Tennessee life and health final exam

M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim?

$1,600

K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?

$20,000 death benefit

An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses?

$3,000

____ of personal life Insurance premiums is usually deductible for federal income tax purposes

0%

in Tennessee, the maximum fine that a commissioner can impose on a producer is ___ per violation

1,000

All of the following statements about traditional individual retirement accounts are false except

10% penalty is applied to withdrawals before age 59 1/2

XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is

100%

What is the maximum fine that can be imposed by the commissioner to a producer who violates a insurance law

1000 per violation

How long is A temporary license valid

180 days

what is the minimum number of activities of daily living (ADL) And insured must be unable to perform to qualify for long-term care benefits

2

An insured must notify the insurer of a medical claim within____ days after an accident

20 days

insurers may request a hearing within ______ if their policy is rejected

20 days

an agent needs to complete ______ of continuing education every ______ years

24;2

The commissioner notifies the association of an insolvent insurer no later than_____ after receiving notice of the insurers insolvency

3 days

If an insurance Producer applicant is Richard to pass a written examination what is also required

A fingerprint based criminal background check

Esteem made by an insured in the insurance application that must be true to the best of one's knowledge which becomes part of the contract is known as

A representation

And employee of 20 years recently retired at age 59 1/2. The employees group life contract can be

Converted to an individual permanent policy at an individual right

If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?

Insured's contingent beneficiary

Which of the following Actions will an insurance company most likely take is an applicant, who has diabetes, applies for a disability income policy

Issue the policy with an altar time payment of claims provision

K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?

Modified Whole Life

The commissioner Would like to hold a hearing against a producer. Before the hearing is held, a notice

Must be sent by registered or certified mail to the producers address on file

all of these statements concerning settlement options are true, except

Only the beneficiary may select

P and Q are married and have three children. P is the primary beneficiary on Q's accidental death and dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The accidental death benefits will be paid to

P only

Which of these is not a fair marketing practice with an existing insurance policy is being replaced

Reduce the cost by lowering the commission

which of these is not a legitimate marketing practice for obtaining business from a competitor,

Reducing the commissions in order to make a sell

T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?

Request of the change will be refused

When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following

Residual disability

Expires a $10,000 whole life policy in 2003 and pays an anyone premium of $100. S dies five years later in 2008 and ensure pays the beneficiary $10,500. What kind of rider did S include on the policy

Return of premium rider

Which factors are taken into consideration when an insurance company determines the premium rate for a whole life policy on an applicant

Risk classification

Which of these terms accurately defines an underwriters assessment of information on a life insurance application

Risk classification

P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA laws, which of the following statements is TRUE?

She does need to provide evidence of insurability

S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation?

Single Premium

Which mode of payment is NOT used by health insurance policies?

Single Premium

In Tennessee, the definition of "individual" may include which of the following

The individuals legal representative

The Consideration clause in a life insurance policy Indicates that a policy owners consideration consist of a completed application and

The initial premium

A policy adhesive can only be modified by whom

The insurance company

when a life insurance application is completed, A policy summary must be given to the applicant. The policy summary must include

The premium cost for basic coverage applied for

Who would qualify for temporary license in Tennessee

a surviving spouse of a deceased producer

A policyowner may generate taxable income from which of the following Dividends options

accumulation at interest

which of the following is the purpose of the Tennessee guaranty Association

all of the above

all of these are considered a producer's breach of fiduciary duty except

allowing premiums to be submitted electronically

Any changes made on an insurance application requires the initials of whom?

applicant

Insurance contracts may be sold, solicited, or negotiated find insurance producer only upon

becoming an appointed producer of an insurer

A life insurance application must be signed by all of these, except

beneficiary

Variable Whole Life Insurance can be described as

both an insurance and securities product

unfair discrimination is best described as

charging a different rate for someone in the same actuarial clsds

which of the following is an example of defamation

circulating brochures that falsely denounce the financial condition of an insurer

How do life insurance companies handle cases where the insured commits suicide within the contract's stated contestable period

claims are denied under the suicide clause of the policy

Periodic health claim payments MUST be made at least

monthly

All of these insurance subjects qualify for continuing education credits in Tennessee EXCEPT

motivating producers

If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best desribes this policy is called

noncancellable

Which of the following best describes a short term medical expense policy

nonrenewable

The notice of claim's provision requires a policy owner to

notifying insurer of the claim within a specific time

When a Medicare supplement policy is delivered to a policyholder, which of the following must accompany the policy

outline of coverage

an individual health policy is required to contain an

payment of claims provision

M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the

policy proceeds

J applies for an insurance policy. What BEST Describes the particular terms of this policy

policy summary

coordination of benefits provision

prevents an insured covered by two health plans for making a profit on a covered loss

The individual who provides general medical care for a patient as well as the referral for specialized care is known as

primary care physician

The Tennessee insurance guaranty association

protects Tennessee insurance policy owners in the event an insurance company becomes insolvent

Y purchased $100,000 worth of permanent protection on himself and $50,000 worth of 10-year term coverage for his wife on the same policy. Which of these policies did Y purchase?

whole life policy with an insured rider

In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments

After an insured has become totally disabled as defined in the policy

Under a Long Term Care policy, which benefit would be typically excluded or limited?

Alcohol rehabilitation

a Business entity can be defined as an

An association or a limited liability company

Which of the following statements best describes what the legal actions Provision of an accident and health policy requires

An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed

A policy loan is made possible by which of these life insurance policy features

Cash value provision

For a change to health policy to be valid, what is required

Changes in the policy must be approved by an executive officer of the insurer

A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed?

Company X

An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet?

Consideration clause

How are surrender charges deducted in a life policy with a rear-end loaded provision?

Deducted when the policy is discontinued

Which of the following policy provisions prohibits an insurance company from incorporating external documents into an insurance policy

Entire Contract

What provision in a life insurance policy states that the application is considered part of the contract?

Entire Contract provision

which of these statements describe a modified endowment contract (MEC)

Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract

The sections of an insurance contract which limit coverage are called

Exclusions

Long Term care policies will usually pay for eligible benefits using which of the following methods?

Expense incurred

From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant?

Fair Credit Reporting Act

The insurance commissioner as required to do which of the following before holding a hearing that could lead to the suspension of a producers license

Give written notice to the producer

The purpose of the______ period clause is to avoid an unintentional lapse of a life insurance policy

Grace

A long-term care policy sold in Tennessee must be

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

Which type of provider is known for stressing preventative medical care and routine physical examinations?

Health maintenance organization's (HMO)

S wants to open a tax-exempt health savings account. To qualify for this type of account, federal law dictates that S must be enrolled in a

High Deductible Health Plan

Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?

If Tom's employment is terminated, 20% of the funds would be forfeited

which of these is NOT a reason for purchasing life insurance on the life of a minor

If both parents were to die, it would provide death benefits to the child

T sends proof of loss to Her insurer for an acceptable medical expense claim under her individual health insurance policy. Upon receipt, the insurer must pay the Benefits

Immediately

A licensed Producer can be BEST described as an

Individual who places insurance on behalf of anyone seeking insurance

On January 8, an application filled out an application for a life insurance policy but did not include the initial premium. The insurance company approved the application on January 14 and issue the policy January 15. The Producer deliver the policy on January 26 and collected the first premium. When did the coverage because effective

January 26

T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?

Less than $5,000 per month benefit regardless of the cause

which of these Are not an example of a non-forfeiture option

Life Income

which of the following are not managed care organizations

Medical Information Bureau (MIB)

The provision That defines to whom the insurer will pay benefits to is called

Payment of Claims

Which of these is considered a mandatory provision

Payment of Claims

which of these statements concerning an Individual Straight life annuity is accurate

Payments are made to an annuitant for life

Insurance policies are considered Aleatory contacts because

Performance is conditioned upon future occurrence

The underwriting process involves all of these, except for

Policy loan

XYZ corp was issued A group accident and health policy for its employees. Under this plan a

Policy must be issued to XYZ, and a certificate must be issued to each employee

On a life insurance policy, who is qualified to change the beneficiary designation

Policyowner

which of the following statements about a guaranteed renewable health insurance policy is correct

Premiums normally increase at time of renewal

The annuity that represents the largest possible monthly payment to an individual annuitant is a(n)

Straight Life annuity

B is an insurance producer who Occasionally engages in financial planning. B sells an insurance policy during the course of a financial planning seminar, B must disclose to the client

That a commission will be earned in addition to any fee charge for financial planning

What authority does the commissioner have over Tennessee producers

The commissioner may establish guidelines for continuing education as part of the producer license renewal procedure

Who determines the education credits needed for a producers Continuing education

The commissioner of commerce and insurance

T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called

Time Limit on Certain Defenses

The policy provision that entitles the insurer to establish conditions that insured must meet while a claim is pending is

Time limit on certain defenses

what is the elimination period of an individual disability policy

Time period a disabled person must wait before benefits are paid

Life insurance immediately creates an estimate upon the death of an insured. Which of the following policies is characterized by guaranteed minimum death benefit

Variable life

What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?

Waiver of premium rider

which of these is considered a statement that is assured to be true in every Respect

Warranty

which of the following is not a requirement to sell, Solicit, Or negotiate long-term care insurance

complete a one time 4 hour course on estate planning

Major medical policies typically

contain a deductible and coinsurance

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

If it's employees share in the same cost of insurance, what type of group life insurance plan would a corporation house

contributory

When does the free-look provision for health insurance begin

date the policy is delivered to the insured

K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed?

daughter

The combination of whole life and _______ Term insurance as referred to as a family income policy

decreasing

Which of the following does Social Security not provide benefits for

dismemberment

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

the federal income tax treatment of an employer-provided group Medical Expense insurance can be accurately described as

employees premium paid by the employer is tax deductible to the employer as a business expenditure

A provision that the policy, application, and all attachments shall constitute the _____ between the parties

entire contract

When an insurance company since a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called D

entire contract provision

How often must commissioner examine each domestic company

every 5 years

D is the policy owner and insured for a $50,000 life Insurance policy. The beneficiary is D's wife. D and His wife divorce and D remarries, transferring the ownership of his policy to his new wife. If D dies without making any further changes, to whom with the policy proceeds be paid to

ex-wife

Health insurance benefits not covered due to an act of war are

excluded by the insurer in the contract provisions

Which of the following would best describe the actions of an insurer who promises the cheapest premium rate in the United States

false advertising

In Tennessee, an __________ insurance company is one formed under the laws of a state outside of Tennessee.

foreign

In tennessee, an insurer that is incorporated in New Jersey and conducts business in Tennessee is called an

foreign insurer

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

health maintenance organization

if a producer commits an act of coercion or intimidation, how would the producers insurance company be held responsible for this act?

if the insurer approves of this act

all of these are powers of the commissioner except

incarcerate a producer

G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills?

insured

We're engaged in an insurance transaction in Tennessee, the producer represents the

insurer

The clause in an accident and health policy which defines the benefit amount the insurer will pay is called the

insuring clause

Which of the following health insurance policy provisions specifies the healthcare services a policy will provide

insuring clause

A policy owner's rights are limited under which beneficiary designation?

irrevocable

Dividends Paid from a life insurance policy are

issued by the insurer

And insurance producer can be found guilty of rebating by

sharing commissions with a client who has purchased insurance

which of the following best describes a warranty

statement guaranteed to be true

Which of the following is the reimbursement of benefits for the treatment of the beneficiary's injuries caused by a third-party

subrogation

Which of the following statements about the classification of applicants is incorrect

substandard applicants are never declined by underwriters

The most important factor to consider when determining whether to convert term insurance at the insured's attend age or the insured's original age is

the cost

The amount of coverage on a group credit life policy is limited to

the insured's total loan value

P's individual Health policy is now in the grace period. P's coverage will remain in force if

the premium is paid

A disability elimination period is best described as a

time deductible

The reason for backdating a policy is

to obtain a premium rate based on an earlier age

S, age 40, is looking to buy A life insurance policy that will allow for increases or decreases in coverage as his needs to change. The policy best suited for S would be

universal life

A producer MUST leave a buyer's guide with an applicant for which type of policy?

universal life insurance

An ____ life policy offers the owner investment and product such as money market funds, long term bonds, and equities

variable

An _______ annuity pays benefits based on units rather than stated dollar anountd

variable

A life policy with a death benefit in cash value that can fluctuate according to the performance of its underlying investment portfolio is referred to as

variable life

ABC insurance company has excepted a life insurance application which contains an answered questions. The company then makes the application part of the life contract. In the situation, the insurer has:

waived one of its legal rights