Final exam life and health
Peggy surrenders a permanent life policy with a cash value of $15,000 and then outstanding policy loan of $5,000. If she chooses the reduced paid-up option what will be the result?
A paid up permanent policy purchased with $10,000
Kim has purchased a straight life annuity. What will this type of annuity provide her with
A periodic income for life
life income settlement option
A specified income amount will be paid to the payee, a lifetime income can be paid to a second payee if the first payee dies, and a lifetime income will be paid to the payee
a departing employee has decided to continue his group coverage through Cobra who pays the premium in this situation
employee
a policy owner can can collect the face amount on what type of policy?
endowment policy. an endowment policy is characterized by cash values that grow at a rapid Pace so that the policy matures or endows at a specified date that is before age 100
the agreement between a producer and an insurance company specifies The Authority given to a producer to act on behalf of the insurer is called
expressed Authority
an insured owns a policy which includes a disability income Rider. the disability benefit amount paid to the insured is based on the
face amount of the policy
Policy dividends for life insurance are
Not guaranteed
the maximum amount of coverage placed on a disability income policy is based on the insureds?
earned income from the previous year.
the Alabama life and disability insurance Guaranty has the power to
loan money to an insolvent insurance company, guarantee the obligations of an insurance company, and provide money to satisfy the obligations of an insurance company
extended residence in a nursing home is covered by a
long-term care policy
what does renewable term guarantee
the insured's insurability
a Disability Policy in Alabama that is paid on a monthly basis is required to have a grace period of
10 days
at what age is an insured for life insurance considered statistically dead
100
What will the insurance company pay once the stop-loss is exceeded on a major medical policy
100% of covered expenses
This insurance producer has allowed his license to lapse. He would like to reinstate his license without retaking a pre license course or passing a written examination. To do this do Leo must reinstate the license within__________ months from the renewal date
12 months
The minimum grace period for a life insurance policy sold in Alabama is
30 days
representation
A statement made by the applicant that they consider to be true and accurate to the best of the applicants belief
Which of the following is not an example of insurable Interest
An airline ensuring the lives of its passengers is not insurable interest
All students attending a large college would most likely be covered by which type of Health policy
Blanket policy
Under a health maintenance organization HMO service providers are paid a fixed monthly fee for each member. This concept is called
Capitation
Capitation
Capitation payments are payments agreed upon in a capitated contract by a health insurance company and a medical provider. They are fixed, pre-arranged monthly payments received by a physician, clinic or hospital per patient enrolled in a health plan, or per capita.
Which type of Term policy allows the policyowner to switch to permanent insurance
Convertible term
Amy owns a disability income policy with a non-cancelable renewal provision. Which of the following is guaranteed in her policy
Coverage and premium rate are guaranteed as long as the premiums are paid
Which statement accurately portrays a whole life policy
Endows at age 100 and paid up at a stated time
If insurance premiums are paid more frequently than annually the policy owner can expect to
Have a higher total outlay of dollars for the coverage for that year
Tina has an insurance policy with a 10-day free-look provision. Which of these statements is correct
Her policy can be returned for 100% refund of the premium within 10 days from the date the policy is delivered
Long-term care policies normally provide benefits for
Home Health Care
Benefits under a health insurance policy May with the insureds written request be payable to
I Hospital, physician, or surgeon. The right of assignment built into most commercial Health policies allows the policyowner to assign benefit payments from the insurer directly to the healthcare provider
Jan is named irrevocable beneficiary of Jim's life insurance policy which of the following statements is correct
Jim needs Jan's permission to borrow the policies loan value
a retirement plan intended for a sole proprietor and his or her employees would be a
Keogh plan
According to Alabama Law agents of a health maintenance organization HMO
Must be licensed as Insurance Producers and are subject to all producer licensing requirements
Which of these actions could result in a lapsed policy
Premium was not paid during the grace period
Alabama's annuity disclosure regulation
Requires the delivery of a buyer's guide and a Disclosure document to an annuity applicant
Trent has a permanent partial disability where he is paid 50% of his previous income. Trent is covered by a
Residual disability benefit
Risk
Risk is the uncertainty of loss
The monthly benefit of an annuity certain is determined by
The annuitant's payout Period selection
The period of time during which a surviving spouse does not qualify for Social Security survivor or retirement benefits is called
The blackout period
Why are insurance contracts said to be contracts of adhesion
The contract has been prepared by one party the insurer and the other party which is the insured must accept the contract as written
A policy owner with a $100,000 whole life policy has a cash value of $10,000. There is an outstanding loan of $5,000 and a past due premium of 250. If the policy owner chooses the reduced paid-up option and then later dies what will the beneficiary receive
The reduced paid-up coverage amount minus $5250
At what point does a whole life policy pay the face amount?
Upon the insureds death or reaching the age of 100
What do major medical policies typically cover
Usual, customary, and necessary expenses
When does adverse selection exist
When the risks accepted for insurance has a higher likelihood of experiencing loss than an average group
in regards to insurance applications which of the following statements is true?
changes on the application must be consented to in writing
which type of assignment transfers a portion of the policy owners right to another party in order to secure a debt to that party?
collateral assignment
which type of life insurance Rider allows a policy owner to increase the level of coverage to keep up with inflation
cost of living Rider
mortgage protection is typically covered with
decreasing term
a cross purchase buy-sell agreement is in place for ABC company's four founding Partners. What would this agreement require if the agreement is funded with individual life insurance
each partner must own a policy on the other partners
which of these will not result in an increase in life insurance policy dividends?
higher Reserves because reserves are intended for benefit amounts not dividends
a life insurance beneficiary has chosen a settlement option in which the principal never decreases unless the beneficiary makes a withdrawal. This settlement option is called the
interest-only option
a Life Insurance Producers agency agreement normally authorizes the licensee to do all of the following except
issue policies; the producer or agent cannot issue policies. but are authorized to solicit Insurance, sell insurance, and collect premiums
insurance policies issued by companies which are owned by stockholders and do not pay policy Dividends are known as
non-participating policies
which of the following terms may be used when describing the premiums for a life insurance policy advertised in Alabama
none of these; not savings or profit or deposit
insurance policies issued by companies which allow their policy owners to participate in the favorable experience of the company through payment of dividends are known as
participating policies
which of the following is not guaranteed by a whole life policy
policy dividends
an insurance producer who offers a potential client something of value as an incentive to purchase insurance is engaging in
rebating
an insurance producer must have which of the following in order to sell variable life insurance policies
registered with finra, license for variable life and annuities contracts, and a valid insurance license
the long-term care partnership program is designed to allow seniors to
shelter assets from the spend down requirements of Medicaid
who does a disability income policy normally cover
wage earners
a long-term care insurance must be unable to perform a minimum of ___________ activities of daily living or adl's to receive benefits
2
any individual who has failed 2 Alabama Insurance licensing examinations must wait how long before retaking it a third time?
3 months
Bert purchased an immediate annuity with quarterly payments. When will this annuity start making payments
3 months after the annuity is bought
Jackie took out a Medicare supplement insurance policy and has a pre-existing condition. In this situation a pre-existing condition is defined as a condition for which medical advice was given or received within ____________ of the effective date of coverage
6 months
Bart is injured and provides notice of a health claim to his insurer He later receives the required claims forms. Within how many days of the loss must Bart file proof of loss with the insurance company
90 days
With term insurance which of the following types of Premium Remains the Same for the entire policy period
Level premium
What does disability Buy sell insurance provide
Lump sum benefit
Don and Marie married in each have a major medical plan provided by their employers. Don was born in August of 1969 and Marie was born in March of 1976. For there to dependent children,
Marie's plan is primary and Don's and secondary. The primary health insurance plan is the one that belongs to the parent whose birthday comes up first in the calendar year. it makes no difference to the insurance companies which parent is Older.
which welfare program provides assistance to the needy
Medicaid
Catherine is a retiring and was recently hospitalized for 10 days. Which type of insurance policy would best cover her for excess Hospital expenses
Medicare supplement. A Medicare supplement policy will provide a subscriber the best coverage for excess charges
an insurance premium can be defined as
Money Paid to an insurance company for benefits provided in the policy
Total disability can be defined as the insureds inability to perform the occupation for which he or she is reasonably qualified by education training or experience for disability income insurance purposes this definition is what
Own occupation
An insurance company may cancel a life insurance policy under which of the following conditions
The outstanding policy loan exceeds the cash value of the policy
All of these statements concerning the coordination of benefits are true except
The secondary insurance does not pay benefits. Which means the secondary insurer does pay benefits
According to required provision 4 when an insured applies for reinstatement of a health policy and receives a conditional receipt how long does the insurer have to approve or deny
Within 45 days of the date of the application
When can a lapsed life insurance policy usually be reinstated
Within three to five years of the policy lapsing
what is a Certificate of Insurance
a certificate issued to each individual covered by the group life insurance
Individual disability income policies normally have a premium that
adjusts annually. The most common type of individual disability income policy is the guaranteed renewable policy which typically adjust the premium on an annual basis
which of the following is an example of a nonforfeiture value
after a policy owner cancels their permanent policy the cash value accumulation must be made available to the policy owner. when a policy owner stops paying premiums on a permanent policy its cash value accumulation or equivalent must be made available to the policy owner
which of the following statements is not correct
agents are allowed to waive certain policy provisions; changes in an insurance policy must be approved by an executive officer of the insurance company, changes in an insurance policy must be endorsed on the policy or attached in a rider, and agents are never allowed to waive policy Provisions r the correct statements
Medicare supplement policies marketed in Alabama
cannot offer benefits that simply duplicate Medicare benefits, cannot be more restrictive than Medicare, and cannot treat a loss due to injury differently than a loss due to illness
the Commissioner of Insurance may not do which of the following
change insurance laws
Ed has an insurance policy with an insurance company. Before eds policy will pay a claim certain events must occur. Because of this an insurance policy is considered to be
conditional
Rodney applies for an insurance policy and pays the first premium. The receipt given for the first premium is called a
conditional receipt
which of the following events would allow a policy owner with a guaranteed insurability rider purchase additional life insurance
having a child, getting married, and reaching a specified age stated in the policy
which of the following does NOT describe a life income settlement option
income is paid until the principal amount decreases to zero;
collateral assignment
policy is assigned to a creditor as collateral for debt. If insured dies creditor is entitled to be reimbursed out of benefit proceeds for the amount owed
what describes a level term policy
premium and don't protection remain constant for the term of the policy
what is the applicants consideration in an insurance contract
premiums
an insured should be restored to the approximate Financial condition occupied before the loss occurred. this is called the
principle of indemnity
XYZ insurance company issued a new life policy to an insured that replaced an existing policy. XYZ insurance company is considered to be the
replacing insurer
in regards to a life insurance policy and annuity contract all statements made on the application are considered to be
representations
Barbara has the right to change the beneficiary designation on her life insurance policy. Barbara's beneficiary is a
revocable beneficiary
Susan owns a life insurance policy that has accumulated $10,000 in cash value in which she can no longer pay premiums. If she elects to take the extended term option which of these actions would she take
she will use the $10,000 the policy accumulated in cash value to buy term insurance of the same face amount as her original policy
all these statements concerning a key employee life policy is true except
the key employee names beneficiary; the company pays premiums and names the beneficiary, they can't employee must sign application, and the company is owner of policy
which of the following statements about a non-cancellable policy is false
the premium can be increased over time; true statements about non-cancelable policy are: so long as the premiums are paid the policy cannot be changed in anyway, non-cancelable provisions are most commonly found in disability income policies, and the premium rate cannot be increased over time
absolute assignment
the transfer is complete and irrevocable and the assignee receives full control over policy and full rights to benefits
Albert surrenders his whole life policy 10 years after it was purchased. What can he expect
to pay taxes on a cash value in excess of Premium Payed. if a whole life policy is surrendered for cash 10 years after it was purchased the policy owner can expect to pay taxes on the cash value in excess of premium paid
if a long time care LTC policy in Alabama has been in effect for more than _________________ the insurer can contest any material representation on the application
two years. An application in LTC policy in Alabama becomes in contestable when the policy has been in effect for more than 2 years
which of the following long-term care LTC practices is permitted in Alabama
using direct mail to Market an LTC policy
a group disability income policy will
usually pay short-term benefits of less than 2 years in duration
