Kansas Life & Health Insurance Final Exam

Kansas Life & Health Insurance Final Exam flashcards.

When can a policy owner change a revocable beneficiary?

Anytime

J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used?

Revocable

M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?

Revocable Beneficiary

Revocable beneficiary

The policy owner may change the beneficiary at any time without notifying or getting permission from the beneficiary.

K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?

Proceeds will be paid to K's estate if P dies within a specified time

How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?

If the primary beneficiary dies before the insured

Which statement is true regarding a minor beneficiary

Normally, a guardian is required to be appointed in the Beneficiary clause of the contract

A life insurance application must be signed by all of these EXCEPT

Beneficiaries are not required to sign an insurance application

K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?

A conditional receipt indicates that certain conditions must be met in order for the insurance coverage to go into effect.

P is a producer who notices 5 questions on a life application were not answered. What actions should P take?

Schedule another appointment with the applicant to complete the unanswered questions

M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT

Free-look period has expired

An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the

Applicant's physician

On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take?

Collect initial premium along with a signed health statement

What is being delivered during a policy delivery?

Insurance contract to the proposed insured

Before a life insurance policy is issued, which of these components of the contract is required?

Applicant's signature on application

Which of the following is an important underwriting principle of group life insurance?

Everyone must be covered in the group

A noncontributory group term life plan is characterized by

The entire cost of the plan is paid for by the employer

A person who is insured within a group contract will be given a

certificate

Group life insurance policies are generally written as

Annually renewable term

Which provision is NOT a requirement in a group life policy?

Accidental

If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?

Contributory

W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n)

Immediate annuity

What type of annuity has a cash value that is based upon the performance of it's underlying investment funds?

Variable

T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this

Life Annuity with period certain

Which of these statements concerning an Individual Straight Life annuity is accurate?

Payments are made to an annuitant for life

An individual who purchases a Life annuity is given protection against

The risk of living longer than expected

What is Old Age and Survivors Health Insurance (OASDHI) also known as

Social Security

Which of these retirement plans can be started by an employee, even if another plan is in existence?

Individual Retirement Account (IRA)

Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company

Annuity

A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed?

Company X

Upon completion of the application

At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act?

Who elects the governing body of a mutual insurance company?

Policyholder

An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the

Fair credit reporting act

When does a Guaranteed Insurability Rider allow the insured to buy additional coverage?

At future dates specified in the contract with no evidence of insurability required

The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and

The initial premium

When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n)

Exclusion

Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself?

Entire Contract provision

What provision in a life insurance policy states that the application is considered part of the contract?

Entire contract provision

Which of these is NOT considered to be a right given to a policyowner?

Modify a provision in the insurance contract

How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period?

Claims are denied under the Suicide clause of the policy

M had an annual life insurance premium payment due January 1. She died January 10 without making the premium payment. What action will the insurer take?

Pay face amount minus the past due premium

What benefit does the Payor clause on a Juvenile Life policy provide

Premiums are waived if payor becomes disabled

S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?

Automatic policy loan

P purchases a $50,000 term life insurance policy in 2005. One of the questions on the application ask if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary?

$50,000 minus any outstanding policy loans

S buys a $10,000 Whole Life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy

Return of premium rider

The automatic premium loan provision is designed to

avoid a policy lapse

Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE?

Evidence of insurability is required when the option is exercised

When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?

Void the policy only if it is discovered during the Contestable period and proven to be material

The Consideration clause in a life insurance contract contains what pertinent information?

Amount of premium payments and when they are due

Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling

Variable life

What kind of special need would a policyowner require with an Adjustable Life insurance policy

flexible premiums

Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy?

Increasing face amount

N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?

30 pay life

When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?

Conversion provision

Which of these is an element of a Variable Life policy

A fixed, level premium

Which of these would be considered a Limited-Pay Life policy?

Life paid up at age 70

The amount of coverage on a group credit life policy is limited to

The insured's total loan value

What type of life insurance incorporates flexible premiums and an adjustable death benefit

universal life

Which statement about a whole life policy is correct?

Cash value may be borrowed against

Which statement is correct regarding the premium payment schedule for whole life policies?

Premiums are payable throughout the insured's lifetime/ coverage lasts until death of the insured

T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase

10 year endowment

What type of insurance offers permanent life coverage with premiums that are payable for life?

Whole life

What type of life policy covers 2 lives and pays the face amount after the first one dies?

Joint Life policy

A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as

Variable life

Family maintenance policy

What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?

All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for

Modified whole life

K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this

Modified whole life

S is covered by a whole life policy. Which insurance product can cover his children

Child term rider

Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health

Conversion

When is the face amount paid under a Joint Life and Survivor policy?

Upon death of the last insured

What type of life policy covers two people and pays upon the death of the last insured?

Survivorship

Which of these characteristics is consistent with a Straight Life policy?

Premiums are payable for as long as there is insurance coverage in force

Which statement is true concerning a Variable Universal Life policy?

Policyowner controls where the investment will go and selects the amount of the premium payment

When must insurable interest be present in order for a life insurance policy to be valid

At the time of application

If a contract of adhesion contains questionable language, to whom would the interpretation be in favor of?

insured

When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have

insurable interest in the proposed insured

Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called

representations

The part of a life insurance policy guaranteed to be true is called a(n)

Warranty

T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. When T submits a claim, his employer's plan is considered what type of carrier under the Model Group Coordination of Benefits provision?

Primary carrier

The reason for a business having a Business Overhead Expense Disability Plan is to cover

fixed business expense

The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the

Waiting period

A medical care provider which typically delivers health services at its own local medical facility is known as a

Health maintenance organization

Which of the following BEST describes how a Preferred Provider Organization is less restrictive than a Health Maintenance Organization?

More physicians to choose from

Medicare is intended for all of the following groups EXCEPT

full time students

J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a preset price. What type of plan does J belong to

health maintenance organization

Which of these is considered a true statement regarding Medicaid?

Funded by both state and federal governments

Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges?

The maximum amount considered eligible for reimbursement by an insurance company under a health plan

Which of these options can an individual use their medical flexible spending account to pay for

prescription drugs

Which of the following statements BEST describes dental care indemnity coverage

Services are reimbursed after insurer receives the invoice

Major Medical policies typically contain a

Deductible and coinsurance

An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses

$3,000

Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deducitble

Carryover Provision

With a Basic Medical Expense policy, what does the hospitalization expense cover

Hospital room and board

N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as

Coinsurance

In Major Medical Expense policies, what is the intent of a Stop Loss provision

Limits an insured's out-of-pocket medical expenses

Which of the following BEST describes a Hospital Indemnity policy?

Coverage that pays a stated amount per day of a covered hospitalization

For which of the following expenses does a Basic Hospital policy pay

Hospital room and board

Which of the following costs would a Basic Hospital/Surgical policy likely cover

Surgically removing a facial birthmark

Deductibles are used in health policies to lower

Overused of medical services

Basic Hospital and Surgical policy benefits are

Lower than the actual expenses incurred