Maine Insurance - Questions Frequently Missed
How long must an individual's disability be expected to last in order to qualify for Social Security disability benefits?
12 months
What is the maximum annuity benefit liability to the Maine Life and Health Guaranty Association for an individual?
250k
Walt is totally disabled and has applied for Social Security disability benefits. How long must Walt wait to be eligible to receive full Medicare benefits?
29 months
How many days does someone have to send funds to a viator after a beneficiary has been changed due to a settlement contract?
3 business days
A producer or business entity must keep a complete record of all transactions completed under the license at the place of business for at least:
3 years
What is the normal waiting period for premiums to be waived?
3-6 months
How many days does an insurer have to inform the Superintendent of a producer's termination?
30 days
How much time does a person who was a party to a hearing have to appeal the order by the Superintendent?
30 days
How much time does an insurance licensee have to apply a received premium?
30 days
How much time does an insurer have to pay a claim once a proof of loss is verified?
30 days
If an insurance producer, changes their business address, how much time does she have to inform the Superintendent?
30 days
If an insurance producer, changes their business telephone number, how much time does she have to inform the Superintendent?
30 days
What is the maximum life insurance death benefit liability to the Maine Life and Health Guaranty Association for an individual?
300,000
Tim's Toy Shop has gone bankrupt and needs to terminate all employees. Tim informs all employees of their right of conversion under the employer-sponsored group life plan. How many days are Tim's employees allotted to convert their group life coverage to individual coverage?
31 days
How much time does a person who was NOT a party to a hearing have to appeal the order by the Superintendent?
40 days
Which of the following correctly describes the penalty applied to a company for calling a person whose phone number is on the Do Not Call List?
40,000
How long is the waiting period for disability benefits under Social Security?
5 months
What is the maximum civil penalty for an individual convicted of an insurance law violation?
5,000
How much time does a producer who fails to pay their licensing fee have to pay before their license is suspended?
90 days
If an applicant's gross single premium is $2,000 and their net single premium is $1,700, what is the loading?
$300
Diane, an applicant for a life insurance policy, is found to be a substandard risk. The insurer will most likely:
Charge a higher premium
Aviation Clause
Charge higher premiums, insurer will not pay the claim if the insured dies due to involvement with aviation.
How does an insurer verify the personal characteristics of an applicant?
Inspection report
Can an individual who is not currently licensed receive a commission?
No
What is the primary purpose of the Investment Company Act of 1940?
Requires insurer to maintain a separate account for variable investments
Which of the following laws requires sales representatives selling variable products to have a Series 6 license?
Securities Act of 1934
What are the two types of war/military service exclusions?
Status Clause and Results Clause
Military Clause is made up of what clauses:
Status and Results
Beneficiary can be:
Trust, charitable org, institutions, minors, estates or classes of individuals
What is the waiting period for an appointment of an insurer
will file, in a format approved by the Superintendent, a notice of appointment within 15 days from the date the agency contract is executed or the first insurance application is submitted.
Policy Summary
document that lists all details regarding the policy, such as the premium, benefits, cost indexes, etc.
What does Option B do
pays the death benefit and cash value by charging a higher premium to account for the additional cash value that is paid on top of the policy face amount.
Fine for operating without a license
no less than $100 and no more than $1000 or 6 months of prison
Civil penalty amounts for individual
no less than $500 and no more than $5,000
The Superintendent may not issue a license to a person whose license has been revoked for at least:
1 year
Unfair Solicitation Methods:
1. Cold Lead advertising 2. schedule an appointment for medicare and intend to sell life insurance, health or annuity 3. Solicit the sales of medicare products door to door
Superintendent may suspend/revoke license for the following:
1. Providing incorrect/misleading info in app 2. violating insurance laws 3. obtaining license through misrepresentation 4. improperly witholding, misappropriating or converting held money 5. intentionally misrepresenting info on app 6. being convicted of criminal offense 7. Unfair trade practice or fraud 8. dishonest practices 9. Having insurance license supsended in different state 10 . Forging another's name 11. Improperly using notes 12. knowingly accepting insurance business from individual that is unlicensed 13. Failing to pay state income tax *applicant may make written demand within 30 days before a hearing.. hearing must be held within 30 days after
Limited licenses can be issued to the following:
1. credit 2. travel accident and baggage contracts 3. title insurance contracts 4. auto mechnical breakdown contracts 5. insurance sold in connection with rental car (no more than 60 days)
License requirements for business entities
1. life and health 2. accident and health 3. property insurance 4. casualty insurance 5. variable life 6. personal lines property 7. credit limited line 8. auto mechanical breakdown 9. insurance associated with rental cars
Exemption from licensing exam exists for the following people:
1. someone who held similar license in maine (not temp) within the past 2 years 2. limited insurance producer or baggage insurance 3. applicant for residence producer who is an attorney of law 4. limited insurance producer who sells mechanical breakdown insurance 5. applicant for limited license involved in a motor vehicle rental company
Temporary licenses can be issued to the following:
1. surviving spouse of licensed producer who dies or becomes mentally/physically ill 2. member or employee of business entity that is licensed as producer 3. Designee of insurance producer that is entering the armed forces or active service 4. any other situation where public interest warrants and will be best served
How much time does someone have to return a new life insurance policy for a full refund?
10 days
After a settlement contract payment is received, the viator has the right to rescind the contract before
15 days
Within how many days after informing the Superintendent of a producer's termination does the insurer have to inform the producer?
15 days
At what age may a minor purchase a life or health insurance contract?
15 years old
What is the maximum civil penalty for a corporation convicted of an insurance law violation?
15,000
As a prerequisite to maintaining a license, licensees must complete a continuing education requirement every:
2 years
How long is the loan period on STOLI arrangements?
2 years
If Jerry's insurance producer's license expires, how much time does he have to be reinstated without retaking the Maine insurance licensing examination?
2 years
In most states, the period of contestability for material misrepresentations made on a life insurance application is:
2 years
How much time does an insured normally have to file a notice of claim with their insurer after a health occurrence?
20 days
What is the minimum civil penalty for a corporation convicted of an insurance law violation?
2000
After a settlement contract is executed by all parties, the viator has the right to rescind the contract before:
30 days
What is the maximum major medical insurance liability to the Maine Life and Health Guaranty Association for an individual?
500,000
How many months can a life insurance policy be backdated?
6 months
If the Superintendent fails to act, how much time does someone have to file an appeal?
6 months
What is the maximum prison sentence for someone who continues to be involved in the insurance business after their insurance producer license has been suspended?
6 months
Jacob has been insured under his employer-sponsored group life insurance plan for seven years. He becomes totally disabled upon termination of his group coverage. Which of the following is true?
6 months allowed for continuation of group coverage
After a surviving spouse is in their blackout period, the earliest age they can begin to receive survivors benefits is:
60
Conversion from a group policy to an individual policy must be made within a maximum of how many days of termination from the group coverage?
60 days
What is the earliest age at which an individual can begin to receive Social Security retirement benefits?
62
During which annuity phase is the annuitant's age important?
Annuity Phase
Misrepresentation examples:
Any statement representing a health discount plan (HMO) as a form of insurance is a misrepresentation. Relating only the benefits and not including a description of conditions or limitations is misrepresenting the policy. Suggesting a policy is better suited for a prospective applicant than the facts would indicate to a reasonable person is misrepresentation.
All of the following are contained in the policy summary, EXCEPT:
Beneficiary Designations
foreign Insurer from different state has to hold what to transact insurance in foreign state?
Certificate of Authority or maintains adequate reserves of assets and liabilities
Common Disaster Clause
Clause protects the contingent beneficiaries' rights by stipulating a certain number of days the primary beneficiary must outlive the insured after a common accident causing near-simultaneous death in order for the primary beneficiary to receive the policy proceeds. *Beneficiary must outlive insured by 15-30 days
When the extended term option is used, the face amount is:
Equal to prior face amount
Which of the following best describes option 1 under a universal life policy?
Death Benefit is a designated amount specified by the policy owner
Buyers Guide
Document produced by the NAIC. It provides information that allows prospective purchasers a way to compare several types of insurance policies - must be delivered to applicant at the time of application (at latest)
What nonforfeiture option permits the policyowner to use the cash values to purchase paid-up term life insurance coverage?
Extended
What part of a mortgage reduction policy decreases over time?
Face Amount
Transfer of Value Rule
If a life insurance policy is assigned for valuable consideration and the insured under the life insurance policy dies, the new owner of the policy will be responsible for paying taxes on the amount of proceeds paid (including premiums that were paid by the original owner) that exceed the valuable consideration. - exceptions - transfers to the insured, transfers to ao business partner or to a corp where insured is a stockholder
Uniform Simultaneous Death Act
If the insured and the primary beneficiary are killed at the same time due to a common accident and there is no conclusive evidence as to who died first, the policy proceeds will be paid as if the primary beneficiary died first, in which case the policy proceeds are paid to the contingent beneficiaries or to the insured's estate.
Which of the following best describes the term, net single premium?
Mortality-Interest
Status Clause
Insurer will not play the claims if the insured dies while in active military service
who is the MIB intended to protect:
Insurers from misrepresentation and fraud
Which report may contain information gathered through interviews with friends and neighbors, employers and coworkers, who know the insured?
Investigative Report
Which of the following is not true about the family income policy?
It is issued on entire family A: It is only issued on family bread winner
Sam submits an application with initial premium for a life insurance policy on July 6th. The agent issues Sam a conditional receipt at this time. Sam takes the required medical exam on July 10th. The insurer approves the policy on August 1st, and the agent delivers the policy to Sam on August 10th. Which day did Sam's coverage begin?
July 10
WHt does HIPAA do with living benefits?
Makes sure proceeds are exempt from federal income tax in accelerated benefits and viatical settlements
Written Notice of Hearing
Minimum of 14 days unless different period is expressively provided
Who produces the buyers guide and what is it used for?
NAIC, It provides information that allows prospective purchasers a way to compare several types of insurance policies.
A producer must give a client during a replacement a
Notice to Applicant Regarding Replacement of Life Insurance
What must be offered in lue of an HIV test?
Post test counseling
What is the surrender cost index for a life insurance policy?
The cash value of a life insurance policy at a given time
What is the net payment index for a life insurance policy?
The cost of the policy based on amount of premium and frequency of payment
Results Clause
Will not pay the claim if dies due to an act of war
ABC Insurer sells a $500,000 single premium immediate annuity to four different people. Who receives the largest check?
oldest man - 60 year old male
What is the name of the document that describes investments, charges and policy features of a variable life contract, which must be provided to applicants upon policy application?
prospectus
Cost Index
provides a means of comparing the true cost of life insurance policies.