Life and Heath Test Q's
For which of the following expenses does a Basic Hospital policy pay? Hospital room and board Prescription medication Surgical fees Physician's fees
A Basic Hospital policy pays expenses for hospital room and board, as well as other miscellaneous medical expenses incurred during hospitalization.
J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a predetermined price. What type of plan does J belong to? Multiple Employer Welfare Arrangement Multiple Employer Trust Health Maintenance Organization Co-op Arrangement
A Health Maintenance Organization (HMO) contracts with doctors and hospitals to provide medical benefits to subscribers at a predetermined price.
What kind of premium does a Whole Life policy have? decreasing adjustable level deferred
A Whole Life insurance policy has a level premium.
An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective? When the policy is issued The date of policy delivery When the conditions of the receipt are met The date the sales appointment was set
A conditional receipt indicates that certain conditions must be met in order for the insurance coverage to go into effect.
Under the Affordable Care Act (ACA), health coverage is provided for dependents up to the age of 18 21 25 26
A dependent's health coverage is provided under the Affordable Care Act (ACA) until the child reaches the age of 26.
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 noncancellable conditionally renewable cancellable guaranteed renewable
A noncancellable policy is one which the insurance company cannot cancel and which premiums cannot be increased.
A person is required to be AT LEAST how old before he or she is licensed as an agent in North Carolina? 15 16 18 21
A person is required to be at least 18 years old before he or she is licensed as an agent in North Carolina.
D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits? Residual Benefit clause Waiver Benefit clause Concurrent Benefit clause Guaranteed Benefit clause
A residual amount benefit is based on the proportion of income actually lost due to the partial disability, taking into account the fact that the insured is able to work and earn some income.
What type of life policy covers two people and pays upon the death of the last insured? Shared Survivorship Adjustable Joint
A survivorship life policy insures two individuals and is designed to pay a benefit upon the second death.
According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid? 7 days 10 days 31 days 60 days
According to the Mandatory Uniform Policy Provisions, the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid is 31 days.
To be licensed as an accident and health insurance agent in North Carolina, the applicant MUST be at least 21 years of age and a resident of North Carolina successfully pass an examination given by the National Association of Securities Dealers have successfully completed at least 20 hours of instruction approved by the Commissioner of Insurance must be a member of the National Association of Financial Advisors
All individual applicants for licensing as agents shall furnish evidence to the Commissioner of successful completion of at least 20 hours of instruction for each license,
Whole Life insurance policies are contractually guaranteed to provide each of the following EXCEPT cash value that will ultimately replace the death benefit nonforfeiture benefit options premiums that remain fixed for the life of the policy partial withdrawal features beyond a surrender charge period
All of these are contractually guaranteed to be provided in a whole life insurance policy EXCEPT "partial withdrawal features beyond a surrender charge period".
An agent who sells an individual life insurance policy in North Carolina MUST deliver to the policyowner an Underwriting Report Disclosure A Prospectus and Ledger Statement A Policy Summary and Buyer's Guide An Annual Financial Statement of the insurer
An agent who sells an individual life insurance policy in North Carolina MUST deliver to the policyowner a Policy Summary and Buyer's Guide.
An immediate annuity consists of a variable premium flexible premium single premium deferred premium
An immediate annuity has a single premium.
Information obtained from a phone conversation to the proposed insured can be found in which of these reports? Agent's report MIB report Inspection report Attending physician's report
An inspection report may include information obtained by a telephone call to the proposed insured.
An insurance broker in North Carolina is a representative of the insurance company insured insurance agency underwriting association
An insurance broker in North Carolina is a representative of the insured.
An insurance company MUST clearly specify questions designed to obtain information solely for marketing research only on health insurance applications in any insurance transaction only on property insurance applications only when instructed to do so by the company
An insurance company MUST clearly specify questions designed to obtain information solely for marketing research in any insurance transaction.
AT LEAST how many days before the effective date of a rate increase must an insurer provide written notice to individual accident and health policyowners? 30 45 50 90
An insurer must provide written notice at least 30 days before the effective date of a rate increase.
What kind of life insurance beneficiary requires his/her consent when a change of beneficiary is made? Irrevocable beneficiary Tertiary beneficiary Primary beneficiary Revocable beneficiary
An irrevocable designation may not be changed without the written consent of the beneficiary.
Approved premium rates for group health insurance shall be guaranteed by the insurer for an initial period of not LESS than how many months? 6 12 18 24
Approved premium rates for group health insurance shall be guaranteed by the insurer for an initial period of not less than 12 months.
Before a Health Policy is issued or delivered, the form, classification or risks, and premium rates MUST be filed with the Life and Health Guarantee Association Commissioner of Insurance North Carolina Rate Bureau Post Assessment Insurance Guaranty Association
Before an insurance policy is issued or delivered, the form, classification or risks, and premium rates must be filed with the Commissioner of Insurance.
What type of employee welfare plans are not subject to ERISA regulations? Church plans Major medical plans Corporate Qualified plans
Church plans are exempt from ERISA regulations.
Circulation of any oral or written statement or any pamphlet, circular, article, or literature that is false or maliciously critical of or derogatory to the financial condition of an insurer is known as intimidation defamation boycott discrimination
Circulation of any oral or written statement or any pamphlet, circular, article, or literature that is false or maliciously critical of or derogatory to the financial condition of an insurer is known as defamation.
Continuation of coverage of a group Hospital, Surgical, and Major Medical Policy MUST include dental coverage vision care prescription drug benefits hospital expenses
Continuation of coverage of a group Hospital, Surgical, and Major Medical Policy MUST include hospital expenses.
Under a Group Health Insurance Policy, continuation shall be available only to an employee who has been insured immediately prior to the date of termination for a period of AT LEAST 30 days 3 months 180 days 9 months
Continuation of group health coverage is only available to those employees who were covered under a group plan for a minimum period of 3 months prior to the date of termination.
Credit Life insurance is issued in any amount at the discretion of the applicant used in the event of loss of income issued in an amount not to exceed the amount of the loan coverage that waives the premiums on a loan payment in the event of total disability
Credit life insurance is designed to cover the life of a debtor and pay the amount due on a loan if the debtor dies before the loan is repaid.
One becomes eligible for Social Security disability benefits after having been disabled for 3 months 5 months 6 months 12 months
Disability income benefits are paid to the covered worker in the amount of the PIA after a 5-month waiting period
Eligible employees must be added to group health coverage NO LATER than how many days after their first day of employment? 30 45 60 90
Employees shall be added to the master group coverage no later than 90 days after their first day of employment.
Every Group Health Policy providing benefits for chemical dependency treatments must include, for the life of the contract, a minimum benefit of $8,000 minimum benefit of $16,000 minimum benefit of $24,000 lifetime benefit equal to all other covered charges
Every Group Health Policy providing benefits for chemical dependency treatments must include a minimum benefit of $16,000 for the life of the contract.
Which of these is NOT a characteristic of a Health Reimbursement Arrangement (HRA)? Employee funds the HRA entirely Employer funds the HRA entirely HRA's can be offered with other health plans HRA's allow reimbursement for eligible medical expenses
HRA plans are employer-funded medical reimbursement plans
If a company accepts a renewal premium payment that would extend coverage beyond the policy's MAXIMUM age limit, the company can recover any benefits that are paid to the insured after the maximum age limit can simply refund the premium for the period of time after the maximum age limit has been reached can refuse to pay any claims that occur after the maximum age limit must continue the coverage to the end of the period of time for which the premium was accepted
If a company accepts a renewal premium payment that would extend coverage beyond the policy's maximum age limit, the company must continue the coverage to the end of the period of time for which the premium was accepted.
A vacancy that occurs during the North Carolina Commissioner of Insurance's term of office MUST be filled by the Deputy Commissioner Governor voters of this state State Legislature
If a vacancy occurs during the term, it shall be filled by the Governor for the unexpired term.
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? Deposit the applicant's check into his account and make a personal check out to the insurance company from his personal account Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company Cross off his name on the "pay to" portion of the check, write the name of the insurance company, and send the check back to the insurance company Deposit the check in to his personal account, use the funds to purchase a cashiers check, and send the new cashiers check back to the insurance company
If an agent receives a check made out to them instead of the insurance company, they should return the check to the customer and collect a new check properly made out to the insurance company.
If an insurer has been notified by the Commissioner of Insurance that an individual Health Policy form does not comply with the state's laws, the insurer may continue to issue the form while it is being revised not issue the form in connection with any new application not be entitled to the reasons for the Commissioner of Insurance's disapproval begin issuing the form after 20 days
If an insurer has been notified by the Commissioner of Insurance that an individual Health Policy form does not comply with the state's laws, the insurer may not issue the form in connection with any new application.
If the Commissioner of insurance finds that a licensed person has used fraudulent, coercive, or dishonest practices or has proved to be incompetent, untrustworthy, or financially irresponsible, the law allows the Commissioner to recommend denial of the license to the central licensing office convert the license from a permanent to temporary license until the deficiencies are corrected suspend, revoke, or refuse to renew the agent's license imprison an agent up to 2 years
If the Commissioner of insurance finds that a licensed person has used fraudulent, coercive, or dishonest practices or has proved to be incompetent, untrustworthy, or financially irresponsible, the law allows the Commissioner to suspend, revoke, or refuse to renew the agent's license.
S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation? 403(b) Plan Deferred Premium Single Premium Period Certain
Immediate Annuities are purchased with a single lump sum payment and will start providing income payments within the first year, but usually starting 30 days from the purchase date.
T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect? $5,000 per month benefit $10,000 per month benefit if the cause was accidental More than $5,000 per month benefit if cause was work-related Less than $5,000 per month benefit regardless of the cause
In a $5,000 per month Disability Income Policy, a covered partial disability will typically result in less than $5,000 per month regardless of the nature of the disability.
The investment gains from a Universal Life Policy usually go toward the death benefit the dividends the cash value paying off a policy loan
In a Universal Life Policy, income is usually directed toward the cash value.
Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase? Applicant's occupation Applicant's monthly income Applicant's health Applicant's previous disabilities
In determining how much Disability Income insurance a prospective insured should purchase, the most important factor to be considered is the insured's monthly income.
All of the following statements regarding group health insurance is true EXCEPT Premiums are usually determined by the claims experience of the group A master contract is issued for the group An individual policy is given to each member Group health insurance premiums are typically lower than individual health insurance premiums
In group health insurance, each member receives a certificate of insurance, not an individual policy.
Which statement is true regarding a minor beneficiary? Normally, the death proceeds are required to be held in trust until the beneficiary reaches the age of 21 Normally, a guardian is required to be appointed in the Beneficiary clause of the contract The minor must pay the debts of the insured's estate before receiving any of the proceeds The minor is entitled to receive the death proceeds immediately
In most cases, insurers require that a guardian be appointed in the Beneficiary clause of the policy or that a guardian be designated in the will.
M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim? $2,000 $1,760 $1,600 $400
In this situation, $2,200 - $200 deductible x 80% = $1,600.
S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy? Accelerated death benefit rider Return of premium rider Family income rider Term rider
In this situation, a return of premium rider was included on the policy.
When L applies for a Health Insurance Policy, L unintentionally fails to list a previous visit to a cardiologist. If the insurance company contests the policy, it MUST do so within 2 years after it discovers the misstatement from proof of loss being submitted from the date of issue of paying a claim for an illness or inquiry related to the misstatement
In this situation, the insurance company must contest the policy within 2 years from the date of issue.
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct? Straight life accumulates faster than Limited-pay Life 20-Pay Life accumulates cash value faster than Straight Life Cash value accumulation of both 20-Pay Life and Straight Life depend on the insurer's financial rating 20-Pay Life and Straight Life accumulate cash value at the same rate
In this situation, the statement "20-Pay Life accumulates cash value faster than Straight Life" would be correct.
Insurance agents MUST obtain a license from North Carolina's Secretary of State Attorney General Commissioner of Insurance Commissioner of Labor
Insurance agents MUST obtain a license from North Carolina's Commissioner of Insurance.
Insurance policies are considered aleatory contracts because they are "take it or leave it" contracts both parties consent to the contract performance is conditioned upon a future occurrence the contract is voidable upon proof of fraud
Insurance contracts are aleatory. This means there is an element of chance and potential for unequal exchange of value or consideration for both parties. An aleatory contract is conditioned upon the occurrence of an event.
Which of these arrangements allows one to bypass insurable interest laws? Concealment Indemnity contract Contract of adhesion Investor-Originated Life Insurance
Investor-originated life insurance (or IOLI), sometimes called stranger-originated life insurance (or STOLI) is used to circumvent state insurable interest statutes. This is done when an investor (or stranger) persuades an individual to take out life insurance specifically for the purpose of selling the policy to the investor. The investor compensates the insured and makes the premiums, then collects the death benefit when the insured dies.
K works for XYZ Clothing Store from September through December each year. K works 45 hours a week for this period of time. The employer's Group Policy would consider K eligible for the insurance because K is working the required number of hours a week not eligible for the insurance because as a seasonal employee K does not meet the definition of "employee" under North Carolina law eligible for the insurance since the employer desires K to have insurance coverage eligible for the insurance as long as K pays the premium
K is not eligible for the insurance because as a seasonal employee K does not meet the definition of "employee" under North Carolina law.
L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They purchase a Family Policy that covers L's spouse to age 65. A death benefit will NOT be paid in which of the following circumstances? L's spouse dies at age 62. L's spouse dies at age 66. Their natural child dies at age 18. Their adopted child dies at age 18.
L's spouse has coverage until age 65.
Life insurance that covers an insured's whole life with level premiums paid over a limited time is called Adjustable Life Renewable Term Limited Pay Life Joint Life
Life insurance that covers an insured's whole life with level premiums paid over a limited time is called Limited Pay Life.
No insurer shall refuse to insure an individual because of age race occupation health condition
No insurer shall refuse to insure an individual because of race.
One of the stated purposes of the Life and Health Insurance Guaranty Association is to guarantee interest rates on life and annuity policies provide to all companies a guaranteed number of prospects each year assist in the prevention of insurer insolvencies provide legal services for suits filed against insolvent companies
One of the stated purposes of the Life and Health Insurance Guaranty Association is to assist in the prevention of insurer insolvencies.
Which of the following terms is defined as any transaction in which new life insurance or a new annuity is to be purchased and existing life insurance or annuity is to be terminated or discontinued? Rebating Replacement Conservation Solicitation
Replacement is any transaction in which new life insurance or a new annuity is to be purchased and existing life insurance or annuity is to be terminated or discontinued.
All of the following actions are considered rebating EXCEPT sharing commissions with other licensed and appointed agents refunding part of the premium as an inducement for purchase offering special dividends offering anything of value not specified in the policy
Sharing commissions with other licensed and appointed agents is not considered rebating.
Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party? Indemnity Subrogation Legal action Consideration
Subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid to the insured for the loss.
A term life insurance policy matures A. upon endowment of the contract B. upon death of the insured C. when the cash value equals the death benefit D.upon the insured's death during the term of the policy
Term life policies can only mature (pay out the face amount) if death occurs during the term of the policy.
A term life insurance policy matures upon endowment of the contract upon death of the insured when the cash value equals the death benefit upon the insured's death during the term of the policy
Term life policies can only mature (pay out the face amount) if death occurs during the term of the policy.
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? Modified Whole Life 20-Pay Life Decreasing Term Endowment
The Automatic Premium Loan provision can be incorporated into all of these policies EXCEPT decreasing term.
A policy loan is made possible by which of these life insurance policy features? Extended term provision Cash value provision Owner's rights provision Consideration clause
The Cash value provision makes a policy loan possible.
The Insurance Information and Privacy Protection Act is designed to limit or direct the information collection activities of all of the following EXCEPT agents and limited representatives insurance support organizations insurance regulators insurance companies
The Insurance Information and Privacy Protection Act is designed to limit or direct the information collection activities of all of the following EXCEPT insurance regulators.
Which of the following requires that an applicant for an individual Health Policy be notified of an investigation into his personal character, general reputation, and mode of living? Consumer Protection Agency Fair Labor Standards Board Insurance Information and Privacy Protection Act Civil Rights Act
The Insurance Information and Privacy Protection Act requires that an applicant for an individual Health Policy be notified of an investigation into his personal character, general reputation, and mode of living.
The clause identifying which losses resulting from an accident or sickness are insured by the policy is called the Entire Contract provision Consideration clause Benefit clause Insuring clause
The Insuring clause identifies which losses resulting from an accident or sickness are insured by the policy.
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? Interest Only Fixed Period Fixed Amount Life Income
The Life Income settlement option pays a specified amount to the annuitant with no residual value payable to a beneficiary.
Which statement regarding the Misstatement of Age provision is considered to be true? Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered Requires that a new policy must be applied for if a misstatement of age is found on the current policy Misstatement of Age provision is valid only during the contestable period Insurer may void the policy if a misstatement of age is discovered
The Misstatement of Age provision states an adjustment be made in the amount of insurance if the age of the insured is misstated.
The provision that defines to whom the insurer will pay benefits to is called Entire Contract Proof of Loss Claim Forms Payment of Claims
The Payment of Claims provision in a Health Insurance policy states to whom claims will be paid.
The premiums paid by an employer for his employee's group life insurance are usually considered to be tax-deductible to the employer partially deductible to the employee tax-deductible to the employee taxable income to the employee
The amount an employer pays for his employee's life insurance is typically deductible to the business.
A disability elimination period is best described as a time deductible dollar deductible eligibility period probation period
The best way to describe a disability elimination period is a "time deductible".
B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what will the policy pay B's beneficiary? $100,000 $200,000 $300,000 $400,000
The correct answer is "$300,000. In this situation, the policy will pay $300,000.
N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase? 30 Pay Life Term to Age 70 Universal Life Adjustable Life
The correct answer is "30 Pay Life". Limited pay whole life policies have level premiums that are limited to a certain period.
If after satisfactory proof of loss, an insurer fails or refuses to pay death proceeds, the insurer must pay interest on the proceeds after how many days? 15 30 45 60
The correct answer is "30 days". If after satisfactory proof of loss, an insurer fails or refuses to pay death proceeds, the insurer must pay interest on the proceeds after 30 days.
What kind of life insurance product covers children under their parent's policy? Family Maintenance rider Term rider Family Income rider Payor benefit
The correct answer is "A Term rider". Family plan policies usually cover the family head with permanent insurance and the coverage on the spouse and children is term insurance in the form of a rider.
Which provision is NOT a requirement in a group life policy? Conversion Grace period Incontestable period Accidental
The correct answer is "Accidental". An AD&D provision is not required in a group life policy.
G purchased a $50,000 single premium, Straight Life Annuity 2 years ago. G has been receiving monthly payments from the annuity. When G dies, the insurer Does not have to make any further payments Must continue to make monthly payments to G's beneficiary for the rest of the beneficiary's life Must pay G's beneficiary the difference between the amount paid to G and $50,000 in a lump sum Must continue to make monthly payments to G's beneficiary until the difference between the amount paid to G and $50,000 is paid out
The correct answer is "Does not have to make any further payments". With a Straight Life Annuity, the insurer does not have to make further payments after the annuitant dies.
Which of the following health policy provisions states that the producer does NOT have the authority to change the policy or waive any of its provisions? Time Limit on Certain Defenses Reinstatement Entire Contract Change of Beneficiary
The correct answer is "Entire Contract". The Entire Contract provision states that the producer does NOT have the authority to change the policy or waive any of its provisions.
What action should a producer take if the initial premium is NOT submitted with the application? Keep the application until premium is paid Forward the application to the insurer after giving the applicant a binding receipt Forward the application to the insurer without the initial premium Forward the application to the insurer after giving the applicant a conditional receipt
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.
A policyowner would like to change the beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy and make the change permanent. Which type of designation would fulfill this need? Revocable Contingent Irrevocable Primary
The correct answer is "Irrevocable". An irrevocable designation may not be changed without the written consent of the beneficiary.
Which plan is intended to be used by a sole proprietor and the employees of that business? SEP Plan Keogh Plan Individual Retirement Account (IRA) SIMPLE Plan
The correct answer is "Keogh Plan". A Keogh Plan may be used by a sole proprietor only if the employees of the business are included.
Which of these life products is NOT considered interest-sensitive? Modified Whole Life Variable Universal Life Interest Sensitive Whole Life Variable Life
The correct answer is "Modified Whole Life". All of these have an interest-sensitive investment aspect EXCEPT Modified Whole Life.
A policyowner is able to choose the frequency of premium payments through what policy feature? Consideration Payor benefit Premium Mode Assignment provision
The correct answer is "Premium Mode". Premium Mode is the feature that allows the policyowner to select the timing of premium payment, such as monthly, quarterly, annually etc.
What benefit does the Payor clause on a Juvenile Life policy provide? Allows payor to assign ownership in the event payor becomes disabled Allows payor to increase face amount without providing evidence of insurability Premiums are waived if juvenile becomes disabled Premiums are waived if payor becomes disabled
The correct answer is "Premiums are waived if the payor becomes disabled". The Payor clause of a juvenile life policy provides a waiver of premiums if the payor becomes disabled.
Which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT? Premiums normally decrease at time of renewal Premiums normally increase at time of renewal Policy can renewed at any time by the company Policy can be cancelled at any time by the company
The correct answer is "Premiums normally increase at time of renewal". A Guaranteed Renewable Health Insurance policy can have increasing premiums at time of renewal.
Which of these Nonforfeiture Options continue a build-up of cash value? Waiver of Premium Extended Term Reduced Paid-Up Cash Surrender
The correct answer is "Reduced Paid-Up". A Reduced Paid-Up option would provide continuing cash value build-up.
Equity indexed annuities are invested in which of the following Insurer's general account Savings bonds Insured's general account S&P 500
The correct answer is "S&P 500". An indexed annuity is a type of tax-deferred annuity whose credited interest is linked to an equity index — typically the S&P 500.
Which of these life insurance riders allows the applicant to have excess coverage? Automatic Premium Loan rider Waiver of Premium rider Guarantee Insurability rider Term rider
The correct answer is "Term rider". Term riders allow an applicant to have excess life insurance coverage.
What type of life insurance are credit policies issued as? Whole Variable Term Universal
The correct answer is "Term". The type of insurance used is decreasing term, with the term matched to the length of the loan period (though usually limited to 10 years or less) and the decreasing insurance amount matched to the declining loan balance.
Which of the following statements is true about most Blue Cross/Blue Shield organizations? They are the same as private insurance companies They are federally sponsored They are nonprofit organizations They are owned by hospitals and physicians
The correct answer is "They are nonprofit organizations". Most Blue Cross/Blue Shield organizations are considered to be nonprofit.
What is the elimination period of an individual disability policy? Time period an insured must wait before coverage begins Time period a disabled person must wait before benefits are paid Time period after the policy issue date in which the provisions are still contestable The point in time when benefits are no longer payable
The correct answer is "Time period a disabled person must wait before benefits are paid". The elimination period of an individual disability insurance policy refers to the amount of time a disabled person must wait before benefits are paid.
Consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine driving history probability of making timely premium payments if applicant is a tobacco user overall health of the applicant
The correct answer is "probability of making timely premium payments". The purpose of these reports is to provide a picture of an applicant's general character and reputation, mode of living, finances, and any exposure to abnormal hazards.
An individual who purchases a Life annuity is given protection against inflation the risk of dying prematurely the risk of living longer than expected the risk of not having enough retirement income
The correct answer is "the risk of living longer than expected". A Life annuity offers protection against the risk of living longer than anticipated.
The funds used by the Life and Health Insurance Guaranty Association to carry out its purpose are obtained from the agents of member companies state government federal government member companies
The funds used by the Life and Health Insurance Guaranty Association to carry out its purpose are obtained from the member companies.
P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take? Beneficiary will be denied the claim Beneficiary will be denied the claim and refunded all paid premiums Beneficiary will be paid the Death Benefit Beneficiary will be paid a partial Death Benefit
The incontestable clause prevents the insurer from canceling the contract even for a material misrepresentation.
Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy? Issue the policy with a diabetes exclusion Issue the policy with an altered Time of Payment of Claims provision Issue the policy with a rating Decline the applicant
The insurance company may take all of these actions EXCEPT issue the policy with an altered Time of Payment of Claims provision.
With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's monthly expenditures at the time of disability gross income at the time of purchase gross income at the time of disability occupation at the time of purchase
The insured's earned income at the time of purchase limits the amount of the monthly benefit that an insured may purchase in a Disability Income Policy.
The policyholder has how many days to return an Accident/Health Insurance Policy and receive a full refund on premiums? 5 10 15 30
The policyholder has 10 days to return an Accident/Health Insurance Policy and receive a full refund on premiums.
Group/voluntary long-term care policy premiums are typically deducted from the employee's income and are approximately the same premium as compared to individual long term care coverage are more expensive as compared to individual long term care coverage are less costly as compared to individual long term care coverage are substantially more costly as compared to the premiums for individual long term care coverage
The premiums on a group/voluntary policy are usually deducted from an employee's wages and are generally lower than the premiums on an individual policy.
The rules and regulations of the Life and Health Insurance Guaranty Association in North Carolina apply to policies under which risk is borne by the policyholder contracts of reinsurance that are sold in North Carolina Life and Health Policies issued by companies authorized in North Carolina life and health insurance coverage issued under a self-funded Multiple Employer Welfare Arrangement (MEWA)
The rules and regulations of the Life and Health Insurance Guaranty Association in North Carolina apply to Life and Health Policies issued by companies authorized in North Carolina.
S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a Low-deductible health plan Medicare Supplement High-deductible health plan Flexible savings plan
To be eligible for a Health Savings Account, an individual must be covered by a high-deductible health plan (HDHP), must not be covered by other health insurance (does not apply to accident insurance, disability, dental care, vision care, long-term care), must not be eligible for Medicare, and can't be claimed as a dependent on someone else's tax return.
Inducing or attempting to induce any insured person through misrepresentation to lapse, forfeit, or surrender insurance is rolling over rebating twisting coercion
Twisting is inducing or attempting to induce any insured person through misrepresentation to lapse, forfeit, or surrender insurance is considered twisting.
The following acts are examples of unfair methods of competition and deceptive practices in the business of insurance EXCEPT the use of misrepresentations and false advertising of policy contracts false financial statements comparisons showing that a policy has higher benefits rebates
Using a comparison that shows a policy having higher benefits is not considered an unfair method of competition.