Exam 3 Flashcards
Which best describes pure life annuity settlement option
Pure life provides payments for as long as annuitant is alive
Pure life guarantees that all proceeds will be paid out
Benefits are paid for a fixed period of time specified when policy begins to pay
Pure life provides payments for as long as the annuitant is alive
Will only pay for as long as annuitant lives
An insured owns a 50000 whole life policy. At 47 insured decides to cancel policy and exercise extended term option for policy’s cash value which is 20000. Face amount?
20000
50000
Determined by insurer
50000
Face of term policy would be same as face amount provided under whole life policy
Which will be appropriate for parent buying policy on child
Third party ownership
Family term rider
Third party ownership
Which’s derives pure life annuity settlement
Pure life provides payments for as long as annuitant is alive
Pure life guarantees all proceeds are paid out
Pure life provides payments for as long as annuitant is alive
Because ins policy is a legal contract must require following except
Legal purpose
Conditions
Conditions
Part of policy structure
Insuring clause of a disability policy usually sates all except
Method of premium payment
Identities of ins company and insured
Method of premiums payment
Beneficiary wants guarante that all b energy’s paid from principal and interest would be paid for a period of 10 years before being exhausted
Fixed amount
Fixed period
Fixed amount
Federal fair credit act
Regulates consumer reports
Protects customer privacy
Regulates consumer reports
Gramm leach Bailey
Protect private customer info filed with fincnaicla institution
Allow ins companies access to medical info for underwriting purposes
Protect private customer info filed with fincnaicla institution
Which describes taxation of individual disabilit income ins premiums and benefits
Premiums are not tax deductible and benefits are not taxable
Premiums are not tax deductible but befnits are taxable
Premiums are not tax deductible and benefits are not taxable
Disability tax= not not
When policy is surrendered for its cash value
Policy can be converted to term coverage
Coverage Ed’s and policy cannot be reinstated
Policy can be converted to term coverage
Following qualified as dependent under dependent care flexible spending acct except
Jeremy had to have both legs amputated but has learned how to take care of himself and get around
Joe was paralyzed from neck down in a car accident and is cared for by his wife
Jeremy had to have both legs amputated but has learned how to take care of himself and get around
Death benefit in a variable universal life policy
Always equals face amount stated in policy
Depends on performance of separate account
Depends on performance of separate account
Purpose of settlement options
Provide beneficiary with income to end of beneficary’s life
Determine how death proceeds will be paid
Guarnatees built into policy
Determine how death proceeds will be paid
Which Nonforfeiture option provides coverage for longest period of time
Reduced paid up
Paid up option
Reduced paid up
All true re installments for fixed period annuity settlement EXCEPT
Is a life contingency option
Payments are not guaranteed for life
Is a life contingency option
Fp NOT contingency fpc
Name of clause included that eliminates benefit if insured dies a s result of war or while serving in military
Hazardous occupation
War or military service
War or military service
Which of following polices have irs required corridor gap between cash value and death benefit
Universal life option a
Universal life option b
Universal life option a
Corridor a please
Disability probationary period refers to the time
During which illness related disabilities ar excluded from coverage
Between the first day of disability and the actual receipt of payment fro the disability incurred
During which illness related disabilities ar excluded from coverage
Which statement accurately describes group disability income ins
There are no participation requirements for employees
The extent of benefits is determined by insured’s income
The extent of benefits is determined by insured’s income
Not cause the death benefit to increase
Payor benefit rider
Guaranteed insurability rider
Payor benefit rider
Minimum number of credits required for partially insured status
6 credits
40 credits
6 credits
Pi6
Two terms directly related with premium
Level or flexible
Renewable or convertible
Level or flexible
Benefit of choosing extended term as a onfortfeiture option
Allows for coverage to continue beyond maturity date
Has the highest amount of ins protection
Has the highest amount of insurance protection
Determined whether disability ins benefits are taxed
Contract provisions
Whether the premiums were tax deductible
Whether the premiums were tax deductible
Denied ins bc of info found on consumer report. Which requires company supple applicant with name and address of consumer reporting company
Consumer privacy act
Fair reporting act
Consumer privacy act
Dicrcp
Guaranteed renewable health ins policy allows
Policyholder to renew policy to a stated age with company having right to increase premiums on entire class
Insurer to renew the policy to a specified age
Policyholder to renew policy to a stated age with company having right to increase premiums on entire class
All correct about equity index annuities except
Annuitant receives fixed amount of return
They have a guaranteed minimum interest rate
Annuitant receives as fix amoun of return
Eifar
Guaranteed renewable disability ins policy
Renewable at insured’s option to a specified age
Guaranteed to have a level premium for the life of the policy
Renewable at insured’s option to a specified age
Gr=sa
Insurer issues an individual health ins policy that is guaranteed renewable insurer agrees
To renew tha policy until the insured reaches 65
To renew the policy indefinitely
To renew tha policy until the insured reaches 65
Concerning dividends all true except
Dividend amounts are guaranteed in the policy
Lower ins company costs generate higher dividends
Dividend amounts are NOT guaranteed in the policy
Correct regarding group ins
Employer is policyholder
Each employee receives a policy
Employer is policyholder
What is purpose of disclosure statement in life ins policies
To explain features and benefits of proposed policy to consumer
To protect agents and insurers against lawsuits
To explain features and benefits of proposed policy to consumer
Nature of aleatory
Exchange of unequal values
Only one of parties being legally bound by contract
Exchange of unequal values
Ownership provision entitles the policyowner to do all except
Set premium rates
Rec a policy loan
EXCEPT Set premium rates
Which is not true re life with guaranteed minimum annuity settlement option
Does not guarantee that entire principal amount will be paid out
Payments can be made in installments as a single cash refund
Does not guarantee that entire principal amount will be paid out
IT DOES
Gmadng
Which Nonforfeiture option does company pay surrender value and have no obligations
Extended term
Cash surrender
Cash surrender
Pure life income is payable by company
Only for life of annuitant
For as long as either annuitant or named beneficiary is alive
Only for life of annuitant
Which correct re relationship between Medicare and hmo
Hmo may pay for services not covered by Medicare
Hmo do not pay for services covered by Medicare
Hmo may pay for services not covered by Medicare
Level term ins provides a level death benefit and a level premium during policy; if renewals at end of specified period of time policy premium will be
Adjusted to insured’s age at time of renewal
Based on issue age of insured
Adjusted to insured’s age at time of renewal
All true re decreasing term policy except
Death benefit is 0 at end of policy term
Payable premium amount steadily declines throughout duration of contract
Payable premium amount steadily declines throughout duration of contract
Which is not true re variable universal life policy
Cash values are not guaranteed
Death benefit is fixed
Death benefit is NOT fixed
Vuldb
All true about group disability income ins except
Coverage applies both on and off job
Longer waiting period lower premium
Coverage applies both on and off the job
Advantage of reinstating policy instead of applying for new one
Cash values have gained interest while policy was lapsed
Original age is used for premium determination
Original age is used for premium determination
If consumer requests additional information concerning an investigative consumer report how long does insurer or reporting agency have to comply
5 days
3 days
5 days
In all health care plans under Aca how many essential benefit categories are there
10
5
10
Hmo cancelled for non payments ..how long of notice must insurer give insured
30 days
45 days
45 days
Which of following health ins plans does not require insured or pay deductible
Hmo
Major medical
Hmo
Publishes intimidating brochures. Which best describes
Illegal under any circumstances
Illegal until d endorsed by guaranty association
Illegal under any circumstances
How much notice provided to insurer prior to suspending insuer’s certificate of authority
10 days
30 days
10 days
Completed 35 hours of continuing education in one renewal period how many hours will have it complete in next renewal period
24
35
24
Which would be beneficiary in credit life ins
Borrower
Creditor
Creditor
On advert, company claims that it has funds that are not available for payment of losses or claims. Company is guilty of
Misrepresentation
Rebating
Misrepresentation
All could be rebates if offered except
An offer of employment
Dividends from mutual insurer
Dividends from mutual insurer
Holds certificate of authority in state it transacts business is
Certified insurer
Authorized insurer
Authorized insurer
Not required on an illustration used in sale of life ins
Generic name of policy
Name of primary and secondary beneficiary
Name of primary and secondary beneficiaries
What do agents represent
Department of ins
Ins company
Ins company
True regarding key employee disability except
Premiums are not tax deductible for employer
Benefits are taxable to the employer
Benefits are taxable to the employer
THEY ARE NOT
Fixed in fixed annuity refers to all except
Death benefit
Guaranteed rate of interest
Death beenfit
60 year old participant in 401k takes distribution and rolls i over to an ira within 60 days. Which is true
No taxes due since plan participant is over 59.5
Amount of distribution is reduced by amount of 20% holding tax
Amount of distribution is reduced by amount of 20% holding tax
Employee becomes insured under a ppo plan provided by his employer if insured decides to go to physician who is not a ppo provider which of following happens
Ppo will pay reduced benefits
Ppo will pay same benefits as if insured had seen a ppo physician
Ppo will pay reduced benefits
If insured withdraws a portion of face amount in form of accelerated benefits bc of terminal illness how will that affect payable death benefit from policy
Death benefit will be smaller
Death benefits will be larger
Death benefit will be smaller
Association could buy group ins for its members if it meets all of following requirements except
Is contributory
Has at least 50 members
Has 50 members
Benefits for individual disability plans are based on
Flat amount
Percentage of worker’s income
Flat amount
All of following are true regarding ins policy loans except
Policy owners can borrow up to full amount of their whole life policy’s cash value
Policy loans can be mad eon policies that do not accumulate cash value
Policy loans can NOT be made on policies that do not accumulate cash value
Let distinction between variable whole life and variable universal life products
Variable universal life is regulated solely through Finra
Variable whole has guaranteed death benefit
Variable whole has guaranteed death benefit
Which of following organizations are practicing providers compensated on fee for service basis
Hmo
Ppo
Ppo
Characteristic does not describe managed care
High quality care
Unlimited access to providers
Unlimited access to providers
Section of health policy that states causes of eligible loss under insured is assumed to be disabled is the
Insuring clause
Probationary period
Insuring clause
Clic
Insuring clause of disability policy states all of following except
Method of premium payment
Identities of ins company and insured
EXCEPT Method of premium payment
Disability policy: probationary period refers to the time
During illness related disabilities are excluded from coverage
Between the first day of disability and actual receipt of payment for disability incurred
During illness related disabilities are excluded from coverage
Insured has chosen joint and 2/3 survivor as settlement option. What does this mean to the beneficiaries
Surviving beneficiary will continue recg 2/3 of benefit paid when both benefits paid were alive
One of the beneficiaries will rec 1/3 and other 2/3 of proceeds when insured dies
Surviving beneficiary will continue recg 2/3 of benefit paid when both benefits paid were alive
For individual who’s is eligible for Medicare at age 65 who is still employed and covers under employer’s plan which is true
Employer plan is secondary coverage; Medicare is primary coverage
Employer plan is primary coverage and Medicare is secondary coverage
L
Consumer requests additional info concerning investigative consumer report how long insurer or reporting agency have to comply
5 days
10 days
5 days
Which Nonforfeiture option provides coverage for longest period of time
Extended term
Reduced paid up
Reduced paid up
All about equity index correct except
Interest rate is tied to an index such as standard and poor 500
Annuitant recs a fixed mount of return
Annuitant revives a fixed amount of return
THEY DO NOT
Under straight life annuity if annnuitant dies before principal amount is paid out beneficiary will rec
Nothing payments will cease
Guaranteed minimum benefit
Nothing payments will cease
Fixed annuities provide all except
Hedge against inflation
Minimum guarantee rate of interest
Hedge against inflation
Noncontributory group disability income plan has 30 day elimination period and offers benefits of 2000 a month. If Emp is unable to work for 7 months due to covered disability Emp will rec
12000 all of which is taxable
14000 all of which is taxable
12000 all of which is taxable
Under pure life annuity income is a payable by company
Only for life of annuitant
For as long as either annuitant or named beneficiary is alive
Only for life of annuitant
Advantage of qualified plans to employers is
Tax free earnings
Tax deductible contributions
Tax deductible contributions
Client has new individual disability income policy with a 20 day probationary period and a 30 day elimination period . Ten days later client breaks legs nd off work for 45 days. Disability pays for how many days
45
15
15
Which is not true re life with guaranteed minimum annuity settlement option
Is a life contingency option
Does not guarantee that entire principal amount will be paid out
Does not guarantee that entire principal amount will be paid out
IT DOES
Gmasep
What percentage of individually owned disability income benefits is taxable
0
50
0
Premiums paid by self employed sole proprietors or partners for medical expense ins are
Totally tax deductible
Not tax deductible
Totally tax deductible
Sespt
Individual purchasing permanent life ins policy with face value of 25000. While this is all ins he can afford wants to be sure additional coverage will be available in future
Guaranteed renewable option
Guaranteed insurability option
Guaranteed renewable option
25000=gro
Level term ins provides a level death benefit and a level premium during the policy term. If policy renews at end of specified period time policy premium will be
Adjusted to insured’s age at time of renewal
Based on the issue age of the insured
Adjusted to insured’s age at time of renewal
Insured is involved ins car accident in addition to less serious injuries he permanent loses the use of his legs nd rendered completely blind. Blindness improves month later. What extent will insured rec presumptive disability benefits
No benefits
Full benefits until blindness lifts
No benefits
Which is not true re variable universal life policy
Death benefit is fixed
Minimum death benefit is guaranteed
Death benefit is NOT fixed
How many consecutive months of coverage must ltc ins provide in this state
12
24
12
Guaranteed renewable health ins policy allows
Insurer to renew policy to a specified age
Policyholder to renew the policy to a stated age with the company having the right to increase premiums on entire class
Policyholder to renew the policy to a stated age with the company having the right to increase premiums on entire class
Which of following is not true re annuity certain
It will pay until a fixed amount is liquidated
Benefits stop at the annuitant’s death
Benefits stop at the annuitant’s death
Cobra plies to employers with at least
50
20
20
Group health ins is characterized by all except
Lower administrative costs
Adverse selection
Adverse selection
Which following best describes the mib
Govt agency that collects medical info on the insured from the ins companies
Nonprofit org that maintains underwriting nod on applicants for life and health ins
Nonprofit org that maintains underwriting nod on applicants for life and health ins
All following true about group disability income ins except
Longer waiting period, lower premium
Coverage applies both on and off the job
Coverage applies both on and off job
Which of following is used to compare the cost of one life ins policy against another in order to guide prospective purchasers to polices that are competitively priced
Cost comparison methods
Policy cost indices
Cost comparison methods
All statements apply to temporary licenses except
They allow licenses to sell new policies
They require 40 hours of license training
They allow licensees to sell new policies
Which of following health ins plans does not require insured to pay deductible
Hmo
Medicare part a
Hmo
In response to alleged fraud must respond within
15 days
30 days
15 days
On advertisementment company claims that it has funds in its possession that are not available for payment of losses or claims. Company is guilty of
Misrepresentation
Rebating
Misrepresentation
Insurerer that holds a certificate of authority in state in which it transacts biz is considered a
Authorized insurer
Certified insurer
Authorized insurer
Covered under grou life ins policy may convert policy to any of following except
Level term
Universal life
Level
If ins company offers Medicare supplement policies it must offer which of following plans
A
Ab
A
Not required to be stated in outline of coverage provided with long term care policy
Policy number
Basic info about supplementary policies
Basic info about info supplementary policies
All following could be considered rebates if offered to an insured in sale of ins except
Offer of employment
Dividends from a mutual insurer
Dividends from mutual insurer
Who chooses primary care physician in HMO
Referral physician
Individual member
Individual member
All correct re executive bonus except
Policy owned by company
It is considered a non qualified employee benefit
Policy is owned by the company
Following would be considered rebating except
Agent misrepresents policy benefits to convince policy owner to replace policies
Agent offers to share his commission with a policyholder
Agent misrepresents policy benefits to convince policy owner to replace policies
Initial amount of credit life ins may not exceed
Borrow’annual income
Amount to be repaid under contract
Amount to be repaid under contract
Insurer or agent must respond to commissioner regarding complaint brought against them within 10 days
15 days
15 days
Regulations regarding replacement apply to which
Renewable term
Replacement of existing policy by same insurer
Renewable term
Licensed agent in texas receives criminal conviction
Insurance fraud division
Department of insurance
Department of insurance
To complain with fair credit reporting act when must producer notify an applicant of credit report request
At time of application
At initial interview
At time of application
If policy has automatic premium loan provision wha happens if insured dies before loan is paid back
Policy beneficiary receives full death benefit
Balance of loan will be taken out of death benefit
Balance of loan will be taken out of death benefit
Insured purchased a 10 year level term life policy that is guaranteed renewable and convertible. Wha happens at end of 10 years
Insured may renew policy for another 10 years at same premium rate
Insured may renew policy for another 10 years but at higher premium rate
Insured may renew policy for another 10 years but at higher premium rate
President of company starting annuity. Decides corporation will be annuitant. Which is true
Annuitant must be natural person
Corporation can be annuitant as long as beneficiary is a natural person
Annuitant must be a natural person
Insured has had a life ins policy that he purchased three years ago when he was 40. He is killed and discover he is actually 45 not 43.
Pay reduced death benefit
Pay full death benefit
Pay reduced death benefit
Which of following is second to die policy
Survivorship life
Joint life
Survivorship life
For individual eligible for Medicare at 65, still employed and covered under employer’s plan which is true
Employer plan is primary coverage and Medicare is secondary coverage
Employer plan is secondary coverage and Medicare is primary coverage
Employer plan is primary coverage; Medicare is secondary coverage
65 and older covered under employer’s ins plan regardless of age
Consumer requests additional info concerning investigative consumer report how long does insurer or reporting agency have to comply
5 days
10 days
5 days
Which is true regarding elimination periods and cost of coverage
Long elimination period lower the cost of coverage
Elimination periods have no effect on cost of coverage
Long elimination period lower the cost of coverage
All would be eligible to establish keogh except
Sole proprietor of film development store with no employees
President and employee of family corporation
President and employee of family corp
Keogh are for self employed individuals
Which is not true about beneficiary designations
Beneficiary may be a natural person
Beneficiary must have insurable interest in the insured
Beneficiary must have insurable interest in the insured
Which of the following is not a factor in determinining qualifications for social security disability benefits
Workers pia
Workers occupation
Workers occupation
True re cash surrender nonfortfeiture option
Policyholder recs original cash value of policy
Funds exceeding premium paid are taxable as ordinary income
Funds exceeding the premium paid are taxable as ordinary income
To attain currently insured status under social security earn how many credits last 13 quarters
6 credits
40 credits
6 credits
Which determines length of time benefits will be receive under fixed amount settlement
Size of each installment
Length of income period
Size of each installment
Why is equity indexed annuity considered fixed annuity
Has a fixed rate of return
Has a guaranteed minimum interest ate
Has a guaranteed minimum interest ate
Eigm
Dividend option where policyowner uses dividends to purchase a term policy for one year is referred to as the
One year term option
Paid up option
One year term option
Doy1
Annual life ins dividend check
Cash option
Annual dividend provision
Cash option
Alico
