Oklahoma Life and Health Final Exam
An insured files for an accident and health insurance policy claim eight days after the premium due date. The benefit payable is $500 and the overdue premium is $200. Assuming that the policy pays on a first-dollar basis and contains the unpaid premium provision, how much will the insurer pay?
$300
An individual is insured under a major medical plan with a $1,000,000 lifetime benefit. The plan has a $500 deductible and an 80% coinsurance. If the insured suffers a $50,500 medical expense during the calendar year, what is the remaining lifetime benefit?
$960,000
How long is individual medical expense insurance normally written for?
1 year
John received a one-time distribution of $50,000 from his modified endowment contract (MEC). Prior to that, the contract's cash value was $150,000, the contract investment amount was $100,000, and the death benefit was $500,000. What percentage of the $50,000 distribution was taxable as ordinary income?
100%
Part A Medicare includes coverage for all of the following services EXCEPT
120 days of Skilled Nursing Facility care
A producer's license MUST be renewed every ___ year(s).
2
A life insurance policy becomes incontestable after it has been in force for
2 years
An insured must notify an insurer of a medical claim within how many days after an accident?
20
If a new policy is replacing an existing one the insured is given the right to return for a full refund of at least ____ days after policy delivery
20
Producers must complete a total of ___ Continuing Education credits for each two-year licensing period.
24
How long must a life insurance policy be in effect before the policyowner may use the nonforfeiture provision?
3 years
An insured previously covered under a private health insurance plan must notify the insurer within ____ days of deactivation from the military in order to reinstate the coverage.
30
Which type of life insurance policy is best suited for paying off the outstanding balance of a 30-year mortgage in the event of the insured'd death?
30-year decreasing term
All individual and group health insurance policies that provide coverage for a newborn child require that the insurer be notified of a child birth. Any additional premium due must then be paid within __ days of the child's birth.
31
In the event of employment termination, a person covered by a group life policy also has the right to covert such coverage to an individual policy within __ days without proving insurability.
31
A small employer in Oklahoma may NOT consist of more than ___ eligible employees.
50
If an employee loses employment, how long does the employee have to apply for COBRA (continuation of coverage)?
60 days
Under HIPAA (Health Insurance Portability and Accountability) requires guarantee issue of insurance as long as there has not been more than a __ day gap in coverage.
63
Which of these is NOT an advantage of term life insurance?
A cash benefit will be provided if the insured is alive at the end of the policy period
____ is the authority given to a producer to sell, solicit, or negotiate policies on behalf of the insurer.
Appointment
How many an insurance company classify an accidental death benefit on a life policy?
As an optional policy rider
The policy provisions that permits an employee to change from group life coverage to an individual life policy is called the
Conversion provision
_____ life insurance is designed to pay the balance of a loan if the insured dies before the loan has been repaid.
Credit
Which health policy clause specifies the amount of benefits to be paid?
Insuring
A life policy that has premiums that are lower than normal during the early years is called
Modified life
What is the eligibility requirements for Medicare Part B?
Must be eligible for Medicare Part A
Which of the following does NOT meet the requirements of "skilled nursing care"?
Must be provided exclusively in a hospital
Which of these is NOT used as selection criteria in the underwriting process of a life insurance
National origin
Wyatt is shopping for life insurance and is mainly concerned with the policy's death benefit. Which index should he be looking at when making comparisons?
Net payment cost index
Which of these is a valid reason for an insurer's cancellation of a Medicare Supplement policy?
Non-payment of premium
Tim is covered by an accident and health insurance policy that may not be changed in any way by the insurer up to a stated age, as long as the premiums are paid. What type of policy is this?
Noncancelable
Jerome is covered by a disability income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?
Nonoccupational coverage
An insured is covered with a health insurance policy. If the insured would like to cancel the policy, he/she must
Notify the insurance company in writing
Which statement is NOT true regarding health insurance policies that provide limited benefits?
Only persons under the age of 65 are eligible
Alan is an enrollee of a health maintenance organization (HMO) which uses a gatekeeper system. If there ever comes a time when he needs emergency health services, what should he do?
Proceed to the nearest emergency room
Which of the following actions by the producer would NOT result in a license suspension or revocation?
Producing an inadequate amount of new premium
The automatic premium loan provision can be accurately describe as a
Provisions that would provides a policy loan to pay any premiums by the end of the grace period
Which of these occurrences could improve an insurer's ability to reduce premiums?
Rate of earning on investments increase
What effect can a long-term care benefit rider have on a life insurance policy?
Reduced death benefit
What could be the potential result of taking out a cash value loan under a life insurance policy?
Reduces the amount receivable upon surrender of the contract
A life insurance policyowner would like a dividend option that result in a limited current outlay of funds. Which dividend option would be chosen?
Reduction of premium payment
Twisting is
Replacing an insurance policy from one insurer to another based on misrepresentation
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?
Request of the change will be refused
The envelope in which insurance solicitation material is contained may be addressed to the parents of students. The address may NOT include any combination of words which imply that the correspondence is from the
School
An insured, age 67, is covered under a disability income policy. What will the insurer normally require in order for the insured to continue coverage?
The insured must be actively at work for a specified number of hours per week
Which of the following is true regarding a person receiving a waiver of premium benefit?
The insured must be disabled for a period of time
The Optionally Renewable provisions allows what party to cancel the contract?
The insurer
James is covered with health insurance by two different insurers. The "insurance with other insurers" provision in an individual health insurance policy allows an insurer to pay benefits to the insured on a pro-rata basis when
The insurer was not notified prior to the claim that the insured has other health coverage
Under an adjustable life insurance policy, which of the following may NOT be changed without further underwriting?
The person insured
Taxable income may be the result from all of these modified endowment contract (MEC) transactions EXCEPT for
The policy is surrendered for less than what was paid into it
What is considered the collateral on a life insurance policy loan?
The policy's cash value
Which of these must be disclosed in a universal life policy?
The policy's surrender charges
A life insurance illustration showing future premiums being paid out of nonguaranteed values must disclose that
The policyowner may need to resume premium payments depending on actual results
Which of these statements regarding the extended term insurance nonforfeiture option in a life policy is accurate?
The premium to purchase the coverage comes from the policy's cash value
When would evidence of insurability be required for a person already covered with a variable universal life policy?
When the death benefit is increased
When does the producer give a premium receipt for a life insurance application?
When the initial premium has been paid with the application
A(n) ____ insurance company is one that was formed under the laws of another country outside of the U.S.
alien
The absolute assignment of a life insurance policy results in
all incidents of ownership transferred to the assignee
In a disability buy-sell agreement, the policies funding the agreement are owned by the
business entity
On issuance of an emergency cease and desist, how must the commissioner deliver notice to the person affected?
by certified mail
A deliberate lie by an insured to the insurer to obtain a lower premium is an example of
fraud
What type of premiums are associated with individual mortgage protection life insurance policies?
level premiums
Field underwriting by a producer
may result in the disclosure of hazardous activities of the applicant
Which of the following is excluded in a medical expense plan?
military duty
Periodic health claim payments MUST be made at least
monthly
The Fair Credit Reporting Act protects consumers
with guidelines regarding credit reporting and distribution
A health insurer MUST provide a proof of loss form
within 15 days of receipt of the notice of loss
An annuity's accumulation period may
Continues after the purchase payments stop
Which statement regarding whole life insurance is accurate?
Insurance coverage can continue for life
The insured's consideration given for a health insurance policy is
The first premium payment and the application
Disability income insurance normally excludes coverage for a disabilities that arise from
Active military duty
Which of the following statements accurately describes the "time limit on certain defenses"?
After a stated period of time, claims cannot be denied due to material misrepresentation on the application
Which of the following statement regarding the Fair Credit Reporting Act is TRUE?
An Insurer does NOT need to discuss any credit history inconsistencies with the applicant
Rick is a disabled worker receiving Social Security benefits. What are his wife and dependent children eligible for?
An income benefit which is a percentage of his primary insurance amount
According to the Pregnancy Discrimination Act of 1978, employers must treat pregnancy in the same manner as
Any other medical disability
In what situation could an insurance policy's coverage be modified?
Applicant is a substandard risk
When does the insured stop making payments under a thirty-payment whole life policy?
At the time of death or 30 years after the policy's inception, whichever comes first
In the event of premium default, which life insurance provisions will use the cash value to keep the policy in force?
Automatic premium loan
Which statement regarding the cash value of a whole life insurance policy is correct?
Available to the policyowner when policy has been surrendered
Which of the following statements BEST describes a double indemnity provision in travel accident insurance?
Benefits are doubled under certain circumstances stated in the policy
An accident and health insurer has just received written proof of loss from one of its insureds. The insured must now wait 60 days before
Bringing legal action against the insurer
If a Texas company proposes, and/or makes an insurance contract by mail for an Oklahoma resident, this is considered:
Business in the state of Oklahoma
Which report contains information regarding an individual's general reputation and credit standing?
Consumer report
The Insurance Information and Privacy Protection Act is designed to limit or direct the information collection activities of all the following, EXCEPT:
COBRA representatives
Which of the following provisions allows an insured or the insurer to terminate the policy?
Cancelable provision
The principal source of information concerning an applicant's identity, age, and marital status is found in the
Completed application
What must be given to a life insurance applicant when the agent receives an application and the initial premium?
Conditional receipt
An accident and health insurance policy's premium requirements are set forth in which of the following provisions?
Consideration clause
Which of the following health insurance provisions requires that the application becomes part of the policy?
Entire contract clause
How are benefit payments from individually-owned medical expenses policies treated for tax purposes?
Exempt from income taxes
Fraternal Benefit Society has each of the following characteristics EXCEPT
Exist For profit
Which tax is normally associated with an individual's death?
Federal estate tax
When does the primary funding for Medicare Part A come from?
Federal payroll and self-employment taxes
Which life insurance policy provisions allows a policyowner to cancel the policy and receive a full refund within a limited time period after policy delivery?
Free-Look period
When the disclosure of an insured's nonpublic information is involved, what is the insurer obligated to do?
Give notice, explain, and allow opting out
A large corporation pension plan purchased an accumulation annuity contract where all of the participating employees received certificates of participation. What is this contract called?
Group deferred annuity
Which of the following types of health insurers is characterized by a limited choice of providers?
Health maintenance organization
What can be expected when a preferred provider organization (PPO) patient decides to use a non-PPO?
Higher out-of-pocket expenses
Which life insurance clause prohibits an insurance company from questioning the validity of the contract after a stated period of the time has passed?
Incontestable clause
Which group benefits under COBRA have expired, a fully insured group policy can be converted to a (n)
Individual health policy
After the initial enrollment period for Medicare Part B has expired, when may an individual purchase again?
January through March of each year
Joe is a military retiree after having served 20 years of active duty. Upon retiring, he requests reinstatement of his lapsed individual health policy and is denied. Which of the following is correct?
Joe cannot be denied reinstatement to his original individual health plan
All of these are duties that a producer may be required to perform when delivering an insurance policy EXCEPT
Leave a conditional receipt with client
What is guaranteed cash value of a whole life insurance policy when the insured turns 65 years old?
Less than the policy's face amount
Laura added a children's rider to her life insurance policy. What type of coverage was added?
Level term
Commissions may ONLY be paid to
Licensed and duly appointed producers
Inpatient psychiatric care is covered under Part A Medicare for 190 days per
Lifetime The lifetime maximum for inpatient psychiatric care under Part A Medicare is 190 days.
How can a group dental insurer discourage adverse selection?
Limit the duration of coverage
Tim is confined to a nursing home but doesn't have a terminal illness. Which life insurance rider is designed to help pay for this type of expense?
Long-term care benefit rider
Medicare Part A coninsurance payments are covered by
Medicare Supplement Plan A
Which of the following covers the Part A deductible of Medicare?
Medicare supplement core benefits
Medicare Part B excess charges are covered by
Medicare supplemental insurance
Why do insurers require a minimum number of employees participate in a group insurance plan?
Minimize adverse selection
What is considered a valid reason for an insurer's refusal to pay policy proceeds directly to an minor?
Minors are normally not capable of handling money in a reasonable manner
A producer may be disciplined by the Commissioner for which of the following actions?
Misappropriation of premium funds
Which of the following actions by a producer would NOT result in a license suspension or revocation?
Misdemeanor conviction
An example of an unfair claims settlement practice is
Misrepresenting policy provisions affecting a loss
A signed good health statement may be requested by a life producer at the time of
Policy delivery
If an insured dies during the grace period with no premiums paid
Policy's face amount minus any premiums due
The standard provisions of an accident and health insurance policy require that the
Policy, endorsement, and attached papers constitute the "entire contract"
Replacement regulation is designed to protect
Policyowners from misrepresentations and loss of benefits
The agreement in which hospitals and physician groups in a specific area contract with an insurance company to provide medical care at predetermined costs is
Preferred Provider Organization (PPO)
How is the insured protected if a payor benefit rider is attached to the life insurance policy?
Premium payments are waived in the event the premium payor dies or becomes disabled
Which statement regarding the life insurance premium for a children's rider is true?
Premium remains the same no matter how many children
How are level term policies able to provide level premiums?
Premiums are averaged over the term of the policy
A Guaranteed Renewable provisions allows
Premiums which can only be increased per rate class
When must a producer provide disclosure about information practices to an applicant?
Prior to or at the time of signing the application
Kelly purchases a health insurance policy issued on a conditionally renewable basis. The insurance company has a right to refuse renewal of the policy for
Specific reasons stated in the contract
How does the cost for a survivorship life policy compare to the cost of combining two separate life insurance policies?
Survivorship life policy is lower
Where a ten year renewable term life insurance policy issued at age 45 is renewed, the premium rate will be the current rate for
Ten year term insurance for a person aged 55
All parts of the Medicare program (except for public information and enrollment) are administered by which federal agency?
The Centers for Medicare and Medicaid Services
Which statement concerning the Entire Contract provisions in an individual accident and health insurance policy is TRUE?
The agent doesn't have the authority to change the policy or waive its provisions
All of these statements concerning group credit life insurance are false EXCEPT
The face amount is based on the outstanding loan balance
How does a continuous premium whole life policy differ from a limited payment whole life policy?
The time period in which premiums will be paid
How is an insured's accident and health claim handled by an insurer if it occurs during the policy's grace period?
The unpaid premium may be subtracted from the reimbursement
An insurer may pay a commission in which of the following scenarios?
To a licensed producer who is appointed with the insurer
Which of these is NOT a reason to buy a term life policy?
To accumulate savings
How is a collateral assignment used in a life insurance contract?
Transfers specific ownership rights to a creditor
A medical expense health plan claim may be denied due to material misrepresentation within ____ year(s) of issue.
Two
Which of the following BEST describes a "partial disability"?
Unable to perform one of more job duties
Under what circumstances does an accident and health insurer have the right to request an autopsy?
When not prohibited by state law
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 conditions of the receipt are met
Before emailing a client an insurance document during a transaction, what must the client provide before the producer can send the document?
consent to receive the email
Which of the following reduces the opportunity for overinsurance?
coordination of benefits provision
Which of these life insurance policies does NOT contain a cash value provision?
decreasing term life
The amount of a covered loss to be paid by the insured before a major medical expense policy begins to pay is called the
deductible amount
How often must the commissioner examine each domestic insurance company?
every 5 years
Which of these is NOT considered a preventative service in a dental plan?
fillings
Insurable interest in one's own life is legally considered as
generally unlimited
Which of the following is NOT A qualification to be licensed as a producer?
high school diploma
A business may purchase an annuity for all of the following reasons EXCEPT
informally funding a non-qualified deferred compensation plan
Which of these procedures is NOT designed for ambulatory care centers?
inpatient surgery
Where will a life insurance policy's proceeds be directed to if all the beneficiaries die before the insured?
insured's estate
Who is required to notify the producer in the event appointment termination?
insurer
An alien insurer
is an insurer operating in the U.S. but headquartered outside the U.S.
The insurance coverage in a variable life insurance policy may vary based on the value of
its underlying investments
Qualified long-term care premiums are treated for tax purposes as
tax-deductible to the extent they exceed 7 1/2% AGI
The reason for backdating a policy is
to obtain a premium rate based on an earlier age
