Basic principles of insurance Flashcards
What is the transfer of risk from one party to another through a legal contract?
Concept of insurance
What is the transfer of risk through pooling or accumulation of funds?
Insurance
Insurers’s Policies which restore insured to the financial position they enjoyed before the insured loss is called what?
Indemnify
What are the two classifications for an insurers? Insurance Companies?
Private (commercial) companies
Or
Government providers
What is the company providing the insurance called?
Insurer
What is the covered person known as?
The insured
Insurance programs provided by federal and state governments are known as what?
Social insurance
Government insurers are owned and operated by who?
Federal or state entity
Companies that sell more than one line of insurance are known as what?
Multi line insurers
What is a company that only sells one line of insurance called?
Mono-line insurer 
public or private company owned by shareholders, who have bought shares in the company that, in the case of a public company, trade on a stock exchange.
Stock insurance company
What is a non-participating issue policies?
- They don’t pay dividends because policy owners do not own the insurance company
- Neither does purchase of nonparticipating insurance policies grant any ownership Privilege.
What insurance company organize and Incorporated on the state law but have no stockholders?
Mutual insurance companies
Anyone who purchased insurance from a mutual insurer is both what and what?
A policy holder and owner
Mutual companies are referred to as participating companies because?
Policyholders participate in the distribution of dividends
Can policyholders in a mutual company have the right to select the board of directors?
They have a vote For members of the board of directors. Yes
The amount of earning paid to a policyholder as dividends as of the insurance company set-asides funds required to cover reserves, operating expenses, any general business purposes.
Divisible surplus
When a stock company may be converted into a mutual company, what is this process called?
Mutualization
Mutual companies can convert to stock companies through a process called?
Demutualization
This is a rare case
An insurance company issuing both participating and non-participating policies is called what?
Using a mixed plan
 Participating policies versus non-participating policies? What’s the difference
Participating policies allow policy holders to elect board directors and receive dividends from the surplus
Nonparticipating do not allowed policyholders in election or receive dividends
 What type of company are classified by the way they charge premiums?
Assessment mutual companies
This society primary for their social, charitable, and benevolent activities?
Fraternal
Societies
Fraternal societies memberships are based on what three things?
- Religion
- Nationality
- Ethnicity
What are three things to be Characterized as fraternal benefit society?
- Be a nonprofit organization
- Have a log system that includes which ritualistic work & maintain rep gov’t form w/ elected officers
- Must exist for reasons other than obtaining insurance. 
An unincorporated organization overseen by a board of governors /directors in which individuals (subscribers)agree to ensure each other?
Reciprocal insurers
Who handles the transaction for reciprocal insurers? Also, authorize to conduct data day affairs of the insurer on behalf of the subscribers
Attorneys in fact
What does RRG stands for?
Risk Retention Group
This is a specialized insurance company created under the terms of the federal liability risk retention act of 1986 to provide liable insurance for individuals and entities with a common Von
Risk Retention Group (RRG)
What is the primary purpose of a RRG?
Retain or pool risks.
Are risk retention groups only license in their state of domicile?
Yes
What does RPGs stands for?
Risk purchasing group
How is a RPG different from RRGs?
RPG purchase Insurance from an insurance company. They do not themselves act as a insurer
Who are a specialized branch of the insurance industry because they ensure other insurance?
Reinsurers.
An arrangement by which an insurance company transfer a portion of an assume risk to another insurer
Reinsurance 
In a reinsurance agreement, the insurance company that transfer some or all of his loss exposure (risk) to another insurer is called what?
Primary insurer (also called ceding company)
What is a company assuming the risk?
Re-insurer or assuming company
A portion of the risk that the ceding insurer retains is called what?
Net retention or net line
An insurer established and owned by parent firm or group of firms to insure the parent’s loss exposed is known as what?
Captive insurer
What is referred to a non-traditional insurance market?
Surplus line insurance
A typical reinsurance contract between two insurance companies is called what?
Treaty reinsurance
This involves an automatic sharing of the risk as soon based on previous establish criteria?
Treaty reinsurance
In some situations, a primary insurer will seek reinsurance tailored to a covert specific risk or exposure without an ongoing agreement? 
Facultative reinsurance
What needs to be done to qualify for surplus line coverage?
The insured must demonstrate that he has made an unsuccessful effort to secure coverage in an authorize market. An individual may not attempt to secure coverage just because it’s less expensive.
Does service providers sell insurance?
No, they sell medical and hospital care services to their subscribers
What is a HMO?
Health maintenance organization
What does a health maintenance organization HMO offers.
Wide range of health care services to subscribers. 
Who sells medical & health care services to their subscribers, not insurance.
Service providers
What does PPO stand for?
Preferred provider organization
How are HMOs and PPOs different
HMO-Specific doctors and hospitals contract to work with HMO.
PPO-Group desireing healthcare services Little team priced discounts or special services from certain selected healthcare providers in exchange for four fern its members or employees to them
This organization is not I insure her rather a syndicate of individuals and companies that individually on the right insurance. Who am I?
Lloyd of London
What is a self-funded plan to cover potential losses?
Self insurers
 characterized by relatively small face amounts(1k to 2k). Selling agent visits the policy owners home each week to collect premiums. Who am I?
Industrial Insurer
And ensure it miss or authorized to transact insurance business in a particular state is referred to as what?
Authorized insurer 
 Also known as an admitted insurers, an authorize company is issued what?
Certificate of authority
This insurer is organized and incorporated in the state where it is writing business, which usually contains its principal office
Domestic insurer
This ensure is authorize in one state but organize and incorporate it into the laws of a different state?
Foreign insurer
This is sure is authorized in any state within the United States but as pressal office is located outside this country?
Alien insurer
A division ,within insurance company, responsible for increasing the number of prospective applicants.
Marketing or sales
This department Completing the application and face-to-face appointments with individual prospective buyers
Sales department
A department Responsible for reviewing applications, conducting an investigation to gain additional information about applicants, assigned risk classification, and approving or declining an application.
Underwriting
This department is responsible for processing, investigating, and pain cleans for losses incurred by the insured
Claims
This department calculates policy rates, reserves, and dividends and makes other applicable statistical studies and reports focusing on morbidity & morality tables.
Actuarial
 These individuals who solicitor sales of insurance products to the public.
Producers
1 or more insurer under the terms of their appointments contract
Agents
Represents themselves and the insured
Brokers
Not licensed to sell insurance. Represents a producer or solicit perspective applicants to meet and discuss their insurance needs with that producer on their behalf.
Solicitor
Insurance company employees who do not engage in sales activity that pays commission.

Service representatives
This person identify, excess, examine, and classifies the amount of risk represented by an applicant to determine if coverage should be provided and at what cost. They also approve or decline an insurance application and determine the cost to provide insurance?
Underwriter
This person calculate policy rates, reserves, and dividends. They also make statistical studies and reports.
Actuaries
This person engages in investigation work to obtain information for adjusting, sadly, or denying insurance claims.
Insurance adjuster
This title referred to a person who, for compensation, Acts on behalf of the insured or aids them with insurance claim supplements
Public adjuster
What is the difference between a captive or a career agent to a independent agent?
Capture/career agent works for Why insurance company and cells only the insurance company policies
A independent agent works for themselves and sells the insurance products of many companies.
The primary agency is the cell insurance, although they may build a small salesforce to a system. Responsible for maintaining their own office and administrative staff.
Personal producing general agency (PPGA)
This agency is a creation of property and casualty industry, does not tie a sales staff or agency to any particular insurance company. They are compensated on a commission or feed base for a business they produce?
Independent agency
This type of agency recruits train and supervise agents to managerial or general agents. They primarily build staff.
Career agencies
This agency do not train recruit or supervise agents. they primarily sell insurance
Personal producing general agencies PPGA
These Types of agents represent in the number of insurance companies through contractual agreements
Independent agents (American agency system)
This case involved 1 state’s attempt to regulate an insurance company domiciled in another state.
1868 Paul v. Virginia
In the southern eastern on the writer association case, Supreme court ruled
At the insurance industry is a form of interstate commerce Regulated by the federal government. It did nullify laws that conflicted with the federal legislation. 
1944 US versus southern eastern underwriters association (SEUA)
 this law made it clear that states continue to participate in the Regulation of insurance was in the public’s best interest. Also made possible the application of Federal any trust laws to the extent that is not regulated by state law.
1945 McCarran-Ferguson Act
Intervention of the federal trade commission, sought to control the health insurance industry advertising and sales literature.
1958 intervention by the FTC. Federal tray commission
Intervention by the security and exchange commission, The Supreme Court rule that federal security laws apply to ensures that issue variables annuities and does requires insurers to conform to both SEC and state regulation
1959 intervention by the security and exchange commission. 
This law is the authorization that requires fair and accurate reporting of information about consumers including insurance applications. 
1970 passage of the fair credit reporting act
A criminal offense for individuals convicted of a felony involving dishonesty or a breach of trust to participate in the insurance business without first obtaining a letter of written consent to engage in the business of insurance from the appropriate state regulator
1994 United States code section 1033 and 1034 regarding fraud and false statements
This act allow commercial banks, investment banks, retail brokerage, and insurance company to engage in each others lines of business
1999 federal service moderation act
Also called(Gramm-Leach-Bliley Act)
Was adopted in response to the September 11, 2001 Terrace attacks. The law aims to detect, deter, and disrupt terrorists efforts and funding while prosecuting international money laundering. 
2001 uniting and strengthening America by providing appropriate tools required to enter step and instruct terrorism act
(Patriot Act)
Do not call registry allow consumers to list their phones in a registry of numbers who telemarketers,including insurers, cannot legally make solicitation calls.
2003 do not called implementation act. 
To spread risk by separating the cost of possible losses over a large number of people
Risk pulling or loss sharing
What is the principle of indemnity?
To restore the insured to the same financial position prior to the loss in question occurred.
Predicting the level of future losses expected across a large group is known as?
Spread of risk/risk spreading 
immediate specific event that causes a loss
Perils
 Insurance Policy define the peril they protect against. IE cancer, fire or lightning, very specific.
Specified (name) Perils
Policies that doesn’t name the perils they cover. They cover all perils.
Special or Open Peril Insurance
An unintended Unforeseen reduction or destruction of financial or economic value?
Loss
Losses can be defined as what two occurrences
Accident or occurrence
And unforeseen unexpected unattended and setting event
Accident
In the event that causes a loss
Occurrence
The risk of possible loss
Loss exposure
Similar objects of insurance expose the same group perils
Homogeneous exposure units
Physical hazard or tangible conditions existing in a manner that makes the laws more likely to occur
Physical hazards
The loss is more lightly to occur due to the dishonest character of the insured, who may be more disposed to either engage in the criminal activity or cause a laws because of negative habits
Moral hazards
Result from the personal or subjective thoughts process of the insured
Morale hazards
Potential or uncertainty of loss
Risk
A potential for loss only with no possibility of gain
Pure risk
Risk that presents to chance for both loss and gain
Speculative risk
A potential for loss only with no possibility of gain
Pure risk
The importance of Representation is demonstrated in what Rule?
Materiality of concealment
Which of the following is not a requirement of a contract?
Equal consideration between parties is not a requirement of a contract
What does the insurance term indemnity refers to
Make whole 
A contract requires
And offer and acceptance of the contract terms
Which statement is correct when describing a contract of adhesion 
Contract may be excepted or rejected by the insured
Which course of action is the insurer entitled to when deliberate concealment is committed by the insured
Rescinding the contract
Reasonable necessary acts that an agent must perform for carrying out his or her especially authorized duties are covered by an agent
Implied authority
Restoring insured to the same condition as before a loss is an example of the principle of
Indemnity
Which of the following is not required in the content of a policy
The probability of loss
Which of the following statements about the aleatory contracts is NOT true?
The insured and insurer contributes equally to the contract
Which of the following contracts is the fine as one that restores and injured party to the condition that presents before the loss
Indemnity contract
Which principal is accurately described when the statement “insureds are entitled to recover an amount not greater than the amount of their loss”
Indemnity
When handling premiums for a insured, and Agent is acting in which capacity?
Fiduciary
Which of the following statements correctly describe a contract of indemnity? 
One party is restored to the same financial position the party was in before the loss occurred
If a material warranty violates on the part of the insured is found, what recourse does an insurer have?
Rescind the policy.
Scott has just purchased a new home. He is now shopping for a life insurance policy that provides a death benefit that matches the projected outstanding debt of his mortgage. Which life policy would best suit his needs?
Mortgage redemption
A life insurance policy limits of liability would be
The policy’s face value
A life insurance policy that pays the face amount if the insured survives to a specific period of time is called?
Endowment insurance
Mark, age 45, has a modified endowment contract. What is the tax penalty for taking a loan against his policy prior to the age of 59 1/2?
10%
Any modified endowment contract, the penalty tax imposed on premature withdrawals is?
10%
Which of the following types of life insurance is normally associated with a mortgage loan?
Decreasing term
Which of the following is a life insurance policy that does not require a physical exam?
Non-medical
In a renewable term life insurance policy, the contract will usually
Require a higher premium payable at each renewal
Which of the following type of life insurance combines a saving element along with a flexible premium option?
Universal life
Insurance policy written after 1988 that fails to pass the seven pay test is known as?
A modified endowment contract
Term insurance is appropriate for someone who
Seeks temporary protection and Lower premiums
Tom is shopping for a policy that covers two people and would pay the face amount only when the first person dies. The type of life policy he is looking for is called a?
Joint life policy
All of these are characteristics I have a universal life insurance policy except
Fixed surrender value
Which of the following is not true regarding a family policy that covers children
Conversion of Child’s coverage to permanent insurance requires evidence of insurability
John and Mary have a handicapped child that is financially dependent upon them. The death of one of the parents would not be financially disastrous, however the death of both likely would be. Which policy would best be suited for them?
Second to die policy
A life insurance policy with the insured can choose where the cash value can be invested is?
Variable life
What is the proper order of an initial life insurance premiums from lowest to highest?
Modified premium, ordinary life, single premium.
Lynne owns a life policy that guarantees the right to renew the policy each year, regardless of health, but add an increase premium. What kind of policy is this?
Renewable term
Which of the following statements do not apply to child coverage in a family policy?
Only children born prior to policy issue date may be included
Which of the following is not a true description of non-medical life insurance
Applicants are not required to answer medical questions on the application
How is a life insurance policy dividends legally defined?
A return of excess premiums not taxable
What are collateral assignment normally associated with?
Bank loans
Jerry is an insured who understated his age on his life insurance application, paint while I was per 1000 of insurance instead of $15 per 1000. If he dies, how will the adjusted death benefits be calculated?
12/15th of the policy’s face policy
Which statement is true regarding policy dividends?
A dividend option is selected by the insured at the time of policy purchase
Mike and Ike are 30 year old identical twins. Both are in excellent health. Each brother purchase a life policy that has a $750 annual premium. Mike’s by 18 year renewable return policy. I purchase a whole life policy. All of the following statements are true except
Mike has the option of using his cash value to purchase it reduce amount of pay up whole life insurance
Which provision will pay a portion of the death benefit prior to the insured death due to a serious illness?
Accelerated death benefit
Bruce is involved in an accident and becomes totally and permanently disabled. His insurance policy continue to force without payments further premiums. Which policy provision is responsible for this?
Waiver of premium provisions
What time period allows an insured life insurance policy to return in force even if the premium was not paid on the due date?
Grace period
If an insured dies because of an accident which type of life insurance rider will provide additional coverage?
Accidental death rider
What does a grace period allows a life insurance policy owner to do?
Make a premium payment after the due date without any loss of coverage
Add a policy has lapsed, which provision allows the insured to continue coverage?
Reinstatement provision
A life insurance policy can be rendered for its cash value on which policy provision?
Nonforfeiture option
What does a guaranteed insurability option allows an insured to do?
Purchase additional coverage with no evidence of insurability required
Which of these is not a valid policy dividend option?
Monthly income payment
Which of the following does a policy owner not have the right to change?
Dividends schedule
How are acts of war in aviation treated under a group life insurance policy?
Policy exclusions
Any life insurance policy the entire contract consist of?
Policy and an attached application
Which policy provision protects the policy owner from unintentional lapse of the contract?
Grace period
When a life insurance policy is surrendered how does the cars recovery rule apply?
The policies cost basis is exempt from taxation
When an accidental death benefit is added to a whole life policy, how does it affect the policy’s cash value?
Policy cash value is not affected
Windows in life insurance policy waiver or premium takes effect?
Insured become totally disabled
Which of the following is not a common life insurance policy writer?
Extended term
An example of need me a beneficiary by class would be
To the children born of my union with Ned Jackson
How are death benefits that I received by a beneficiary normally treat it for tax purposes
Exempt from federal income taxes 
Pam is the primary beneficiary of a life insurance policy and wants to let the death benefit accumulate and receive only the monthly investment proceeds. Which settlement option should she choose?
Interest option
What is the price of insurance for each expose unit?
Rate
The probability of death listed by year is demonstrated in
Mortality tables 
Which of these is the automatic mode of settlement for life insurance policies proceeds?
Lump sum
Which of these is considered a major tax advantage of life insurance
Income tax is typically not owed on proceeds paid directly to a beneficiary
Which of the following is not a life insurance settlement option?
Extended term option
A beneficiary receive only the death benefit earnings in which settlement options?
Interest option
When calculating life insurance premium rates which component would an agent commission falls under?
Insurer expenses
Which of the following describes a number of days in a year compared to the number of people in a select group?
Mortality rate
A creditor will be allowed rights of life insurance policy proceeds if which of the following beneficiary is chosen?
The insured’s estate
Pat is insured with a life insurance policy and Kathy is his primary beneficiary. They are both involved in an automobile accident where a pet dies instantly and Karen days five days later. Which policy provision will protect the rights of the contingent beneficiary to receive the policy benefits?
Common disaster clause
Premiums are best described as
 The amount and insured pays per unit of coverage
Which of the following is not a component of determining policy premiums?
Dividends
When calculating life insurance premium rates, which component is affected by the insured age and gender?
Mortality
Which of the following is not a component of determining policy premiums?
Dividends 
Sharon is the policyholder of a $50,000 life insurance policy. Her son, Mike, is a beneficiary. If Sharon must obtain Mike’s signature in order to change the beneficiary what kind of beneficiary designation is this?
Irrevocable
Which of these premium payment frequencies is not typically available to a policy owner
Biweekly
Which of the following is not an insurers policy expense?
Premium
A spendthrift clause in a life insurance policy
Restricts the ability of the beneficiary to assign benefits

A policyholder Is prohibited from making any changes to a policy without the beneficiary written consent on the beneficiary designation?
Irrevocable beneficiary
Which of these is the automatic mode of settlement for life insurance policy proceeds?
Lump sum
What is the primary feature of an by viatical settlement?
Reduce death benefit pre-payment
Which of the following is not an important reason for life insurance applications
The beneficiary must sign the application b4 the insurer will issue the policy
Which of the following is not a risk classification that on the riders would use
Dividend risk
Which of the following risk classification charge the highest premium
Substandard
An applicant has revealed conditions that require more information. Which of the following is needed next?
Attending physician statement
The objective of underwriting is to
Avoid selecting a disproportionate number of bad risks
When an insurance company requires an attending physician report, their request must be accompanied by a 
Copy of the signed authorization
Which of the following race classifications charge is the lowest premium
Preferred
The risk selection process is primarily given which insurance company is department
Underwriting
What are members of the medical information bureau required to report
Medical ailments discovered all the underwriting process
What was an application to do in order to authorize the release of an attending physician report?
Sign a consent form
A report which is based on creditworthiness & characteristics that influences and insurance application Eligibility for the life and health insurance is called
Consumer report
When an applicant applies for insurance, the process by which the insurer determines whether to issue a policy is called
Underwriting
When insurance company request an attending physician report, the request must be accompanied by a
Copy of the signed authorization
The medical information bureau consisted
The life and health insurance companies
Most US life insurance companies belong to the
Medical information bureau (MIB)
Which of the following type of information is not required for a life insurance application?
Ethnicity
Employers provide a group term life insurance is exempt from income taxation up to
$50,000
Employment participation in a non-contributory group life insurance plan must be
100%
How is the cost of an employer provided group life insurance with coverage amounts above $50,000 treated for tax purposes?
Taxable income to the employee
Who is issued a certificate of insurance with a group insurance policy?
Participants
Who are the parties to master contracts in a group life insurance policy?
Insurer and employer
All of the following are considered characteristics of group life insurance except
Individuals policies
A terminated employee has to exercised to conversion privilege is able to convert
Term insurance into permanent insurance
Which of the following is not a requirement for a terminated employee that has exercise to conversion privilege?
Provide proof of insurability
Which of the following describes a contributory group insurance plan?
Part of the premium is paid by the employee
How does underwriting difference between group life and individual life insurance?
Medical questions must be answered on individual life insurance
Which of the following is not a characteristic of the conversion privilege?
Employers pay the premium for the converted policy
Tim was recently terminated from his employment and opt to change his existing group term life insurance to individual permanent life insurance. What is this process called
Conversion
Which of the following is not a requirement for a terminated employee that has exercised the conversion privilege?
Provide proof of insurability
A saving vehicle designed to the 1st accumulate funds & then systematically liquidates the funds is called?
Deferred annuity
The systematic liquidation of a sum of money is provided by an
Annuity
What is a common reason people purchase an annuity?
To protect against the risk of outliving their financial resources
An annuitant would like to determine The current value of her annuity. To do this, she multiply the number of accumulation units she owns times the unit value of the separate accounts. What kind of annuity best matches this description
Variables annuity
An annuity which is backed by life insurance for separate account is called
Variable annuity
 what kind of annuity pays income to two annuitants until their death
Joint and survivor annuity
An Annuitiant Would like to determine the amount of an annuity distribution that is exempt from taxes. What is used to calculate this?
Exclusion ratio
Victoria owns a life annuity and Elect to receive annuity payments monthly for the remainder of her life with 10 years certain. Her annuity will make payments
For a minimum of 120 months and a maximum of the remainder of her life
Cindy buys a 10 year certain annuity within a starmment refund. After receiving monthly payments for five years, Cindy dies. How many remaining payments will insurer make to her beneficiary?
60 payments
What distinguishes a deferred annuity from an immediate annuity?
The time at which Benefit payments start
Which of the following is not a feature of equity index annuities?
Offers a maximum interest rate that increases annually
How long is a person expected to be disabled in order to receive Social Security disability benefits
12 months
The reason for social insurance is to
Protect certain vulnerable segments of the population
The blackout period Affects who’s benefits?
Surviving spouse
All of the following statements correctly describe the purpose of Social Security except
It provides a source of income for a meaningful standard of living during retirement
An individual that has 40/4 of coverage, for security purposes, is considered to be
Fully insured
What determines the Social Security normal retirement age
Year in which Worker was born
At what age is a surviving spouse without dependents eligible for Social Security survivor benefits?
60
How long was the individual be unable to engage in any gainful activity due to the physical or mental disability in order to qualify for Social Security total disability?
12 months
Which social security status does a worker with 6/4 of coverage doing the last 13 quarters have?
Currently insured
In order to be considered currently insured under Social Security, an individual must be credited with
6/4 of coverage doing the last 13 quarter period
A worker is entitled to Social Security benefits If all of the following are true, except for
Worker cannot perform his or her current job, but is actively seeking other employment
Who is not eligible for Social Security survivor benefits?
A deceased workers dependent parents of any age
What is considered to be the definition of disability, according to Social Security
Unable to engage in any substantial gainful activity
What type of worker has Social Security benefits available to them?
Fully insured
Who is eligible for retirement benefits under Social Security?
Fully insured workers
The period in which there are no Social Security benefits for the surviving spouse is called
Blackout period 
What type of worker has Social Security benefits available to them?
Fully insured
How does one qualify as a fully insured individual under Social Security disability coverage?
The individual has been credited with the appropriate number of quarters of coverage
Which statement is not true regarding Social Security benefits?
Benefits are designed to replace the entire amount of the workers earning
Retirement plans or prevent it from favoring Harley commission employees under the government regulations?
Nondiscrimination
Employers contribution to qualified plans are
Text deductible by the employer
Nondeductible contributions are typically associated with a
Roth IRA
Mike has inherited his fathers traditional IRA. As a beneficiary, he will pay _____ taxes on any money withdrawn.
Income
ESOPs are typically invested in
Employer stocks
How are Roth IRA’s treated for tax purposes?
Nondeductible contributions and Tax free distributions
What does ESOP stand for?
Employee stock ownership plan
What area of group health insurance is Regulate it on the employee retirement security act of 1974. (ERISA)?
Disclosure & reporting
Under a 10 year vesting schedule, what percentage of employer contributions must be vested after 10 years of service?
100%
Retirement plans cannot favor highly commission employs. The government regulation that prevent this from happening is called
Nondiscrimination 
Which of the following employers is required to follow ERISA regulations?
A local electrical supply company with 12 employees.
Which of these concerning traditional IRAs is correct?
Earnings are taxable when withdrawn
Which of the following pieces of information is not gathered doing the personal financial planning process?
And individuals civic organization membership
All of these are common personal uses of life insurance except
Find a buy-sell agreement
Life insurance create an immediate estate. This phrase means
When the insured dies, a death benefit is paid
Human life value concept is based on
Income
Buy sell agreement are typically found it by which to insurance products?
Life insurance and disability insurance
Key person insurance is intended to
Cover business losses due to the death of a key employee
Bob and Tom are partners in a business. If one of them were to die, which of the following would guarantee a market for each of their shares of the business?
Buy-sell agreement
What percentage of eligible employees must participate in a non-contributory Group health plan before it can be put into affect
100%
And employer is issued a group medical insurance policy. This single contract is known as
Master policy
Under the health insurance Portability and accountability act (HIPAA), No employees new group health plan will verify credible coverage so that the
Employees waiting period for coverage of a pre-existing condition can be reduced under the new employers health plan
Minimal participation standards exist for group health insurance plans in order to
Prevent adverse selection
Buy sell plans are typically funded by which two types of insurance
Life insurance and disability insurance
Who is financially liable for the payments of covered Claims in a full ensure group health plan?
Insurer
Coverage is limited for vision and dental insurance in all of the following ways except
Specific dollar amounts for examination
The consolidated omnibus budget reconciliation act (cobra) applies to employers who employed at least
20 employees
Honor a disability income policy, which provisions will be payable at the cost of an injury is unexpected an accidental?
Accidental bodily injury provision
Business overhead expense insurance pays for
Business expenses when a business owner becomes disabled
The problem of over insurance is address in which health insurance provision?
Coordination of benefits
On the group health insurance, a certificate of coverage is issue to the
The employee
When a claimant has Coverage on the more than one Health plan, which group medical plan provision applied?
Coordination of benefits
Doing the underwriting process for a group health policy, it was discovered that 15 out of 50 members of the group have major health issues. How will the insurer handle this?
Accept or reject the whole group
An Eligible individual who would like to obtain group health insurance without providing evidence of insurability must
Enroll within a specific eligibility period 
The limited period of time given to all members to sign up for a group health plan is called
Enrollment period
Which of the following is not typically covered on the vision care insurance
Eye surgery
Credit accident and health plans are designed to
Help pay off existing loans during period of disability
The policyholder for a group health benefit claim is considered to be there
Employer
In an employer sponsor contributory group Disability income plan, the employer pays 60% of the premium & each employee pays 40% of the premium. Any income benefits paid are taxed to the employees at. 
60% of the benefits
Which of the following would be considered a possible applicant and contract policyholder for group health benefits.
Employer
Where are group disability benefits considered to be tax free to a insured?
When the recipient pays the premiums
What does the consolidated on the bus budget reconciliation act cobra of 1985 allows an employee to do?
In the event of employment termination, group health insurance can be kept if the employee pays the premiums
Which type of business insurance is meant to cover the cost of continuing to do business while the owner is disabled?
Business overhead expense policy
A person covered with an individual health plan
Is issued a policy
Group health plans may deny participation based upon
Members Part time employment status
In regards to a group health insurance plan, which statement is correct
A non-contributory  Group health insurance plan requires 100% participation of all eligible members
Health insurance typically covers which of the following perils
Injury due to accident
Which of the following does coordination of benefits allow?
Allow the secondary payor to reduce their benefits payment so no more than 100% of the claim is paid.
Which of the following is an example of a third-party administrator?
Outside organizations that process claims for the employer self funded group plan
An employee for XYZ Corp. is injured on the job. Where does coverage for the employees injuries come from?
Workers compensation 
At age 65 which of the following is available at no cost to all individuals?
Medicare part a
Individuals becomes eligible for Medicare part a benefit at what age?
65
John’s healthcare plan pays benefits of 90% for N network providers and 70% outside network providers what kind of plant is this?
PPO or preferred provider organization
How is a Medicare claims submitted?
Expense or submit it to Medicare by the health provider
Disable workers are covered on the workers Compensation medical expense benefits for how long?
No limit
Individual health insurance coverage typically excludes injuries and an employees work place because
It’s covered by the state workers compensation program
After the annual deductible is met, a Medicare part B patient will pay ______ of the remaining cover expenses
20%
Coverage for Care received from my network provider pays morning care received from a non-network provider in what type of health plan
PPO or preferred provider organization
Which of the following services are health maintenance organization not required to provide
Prescription drugs
Medicare part a cover is what type of care?
Skilled nursing facility care
Medicare part B cover’s
Physicians expenses
Who acts as a gatekeeper in a health maintenance organization or HMO?
Primary care physician
Which statement regarding Medicare is true?
Benefits for diagnostic test and x-rays performed on an outpatient basis are provided by part B
Individual 865 or older exclusively eligible for which optional program?
Medicare part B
Which of the following is not a characteristic of a preferred provider organization or PPO?
Primary Physicians serve as gatekeepers
Medicare part B has an initial enrollment period. How many months out an individual’s 65th birthday month does enrollment period ends?
Three months
Which statement about health maintenance organization is not true?
When a member uses out of network providers, a higher monthly fee is charged
Which of the following healthcare providers provide both to healthcare services and health care coverage?
Health maintenance organization or HMO
Which statement is true regarding Worker’s Compensation coverage
Employers pay the entire premium for worker compensation coverage
Who would Be most likely to submit a Medicare part a claim?
Hospital
After the annual deductible is met, Medicare part B will pay ______of the remaining approve charges.
80%
Disable work as I covered on the workers compensation medical expense benefit for how long?
No limit
If a healthcare provider is considered to be a service provider, what does this mean?
Payment for services goes directly to the provider in a long time
What does the term coinsurance refer to
After the deductible is satisfied, the percentage paid by the insured for the remaining cover expenses
Major medical expense plans provide coverage for each of the following except
Work related injuries
Which of the following does specified diseases insurance not cover?
Cost is covered by medical expense insurance
Health insurance policies typically contain a provision stating that insureds and their insurer share covered losses an agreed proposition. Which provision does this refer to?
Coinsurance.
And insured is protected from the expense of a catastrophic Illness by which of the following health providers provisions?
Stop loss
All of these are examples of cost sharing in a health insurance policy?
Coordination
At what point does a self insured group qualifies for a stop loss coverage?
When claims exceed a specified limit in a set period of time
Low frequency diseases can be exclusively covered by what kind of health insurance policy?
Limited policies
Which of the following is not included in comprehensive major medical plans?
First dollar coverage
Medical expense policies will typically covered which of the following?
Injuries caused by accident
The elimination period in a disability income policy serves the same purpose as a ______in a medical expense policy.
Deductible
A major medical insurance were typically covered medical expenses that results from
A negative reaction to prescription medication 
What does a hospital confinement indemnity policy pays for
Pays a specific daily amount while the insured is confined to a hospital
Major medical express plans typically use a cause containment measure for emergency hospital care. This is referred to as a_________
Deductible
What is considered the most type of specific disease insurance policy?
Cancer
Under a disability income insurance policy, which criteria must be met for bodily injury to be classified as accidental?
The cars may be intentional, but the result must be accidental. 
Which of the following is not a provision in a disability income policy?
Deductible and coinsurance provision
An individual covered under a disability income policy may be eligible for a partial disability benefit if
The insured can perform some other job activities on a part-time basis
Kim is insured under a disability income insurance policy with an own application clause. She was recently injured in an automobile accident and can no longer perform the task of her job. Kim is now considered to be
Totally disabled 
Coming from an insurance point of you, which of the following is the main risk associated with disability?
Loss of income
Dylan is considered partially disabled by her insurance company. Which of the following best describes her situation?
She is working part time and receiving lost income under her long-term disability benefit
Which of the following calor your premium of a proposed disability income policy?
Increasing in the elimination period
Which of these statements is not true concerning recurrent disability?
The ensure continued coverage at the new elimination period
Manual it’s just sit it to be disabled as to find by the American with disabilities act. As such, he is unable to perform any of the following life activities except
Driving
Which of the following is a characteristic of the disability elimination period?
Benefits are not payable
The elimination period in a disability income policy serve the same purpose as
A deductible
What are residual disability income insurance payments based on?
The amount of the insured income is reduced by the disability
Alan has a disability income policy with a 2500 monthly benefit and a 30 day elimination period. He is unable to work 90 days following an automobile accident. What will the policy pay?
$5,000
The percentage of a participant income our group long-term disability benefit amount typically limited to?
60%
Which of the following is not a provision in a disability income policy?
Deductible and coinsurance. 
An example of a pre-assumptive disability would be
Deafness
Under a long-term care insurance policy adult daycare coverage will provide for
Part-time care at a facility for elderly individuals who live at home
All of these statements concerning Medicare are true except
Long-term care is covered by Medicare part C
What portion does it insured pay for cover expenses on the Medicare part B after the deductible
20%
Which of the following plans will cover medical cars that Medicare doesn’t cover?
Medicare supplement
Which of the following are two examples of activities of daily living used in qualifying for long term care benefits?
Eating and dressing
The open enrollment period for Medicare supplement begins at age
65
What type of coverage pays a benefit for part-time nursing care that can be provided in a patient’s home?
Home health care
Which of the following would be considered an activity of daily living under a long-term care policy
Bathing
Rating and individuals needs for long-term care benefit can be measured by
Activities of daily living
Which of the following is not included on the long term care insurance
Hospital acute care
Periodic increase in policy benefits are allowed in which long-term care policy provision?
Inflation protection
Christina has a health insurance policy that has been in force be on the incontestable period. The insurer has discovered that a fraudulent statement was made on the application. What would ensure have to pay on a claim, I’m sure it wasn’t a guaranteed renewable policy?
Nothing
I need a payment of claims provision, when are benefits typically payable at the proof of loss is receive?
Immediately
A Health insurance policy where the insurer has a right to terminate the policy for reasons other than the insured health is called
Conditionally renewable
Which of the following is not a requirement uniform provision in individual health policies?
Change of occupation
Under a non-cancellable health insurance policy, an insurer can
Cancel the policy for nonpayment of premium
The insurer has the option of terminating a health insurance policy on a date it stated in the contract. What type of policy is this?
Optionally renewable
What situation does a waiver of premium provision keep a health insurance policy in force without premium payments?
When an insured becomes totally disabled
The conditions, times, and circumstances under which and insured is not covered by your Health Policy are called?
Exclusions
Under a health insurance policy, the provision that states the kind of benefits provided and the circumstances under which they will be paid is called the? 
Insuring clause
Hey Health insurance policy paid on a quarterly basis as a grace period of
31 days
Bruce is involved in an accident and become totally and permanently disabled. His insurance policy continue to force without payment of future premiums. Which policy provision is responsible for this?
Waiver of premium provision
Which type of health insurance policy cannot be canceled by the insurer nor increase the premiums?
noncancellable.
What type of changes can be made to a guaranteed renewable health insurance policy?
The premium rates of the policy owner
The misstatement of age for provision in a health policy states that if an insured gives the wrong age at the time of application, what action can the insurance company take?
Benefits can be adjusted
States that have no laws no gain laws requires a replacing policy to
