Insurance Test
What is the typical deductible for basic surgical expense insurance?
$0 / As with the other types of basic medical expense coverage, there is no deductible, but coverage is limited.
What is the maximum amount a person guilty of an unfair method of competition or an unfair or deceptive act or a prohibited practice may be fined in any 12 month period?
$100,000 If the Director determines, after a hearing, that a person is guilty of an unfair method of competition or an unfair or deceptive act or a prohibited practice, the guilty person will be ordered to pay a fine of up to $1,000 for each violation, but not to exceed $100,000 in any 12 month period, and/or have their license revoked or suspended.
Level 2 Violations of unfair insurance trade practices may result in a monetary penalty NOT TO EXCEED
$50,000
Level 2 Violations of unfair insurance trade practices may result in a monetary penalty of up to
$50,000
When may HIV-related test results be provided to the MIB? 1) only if the individual is not identified 2) under all circumstances 3) when given authorization by the patient 4) only when results are negative
1) only if the individual is not identified
which of the following are NOT assignability provisions relating to the assignment of ownership by a person under a group life policy? 1) the right to assign additional riders 2) the right to designate a beneficiary 3) the right to have an individual policy 4) the right to pay premiums
1) the right to assign additional riders
A client has a new individual disability income policy with a 20-day probationary period and a 30-day elimination period. Ten days later, the client breaks their leg and is off work for 45 days. How many days of disability benefits will the policy pay?
15 A probationary period refers to the amount of time that coverage is not available for illness-related disabilities, so it would not apply to a broken leg. The elimination period, however, is the time that must elapse between the onset of the disability and when benefits will start being paid. In this case, the individual is considered disabled for 45 days, and the benefits will start to be paid after 30 days. So, the client will receive benefits for 15 days.
The benefits for group disability plans are based on: 1) the number of employees in the company 2) a percentage of the worker's income 3) a flat amount 4) the employer's net worth
2) a percentage of the worker's income
according to the insurance replacement regulations, which of the following would be an example of a policy replacement? 1) a lapsed policy is reinstated with a specific timeframe 2) a policy is reissued with a reduction in cash value 3) a term policy expires, and the insured buys another term life policy 4) term insurance is changed to a whole life policy
2) a policy is reissued with a reduction in cash value
An adjustable life policy can assume the form of: 1) only permanent insurance 2) either term insurance or permanent insurance 3) neither term insurance or permanent insurance 4) only term insurance
2) either term insurance or permanent insurance adjustable life was developed in an effort to provide the policyowner with the best of both worlds (Term and permanent coverage).
which is NOT a required coverage in health insurance policies in MO 1) chemical dependency 2) mental retardation 3) immunization 4) bone marrow transplants
2) mental retardation mental retardation may be excluded. mental health MUST be included
the director has the power and authority to perform all of the following EXCEPT: 1-amend regulations 2-write insurance statues 3-regulate the internal affairs of the Department of Insurance 4-Aid in the interpretation of any state insurance law
2-write insurance statues
what is a formulary? 1. list of required provisions in a health policy 2. a list of prescription drugs covered by a prescription drug plan 3. a specified format for an insurance application 4. medication ingredients and dosage
2. a list of prescription drugs covered by a prescription drug plan
if an insured submits written proof of loss, what is the max amount of time after submittal the the insured has to initiate legal actions
3 years
which of the following is NOT true regarding a deferred annunity? 1) used to accumulate funds for retirement 2) can be purchased with a single lump sum 3) income payments begin within 1 year from the date of purchase 4) the annunity grows tax deferred
3) income payments begin within 1 year from the date of purchase deferred annuity payments begin sometime after 1 year after the contract was purchased
which of the following is true regarding copayment and coinsurance for services provided by a PT under a health plan benefit? 1) they are a flat amount established by the insurer 2) they are not allowed 3) the must be the same as for the services of a PCP 4) they can be higher than the regular copayments under the policy
3) the must be the same as for the services of a PCP
Within what time frame must a policy holder file a petition for adoption?
30 day of the birth or placement of the child
Which of the following scenarios would require that an insured is provided with a conversion option from group to individual LTC coverage? 1) the insured employer was terminated 2) the insured failed to pay premiums on time 3) the group policy was terminated 34) the insured had continuous coverage under the policy
34) the insured had continuous coverage under the policy
a variable life policyholder who owns a scheduled premium policy experiences many months of negative returns in the policy's subaccounts. In regards to the minimum death benefit, 1) it may reduced to 0 2) cash values will be used to pay the death benefit 3) it will be lower than the initial face amount 4) it will be equal to or greater than the initial face amount
4) it will be equal to or greater than the initial face amount
which of the following scenarios would NOT allow the insurer to contest the validity of an insurance policy? 1) a material misrep on the app was discovered 1 year after issue date 2) a fraud misstatement was found 3 years after issue date 3) 2.5 years after the policy was issued, the insured stopped paying premiums 4) the insured determined the policyholder uninsurable 2 years after the policy was issued
4) the insured determined the policyholder uninsurable 2 years after the policy was issued validity may NOT be contested unless its for a nonpayment of premium or fraudulent misstatements by the applicant, after the policy has been in force for 2 years.
Under the mandatory uniform provision Legal Actions, an insured is prevented from bringing a suit against the insurer to recover on a health policy prior to
60 days after written proof of loss has been submitted
Which of the following is NOT a type of whole life insurance? a) Level term b)Single premium c)Straight life d)Limited payment
A! Level Term IS NOT a type of whole life insurance. There are several types of whole life policies. The first three, Straight Life, Limited Payment, and Single Premium, are the basic forms of whole life. Level term is a type of term insurance.
who pays the premiums in credit term insurance?
BORROWER only (the creditor wouldn't buy insurance, banking on their premium polices not being made. Doesn't make sense)
Which of the following best describes fixed-period settlement option?
Both the principal and interest will be liquidated over a selected period of time. Under the fixed-period option (also called period certain), a specified period of years is selected, and equal installments are paid to the recipient. Both the principal and interest are liquidated together over the selected period of time.
Which of the following best describes annually renewable term insurance? a)Neither the premium nor the death benefit is affected by the insured's age b)It provides an annually increasing death benefit c)It is level term insurance d)It requires proof of insurability at each renewal.
It is level term insurance. Annually renewable term is a form of level term insurance that offers the most insurance at the lowest cost.
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
Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner? a) Payment of Claims b)Change of beneficiary c)Entire Contract Clause d)Proof of Loss
The Payment of Claims provision states that the claims must be paid to the policyowner, unless the death proceeds need to be paid to a beneficiary.
When does credit life insurance coverage take effect?
The date the debtor becomes obligated to the creditor
When can a Long-Term Care policy deny a claim for losses incurred because of a pre-existing condition?
Within 6 months of the effective date of coverage
All of the following statements about Medicare supplement insurance policies are correct EXCEPT a)They cover the cost of extended nursing home care.b)They cover Medicare deductibles and copayments.c)They supplement Medicare benefits.d)They are issued by private insurers.
a Medicare supplement policies (Medigap) do not cover the cost of extended nursing home care. Medigap plans are designed to fill the gap in coverage attributable to Medicare's deductibles, copayment requirements, and benefit periods. These plans are issued by private insurance companies.
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true? a)The annuitant must be a natural person.b)A corporation can be an annuitant as long as it is also the owner.c)A corporation can be an annuitant as long as the beneficiary is a natural person.d)The contract can be issued without an annuitant.
a Owners of annuities can be individuals or entities like corporations and trusts, but the annuitant must be a natural person, whose life expectancy is taken into consideration for the annuity.
what's the difference between straight line policy and 20-pay whole life policy? a) face amount and cash value b) policy maturity date c) premium payment period d) the benefit statement option
a limited pay whole life policy, just like straight life, endows for the face amount if the insured lives to 100. The premium's however are completely paid up in 20 years
Which of the following is NOT a medicaid qualifer? a) insurability b) income level c) age d) residency
a) insurability medicaid is a program operated by the State, with some federal funding, to provide medical assistance to those in need. To qualify - poor - US citizen or permanent resident - must meet other qualifiers such as: over 65, blind, disabled, pregnant
an insurer purchased a health insurance policy with a renewability clause the states the policy is "Guaranteed Renewable". This means that as long as the required premiums are paid, the policy will continue until the insured a) reaches age 65 b) dies c) reaches ago 100 d) becomes disabled
a) reaches age 65
Which of the following documents provides a disclosure of a Medicare supplement policy? a)Outline of coverage b)Buyer's guide c)Statement of renewal provisions d)Policy summary
a)Outline of coverage In order to provide complete disclosure, insurers are required to provide an outline of coverage upon policy application. The outline must include a description of the benefits and coverage, a statement of renewal provisions, and a statement identifying the outline of coverage as a summary of the policy issued.
for a producer to act on behalf of an insurance company, the producer must have a(n) 1) endorsement 2) designation 3) certificate of authority 4) appointment
appointment producers may only sell, solicit, or negotiate insurance on behalf of an insurer if they have been properly APPOINTED
The term "fixed" in a fixed annuity refers to all of the following EXCEPT a)Amount and length of payments b)Death benefit c)Guaranteed rate of interest d)Equal annuity payments
b) death benefit A fixed annuity is fixed in the sense that it provides a guaranteed minimum rate of interest and income payments that do not vary from one to the next. The company also guarantees the specified dollar amount for each payment and the length of the payout period. Annuities do not provide a death benefit.
which of the following would NOT be eligible for coverage under a key person? a) manager of a small store b) owner of a shop c) exec officer of a company d) pharmacist in a drug store
b) owner of a shop the owner is the principal, not a key person
Policies written on a third-party ownership basis are usually written to cover which of the following? a) policyowner's estate b) policyowner's minor children or business associates c) policyowners who are not insureds d) insured's estate
b) policyowner's minor children or business associates most policies involving 3rd party ownership are written in business situations or for minors in which the parent owns the policy
all of the following statements about indexed whole life insurance are correct EXCEPT: a) the cash value depends on the performance equity index b) the policy face amount remains level throughout the life of the policy c) the premium is fixed d) there is a guaranteed minimum interest rate
b) the policy face amount remains level throughout the life of the policy the face amount is increased annually to keep pace with inflation
Which of the following types of insurance is investment based, has a level fixed premium, and a nonguaranteed cash value? a) credit life b) variable whole life c) interest-based life d) universal life
b) variable whole life variable life is a level fixed premium investment based product; it is a combination of decreasing term insurance and an investment fund
Insured have the right to do which of the following if they have not received the proper claim forms within 15 days of their notice to the insurer of a covered loss under a major medical policy? a). Speak with a claims adjuster or another representative from the insurance company b). Submit the description in their own words on a plain sheet of paper. c). Be reimbursed any copayment or deductible on the claim d). Demand full payment immediately for the claim
b). Submit the description in their own words on a plain sheet of paper.
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than a)Prior to filling out an application for insurance.b)With the policy.c)Upon issuance of the policy.d)Within 30 days after the first premium payment was collected. If a life insurance policy contains a free-look period of at least 10 days, the buyer's guide can be delivered with the policy. If it doesn't, the buyer's guide must be delivered prior to accepting the initial premium.
b. with the policy If a life insurance policy contains a free-look period of at least 10 days, the buyer's guide can be delivered with the policy. If it doesn't, the buyer's guide must be delivered prior to accepting the initial premium.
The family term rider incorporates a) Key person whole life and dependents term b) Cost of living rider and family protection rider c) Spouse term and children's term d) Whole life and other-insured term
c) Spouse term and children's term
The Medical Information Bureau (MIB) was created to protect a)Insureds from unreasonable underwriting requirements by the insurance companies b)Medical examiners that perform insurance physical examinations c)Insurance companies from adverse selection by high risk persons d)Insurance departments from lawsuits by policyowners.
c)Insurance companies from adverse selection by high risk persons The MIB makes information available to underwriters to assist them in the underwriting process. It is a nonprofit trade organization which receives adverse medical information from insurance companies and maintains confidential medical impairment information on individuals.
Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean? a)The beneficiary will receive the lump sum, plus interest b)The primary beneficiary will receive the death benefit and the secondary beneficiaries will share the interest payments c)The beneficiary will only receive payments of the interest earned on the death benefit d)The beneficiary must pay interest to the insurer.
c)The beneficiary will only receive payments of the interest earned on the death benefit. With the Interest Only settlement option, the insurance company retains the policy proceeds and pays interest on the proceeds to the recipient (beneficiary) at regular intervals (monthly, quarterly, semiannually, or annually).
a whole life policy is surrendered for a reduced paid up policy. The cash value in the new policy will 1) reduce to the pre-surrender value 2) continue to increase 3) remain the same 4) decrease over time
continue to increase
Which of the following is a key distinction between variable whole life and variable universal life products? a)Variable universal life is regulated solely through FINRA. b)Variable whole life allows policy loans from the cash value c)Variable universal life has a fixed premium d)Variable whole life has a guaranteed death benefit.
d)Variable whole life has a guaranteed death benefit. Variable universal life insurance may or may not have a minimum death benefit, unlike variable whole life insurance which guarantees a minimum death benefit.
how will life insurance proceeds that are paid as a lump sum received by the beneficiary? 1) taxed as investment income 2) tax deductible income 3) free of federal income taxation 4) taxed as ordinary income
free of federal income taxation life insurance proceeds paid to a named beneficiary are generally free of federal income taxation if taken as a lump sum
an insured has an individual disability income policy with a 30 day elimination period. he becomes disabled on june 1st for 15 days. when will he collect disability income payments?
he won't collect anything because he didn't salsify the elimination period
The insurer of a credit life policy requires evidence of insurability from the debtor. The debtor becomes obligated to the creditor on March 1st, and the evidence of insurability is provided to the insurer on March 30th. When will the term of insurance begin? 1) on the date the EOI was request 2) 3/1 3) 3/30 4) whenever the insurer finds the EOI sastifactory
if the insurer requires EOI, and that evidence is provided 30 days after the debtor becomes obligated to the creditor, the term of the insurance begins on the date the company determines the EOI to be sastifactory
which of the following is provided by a skilled medical personnel to those who need occasional medical assistance or rehab care?\ a) home health care b) skilled care c) intermediate care d) custodial care
intermediate care = occasional nursing and rehab care that is ordered by a doctor and provided by skilled people for such things are bandage or administrating meds
which of the following statements is TRUE regarding an agent's report during the policy application process?
it provides the agent's personal observations concerning the proposed insured
Medicare part B covers all EXCEPT: 1) outpatient hopsital services 2) doctor's services 3) LTC services 4) home health visits
medicare doesn't cover LTC
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
mutual insurer
If a basic medical insurance plan's benefits are exhausted, what type of plan will then begin covering those losses? a) social security b) supplemental major medical c) supplemental basic medical d) none
supplemental major medical
if a nonresident producer wishes to sell insurance in the state of MO, the producer must meet all of the following requirements EXCEPT: 1) submit an app to for licensure to the director 2) take and pass the MO insurance licensing exam 3) reside in a state that allows the same privileges as MO residents 4) be licensed in another state in good standing
take and pass the MO insurance licensing exam licensed non-resident insurance producers are not required to take the MO state exam as long as they meet the non-resident approved requirements
An adjustable life policy owner can change what?
the coverage period
An insured commits suicide 18 months after obtaining a life insurance policy. How does this affect the policy's death benefits? (in MO)
the insurance company must pay FULL death benefits (remember MO is 1 year, most are 2 years)