Exam 18 Wrong Answers Flashcards
An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?
Guaranteed insurability option
An individual is insured under his employer’s 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
How many eligible employees must be included in a contributory plan?
75%
If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this?
Jumping juvenile policy
The risk management technique that is used to prevent a specific loss by not exposing oneself to that activity is called
Avoidance
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report
Must be informed of the source of the report
In a non contributory health insurance plans, what percentage of eligible employees must participate in the plan before he plan can become effective?
100%
Which of the following statements is not correct concerning Cobra Act of 1985?
It required all employers, regardless of the number or age of employees, to provide extended group health coverage
For how many days of skilled nursing facility care will Medicare pay benefits?
100
Which of the following is not true regarding the life with guaranteed minimum annuity settlement option?
It does not guarantee that the entire principal amount will be paid out
Which of the following is called a “second to die” policy
Survivorship life
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2,500
When an insured combines two periods of disability into one, the insured must have suffered a
Recurrent disability
According to Obra, what is the minimum number of employees required to constitute a large group?
100
The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured’s employment is called
Nonoccupational coverage
The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as
Legal actions
What is the advantage of reinstating a policy instead of applying for a new one?
The original age is used for premium determination
Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined at its own expense, while a claim is pending?
Unlimited
Which of the following is not a feature of a noncancellable policy?
The insurer may terminate the contract only at renewal for certain conditions
All of the following are true regarding the guaranteed insurability rider except
This rider is available to all insureds with no additional premium
Nonforfeiture values guarantee which of the following for the policyowner?
That the cash value will not be lost
The insuring clause of a disability policy usually states all of the following except
The method of premium payment
While a claim is pending, an insurance company may require
An independent examination as often as reasonably required
Shortly after a replacement transaction on a Medicare supplement policy, the insured decided to cancel the policy, but is unsure whether the free look provision applies. The insured could find that information in the
Notice regarding replacement
Which of the following are the main factors taken into account when calculating residual disability benefits?
Present earnings and earnings prior to disability
Within how many days must a producer respond to an inquiry from the Commissioner?
30 days
Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?
The beneficiary will receive only payments of interest earned on the death benefit
What document describes an insured’s medical history, including diagnoses and treatments?
Attending Physician’s Statement
Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage?
Health Maintenance Organization plan
What document grants express authority to an agent?
Agent’s contract with the principal
The part of Medicare that helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care is known as
Part A
The term “illustration” in a life insurance policy refers to
A presentation of non guaranteed elements of a policy
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?
Fixed period
When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply?
Case management provision
In order to minimize adverse selection, employer group dental plans may require employees who enroll after they were initially eligible to participate to do all of the following except
Increase benefits for a period of one year
The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?
2 years
Which of the following is true regarding Medicare supplement policies?
They must be guaranteed renewable
If a consumer requests additional information concerning an investigative consumer report,how long does the insurer or reporting agency have to comply?
5 days
