Simulated Exam 2
An insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy, stock performance declined and the cash value fell to $10,000. If the insured dies, how much will be paid out?
$50,000 -- the cash value you may not guaranteed, but the the CV cannot decrease the death benefit below the original amount.
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])
All accident and health insurance policies issued in this state must include a grave period of at least
30 days
If an insured's cognitive impairment results in the lapse of a long-term care policy, how long from the policy lapse may the insured request reinstatement?
5 months
An agent is acting ethically in all of the following situations EXCEPT
Always representing the insured -- The agent MUST always represent the insurer.
To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?
At the time of application
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?
Conditional
What is the purpose of managed care health insurance plans?
Control health insurance claims expenses
Which of the following is NOT an exclusion in medical expense insurance policies?
Coverage for dependents.
Which of the following are authorities that an agent can hold?
Express and Implied
True or False: Representing the client is one of the agents' responsibilities?
False
True or False: The interest is not taxable since it remains inside the insurance policy.
False: The interest is not taxable since it remains inside the insurance policy.
As it pertains to group health insurance, COBRA stipulates that
Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.
Life income joint and survivor settlement option guarantees
Income for 2 or more recipients until they die.
In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?
Insurer to insured
Which of the following policy components contains the company's promise to pay?
Insuring clause
An insured has health insurance that covers them at work and at home. This policy was written on what basis?
Occupational
The 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
Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner?
Payment of claims
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
Which of the following best details the underwriting process for life insurance?
Selection, classification, and rating risks
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 what?
Survivor protection
Which of the following is called a "second-to-die" policy?
Survivorship Life
A 60-year old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 6p days. Which of the following is true?
The amount of the distribution is reduced by the amount of a 20% withholding tax, because this person did not make a trustee-to-trustee roll over.
In a case where the primary beneficiary predeceases the insured, in the event of the insured's death, the death benefit proceeds will be paid to
The contingent beneficiary
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
Why should the producer personally deliver the policy when the first premium has already been paid?
To help the insured understand all aspects of the contract
A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as what?
Usual, customary, and reasonable