death benefit remains level and the policy may be guaranteed to be renewable each year without proof of insurability
What is survivor protection
Death of a primary wage earner, provide the funds necessary for survivors to maintain their lifestyle
What is the purpose of a provision
Define rights and duties of both the insurer and the policy holder
What is a provision
Define the characteristics of an insurance contract
What are short term medical plans
Designed to provide temporary coverage for people in transition between jobs
What us disability income insurance
Designed to replace lost income
What is the advantage of the 7- pay period
Determines if it is a MEC or not
When can FSA benefits be changed?
During open enrollment period
What is the goal of the HMO
Early detection through regular checkups
What is accelerated benefit?
Early payment of a portion of the death benefit
withdraws prior to age 59 1/2 are considered what?
Early withdraws and are subject to a 10% tax
When does the childrens term rider expire
Either 18 or 21
What is not covered by health maintenance organizations
Elective services
What is the period of time immediately following a disability that benefits are not payable
Elimination period
What is a profit sharing plan
Employer contributes money into an employees retirement plan when the company shows a profit
When does a permanent life insurance policy remain in effect?
Entire life of the insured or until you reach 100 years old
How much can a policy owner take out
Entitled to borrow an amount equal to available cash value
What happens if the master contract in group life insurance is terminated
Everyone who has been on the plan for at least 5 years is allowed to convert to individual permanent insurance
What is an investigative consumer report
Everything consumer reports have but gathered through interviews with associates, friends and neighbors of the consumer
Why is the cash value in option B lower in the older years?
Expenses of this option are greater than option A (Everything else will be equal)
What is the death benefit in Option B always equal to?
Face amount of the policy
How do PPOs contract
Fee for service basis
What is an agent referred to?
Field underwriter; because they are the ones typically who solicited the potential insured.
How many pints of blood will be paid for by medicare supplement core benefits
First 3
What is a primary beneficiary
First claim to policy proceeds following the death of an insured
Another term for no deductible
First dollar basis
what is an indexed annuity
Fixed annuity that aims for higher returns
What type of premium do Universal life policies have
Flexible premium
What is a transfer of interest
From one trustee directly to another
What is the insured required to provide when it comes to their medical condition and competency of to enter contract
Full disclosure
What is not a business use of life insurance
Funding against company's general financial lose
What is another commonly used limited license in Indiana
Funeral directors license
2 parts of completing the application
General Info and medical information
Under option A, what happens to the death benefit
Gradually increases
What is rule 38.1
Group coordination benefits
What do most long term care plans have
Guaranteed renewability
What does Indiana require all health insurance policies sold in the state be
Guaranteed renewable
What type of renewal must Medicare supplements have
Guaranteed renewable
where do the benefits designated to a minor get paid to
Guardian or trustee of the minor
What are Point of Service characteristics
HMOs and PPOs
What makes it possible for self employed persons to be covered under the IRS
HR-10 or Keogh plans
How does a beneficiary get a death benefit if the insured commits suicide
Has to be past the stipulated period of time to be awarded. If they do it before the benefit will not be rewarded
What does HIPAA stand for?
Health Insurance Portability and Accountability Act
What is the Indiana childrens health insurance program
Health care program for children and pregnant women as well as working families with low incomes
What does a critical illness policy cover
Heart attack, stroke, renal failure and pays a lump sum
Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information
Held or transmitted by a coverage entity -Any form of media, whether electronic, paper or oral
What are health savings accounts designed to do
Help individuals save for qualified health expenses
What is the uniform simultaneous death law
If the insured and primary beneficiary die at the same time and they can not tell who died first, then they rule as if the primary beneficiary died first.
What is pure death protection?
If the insured dies during the term then the policy is paid to the beneficiary
When can an insurer not deny a claim due to misrepresentation
If the policy has been in force for at least 2 years
When do indexed life policy premiums increase
If the policy owner assumes the risk
Is surrendering for cash value taxable income
If the value exceeds the amount paid for premiums
What is false advertising
Illegal practice of advertising or circulating untrue material
What is home convalescent care
In home care under a planned program established by his or her attending physician
Exception to signatures on an application
In the case of an adult or parent applying for insurance on a minor or child
What happens to the Death Benefit in Option B annually?
Includes annual increase in cash value which means the death benefit gradually increases as well
What is the family term rider
Incorporates the childrens term and the spouse term
Does the premium increase in an annually renewable term?
Increases annually according to attained age, as the probability of death increases
What happens to indexed life indexed life face amount?
Increases annually to keep pace with inflation
What insurance is used for return of premium rider
Increasing term
Which hospital policy pays a fixed amount each day that the insured is in the hospital
Indemnity
2 components of a universal policy
Insurance and cash account
What was the medical information bureau created to protect?
Insurance companies from adverse selection by high risk customers
Who takes initial returns in an indexed annuity
Insurance companies reserve initial returns, but pay excess to the annuitant
What two components does a Universal life policy have
Insurance component and a cash amount
What is third party ownership
Insurance contract is owned by someone other than the insured
What do all admitted insurers have to be a member of
Insurance guaranty association
What is controlled business defined as
Insurance written on the interests of: -The applicant or licensee -applicant or licensee's immediate family - Applicant or licensee's employer/ business partner
Why are decreasing terms commonly purchased
Insure the payment of a mortgage or other debts
What does the change of occupation provision allow
Insurer to adjust the benefits if the insured changes occupations
Who makes up the Medical Information Bureau?
Insurers
What part of a settlement option is taxable as income
Interest portion
Main purpose of the seven- pay test?
It determines if the insurance policy is an MEC.
Why is an equity indexed annuity considered to be a fixed annuity?
It has a guaranteed minimum interest rate
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.
What does the S&P 500 do
It measures 500 U.S. stocks that are supposed to be representative of the overall stock market.
What happens to the cash value in older years with option B?
It will be lower
In a coinsurance provision what will the premium be if the larger percent is paid by the insured
It will lower the required premium
What is key person disability
Key persons economic value to the business and is determined by the potential loss of business income which would occur during hiring/ training
How is the commissioners suitability for office determined by individuals in Indiana
Knowledge and skill in Insurance
Which type of term insurance is the most common
Level
What type of term does a spouse term rider have
Level term
What is Variable whole life
Level, fixed premium and is a investment based product
What is rule 24 in Indiana
Life Insurance Solicitation
Agents or companies that sell variable annuity must be registered with what?
Life and health license and FINRA
What funds a buy- sell agreement
Life insurance
What does rule 13 in Indiana deal with
Life insurance advertising
Term Insurance
Life insurance coverage for a specified period of time, less expensive than whole
What is Indiana rule 16.1
Life insurance replacement
Adjustable Life
Life insurance which permits changes in the face amount, premium amount, period of protection, and the duration of the premium payment period.
What has a shorter premium paying period between limited pay and single life or straight life
Limited pay and single life
What is the legal actions provision
Limits the amount of time which a claimant may seek recovery from an insurer under a policy
What does an in network provider mean
Lower out of pocket costs
An applicant who receives a preferred risk classification qualifies for
Lower premiums than a person who receives a standard risk
How are accidental death and dismemberment benefits paid
Lump Sum
What does a traditional retirement account allow individuals with earned income to do?
Make tax deductible contributions regardless of age
How long does a commissioner issued temporary producer license last
Maximum period of 180
What does level mean?
Means the death benefit does not change throughout the life of the policy
What is included in the medical information section of the application?
Medical background, present health, any medical visits in the recent years, medical status of living relatives as well as the cause of death of deceased relatives
How is life expectancy calculated?
Medical history and mortality factors
What provides an underwriter with information regarding an applicants health history
Medical information bureau
What are High deductible health plans used in coordination with
Medical savings accounts, Health savings accounts and out of pocket limits
what is part C of medicare
Medicare Advantage
Under the affordable care act, what classification applies to health plans based on cost
Meta level classification
What is an MEC
Modified Endowment contract
What do annuities use?
Mortality tables
Special features of life policies
Most term insurance polices are renewable, convertible or renewable and convertible (R&C)
What is the difference between a simplified employee plan and an IRA
Much larger amount can be attributed every year to a simplified employee plan
What does the agent have to do if they feel there is misrepresentation of an application
Must inform the insurance agency
What does the agent do whenever they collect a premium?
Must issue a premium receipt (Determines when the coverage will be effective)
How does one establish a SIMPLE plan
Must not have a qualified plan in place already
What happens when an insurer receives a notice of claim
Must supply claims forms to the insured
How do you become eligible for workers compensation
Must work in an occupational field covered by workers comp and had an accident or sickness that is work related
who developed the format for a long term care insurance shoppers guide
National association of insurance commissioners
What is the primary eligibility requirement for medicaid benefits
Need
Are dividends from a mutual insurer considered a rebate
No
Are policy loans from from the cash value income taxable
No
Are short term disability plans renewable
No
Are there deductibles for basic hospital expense coverage?
No
Can an individual hold a consultants license and an insurance producers license at the same time
No
Can assets in the separate account be comingled with assets in the general account?
No
Can you limit coverage based on marital status
No
Do you need to pass a written exam when applying for a nonresident producer license in Indiana
No
Does a viatical broker need to be licensed insurance producers
No
Does indexed life require proof of insurability?
No
Does rule 18 in Indiana include want ads soliciting new agents
No
Does the insuring clause provision state the method of premium payment
No
Does the payable premium steadily decline throughout the duration of a decreasing contract?
No
If there is an irrevocable beneficiary can you borrow against policies cash value?
No
If you have other riders does it defeat a guaranteed insurability
No
If you surrender a policy can you reinstate it?
No
Is a temporary license available for a producers retirement in Indiana
No
Is inviting a prospective clients to the grand opening of the office considered illegal inducement
No
Is the refunded premium from return of premium taxable?
No
Is there a deductible for basic hospital expense coverage
No
Is there individual underwriting for group life insurance
No
Is workers compensation a business use of life insurance
No
Is workers occupation a factor in determining Social security disability benefits
No
are carryover of credits permitted in continuing education
No
are key person disability benefits considered taxable income
No
are social groups eligible for group coverage
No
can insurance companies coverage due to covered claims
No
is collecting a payment when delivering a policy the agents responsibility
No
Is a decreasing term typically renewable
No because at the end of the policy life the death beneficiary is $0
Are dividends considered to be income for tax purposes
No since they are unused premiums
what is the time limit on certain defenses provision
No statement or misstatement made in the application at the time of issue will be used to deny a claim after policy is in force for 2 years
is a viatical statement a policy option
No they are separate contracts
Do basic surgical expense coverages have a deductible
No, but coverage is limited
Does custodial care need to be administrated by a medical personnel
No, can be a non medical personnel
Are HMOs offered nationwide
No, divided into geographic territories
Is an executive bonus a qualified plan
No, it is not subject to plan limits established by IRS
Does group disability insurance cover on and off the job
No, just while they are off the job
Does partial disability cover all workers
No, only full time workers
Can you take out as much as you want for a partial withdrawal
No, there is a limit
Do health maintenance organizations contract with insurance companies
No, they are between the insured and the HMO
Can the underlying assets in a variable whole life policy be kept in the insurance company's general account?
No, they must be kept in a separate account
Is part B coverage provided free of charge when you turn 65
No, they must enroll and pay a monthly premium
Can you get paid workers compensation only if it was not his/ her fault
No, workers compensation is payable regardless or fault or negligence
Is loss by illness covered covered with a disability income policy
Not if it occurs during the probationary period
What is a non qualified retirement plan
Not subject to the requirements regarding participation, discrimination and vesting
When is the annual open enrollment for state insurance exchanges?
November 1st through January 31st
What is intermediate care?
Occasional nursing and rehabilitation care that requires daily medical assistance on a less frequent basis
What is the official name of the social security program
Old age survivors disability insurance
When is the joint life death benefit paid
Only after the first death
What are cancer policies
Only covers cancer and pays a lump sum
What are the two death benefit options under universal life?
Option A and Option B
What is a Modified Endowment Contract
Overfunded life insurance policy
Collateral assignment meaning
Partial and temporary assignment of policy rights
What do universal life policies allow
Partial withdrawals of the cash value
in a partially contributory group health plan, who pays all of the costs
Partially by the employer and partially by the employee
To buy a medigap policy what must an applicant be enrolled in
Parts A and B of medicare
What is the accumulation period
Pay period, when the owner makes payments into an annuity (Also earn interest on a tax deferred basis)
What is a deferred annuity
Payments begin sometime one year after the purchase date
What is the accidental death rider
Pays some multiple of the face amount if the death is a result of an accident
What is the accidental death and dismemberment rider
Pays the face amount for that death and a percentage for accidental dismemberment
What are group disability plans benefits usually based on
Percentage of the workers income
What best describes what an annuity period is?
Period of time in which accumulated money is converted into income payments
What provision is mandatory for health insurance policies
Physical exams and autopsy
What must be present in all medicare supplement plans
Plan A
Who bears the risk in variable contracts
Policy owners bear the investment risk
Return of premium
Policy refunds every penny of the premiums if one outlives the defined term
What is the assignment provision
Policyowner has the right to transfer partial or complete ownership of policy to another person
What is important in replacing a contract
Pre-exisitng conditions
What is part D of medicare
Prescription drug coverage
What must an insurer do to legally acquire info from investigators
Present the insured with a disclosure authorization notice
What is the common disaster clause
Presumed the primary beneficiary died first so the proceeds will be given to the contingent beneficiary
What is the incontestability clause?
Prevents an insurer from denying a claim due to statements in the application after the policy has been in force for 2 years
What is the automatic premium loan provision
Prevents the unintentional lapse of a policy
Why is a decreasing term used
Primarily when amount needed protection is time sensitive
What is the benefit rewarded from the accidental death and dismemberment in the event of the insureds death
Principal sum
What is estate conservation
Proceeds may be used to pay inheritance taxes and federal estate taxes so the selling off of assets is not necessary
Agent/Producer
Producer= Agents and brokers Agents= Agents of the insurer
Who's responsibility is it to renew their license in Indiana
Producers
after a loss occurs what must a claimant submit
Proof of loss
What is the suicide provision
Protect insurers who buy life insurance with the intent to commit suicide
What is the purpose of a grace period
Protect the policy holder from unintentional lapse
What does rule 13 in Indiana do
Protects consumers against unfair trade practices
What is medical expense insurance
Provide benefits for the cost of medical care that results from accidents or sickness
What is long term care coverage
Provide for the payment of part of the death benefit in order to take care of the insureds health care expenses
What is the return on premium rider
Provides amount of money equal to the premium paid for policy if insured dies during term.
What is a living needs rider
Provides for the payment of part of the death beneficiary if the insured is diagnosed with a terminal injury that will result with death in 2 years
What is a coinsurance provision
Provides for the sharing of expenses between the insured and the insurance company
What is an annuity
Provides income for a specified period of years or for life
What does term insurance do
Provides the greatest amount of coverage for the lowest premium
Convertible term provision
Provides the policy owner with the right to permanent life insurance without evidence of insurability
What is the purpose of the living needs rider
Providing the insured with the necessary medical and nursing home expenses
What is the presumptive disability provision
Provision found in most disability income policies that specifies the conditions that will automatically qualify for full disability benefits
When is a settlement option exercised
Purchase of an immediate annuity
What is a disadvantage of a fixed annuity
Purchasing power that they afford may be eroded over time due to inflation
What is 403(b) Tax sheltered annuities plan
Qualified plan available to employees of certain non profit organizations
What can an insurer change on a guaranteed renewable health insurance policy
Rates by class
Which nonforfeiture option provides coverage for the longest period of time?
Reduced- paid up
What does the federal credit reporting act do?
Regulates consumer reports
Business Overhead Expense Policy
Reimburses small business owners for overhead expenses incurred while the business owner is totally disabled
What did the SECURE act of 2019 do
Removed the prior age limit for all contributions
What does business overhead pay for
Rent
What does business overhead pay in event of loss
Rent
Conditional Contract
Requires that certain conditions must be met by the policyowner and the company in order for the contract to be executed, and before each party fulfills its obligations.
Primary purpose of a 401(K)
Retirement
What is the waiver of monthly deductions
Rider only pays the monthly deductions and not the full premium
How are Viatical settlements regulated in Indiana
Rule 61 of the Indiana administrative code
What is a contingent beneficiary
Second claim In the event that the beneficiary dies before the insured
What section of the Internal Revenue code is a 403(b) plan
Section 501(C)(3)
What is a survivorship life policy
Similar to Joint life, insures two or more people based on joint age but pays on the last death
Which type of life insurance policy generates immediate cash value?
Single Premium
How can a deferred annuity be paid
Single lump payment or through periodic payments
What is the most common immediate annuity
Single premium annuity
What are social insurance supplements also called
Social security riders
What is part B of medicare funded by
Social security taxes
What does the term fully insured refer to
Someone who has earned 40 quarters of coverage
What is a key person
Someone who has specialized knowledge, skills or business contacts
What is a limited lines insurance producer authorized by the commissioner to solicit
Specialty insurance products
What is a stop loss limit
Specified dollar amount beyond which the insured no longer participates in the sharing of expenses
What is the disability buy-sell
Specifies how a business will pass between business owners if one of them dies or becomes disabled
What is the time of payment claims
Specifies that claims are to be paid immediately upon loss
What is a recurrent disability
Specifies the period of time which the recurrence of an injury or illness will be considered as a continuation of a prior period of disability
What do you call it if the rider only covers the spouse
Spouse term rider
What are the two things an agent can do with an application if they made a mistake
Start completely over with a fresh application Draw a line through the incorrect answer and have applicant initial
What is the best way to change an application
Start over with a fresh application
If you convert a group policy to an individual, what happens to the face value
Stays the same as the group face value (Premium will be higher)
What do the separate accounts invest in?
Stocks, bonds and other security investment options
What common whole life policy has the lowest annual premium
Straight life
In a 401(K) plan what do employees do
Take reduction in current salaries by deferring amounts into a retirement plan
What is a transfer
Tax- Free transfer of funds from one retirement program to a traditional IRA
What can key person insurance be issued as
Term or life
Lapse
Termination due to a non payment of premium
During policy replacement what must the agent make sure of
That the current policy is not cancelled before the new policy is issued
What is the insurance commissioner
The CEO and the administrative officer of the insurance department
Who sets the annual contribution limit of a Dependent Care Flexible Spending Account?
The IRS
What is the S&P 500?
The S&P 500 is a stock index published by Standard & Poor's.
Who is responsible to make sure the application is filled out correctly and to the best of the applicants ability?
The agent
Who's responsibility is it to deliver the policy
The agent
When changing an application what must happen
The applicant must initial the correct answer
What happens if the annuitant dies while the annuity is the accumulation stage
The beneficiary will receive the greater of the money paid into the annuity or the cash value
What is a indexed life policy
The cash value is dependent upon the equity index
Endow meaning
The cash value of a whole life policy has reached the contractual face amount
Who is responsible for examining the operations of an insurance company in Indiana
The commissioner
Who owns the policy in an employee bonus arrangement
The employee
What is the conversion privilege
The employee will not lose insurance if they are fired. (Can go from group to individual without proof of insurability)
What is combined in variable universal life
The flexible premium of universal life and the investment component of variable life
With key person insurance what is the key employee
The insured
Who do viatical brokers represent?
The insureds
Attained age meaning
The insureds age at the time of the policy is issued or renewed
What happens if none of the beneficiaries are alive when the insured dies?
The insureds estate will receive all proceeds
subrogation meaning
The insureds right to recovery against a third party
Who can legally bind insurance
The insurer
Who is in charge of paying for the medical examination during underwriting
The insurer
Who has the authority to make changes to an insurance policy
The insurers executive officer
During the withdrawal, what part may be subject to taxation?
The interest earned on the withdrawn cash value
In group insurance what is given to the employer
The master contract
What does the entire contract provision stipulate?
The policy and copy of the application along with any riders constitutes the entire contract
Who has the owners rights to a policy
The policy owner
Living benefits
The policy owner can borrow against the cash value while the policy is in effect, or can receive the cash value when the policy is surrendered.
Who signs if the proposed insured is not the same person as the policy owner?
The policy owner must also sign the application
who do viatical producers represent?
The providers
What creates an immediate estate
The purchase of life insurance
What is group life cost of coverage based on
The ratio of men and women in the group
What is a dividend
The return of unused premiums
What is hospice care intended for
The terminally ill
What must an insurer include in an individual health insurance policy
The uniform individual accident and sickness policy provision law
What is an insureds premium based on when converting their policy
Their current age
What is an insureds premium based on when renewing policy
Their current age
Why are dividends not taxable
They are a return of unused premiums
Non-forfeiture Values
Those guaranteed values in a life insurance policy that cannot be taken from the insured, even if he or she ceases to pay premiums.
How is an estate created
Through earnings, savings and investments
What is a grace period?
Time after the premium due date to pay the policy before it lapses
What is the purpose of COBRA
To provide continuation of coverage for terminated employees
What is the purpose of a fixed period settlement option
To provide guaranteed income for a certain amount of time
What is the conversion factor
Total amount payable per point
2 most common qualified individual retirement plans
Traditional IRAs and Roth IRAs
Maximum percentage of accelerated benefits
Typically 50% but insurers can legally pay up to 100% of face value
What is typically true about a preferred risks premium
Typically higher
What type of policy can you skip a premium on and not lapse if you sufficient cash value
Universal life
When can an investigative consumer report not be made?
Unless consumer is advised about the report 3 days before
What is the special risk policy
Unusual types of risks that are not normally covered under accidental death and dismemberment
What is the waiver of premium provision?
Waves the premium of the policy if insured becomes totally disabled or until they can return to work
What does the general information portion of the application identify?
What type of policies the applicant applied for (typically contains info regarding the beneficiary)
When can an insurer disclose an individuals genetic info
When affected party gives consent
What is a mode
When premiums are due how often they are to be paid to whom
When does the applicant make the offer
When submitting the application
When are life insurance proceeds free of federal income tax
When taken as a lump sum
When can Roth IRAs grow tax free
When the account is open for at least 5 years
What is a settlement option
When the beneficiary receives payments consisting of both principal and interest
What is a non contributory plan
When the employer pays all of the premiums
When are accelerated benefits taxable
When the insured is chronically ill (Tax free up to a certain limit)
When does the acceptance take place on an applicants offer
When the insurers underwriter approves the application
When does the cash value in an adjustable life develop?
When the premiums paid are more than the cost of policy
In Indiana any person who reports in good faith any suspected insurance fraud is called
Whistleblower
Most common form of life insurance policy
Whole life
Deferred meaning
Withheld or postponed until a specified time or event in the future
When must death occur to receive the death benefit from accidental death rider
Within 90 days of the accident
How long does a claimant have to submit a proof of loss
Within 90 days or a reasonable time
Can you negotiate when settling claims in Indiana
Yes
Does Variable whole life have a Guaranteed death benefit?
Yes
Does indexed life have a minimum interest rate?
Yes
Does the applicant need to be informed of the sources being contacted and how the information is being gathered during underwriting
Yes
Is coverage for a newly adopted child the same as other children
Yes
Does an Health savings account holder have to pay tax for a non health expenditure withdrawal
Yes and a penalty if under 65
Can the group life policy convert to any form of insurance?
Yes besides term insurance
Is there a rider to insure someone not in the family
Yes they are called non family insureds
Is an employee bonus tax deductible
Yes to the employer
Are traditional IRAs tax deductible?
Yes, but may be limited if the owners income exceeds a certain level
Can companies match your 401(K)
Yes, can be a dollar amount or on a percentage basis
Does an employee bonus affect income tax
Yes, it is income taxable to the employee
Can there be more than one primary beneficiary
Yes, policy owner can name as many and how it is split up
Does withdrawing from the cash value affect the death benefit?
Yes, reduced by any amount of partial surrender
Do you need proof of insurability if you are changing the death benefit in an adjustable life policy
Yes, you need to show proof of insurability
What do you have to pay after the basic policy is exhausted
a corridor deductible
To be eligible for a health savings account what must an individual be covered by
a high deductible health plan
How long does the annuity period last
a lifetime or for a period
What does the annuitant have to be
a natural person
What is medicaid
a needs tested program administered by the states to provide assistance to persons who are not able tp provide for themselves
What is a cross- purchase plan
a partnership buy-sell agreement in which each partner purchases insurance on the life of each of the other parties
fees required for a producer in Indiana to reinstate a lapsed license
a penalty 3 times the unpaid renewal fees
Applicant/Proposed insured
a person applying for insurance
What is a beneficiary?
a person who derives advantage from something, especially a trust, will, or life insurance policy.
Cash value meaning
a policy's saving elements or living benefit
What is a record of insurability
a record of a person's past and current health events
What is a deductible
a specified amount of money that the insured must pay before an insurance company will pay a claim
What does each basic surgical expense coverage have
a surgical schedule
warranty
absolutely true statement upon which the validity of the insurance policy depends (Statements made by applicants are not considered warranties unless in the case of fraud)
What does collecting the initial payment increase the chance of?
accepting the policy when it is issued
What does a policy written on a non occupational basis cover
accidents and sickness that occur while on the job
What does a policy written on an occupational basis cover
accidents and sickness that occurs away from the job
How are insurance companies classified?
according to the location of incorporation (domicile).
What is false advertising?
ads can not include any untrue deceptive or misleading statements that apply to the business of insurance
When must coverage for a dependent child go to
age 26
What is included in the general info section of an application?
age, address, birthday, gender, income, marital status and occupation (Inquires about existing policies and if the proposed insurance will replace them)
Elements of a Legal Contract (4)
agreement, consideration, competent parties, legal purpose
What does rule 38.1 do
allows health insurance plans to include a coordination of benefits provision
What is the relation to earnings to insurance provision state
allows insurance companies to limit the insureds benefits to his/her income over the last 24 months
Renewable Term provision
allows the policy owner the right to renew the coverage at the expiration date without evidence of insurability
Where is skilled care provided
almost always in an institutional setting
What is an integrated deductible
amount of deductible is satisfied by amount paid under basic medical coverage
What is an executive bonus
an arrangement where the employer offers to give the employee a wage increase in the amount of the premium on a new life insurance policy on the employee
What can an insurance company require while a claim is pending
an independent to be examined as often as reasonably required
What is a simplified employee pension
an individual retirement account (IRA) that an employer or self-employed individual can establish.
What is a domestic insurer
an insurance company that has gotten its license to operate in a particular state by following the statutory laws and requirements of that state and building its headquarters there.
What is the least expensive first year premium?
annually renewable term
What is rebating
any inducement offered to the insured in the sale of insurance products that is not specified in the policy
What is total disability defined as occupation wise
any occupation
What does small employer mean
any person, firm, corporation or partnership engaged in business on at least 50% of its working days
What is a corridor deductible
applied between the basic coverage and the major medical coverage
How are disability insurance premiums deductible
as a business expense
How long is an Indiana insurance producers license valid for
as long as fees are paid and education requirement is met by due date
How long does a commissioner serve in office
as long as the governor wants
When can insurance benefits be extended to a persons new born
as soon as they are born
What must each separate account maintain (domestic insurer)
assets with a value at least equal to the reserves and other contract liabilities
When does the return on premium rider expire
at 60 years old
how long does long term care last
at least 12 months for each covered person
in Indiana what is every small employer carrier required to actively offer small employers
at least 2 health benefit plans
How often does a commissioner do an examination of an insurance company in Indiana
at least once every 5 years
When must a producer notify an applicant that a credit report may be requested
at the time of the application
What is the premium based on for the guaranteed insurability rider
attained age
What does conservation mean?
attempt from existing insurer or producer to dissuade a policyowner from replacement of a life insurance or annuity
What is managed care
attempting to contain cost by controlling the behavior of participants
Which medical professional is not covered under the LTCs home health care
attending physician
What are the 2 health benefit plans every small employer is required to offer
basic and standard health plans
to be eligible for tax credits under the affordable care act, income must be at what percent of the federal poverty level
between 100 and 400%
What is a cash or deferred arrangement (CODA)?
can choose to receive taxable cash compensation or have money contributed to 401(K)
What is a disability rider
can keep your insurance coverage without having to worry about making your premium payments.
What is home health care
care provided in a person's home by a skilled nurse or other professional service
What must a life insurance policy have to allow loans
cash value
What does an Indiana insurance company need to receive before being legally open for business
certificate of authority
What does the payment of claims provision state
claims must be paid to the policy owner unless death proceeds need to be paid to a beneficiary
What is the traditional net cost index
compares the cash values available to buyers if they surrender the policy in 10-20 years
What are pre existing conditions
conditions for which the insured has received diagnosis, advice, care or treatment during a specific time
What does CE mean in Indiana insurance
continuing education
What if a policy is issued with questions left unanswered?
contract will be interpreted as if the insurer waived its rights to have an answer to the question (Insurer will not have the rights to deny coverage based on info that the unanswered question might contain)
What does the gatekeeper of HMO do
control specialist cost (Helps keep member away from the higher priced specialist)
Term for specific dollar amount paid by an HMO member
copayment
What is rule 24 in Indiana defined as
cost is the difference between what the insureds pay and what they get back
What is basic hospital expense coverage
cover hospital room and board and miscellaneous expenses
What is workers compensation
coverage offered and regulated by the states
Another name for interest sensitive whole life insurance
current assumption life
What qualifies as a principal amount in accidental death and dismemberment
death or loss of 2 limbs or loss of sight in both eyes
What happens to pure insurance in Option A
decreases as time passes
What is an annual deductible
deductible paid once a year
What is taxation on a SIMPLE plan
deferred
What is respite care?
designed to provide relief to the family care giver
what is the buyout agreement that specifies who will purchase a disabled partners interest
disability buyout
What is an individual deductible
each insured is personally responsible for a specified deductible amount each year
When an individual becomes a member of the HMO who do they choose?
either a primary care physician or a gate keeper
What is the elimination period designed to do
eliminate coverage for short term disabilities and reduce filing of claims
in a contributory group health plan, who pays all of the costs
employee pays the entire premium
Nature and purpose of point of service plan
employees do not have to be locked into one plan or make a choice between two plans
What does the COBRA act of 1985 apply to
employers with 20 or more employees
What does rule 18 in Indiana do
ensures the sale of of accident and sickness insurance is in the public interest
What is medicare
federal medical expense insurance program for people age 65 or older
Types of Annuities
fixed, variable, equity-indexed
How are health management organizations typically divided
geographic areas
Term life meaning
guarantees payment of a stated death benefit if the policyholder dies within the stated term period.
What is cash accumulation
guarantees that the money will be available when needed
What does HMO mean?
health maintenance organizations
In an annuity what does a shorter life expectancy mean
higher benefit
What does an out of network provider mean
higher out of pocket costs
What is another name for the Indiana childrens health insurance program
hoosier healthwise
What is part A of medicare
hospital insurance
What must medicare supplement policies ask
if the applicant is eligible for medicaid
What is a carry over provision
if the insured dud not incur enough expenses during the year to meet the deductible the expenses incurred in last 3 months may be carried over
When do indexed life policy premiums remain level
if the insurer assumes the risk
What is misrepresentation
illegal to issue, publish or circulate anything false, misleading or deceptive as to policy benefits
in long term care where are the pre existing conditions limitations
in a separate paragraph and clearly labeled
What is a partial disability
inability to perform one or more of the regular duties of ones own occupation or the inability to work on a full time basis
What happens to the premium when the benefit period lengthens in long term care policies
increases
What is an insurance producer
individual licensed under Indiana law to sell, solicit and negotiate insurance
What does genetic information mean
information about genes, gene products, hereditary susceptibility to disease
What is an alien insurer
insurer not located in the US
Adverse Selection
insuring of risks that are more prone to losses than the average risk
What is the insuring clause?
is the basic agreement between the insurer and the insured. it states the insurer's promise to pay the death benefit upon the insured's death.
What is a premium mode
is the manner or frequency that the policyowner pays for the premium,
Is cosmetic surgery covered by medicare
it is not covered by medicare
What is a level benefit payment amount
knowing the exact amount of each payment from annuity
When does an Indiana producers license renewal expire
last day of the birth money
What is the benefit period
length of time over which the monthly disability benefit payments will last for each disability after the elimination period
How long do group plans for short term disability pay
less than 2 years
Key characteristics of whole life insurance
level premium, death benefit, cash value, living benefits
What does the illegal occupation provision state
liability will be denied if the insured is injured while committing an illegal act or occupation
What is whole life insurance?
life insurance that pays a benefit on the death of the insured and also accumulates a cash value.
What are accident only policies
limited policies that provide coverage for death, dismemberment, disability or hospital/ medical care stemming from an accident
What percent of a producers annual commission income in Indiana is controlled business
limited to 25%
What qualifies as a capital amount in accidental death and dismemberment
loss of one limb or loss of sight in one eye
In an annuity what does a longer expectancy mean
lower benefit
What is the unfair competition law
made to identify practices of unfair competition and establish procedures and penalties for violations
What is the consideration clause
makes it clear both parties must give some valuable consideration
What is part B of medicare
medical insurance
What is twisting?
misrepresentation, incomplete or fraudulent comparison of insurance policies that persuades an insured/owner
Legal purpose
must be legal and not against public policy
What is the right to examine provision
must offer a free look period of 10 days
Can any statements made before the contract was written be used to alter the contract?
no
Does a non resident need to do a pre licensing course or exam in Indiana?
no
Does transferring the assignment change the insured or amount of coverage
no
Is a seasonal employee who works 30 hours a week be eligible for coverage under a small employer group health plan
no
When transferring a policy do you need consent of insurer
no but you must notify them by writing
Is the cash value of a variable whole life policy guaranteed?
no, it fluctuates with performance in the portfolio in which policy owners have invested in
how many employees classifies a small employer
not fewer than 2 but not more than 50
What is a major medical expense policy
offer a broad range of coverage under one policy
why is a survivorship life policy typically used
offset the liability of the estate tax
How many accounts does a domestic insurer need
one or more separate accounts
Irrevocable Beneficiary
one that cannot be changed without the beneficiary's consent
When may an HIV related test result be provided to the MIB
only if the individual is not identified
When is policy loan policy allowed
only in policies that contain cash value
Under the common accident provision, how many deductibles are paid
only one for the whole family
What do long term policyholders offer to account for inflation
option of purchasing coverages that raise benefit levels accordingly
Who has all of the rights in an annuity?
owner
Absolute assignment meaning
permanent and total transfer of all policy rights
What is a consultant
person who pays a fee, offers advice, counsel or opinion regarding benefits, advantages or disadvantages
What is a SIMPLE plan
plan available to small businesses that employ no more than 100 employees (Who receive at least $5,000 in compensation)
What is a business overhead expense
policy sold to small business owners who need to meet overhead expenses like rent, utilities and employees salaries
What does a guaranteed renewable health insurance policy allow
policyholder to renew the policy to a stated age (Company can increase premiums on entire class)
What is liquidity
policys cash value can be borrowed against at any time and used for immediate needs
What must all health insurance marketplace plans cover
pregnancy and child birth
What does illustrations refer to in a life insurance policy
presentation of nonguaranteed elements of a policy
When must a long term shoppers guide be presented to the application
prior to the time of the application
In Indiana what are producers licenses renewal dates based on
producers birth month
What does promulgate mean?
promote or make widely known
Purpose of Underwriting
protect the insurer against adverse selection
What is permanent life insurance
protection is life long, includes an investment component
What does rule 24 in Indiana do
protects consumers from unfair solicitations
Why are HMOs unique
provide both financing and patient care for members
Accelerated Benefits Provision
provide for the early payment of some portion of the policy's face amount should the insured suffer from a terminal illness or injury
What is a sircon corporation
provides an efficient way to manage, process and track critical info on insurance companies, agencies and producers
What is residual disability
provides benefits for loss of income when a person returns to work after a total disability but can not work as long or at same level as before
What does the Indiana health coverage program do
provides health benefits to state residents that are aged, disabled or blind
What is a replacing insurance company responsible for
providing a copy of important notice regarding producers responsibility
What is an immediate annuity
purchased with a single lump payment
What is term insurance also known as?
pure life insurance
What is the target premium
recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime
what is the main goal of the HMO act
reduce the cost by utilizing preventative care
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?
reduced to the amount of what the cash value would buy as a single premium
How does medical expense insurance function
reimbursement
what is not provided by health maintenance organizations
reimbursement
What is coercion
require as a condition, a loan that the applicant uses to purchase insurance from a specific insurer
Why are annuities purchased for the most part
retirement income and college education
what is underwriting?
risk selection and classification process; considers the risks that are insurable
What is the interest sensitive whole life premium based off
risk, interest and expense. If values change then premium is lowed or raised.
What did the federal government declare variable contracts as?
securities
What does variable annuity do
serve as a hedge against inflation
How much is a copayment
set dollar amount
What is joint life?
single policy designed to insure 2 or more lives
Who can deduct 100% of the cost of a medical expense plan provided to them and their family
sole proprietors and partners
What is a limited risk policy
specific risks in which accidental death and dismemberment benefits will be paid for
What is the payment of claims provision
specifies who the claims will be paid to
what does a funeral directors license
standard life insurance pre licensing and life producer exam
What is the required minimum distribution
starting at age 72 the owner must receive minimum annual amount
Representations
statements believed to be true to the best of one's knowledge, but they are not guaranteed to be true
What type of risk pays the highest premium
substandard risk
A limited pay policy
suited for those who do not want to be paying premiums beyond a certain point in time
What are social insurance supplements used for
supplement or replace benefits that might be payable under social security disability
What is a rollover
tax free distribution of cash from one retirement plan to another
What is a minimum premium
the amount needed to keep the policy in force for the current year
When does the free look period begin?
the date the policy is delivered to the owner
in a noncontributory group health plan, who pays all of the costs
the employer
What is a contract of adhesion?
the insured must accept the entire contract with all of its terms and conditions (Essentially a take it or leave it contract)
What is the notice of claim provision
the insured must give written notice to the insurer within 20 days after a covered loss occurs
What are the consequences of an incomplete application?
the insurer must return to applicant for completion
Revocable Beneficiary
the policyholder reserves the right to change the beneficiary designation without the beneficiary's consent
Insured's Consideration
the premium and statements on the application
Level premium
the premium that does not change throughout the life of a policy
Insurer's Consideration
the promise to pay for losses
What is a aleatory contract?
there is an exchange of unequal amounts or values. (insurance contacts are aleatory)
How can a retired producer collect commission?
they must maintain their license
What is an unfair trade practice in Indiana
to make any statements that an insurers policies are guaranteed by the existence of the insurance guaranty association
Why are state life and health guaranty associations created
to protect policy owners from insolvent insurers within certain limitations
What does the paid up addition use dividends for
to purchase a smaller amount of the same type of insurance as the original policy
What is a supplementary major medical policy used for
to supplement the coverage payable under a basic medical expense policy
Why was the Indiana department of insurance created
to take charge of the organization, supervision, regulation, examination, rehabilitation and liquidation
What is insurance?
transfers the risk of loss from an individual or business entity to an insurance company, spreads the costs of unexpected losses to many individuals.
What is a family deductible
two or more family members pay a deductible in a given year
What are exclusions
types of risks the policy will not cover
What is the partial disability benefit
typically 50% of the total disability benefit
What is the Indiana licensing process
unless exempt must pass a written exam for the following: -Resident insurer producer - Consultants license - Surplus lines producer
How much can plan participants contribute in a traditional IRA
up to a specified dollar amount or 100% of their salary
When is face amount paid for an annuity
upon the death of the annuitant
What is a payor benefit?
use with juvenile policies. if the payor become disable for 6 months or dies, the insurer will waive the premiums until the minor reaches a certain age such as 21
What do paid up addition dividends do
used to purchase more paid up insurance each year which increases the death benefit
What is the insured called in a viatical statement
viators
under 2 group health plans what does the secondary insurer pay
whatever the first company will not pay
What is a contributory plan
when premiums for group insurance are shared between the employer and employees
What is the annuity period
when sum from accumulation period is being converted into a stream of income payments
When are accelerated benefits received tax free
when the insured is terminally ill
What is interest sensitive whole life?
whole life policy that provides guaranteed benefit to age 100
What does a Universal Life policies allow for policyholders to do
withdraw a limited portion of the policy's cash value. Each withdrawal, however, is usually charged, and the amount and frequency of withdrawals are usually limited.
When do payments start for an immediate annuity
within 1 year of purchase date
How long does a business have to inform the commissioner of a change in business, address, name or email address
within 30 days of the change
When can a Long-Term Care policy deny a claim for losses incurred because of a pre-existing condition?
within 6 months of the effective date of coverage
When must a rollover be completed
within 60 days from time the money is taken out of the first plan
What is a consumer report
written or oral information regarding a consumers credit, character, reputation or habits collected by a reporting agency
What is defamation
written or oral statements that are intended to injure a person in the insurance business
Are premium payments on personally owned disabilities non deductible
yes
Does an applicant have to give consent for an HIV exam
yes
In a traditional IRA can the owner withdraw funds at any time?
yes
does interest sensitive whole life policies have a minimum guaranteed interest rate
yes
Can a producer act as a consultant
yes and accept both a fee and commission for same transaction
are group income premium payments considered tax deductible by the business
yes, as an ordinary business expense
Can a person hold an Indiana resident license and not live in Indiana
yes, as long as they do not hold any resident licenses in any other state
can a producer ask for a request to the CE requirement period
yes, by filling out a form and paying a $25 extension fee
Are contributions to health savings accounts deductible?
yes, even if the taxpayer does not itemize
When selecting a primary care physician in a PPO plan can you choose medical providers not found on the list
yes, they are considered preferred but an insured has the option to visit out of network providers
In Indiana can producers give a small item?
yes, valued at $25 or less
