Life and Health Insurance

Which of the following best describes a term policy?

Temporary coverage

All of the following may be used for medical underwriting purposes EXCEPT

Marital status

A person has a policy from a mutual insurance company that pays dividends and dividend interest each year. what is correct about the taxation consequences?

The dividend is free, the interest is taxed on annual income taxes

Stating a prospective insured must fill out a form or their rights may be impaired is illegal due to

Coercian

Which clause specifically applies to Pre-existing Conditions?

Time limit on certain disease

In this state, all medical insurance policies are required to provide for drug and alcohol abuse coverage. All of these policies include the following provisions EXCEPT

Transportation to and from treatment center

Which of the following ordered the Investigative Consumer Report?

Underwriter

Which of the following provisions notifies the insurer of the exact costs in the event of a claim and must be sworn statement?

Proof of Loss

A contract that has multiple parties and requires conditions to be met before consideration may be paid is best described as:

Conditional

Which of the following must be provided for by HMO by LAW

Preventative Care

Under Nonforfeiture Law, an insurer CANNOT deter Payment of cash surrender past how many months?

6 months

A person who has temporary license must receive how much insurance training prior to receiving their general license?

40 hours

Hospice is covered under which portion of medical plan?

Managed Care

In which of the following scenarios would the insurer cancel a medical policy?

The premium was not paid

Which type of annuity pays benefits based upon units?

Variable annuity

X has an Accidental Death policy with a 100000 death benefit and a triple indemnity rider in the event of death by common carrier. X is involved in a commercial airline crash, what is the Maximum amount X’s policy will pay?

300,000

Agent Y completes an application on January, 8th while collecting the premium at the same time. The insured V has stated they would like to be covered at the time of application regardless of health status but agent Y has repeatedly told V the policy will go into effect at the time of the medical exam. Which type of receipt will agent Y give to V on January 8th?

Conditional Receipt

R has a policy with a 20000 Accidental Death Benefit. R is riding on an airplane and the airplane crashes, R dies. How much will R’s beneficiary receive?

20000

Insured in a viatical settlement are known as:

Viators

Credit life insurance is most similar to what type of policy?

Decreasing term life

X’s employer has noticed an increase in her experience (group) rated plans premiums this year. In response, X’s employer has raised the health plans deductible to 2500. Which type of employee funded roll-over account would allow for savings toward the deductible up until 65?

Health Saving Account

All of the following can be considered Activity of Daily living EXCEPT

Bending to pick up a dropped tooth brush

H originally applied for disability insurance as ana insurance agent but 2months after receiving the policy he took a job as a construction worker. when the claim arises, what will most likely happen

The benefits will be adjusted to reflect what the premiums would have been able to purchase

Suicide is excluded for which reason

to protect the insurer from insured purchasing insurance for that sole purpose

A short term major medical policy is most likely written as:

Nonrenewable

Joint life is also known as which?

First to date

In which of the following scenarios would the insurer cancel a medical policy?

Premium was not paid

Which type of annuit pays benefits based upon units?

Variable annuity

P has an employer paid for Disability Income Policy. When P receives 2000 from the policy, what are the taxation consequence?

The 2000 is taxable to P

Which of the following MUST an agent notify an insured of when purchasing a participation policy?

Dividends are not guaranteed

Name the renewable option under National Association of Insurance Commissioners Uniform Policy Provisions that may be purchases with a single premium for the longest amount of time:

Noncancellable

Which of the following best describes the insured rights in a third party ownership contract?

The insured has no rights

An Insurer legally formed in Iowa is considered what to Texas?

Foreign

Which policy will generate cash value the quickest out of these options for a 55 year old?

Life paid up to 65

Most major medical plans cover medical expenses both in and out of the hospital and have high maximum limits. What is the term used to describe this?

Eligible

Which provision states that an insured may NOT change a beneficiary?

Entire Contract

What is the minimum benefit period for Long Term Care?

12 Months

Which of the following is NOT true about a Disability Waiver of Premium Rider?

There is a 7 month waiting period

What is the purpose of a deductible and preauthorization forms from an insurer?

Lower over utilization of health services

The statement that best describes the Guaranteed Insurability Rider would be

A higher Premium is required upon its use

A comprehensice PPO would not cover which of the following?

Experimental and investigative services

Which of the following is NOT true about Health Reimbursement Account?

Funds are solely contributed by the employee

The insured has a disability policy including the payment of claims provision. What is the purpose of this provision?

To Determine who gets paid in a claim

All of the following are a factors for the paid up additions amount added excepts:

Insured Insurability status

The entire contract clause states that only which party may make changes to the contractor?

Insurer

Which of the following would pay a surgeon income in the event they are injured?

Disability

The following is true by federal guidelines in regards to Health Reimbursement Arrangement:

The plan must be established by the employer

K is purchasing insurance through her local agent. The Local agent submits the application to underwriting and 3 days later K calls her agent to notify him that she has forgotten some medical information. Who would most likely initiate the change on the application?

The producer

Which of the following would be considered misrepresentation in an advertisement?

An insurer exaggerates their dividends payouts in a newspaper advertisement

J and his wife insure each other under two separate major medical policies. Which provision determines the plan that pays first during a claim?

Coordination of Beneftis

During a Medicare Supplement policy sales presentation, the agent has laid out the different plans. Who is responsible for determining if the Medicare Supplement policy is suitable for the insured?

The agent

K, an eligible totally disabled insured, qualifies for medical and disability provisions from Social Security. what will define K’s Benefits?

His current income

Medicaid primarily for which of the following?

Lower income population

A basic hospital policy will pay for which of the following?

Convalescent care 31 days

An insured has a 100,000 Accidental Death and Dismemberment policy and is mowing the lawn. They cut off their toes, what is the max amount they will receive in benefits?

0

Costs paid for by a medical policy are referred to?

Eligible expenses

The entire contract clause allows an insured to perform all of the following except:

Modify the contract 

What is the advantage of reinstating a policy instead of applying for a new one?

The original age is used for premium determination

The clause in a contract that states a claim in court may not be brought against an insurer for 60 days after proof of loss was submitted is known as:

-Legal actions clause

Which of the following policies would not have an automatic premium loan provision?

Term

What is CORRECT about Variable Universal Life insurance cash value?

-The policyowner directs the cash value investments which may lose value.

What is the open enrollment period for Medicare Part B? 

January 1st through March 31st

What percentage of medical expenses are partners allowed to deduct at the end of the year?

100%

M works at company XYZ and they purchase a Key Employee Insurance Policy on her. Which of the following best describes this concept?

XYZ is the policyowner, M is the insured, XYZ is the beneficiary

Which statement best describes a whole life policy?

Fixed premium policy with cash value that grows more the longer the policy is in force

Agents may charge a fee for services in which scenario?

Fees represent a reasonable business expense

Which type of settlement option does period- certain apply to?

Life Income

All of the following may be considered limited plans expect:

Life Insurance

This optional provision is usually standard on whole life policies, which can help prevent its lapse in the event an insured missed a premium payment is

Automatic premium loan

An employer purchases a long term care policy for an insured, how are benefits taxed?

Tax free

Taylor pays a monthly premium of 100 for her health insurance. What would be the duration of the grace period under her policy?

10 days

All of the following are attributes of group insurance except

Each employee receiving an individual policy.

The dividend option if used and created a taxable event is known as

Accumulation of interest

Which program uses Primary Insurance Amount to determine coverage costs?

Social security

What percentage of participation on a small employers plan must be maintained?

75%

Where can the insured find the benefits and perils listed in a policy?

Insuring clause

An immediate annuity would have which of the following?

Single premium

Will and Sam purchase a buy sell agreement on their company and names himself as beneficiary. The company becomes insolvent two months later and Will dies. Even though there is no insurable interest, how will these benefits be paid?

Sam receives the full benefit

Which of the following highlights the benefits and exclusions in a life insurance contract?

Policy summary 

Which provision in disability will ensure that no premiums are required while receiving payments?

Waiver of premium

X is the primary beneficiary, Y is the insured and Z is the named as contingent beneficiary. One day X is driving Y and Z to Austin, Texas for the SXSW festival when Y, the front seat passenger, sees a deer jumping across the street. Z tells X to swerve but X swerves the wrong way into oncoming traffic. X and Z die immediately, at the scene, who gets the benefits?

Nobody

Which policy will generate cash value the quickest out of these options for a 55 year old?

Life paid up at 65

Most major medical plans cover medical expenses both in and out of the hospital and have high maximum limits. What is the term used to describe this?

Eligible

An insured has a 500 dollar deductible and 80/20 coinsurance with a claim of 5000. How much out of pocket did this customer have?

1400

Which of the following disability provisions would not cover on the job injuries?

nonoccupational

A person wants to name a charity as the permanent beneficiary of his life insurance. Which of the following best describes his designation?

Irrevocable

What would be the consideration of an insured in an insurance contract?

Paying the first months premium 

The type of renewability option that provides for coverage until 65 without premiums increasing woyld be best described as

Guaranteed Noncancelable

Which type of assignment is best suited for a bank loan?

Collateral assignment

What is true about a section 125 plan if the employee elects more coverage than the employer pays for?

The employee would pay the difference 

Which rider will allow the insured o add their child onto the policy?

Child term rider

Which of the following is illegal?

Only insuring your family

An ex-employee who has exhausted COBRA coverage and chooses to convert to individual coverage would NOT have to do which of the following?

Complete medical underwriting

Which of the following best describes Medicare?

Part A -Hosital services Part B - Physician services

In which portion of the contract would an insured find the benefits covered and not covered as well as the scope of the coverage?

Insuring clause

An insured applied for life insurance on April 1st without including the initial premium. The policy was issued on April 15th and delivered on April 21st. When the insured paid the first months premium and signed as a health waiver. When was the insured initially covered?

April 21st

An absolute assignment can best be described as

One way transfer

A person in hospice could receive which of the following?

Pain medicine

All of the following are unfair claims settlement practices on an insurer's part EXCEPT

Compromising the payment of a claim if fraud or illegal acts are suspected

An insured has a 20 Pay Whole Life policy in the amount of 20,000 with Accidental Death and Dismemberment rider that pays double indemnity. The insured died due to cancer, what amount will the beneficiary receive?

20,000