simulate test #4
In a Disability Income policy, all of the following are considered presumptive disabilities EXCEPT
Loss of one eye.
Charges for services provided through a HICAP agency are
Never made to the client.
The Waiver of Cost of Insurance rider is found in what type of insurance?
universal Life
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
Consideration
Which of the following is NOT a characteristic or a service of an HMO plan?
Contracting with insurance companies
Intentionally misrepresenting or concealing a material fact to induce an insurance company to make a contract is known as
Fraud.
What type of insurance would be used for a Return of Premium rider?
Increasing Term
Which statement is NOT true regarding a Straight Life policy?
Its premium steadily decreases over time, in response to its growing cash value.
After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?
Monthly premium waiver and monthly income
First-year commission on a Medicare supplement policy may NOT exceed
200% of the 2nd year commission on the same policy.
Which of the following is NOT typically excluded from life policies?
Death due to plane crash for a fare-paying passenger
An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?
Guaranteed insurability option
What are the three basic coverages for medical expense insurance?
Hospital, Surgical, Medical
Who is the beneficiary in a credit disability income policy?
The lending institution
All of the following are true of key person insurance EXCEPT
The plan is funded by permanent insurance only.
Which of the following is NOT true regarding Blue Cross and Blue Shield organizations?
They are insurance companies.
Which of the following is true regarding taxation of accelerated benefits under a life insurance policy?
They are tax free to terminally ill insured.
When does a person qualify to receive disability-related income?
When the insured is unable to perform his/her iob duties
Issuance of health policies to insureds with chronic or ongoing conditions could result in all of the following EXCEPT:
Lower overall costs and premiums.
Social Security was created to provide all of the following benefits EXCEPT
Unemployment income.
The guaranteed insurability option
allows the insured to purchase specific amounts of additional insurance at specific times without proving insurability.
The Department of Insurance contacts an agent about a claim that was settled two months ago. Within what timeframe must the agent issue a complete response?
21 days
Joe, Larry, and Curly own a small business. They have made a legal arrangement that states that if one of them dies or becomes disabled, the other two will be able to buy the partner's shares. Which term best describes this arrangement?
Business Continuation
If found material for underwriting, a misrepresentation
Can void contract
Which of the following statements pertaining to Medicare Part A is correct?
Individuals who have ALS automatically qualify for Medicare Part A, regardless of age.
If a client has purchased a long term care policy that a HICAP counselor determines to be inadequate for the needs of the client, the counselor will
Inform the client of the inadequacies in the policy.
Which of the following is true regarding the spendthrift clause in life insurance policies?
It can protect the policy proceeds from creditors of the beneficiary.
An insured is covered under a Medicare policy that provides a list of network healthcare providers that the insured must use to receive coverage. In exchange for this limitation, the insured is offered a lower premium. Which type of Medicare policy does the insured own?
Medicare SELECT
Which of the following statements is correct?
Medicare will cover nursing home care if it is part of the treatment for a covered illness.
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?
The annuitant must be a natural person.
Which is NOT true about beneficiary designations?
The beneficiary must have insurable interest in the insured.
Which of the following statements is true regarding coinsurance?
The larger the percentage that is paid by the insured, the lower the required premium will be.
A policy with a 31-day grace period implies
The policy will not lapse for 31 days if the premium is not paid when due.
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
Which of the following is true regarding free insurance issued in this state?
It is illegal.
When a reduced paid-up nonforfeiture option is chosen, what happens to the face amount of the policy?
It is reduced to the amount of what the cash value would buy as a single premium.
According to the Entire Contract provision, a policy must contain
A copy of the original application for insurance.
Which of the following would best describe total disability?
A person's ability to work is significantly reduced or eliminated for the rest of his/her life.
Which of the following is NOT an allowable 1035 exchange?
A whole life insurance policy is exchanged for a term insurance policy.
Which describes the features of a comprehensive major medical policy?
Basic medical expense benefits are provided in a single package.
All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT
Being age 65.
To be eligible for tax credits under the ACA, individuals must have income that is what percent of the Federal Poverty Level?
Between 100% and 400%
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Limited pay whole life
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.
A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called
Cost of living rider.
Which of the following insurance options would be considered a risk-sharing arrangement?
Reciprocal
Which statement accurately describes group disability income insurance?
The extent of benefits is determined by the insured's income.
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
Qualified long-term care policies covering home care must provide benefits if the insured is impaired in at least two of the six activities of daily living (ADL). The term "impaired" means
Needs substantial hands on or standby assistance with ADLs.
All of the following are covered by Part A of Medicare EXCEPT
Physician's and surgeon's services.
Which of the following best describes a pure life annuity settlement option?
Pure life provides payments for as long as the annuitant is alive.
The main difference between immediate and deferred annuities is
When the income payments begin.
HICAP
does not sell policies or recommend agents or companies. It provides free assistance in analyzing policies and explaining coverage to clients.
The spendthrift clause in a life insurance policy prevents
the beneficiary's reckless spending of benefits, and protects the policy proceeds from creditors of the beneficiary or policyowner.
The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?
Interest only option
Which of the following is correct regarding credit life insurance?
It insures the life of a debtor.
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy
Required a premium increase each renewal.
Which of the following is NOT the consideration in a policy?
The application given to a prospective insured
Pure or straight life annuity settlement option will only pay
for as long as the annuitant lives; however, if he/she dies after receiving the first payment, no more payments would be made to an other person. For this reason, pure life has the potential to pay larger monthly benefits than other options.
Who must sign the notice regarding replacement?
Both the applicant and agent
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
Immediate annuity
Which of the following is NOT true regarding the needs approach method of determining the value of an individual's life?
Need is predicted using the number of years until the insured's retirement.
Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?
Optionally renewable
Physician's and surgeon's services are covered under
Part B
According to California law, all of the following may be covered as dependents under group life insurance EXCEPT
The insured's elderly parents living with the insured.
All of the following are requirements for life insurance illustrations EXCEPT
They must be part of the contract.
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?
Limited-pay Life
Which of the following categories of benefits are not covered by an LTC policy?
Care given in an acute care unit of a hospital