Insurance
all of the following are true regarding key person disability income insurance except
Premiums are tax deductible as a business expense
what is true about a spouse term rider
The rider is usually level term insurance
which of the following is not true regarding equity indexed annuities
They earn lower interest rates than fixed annuities.
a hospital indemnity policy will pay
a benefit for each day the insured is in a hospital
The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the
insuring clause
all of the following are nonforfeiture except
interest only
disability income coverage specifies that the policy covers the insured if he is unable to perform any job for which he is qualified. in this case total disability is defined as
Any occupation - more restrictive than other definitions.
To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?
At the time of application
An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)
Equity indexed annuity
who is the owner and who is the beneficiary on a key person life insurance policy
the employer is the owner and beneficiary
which of the following statements about a suicide clause in a life insurance policy is true
Suicide is excluded for a specific period of years and covered thereafter.
Nonforfeiture values guarantee which of the following for the policyowner?
That the cash value will not be lost
which is true regarding obtaining underwriting sources
The applicant must be informed of the sources contacted and how the information is being gathered.
which of the following is true about the requirements regarding HIV exams
The applicant must give prior informed written consent
all the following statements concerning an employer sponsored nonqualified retirement plan are true except
The employer can receive a current tax deduction for any contributions made to the plan
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?
The insured may renew the policy for another 10 years, but at a higher premium rate.
When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled?
The insurer is considered to be notified since the notification to agent equals notification to the insurer.
what is the advantage of reinstating a policy instead of applying for a new one
The original age is used for premium determination
a married couple owns a permanent policy which cover both of their lives and pays the DB only upon the death of the first insured. which policy is that
joint life policy
a married couple owns a permanent policy which covers both their lives and pays the death benefit upon the death of the first insured which policy is that
joint life policy
The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as
legal actions
all the following are true statemnets regarding the accumulation at interest option except
the interest is not taxable since it remains inside insurance policy
which of the following is true for both quity indexed annuities and fixed annuities
they have a guaranteed minimum interest rate
after filling a claim an insured tells the insurer that there is more than one insurance policy in force. the insurer sets aside the claim until it hears what the other company will pay. its classified as
unfair
The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?
100,000
the Patient Protection and Affordable Care Act mandates that insurers provide coverage for dependent children up to age
26
if an insurance company offers medicare supplement policies it must offer which of the gollowing plans
A
To sell variable life insurance policies, an agent must receive all of the following EXCEPT
A SEC registration
which of the following individuals will be eligible for coverage on the health insurance marketplace
A permanent resident lawfully present in the U.S.
In respect to the consideration clause, which of the following is consideration on the part of the insurer?
Promising to pay in accordance with the contract terms
Which nonforfeiture option provides coverage for the longest period of time?
Reduced Paid-Up
which of the following is the closest term to an authorized insurer
admitted
the primary source of info used for insurance underwriting
application
temporary licenses issued in texas
expire 90 days
an insurance company is domiciled in montana and transact insurance in wyoming which term best describes the insurers classification in wyoming
foreign
what is not considered rebating
giving a client a $25 pen with insurer logo during insurance application process
as it pertains to group health insurance, COBRA stipulates
group coverage must be extended for terminated employees up to a certain period of time at the former employees expense
An HMO subscriber no longer meets plan eligibility requirements. When can the insurer cancel coverage?
immediately
which of the following riders will not increase the premium for a policyowner
impairment rider
what type of insurance would be used for a return of premium rider
increasing term
Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?
indemnity
in which location would skilled care most likely be provided
institutional setting
the medical info bureau MIB was created to protect
insurance companies from adverse selection by high risk person
which of the following is not a feature of a guaranteed renewable provision
insurer can increase policy premium on an individual basis
an insured is covered by a disability income policy that contains an accidental means clause the insured exits a bus by jumping down the steps and breaks an ankle. what coverage will apply co
no coverage will apply since the injury could have been foreseen
Bethany studies in England for a semester. While she is there, she is involved in a train accident that leaves her disabled. If Bethany owns a general disability policy, what will be the extent of benefits that she receives?
none
in health insurance if a doctore charges $50 more than what the insurance company considers usual customary and reasonable the extra cost
not covered
a ride attached to a life insurance policy that provides coverage on the insured family member is called
payor rider 95
all the following are covered by part A of medicare except
physician and surgeon service
according to the state nonforfeiture law for life insurance policies insurer must offer at least one of the following nonforfeiture options except
reduction of premium
An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?
revocable
which of the following would be considered a nonqualified retirement plan
split dollar plan
which of the following terms describes the specified dollar amount beyond which the insured no longer participates in the sharing of expenses
stop loss limit
Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to
the insured
an employee is insured under her employer group life plan. if she terminates her group coverage which of the statements is incorrect
the insured may choose to convert to term or permanent individual coverage
all the following are true regarding a decreasing term policy except
the payable premium amount steadily declines throughout the duration of the contract
Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending?
unlimited
The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called
waiver of premium
which of the following is not covered under basic hospital expenses
surgeon fees
what is a foreign insurer
An insurer with a home office in another state
in texas the state continuing education requirements
consist of completing 24 hour of CE each biennium
which of the following provisions states the insurers right to change premium amounts
continuation provision
in the event of a loss after a notice of claim is submitted who is responsible for providing claims forms and to which party
insurer to insured
which is true about a policy assignment
it transfers rights of ownership from owner to another person
which statement is not true regarding straight life policy
its premium steadily decreases over time in response to growing cash value
An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage?
$102
what % of a company employee must take part in a noncontributory group life plan
100%
If an HMO policy is cancelled for nonpayment of the amounts due under the contract, how long of a notice must the insurer give the insured?
30 days
which of the following provides coverage on a first dollar basis
Basic expense
which of the following best describes fixed period settlement option
Both the principal and interest will be liquidated over a selected period of time.
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Cash option
A man is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim?
Claim is denied if his policy contains the Illegal Occupation provision
which of the following is not a characteristic or a service of an hmo plan
Contracting with insurance companies
which of the following is not an exclusion in medical expense insurance policies
Coverage for dependents
which of the following is not allowed in credit life insurance
Creditor requiring that a debtor buys insurance from a certain insurer
which one of the following is an eligibility requirement for social security disability income benefits
Fully insured status
which is true about the cash surrender nonforfeiture option
Funds exceeding the premium paid are taxable as ordinary income.
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
Immediate annuity
what is the main purpose of the seven pay test
It determines if the insurance policy is an MEC.
what is the benefit of choosing extended term as a nonforfeiture option
It has the highest amount of insurance protection
which of the following is not true regarding certificate of authority
It is issued to group insurance participants.
what is the term for how frequently a policyowner is required to pay policy premium
Mode
A participating insurance policy may do which of the following?
Pay dividends to the policyowner
a guaranteed renewable health insurance policy allows the
Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.
what is the purpose of a buyers guide
To allow the consumer to compare the costs of different policies
what is the purpose of COBRA
To provide continuation of coverage for terminated employees
The insured on a health policy only pays for medical costs related to accidents. which of the following types of policies doesthe insured have
accident only
which of the following is not covered under a long term care policy
acute care in hospital
an insured in a group policy has misstated his age on the insurance application. as a result the insurer will most likely
adjust the premium
what does liquidty refer to in a life insurance policy
cash values can be borrowed at any time
Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as
coercion
The usage of words or symbols that are similar to what entity is prohibited in life insurance advertisements?
federal government
if an insured is not required to pay a deductible what kind of coverage do he have
first dollar
if an insured is not required to pay a deductible what kind of coverage does he or she have
first dollar
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?
fixed period
which of the following types of LTC if not provided in an institutional setting
home health care
which of the following is a feature of a disability buyout plan
lump sum benefit payment option
The corridor deductible derives its name from the fact that it is applied between the basic coverage and the
major medical coverage
which of the following is not covered under plan a in medigap insurance
medicare part a deductible
Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is
monthly
an applicant for a health insurance policy returns a completed application and check for premium she receives a conditional receipt two weeks later. wish had the insurer done
neither approved application nor policy issue
on participating insurance policy issued by a mutual insurance company dividends paid to policy holders are
non taxable since the IRS treats them as a return of a portion of the premium paid
L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay?
$900 (deductible + 20% of the bill after the deductible [20% of $2,000])
For group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense?
100%
an insurer must acknowledge receipt of a notice of claim within how many days
15
a client has a new individual disability income policy with a 20 day probationary period and a 30 day elimination period. 10 days later the client breaks his leg and is off work 45 days. how many days of disability benefits will the policy pay
15 days
what is the maximum penalty for habitual willful noncompliance with the fair credit reporting act
2500
the commissioner of insurance issues a cease and desist order to an agent. if the agent wishes to contest the charges in court how many days after the order was issued does the agent have to make the request
30 days
When a disabled dependent child reaches the age limit for coverage, how long does the policyowner have to provide proof of dependency in order for the dependent to remain covered under the policy?
31 days
within how many days must an insured notify the insurer of a child birth and pay required fee
31 days
what is the period of coverage for events such as death or divorce umder COBRA
36 months
An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?
9800
A Straight Life policy has what type of premium?
A level annual premium for the life of the insured
which of following does the insuring clause not specify
A list of available doctors
Who is a third-party owner?
A policyowner who is not the insured
When an annuity is written, whose life expectancy is taken into account?
Annuitant
when possible what should insurers strive to eliminate from illustrations
Footnotes and caveats
which of the following best describes a misrepresentation
Issuing sales material with exaggerated statements about policy benefits
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?
It is reduced to the amount of what the cash value would buy as a single premium
which of the following is incorrect concerning medicaid
It is solely a federally administered program
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?
Life income with period certain
Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?
Replacement rule
which of the following is an example of a producer being involved in an unfair trade practice of rebating
Telling a client that his first premium will be waived if he purchased the insurance policy today
which of the following would be a qualifying event as it relates to COBRA
Termination of employment due to downsizing
which of the following best defines target premium in a universal life policy
The recommended amount to keep the policy in force throughout its lifetime
the paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT
Unearned premiums are retained by the insurance company.
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
the minimum interest rate on an equity indexed annuity is often based on
an indeed like standard and poor 500
all the following are examples of third party ownership of a life insurance policy EXCEPT
an insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan
which of the following products provide income for a specified period of years or life and protects a person against outliving their money
annuity
An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change?
applicant
Under the ACA, health insurance can no longer be underwritten based on which of the following factors?
applicants health condition
in TX, how is the commissioner of insurance places in office
appointed by governor for 2 years
in a replacement situation all of the gollowing must be considered except
assets
an insured premium increase as a result of her age. which type of policy does she have
attained age
what type of policy allows the insurance company to cancel a policy at any time
cancellable
according to the provisions of the patient protection and affordable care act all of the following preventive care services except
cervical cancer exams for all women starting at age 40
an insured and his wife are both involved in a head on collision the husband died instantly and the wife 15 days later. the company pays the DB to the estate of the insured. this indicates that the life insurance policy has what provision
common diaster
an insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. what contract characteristic does this describe
conditional
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?
consideration
which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service
copayment
According to the entire contract provision, what document must be made part of the insurance policy?
copy of original application
which of the following is the best reason to purchase life insurance rather than annuities
create an estate
A partnership buy-sell agreement in which each partner purchases insurance on the life of each of the other partners is called a
cross purchase plan
If an insured changes his payment plan from monthly to annually, what happens to the total premium?
decreases
which of the following terms describes making fake statements about financial condition of any insurer that are intended to any person engaged in the business of insurance
defamation
this arrangement specifies who will purchase a disabled partner's interest on the event he or she becomes disabled
disability buyout
which of the following statements about occupational vs nonoccupational coverage is true
disability insurance can be written as either
all of the following could be considered rebates if offered to an insured in the sale of insurance except
dividends from a mutual insurer
who is the owner and who is the beneficiary in s key person life insurance policy
employer is owner and beneficiary
how long is a newborn covered without notification to the insurer
from moment of birth insurer must be notified within 31 days
How are HMO territories typically divided?
geographic areas
which of the following occupations would not directly help to qualify someone for the office of commissioner of insurance
insurance agent
the medical info bureau was created to protect
insurance companies from adverse selection by high risk person
Who bears all of the investment risk in a fixed annuity?
insurance company
Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to
insured
a 40 year old man buys a whole life policy and named his wife as the only beneficiary. his wife dies 10 years later he never remarries and dies at 61 leaving 2 adult children. assuming he never changed the beneficiary the policy proceeds go to
insured estates
All advertisements are the responsibility of the
insurer
all of the following would be considered an insurance transaction except
obtaining insurance license
what is the major difference between a stock company and a mutual company
ownership
which of the following would accident only policy not cover
surgery to repair a wrist damaged by tendinitis
traditional ira contribution are
tax deductible
the interest owned on policy dividends is
taxable
children's rider attached to whole life policies are usually issued as what type of insurance
term
if an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness how will that the payable death benefit from the policy
the DB will be smaller
in a survivorship life policy when does the insurer pay the DB
upon the last death
which of the following is not a factor in determining qualification for social security disability benefit
workers occupation
the insuring clause of a disability policy usually states all the following except
The method of premium payment
group health insurance is characterized by all the following except
adverse selection
An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do?
ask her to sign a statement of good health
Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care?
attending physician
what document describes an insured medical history including diagnoses and treatments
attending physician statement
the DB in a variable universal life policy
depends on the performance of a separate acct
if the insured has the right to keep a long term care insurance policy in force by making timely premium payments and the insurer may not make any changes to the policy or decline to renew it the policy is
guaranteed renewable
which of the following types of LTC is NOT provides in an institutional setting
home heath care
Who must pay for the cost of a medical examination required in the process of underwriting?
insurer
which provision claims the insured duty to provide the insurer with reasonable notice in the event of loss
notice of claim
which provision concerns the insured duty to provide the insurer with reasonable notice in the event of a loss
notice of claim
An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?
the old policy should stay in force until the new policy is issued
which of the following types of insurance policies would perform the function of cash accumulation
whole life
which of the following is not a term for the period of time during which the annuitant or the beneficiary receives income
Depreciation period
An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day
Elimination period
The policy owner 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 policy owner choose?
Interest only option
what is not a benefit of the POS plan
It allows guaranteed acceptance of all applicants.
what statement best describes the free look provision
It allows the insured to return the policy within 10 days and receive a full refund of premiums.
which of the following is true about the mandatory free look in a life insurance policy
It commences when the policy is delivered
what is the waiting period on a waiver of premium rider in life insurance
6 months
At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called
Guaranteed insurability
which of the following long term care benefits would provide coverage for care for functionally impaired adults on a less than 24 hour basis
adult day care
All other factors being equal, the least expensive first year premium payment is found in
annually renewable term
an individual licensed as an agent must notify the Texas Department of Insurance on a monthly basis of all the following except
any change in business name
To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?
at time of application
the provision that states that both the printed contract and a copy of the application form the contract between the policy owner and the insurer is called
entire contract
the legal process that gives insurer, after payment of loss, the right to seek recovery from a third party that was responsible for the lid is known as
subrogation
which of the following statements regarding the change of beneficiaries provision is false
the policy owner has the right to change beneficiaries in any case
which of the following statements is correct about a standard risk classification in the same age group in with similar lifestyles
standard risk are a majority of people
an insured has endured multiple surgeries and hospitalization for an illness during the summer months. her insurer no longer bills her for medical expenses. what term best describes the condition she had met
stop loss limit
A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?
the insured's premiums will be waived until she is 21.
a temporary license holder can receive a commission from a sale made to all of the following except
the license holders sister in law
which of the following is not required on a illustration used in al the sale of a life insurance policy
the name of primary and secondary beneficiaries
which of the following best describes the annuity period
the period of time during which accumulated money is converted into income payments
If an insured continually uses the automatic premium loan option to pay the policy premium,
the policy will terminate when the cash value is reduced to nothing
an insurance agent wants for a client to replace the current annuities plan with another one. he presents the new one in an incomplete and dishonest way which makes the new contract seem far more appealing than the original one. the policyowmer ends up surrendering her original contract and replacing it with the new one. this is
twisting
An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?
10 days
an insured pays a monthly premium of $100 for her health insurance. what would be the duration of the grace period under her policy
10 days
Giving a client an inducement to a sale not stated in the policy is an unlawful practice known as
Rebating
An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this?
Reinstatement provision
The legal process that gives the insurer, after payment of a loss, the right to seek recovery from a third party that was responsible for the loss is known as
Subrogation
which of the following is not a feature of a guaranteed renewable provision
The insurer can increase the policy premium on an individual basis
which of the following is not a feature of a noncancellable policy
The insurer may terminate the contract only at renewal for certain conditions.
in disability income insurance the time between the onset of an injury or sickness and when benefits begin is known as
elimination period
The HMO Act of 1973 required most employers to offer HMO coverage to their employees as an alternative to traditional health insurance.
employer no longer forced to offer hmo plans
an individual is purchasing a permanent life insurance policy with a face value of $25,000 . this is all he can afford right now but wanted additional coverage in future. which option should be included in policy
guaranteed insurability option
the premium of a survivorship life policy compared with that of a joint life policy would be
lower