INSURANCE EXAM (1-5)
When does a credit disability insurance expire?
15 days after the loan is satisfied
When does credit disability insurance expire?
15 days after the loan is satisfied
37. In relationship to COBRA, how many employees must an employer have for a terminated employee to be eligible for benefits
20
COBRA covers death and divorce for what time?
36 months
A policy that would cover heart disease is often called?
A critical illness policy
In relationship to advertising, which of the following is not part of it?
A rating from a rating service company like A.M. Best
What is mandatory about a contract between an insurer and an insured?
A written contract signed by both parties
Which of the following terms means that an insurance contract is dependent on unequal values being exchanged?
Aleatory
The medical information bureau does not relate to which of the following statements?
An applicant must give written permission to the MIB to give information to other companies
When individuals are qualified to enter into a contract, they make up which part of a contract?
Competent parties of the contract
T/F: it is the agent's responsibility to put more emphasis on the insurer's more profitable policies?
FALSE
What protects consumers from receiving outdated material?
Fair credit reporting act
46. When an agent handles the funds of an insured, the agent is acting in an ___ capacity?
Fiduciary
Large numbers of similar risks, describes which of the following terms?
Homogeneous
What group is funded by its members, and it provides payments for claims for insolvent insurers?
Life and health insurance guaranty association
If an insurance company issues a policy and fails to perform their contractual obligation because it becomes impaired, what organization protects its policyholders?
Life and health insurance guaranty corporation
What association is composed of all the us commissioners
NAIC
If an insurer cancels a policy, how are prepaid premiums to be returned to an insured?
On a pro rata basis, which means all unearned premiums will be returned to an insured
Which of the following best describes unilateral?
Only one person makes a promise
Why is an insurance policy a unilateral contract?
Only the insurance company is bound to live up to its side of the agreement
What is the primary difference between Mutual and Stock companies?
Ownership
Which of the following is a requirement of an agent that solicits insurance?
Provide the applicant with the name of the insurer and their license status
Which of the following best describes the underwriting process?
Selection, classification and rating of risks
T/F: when an agent attempts to replace an individual A&H policy, care should be given to compare benefit levels, limits of coverage and exclusions:
TRUE
to what extent may an insured be reimbursed for their loss?
The amount must be the maximum stated in the policy
Agent Jackson made a mistake in an advertisement. Who is responsible for the content in the advertisement?
The insurance company that agent Jackson represents
Which of the following is factor of the Fair Credit Reporting Act?
To give the consumer the right to protect their own credit information
When is dental treatment covered under a hospital or medical expense policy?
To repair an injury
What leads to class action lawsuits against insurance companies
Unfair and misleading marketing practices
Joan applied for a preferred rate on a health insurance policy? Her insurer responded with a standard risk after evaluating her past medical history. Her insurer's response would be considered which of the following?
a counteroffer
If an accident and health policy covers only a specified illness, what must its advertisement prominently display?
a statement that the policy is limited
Who must sign an application, in addition to an applicant?
agent
10. In an insurance contract, what refers to a contract in which one party may get more benefits than the other party?
aleatory
When an insured pays a small premium for a large amount of coverage, this describes which term?
aleatory
Which of the following relates to the fact that both parties of a contract may not receive the same value?
aleatory
How many eligible members must be covered under a group policy?
all of them
Who represents an insurance company?
an agent
What is not allowed to be gained in an inspection report?
ancestry of an applicant
In a replacement situation, all of the following must be considered except?
assets
John has more than one occupation. His insurance company uses his occupations as a means to classify his risk. How will his insurer classify him?
by using his most hazardous occupation
A major medical insurance policy would cover expenses for all of the following except:
charges covered under workers compensation insurance
In a group prescription drug plan, the insured typically pays what amount?
co payment
What must an agent always follow?
code of ethics
What type of health policy covers all conditions not excluded in a policy?
comprehensive
What element of an insurance contract shows that each party is giving something of value?
consideration
A policy that would cover cancer is called?
critical illness
When an applicant displays a risk that may not be insurable, which of the following describes their classification
declined
What kind of policy covers medical costs related to a specific condition?
dread disease
An agreement that an insurer grants to a producer, is what type of authority?
express
What will a vision care policy cover?
eye examinations and eyeglasses
When reinsurance is purchased on a certain specific policy, what type of insurance does this describe?
facultative
Every insurance applicant must be told if any investigation regarding their character and reputation in relationship to which of the following?
fair credit reporting act
Which act was designed to improve the accuracy of credit reports
fair credit reporting act
What is the statement that refers to agents being accountable for all of the insurance funds they collect?
fiduciary responsibility
ABC Insurance Company conducts business outside of Puerto Rico. What type of insurer is ABC?
foreign
All of the following are health insurance underwriting factors except:
geographic location
What increases the likelihood of a loss occurring?
hazards
Mr. Rodgers had an accidental death and dismemberment policy, and last week he died. An autopsy can be performed under all circumstances except;
his state prohibits the autopsy
A typical accidental death and dismemberment policy would cover all of the following except:
income
Which of the following applies to a change in an insurance application?
it must be initated by the applicant
Who funds the Insurance Guaranty Association
its members
In regard to an insurance company , what is the prime risk associated with a disability?
loss of income
Tri care was designed for all of the following except:
medocaid of the military
George, the owner of an art shop, is very concerned that his employees may help themselves to his art supplies from his inventory without paying for them. What hazard does this represent?
moral
an applicant lying about his/ her age represents what type of hazard?
moral
All of the following may not be underwriting factors, except:
moral hazards
Four years ago Ted purchased a policy. Last year he received a dividend check, but this year he didn't receive one. What does this describe?
mutual
Policyholders receive policy dividends when there is a profit with which type of insurance company?
mutual
When may an applicant be denied coverage, due to information found in their MIB report
never
If an employee is terminated due to selling company production secrets, how long will the employees dependents be covered by COBRA?
no coverage
In franchise groups, how many master policies will be issued?
none
Which of the following is the term applied for a drug used for a purpose not specifically on the label or approved by the food and drug administration for that use?
off the label
A dread disease policy covers
only the diseases specified on the policy, usually that occur relatively infrequently
What document helps to ensure full and fair disclosure to the recipient of their policy?
outline of coverage
____ ___ is the condition for which an applicant should have received or did receive medical treatment within a specified period of time, prior to the effective date of the policy.
pre exisiting condition
Accidental death and dismemberment benefits cover ___ and ___ amounts:
principle and capital
What term best describes an insurer's consideration in an insurance policy?
promise
In regard to the disclosure of an insured's personal medical information, when is it not permitted?
public interest
Which of the following is the most common way to transfer risk
purchase insurance
32. The risk of loss may be classified as
pure & speculative risk
Joe was very active in his job, but after a job change he sits at a desk for work. When Joe gets home he walks 2 miles and he has stopped eating sweets. How is Joe handling his situation with his desk job?
reduction
ABC insurer cedes part of an insured's coverage to another insurance company, but assumes part of the risk. What does this describe?
reinsurance
What is used as protection against catastrophic loss?
reinsurance
Which of the following refers to the situation in which an insurance company transfers part or all of their risk to another insurer?
reinsurance
What are 3 factors that may not be used as underwriting factors?
religion, race & nationality
Henry's is an insurance applicant. His statements regarding his job, hobbies and history background is best related to which of the following?
representation
Self insurance is an example of what kind of risk management?
retention
the chance that a loss may occur, relates to which of the following terms?
risk
What is another name for disease or an illness?
sickness
Which of the following is a rated risk?
substandard
Which risk classification is often considered to be special?
substandard
Which of the following most likely not be covered under vision coverage?
sunglasses
Who is responsible for any marketing materials written by an insurance company?
the insurer
What happens when an individual changes their group health policy to an individual health policy ?
their new individual plan will have a higher premium
Which of the following is the purpose of a long term care policy?
to provide nursing home coverage
The principal of insurance is an example of what kind of risk management?
transfer
The principle of insurance is an example of what kind of risk management?
transfer
All of the following are exclusions from individual health coverage except:
travel
In regard to the only party in an insurance contract that makes a legal enforceable promise, makes the contract _______.
unilateral
when the actions of one party may purposefully give up a known right, it is referred to as a(n):
waiver