Insurance study guide (chap 16-18)
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 (The Legal Actions provision of an Accident & Health policy requires that the insurer settle a claim within 60 days after receipt of Proof of Loss.)
Which of the following is NOT considered rebating?
*Sharing commissions with an agent licensed in the same line of business (Sharing commissions with other licensed agents is not considered rebating.)
A temporary producer license is valid for a maximum of ____ days
180 A temporary license is valid for a maximum if 180 days
M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force.
45 days
Who is a mutual insurance company owned by?
A mutual insurance company is owned by its policyholders.
Which of the following statements describes what an accident and health policyowner may NOT do?
Adjust the premium payments (Correct.) The owner of an Accident and Health policy may not change the premium amount.
In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments
After an insured has become totally disabled as defined in the policy "After an insured has become totally disabled as defined in the policy". The waiver of premium provision keeps the coverage in force without premium payments if the insured has become totally disabled as defined in the policy.
According to the affordable care act (ACA), a dependent child's eligibility status is determined by
Age Under the affordable care act, dependent children are covered up until age 26
Before a health insurance policy is issued, which of these components of the contract is required?
Applicant's signature on application
An admitted company in Connecticut MUST
Be licensed in Connecticut
Life insurance illustrations must include all of these EXCEPT
Beneficiary's name The name of the beneficiary is not required to be included within the life insurance illustration
Which of these MUST be given to a life insurance applicant upon policy delivery?
Buyer's Guide Upon delivery of a life policy, the applicant is given a buyer's guide and policy summary
ABC insurance submits a financial condition statement to the commissioner requesting to conduct business in Connecticut. The commissioner approves the statement and then issues a(n)
Certificate of authority An insurance company that wants to transact business in Connecticut must obtain a certificate of authority from the commissioner
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 (Correct.) The change of occupation provision allows an insurer to adjust policy benefits and/or rates if the insured has changed to a more hazardous occupation.
Health providers are compensated by a preferred provider organization (PPO) for normal dental procedures by what means?
Decreased fee schedules
"A producer does not have the authority to change a policy or waive any of its provisions." The health provision that best describes this statement is called the
Entire Contract The entire contract provision states that the producer doss NOT have the authority to waive the policy or waive any of its provisions
The sections of an insurance contract which limit coverage are called
Exclusions An exclusion limits coverage in an insurance contract
A person covered by a major medical policy leaves the group and converts the coverage to an individual policy. Which of the following statements is INCORRECT about the new policy?
It pays the same benefits as the group policy. A converted individual policy must have comparable, but not necessarily the same benefits as the group policy
What is the purpose of the insurance guaranty association?
Pays authorized claims for liquidated life and health insurers
Which of the following statements accurately describes the Waiver Of Premium provision in an accident and health policy?
Premiums are waived after the insured has been totally disabled for a specified time period
Which of the following involves analyzing a case before admission to determine what type of treatment is necessary?
Prospective review
Which mode of payment is NOT used by health insurance policies?
The correct answer is "Single premium". Single premium is not used when paying for health insurance policies.
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. In this situation, the insurance company will adjust the death benefit to what the premiums paid would have purchased at the insured's actual age.
At what point must insurable interest exist on a life insurance policy?
Upon application being taken Insuranle interest must exist only at the policy inception
ABC insurance company would like to issue a small employer group policy in this state. Before doing so, it is required to
be authorized to write accident and health insurance in this state. Before an insurance conpany can issue a small employer grouo policy, it MUST. Be authorized to write health insurance in this state
A _______ is the signed document that starts the free-look period
delivery receipt The free look period starts at the confirmed delivery of the insurance policy
A hearing must be held before a producer's license can be suspended or revoked. Prior to the hearing, the Commissioner of Insurance is required to
give written notice to the producer's insurance company Before holding a hearing that may lead to suspension or revocation of a producer's license, the Commissioner MUST give written notice to the producer
T sends proof of loss to her insurer for an acceptable medical expense claim under her individual Health Insurance policy. Upon receipt, the insurer must pay the benefits
immediately Under the time of payment of claims provision, the insurer must pay the benefits immediately after receiving proof of loss
Which of the following is protected under the Brokered Transactions Guaranty Fund?
insured The Brokered Transactions Guaranty Fund pays the claims of people (insureds) financially harmed by the dishonest actions of insurance producers
What type of plan normally includes hospice benefits?
managed care plans
XYZ Corp was issued a group health policy for its employees. Under this plan a
policy must be issued to XYZ, and a certificate must be issued to each employee When a group health policy is issued to an employer in CT, the policy must be issued to the employer, and a certificate must be issued to each employee
The legal actions provision of an insurance contract is designed to do all the following EXCEPT
protect the producer
A producer has influenced an existing policyowner to convert an existing whole life policy to Reduced Paid-up insurance. The producer then sells the policyowner a new universal life policy. This transaction is called a(n):
replacement Taking an existing whole life policy and converting it to reduced paid-up insurance while immediately taking out a new life policy is considered a form of replacement, which is a heavily regulated transaction
With Optionally Renewable Health policies, the insurer may
review the policy annually and determine whether or not to renew it "review the policy annually and determine whether or not to renew it". With an Optionally Renewable policy, the insurance company may review the policy annually and choose whether or not to renew it.
Long-term care policies sold in Connecticut may NOT exclude coverage for
senile dementia Cannot be excluded for coverage on long-term care policied in CT
Which of these products does standard nonforfeiture law apply to?
whole life policies Standard nonforfeiture law applies to whole life insurance policies because the cash value that accumulates
An insured must notify an insurer of a medical claim within how many days after an accident?
"20". Notice of a claim is typically required within 20 days after the occurrence or a commencement of the loss.
P is self-employed and owns an Individual Disability Income policy. He becomes totally disabled on June 1 and receives $2,000 a month for the next 10 months. How much of this income is subject to federal income tax?
$0 Disability income benefits that derive from an individual policy which was paid entirely by the policy owner is not subject to federal income tax.
G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills?
*The insured (In this situation, the insured is liable for the medical bills.)
The free-look period for life insurance policies issued in Connecticut is ____ days
10 days Life insurance policies must provide a minimum free period of 10 days upon policy delivery. This allows the policyowner time to decide whether or not to keep it. If the policyowner decides not to keep the policy within the 10 days allowed, a full refund eill be given
An insurer must provide an insured with claim forms within __ days after receiving notice of a loss.
15 days Under the claims forms provision , an insurer must provide an insured with claim forms within a max of 15 days after receiving notice of a loss
To be classified as a small employer in Connecticut, an employer must employ how many eligible employees?
1:50
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 days
B and his family are covered under a family health policy. B and his wife recently had a daughter. B must provide notice of birth and payment of premium to the insurer within _____ days after birth to maintain coverage on the newborn
31 days A policyowner must provide notification of birth and payment of premium to the insurance company within a maximum of 31 days
B is covered by a group health plan. B's employment is terminated and decides to convert the coverage to an individual policy. How many days does B have to convert?
31 days The insured has 31 days after termination to convert the group plan an individual plan
A domestic insurer licensed to conduct business in Connecticut must have their books and records examined by the Commissioner at least every ___ years
5 years A domestic insurer licensed to conduct business in Connecticut must have their books and records examined by the commissioner at least once every 5 years
In Connecticut, the maximum fixed interest rate a life insurance policy may charge is
8% In CT the max fixed interest rate a life insurance policy may charge 8%
Rebating is
An illegal practice in Connecticut Rebating can be described as offering a prospect something of value that is not specified in a contract in order to induce the purchase of that contract. (Bribery) Offering any special inducements or valuable consideration, whatever, not specified in the contract.
A producer's license may be issued without taking an examination for which of these individuals?
An individual who holds an approved professional designation Such as a CLU designation, may qualify for a producer's license without taking an examination
Q is the insured for a $25,000 life insurance policy. Q dies October 15. Q's beneficiary receives a check for $25,108 on December 15. Why did Q's beneficiary receive an amount higher than the policy's face amount?
An insurer must pay interest on proceeds held beginning on the date of death
What is the initial source of underwriting for an insurance policy?
Application containing statements from the insured
When does a family health policy's coverage for a newborn child begin?
At the moment of birth If additional children are born to the family, the health insurance policy must cover the children at the moment of birth
Which of these is NOT a nonforfeiture provision contained in a life insurance policy?
Automatic premium loan
Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?
Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application of to the insurance company
K applies for a health insurance policy on herself and submits the initial premium with the application. She is given a receipt by the producer stating that coverage begins immediately if the application is approved. What kind of receipt was used?
Conditional A conditional receipt indicates that certain conditions must be met in order for the insurance coverage to go into effect
B is a producer who only writes insurance business on his business partners. Which of the following is B engaged in?
Controlled Business Producers who write insurance primarily on themselves, their family, or their business interests are engaged in controlled business
A(n) ___ insurance company is domiciled in Connecticut
Domestic An insurance company domiciled in this state is called a domestic insurer
How many "activities of daily living" must an insured be UNABLE to perform in order to meet the chronically ill requirement of a Long-Term Care policy?
Eligibility for benefits may require the inability tk perform up to 3 ADL's To meet the chronically ill requirement of a Long-Term Care policy, an individual must be UNABLE to perform a minimum of two activities of daily living.
After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?
File written proof of loss The insured may file written proof loss in any forms if the insurer does not furnish forms after the insured give's notice of loss
Which of these terms best describes the obligations involved with handling and managing other people's money?
Fudiciary Responsibility is the manner in which an individual is expected to perform when managing and handling other people's money
All of these are a prerequisite for becoming a licensed agent EXCEPT
Graduating from high school is not a prerequisite for becoming a licensed agent.
A Mutual Insurance Company
Has no shareholders A mutual insurance company is an insurance company that is owned by the policyholders rather than investors or shareholders
T applied for a Disability Income policy and has a history of back injuries. The insurer issued the policy with a statement that excludes coverage for back injuries. This statement is called a(n)
Impairment rider
K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation?
In this situation, coverage may be restored under the reinstatement provision.
M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT
In this situation, the policy will go into effect after all these actions occur EXCEPT the expiration of the free-look period.
If the insurance commissioner determines a producer has been engaging in an unfair or deceptive activity, which of the following actions will likely be taken
Insurance Commissioner orders the activity to cease If the insurance commissioner determines that a producer is engaging in an unfair or deceptive activity, the insurance commissioner will likely order the activity to cease
What is the initial requirement for an insured to become eligible for benefits under the waiver of premium provision?
Insured must be under a physician's care
The entity whose sole purpose is sharing medical data among its member companies is called the
Medical Information Bureau (MIB)
According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options?
Monthly The time of payment for claims is usually specified in different policies as 60 days, 45 days, or 30 days. However, if the claim involves disability income benefits, the benefits must be paid not less frequently than monthly.
What type of renewability guarantees premium rates and renewability?
Noncancellable. Noncancellable policies provides guaranteed renewability and premium rates.
During the course of a Medicare supplement sale, T the agent determines there is an existing policy being replaced. Which of these actions is T NOT required to perform?
Notify the replaced insurance company
The insurance commissioner may issue a(n) ___to assure compliance with an insurance law
Order If the insurance commissioner has determined an insurance law has been violated, an order to cease the activity can be administered
Which contracts are affected by replacement regulations?
Ordinary Life Insurance Replacement regulations apply only to ordinary life contracts
Which of the following statements about a guaranteed renewable health insurance policy is CORRECT?
Premiums normally increase at time of renewal- A Guaranteed Renewable Health Insurance policy can have increasing premiums at time of renewal.
Which of these is NOT a standard provision in qualified long-term care policies sold in Connecticut?
Prior hospitalization (30-day free look period, guaranteed renewability, provide minimum coverage for 12 consecutive months) prior hospitalization is not a required provision fro long term care policies
A handicapped child is covered under an individual health policy. If continuation of coverage is needed beyond the policy's age limit, which of the following is required?
Proof of incapacity and dependency upon reaching the age limit. In Connecticut, continuation of medical plan coverage for a handicapped child beyond the age limit stated in the policy may require proof of the child's incapacity and dependency upon reaching the age limit
All of these are considered sources of underwriting information about an applicant EXCEPT
Rating Services All of these are valid sources to obtain underwriting information about an applicant EXCEPT for a rating service (A.M. Best, Standard & Poor's).
Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?
Return to the customer, collect a new check made out to the insurance company, and send the new check to the insurance company
Which of these terms accurately defines an underwriter's assessment of information on a life insurance application?
Risk Classification Underwriting, another term for risk selection, is the process of reviewing the many characteristics that make up the risk profile of an applicant to determine if the applicant is insurable and, if so, at standard or substandard rates.
The waiting period for a pre-existing condition under a Medicare supplement policy may NOT go beyond
The correct answer is "6 months". Under a Medicare Supplement policy, the waiting period for pre-existing conditions may not exceed 6 months.
When is a Group Health policy required to provide coverage for a newborn child?
The correct answer is "At the moment of birth". A Group Health policy is required to provide coverage for a newborn child at the moment of birth.
As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?
The correct answer is "Coercion". A creditor who requires a debtor to obtain insurance from a particular company or agent as a condition for a loan is guilty of coercion.
What action should a producer take if the initial premium is NOT submitted with the application?
The correct answer is "Forward the application to the insurer without the initial premium". In this situation, the producer should submit the application to the insurance company without the premium. However, if a premium is not paid with the application, the policy will not become valid until the initial premium is collected.
Information obtained from a phone conversation to the proposed insured can be found in which of these reports?
The correct answer is "Inspection report". An inspection report may include information obtained by a telephone call to the proposed insured.
What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision?
The correct answer is "Submit the claim in any form". If forms are not furnished, the insured should submit the claim in any form, which must be accepted by the company as adequate proof of loss.
If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best desribes this policy is called
The correct answer is "noncancellable". A noncancellable policy is one which the insurance company cannot cancel and which premiums cannot be increased.
Which circumstance REQUIRES the pre-existing condition clause in a long-term care policy be waived?
The new policy replaces existing coverage with the same insurer
A Medicare supplement policy holder has ___ days to return the policy and receive a full premium refund
The policyholder has 30 days to return a medicare supplement insurance policy and receive a full refund on premiums
Essential benefits without annual and lifetime limits are required on any health policy purchased
Through the Federal Marketplace A health policy must provide essential benefits without annual and lifetime limits when purchased individually or with group coverage through the federal marketplace
All of the following are typically covered under dental insurance EXCEPT
Treatment which began before the eligibility date. (Fluoride Treatment, teeth cleanings, and x-rays are all covered under Dental Insurance)