Entire Exam Flashcards
Which provision of a life insurance policy states the insurers duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?
Insuring clause
An employee becomes insured under a PPO plan provided by his employer. If the insured decides to go to a physician who is not a PPO provider, which of the following will happen?
The PPO will pay reduced benefits
Medicare Part A is automatically provided when…
an individual qualifies for Social Security benefits at age 65
option that allows the insured to purchase specific amounts of additional insurance at specific times without proving insurability
guaranteed insurability option
the paid up addition option uses the dividend
to purchase a smaller amount of the same type of insurance as the original policy
provides protection for financial loss due to death, disability, superannuation (retirement), and sickness
social security
Who has the power to issue certificates of authority?
Commissioner of Insurance
Under the uniform required provisions, proof of loss under a health insurance policy normally should be filled within
90 days of a loss
What is a penalty tax for nonqualified distributions from a health savings account
20%
What are the three durations of grace periods?
7 days for weekly, 10 days for monthly, and 31 for everything else
During a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. This describes..
Misrepresentation
What three things does an agent need in order to sell variable life?
life insurance license, FINRA registration, securities license
Long term care insurance does NOT provide coverage for
services provided in an acute care unit of a hospital
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
A woman obtains health insurance coverage through the Marketplace on October 1st. Two weeks later she finds out that she is 3 months pregnant. What is true about her coverage?
Pregnancy will be covered immediately.
What documentation grants express authority to an agent?
Agents contract with the princial
Existing insurers must provide policy owners with a policy summary for the existing life insurance within how many days of receiving the written communication and replacement
10
the general statement that defines the insurance agreement and identifies the insured and the insurance company and states what kind of loss is covered
insuring clause
Guaranteed renewable health insurance policy coverage is …
guaranteed at a certain age, but rates can be adjusted for the entire class
In a disability policy, the elimination period refers to the period between
the first day of disability and the day the insured starts receiving benefits
Regarding to the taxation of Business Overhead Policies,
Premiums are deductible and benefits are taxed
When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to
purchase a single premium policy for a reduced face amount
Traditional IRA contributions are
Tax deductible
Under an extended term nonforfeiture policy option, the policy cash value is converted to
the same face amount as in the whole life policy
In a basic expense policy, after the limits of the basic policy are exhausted, the insured must pay what kind of deductible?
Corridor
Which type of policies must provide for newborns, from the moment of birth, with all health insurance benefits applicable to children until 31 days
both individual and group accident and sickness
An insured is involved in an accident that renders him permanently deaf, although he does not sustain any major injuries. The insured is still able to perform his current job. To what extent will he receive presumptibe disability benefits?
Full benefits
In a health insurance policy, what is covered immediately after being reinstated, and what is not?
Accidental injury is immediate but illness and anything else is 10 days later
An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transer?
10,000 and no tax consequence
What is not true about the federal tax advantages of a qualified plan?
at distribution, all amounts received by the employee are tax free
Individual and group accident and sickness policies that cover what kinds of losses must also provide for newborns, from the moment of birth, with all health insurance benefits applicable to children
losses that happen to family members
What is the function of a certificate of authority?
It allows an insurer to transact insurance in Georgia
The primary purpose of disability income insurance is to
replace income lost due to a disability
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive
What is true about policy premiums for a guaranteed renewable provision?
premiums can only be increased by class basis, not individually
An individual is insured under his employers group Disability Income policy. The insured suffered an accident while on vacation that left him unable to work for 4 months. If the disability income policy pays the benefit, which of the following would be true?
Benefits that are attributable to employer contributions are fully taxable to the employee as income
Death benefits payable to a beneficiary under a life insurance policy are generally
not subject to income taxation by the federal government
The relation of earnings of insurance provision allows the insurance company to limit the insured’s benefits to his/her average income over the last
24 months
In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary, and reasonable, the extra cost
is not covered
The equity in an equity index annuity is linked to
an index like Standard & Poor’s 500
What determines the cash value of a variable life policy?
the performance of the policy portfolio
What are the two components of a universal policy?
Insurance and cash account
What is not true regarding policy loans?
money borrowed from the cash value is taxable
What is the benefit of choosing extended term as a nonforfeiture option?
it has the highest amount of insurance protection
What would not be considered a nonqualified plan?
split-dollar plan
In insurance, an offer is usually made when
the completed application is submitted
Which of the following terms refers to the acts of soliciting insurance, making an insurance contract effective, and dealing with matters arising from that contract?
Transacting insurance
In reference to the standard Medicare Supplement benefits plans, what does the word standard mean?
all providers will have the same coverage options and conditions for each plan
nonprofit organization that maintains underwriting information on applicants for life and health insurance
MIB
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
