Final Exam Flashcards
Which of these is considered a mandatory provision? A. Payment of claims B. Insurance with other insurers C. Misstatement of age D. Change of occupation
Payment of claims
T has a term policy that allows him to continue the coverage after expiration of the initial policy.. What type of term coverage is this? A. Renewable B. Increasing C. Level D. Decreasing
Renewable
An example of an unfair claims practice would be
A. Requesting a third-party arbitrator to resolve a disagreement
B. Failing to effectuate prompt, fair, and equitable settlement of a claim
C. Paying a claim promptly after receiving proof of loss
D. Requiring the insured to give a statement under oath
Failing to affect you a prompt, fair, and equitable settlement of a claim
Which of these types of policies may not have the automatic premium loan provision attached to it? A. Modified whole life B. 20-pay life C. Decreasing term D. Endowment
Decreasing term
A potential client, age 40, would like to purchase whole life policy that will accumulate cash value at a faster rate in the early years of the policy. Where did these statements made by the producer would be correct?
A. Straight life accumulates faster than limited-pay life
B. 20-pay Life accumulate cash value faster than Straight Life
C. Cash value accumulation of both 20-Pay Life & Straight Life depending on the insured’s Financial rating
D. 20- pay life and straight life accumulate cash value at the same rate
20-Pay Life accumulate cash value faster than straight life
Which of these are NOT example of nonforfeiture option? A. Extended term B. Reduced paid-up C. Cash surrender D. Life income
Life Income
R had to received full disability income benefits for six months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to him while he is not working at full capacity? A. Residual Disability B. Recurrent Disability C. Presumptive Disability D. Occupational Disability
Residual Disability
But employee is required to pay a portion of the premium for a employer/employee group plan, the employee is covered under which? A. Joint B. Noncontributory C. Contributory D. Participating
Contributory
Taking receipts of premiums and holding them for the insurance company is an example of? A. Commingling B. Misappropriation C. Theft D. Fiduciary responsibility
Fiduciary responsibility
What type of insurance offers permanent life coverage with premiums that are payable for life? A. Credit life B. Renewable term life C. Whole life D. Endowment
Whole life
Variable whole life insurance can be described as:
A. Both Insurance and Securities product
B. An insurance product only
C. A securities product only
D. The insurance company assumes the investment risk
Both Insurance and Securities product
Which of these is NOT a characteristic of a health reimbursement arrangement (HRA)?
A. Employee funds the HRA entirely
B. Employer funds the HRA entirely
C. HRA’s can be offered with other health plans
D. HRAs allow reimbursement for eligible medical expenses
Employee funds the HRA entirely
Why is an applicant signature required on a life insurance application?
A. To attest that the statements on the application are warranties
B. To attest that the statements on the application are accurate to the best of the applicants knowledge
C. To give power of attorney to the producer if needed
D. To attest that all statements on the application are guaranteed to be true
To attest that the statements on the application are accurate to the best of the applicants knowledge
The provision that defines to whom the insurer will pay benefits is called: A. Entire contract B. Proof of loss C. Claim forms D. Payment of claims
Payment of claims
Which of these statements accurately describes the waiver of premium provision in an accident and health policy?
A. Past due premiums on a lapsed policy are waived and coverage is restored
B. The insured is paid a monthly benefit to keep insurance premiums current in the event of a total disability
C. Premiums are waived after the insured has been unemployed for a specified time period
D. Premiums are waived after the insured has been totally disabled for a specified time.
Premiums are waived after the insured has been totally disabled for a specified time period
And insured owns an individual disability income policy with a 30 day Elimination Period for sickness and accidents in a monthly indemnity benefit of $500. If the insured is disabled for 3 1/2 months, what is the maximum amount he would receive for an approved claim? But illumination illumination
$1250. 3 1/2 months minus one month elimination period equals 2.5 months. 2.5 months x $500 monthly indemnity equals $1250
What is the suicide provision designed to do?
A. Decline an applicant who is contemplating suicide
B. Safeguard the insured from an applicant who is contemplating suicide
C. Protect the insured from ever paying a claim that results from suicide
D. Allows the insure the option to pay a death benefit in the event of a suicide
Safeguard the insured from an applicant who is contemplating suicide
Which of the following consists of an offer, acceptance, and consideration? A. Warranty B. Estoppel C. Contract D. Representation
Contract
How long is the typical free look. For long term care insurance policies? A. 20 days B. 30 days C. 40 days D. 50 days
30 days
When does a probationary period provision become effective in a health insurance contract? A. At the policy’s inception B. 30 days after the policy’s inception C. When a claim is submitted D. When a covered loss occurs
At the policy’s inception
T applies for a Life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, which ever is later. Assuming that T is an acceptable risk, what is given to T? A. Binding receipt B. Conditional receipt C. Warranty receipt D. Backdated receipt
Conditional receipt
In the state of Georgia, every policy owner must be offered the following? A. Double $ back guaranteed B. Free-look period C. Waiting period D. Inflation rider
Free-look period
Major medical policy:
A. Pays 100% of covered expenses
B. Contain a deductible & coinsurance
C. Requires use of in-network facilities only
D. Do not contain a deductible and coinsurance
Contain a deductible and coinsurance
All are true statements regarding the underwriting process, Except:
A. Signed consent from applicant must be provided in order to test for aids and HIV virus
B. Aids and HIV virus exams must be conducted in a discriminationary fashion
C. The cost of any examination is paid by insurer
D. The original application is a primary source of information used in the underwriting process
Aids and HIV virus exams can be conducted in a discriminatory fashion
The health insurance program which is administered by each state and funded by both the federal and state governments is called: A. Long-term care B. Medicaid C. Medicare supplemental program D. Medicare
Medicaid
What type of renewability guarantees premium rates and renewability? A. Optionally renewable B. Conditionally renewable C. Non-cancelable D. Guaranteed renewable
Noncancelled
In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments:
A. Whenever an insured is unavailable to work
B. During the time and insured is confined in a hospital
C. Following an accident dull injury, but not during sickness
D. After an insured has become totally disabled as defined in a policy
After an insured has become totally disabled as defined in the policy
Insurers may request a hearing within \_\_\_ if their policy is rejected. A. 20 days B. 30 days C. 60 days D. 90 days
20 days
Premature IRA distributions are assessed a tax penalty of? A. 0 % B. 10% C. 15% D. 20%
10%
An Insurance company may Not reject a prospective insured’s life application on the basis of which of the following: A. Hobbies B. Weight C. Gender D. Medical history
Gender
Which of the following items are regulated by the rules governing advertisement of life insurance and annuities?
A. Communication making marketing and underwriting departments
B. Rate increase an ounce by insurance company via mass mailing
C. Prepared sales presentation she is by the insurance agents
D. Correspondence regarding policy loan interest rate payment
Prepared sales presentation used by insurance agents
G is an accountant who has 10 employees and is concerned about how the business would survive financially if he became disabled. The type of policy which Best addresses this concern is: A. Business overhead expense B. Disability income C. Key employee life D. Contributory
Business overhead expense
According to the time payment of claims provision, the insurer must pay disability income benefits no less frequently than which of the following options? A. Annually B. Semiannually C. Quarterly D. Monthly
Monthly
In Georgia, and insurance company must notify the commissioner within \_\_ days to terminate an agent appointment? A. 30 B. 45 C. 60 D. 90
30
In order to establish a health reimbursement arrangement ;(HRA), it must
A. Be offered in conjunction with other employee provided health benefits
B. Limits of benefits to prescription drugs only
C. Be established by the employer
D. Limit the amount of money the employee can contribute towards the account
Be established by the employer
All statements true about equity indexed life insurance, except:
A. Cash value has a minimum rate of accumulation
B. If the gain on the index goes beyond the policy’s minimum rate of return, the cash value will mirror that of the index
C. The premiums can be lowered or raise, based on investment performances
D. Tried to an equity index such as the S&P 500
C. The premiums can be lowered or raised , based on the investment performance
J purchased a disability income policy that Only J can terminate &; on which the rates will never increase above those illustrated in the policy. Which of the following types of policies did J purchase? A. Guaranteed renewable B. Noncancelable C. Optionally renewable D. Conditionally renewable
Noncancelable
The consideration clause of an insurance contract includes:
A. The buyers guide
B. The summary of the coverage provided
C. The named beneficiaries
D. The schedule & amount of premium payments
The schedule and amount of premium payments
Which of the following statements about the health reimbursement arrangement (HRA) is Correct?
A. If the employee has a qualified medical leave from work, lost wages can be reimbursed
B. If the employee paid for a qualified medical expenses, the reimbursements must be tax-free
C. Any unused amounts are added to the employees gross income
D. Health insurance premiums can be reimbursed to the employee
If the employee paid for a qualified medical insurance, the reimbursement may be tax-free
Which of these actions is taken when a policy owner uses a Life Insurance policy as collateral for a bank loan? A. Revocable assignment B. Beneficiary change C. Irrevocable assignment D. Collateral assignment
Collateral assignment
Which of the following Best describes a short-term medical expense policy? A. Conditionally renewable B. Noncancelable C. Guaranteed renewable D. Nonrenewable
Nonrenewable policy
The percentage of an individual’s primary insurance amount (IPA). Determines the benefits paid in which of the following programs? A. Social security disability income B. Medicare supplements C. Medicaid D. COBRA
Social security disability income
K pays on a $20,000 20-Year endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? A. Return of premiums paid B. Cash value plus interest C. $20,000 of death benefit D. Face amount plus interest
$20,000 death benefit.
If the insured dies before the endowments maturity, the policy face value is paid in a lump sum
During the application process, the agents primary responsibility is to the: A. The commissioner B. The applicant C. The insurance company D . State of Georgia
The insurance company! The insurer
K Failed to pay a renewal premium within the time guaranteed by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation? A. Free look B. Reinstatement C. Grace period D. Consideration
Reinstatement
XZY Company pay the entire premium for his group health plan. The Minimum percentage of eligible employees that must be covered is: A. 25% B. 50% C. 75% D. 100%
100% is for non contributory group
Upon reaching the limiting age, a handicapped child can extend their accident and sickness insurance coverage as a dependent?
A. Only if the child is incapable of employment and chiefly depends on the policy owner
B. For up to an additional 10 years only
C. Only if physically disabled
D. If mentally disabled
Only if the child is in capable of employment and chiefly dependent on the policyowner
P completes an application for a $10,000 life policy, but does not give the producer the initial premium. P’s coverage becomes effective when:
A. P receives the policy and pays the premium
B. P pass is the medical examination
C. The producer receives the policy
D. The insurance company approves the policy
P receives the policy & pays the premium
All of these are considered sources of underwriting information about an applicant, Except: A. Inspection report B. Credit report C. Rating services D. Medical information bureau
Rating services
best, standard, poor
S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy in annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation? A. 430(b) plan B. Deferred premium C. Single premium D. Period Certain
Single premium
Immediate annuities are purchased with a single lump sum payment and will start providing income payments within the first year
What is the maximum number of employees (earning at least $5000) that and employer can have in order to start a SIMPLE retirement plan ? A. 25 B. 50 C. 100 D. 250
100
Which of the following statements BEST defined do usual, customary, and reasonable (UCR) charges?
A. The maximum premium and insured can charge for their health insurance based on geography
B. The maximum amount employer can contribute to a contributory health plan
C. The maximum deductible an insured can be charged
D. The maximum amount considered eligible for reimbursement by an insurance company under a health plan
The maximum amount considered eligible for reimbursement by insurance company under a health plan
According to the Time Limit of certain Defenses provision in an Individual Health Insurance Policy, non-fraudulent misstatements first become incontestable?
A. Two years from the date of the policy was issued
B. Two years after the collection of the initial premium
C. Two years from the date of the first claim
D. Two years from the date the policy was delivered
Two years from the date of the policy was issued
Accident policy will most likely pay a benefit for a: A. Self-inflicted injury B. Critical illness C. On-the-job accident D. Off-the- job accident
Off-the- job accident
Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured? A. HMO B. PPO C. EPO D. PlHSO
PPO
Which premium schedule results in the lowest cost to the policy owner? A. Semi-annual B. Monthly C. Quarterly D. Annually
Annually
An agent would be guilty of rebating by?
A. Returning a portion of a premium as an incentive to purchase insurance
B. Canceling a clients insurance policy without a cause
C. Selling direct marketing products
D. Offering temporary insurance coverage
Returning a portion of a premium as incentive to purchase insurance
A CEO’s personal assistant suffered injuries at home and as a accident, wasn’t able to work for four months. What type of policy will pay a benefit to the personal assistant? A. Disability income B. Major medical C. Key employee D. Business overhead expense
Disability Income
The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called? A. Reinstatement B. Grace period C. Automatic premium loan D. Waiver of premium
Reinstatement
An applicant’s Medical information received from the Medical Information Bureau (MIB) maybe furnished to:
A. Agent
B. Agent spouse
C. National Association of insurance commissioners
D. Applicant’s physician
Applicant’s physician
The health insurance portability and accountability act (HIPAA) Gives privacy protection for: A. Insolvency B. Health information C. Financial information D. Overinsurance
Health information
Which of the following is the minimum age at which an individual can sign a life insurance application A. 15 B. 18 C. 19 D. 21
15
Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insure has the right to change the premium rate for the overall risk class? A. Conditionally renewable B. Non-cancelable C. Guaranteed renewable D. Optionally renewable
Guaranteed Renewable
Usually has increasing premiums
Health insurance benefits NOT covered due to an act of war are:
A. Excluded by the insurer in the contract provisions
B. Assigned to a reinsurer
C. Given a longer probationary period
D. Charge a higher premium
Excluded by the insured in the contract provisions
T is covered by a accidental death and dismemberment (AD/D) policy that has an irrevocable beneficiary. What action will the insurance company take if T request a change of beneficiary?
A. Request will be accepted only if in writing by the insured
B. Change will be made only of premiums are paid current
C. Change will be made immediately
D. Request of change will be refused
Request of the change will be refused
An underwriter determines that an applicant risk should be recategorize due to a health issue. This policy may be an issued with a? A. Delayed effective date B. Exclusion for the medical condition C. Extended contestable period D. Concealment clause
Exclusion for the medical condition or problem
An insured’s inability to perform two or more activities of daily living may trigger which type of policy rider? A. Waiver of premium B. Long term care C. Accelerated death benefits D. Accidental
Long term care
Has 2 or more daily inability that can not perform
Which of the following types of health coverage frequently used as a deductible? A. Major medical policy B. Basic surgical policy C. Basic hospital policy D. Worker’s compensation
Major medical policy
After initially issued, a temporary license is valid for: A. 3 months B. 4 months C. 5 months D. 6 months
6 months!
A domestic insurance company in Georgia is considered a company that?
A. Only sells to Georgia residence
B. Exclusively does business in Georgia
C. Incorporate & formed in Georgia
D. Is licensed to issue direct mail-order coverage
Is incorporated and formed in Georgia
The sections of an insurance contract which limit coverage are called: A. Waivers B. Riders C. Exclusions D. Limitations
Exclusions
The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called: A. Probation period B. Grace period C. Waiver of premium D. Illumination period
Waiver of premium!
A whole life insurance policy owner does not wish to continue making premium payments. Which of the following enables the policy owner to sell the policy for more than its cash value? A. Cash surrender B. Life settlement contract C. Buy-sell arrangement D. 1031 exchange
Life settlement contract
An insured is past due on his life insurance premium, but is still within the grace period. What will the beneficiary receive if the insured dies during the grace period?
A. Refund of all the premiums payed, plus interest
B. Refund of all the premiums paid
C. Full face amount minus any past due premiums
D. Full face amount
Full Face amount minus any past due premiums
P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should he purchase? A. Family benefit policy B. Family maintenance policy C. Family income policy D. Family survivor policy
Family maintenance policy.
It pays a monthly income from the date of the death of the insured to the end of the preselected period. And face amount a policy is payable at a pre-selected.
What action will insurer (Insurance Co) take if an investment payment on a policy loan is not made on time?
A. Cancel the policy if not paid within the grace.
B. Automatically add the amount of interest due to the loan balance
C. Subtract from any dividends owed
D. Disallow any further loans
Automatically add the amount of interest due to the loan balance
C is a key employee at ABC Inc. If a Key Employee Life insurance is purchased on her, which of these statements would be true?
A. ABC is the policy owner, C is the insured, and her husband is a beneficiary
B. ABC is the policy owner, C is the insured, and ABC is a beneficiary
C. C is the policy owner and the insured, and ABC is a beneficiary
D. C is the policy owner, the insured, and beneficiary
ABC is the policy owner, C is the insured and ABC is the beneficiary (company)
S takes out an accident and sickness insurance policy which contains a provision that states that the agent does not have the authority to change the policy or waive any of its provisions. Which health policy provision is this? A. Legal actions B. Insurance with other insurers C. Entire contract D. Reinstatement
Entire contract.
States that the agent does not have the authority to change the policy or waive any of its provisions