Exam life and health insurance
Which health policy clause specifies the amount of benefits to be paid?
Insuring
In a Life insurance contract, an insurance company's promise to pay stated benefits is called the
Insuring clause
The clause identifying which losses resulting from an accident or sickness are insured by the policy is called the
Insuring clause
A policyowner's rights are limited under which beneficiary designation?
Irrevocable
Which of the following statements is CORRECT concerning the time limit on certain defenses provision in a cancer insurance policy?
It allows the insurer to deny the amount of a claim for misstatements on the application occurring prior to the expiration of the first two policy years
Which of the following statements is CORRECT about the conversion provision in a group health insurance policy?
It is mandated by state requirements
On January 8, an applicant 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 issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective?
January 26
An engineering firm that would suffer financially from the death of a project manager should purchase a
Key Person Life Policy
L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They purchase a Family Policy that covers L's spouse to age 65. A death benefit will NOT be paid in which of the following circumstances?
L's spouse dies at age 66.
Which of the following statements BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition?
Less restrictive
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
K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?
Level
Which of these would be considered a Limited-Pay Life policy?
Life Paid-Up at Age 70
An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?
$25,000
An insurer must provide an insured with claim forms within __ days after receiving notice of a loss.
15
All licensees are required to complete how many continuing education hours every two years?
16
What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be unable to perform to qualify for Long Term Care benefits?
2
Continuing education (CE) providers must report to the director a licensee's earned credit hours within
30 days of course completion
An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision?
31
S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations?
36
For coverage of low protein modified food products for treatment of PKU or any inherited disease of amino and organic acids, a health plan may require a reasonable copayment or coinsurance, not to exceed
50% of the cost of the formula or food products
How many days must the insured wait to take legal action against a health insurer after submitting written proof of loss if the insurer refuses to pay?
60
If X wants to buy $50,000 worth of permanent protection on his/her spouse and $25,000 worth of 10-year Term coverage on X under the same policy, the applicant should purchase
A Whole Life Policy with an Other Insured Rider
Which of the following statements about noncontributory employee group life insurance is FALSE?
A minimum number of employees is required to participate
Which of these is considered an unfair trade practice?
A producer stating that a policy's dividends are guaranteed
Which of the following is NOT included in an annuity contract?
AD&D rider
Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies?
Long-Term Care
An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses?
Loss of eyesight due to an accidental injury
Which type of plan normally includes hospice benefits?
Managed care plans
Which of these factors do NOT play a role in the underwriting of a life insurance policy?
Marital status
Which of the following limits may be applied to coverage of treatment of autism spectrum disorders?
Medically necessary treatment in accordance with a treatment plan
Which of the following Dividend options results in taxable income to the policyowner?
Accumulation at Interest
An applicant for a nonresident producer license must meet which of the following requirements?
Must be a producer in good standing in their home state
Which of the following statements describes what an Accident and Health policyowner may NOT do?
Adjust the premium payments
Under a Long Term Care policy, which benefit would be typically excluded or limited?
Alcohol rehabilitation
What type of renewability guarantees premium rates and renewability?
Noncancellable
Which of the following BEST describes a short-term medical expense policy?
Nonrenewable
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
What does the insuring agreement in a Life insurance contract establish?
An insurer's basic promise
When an existing life insurance policy is being reissued with a reduction in cash value, the producer must sign the
Notice Regarding Replacement of Life Insurance or Annuity
S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company did not respond to the claim. S can take legal action against the insurer beginning
November 1
What does Medicare Parts A and B cover?
Part A covers hospitalization; Part B covers doctor's services
When can a policyowner change a revocable beneficiary?
Anytime
When does a Probationary Period provision become effective in a health insurance contract?
At the policy's inception
Who is NOT required to sign a life insurance application?
Beneficiary
All of the following statements about Major Medical benefits are true EXCEPT
Benefits have no maximum limit
When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates?
Change of occupation provision
N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take?
Claim will be denied
A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?
Claim will be paid and coverage will remain in force
Which of the following violations is considered an unfair trade practice?
Coercion
On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take?
Collect initial premium along with a signed health statement
Which of the following is considered a producer's fiduciary responsibility?
Collect premiums and remit to the insurance company as soon as reasonably possible
Which policy is required to contain chemical dependency coverage?
Comprehensive major medical
Which of the following consists of an offer, acceptance, and consideration?
Contract
P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?
Deferred
An employee requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee?
Distribution is subject to federal income tax withholding
Which statement is TRUE in regards to a policy loan?
Past-due interest on a policy loan is added to the total debt
Which of the following is a requirement for obtaining a resident producer license in Missouri?
Pay a $100 license fee
G purchased a $50,000 single premium, Straight Life Annuity 2 years ago. G has been receiving monthly payments from the annuity. When G dies, the insurer
Does not have to make any further payments
Under a trustee group life policy, who would be eligible for a certificate of coverage?
Employee
Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance?
Entire cash surrender value is taxable
D is the policyowner and insured for a $50,000 life insurance policy. The beneficiary is D's wife. D and his wife divorce and D remarries, transferring ownership of his policy to his new wife. If D dies without making any further changes, to whom will the policy proceeds be paid to?
Ex-wife
N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot?
Exclusion
N purchases an annuity by making payments in an amount no less than $100 quarterly. This describes which of the following annuities?
Flexible Installment Deferred
What action should a producer take if the initial premium is NOT submitted with the application?
Forward the application to the insurer without the initial premium
Which of the following policies MUST provide coverage for human leukocyte antigen testing for bone marrow transplantation?
Group comprehensive health insurance
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?
Health Maintenance Organizations (HMO's)
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
Which of the following best describes a contingent beneficiary?
Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured
A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the
Policy Loan provision
Which is true concerning a Variable Universal Life policy?
Policyowner controls where the investment will go and selects the amount of the premium payment
A policyowner is able to choose the frequency of premium payments through what policy feature?
Premium Mode
What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy?
Premiums may increase at time of renewal
The individual who provides general medical care for a patient as well as the referral for specialized care is known as a
Primary Care Physician
T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. Under the Model Group Coordination of Benefits provision, when T files a claim, his employer's plan is considered the
Primary carrier
When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits?
Recurrent Disability
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
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 factors does NOT influence an applicant's need for life insurance?
Self-maintenance expenses
P is a producer who notices 5 questions on a life application were not answered. What actions should P take?
Set up a meeting with the applicant to answer the remaining questions
What is Old Age and Survivors Health Insurance (OASDHI) also known as?
Social Security
For an individual disability policy that is paid for on a monthly premium basis, the Grace Period provision has a MINIMUM of how many days?
Ten
On delivery of a policy, a signed statement of good health is typically requested if
The application was submitted without the initial premium
A policy of adhesion can only be modified by whom?
The insurance company
Which of the following circumstances would cause a Medicare Supplement policy to be cancelled?
The insured fails to pay the premium
J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries sustained in an accident. J's age as stated on the application five years ago was found to be understated by ten years. Which of the following actions will the insurance company take?
The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age
Which of the following statements is INCORRECT about a licensee's responsibility for premiums received?
The licensee must hold them in a separate account at a commercial bank or established financial institution before transmitting them to the insurance company
The Common Disaster clause provides that if both the insured and the sole named beneficiary were to die in a common accident, which of the following is true?
This clause provides the payment of proceeds to the insured's estate
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 the insured must meet while a claim is pending is
Time Limit on Certain Defenses
Which Accident and Health policy provision addresses preexisting conditions?
Time Limit on Certain Defenses
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?
Unilateral
Which of the following BEST describes how pre-admission certifications are used?
Used to prevent nonessential medical costs
Which of the following policies combines investment choices with a form of Term coverage?
Variable Universal Life
Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?
Variable Universal Life
When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?
Void the policy only if it is discovered during the Contestable period and proven to be material
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
When does a life insurance contract become effective if the initial premium is not collected during the application process?
When producer delivers policy and collects initial premium
Replacement is involved in all of the following situations EXCEPT when
a Term policy is converted to a permanent plan with the same insurance company
A foreign insurance company CANNOT conduct business in Missouri without
a certificate of authority to transact business in Missouri
A major medical plan (including an HMO) must cover formula and low protein modified food products for treatment of PKU or any inherited disease of amino and organic acids for
a child covered under the policy and less than six years of age
A statement made by an insured in an insurance application that must be true to the best of one's knowledge and which becomes a part of the contract is known as
a representation
When making a recommendation to a consumer to purchase an annuity, the producer must make reasonable efforts to obtain suitability information. Suitability information includes
age, annual income, financial experience
A Medicare Supplement policy would cover
allowable amounts under Medicare Part B
All of the following provisions are required in a group life policy EXCEPT
an Accidental Death and Dismemberment provision
Missouri insurance laws address diabetes coverage. Under Missouri insurance laws, policies must
apply the same deductible and copays to covered diabetic supplies as other medical conditions
In order to establish a Health Reimbursement Arrangement (HRA), it must
be established by the employer
A credit life insurance policy covers the life of the
beneficiary
Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid
conditional
Under Missouri law, a state regulated health benefit plan must
cover, with no prior authorization necessary, childhood immunization services whether provided in a medical physician's regular office or a qualified hospital emergency room
Credit Life insurance is
coverage that waives the premiums on a loan payment in the event of total disability
A Business Overhead Expense policy
covers business expenses such as rent and utilities
A policy summary must be given for all of the following policies EXCEPT
credit life
The signed document that starts the Free Look period is the
delivery receipt
An agent takes an individual Disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to
determine if the applicant is an acceptable risk by completing standard underwriting procedures
The Director of Insurance may examine the records of an insurance company in order to
determine the solvency of the company
The Director of Insurance is empowered to
enforce state laws relating to insurance
A CORRECT statement about the regulatory authority of the Director is that the Director may
establish guidelines for continuing education as a part of the producer's license renewal procedure
The life insurance and annuity replacement regulation defines replacement as
exchanging an existing policy for a new policy
When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n)
exclusion
All of the following statements about health coverage for physically handicapped dependents of insureds are correct EXCEPT that the dependent must
have been over ten years of age when the handicap was incurred
The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for
health information
When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is
income
Benefits from a group life insurance policy may be assigned by the
insured
An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the
insurer dates the policy
An insurance company may compensate all of the following people EXCEPT
licensed producer not appointed by the company
Which of the following is NOT a limited benefit plan?
life insurance policies
Continuing education units for producers may be granted for participation in all of the following activities EXCEPT
meeting sales production requirements
A producer making an unfair comparison of two insurance policies is considered
misrepresentation
Anyone who makes a fraudulent statement on an insurance application in order to obtain money benefits from an insurance company has committed an act of
misrepresentation
The Notice of Claims provision requires a policyowner to
notify an insurer of a claim within a specified time
If a producer determines that the sale of a Medicare Supplement policy involves replacement, the producer must take all of the following actions EXCEPT
notify the replaced insurance company
Deductibles are used in health policies to lower
overuse of medical services
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
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
policyowner
The Legal Actions provision of an insurance contract is designed to do all of the following EXCEPT
protect the producer
Under Missouri law, a health carrier shall have expedited grievance review procedures for
situations in which the standard time frames for grievance procedures could seriously jeopardize the enrollee's life or health
The suicide provision for life policies would apply to
subsequent increases in benefits
An insurance producer acts in a fiduciary capacity when conducting routine business with all of the following principals EXCEPT
the Director
A health plan in Missouri may deny enrollment for a child on the basis that
the child is no relation to, and is not placed for adoption or adopted by the plan member
The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is
the cost
Under a Renewable Term policy,
the renewal premium is calculated on the basis of the insured's attained age
Group Life policies in Missouri are required to contain a conversion privilege that allows for conversion
to an individual policy for a stated period of time
An insurance company that charges different premiums for insureds in the same risk classification is guilty of
unfair discrimination
Which of the following types of life insurance policies involves an investment account that is separate from the insurer's general account?
variable life
Disability policies do NOT normally pay for disabilities arising from which of the following?
war
Before holding a hearing that may lead to suspension or revocation of a producer's license, the Director must give
written notice to the producer
Before holding a hearing that may lead to suspension or revocation of a producer's license, the Director of Insurance must give
written notice to the producer