Life insurance
An insured has endured multiple surgeries and hospitalizations for an illness during the last few months. Her insurer no longer bills her for medical expenses. Which of the following allows for that?
Stop-loss limit
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
Survivor protection
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
Survivor protection
All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT
The policy is owned by the company
An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen?
The policy will not be affected.
Which of the following is a key distinction between variable whole life and variable universal life products?
Variable whole life has a guaranteed death benefit.
In forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage
The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?
$100,000
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?
$50,000
L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay?
$900 (deductible + 20% of the bill after the deductible [20% of $2,000])
An insurer must acknowledge receipt of a Notice of Claim within how many days?
15
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
If an HMO policy is cancelled for nonpayment of the amounts due under the contract, how long of a notice must the insurer give the insured?
30 days
How long is the grace period in group policies?
31 days
Once the person meets the stringent requirements for disability benefits under Social Security, how long is the waiting period before any benefits will be paid?
5 months
The Insurance Commissioner may examine the affairs of any insurer as often as necessary, but not less frequently than once every
5 years
An agent's license will terminate within how many days from the due date of obligatory fees and continuing education requirements?
90
Which of the following is a feature of a disability buyout plan?
A lump-sum benefit payment option
Who is a third-party owner?
A policyowner who is not the insured
In reference to the standard Medicare Supplement benefits plans, what does the term standard mean?
All providers will have the same coverage options and conditions for each plan
While a claim is pending, an insurance company may require
An independent examination as often as reasonably required
Who can make a fully deductible contribution to a traditional IRA?
An individual not covered by an employer-sponsored plan who has earned income
What is a foreign insurer?
An insurer with a home office in another state
Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?
Annuity certain
Which of the following is a feature of a variable annuity?
Benefit payment amounts are not guaranteed
HMOs that contract with outside physicians to provide health care service to their subscribers compensate those providers on a
Capitation basis
To legally transact insurance in this state, an insurer must obtain which of the following?
Certificate Authority
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.
A insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. This is called
Consideration
In Texas, the state's continuing education requirement
Consists of completing 24 hours of CE each biennium
Which of the following provisions states the insurer's right to change premium amounts?
Continuation Provision
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
What is another name for interest-sensitive whole life insurance?
Current assumption life
Which of the following types of insurance policies is most commonly used in credit life insurance?
Decreasing term
Social Security disability definition includes all of the following EXCEPT
Disability expected to last for at least 6 months
Which of the following statements about occupational vs. nonoccupational coverage is TRUE?
Disability insurance can be written as occupational or nonoccupational
The insurance policy, together with the policy application and any added riders form what is known as a(n)
Entire Contract
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
An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)
Equity indexed annuity
How many pints of blood will be paid for by Medicare Supplement core benefits?
First 3 pints
When possible, what should insurers strive to eliminate from illustrations?
Footnotes and caveats
When an employee terminates coverage under a group insurance policy, coverage continues in force
For 31 days.
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a
Guaranteed insurability rider
Under the Affordable Care Act, health insurance cannot be underwritten based on which of the following factors about the applicant?
Health condition
What are the three basic coverages for medical expense insurance?
Hospital, surgical and medical
Which of the following riders would NOT increase the premium for a policyowner?
Impairment rider
What type of insurance would be used for a Return of Premium rider?
Increasing Term
Which of the following entities has the authority to make changes to an insurance policy?
Insurer's executive officer
Which of the following best describes a misrepresentation?
Issuing sales material with exaggerated statements about policy benefits
What is the main purpose of the Seven-pay Test?
It determines if the insurance policy is an MEC.
Which of the following is NOT true regarding a flexible spending account?
It does not have limits on contributions
Concerning Medicare Part B, which statement is INCORRECT?
It is fully funded by Social Security taxes (FICA)
Which of the following best describes annually renewable term insurance?
It is level term insurance
Which of the following is NOT true regarding a nonqualified retirement plan?
It needs IRS approval
Which of the following statements concerning Medicare Part B is correct?
It pays for physician services, diagnostic tests, and physical therapy.
If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a
Joint life annuity
The form of life annuity which pays benefits throughout the lifetime of the annuitant and also guarantees payment for a minimum number of years is called
Life income with period certain
In a Disability Income policy, all of the following are considered presumptive disabilities EXCEPT
Loss of one eye
The premium of a survivorship life policy compared with that of a joint life policy would be
Lower
Which of the following programs expands individual public assistance programs for people with insufficient income and resources?
Medicaid
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
An insured is covered by a disability income policy that contains an accidental means clause. The insured exits a bus by jumping down the steps and breaks an ankle. What coverage will apply?
No coverage will apply, since the injury could have been foreseen.
Where in the policy must the HMO insurer provide information about the HMO's name, address, and toll-free number?
On the face page
Traditional IRA contributions are tax deductible based on which of the following?
Owner's income
The part of Medicare that helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care, is known as
Part A
Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner?
Payment of Claims
If an insurance company offers Medicare supplement policies, it must offer which of the following plans?
Plan A
Who might receive dividends from a mutual insurer?
Policyholders
When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called
Preferred Provider Organization (PPO)
Which of the following best describes a pure life annuity settlement option?
Pure life provides payments for as long as the annuitant is alive.
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of
Rebating
Which nonforfeiture option provides coverage for the longest period of time?
Reduced Paid-Up
According to the state nonforfeiture law for life insurance policies, insurers must offer at least one of the following nonforfeiture options EXCEPT
Reduction of premium
What type of care is Respite care?
Relief for a major care giver
The regulations regarding replacement apply to which of the following?
Renewable term
Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?
Replacement rule
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
Which of the following may be included on an insurance advertisement?
Testimonials from compensated individuals
The initial amount of credit life insurance may NOT exceed
The amount to be repaid under the contract
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 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.
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
Which of the following is correct regarding selecting a primary care physician in a PPO plan?
The insured may choose medical providers not found on the preferred list.
The insuring clause of a disability policy usually states all of the following EXCEPT
The method of premium payment
Which of the following is NOT required on an illustration used in the sale of a life insurance policy?
The name of the primary and secondary beneficiaries
What is the advantage of reinstating a policy instead of applying for a new one?
The original age is used for premium determination
How does a member of an HMO see a specialist?
The primary care physician refers the member
Which is generally true regarding insureds who have been classified as preferred risks?
Their premiums are lower.
Insurers usually do not reimburse claimants for 100% of income lost due to disability. What is the reason for insurer limitations on coverage amounts?
To provide an incentive for the insured to return to work
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT
Unearned premiums are retained by the insurance company.
All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT
Upon conversion, the death benefit of the permanent policy will be reduced by 50%.
Which of the following is a key distinction between variable whole life and variable universal life products?
Variable whole life has a guaranteed death benefit
Social Security Supplement (SIS) or Social Security Riders would provide for the payment of income benefits in each of the situations below EXCEPT
When the amount payable under Social Security is more than the amount payable under the rider.
When would a 20-pay whole life policy endow?
When the insured reaches age 100
The LEAST expensive first-year premium is found in which of the following policies?
annually renewable term
What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided?
application
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?
conditional
An insurance professional advises a client regarding the benefits of her life insurance policy, in exchange for a fee. Which of the following terms best describes this type of insurance professional?
counselor
A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as
critical illness
Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization?
fraternal benefit society
Fixed annuities provide all of the following EXCEPT
hedge against inflation
An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?
illegal
In long-term care (LTC) policies, as the benefit period lengthens, the premium
increases
Which of the following occupations would NOT directly help to qualify someone for the office of Commissioner of Insurance?
insurance agent
Under workers compensation, which of the following benefits are NOT included?
legal benefits
Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?
principal sum
What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before a loss can be covered?
probationary period
All of the following statements about Medicare supplement insurance policies are correct EXCEPT
they cover the cost of extended nursing home care
