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When an employee terminates coverage under a group insurance policy, coverage continues in force
for 31 days
How long is a newborn covered without notification to the insurer
from the moment of birth, and the insurer must be notified within 31 days
Which of the following information about the applicant is not included in the General Information section of the application for insurance?
Medical background
Which part of an insurance application would contain information regarding the cause of death of the applicant's deceased relatives?
Medical information
Another name for a substandard risk classification is
Rated
The insurer discovered that one of the applicants for life insurance missed a couple of questions on the application. What must the insurer do with the application?
Return to the applicant for completion
Which of the following best details the underwriting process for life insurance"
Selection, classification, and rating of risks
Which of the following would qualify as a competent party in an insurance contract
The applicant has a prior felony conviction
What is the purpose of a fixed-period settlement option?
To provide a guaranteed income for a certain amount of time.
If a dental plan is integrated, it is combined with what type of plan?
Medical
How long is an open enrollment period for Medicare supplement policies?
6 months
The premium charged for exercising the Guaranteed insurability rider is based upon the insured's
Attained age.
All of the following statements about Medicare supplement insurance policies are correct Except
They cover the cost of extended nursing home care.
Which of the following is Not covered under a long-term care policy?
Acute care in a hospital
All of the following would be considered an insurance transaction Except
Obtaining an insurance license
When an annuity is written, whose life expectancy is taken into account?
Annuitant
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
When must insurable interest exist in a life insurance policy?
At the time of application
The premium charged for exercising the Guaranteed Insurability Rider is based upon the insured's
Attained age
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
Other-insured rider
Traditional IRA contributions are tax deductible based on which of the following?
Owner's income
An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would
Pay the claim
This arrangement specifies who will purchase a disabled partner's interest in the event he or she becomes disabled.
Disability buyout
Which of the following is considered a qualifying event under COBRA?
Divorce
Who must pay for the cost of a medical examination required in the process of underwriting?
Insurer
A guaranteed renewable disability insurance policy
Is renewable at the insureds option to a specified age
When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will
Issue the policy anyway and pay the face value to the beneficiary
Which of the following is true about the mandatory free look in a Life insurance policy?
It commences when the policy is delivered
Which of the following is not true regarding the life with guaranteed minimum annuity settlement option?
It does not guarantee that the entire principal amount will be paid out.
Why is an equity indexed annuity considered to be a fixed annuity?
It has guaranteed minimum interest rate
What describes the specific information about a policy?
Policy summary
Which of the following will be included in a policy summary?
Premium amounts and surrender values
Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a
Premium receipt
What is the purpose of a conditional receipt
It is intended to provide coverage on a date prior to the policy issue.
Which of the following is not true regarding a Certificate of Authority
It is issued to group insurance participants
Which part of an insurance application would contain information regarding the cause of death of the applicant's deceased relatives
Medical information
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report
Must be informed of the source of the report
If an agent fails to obtain an applicant's signature on the application, the agent must
Return the application to the applicant for a signature.
To sell variable life insurance policies, an agent must receive all of the following Except
SEC registration
Which of the following special policies covers unusual risks that are not normally included under Accidental Death and Dismemberment coverage?
Special risk policy
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
The customer's associates, friends, and neighbors provide the report's data
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?
The date of medical exam
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.
All of the following are true regarding a decreasing term policy Except
The payable premium amount steadily declines throughout the duration of the contract
In terms of parties to a contract, which of the following does not describe a competent party?
The person must have at least completed secondary education
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?
The policy will be interpreted as if the insurer waived its right to have an answer on the application
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be True?
The policy will be interpreted as if the insurer waived its right to have an answer on the application
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant
With the policy
The main focus for an HMO is
preventive care
Manny has been injured in an accident. Although she is still receiving benefits from her policy, she does not have to pay premiums. Her policy includes
waiver of premium rider
Once the person meets the stringent requirements for disability benefits, how long is the waiting period under Social Security before any benefits will be paid?
5 months
Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray?
50/50
Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as
Contracts of adhesion
An individual purchased a $100,000 joint life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?
$100,000
An insurer must acknowledge receipt of a Notice of Claim within how many days?
15
Viatical settlements may be rescinding within what time period after the viator receives the proceeds
15 days
An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued?
Adjust the claim benefit to reflect the insured's true age
An insurance contract must contain all of the following to be considered binding Except
Beneficiary's consent
A small business owner is the insured under a disability policy that funds a buy-sell agreement. If the owner dies or becomes disabled, the policy would provide which of the following
Cash to the owner's business partner to accomplish a buyout
The type of policy that can be changed from one that does not accumulate cash value to the one that does is a
Convertible term policy
Which of the following is not an essential of an insurance contract?
Counteroffer
What is another name for interest-sensitive whole life insurance
Current assumption life
Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?
Fixed amount
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid
For 20 years or until death, whichever occurs first
If the insured has the right to keep a long-term care insurance policy in force by making timely premium payments, the insurer may not make any change to the policy or decline to renew it, the policy is
Guaranteed renewable
A provision found in insurance policies which prevents the insured from collecting twice for the same loss is called
Subrogation
Which of the following is not covered under Basic Hospital Expense Coverage
Surgeons' fees
Which of the following is called a second-to-die policy
Survivorship life
Your client wants to know what the tax implications are for contributions to a Health Savings Account. You should advise her that the contributions are
Tax deductible
If an applicant does not receive a copy of the new insurance policy, who would be held responsible?
The agent
If an applicant does not receive his or her insurance policy, who would be held responsible?
The agent
Which of the following information will be stated in the consideration clause of a life insurance policy?
The amount of premium payment
An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true?
The group plan will not pay because the employee was injured at work
A policy with a 31-day grace period implies
The policy will not lapse for 31 days if the premium is not paid when due
Which of the following best defines the owner as it pertains to life settlement contracts?
The policyowner of life insurance policy
Which is true about a spouse term rider?
The rider is usually level term insurance
On a health insurance application, a signature is required from all of the following individuals Except
The spouse of the policyowner
Which is generally true regarding insureds who have been classified as preferred risk
Their premiums are lower
Which is generally true regarding insureds who have been classified as preferred risks?
Their premiums are lower
Why should the producer personally deliver the policy when the first premium has already been paid?
To help the insured understand all aspects of the contract
All of the following are true regarding the convertibility option under a term life insurance policy Except
Upon conversion, the death benefit of then permanent policy will be reduced by 50%
In a survivorship life policy, when does the insurer pay the death benefit
Upon the last death
In a survivorship life policy, when does the insurer pay the death benefit?
Upon the last death
Which of the following riders would not cause the Death Benefit to increase?
Payor Benefit Rider
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
Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company
Aleatory
In reference to the standard Medicare Supplement benefits plan, what does the term standard mean?
All providers will have the same coverage options and conditions for each plan
In Insurance, an offer is usually made when
An applicant submits an application to the insurer
While a claim is pending, an insurance company may require
An independent examination as often as reasonably required
Which is the primary source of information used for insurance underwriting
Application
What is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application?
As long as the policy is in force
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
As of the application date
In a replacement situation, all of the following must be considered Except
Assets
The accelerated benefits provision will provide for an early payment of the death benefit when the insured
Becomes terminally ill
According to the provisions of the Patient Protection and Affordable Care Act, all of the following are required preventive care services EXCEPT
Cervical cancer exams for all women starting at age 40
All of the following are duties and responsibilities of producers at the time of application Except
Change any incorrect statement on the application by personally initialing next to the corrected statement
If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to
Charge a higher premium
Which of the following types of insurance policies is most commonly used in credit life insurance
Decreasing term
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
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT
Conditions
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
The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the
Entire contract clause
If an insured changes the premium mode from monthly to annually, what happens to the total premium?
Decreases
A producer agent must do all of the following when delivering a new policy to the insured Except
Disclose commissions earned from the sale of the policy
The provision that states that both the printed contract and a copy of the application form the contract between the policyowner, and the insurer is called the
Entire contract
In the underwriting process, it was determined that the applicant for life insurance is in poor health and has some dangerous habits. Which of the following is true concerning the policy premium?
It will likely be higher because the applicant is a substandard risk
Which of the following best describes the MIB
It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?
Joint life
Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?
Life expectancy
Which of the following is an example of a limited-pay life policy?
Life paid up at 65
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Limited pay whole life
The premium of a survivorship life policy compared with that of a life policy would be
Lower
Which of the following is another term for the accumulation period of an annuity
Pay-in period
An individual buys a flexible premium deferred life annuity with 20-year period certain. What would his beneficiary receive if he died 5 years after beginning the annuity phase?
Payment for 15 years
Which of the following is Not true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner.
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statement is true
The annuitant must be a natural person
The following are all causes for the insurance commissioner to suspend or impose conditions upon the continuance of an agent's license Except
The applicant has been shown to be a poor personal credit risk
The annuitant dies while the annuity is still in the accumulation stage. Which of the following is true?
The beneficiary will receive the greater of the money paid into the annuity or the cash value.
A temporary license holder can receive a commission from sale made to all of the following Except
The license holder's sister-in-law
An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would not be a reason for the insurance company to cancel the policy?
The insured is in an accident and incurs a large claim
Insured Z's health insurance policy year begins in January. His policy contains a carry-over provision. In November, he has a small claim which is less than his deductible. Which of the following is true?
The insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible.
What is necessary in order to be eligible to receive benefits from a long-term care policy?
The insured must be unable to perform some activities of daily living
In order for an insured under Medicare Part A to receive benefits for car in a skilled nursing facility, which of the following conditions must be met?
The insured must have first been hospitalized for 3 consecutive days
If an insurer requires a medical examination of an applicant in connection with the application for life insurance, who is responsible for paying the cost of the examination
The insurer
Which of the following is the best reason to purchase life insurance rather than an annuity
To create an estate
The main difference between immediate and deferred annuities is
When the income payments begin
What is the timeframe for filing relevant Suspicious Activity Reports?
Within 30 days of initial discovery
What is the timeframe of filing relevant Suspicious Activity Report?
Within 30 days of initial discovery