Final Exam XCEL VA
in what situation could an insurance policy's coverage be modified?
applicant is substandard risk
any person who unknowingly violates Virginia insurance law may be punished for each violation by a penalty not to exceed
$1,000 with $10,000 cap
an insured has a $25,000 whole life insurance policy with $6,000 cash value available. Under the extended term nonforfeiture option, what is the amount of insurance available to the insured?
$25,000
Virginia requires that an insurance agent must complete hour(s) of continuing education on the subject of ethics every reporting period
3
administrative actions taken against an agent must be reported to the State Corp Commission within ____ days of the final disposition
30
The free-look period for a new Medicare Supplement policy is
30 days
Kate received a group accident and health termination notice. How many days does she have to apply for a converted policy?
31
which of the following statements accurately describes the "time limit on certain defenses"?
After a stated period of time, claims cannot be denied due to material misrepresentation on the application
the unwritten authority given to a producer to carry out necessary incidental acts of the agency agreement is called
Implied authority
tim is covered by policy A with a $4,000 limit and by policy B with a $2,000 limit. Policy A is primary. If a $6,000 loss is incurred, what will each policy pay?
Policy A will pay $4,000 and Policy B will pay $2,000.
These are all accurate statements regarding universal life insurance
Policy loans are not permitted
which of the following reduces the opportunity for overinsurance
coordination of benefits provision
Al surrenders his life insurance policy for its cash value. The total of the premiums paid into the policy minus total dividends received in cash or used to offset premiums is referred to as the
cost basis
Viatical settlement proceeds may be subject to the claims of
creditors
when using the needs approach for life insurance planning, a lump sum may be created to provide for all of the following EXCEPT
employee benefits
insurable Interest in one's own life is legally considered as
generally unlimited
when an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve?
identifies the needs of an individual and the individual's dependents
the medical info bureau consists of members from which group?
insurance companies
who is protected with the "other insurance with this insurer" provision?
insurance company
an independent agent may
represent several insurers
which of the following would prevent a person from obtaining a Virginia resident agent license
residing in a state outside of Virginia
what kind of arrangement gives the policyowner the right to change beneficiary
revocable designation
what is the face amount of a $50,000 graded death benefit life insurance policy when the policy is issued
under $50,000, but increases annually until fully insured
an insured must furnish written proof of loss to the health insurer within ___ days of the occurrence of loss
90
Dan has a major medical expense policy with a $200 deductible and an 80/20 coinsurance provision. He incurs covered medical expenses of $100 in November and $400 in January. Under the carryover provision, what will the insurer pay?
$240
An insured files for an accident and health insurance policy claim eight days after the premium due date. The benefit payable is $500 and the overdue premium is $200. Assuming that the policy pays on a first-dollar basis and contains the unpaid premium provision, how much will the insurer pay?
$300
Which of these statements about traditional individual retirement accounts is accurate?
10% penalty is applied to withdrawals prior to age 59 1/2
john received a one-time distribution of $50,000 form his modified endowment contract. Prior to that, the contract's cash value was $150,000, the contract investment amount was $100,000, and the death benefit was $500,000. What percentage of the $50,000 distribution was taxable as ordinary income
100%
carlos' agent license has been suspended due to non-renewal. He may apply for reinstatement within the _____ month period following the date the license should have been renewed
12
According to the ACA, dependent children may remain on their parents plan until age
26
tom the agent negotiates an agreement that unreasonably restrains the business of insurance. He has likely committed a violation of insurance law that falls under
Boycott, coercion and intimidation
a group health plan covers employees in virginia, maryland, and tennessee. the state regulatory jurisdiction established for this plan does not affect which plan aspect?
COBRA continuation of coverage
which of the following is not an intended use of an annuity
Create new funds upon the death of a wage-earner
A policyowner has just borrowed from a life insurance policy's cash value. Which of these statements is true?
In the event of death, the loan amount is deducted from the policy proceeds
which statement is incorrect about the interest-only settlement option in a life insurance policy
Interest on proceeds must be paid by the beneficiary
if an individual would like to enroll in Medicare or seek public information about Medicare, which federal agency handles this?
Social Security Administration
which of the following continuing education courses for credit in Virginia?
State continuing education board
in regards to technology and the ACA, which of the following statements is correct?
States which operate with an Exchange must offer an internet-based portal.
which statement concerning the Entire Contract provision in an individual accident and health insurance policy is TRUE?
The agent doesn't have the authority to change the policy or waive its provisions
james is covered with health insurance by two different insurers. The "insurance with other insurers" provision in an individual health insurance policy allows an insurer to pay benefits to the insured on a pro-rata basis when
The insurer was not notified prior to the claim that the insured has other health coverage
which of the following statements about universal life insurance is NOT true?
Universal life insurance normally has a minimum guaranteed cash value for duration of the policy
After an applicant reads and signs an insurance application, he/she should be conscious of the fact that
a false statement could lead to loss of coverage
life insurance replacement can be best defined as
a transaction in which a new life insurance policy is purchased and an existing life insurance policy is surrendered
a prepaid dental plan has an agreement in place with a network of dentists which
accepts an established amount as payment in full for the dental service rendered
mike lost sight in both eyes. He has a policy that pays a lump sum benefit for this injury. What type of insurance does Mike have?
accidental death or dismemberment
disability income insurance normally excludes coverage for disabilities that arise from
active military duty
bathing, eating, and transferring are all types of
activities of daily life
Julie needs assistance for one or two activities for daily living. She may be eligible for
assisted living facility
in the event of premium default, which life insurance provision will use the cash value to keep the policy in force?
automatic premium loan
a domestic insurance company in Virginia must
be formed under Virginia insurance laws
which of these statements regarding Major Medical Expense is NOT true?
benefits are paid on a capitation basis
a policyowner suffers a covered accident and health insurance loss on June 30 and submits the proof of loss to the insurer July 10. If the policyowner cancelled the coverage on July 2, how will the insurance company handle the claim
claim must be paid after proof of loss is received
group life plans sold in Virginia typically contain a conversion option. If the insured elects this option, the new policy
does NOT require evidence of insurability
which of the following health insurance provisions requires that the application becomes part of the policy
entire contract clause
scott has a life insurance policy in which the dividends are left with the insurance company. This particular policy may be paid up when the cash value plus accumulated dividends
equal the net single premium for the same face amount at the insured's attained age
after an applicant reads and signs app, he/she should be conscious of the fact
false statement could lead to loss of coverage
example of misrepresentation is
falsifying the terms, benefits, advantages, or conditions of insurance policy
which benefit supplement added to a life insurance policy insures an entire family
family term rider
the insured's consideration given for a health insurance policy is
first premium payment and the application
Emily is disabled. In order to become eligible for SS disability income benefits, she must be
fully insured, according to SS
when the disclosure of an insured's nonpublic information is involved, what is the insurer obligated to do?
give notice, explain, and allow opting out
An insured may be required to sign which document at policy delivery to ensure there has not been any adverse medical conditions since the time of the application?
good health statement
According to ACA, insurers can no longer deny health coverage due to pre-existing conditions unless that plan is a
grandfathered plan
which of the following situation would qualify an insured to receive funds from an accelerated (living) benefit rider?
insured is expected to remain in nursing home for life
which health policy clause specifies the amount of benefits to be paid
insuring
misrepresenting pertinent policy provisions relating to coverage after a loss
is an unfair claims settlement practice
After an insurance application has been originated, the producer normally
is the major personal contact to the insured
which statement regarding the certificate of insurance is accurate?
it indicates evidence of an employee's insurance coverage
the insurance coverage in a variable life insurance policy may vary based on the value of
its underlying investments
which of the following is associated with an immediate annuity
lack of an accumulation period
All of these are duties that a producer may be required to perform when delivering an insurance policy EXCEPT
leave a conditional receipt with client
a policyowner has a life insurance policy where she had listed her age on the application as 5 years younger than her actual age. If she dies and the insurer discovers the misstatement of age, how much will the insurance company pay?
less than the face amount
when an agent is determining the suitability of an annuity for a client, which of these is NOT usually taken into consideration?
level of education
in a disability income contract, an insured is considered to be totally disabled under the presumptive disability provision if he/she
loses the ability to speak
defamation can be best defined as
making a false or malicious statement on financial condition of another insurer
john bought a deferred annuity on mary. john amends contract years later to name tom as recipient of the proceeds if mary dies. who is the annuitant of this contract?
mary
The pre-existing conditions exclusion under a small employer medical plan
may be partially or fully satisfied by having creditable coverage with a previous employer
which of these is a type of private insurance that covers the cost-sharing amounts under Medicare?
medicare supplement
an agent who informs applicant that there are no exclusions in an insurance policy has engaged in
misrepresentation
periodic health claim payments must be made at least
monthly
What is the eligibility requirement for Medicare Part B
must be eligible for medicare part A
speciality care is provided by which of the following HMO providers?
neurologist
Tim is covered by an accident and health insurance policy that may not be changed in any way by the insurer up to a stated age, as long as the premiums are paid. What type of policy is this?
noncancelable
Jerome is covered by a disability income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?
nonoccupational coverage
an insured is covered with a health insurance policy. if the insured would like to cancel the policy, he/she must
notify insurance company in writing
which of these would likely be considered an Unfair Claims Settlement practice?
offering settlements that are less than the fair value to offset insurer expenses
if group health benefit levels are too high, what could be the end result?
over-utilization
which of these is NOT a factor that influences group health insurance underwriting
physical exams of group members
which of these plans allow a participant to choose either a network or non-network provider at the time when medical care is needed?
point-of-service
what is considered the collateral on a life insurance policy loan
policy's cash value
the standard provisions of an accident and health insurance policy require that the
policy, endorsements, and attached papers constitute "entire contract"
a disability insurance policy was recently issued with a rating. What does this mean?
policyowner will be charged an additional premium
which of these is an accurate statement regarding the fixed period settlement option on a life insurance policy
portion of the payments paid to the beneficiary comes from interest calculated on the proceeds of the policy
A cease and desist order issued against an agent
prohibits a specific practice listed in the order
The automatic premium loan provision can be accurately described as a
provision that provides a policy loan to pay any premiums by the end of the grace period
which of the following actions may result in an agent's license being suspended
rebating portion of commission to insured
a life policyowner sells her policy to a third party in a viatical settlement. under this transaction, the policyowner
receives an amount less than the policy's death benefit
What effect can a long-term care benefit rider have on a life insurance policy
reduced death benefit
a life insurance policyowner would like a dividend option that results in a limited current outlay of funds. Which dividend option would be chosen?
reduction of premium payment
an agent may be personally liable if he or she engages in acts
that are not part of the agency or agent contract
who may terminate coverage under a cancelable health insurance policy?
the insurer or the insured
Which of the following must clearly be illustrated in ALL sales material for market value adjusted annuities?
the market value adjustment can be either upward or downward
which of the following statements about the installments for a fixed period settlement option in life insurance policies is NOT true?
the periodic payment amount is determined by the beneficiary's age
a material change in a modified endowment contract results in
the seven pay test, adjusted for cash value, applies again
The reason for backdating a policy is
to obtain a premium rate based on an earlier age
how is the collateral assignment used in a life insurance contract
transfers specific ownership rights to a creditor
an agent's insurance records must be provided to the state corporation commission
upon request of the state corporation commission
someone who is a licensed to negotiate a viatical settlement contract is a
viatical settlement broker
which of the following best describes the presumptive disability provision?
waives the typical total disability requirements
under what circumstance does an accident and health insurer have the right to request an autopsy
when not prohibited by state law
the conversion option for group term insurance may be exercised by an employee
within 31 days of termination
the following are all elements of a valid contract except
written evidence
Newborn children are automatically covered under an existing family medical plan at the moment of birth for a period of at least ____ days
31
How many months must AJ be disabled before applying for SS disability benefits (totally disabled)
5
an insured MUST wait ____ days to bring legal action against an insurer after written proof of loss has been received by the insurer
60
a producer working for an insurance company may be personally liable for
acts performed which are prohibited in agency contract
An agent's license may only be suspended or revoked if the agent
afforded the right to a hearing
if an existing medicare supplement policy is being replaced by a new policy, who is required to sign the notice of replacement
agent and applicant
what qualifies as acceptance of an insurance contract offer?
an issued policy
an accident and health insurer has just received written proof of loss from one if its insured. Insured must now wait 60 days before
bringing legal action against the insurer
a disabled business owner who has payroll and business expenses paid for has what kind of insurance policy?
business overhead expense
long-term care insurance policies may contain exclusions for all of the following EXCEPT
care for incurable conditions
which statement regarding the waiver of premium rider is accurate
cash payment is not directly provided to the policyowner
which statement regarding universal life insurance is correct?
cash value accumulations have a guaranteed minimum interest rate
An employee welfare plan exempt from ERISA regulations would be
church plans
what type of employee welfare plans are not subject to ERISA regulations
church plans
all of these are considered to be a violation of the federal fraud and false statements act except
claims reimbursement
_________ is the attempt made by an agent to intimidate or use force
coercion
an agent must notify the Bureau of Insurance for
conducting business under an assumed name
if dividend option choices are offered on a whole life insurance policy, the policy must
contain a statement that dividends are NOT guaranteed
in virginia, a period of accident and health insurance coverage which may be applied to reduce the length of a pre-existing condition exclusion under a new plan is called
creditable
major medical plans typically exclude coverage for which of the following benefits
custodial care
what action may the bureau of insurance take when it finds that a license applicant is not competent or untrustworthy
decline to issue the license
elimination periods typically apply to
disability policies
what is the name of the rider that provides an additional purchase option in a life insurance policy
guaranteed insurability rider
Which type of deductible must be satisfied again for each illness or accident in a major medical plan
per-cause
Where is the difference between a standard risk and a substandard risk reflected?
premium charges
in virginia, which of the following records are not required to be maintained by an agent
premium quotes for policies not accepted
a guaranteed renewable provision allows
premiums which can only be increased per rate class
which of the following provisions is NOT required to be included in qualified long-term care policies
prior hospitalization
An example of endodontic treatment is
root canal
secuirty laws passed by congress are enforced by which federal agency
secuirty and exchange commission
which of these is NOT considered the responsibility of a producer during the underwriting process?
selecting final approval date
which is a role of the replacing insurer during a life insurance replacement transaction
send notice to the proposed replacement to existing insurer
Assets that back non-guaranteed values of variable life insurance products are held in which account
separate account set up by the insurer
chuck and shaquille are both licensed agents in the same line of insurance. chuck provides shaquille with a referral that results in a sale. comissions on the sale will likely be
shared by both agents
Kelly purchases a health insurance policy issued on a conditionally renewable basis. The insurance company has a right to refuse renewal of the policy for
specific reasons stated in the contract
which life insurance policy provision prohibits a beneficiary from "commuting, encumbering, withdrawing, or assigning" any potion of the proceeds prior to actual receipt from the company
spendthrift clause
which of the following has the power to suspend or revoke an agent's license
state corporation commission
what happens to the cash value of a market value adjusted annuity if it's surrendered prior to the end of the stated guarantee period?
subject to market value adjustment