Life, Health insurance exam study guide

Social Security Supplement (SIS) or Social Security Riders would provide for the payment of income benefits in each of the situations below EXCEPT

When the amount payable under Social Security is more than the amount payable under the rider.

An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true?

The insured was in compliance with the policy requirements regarding claims.

A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

The insured's premiums will be waived until she is 21.

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to

The insured.

Under a SIMPLE plan, which of the following is TRUE regarding taxation on both contributions and earnings?

They are tax deferred on both contributions and earnings until funds are withdrawn.

A life insurance policy has a legal purpose if both of which of the following elements exist?

insurable interest and consent. To ensure legal purpose of a life insurance policy, it must have both insurable interest and consent.

the sole beneficiary of a life insurance policy dies before the insured. If the policyowner fails to change the beneficiary before the insured's death, the proceeds of the policy will go to

the insureds estate

Who is responsible for the contents of life insurance advertising?

the insurer

Which of the following will vary the length of the grace period in health insurance policies?

the mode of the premium payment

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to

spouse of the insured

Once the person meets the stringent requirements for disability benefits under Social Security, how long is the waiting period before any benefits will be paid?

5 months

An insured has a primary group health plan and an excess plan, each covering losses up to $10,000. The insured suffered a loss of $15,000. Disregarding any copayments or deductibles, how much will the excess plan pay?

$5,000

L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay?

$900 (deductible + 20% of the bill after the deductible [20% of $2,000])

In any case where there is a controversy or dispute between the insurance company and the insured, the soliciting agent is the agent of the

..Company.

Existing insurers must provide policyowners with a policy summary for the existing life insurance within how many days of receiving the written communication and replacement?

10

What percentage of a company's employees must take part in a non-contributory group life plan?

100%

Insurers must keep files of all advertisements used in Georgia for how many years?

4 years

Which of the following policy components contains the company's promise to pay?

Insuring clause

The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the

Insuring clause.

What is the main purpose of the Seven-pay Test?

It determines if the insurance policy is an MEC. "The Seven-pay Test determines whether an insurance policy is "over-funded" or if it's a Modified Endowment Contract. In other words, the cumulative premiums paid during the first seven years of a policy must not exceed the total amount of net level premiums that would be required to pay the policy up using guaranteed mortality costs and interest."

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.

A brain surgeon has an accident and develops tremors in her right arm. Which disability income policy definition of total disability will cover her for all losses?

"Own occupation" - less restrictive than other definitions (In theory, the brain surgeon could find other work, but because her disability income policy specifies that she is covered for her own occupation, she would be wholly covered.)

If a person is compensated for a testimonial in an advertisement, which of the following statements should be included in the advertisement?

"Paid endorsement"

Which of the following is the closest term to an authorized insurer

Admitted

Following an injury, a policyowner covered under Medicare Parts A & B was treated by her physician on an outpatient basis. How much of her doctor's bill will she be required to pay out-of-pocket?

20% of covered charges above the deductible "After the deductible, Part B will pay 80% of covered expenses, subject to Medicare's standards for reasonable charges."

According to the Entire Contract provision, a policy must contain

A copy of the original application for insurance.

Which of the following would be an example of a limited accident and health insurance policy?

A dread disease policy

Who is a third-party owner?

A policyowner who is not the insured

Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain

A statement that is sufficiently clear to identify the insured and the nature of the claim

Insurers or agents soliciting partnership policies must provide each prospective applicant with all of the following EXCEPT

A statement that the insured does not automatically qualify for Medicare Part A.

If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following?

Adjust the benefit in accordance with the increased risk.

Group health insurance is characterized by all of the following EXCEPT

Adverse selection. "If an insurer issues a group health insurance policy, they must cover everyone in the group under the master contract. Group underwriting process is designed to avoid adverse selection."

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

Aleatory "In an aleatory contract, unequal amounts are exchanged between payments and benefits. In this instance, the insured receives a large benefit for a small price."

The death protection component of a universal life policy is expressed as what type of coverage?

Annually renewable term

An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change?

Applicant

What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided?

Application

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?

As of the application date

Which of the following entities has the authority to make changes to an insurance policy?

Insurer's executive officer

Kevin and Nancy are married; Kevin is the primary breadwinner and has a health insurance policy that covers both him and his wife. Nancy has an illness that requires significant medical attention. Kevin and Nancy decide to legally separate, which means that Nancy will no longer be eligible for health insurance coverage under Kevin. Which of the following options would be best for Nancy at this point?

COBRA "Dependents of employees are eligible to receive group health insurance under the employee's plan. If the employee and the dependent become legally separated or divorced, or if the employee dies, the dependent will be eligible for COBRA benefits for up to 36 months. This is best for Nancy, since she has endured a long-term illness. Otherwise, being approved for individual health insurance would be difficult."

Which of the following would be considered a violation of life insurance advertising regulations?

Calling a variable insurance policy an investment plan

Which of the following must an insurer obtain in order to transact insurance within a given state?

Certificate of authority

When delivering a policy, which of the following is an agent's responsibility?

Collect payment at time of delivery (if payment has not already been collected)

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the

Consideration Clause. "The consideration clause specifies that both parties to the contract must give some valuable consideration. The payment of the premium is the consideration given by the applicant. Because the applicant had not paid an initial premium, she is not covered by insurance."

Which of the following terms describes a specific dollar amount of the cost of care that must be paid by the member?

Copayment

Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance?

Defamation

Insurers must screen all marketing plans to ensure that an advertisement does NOT use as the name of any kind of an annuity contract any phrase that

Does not include the word "annuity" unless accompanied by other clear language indicating it is an annuity.

What is the goal of the HMO?

Early detection through regular checkups (The goal of the HMO is early detection so members are encouraged to participate in regular checkups. In this way the HMO hopes to catch disease in its earliest stages when treatment has the greatest chance for success.)

In disability income insurance, the time between the onset of an injury or sickness and when benefits begin is known as the

Elimination period.

Once an agent has met the requirements to sell long-term care insurance partnership policies, how often must the agent complete the 4 hours of ongoing training courses?

Every 24 months

If an insured is not required to pay a deductible, what kind of coverage does he/she have?

First dollar

Life insurance death proceeds are

Generally not taxed as income.

The automatic premium loan provision is activated at the end of the

Grace period.

What are the 2 types of Flexible Spending Accounts?

Health Care Accounts and Dependent Care Accounts

Which of the following riders would NOT increase the premium for a policyowner?

Impairment rider (The impairment rider excludes a specified condition from coverage, therefore, reducing benefits. An insurance company will not charge extra for a rider that reduces benefits.

what is an important feature of a dental expense insurance plan that is not typically found in a medical expense insurance plan?

Inclusion of diagnostic and preventative care

Annually renewable term policies provide a level death benefit for a premium that

Increases annually.

All of the following are differences between individual and group health insurance EXCEPT

Individual insurance does not require medical examinations, while group insurance does require medical examinations.

Underwriting a group health insurance plan that is paid for by the employer requires all of the following EXCEPT

Individual members of the group may select the level of benefits for their own coverage.

Which of the following is true about the premium on the children rider in a life insurance policy

It remains the same no matter how many children are added to policy

Which of the following statements is true concerning the accidental death rider?

It will pay 2 or 3 times the face amount if death is the result of an accident and occurs within 90 days of such an accident.

A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?

Level term

Which of the following best describes the unfair trade practice of defamation?

Making derogatory oral statements about another insurer's financial condition

Which of the following statements is NOT correct?

Medicare Advantage must be provided through HMOs. (Medicare Part A provides hospital care; Medicare Part B provides doctors and physician services, and Medicare Advantage (previously Medicare+Choice) offers expanded benefits for a fee through private health insurance programs such as HMOs and PPOs.)

An agent commingled $300 of insurance premiums collected with new applications with his personal funds. The agent could be found guilty of a

Misdemeanor. (Any willful violation will be considered a misdemeanor unless the amount involved exceeds $500, in which case the violation will be considered a felony.)

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report

Must be informed of the source of the report.

An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point?

Neither approved the application nor issued the policy

The coverage provided by a Disability Income policy that does not pay benefits for losses occurring as the result of the insured's employment is called:

Non-occupational coverage

Qualifications for soliciting, selling or negotiating a long-term care partnership policy include all of the following EXCEPT

Obtaining a partnership policy license from the Commissioner.

An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A and Part B. What is the insurance company obligated to do?

Offer the supplement policy on a guaranteed issue basis

What is the major difference between a stock company and a mutual company?

Ownership (Mutual companies are owned by policyholders, while stock companies are owned by stockholders.)

An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would

Pay the claim.

An insured purchased a life policy in 2010 and died in 2017. The insurance company discovers at that time that the insured had concealed information during the application process. What can they do?

Pay the death benefit

Which of the following is another term for the accumulation period of an annuity?

Pay-in period

A guaranteed renewable health insurance policy allows the

Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.

Who might receive dividends from a mutual insurer?

Policyholders

woman obtains health coverage through the Marketplace on October 1. Two weeks later she finds out that she is 3 months pregnant. Which of the following is true about coverage for pregnancy?

Pregnancy will be covered immediately

In which of the following instances would the premium be tax deductible?

Premiums paid by an employer on a $30,000 group term life insurance plan for employees "As a general rule, premiums paid for life insurance are not tax deductible. The exception to this rule is when an employer buys group term life insurance for his employees since it is considered a business expense."

The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

Reduction of premium

Who elects the Commissioner of Insurance to office?

Registered voters

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy

Required a premium increase each renewal.

Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application?

Return the application to the applicant for completion

Long-term care insurance does NOT provide coverage for

Services provided in an acute care unit of a hospital. "Long-term care insurance provides coverage for1 or more necessary, diagnostic, preventive, therapeutic, rehabilitative, maintenance or personal care services. Care must be given in a setting other than an acute care unit of a hospital."

Which of the following statements about a suicide clause in a life insurance policy is true?

Suicide is excluded for a specific period of years and covered thereafter.

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as

Survivor Protection

Which statement accurately describes group disability income insurance?

The extent of benefits is determined by the insured's income

Your client wants to know what the tax implications are for contributions to a Health Savings Account. You should advise her that the contributions are

Tax deductible.

If the Commissioner is not able to serve due to disability, resignation, or death, which of the following will happen?

The Chief Deputy Commissioner will serve as the Commissioner until the next election.

When an insured under a life insurance policy died, the designate beneficiary received the face amount of the policy as well as a refund of all the premiums paid. Which rider is attached to the policy?

The Return of Premium ( Rider pays the beneficiary not only the face amount of the policy but also the amount that had been paid in premiums. The rider stipulates that death must occur prior to a certain age in order for the premium amount to be returned. The Return of Premium Rider is funded by using increasing term insurance.)

A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid?

The benefits will be coordinated.

Which of the following is true regarding elimination periods and the cost of coverage?

The longer the elimination period, the lower the cost of coverage

Which of the following statements regarding the Change of Beneficiaries Provision is false?

The policyowner has the right to change beneficiaries in any case.

Under an extended term nonforfeiture option, the policy cash value is converted to

The same face amount as in the whole life policy

Which of the following is NOT true of life settlements?

The seller must be terminally ill.

In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT

The type of investment.

Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner?

Third-party ownership

Which provision states that the insurance company must pay Medical Expense claims immediately?

Time of Payment of Claims (The Time Payment of Claims provision requires that claims will be paid immediately upon receipt of proofs of loss except for periodic payments, which are to be paid as specified in the policy.)

What is the purpose of a fixed-period settlement option?

To provide a guaranteed income for a certain amount of time

When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees

To renew the policy until the insured has reached age 65.

What is the primary purpose of disability income insurance?

To replace income lost due to a disability

A medical expense policy establishes amount of benefit paid based on charges which fall within standard range of fees for a specific procedure by a doctor in that geographic area is known as

Usual, customary and reasonable. (The usual, customary and reasonable approach for determining insurance benefits is based upon the fees normally charged for specific procedures in the geographic location where the services are provided.)

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of premium.

All of the following benefits are available under Social Security EXCEPT

Welfare Benefits (Social Security provides death benefits, old-age or retirement benefits and disability benefits to eligible workers. Social Security is an entitlement program, not a welfare program.)

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

When would a 20-pay whole life policy endow?

When the insured reaches 100

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant

With the policy.

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant

With the policy. "If a life insurance policy contains a free-look period of at least 10 days, the buyer's guide can be delivered with the policy. If it doesn't, the buyer's guide must be delivered prior to accepting the initial premium."

A claimant wants to bring a recovery action against an insurance company for a loss claimed under a policy. The action must be brought

Within 3 years.

ow soon following the occurrence of a covered loss, or after the insurer becomes liable for periodic payments for income benefits, must an insured submit written proof of such loss to the insurance company?

Within 90 days or as soon as reasonably possible but not to exceed one year.

what is the maximum period of time during which an insurer may contest fraudulent and misstatements made in the health insurance application

as long as the policy is in force

under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?

cash surrender

What policy component must decrease in decreasing term insurance?

face amount

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?

foreign

What required provision protects against unintentional policy lapse?

grace period

A Medicare supplement plan must have at least which of the following renewal provisions?

guaranteed renewable

The expense of an autopsy covered under the physical exam and autopsy provision is paid by

insurer

ho must pay for the cost of a medical examination required in the process of underwriting?

insurer

which is true regarding HMO coverage

it is divided into geographic territories

which of the following terms means a result of calculation based on the average number of month the insured is projected to live due to medical history and mortality factors?

life expectancy

he dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the

one-year term option

Underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT

premiums always stay the same

Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?

presumptive disability

Respite care is best defined as:

relief of major care giver

What type of whole life insurance policy generates immediate cash value?

single premium whole life

which of the following is TRUE about nonforfeiture values?

they are required by state law to be included in the policy

what kind of policy allows withdrawals or partial surrenders

universal life

Which of the following policies would be classified as a traditional level premium contract?

Straight Life

An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?

The old policy should stay in force until the new policy is issued.

What is the benefit of choosing extended term as a nonforfeiture option?

It has the highest amount of insurance protection. (Under this option the insurer uses the policy cash value to convert to term insurance for the same face amount as the former permanent policy. The duration of the new term coverage lasts for as long a period as the amount of cash value will purchase.)

A small hardware store owner is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability?

Business overhead expense policy (Business Overhead Expense (BOE) insurance is sold to small business owners for the purpose of reimbursing the policyholder for various business overhead expenses during a period of total disability. Expenses such as rent, utilities, and employee salaries are covered.)

Which of the following best describes annually renewable term insurance?

It is level term insurance.

Individual and group accident and sickness policies that cover what kinds of losses must also provide for newborns, from the moment of birth, with all health insurance benefits applicable to children?

Losses that happen to family members

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?

$100,000 (not the triple amount - the triple indemnity rider was voided bc he caused the accident)

A client has a new individual disability income policy with a 20-day probationary period and a 30-day elimination period. Ten days later, the client breaks their leg and is off work for 45 days. How many days of disability benefits will the policy pay?

15 days (A probationary period refers to the amount of time that coverage is not available for illness-related disabilities, so it would not apply to a broken leg. The elimination period, however, is the time that must elapse between the onset of the disability and when benefits will start being paid. In this case, the individual is considered disabled for 45 days, and the benefits will start to be paid after 30 days. So, the client will receive benefits for 15 days.)

The sole proprietor of a business makes a total salary of $50,000 a year. This year, his medical expenses have reached a total of $75,000. What amount may the dolls proprietor deduct in regards to his medical expenses?

50,000

What is the waiting period on a Waiver of Premium rider in life insurance policies?

6 months

Once an individual is licensed as an insurance producer for life or accident and health insurance, how many hours of training must the producer complete initially to sell long-term care insurance partnership policy?

8 hours

An agent is acting ethically in all of the following situations EXCEPT

Always representing the insured. (An agent will always be deemed to represent the insurer, not the insured. If an agent is working within the conditions of the contract, the insurance company is fully responsible for his/her actions. However, when making a sale, the agent should keep the customers' best interest in mind.)

Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?

Apparent (Apparent authority (also known as perceived authority) is the appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.)

Whenever agents submit applications to insurers, they must also submit statements disclosing whether or not replacement is involved. Who must sign these statements?

Applicant and agent

All of the following are true of the federal tax advantages of a qualified plan EXCEPT:

At distribution, all amounts received by the employee are free of taxes.

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the

Consideration Clause. (The consideration clause specifies that both parties to the contract must give some valuable consideration. The payment of the premium is the consideration given by the applicant. Because the applicant had not paid an initial premium, she is not covered by insurance.)

Which of the following is NOT an example of insurable interest?

Debtor in creditor

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

Other than for a qualified life event, when can a change be made in benefits for a Flexible Spending Account (FSA)?

During the open enrollment period

When a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has a face amount

Equal to the original policy for as long a period of time that the cash values will purchase.

An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)

Equity Indexed Annuity.

Todd has been informed that he has a hernia which requires repair. When Todd researches the cost, he learns that his insurance plan will cover 200 points worth of surgical expenses. Each point represents $10, which means that $2000 of his surgery will be covered by his insurance plan. What system is Todd's insurance company using?

Relative value (In a relative-value approach, a surgical procedure is assigned an amount of points relative to the maximum coverage allowed for a given surgery.)

An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?

Revocable

The legal process that gives the insurer, after payment of a loss, the right to seek recovery from a third party that was responsible for the loss is known as

Subrogation (Subrogation is a provision found in most insurance policies that gives the insurer, after payment of a loss caused by a third party, the insured's rights to recovery against that third party. The insurer's rights are only to the extent of the loss payment.)

In a life settlement contract, whom does the life settlement broker represent?

The owner

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT

Unearned premiums are retained by the insurance company. (This rider allows the insurer to cancel the policy at any time, or at the end of the policy period. Any unearned premium must be returned to the policyholder. If the insurer cancels, the unearned premium will be returned on a pro rata basis.)

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral

An insured under a life insurance policy has been diagnosed with a terminal illness and has 6 months to live. The insured knows that his financial state will worsen even more with the upcoming medical expenses. What option could the insured utilize?

Viatical settlement (A viatical statement allows an insured with a life-threatening condition to sell the existing policy in order to receive benefits when they are most needed. Viators typically receive a percentage of the policy's face value from the person who purchases the policy.)

long term care policies as the benefit period lengthens, the premium

increases

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

Pay the policy proceeds only if it would have issued the policy.

All of the following are characteristics of group life insurance EXCEPT

Premiums are determined by the age, sex and occupation of each individual certificate holder.

A nonresident agent is allowed to conduct insurance transactions in Georgia because his home state allows Georgia residents to transact insurance business in it. This is known as a/n

Reciprocity agreement.

Nonforfeiture values guarantee which of the following for the policyowner?

That the cash value will not be lost

Which of the following is true about the requirements regarding HIV exams?

The applicant must give prior informed written consent.

Which of the following is NOT the consideration in a policy?

The application given to a prospective insured

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?

The beneficiary will only receive payments of the interest earned on the death benefit.

When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled?

The insurer is considered to be notified since the notification to agent equals notification to the insurer.

Hospital indemnity hospital confinement indemnity policy will provide payments based on

The number of days confined to a hospital

In life insurance policies, cash value increases

Grow tax deferred Generally life insurance cash values are only income taxed if the policy is surrendered (totally or partially) and the cash value exceeds the premiums paid.

Which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members?

Term Rider

What is the period of coverage for events such as death or divorce under COBRA?

36 months

Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray?

50/50 (After the deductible has been paid, the insurance company will pay a specified amount for a physician's visit, while the insured pays the remaining percentage. This is called "coinsurance". Plans will often be listed in a fraction format, with the first number representing the amount that will be paid by the insurer. The less the insurer must pay with coinsurance payments, the lower the premiums will be. Therefore, Ray should choose the 50/50 plan.)

The purpose of managed care health insurance plans is to

Control health insurance claims expenses

All of the following are true about group disability Income insurance EXCEPT

Coverage applies both on and off the job.

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

Fixed period (Under the fixed-period installments option (also called period certain), a specified period of years is selected, and equal installments are paid to the recipient. The payments will continue for the specified period even if the recipient dies before the end of that period.)

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

Insuring clause

Why is an equity indexed annuity considered to be a fixed annuity?

It has a guaranteed minimum interest rate (While equity indexed annuities earn higher interest rates than fixed annuities, both types of annuities guarantee a specific minimum interest rate.)

Which statement about the reinstatement provision is true

It requires the policyholder to pay, with interest, all the premiums that are in arrears in order for the policy to be reinstated

Which of the following statements is TRUE about a policy assignment?

It transfers rights of ownership from the owner to another person. (The policyowner may assign a part of the policy (collateral assignment) or the entire policy (absolute assignment).