Answers I have gotten wrong
All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?
Lower Survivorship Life is much the same as joint life in that it insures two or more lives for a premium that is based on a joint age. The major difference is that survivorship life pays on the last death rather than upon the first death. Since the death benefit is not paid until the last death, the joint life expectancy in a sense is extended, resulting in a lower premium than that which is typically charged for joint life.
Which of the following would be considered a nonmedical insurance application?
An application on which the medical information is completed by the applicant and the agent only An application on which all of the questions, including medical history questions, do not need to be completed by medical professionals, and may be completed by the applicant and the agent.
If an applicant does not receive a new insurance policy, who would be held responsible?
The Agent It is the responsibility of the agent to deliver the policy.
Which of the following provisions states the insurer's right to change premium amounts?
a) Coverage Limitations b) Continuation Provision c) Premium Provision d) Insurer's Rights Answer: Continuation Provision The Renewal Provision, also known as a "Continuation Provision", must be included on the first page of Medicare supplement policies. This provision explains the right of the insurer to alter premium amounts.
The primary beneficiary of her husband's life policy found that no settlement option was stated in the policy on the date of her husband's death. Who will select the settlement option in this case?
The beneficiary If a settlement option is not selected by the policyowner before the insured dies, then the beneficiary can choose the option.
When would a 20-pay whole life policy endow?
When the insured reaches age 100
What is the timeframe for filing relevant Suspicious Activity Reports?
Within 30 days of initial discovery Relevant SAR reports must be filed with FinCEN within 30 days of initial discovery of a suspicious transaction.
Which of the following would NOT be considered a limited coverage policy?
Cancer insurance (only cover cancer) Credit insurance (insurance used to pay off the balance of a loan in the event of the death of a debtor) Major medical expense insurance Accident insurance (only cover accidents) Answer: Major medical expense insurance Limited policies cover only expense incurred from specific diseases, or specific causes.
Regarding long-term care coverage, as the elimination period gets shorter, the premium
Gets higher. LTC policies also define the benefit period for how long coverage applies, after the elimination period. The benefit period is usually 2 to 5 years, with a few policies offering lifetime coverage. Obviously the longer the benefit period, the higher the premium will be; and the shorter the elimination period, the higher the premium will be.
What document describes an insured's medical history, including diagnoses and treatments?
Physician's Review Individual Medical Summary Comprehensive Medical History Attending Physician's Statement Answer: Attending Physician's Statement An Attending Physician's Statement (APS) is the best way for an underwriter to evaluate an insured's medical history. The report includes past diagnoses, treatments, length of recovery time, and prognoses.
Which of the following individuals must have insurable interest in the insured?
Policyowner Policyowner must have an insurable interest in the insured, i.e. in his/her own life if the policyowner and the insured is the same person, or in the life of a family member or a business partner.
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of
Rebating. When producers give or promise anything of value that is not specified in the policy, they are guilty of rebating
Which health insurance provision describes the insured's right to cancel coverage?
Renewal provision Renewability provisions are included in each health insurance contract and outlines both the insurer's and insured's right to cancel or renew coverage. This is considered to be a very important provision required by HIPAA, the federal Health Insurance Portability and Accountability Act of 1996.
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.
Which of the following is NOT covered under a "core" policy, Plan A in Medigap insurance?
The first three pints of blood each year. The Medicare Part A deductible. Approved hospital costs for 365 additional days after Medicare benefits end. The 20% Part B coinsurance amounts for Medicare approved services. Answer: The Medicare Part A deductible. Medicare Supplement Plan A provides the core, or basic, benefits established by law. All of the above are part of the basic benefits, except for the Medicare Part A deductible, which is a benefit offered through nine other plans
Which of the following is NOT required to be stated in the outline of coverage provided with a long-term care policy?
a) Basic information about the insurance company b) Basic information about supplementary policies c) The policy number d) The right to return the policy for a refund ANSWER: Basic information about supplementary policies The outline of coverage must follow the standard format included in the insurance regulations. It must provide information about the insurance company, the policy number, important features of the policy, and explain the right to return the policy for a refund.
Which of the following would NOT be considered a misrepresentation on the part of the insurer?
a) Embellishing the benefits provided in the policy b) Overstating returns on policy dividends c) Backdating policies to secure a lower premium for the insured d) Implying that term insurance has cash value answer: Backdating policies to secure a lower premium for the insured It illegal to issue, publish, or circulate any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, or the payment of dividends. Demonstrating conservative returns in the illustrations would not be a violation.is
Under the ACA, health insurance can no longer be underwritten based on which of the following factors?
a) The applicant's tobacco use b) The applicant's health condition c) The applicant's family composition d) The applicant's age Answer: applicant's health condition When health insurers set their premium rates, they are only permitted to base those rates on 4 standards: geographic rating area, family composition, age, and tobacco use.
Within how many days must an insured notify the insurer of a child's birth and pay any required fees?
31 days
When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called
Preferred Provider Organization (PPO). The insurer negotiates the rates for specific procedures for their subscribers. If the subscriber chooses to go to a provider outside the preferred provider, they will have to pay a part of the cost of service.
Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?
Those who have been insured under the plan for at least 5 years If the master contract is terminated, every individual who has been on the plan for at least 5 years will be allowed to convert to individual insurance of the same coverage.
The Ownership provision entitles the policyowner to do all of the following EXCEPT
Receive a policy loan. Assign the policy. Designate a beneficiary. Set premium rates. The insurer sets premium rates based upon underwriting considerations ANSWER: SET PREMIUM RATES
If a person is disabled at age 27 and meets Social Security's definition of total disability, how many work credits must he/she have earned to receive benefits?
12 credits Persons disable between ages 24 and 31 can qualify for benefits if they have credit for having worked half of the time between age 21 and the start of the disability. For example, if Joe becomes disabled at age 27, he would need 12 credits (or 3 years' worth) out of the prior 6 years (between ages 21 and 27).
An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement?
$200,000 The beneficiary would most likely receive twice the face value of the policy, since his fatal injuries were caused by an accident and he died within the 90-day benefit limit stipulated in most policies.
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Cash option The cash option allows an insurer to send the policyholder an annual, nontaxable dividend check
The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?
Interest only option With the interest-only option, the insurance company retains the policy proceeds and pays interest on the proceeds to the recipient (beneficiary) at regular intervals.
An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?
Full benefits Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of at least two limbs (Loss of use does not qualify in some policies.), total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work.
All of the following are the most common variations in a Long-Term Care policy EXCEPT
The amount paid for nursing home care. Number of days of confinement covered. Number of home health visits covered. Number of family dependents. Long-Term Care policies can vary in the number of days of confinement covered, the number of home health visits covered, the amount paid for nursing home care, and other contract provisions. ANSWER: Number of family dependents.
In a group health policy, a probationary period is intended for people
Who joined the group after the effective date. The probationary period is the waiting period new employees must satisfy before becoming eligible for benefits.
Which of the following would be required to obtain a Certificate of Authority?
a) The HMO b) Agents c) Enrollees d) Subscribers ANSWER: The HMO In order to establish or operate a health maintenance organization, a certificate of authority from the Commissioner is required.
Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner?
Entire Contract Clause Proof of Loss Payment of Claims Change of beneficiary Answer: Payment of Claims The Payment of Claims provision states that the claims must be paid to the policyowner, unless the death proceeds need to be paid to a beneficiary.
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?
Apply for social security benefits Apply for coverage under the same group policy that covers Kevin Convert to an individual insurance policy with 31 days so she won't have to provide evidence of insurability COBRA ANSWER: 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.
All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT
Any type of insurance policy may be used. The employer pays a bonus to a selected employee to fund the policy. It is considered a nonqualified employee benefit. The policy is owned by the company. ANSWER:The policy is owned by the company. The policy is owned by the employee.
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a
Guaranteed insurability rider. Paid-up additions option. Cost of living provision. Nonforfeiture option. Answer: Guaranteed insurability rider. The Guaranteed Insurability rider allows the policyowner to purchase specific amounts of additional insurance at specific dates or events, without proving continued insurability. Rates for the additions are based upon attained age.
All of the following statements are correct regarding Credit Life Insurance EXCEPT
a) Benefits are paid to the borrower's beneficiary. b) The amount of insurance permissible is limited per borrower. c) Premiums are usually paid by the borrower. d) Benefits are paid to the creditor. ANswer: Benefits are paid to the borrower's beneficiary In Credit Life Insurance, the creditor is the beneficiary for the amount of benefit equal to the outstanding balance of the loan.
An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?
Guaranteed insurability option The guaranteed insurability option allows the insured to purchase specific amounts of additional insurance at specific times without proving insurability.
Which of the following best describes an unfair trade practice of defamation?
a) Issuing false advertising material b) Refusing to deal with other insurers c) Making derogatory oral statements about another insurer's financial condition d) Assuming the name and identity of another person Answer: Making derogatory oral statements about another insurer's financial condition Making oral or written statements directly or indirectly which are derogatory or maliciously critical of another insurer would be an example of an unfair trade practice of defamation.
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?
a) The insured may choose to convert to term or permanent individual coverage. b) The insured would not need to prove insurability for a conversion policy. c) The insured may convert coverage to an individual policy within 31 days. d) The premium for individual coverage will be based upon the insured's attained age. ANSWER: The insured may choose to convert to term or permanent individual coverage When group coverage is converted to an individual policy, the INSURER will determine the type of coverage, usually permanent insurance.
An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?
a) Unfair Discrimination b) Defamation c) Illegal d) A legal advertising strategy Answer: Illegal It is illegal to participate in any boycott, coercion, or intimidation that is intended to restrict fair trade or create a monopoly.