MN Accident, Health, & Life Licensing

If an insurer receives a notice of claim, it must supply a claim form to the insured within:

15 days. If it fails to do so, the claimant may submit proof of loss in any form so long as it explains the occurrence, character, and extent of the loss for which the claim is submitted.

If an individual's group life insurance has been terminated, he or she may apply for an individual policy within how many days after termination?

31 days.

An individual life insurance policy CANNOT be backdated more than how many months before the original application for insurance was made?

6 months

All producers' financial records must be maintained for at least:

6 years

All accident and health insurance policies must be filed with the Commissioner at least how long before they can be used?

60 days. All accident and health insurance policies issued or delivered in Minnesota and all related applications, riders, endorsements, classifications of risk and premium rates must be filed with the Commissioner at least 60 days before they can be used.

Which of the following is a required provision in all individual life insurance policies? A) Notice of claim. B) Open enrollment. C) Reinstatement. D) Conversion.

All individual life insurance policies must include a reinstatement provision stating that if the policyowner defaults on premium payments, the value of the policy can be applied to purchase other insurance. If the insurance is in force and the original policy has not been canceled or surrendered to the company, the policy can be reinstated within three years of default. Satisfactory evidence of insurance must be provided; back payment of premiums with interest and payment of any other indebtedness to the company must be made.

How many members must be eligible for insurance under an association group life policy?

All members or any class of members of an association must be eligible for insurance under an association group policy.

The delayed payment provision in a whole life policy provides that:

Although it is rarely used, the delayed payment provision enables the insurer to postpone payment of the cash surrender value for six months after the policyowner requests payment.

Tom has a $50,000 whole life policy. If he continued to pay the required premiums and lived to age 100, he would receive:

By design, a whole life policy endows for its face amount at age 100. That means that when the policyowner is 100 years old, the cash value of the policy equals the face amount of the policy. At that point, the insurance is canceled, and the insured receives the face amount as an endowment.

A cancelable policy is one that the insurer can...

Cancel at any time and for any reason. Clearly, this type of policy is most beneficial to the insurer, not the insured

All of the following statements about health service plan corporations are correct EXCEPT: A) all persons acting as agents for a service plan corporation must be licensed. B) they are nonprofit corporations. C) they must hold a certificate of authority. D) they contract for health and life insurance for subscribers

D) they contract for health and life insurance for subscribers.

Which of the following is an optional provision in an individual accident and health insurance policy? A) Reinstatement. B) Time limit on defenses. C) Change of beneficiary. D) Misstatement of age.

Individual accident and health insurance policies must contain provisions for reinstatement, time limit on defenses, and change of beneficiary. A misstatement of age provision is optional. However, if it is included in a policy, the Commissioner must approve the wording.

Credit life insurance, credit accident and health insurance, and credit involuntary unemployment insurance can be issued in all of the following forms EXCEPT:

Individual life, accident and health insurance issued to debtors, as well as group life issued to creditors are acceptable forms. A group accident and health insurance policy issued to a creditor on a term plan would be another acceptable form.

All of the following are required provisions in health insurance policies EXCEPT: A) notice of claim. B) change of occupation. C) grace period. D) entire contract.

The change of occupation provision in health insurance is an optional provision. Nevertheless, many insurers include this provision in their disability income policies because an individual's occupation has a direct bearing on her risk profile, which directly affects the premium

A company is interested in providing a group health insurance plan for its employees. An insurer will require that the company meet all of the following requirements in order to be eligible for insurance EXCEPT: A) all employees must be part of a natural group. B) all employees must be in good health. C) the employee group must be made up of at least 10 persons. D) specified groups of persons can be excluded from the plan.

The correct answer was: all employees must be in good health. It is not necessary for all members of the group to be in good health for the employer to be eligible for group insurance. With many policies today, ineligible employees may be rated or excluded. The group size typically can be no smaller than 10 employees. Most employee groups qualify as natural groups, and specified groups, such as management, can be excluded.

The death benefit proceeds of a life insurance policy are protected from the beneficiary's creditors unless:

The spendthrift clause is designed to protect the proceeds of a life insurance policy from the beneficiary's spending habits and creditors. When this clause is included in the policy, the creditors cannot attach the death benefit proceeds before they are made to the beneficiary. Once the beneficiary has received the proceeds, however, the creditors can take steps to attach those proceeds. Since a lump sum settlement would immediately place all of the proceeds in the beneficiary's possession, the proceeds would not be protected from the beneficiary's creditors.

If an insured does not exercise the option to increase coverage under a guaranteed insurability rider, what is the result?

When no purchase is made under a guaranteed insurability option, the option for that particular age expires automatically. There is no change in the underlying policy. Normally, the insured will have 90 days in which to exercise an optional purchase.

If an insurer employs unlicensed producers, the Commissioner can assess what penalty?

a $25 penalty for each policy sold by the producer, up to $300 per producer for all offenses

Once a policy becomes a MEC, it cannot lose that status. As such, pre-death distributions are treated first as....

a distribution of (income-taxable) gain, which in this case is $17,000.

The modified whole life policy is issued with...

a level premium payable during the first few (usually 5) years that is lower than the normal whole life policy rates. The premium increases and is higher than normal thereafter.

The needs approach for determining how much insurance protection is needed requires:

an analysis of the family's financial needs if the breadwinner dies. Then the family's ability to meet these needs out of current or anticipated assets must be assessed. This involves determining the amount of monthly benefits the family will receive from Social Security, pension plans, personal savings, and any other sources. The human life approach requires an estimate of an individual's average annual future earnings according to the number of years she expects to work until retirement.

The optional provision Other Insurance in This Insurer is...

an overinsurance provision. It is designed to limit the insurance company's risk with any one individual insured. An important consideration in health insurance underwriting is avoiding issuing a policy that provides too high a benefit, which would be a disincentive to return to gainful employment. Therefore, this provision sets a limit on the total indemnity for a particular type of coverage.

Medical cost management is designed to:

control health claims expenses. It does so in four ways: mandatory second opinions, precertification review, ambulatory surgery, and case management.

The return-of-premium rider...

increases the death benefit by the sum or premiums paid to date.

When replacing a life insurance policy, an agent must:

obtain a list of all life insurance to be replaced, give the applicant and the replacing insurer a copy of the "Notice of Replacement" signed by the applicant and the agent, leave a copy of all sales proposals used with the applicant, and send to the replacing insurer a copy of the application and any sales proposals used in the presentation.

Social Security is designed to...

provide basic protection to all working Americans against the financial problems arising from death, disability, and aging. It is not designed to provide a source of income for a reasonable standard of living when a person retires.