Exam 6 Wrong Answers

Question 1

Under a Key person disability income policy, premium payments

Answer 1

Are made by the business and are not tax deductible

Question 2

Which of the following is true regarding a term health policy?

Answer 2

It is nonrenewable

Question 3

What is the benefit of choosing extended term as a nonforfeiture option?

Answer 3

It has the highest amount of insurance protection

Question 4

According to the Future Increase Option Rider (FIO), which of the following is not a qualifying event to increase an insured’s benefit level?

Answer 4

Death of a spouse

Question 5

Which of the following statements regarding HIV testing for life insurance purposes is Not true?

Answer 5

Insurers are barred from requesting HIV testing

Question 6

Which of the following is Not a characteristic or a service of an HMO plan?

Answer 6

Contracting with insurance companies

Question 7

Certain conditions, such a dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?

Answer 7

Presumptive disability

Question 8

Which of following best describes gross annual premium?

Answer 8

Net premium plus expenses

Question 9

If a settlement option is not chosen by the beneficiary or policy owner, which option will be used?

Answer 9

Lump sum

Question 10

All of the following are true regarding Medical Information Bureau (MIB) except

Answer 10

MIB reports are based upon information supplied by doctors and hospitals

Question 11

All other factors being equal, the least expensive first year premium payment is found in…

Answer 11

Annually Renewable Term

Question 12

Insurers are required to give the insured converting to an individual policy notice of their conversion privilege

Answer 12

15 days prior to group policy expiration

Question 13

Issue age policy premiums increase in response to which of the following factors?

Answer 13

Increased benefits

Question 14

A policy will pay the death benefit if the insured dies during the 20 year premium paying period and nothing if death occurs after the 20 year period. What type of policy is this?

Answer 14

Level term

Question 15

Which of the following entities must approve all continuing education courses in this state?

Answer 15

The Commissioner

Question 16

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

Answer 16

5 days

Question 17

What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before a loss can be covered?

Answer 17

Probationary period

Question 18

Which provision states that the insurance company must pay Medical Expense claims immediately?

Answer 18

Time of Payment of Claims

Question 19

Which benefits would a disability plan most likely pay?

Answer 19

Income lost by the insured’s inability to work

Question 20

All of the following are characteristics of group life insurance except

Answer 20

Premiums are determined by the age, sex and occupation of each individual certificate holder

Question 21

What is the amount a physician or supplier bills for a particular service or supply?

Answer 21

Actual charge

Question 22

The insurer may suspect that a moral hazard exists if the policy holder…

Answer 22

Is not honest about his health on an application for insurance

Question 23

An insured purchased a life policy in 2010 and died in 2017. The insurance company discovers at that time that the insured had concealed information during the application process. What can they do?

Answer 23

Pay the death benefit

Question 24

Variable whole Life a insurance is based on what type of premium?

Answer 24

Level fixed

Question 25

All of the following are ways in which a Major Medical policy premium is determined except...

Answer 25

The average age of the group

Question 26

All of the following are true statements regarding the accumulation at interest option Except...

Answer 26

The interest is not taxable since it remains inside the insurance policy

Question 27

In long term care policies, the term “chronically ill” means an individual who is unable to perform at least 2 activities of daily living for at least...

Answer 27

90 days

Question 28

Which nonforfeiture option has the highest amount of insurance protection?

Answer 28

Extended term

Question 29

Which of the following does not have to be disclosed in a long term care (LTC) policy?

Answer 29

The aggregate amount of premiums due

Question 30

In a group prescription drug plan, the insured typically pays what amount of the drug cost?

Answer 30

Copayment

Question 31

Medicaid provides all of the following benefits except...

Answer 31

Income assistance for work related injury

Question 32

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

Answer 32

$2,500

Question 33

When health care insurers negotiate contracts with health care providers or physicians to provide health care services for services for subscribers at a favorable cost, it is called...

Answer 33

Preferred Provider Organization (PPO)

Question 34

Are insurance company underwriters allowed to discriminate?

Answer 34

Yes, but not unfairly

Question 35

Which provision allows a person to return a Medicare supplement policy within 30 days for a full premium refund?

Answer 35

Right to examine

Question 36

The insurer must be able to rely on the statements in the application, and the insured must be able to rely on the insurer to pay valid claims. In the forming of an insurance contract, this is referred to as...

Answer 36

Utmost good faith

Question 37

With regards to premium rates, which of the following is not true?

Answer 37

The Commissioner sets all insurance premium rates used in Pennsylvania