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
What explains the policyowners right to change beneficiaries, choose options, and receive proceeds of a policy?
Owners rights
If an insured continually uses the automatic premium loan option to pay the policy premium,
the policy will terminate when the cash value is reduced to nothing
Other than for a qualified life event, when can a change be made in benefits or a Flexible Spending Account ?
During the open enrollment period
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?
Equal to the original policy for as long as the cash values will purchase
allows an insured with a life threatening condition to sell the existing policy in order to receive benefits when they are most needed
viatical settlement
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 insured owns a general disability policy and is injured during a war, rendering him disabled. What will be the extent of benefits that he will receive?
0%
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
Which type of agent authority is also called “perceived authority”?
Apparent
What is not true about beneficiary desginations?
the beneficiary must have insurable interest in the insured
A universal life insurance policy is best described as ..
an annuably renewable term policy with a cash value account
Which of the following is not true of life settlements?
the seller must be terminally ill
What is true about the requirements regarding HIV exams?
the applicant must give prior informed written consent
What is not a characteristic or service of an HMO plan?
contracting with insurance companies
Todd has been informed that he has a hernia which requires repair. When Todd researches the cost, he leans that his insurance plan will cover 200 points worth of surgical expenses. Each point represents $10, which means that $2000 of his surgery will be covered by his insurance plane. What system is Todd’s insurance company using?
Relative value
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 employees expense
What would provide an underwriter with information concerning an applicants health history?
The medical information bureau
Employer contributions made to a qualified plan ..
are subject to vesting requirements
If a person is disabled at age 27 and meets Social Security’s definition of total disability, how many word credits must they have earned to get benefits?
12
Which health insurance provision describes the insured right to cancel coverage?
renewal provision
What is not a feature of a noncancellable policy?
the insurer may terminate the contract only at renewal for certain conditions
In a group health policy, a probationary period is intended for people who
join the group after the effective date
What is true regarding the annuity period?
it may last for the lifetime of the annuitant
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
immediate annuity
What is the typicl deductible for basic surgical expense insurance?
0
Giving a client an inducement to a sale not stated in the policy is an unlawful practice known as
rebating
an insurance agent has received a request or a hearing from the commisioner . Within how many days must the hearing be held?
30 days
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT
dividends from a mutual insurer
making statements that are false as to the financial condition of any insurer and which are calculated to injure any person engaged in the business of insurance
defamation
In life insurance policies, cash value increases..
grow tax deferred
excludes a specific condition from coverage, therefor reducing benefits.
impairment rider
The policy owner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
The death benefit can be increased by providing evidence of insurability
What is not covered by HMO’s?
Elective services
which nonforfeiture option provides coverage for the longest period of time?
reduced paid up
What is an example of a producers fiduciary duty?
the trust a client places in the producer in regard to handling premiums
If settlement option is not chosen by the beneficiary or policy owner, which option will be used?
lump sum
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
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?
life income with period certain
A guaranteed renewable disability insurance policy
is renewable at the insured option to a specific age
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
either the amount paid into the plan or the cash value of the plan, whichever is the greater amount
What is true about taxes of a qualified plan
it has tax benefits for both employer and employee
what best describes fixed period settlement options
both the principal and interest will be liquidated over a selected period of time
which nonforfeiture option has the highest amount of insurance protection
extended term
in insurance transactions, fiduciary responsibility means
handling insurer funds in a trust capacity
which authority is not stated in an agents contract but is required for the agent to conduct business
implied
what is the term for the period of time during which the annuitant or the beneiciary receives income
depreciation period
what determines the length of time that benefits will be received under the fixed amount settlement option
size of each installment
what is not true regarding continuing education requirements in this state
producers may repeat the same courses to meet the required CE hours for a licensing period
an insurance producer just sold an insurance policy to his sister. What kind of business is this/
controlled
when do certificates of authority expire in georgia
june 30 of the year following issuance
what best describes fixed-settlement period settlement options?
both the principal and interest will be liquidated over a selected period of time `
What type of insurance would be used for a return of premium rider?
increasing term
What regarding Business Overhead Policies is not true?
Benefits are usually limited to six months
What is true about nonforfeiture values?
They are required by state law to be included in the policy
All of the following are personal uses of life insurance except
buy sell agreements
What is not covered under Plan A in Medigap insurance
The medicare part A deductible
What is not a dividend option?
fixed period installments
What is the tax advantage of a qualified retirement plan?
the earnings in the plan accumulate tax deerred
long term care coverage may be available as any of the following options except
endorsement to a health policy
What is not a benefit of a POS plan?
it allows guaranteed acceptance of all applicants
the death benefit under the Universal Life Option B
gradually increases each year by the amount that the cash value increases
which nonforfeiture option has the highest amount of insurance protection
extended term
what describes taxation of individual disability income insurance premiums and benefits?
premiums are not tax deductable and benefits are not taxable
what is the best reason to purchase life insurance rather than annuities
to create an estate
who owns the executive bonus policy?
the employee
What is true regarding inpatient hospital care for HMO members
care can be provided outside of the service are
An IRA purchased by a small employer to cover employees is known as
Simplified Employee Pension Plan
A 60 year old participant in a 401K plan takes a distribution and rolls it over to an IRA within 60 days. What is true?
The amount of the distribution is reduced by the amount of the 20% withholding tax
How many consecutive months of coverage must LTC insurance provide in this state?
12 months
What is the purpose of settlement options
they determine how death proceeds will be paid
The premium charged for exercising the Guaranteed Insurability rider is based upon the insureds
Attained age
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B
What is not true regarding Equity Indexed Annuities
They earn lower interest rates than fixed annuities
Disability income coverage specified that the policy covers the insured if he is unable to perform any job for which he is qualified. In this case, total disability is defined as
any occupation, more restrictive than other definitions
What is the time frame for filing relevant Suspicious Activity Reports
within 30 days of initial discovery
a producer who fails to segregate premium monies form his own personal funds is guilty of
commingling
When an insurer combines two periods of disability into one, the insured must have suffered a
recurrent disability
