NC LIfe

M's insurance company denied reinstatement application for her lapsed policy. How long does the insurance company have to notify M about the denial before its placed back in force?

45 days

Insurance policies are offered on a "take it or leave it" basis, which makes them:

Contracts of Adhesion

A characteristic of Preferred Provider Organizations (PPOs) would be:

Discounted fees for the patient

The federal income tax treatment of employer-provided group Medical Expense insurance can be accurately described as:

Employee's premiums paid by the employer is tax-deductible to the employer as a business expenditure

P owns a $25,000 Life Policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does P own?

Endowment at age 70

The payments on Q's annuity are no less than $250 quarterly. Which annuity does Q own?

Flexible Installment Deferred

A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow?

Guaranteed Insurability Option rider

K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered

Guaranteed renewable

Life insurance that covers an insured's whole life with level premiums paid over a limited time is called:

Limited Pay Life

In Major Medical Expense policies, what is the objective of a Stop Loss provision?

Limits an insured's out-of-pocket medical expenses

The Accelerated Death Benefit provision in a life insurance policy is also knows as a(n):

Living Benefit

Which Nonforfeiture Option continue a build-up of cash value?

Reduced Paid-Up

K is shopping for a permanent life insurance policy that will offer her the MOST protection per dollar of annual premium. Which of these policies best fits her needs?

Straight life

Q is looking to buy a life insurance policy that will provide the greatest amount of protection for a TEMPORARY time period. Which policy should Q purchase?

Term life

A Return of Premium life insurance policy is

Whole life and Increasing term

When can a lapsed life insurance policy usually be reinstated

Within 5 years

A variable insurance policy

does not guarantee a return on its investment accounts

If a contract of adhesion contains questionable language, to whom would the interpretation be in favor of?

insured

Dividends paid from a life insurance policy are

issued by the insurer

An agent inducing an insured to lapse, forfeit, or surrender insurance through misrepresentation is committing the illegal act of

twisting

What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability?

Convertible Term

Which insurance rider lets you have excess coverage?

Term rider

What percentage of life insurance premiums are deductible for federal income tax purposes?

0%

Z is an agent who violated the Insurance Information and Privacy Protection Act. Z was then issued and served a statement of charges and notice of hearing by the Commissioner of Insurance. Z's hearing date must be at least ____ days after service of charges.

10

An insured must notify an insurer of a medical claim within how many days after an accident?

20

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 paid the Death Benefit

Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?

Business owner becoming disabled

Term insurance has which of the following characteristics?

Expires at the end of the policy period

Which kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?

Family Maintenance Policy

Which health policy clause specifies the amount of benefits to be paid?

Insuring

K's whole life insurance policy lapsed two months ago due to nonpayment. She would now like to reinstate the policy. Which statement is INCORRECT?

K will forfeit the right to use the automatic loan provision

Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured?

PPO

The insured and insurance company will share cost of covered losses under which health policy feature?

Payment of Claims provision

When an employee is terminated, which statement about a group term life conversion is true?

Policy proceeds will be paid if the employee dies during the conversion period

S, age 40, is looking to buy a Life Insurance policy that will allow for increases or decreases in coverage as his needs change. The policy best suited for S would be

Universal Life

Free look provision begins

Upon receipt of the policy by the policy-owner

A Life insurance policy owner would like to take out a policy loan against the cash value in his Whole Life Policy. The interest rate applied to this loan may vary over time. This is referred to as a(n) ___ rate loan.

Variable

Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?

Variable Life

A life policy contains a morality charge as well as self-directed investment choices is called a(n)

Variable Universal Life policy

Which policy is characterized by flexible premiums and death benefit and allows the policy-owner control of the investment aspect of the plan?

Variable Universal life

Under a Graded Premium policy, the premiums

are lower during the policy's early years

M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the

policy proceeds

A Limited-Pay Life policy has

premium payments limited to a specified number of years

Under a Renewable Term policy,

the renewal premium is calculated on the basis of the insured's attained age

K purchased a Life insurance policy in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much-higher premium is paid because of falling interest rates. This type of policy is known as a(n) _________ life policy.

universal

The Cash value in a(n) _____ life policy may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors.

universal

When is the face amount paid under a Joint Life and Survivor policy?

upon death of the last insured

A contract where one party either accepts or rejects the terms of a contract written by another party is called a contact of

Adhesion

How long does the coverage normally remain on a limited-pay life policy?

Age 100

When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the

Entire Contract provision

Which of the following types of organizations are prepaid group health plans, where members pay in advance for the services of participating physicians and hospitals that have agreements?

HMO

Q would like to purchase $100,000 of permanent protection on his wife and $50,000 of Term coverage on himself under the same policy. What kind of policy should Q purchase?

Whole life policy with other insured rider

K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n):

installment refund annuity