New Mexico Insurance license notes
The inability to perform SOME of the duties of one's own occupation is known as a....
....residual disabily
A material change in a MEC results in....
....the seven pay test, adjusted cash value applies
the difference between an actual charge and the amount approved by Medicare is refered to as a...
...Excess charge
A life insurance guaranteed insurability rider gives the right to...
...periodically purchase additional insurance
A stock insurance company is owned by its....
...shareholders
How much of the medical expense policies for self-employed are tax deductible
100% of the premiums paid are tax deductible
A health insurer must be provided with written proof of loss _____ days after the notice of loss
15
what is the tax withholding of rollover funds from a profit sharing plan
20% is withheld for income tax
What does decreasing term not contain
A cash value provision
What term describes the fact that both parties of a contract may not receive the same value
Aleatory
An unincorporated association where members provide coverage for each other
Reciprocal
Assets that back the non-guaranteed values of variable life insurance products are held in which account
Separate account set up by the insurer
Who regulates settlement claims
State Insurance departments
All parts of the Medicare program are administered by which federal agency
The Center for Medicare and Medicaid Services
Insurable risk requires that
The chance of loss is calculable
What must be disclosed in a universal life policy
The policy's surrender charges
What can a whole life policy provide
automatic premium loan provision
The cash value of a whole life policy is
available when the policy has been surrendered
Reductions in coverage are one feature of
cost containment
What is not an element of a valid contract
countersignature
Which disability buy-sell agreements is best suited for businesses with a limited number of partners
cross-purchase agreements
Which kind of term is best for paying off the outstanding balance of a mortgage in the event of the insured's death
decreasing term
It is not an underwriting responsibility when the agent
determines the final rate classification
In an individual accident and health insurance policy the agent
doesnt have the authority to change the policy or waive provisions
Consideration is an element that shows
each party is giving something of value
An attached agreement that alters the terms of a policy is an
endorsement
Medicare Part A benefit period begins the first day the insured
enters the hospital
When an insurance company transfers a portion of its risk on a case by case basis this is called
facultative reinsurance
What is Medicare?
federal insurance program for persons over 65 or persons with permanent disabilities
an insurance company writing business in another state than the one they are in is a
foreign
Medicare supplement policies may not include renewal provisions less favorable to the insured than
guaranteed renewable
Similar objects which are exposed to the same group of perils are referred to as
homogeneous exposure units
A family counselling benefit is offered under...
hospice care
a Single premium deferred annuity sometimes contains a bailout feature. Which statement is correct
if the interest rate falls, the surrender charge is waived
What kind of protection is associated with level premiums
individual mortgage protection life insurance
Risk transfer is an example of
insuring a risk against possible loss
Insurable interest is an element of
legal purpose
the death proceeds of a credit life insurance policy are typically paid to the
lender
What action can an insurer take to discourage malingering and false disability claims
limited amounts of benefits an insured can receive
What can't trigger a benefit under the presumptive disability provision
loss of any limb
If the insured was hospitalized prior to entering the facility, which program covers skilled nursing facility expenses
medicare
A policy that has premiums that are lower than normal during the early years is called
modified life
When must an agent provide a replacement notice on life insurance
no later than at the time of taking an application
A licensed agent who lives in a different state is a
nonresidential agent
Universal life insurance does not
normally have a minimum guaranteed cash value for the duration of the policy
A physician who accepts assignment on all medicare claims is called a
participating provider
Annuity accumulation may continue if
payments stop
What happens to a life insurance policy when the loan balance exceeds the cash value
policy will no longer be in force
The law of large numbers enables an insurer to
predict losses
In most dental plans a deductible is typically not applied to
preventative diagnostic services
What is not true about the law of large numbers
rates can be calculated to compensate for losses
What kind of insurance company covers other insurance companys
reinsurance
What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as?
representation
A hold-harmless clause is an example of
risk transfer
Long term care insurance policies may not exclude coverage for
senile dementia
When an employee is given money to purchase life insurance the pan is called a
split-dollar
Warranty vs. Representation
statements on a contract vs on an application
When the MEC is surrendered the gain is treated as
taxable income and penalized
An agents authority to bind an insurer to an insurance contract is granted by
the agent's contract and the company's appointment
The exclusion ratio determines
the amount of an annuity payment subject to income tax
The surrender charge on many deferred annuity contracts are waived when
the annuitant dies or becomes disabled
What is true about group credit life insurance
the face amount is based on the outstanding balance
Paying for additional residual disability coverage while having group disability income requires that
the insured will pay taxes on the disability received by their employer but will receive any residual benefits tax-free
When a producer submits an application that discloses personal information regarding the applicant, who supplies the privacy notice?
the producer
A contract of adhesion means that
the terms must be rejected or accepted in full
When a nonparticipating whole life policy's cash value is surrendered
the total premiums paid are received tax-free and the rest is taxed as ordinary income
A business becoming incorporated is an example of risk
transfer
When issued, the face amount of a graded death benefit is
under the policy amount but increases over time
An insurance policy that can be classified as a securities product is called
variable life
If a terminally ill individual sells his life insurance policy then it is considered a
viatical settlement
When would a medical exam not be required
when the individual has a family history of cancer
A licence must be renewed every...
year
Why name a trust as a beneficiary
Management of proceeds would be provided
With Medicare Part B coinsurance...
Medicare supplement is a care benefit
a provision that has the ability to reduce the benefit is
accelerated benefit
The insurer is responsible for
acts by the producer that are authority only
what is on the first page of the Notice to Buyer
an explanation that some long-term care costs may not be covered
an individual who purchases a modified life insurance policy expects
an improvement in future income
What type of insurer limits the exposure it writes to those of its owners
Captive insurer
Supplemental income for life insurance can be derived from the
Cash value
What isn't part of an insurance policy
Claim forms
Prepaid dental plans differ from most other types of dental plans in what way?
Closed panel of dentists can only be used
What type of insurance is a group credit
Decreasing term
use it or lose it refers to
Flexible Savings Account
What best describes a universal life policy
Flexible policy + monthly renewable
Something that increases the possibility of risk is a
Hazard
Some Standard Medicare Supplement policies include which benefit
Hospice Care
POS plans combine
Indemnity plan features with those of an HMO
Which health policy clause specifies the amount of benefits to be paid
Insuring
The authority granted to a producer is provided via the
Law of Agency
Which insurance rider is designed to help pay for being confined to a nursing home without a terminal illness
Long-term Care Benefit rider
What is true with group disability income
The specified benefit amount is a percentage of his wages
Elimination period of an individual disability policy is the....
Time period a disabled must wait before benefits are paid
What kind of contract between 2 insurers involves automatic assumption of risk
Treaty reinsurance
What isn't true about universal life insurance
Universal life normally has a minimum guaranteed cash value for the duration of the policy
When would evidence of insurability be required for a person already covered by a variable universal life policy
When the death benefit is increased
Which insurance policy would be eligible to include an automatic premium loan provision
Whole life
an insurance application requires the applicant to make a full and accurate disclosure of the risk fact involved so the policy is considered
a contract of utmost good faith
For tax purposes, assigning a policy to another insurer for a contract is treated as
a section 1035 exchange
Federal taxes may not be deducted from
a variable life policy
