Exam 5 Wrong Answers Flashcards
All of the following may be excluded from coverage in a Major Medical Expense policy except
Emergency surgery
Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?
Apparent
A father owns a life insurance policy on his 15-year old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?
The insured’s premiums will be waived until she is 21
In major medical insurance policies, when the insured’s share of coinsurance reaches a certain amount, the insured is no longer obligated to pay it. This feature is known as…
Stop-loss
Which of the following protects consumers against the circulating of inaccurate or obsolete personal or financial information?
The Fair Credit Reporting Act
All of the following are examples of risk retention except
Premiums
Most scheduled plans provide first dollar benefits without
Coinsurance and deductibles
In forming an insurance contract, when does acceptance usually occur?
When an insurer’s underwriter approves coverage
Which renewal option does not guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date?
Optionally renewable
Peril is most easily defined as…
The cause of loss insured against
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
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated
An applicant is considered to be high-risk, but not so much that the insurer wants to deny coverage. Which of the following is not true?
The insurer will issue a conditional coverage
Which of the following insurance options would be considered a risk sharing arrangement?
Reciprocal
A producer is helping a married couple determine the financial needs of their children in the event one or both should prematurely die. This is a personal use of life insurance known as…
Survivor protection
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
As of the application date
Which of the following best describes annually renewable term insurance?
It is level term insurance
If a retirement plan or annuity is “qualified” this means
It is approved by the IRS
Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?
Optionally renewable
Which of the following is true regarding a term health policy?
It is nonrenewable
An insured has $1,000 HRA account through his employer. He incurred $750 in medical expenses the first year of the plan. How much, if anything, will the insured be able to roll over toward next year’s expenses?
$250
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon death of the first insured. Which policy is that?
Joint Life Policy
A policy owner of a life insurance policy who is also the insured is diagnosed with a terminal illness, so he sells the policy to a viatical company in order to pay medical bills. What term best describes the policy owner’s role in this transaction?
Viator
Variable whole life insurance is based on what type of premium?
Level fixed
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
Which of the following is not true regarding an annuity certain?
Benefits stop at the annuitant’s death.
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive
When the insured initiate the cancellation of a policy, the unearned premium will be refunded on a
Short rate basis
Which of the following is true about the premium on the children’s rider in a life insurance policy?
It remains the same no matter how many children are added to the policy
If a policy is rated up, which of the following is true?
The premium increases
What is the waiting period on a Waiver of Premium rider in life insurance policies?
6 months
In which Medicare supplemental policies are the core benefits found?
All plans
Equity indexed annuities
Seek higher returns
Which of the following options best depicts how the eligibility of members for group health insurance is determined?
By conditions of employment
The premium of survivorship life policy compared with that of a joint life policy would be…
Lower
All of the following are true of the key person disability income policy except…
Benefits are considered taxable income to the business
When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called…
Executive bonus
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
All other factors being equal, the least expensive first year premium payment is found in…
Annually renewable term
