Insurance

Question 1

Acronym to describe Insurable Risks

Answer 1

C.H.A.D.
not Catastrophic, Homogenous exposure units, Accidental, & Determinable

Question 2

Acronym for elements needed in legal contract

Answer 2

C.O.A.L.L
Competent parties, Offer, Acceptance, Legal consideration, & Lawful purpose

Question 3

Characteristics of Insurance Contracts

Answer 3

Adhesion, Aleatory, Unilateral, & Conditional

Question 4

What power does the National Association of Insurance Commissioners (NAIC) have over Insurance Industry?

Answer 4

None. NAIC provides watch lists of insurance companies based on ratio analysis. They have no regulatory power over insurance industry. Regulation is on State level.

Question 5

6 Steps of Risk Management

Answer 5

D.I.E. Squared
Determine objectives of risk mgmt
Identify risks
Evaluate ID’ed risks’ probability & loss
Determine alternatives for risk mgmt
Implement program
Evaluate, monitor, & review

Question 6

When must an insurable interest exist for property insurance claim?

Answer 6

At policy inception and at time of loss

Question 7

When must an insurable interest exist for life insurance claim?

Answer 7

At policy inception only

Question 8

Describe Express, Implied, & Apparent Authority.

Answer 8

Express is agreement between company & agent.
Implied is based upon appearance such as business cards, letterhead, company sign, etc.
Apparent is when no actual authority exists at all.

Question 9

What are the 5 dividend options for insurance?

Answer 9

C.R.A.P.-O
Cash option, Reduce premiums, Accumulate at interest, Paid-up additions, & One yr term

Question 10

What are the 3 Nonforfeiture Options for Life Insurance?

Answer 10

Cash Surrender
Reduced Paid-up Insurance
Extended Term Insurance

Question 11

What year was taxation treatment for annuity payments changed from LIFO to FIFO?

Answer 11

1982

Question 12

What is the time of coverage through COBRA for reduction in hours and/or normal termination?

Answer 12

18 months. All other scenarios or events are 36 months of coverage

Question 13

In terms of Property & Casualty for Homeowners Insurance, which part of the insurance is identical?

Answer 13

Section II, Liability & Medical Payments are identical.

Question 14

Is a family member covered under Part A (Liability Coverage) for a Personal Auto Policy when operating 1.) Your covered auto, 2.) Rented auto, 3.) Borrowed car, 4.) Replacement car after 31 days

Answer 14

1.) Your covered car YES
2.) Rented auto YES
3.) Borrowed car YES
4.) Replacement car after 31 days NO, you must notify insurance company within first 30 days of buying new car.

Question 15

How much does a retiree’s Social Security benefit increase by (in simple interest) each year they delay their benefit?

Answer 15

8%

Decreases by 5/9 per years if retiree retires early within first 3 years, if retiree retires earlier than three years benefits reduced on additional years by 5/12 per year.

Question 16

What is not covered by Medicare Part B?

Answer 16

-Dental care, dentures
-Cosmetic surgery
-Hearing aids
-Eye exams

Question 17

How many quarters of coverage are needed for most workers to be fully insured for Social Security benefits?

Answer 17

40 quarters

Question 18

What does someone who is receiving Social Security benefits early (i.e., age 62) have to do to receive Medicare Part A benefits?

Answer 18

Nothing, coverage starts automatically at age 65. No need to file separate application.

Question 19

What are requirements that make a LTC policy qualified (tax-deductible)?

Answer 19

LTC policy is qualified if:
-no surrender value
-limited to qualified LTC services
-uses dividends to reduce future premiums or increase benefits
-meets consumer protection laws
-doesn’t pay for expenses under Medicare

Question 20

What are the 6 ADLs?

Answer 20

B.E.D.T.T.C.
B.athing, E.ating, D.ressing, T.ransferring,
T.oileting, C.ontinence

Question 21

What are the general exclusions for all Homeowners Insurance policies?

Answer 21

-Movement of ground (earthquake)
-Ordinance of law (loss from regulations regarding construction/demolition)
-Damage from water (floods, water from underground, sewer backup)
-War or nuclear hazard (including nuclear powerplant)
-Power failure (power plant failure causing a loss)
-Intentional Act
-Negligence

Question 22

What are the different coverages for Homeowners Coverage?

Answer 22

Section I
Coverage A- “Attached Structures”
Coverage B- “space Between” (covers detached garages, etc.)
Coverage C- “covers my crap” (Contents)
Coverage D- “Damage so bad I can’t live here” (pays for housing elsewhere during repairs)
Section II
Coverage E- “EEEkkk I am in trouble” (liabilty)
Coverage F- “someone FELL and I owe them medical payments”