Simulation exam

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 at 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 employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage?

$102

A noncontributory group disability income plan has a 30-day elimination period and offers benefits of $2,000 a month. If an employee is unable to work for 7 months due to a covered disability, the employee will receive

$12,000, all of which is taxable.

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

How many consecutive months of coverage (other than in an Acute care unit of a hospital) Must LTC insurance provide in this state?

12

Which of the following disability income policies would have the highest premium?

15-day waiting period / 10-year benefit period

The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?

2 years

What is the waiting period on a waiver of premium rider in life insurance policies?

6 months

Which of the following is a feature of a disability buyout plan?

A lump-sum benefit payment option

All of the following are correct about required provisions of a health insurance policy except

A reinstated policy provides immediate coverage for an illness.

When the insured purchased his health policy he was a window washer. He has since changed occupations and now manages a library. If the insurer is notified of the insured's change of occupation, the insurer should

Adjust the benefit in accordance with the decreased risk

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

Aleatory

When an insured purchased her disability income policy, she misstated her age to the agent. She told the agent that she was 30 years old, when in fact, she was 37. If the policy contains optional misstatement of age provision

Amounts payable under the policy will reflect the insured's correct age.

When an annuity is written, whose life expectancy is taken into account?

Annuitant

In an annuity, the accumulated money is converted into a stream of income during which time period?

Annuitization period

What is the maximum period Of time during which an insurer may contest fraudulent misstatements made in the health insurance application?

As long as the policy is in force

An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do?

Ask her to sign a statement of good health

To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?

At the time of application

Which of the following best describes Fixed period settlement option?

Both the principal and interest will be liquidated over a selected period of time.

After a persons employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is not true?

By law, the new, individual policy must provide the same benefits as the group insurance policy.

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.

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the

Consideration clause

Which of the following is not an exclusion in medical expense insurance policies?

Coverage for dependents

Which of the following is not an example of a valid insurable interest?

Debtor in the life of the creditor

What is an important feature of a dental expense insurance plan That is not typically found in a medical expense insurance plan?

Diagnostic and preventive care

A producer agent must do all of the following when delivering a new policy to the insured except

Disclose commissions earned from the sale of the policy.

Items stipulated in the contract that the insurer will not provide coverage for are found in the

Exclusions

All of the following are dividend options except

Fixed period installments

As it pertains to group health insurance, cobra stipulates that

Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.

Most LTC plans have which of the following features?

Guaranteed renewability

Before an agent delivers a policy, the insurer makes a last-minute change to the policy. The agent informs the insured of this change, and he accepts it. In response, the agent must

Have the insured sign a statement acknowledging that he is aware of the change.

Health savings accounts are designed to

Help individuals save for qualified health expenses.

Annually renewable term policies provide a level death benefit for a premium that

Increases annually

Which of the following Entities can legally bind coverage?

Insurer Only insurers, not agents, can bind coverage.

In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?

Insurer to the insured

The Mode of Premium Payment

Is defined as the frequency and the amount of the premium payment.

Which of the following statements is not true concerning Medicaid?

It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income.

Which of the following best describes a MIB?

It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.

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

Which of the following statements is true about a policy assignment?

It transfers rights of ownership from the owner to another person.

In the underwriting process, it was determined that the applicant for life insurance is in poor health and has some dangerous habits. Which of the following is true concerning the policy premium?

It will likely be higher because the applicant is a substandard risk.

Which of the following is true of a PPO?

Its goal is to channel patients to providers that discount services.

All of the following would be qualified as a dependent under a dependent care flexible spending account except

Jeremy had to have both legs amputated, but has learned how to take care of himself and to get around in a wheelchair

An applicant for a health insurance policy returns a completed application To her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has insurer done by this point?

Neither approved the application nor issued the policy

Prior to purchasing a Medigap policy a person must be enrolled in which of the following?

Parts A and B of Medicare

With respect to the consideration clause, which of the following would be considered consideration on the part of the applicant for insurance?

Payment of premium

According to the PPACA metal levels classification, if a health plan is expected to cover 90% of the cost for an average population, and the participants would cover the remaining 10%, what type of plan is that?

Platinum

All of the following are true regarding insurance policy loans except

Policy loans can be made on policies that do not accumulate cash value.

What describes a specific information about a policy?

Policy summary

Guaranteed renewable health insurance policy allows the

Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.

All of the following are characteristics of group life insurance except

Premiums are determined by the age, sex and occupation of each individual certificate holder.

Insurers may change which of the following on a guaranteed renewable health insurance policy?

Rates by class

The policy owner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

Reduction of premium

What type of care is Respite care?

Relief for a major care giver

The ownership provision entitles the policy owner to do all of the following except

Set premium rates

An Employee has group life insurance through her employer. after five years she decides to leave the company and work independently. how can she obtain an individual policy?

She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.

Which of the following terms describes the specified dollar amount beyond which The insured no longer participates in the sharing of expenses?

Stop-loss limit

A provision found in insurance policies which prevents the insured from collecting twice for the same loss is called

Subrogation

The legal process that gives the insurer, after payment of a loss, The right to seek recovery from a third-party that was responsible for the loss is known as

Subrogation

The premiums paid by the employer in a business life insurance policy are

Tax deductible by the employer

Which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the Policy to provide an additional amount of temporary insurance of the insured, or allows amounts of temporary insurance to cover other family members?

Term rider

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act The purpose of the Fair Credit Reporting Act is to protect consumers against the circulation of inaccurate or obsolete information and to ensure that consumer reporting agencies are fair and equitable in their treatment of consumers.

Which of the following is true about the requirements regarding Hiv exams?

The applicant must give prior informed written consent

Who chooses a primary care physician in an HMO plan?

The individual member

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to

The insured Payments for loss of life benefits are to be made to the designated beneficiary. If no beneficiary has been named, payment proceeds are to be paid to the deceased insured's estate. Claims other than death benefits are to be paid to the insured or the insured's estate, unless otherwise assigned by the insured.

Which of the following determines the cash value of a variable life policy?

The performance of the policy portfolio

All of the following are true of key person insurance except

The plan is funded by permanent insurance only.

Which of the following statements is most correct concerning the changing of an Irrevocable beneficiary?

They can be changed only with the written consent of that beneficiary.

All of the following are requirements for life insurance illustrations except

They must be part of the contract.

What is the purpose of the buyers guide?

To allow the consumer to compare the costs of different policies

What is the purpose of establishing a target premium for universal life policy?

To keep the policy in force

What is the purpose of a fixed period settlement option?

To provide a guaranteed income for a certain amount of time

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%

In a survivorship policy, when does the insurer pay the death benefit?

Upon the last death

Which of the following types of policies allows for a flexible premium and a variable investment component?

Variable universal life insurance

When would a 20-pay whole life policy endow?

When the insured reaches age 100

Group health insurance is characterized by all the following except

adverse selection

An insurer is attempting to determine the insurability of an applicant and decides to obtain medical information from several different sources. Which entity must be notified of the investigation?

applicant

An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?

conditional

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

All the following statements are true regarding tax-qualified annuities except

employer contributions are not tax deductible

Who must pay for the cost of medical examination required in the process of underwriting?

insurer

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as

legal actions

The primary eligibility requirement for Medicaid benefits is based upon

need

Which of the following riders would not cause the death benefit to increase?

payor benefit rider

Under a SIMPLE plan, which of the following is TRUE regarding taxation on both contributions and earnings?

they are tax deferred until withdrawn

A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as

usual, customary, and reasonable