Life and Health Insurance State Exam Stimulator questions (#3)

Which of the following is NOT required in the Outline of Coverage for a health insurance policy?

Projection of the policy's future costs

What is the consideration given by an insurer in the Consideration clause of a life policy?

Promise to pay a death benefit to a named beneficiary

When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits?

Recurrent Disability

The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called:

Reinstatement

J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?

Reinstatement provision

A producer who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out has committed:

twisting

A life insurance policy that provides a policy owner with cash value along with a level face amount is called:

whole life

according to the affordable care act (aca) a dependent child's eligibility is based on:

age

Group life insurance policies are generally written as

annually renewable term

Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate for the overall risk class?

Guaranteed Renewable

K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered

Guaranteed renewable

Which of the following types of organizations are prepaid group health plans, where members pay in advance for the services of participating physicians and hospitals that have agreements?

HMO

Insurance contracts are known as because certain future conditions or acts must occur before any claims can be paid

conditional

A ____ sells insurance advice for a fee

consultant

A prospective insured completes and signs an application for health insurance but intentionally conceals information about a pre-existing heart condition. The company issues the policy. Two months later, the insured suffers a heart attack and submits a claim. While processing the claim, the company discovers the pre-existing condition. In this situation, the company will

continue coverage but exclude the heart condition

S is the policyowner of a Major Medical policy. The premiums are paid monthly and due on the 1st of each month. S fails to make September's payment and is hospitalized October 15th. When S files the claim for this hospitalization, the insurer will likely:

deny the claim

A business entity acting as an insurance producer MUST:

designate at least one licensed producer to be responsible for the entity's compliance with the insurance laws and rules

All of these are characteristics of an Adjustable Life policy EXCEPT

face amount can be adjusted using policy dividends

T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this?

renewable

The free look period for life insurance policies issued in Indiana is ___ days

10

An insurer must provide an insured with claim forms within __ days after receiving notice of a loss.

15

According to Indiana Law, how long can statements made by an Applicant on a Health insurance policy be contested?

2 years

If a new life insurance policy is replacing an existing one, the insured is given the right to return for a full refund at least ____ days after policy delivery.

20

An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?

20% is withheld for income taxes

According to Indiana law, how long is the right of return for a Long Term Care policy?

30 days

According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid?

31 days

V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable?

4 months

Which statment is TRUE regarding a Variable Whole Life policy?

A minimum guaranteed death benefit is provided

Which of the following statements about noncontributory employee group life insurance is FALSE?

A minimum number of employees is required to participate

Which provision is NOT a requirement in a group life policy?

Accidental

Which of the following actions does the Insurance Commissioner NOT have the power to conduct?

Activate insurance companies' financial reserves

A "reimbursement policy" pays what amount of covered Long-Term Care expenses?

Actual covered expenses up to the daily maximum

A domestic insurance company in Indiana MUST

Be incorporated and formed in Indiana

M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate?

Earned, but unpaid benefits

In a Disability Income policy, which of these clauses acts as a deductible?

Elimination period

Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance?

Entire cash surrender value is taxable

At the age of 45, an individual withdraws $50,000 from his Qualified Profit-Sharing Plan and then deposits this amount into a personal savings account. This action would result in:

Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan

Which of these actions should a producer take when submitting an insurance application to an insurer?

Inform insurer of relevant information not included on the application

Who makes the legally enforceable promises in a unilateral contract?

Insurance company

What is being delivered during a policy delivery?

Insurance contract to the proposed insured

In a Key Employee life insurance policy, the third-party owner cna be all the following except:

Insured

How are policyowner dividends treated in regards to income tax?

Interest on accumulations is taxed

Which statement regarding third-party ownership of a life insurance policy is true?

It is used extensively in estate-planning as well as business circumstances

Which of the following actions may NOT be taken by an insurance company to insure a substandard applicant for disability income coverage?

Lengthen the contestability period

Which of these is NOT an example of Nonforfeiture option?

Life income

C is the policyowner of a comprehensive individual major medical policy. C pays an annual premium which is due September 1. If C forgets to pay the premium and is hospitalized September 10, how will the insurer handle this claim?

Pay the claim in full minus the premium due

A provision in a life insurance policy that pays the policy owner an amount that does not surpass the guaranteed cash value:

Policy Loan provision

Which of the following actions is NOT possible with a Universal Life policy?

Premiums may be applied as a credit against income tax

Post dollar contributions are found in

Roth IRA investments

What is the underlying concept regarding level premiums?

The early years is charged more than what is needed

In order for a domestic, foreign, or alien insurance company to conduct business, it must be authorized by whom?

The state where they are conducting business

A Nonforfeiture clause gives the policyowner

guaranteed values even if the policy has lapsed

A medical care provider which typically delivers health services at its own local medical facility is known as a

health maintenance organization

Which of the following actions require a policy owner to provide proof of insurability in an Adjustable Life policy?

increase face amount

Which of these types of coverage is best described as a short term medical policy?

interim coverage