Mi Life and Health License Exam Flashcards
1
Q
Formed to provide only liability insurance to its policy holders
A
risk retention group
2
Q
premiums may be increased or decreased at the policy owners option
A
universal life insurance
3
Q
Employs producers to sell company’s insurance products. Insurer owns the business producers write
A
direct writing companies
4
Q
premium notices sent to policy owners for payment of their life insurance reflect the
A
gross premium
5
Q
The period when no social security benefits are paid to a surviving spouse
A
black out period. youngest child reached 16 and surviving parent reaches 60
6
Q
agent authority is specifically set forth in writing
A
express
7
Q
Often used to provide funds to pay off an outstanding debt in the event insured passes before loan has been repaid
A
decreasing term insurance
8
Q
premium at inception of the policy is lower that the continuous premium whole life rate and then increases each year for the first 5 years then premiums level off
A
graded premium whole life
9
Q
in insurance the insurer is the______ and the producer is the _____
A
principal and agent
10
Q
stock insurer is owned by
A
shareholders
11
Q
mutual insurer is owned by
A
policy holders
12
Q
explains the promise the insurer has made to the pay a death benefit to a designated beneficiary
A
insuring clause
13
Q
Build cash values and have premium paying periods to age 100
A
modified whole life
14
Q
Life policy -premium increases each year during the first few years after policy issue
A
graded premium whole life
15
Q
Life policy that Builds cash value and have premium paying periods up to 100
A
graded premium whole life
16
Q
premium does not increase annually after the 1st few years and level off after premium period
A
modified whole life
17
Q
person is appointed by insurance company to transact business on its behalf. They collect client premium and have them sign PPW. What type of authority>
A
IMPLIED
18
Q
LIFE FREE LOOK PROVISION ALLOWS FOR HOW AMNY DAYS TO RETURN
A
10 DAYS
19
Q
STATES WHO BENEFITS SHOULD BE PAID
INSURERS PROMISE TO PAY
USUALLY FOUND ON 1ST PAGE
A
INSURING CLAUSE
20
Q
WITHDRAWALS FROM A UNIVERSAL LIFE POLICY REDUCE _____ AND _____
A
THE DEATH BENEFIT AND CASH VALUE
21
Q
SAVINGS AND EARNINGS FROM THIS TYPE OF COMPANY ARE RETUNRED TO THE POLICY OWNERS AS DIVIDENDS OR RETAINED FOR FUTURE OBLIGATIONS
A
MUTUAL LIFE INSURANCE
21
Q
A CORP OR LLC THAT ASSUMES AND SPREADS THE LIABILITY EXPOSURE FOR ANY OF ITS GROUP MEMBERS
A
RISK RETENTION =GROUP
22
Q
IS OWNED AND CONTROLLED BY POLICY HOLDERS
A
MUTUAL LIFE INSURANCE COMPANY
23
Q
WHAT DIVIDEND OPTION PRODUCES A REULST SIMILIAR TO TAKING CASH AND DEPOSITING
A
LEAVING DIVIDENDS TO ACCUMULATE AT INTEREST
24
ANNUITIES CAN BE PURCHASED WITH (3)
SINGLE LUMP SUM, SCHEDULED OR FLEXIBLE PAYMENT`
25
THE WITHDRAWAL RULE ON ANNUITY CASH VALUE IS
LAST IN FIRST OUT (LIFO)
26
A REPRESENTATION MUST BE )))) TO VOID A CONTRACT
MATERIAL
27
WHO BESIDES STATE REGULATES THE SALE OF VARIABLE LIFE INS AND ANNUITIES
SEC
28
DYING TO SOON IS AN EXAMPLE OF
A PERIL
29
IF CONSUMER REPORTS ARE PROVIDED UNDER FALSE PRETENSES THE MAX PENALTY IS
$5000 AND/OR 1 YEAR IMPRISONMENT
30
REPLACING INSURER MOST NOTIFR OTHER INSURER IN HOW MANY DAYS WHEN REPLACING A LIFE INSURANCE CONTRACT
3 DAYS
31
RISK THAT HAS A CHANCE FOR BOTH LOSS AND GAIN
SPECULTATIVE
32
FOR A GROUP INSURANCE PLANS EMPLOYEE RECEIVE A
CERTIFICATE OF INSURANCE
33
IF AN ANNUITANT HAS A CASH REFUND ANNUITY AND THEY DIE BEFORE INCOME BEGINS THE BENEFICIARY RECEIVES
A KUMP SUM CASH PAYMENT EQUAL TO THE ANNUITY FUND
34
TYPE OF AUTHORITY FOR AGENT UF DETAILS AND DUTIES ARE SPELLED OUT IN CONTRACT
EXPRESS AUTHORITY
35
ANYONE WHO MAKES A FRAUD DEATH CLAIM, CERTFICATE OR CLAIM WITH INSURER CAN RESULYT IN
A FINE UP TO $1000 AND UP TO 3 MONTHS IN PRISON
36
4 ELEMENTS OF ANY LEGAL CONTRACT
COMPETENT PARTIES
LEGAL PURPOSE
AGREEMENT
CONSIDERATION
37
A FALSE STATEMENT OF FACT
MISREPRESENTATION
38
FILING A FRAUDULENT HEALTH INSURANCE CLAIM IS AN EXAMPLE OF A
MORAL HAZARD
39
AN ANNUITANT IF AN ANNUITY CAN BE COMPARED TO A ____ WITH RESPECT TO A LIFE INSURANCE POLICY
THE INSURED
40
WHEN A CERTFICATE HOLDER CONVERTS FROM GROUP LIFE TO INDIVIDUAL THE CONVERTED POLICY MUST BE A
PERMENANT INSURANCE
41
REQUIRED INDIVIDUAL LIFE INSURANCE PROVISIONS
INCONTESTABILITY
MISTSTATEMENT OF AGE
GRACE PERIOD
ENTIRE CONTRACT
EOI
INDIVIDUAL CERTFICATES
ASSIGNMENTG
42
LIFE INSURANCE INCLUDE IN GROSS ESTATE IF
OWNERSHIP AT TIME OF DEATH\
ESTATE IS BENEFICIARY
OWNERSHIP WAS TRANSFERRED WITHIN 3 YEARS OF DEATH
43
DEATH BENEFIT CLAIM SHOULD BE PAID
WITHIN 60 DAYS OF
44
CONTRIBUTIONS TO A SEP ARE NOT INCLUDED IN TAXABLE INCOME AS LONG AS THE CONTRIBUTION DOES NOT EXCEED
25% OF THE EE'S INCOME UP TO A SPECIFIED AMOUNT
45
WHICH TYPE OF ANNUITY PAYOUT GUARANTEES AT A MINIMUM THE PAYOUT OF THE PRINCIPAL AMOUNT
CASH REFUND
46
WHOLE LIFE THAT DOES NOT PAY DIVIDENDS AND VALUE GROWS FROM PREMIUM PAYMENTS AND INTEREST
INTREST SENSITIVE WHOLE LIFE
47
FACTORS THAT DETERMINE ANNUITY BENEFIT
AGE, SEX, EXPENSE, PREMIUM CONTRIBUTIONS, INTERST RATE AND ANNUITY TYPE
48
nonqualified annuities are funded with
after tax dollars
49
penalties for violating fait credit reporting act
fines, damages, consumer, punitive damages and reasonable attorney fees.
49
offering to pay any part of commission , gifts, services, or anything else of value
rebating
50
riders based on term life insurance
spousal
cost of living
return of premium
51
annuities are classified by
method of payment
number of lives covered
disposition of proceeds
52
key person insurance needs which parties to sign application
the insured, another officer and the agent
53
insurance operating cost is know as the
expense load
54
statements that are guaranteed to be true
warranties
55
a license an insurer needs to sell is called
certificate of authority
56
factors for determining premium rates for life
mortality
interest
expenses
57
reciprocal insurers are unincorporated groups of people called
subscribers
58
purpose of common disaster provision is to
protect interests of contingent beneficiaries
59
the premium for transferring a risk should be
affordable for the average customer
60
life insurance gross premium is
net single premium plus expense
61
commission must decide to accept an application for an insurance license within how many days
60
62
small business retirement plans for 100 or less employees
simple plan
63
group life probationary periods are normally
1-12 months
66
Life Insurance premium factors
Interest earnings
Expenses
Mortality
67
If you surrender your whole life policy, what are reduced paid up policy?What happens to the cash value
Face value reduced, cash value still increases
68
If you have a refund annuity and die before income begins what does the beneficiary receive?
A lump sum cash payment equal to the start of the annuity fund less The amount of income already paid
69
70
1 policy that covers 2 people
Joint life
71
An agent must notify an applicant of what sources to assess applicant
Application
Medical report
Attending physician.
S statement
Medical information bureau special questionnaires, inspection reports and credit reports
72
Sells to consumers without producers
Direct response company
73
Primary reason for designating a trust as a life insurance policy beneficiary
So the insured can control the proceeds after death
74
Transfer of rights and Benefits is irrevocable
Absolute assignment
75
3 parties to a trust
Grantor, trustee, beneficiary
76
An incorporated insurer whose governing body is elected by the policy owners
Mutual company
77
Adjustable life policy features
Premiums can be increased or decreased
Face amount, Subject to eoi
78
A partial withdraw of cash value from the policy is only available with
Universal life
79
Authorizers the insurer to designate the pay e of the life insurance death benefit if the designated beneficiary cannot be located
Facility of payment clause
80
Annual gross premium of life insurance
Net premium plus expense
81
Indicaters of financial strength of insurers
Loss experience
Reserves
Investment performance
Management
Operating expenses
82
Business use of life insurance
Buy-sell funding
Deferred Compensation
Key person coverage
83
With a non MEC life policy how are loans taxed
Loans are tax free
84
Taxability of insurance policy dividends
Not taxable, considered return of premiums paid
85
What type of employees may generally participate in a tax sheltered annuity
Employees of nonprofit charitable educational and religious organizations
86
Interest earned and distributions made are tax-free if Roth.I.R a is maintained for how many years
5 years
87
Provision of life insurance that states new statement shall avoid this policy or be used in defense of a claim under it unless contained in the application
Entire clause contract
88
Contract agreement between ceding insurers and reinsurer to underwater certain classes of risk
Treaty reinsurance
89
90
Contract prepared by 1 party
Adhesion
91
Person is appointed by insurance company to transact business. They collect premiums and have them sign paperwork.What type of authority?
Implied
92
93
What policies endow at 100
Whole and limited pay life
94
Two ways a reinsurance company can accept risk
Facilitative or treaty
95
Insurers considers risk before allowing transfer from ceding company
Facilitative
96
Sole proprietor retirement plan
Kroger plan
97
The intentional failure to disclose known facts on an insurance application
Concealment
98
Form to provide liability insurance to its policy holders
Risk retention group
99
The net premium is defined as
Mortality minus interest
100
An insurance what is the insurer and what is the producer
The insure is the principle in the producer is the agent
101
When important material facts are hidden by insured
Concealment
102
103
104
Under a fixed period option life insurance the payment of exces interest will
Make the payment larger
105
106
107
In mind all life and health advertisements must be
Maintained at the insurance home office for a minimum of four years
108
Regardless of an anew attendant's age, health or marital status, which type of annuity will provide the most monthly income?
Straight life annuity income
109
They are the difference between the gross premium charge and the actual experience of the insurer
Policy dividends
110
Premiums are lower during the first few years and the animal increase to a higher constant level
Modified whole life policy
111
What type of policy will the face amount remain level in the cash value?Grow each year until you die or reach a hundred
Whole life policy
112
In the michigan , who is ultimately possible for making sure content of an insurance advertisement meets state law requirements
Insurer
113
Under what option if the primary beneficiary dies payments of the same amount until all installments equal the original amount
Installment refund option
114
What type of life policy has a fixed premium and a separate account
Variable life policy
115
What option is designed to protect the policy owner?Should the policy be in danger of lepsing for non payment of premiums
Automatic loan premium
116
What qualifies under a 1035 exchange
Life insurance to annuity
Life insurance to life insurance
Annuity to Annuity
117
What can an assured add to a permanent Insurance policy?Which will provide additional coverage , but cost less than purchasing a separate palace
Term insurance rider
118
An individual wishes to purchase whole Life Insurance but does not wish to pay premiums.Past retirement age which policy should the person buy
Limited pay
119
A partial withdrawal of cash value from the policy is only available with what type of policy
Universal life
120
Premiums are lower in the early years of the policy term in higher in the later years
Modified whole life
121
Under which condition made an insured convertible life policy to whole life
If the insurer changes the investment objectives of the plan
122
What differentiates a variable life product from a conventional life product
The fact that the product has a separate account which is distinct from the general account
123
Provide insurance and benefits at very according to the investment experience of their underlying accounts
Variable life
124
When agents act on behalf of insurers they are acting under which legal principle
Agency
125
Grace periods for weekly payments.Monthly payments or quarterly or more payments
7, 10, 31 days
126
Fixed monthly fee paid to health care provider
Capitation
127
Misrepresentation Comparisons or rebates to get a person to replace with new insurance
Twisting
128
Medical decision attempting to ensure that the hospital's day is as short as possible.Yet still appropriate for the patient's medical condition
Concurrent review
129
For a ltc policy to be considered qualified a health care professional must certify an illness will last a minimum of
,
3 months
130
Business overhead expense policies do not include compensation for
Owners
131
132
Disability income benefits for partial disability are payable to eligible insurance for a maximum of
3-6 months
133
Which kind of insurance company is owned by individuals who buy shares but are not entitled to policy dividends
Stock insurance company
134
Medicare part a pays what percentage for the 1st 60 days of hospitalization
100% after deductible
135
In addition to the buyer , skype on the delivered to an applicant orange , with or before the delivery of a life insurance policy
Outline of coverage
136
Benefit periods for short term disability are normally
6.
Months to 2 years
137
If an agent or producer diverts funds belonging to insurer to her own use they have committed the illegal act of
Theft
138
When important amateur effects are hidden by an insured on an application this is known as
Concealment
139
An individual may take legal action to recover on an accident and Health Insurance Policy.No sooner than how many days in no later than how many years
60 days and three years once proof of a loss is furnished
140
Changes made to an insurance policy must be approved in writing by
An executive officer of the insurance company
141
Please cost to bring in a substitute provider to the insurance home or moving the insurer to a care facility for a period of time
Respite care provision
142
Individuals who own life insurance and are called certificate holders are members of a
Fraternal benefit society
143
This was designed to limit the risk with anyone individual insured by the insurance company
Optional other insurance
144
An ensure that issues participating policies is called
A mutual insurer
145
146
After proof of loss legal action on health policy to recover is only during what time period
60 days and 3 years
147
If a producer undergoes criminal prosecution he must notify the director in how many days
30
148
A required provision of individual health policies set a written notice of claim must be given to the insurer within
Twenty days after the loss or as soon as reasonably possible
149
The time of payment claims provision and an accident in health policy requires that
All claims must be paid immediately after the insurer receives a written proof of loss
150
All claims must be paid immediately after the insure.R receives a written proof for the loss
151
152
153
Promising a return of profit not disclosed in the insurance policy is an example of
An illegal inducement
154
An insurance company that holds a certificate of authority in a state baby known as any of the following
Approved admitted or accepted
155
Which characteristic of insurance provides legal protection for insurance when coverage is not clearly stated in the policy
Adhesion
156
What disability policy and demonifies?The business for certain expenses incurred when the business owner is disabled
Business overhead expense policy
157
Medicare part d coverage starts is one after a person enrolls
First of the month after
158
In this type of policy policy holders may participate in dividends
Mutual insurer
159
160
Under the required claim form's precision of a health insurance policy and insurance must furnish the claim form to the insured within how many days
15 days
161
My most insurance definitions partial disability is
The Ina.
Bility of an insured to perform at full capacity
162
Broad range of medical personal and environmental services designed to assist individuals who have lost their ability to remain completely independent in the community
Long term care
163
And the reinsurer considers each risk before allowing the transfer to be made from the seating company
Facultstive risk
164
Medicare part b pays.What percentage of medical expenses have for the insured pays the deductible
80%
165
Disability income benefits for partial disability typically are payable to eligible ensured for how many months
3_6
166
Types of care defined in a long term care policy
Home healthcare ,adult day care, respite care and assisted living
167
The waiting period for pre-existing conditions for a medicare.Supplemental policy cannot be more than
6 months
168
Are premiums for a disability by cell insurance tax deductible
No
169
Are the benefits received from a disability buy sell insurance taxed
No
170
A medicare supplemental policy that contains restricted network provisions
Select policy
171
The time of payment of claim provision in an accident in health insurance policy requires that
Claims must be paid immediately after the insurance receives a written proof of loss
172
The claim forms provision on an exit and health policy requires that
The insurance must provide forms no later than fifteen days after receiving
173
The notice of claimed provision on a health , an accident policy
Written notice be given to the insure within twenty days after any loss
174
Written notice be given to the ensure within twenty days after any loss
175
Which best describes the policy provision for the payment of additional income when the insured is eligible for social insurance benefits?They have not yet begun
Social security rider
176
And incorporated and sure whose governing body is elected by the policy owners is
A mutual company
177
Under the entire contract provision any changes made to the policy must be
Approved in writing by an executive officer and attached to the policy in the form of an amendment
178
The premiums and benefits and a business overhead expense plan are
Deductible and taxable
179
How many days must you be in the hospital?For medicare to provides.
Killed care in a nursing home
3 days
180
What disability policy can be used to fund buy sell agreements between partners or stockholders
Disability buy out policy
181
Which dental plan cover?
S dental services on a traditional for service basis
Comprehensive plan
182
In michigan the free look or trial examination period for a long term care policy is
30 days
183
A mutual insurance company formed to ensure people in the same business occupation.Or profession
Risk retention group
184
Term used by insurers to measure the percentage of business that renews coverage year after year
Persistency
185
Most costly type of medical care
Inpatient hospital
186
Type of health insurance policy that prevents seeing insurer from changing the premium rate or modifying the coverage in any way
Noncancelable
187
Aint noticed.The applicant must be issued to the consumer no later than
Three days after the report was requested
188
Assisted living facilities are for
A senior citizens who are still able to live independently but want a combination of housing meals and personal
189
With a cant sublimable policy the insurer may
Cancel the policy at any time
190
191
Comprehensive dental plans pay benefits on a
Usual and customary basis
192
Term for win disability benefits will provide benefits for loss of earnings without regard for occupational status and even if the insured is able to return to work on a full time basis
Residual basis
193
The commissioner must decide whether to accept an application for an insurance license within
60 days
194
A formal technique designed to evaluate the clinical necessity appropriateness for efficiency of healthcare services procedures or settings
Utilization.
Review
195
Type of dental insurance plan.What's characterized by the fact that dentist are paid a prearranged fee for dental services
A PP o dental.
Plan
196
Laws for grandfather and non grandfather plans
Insurance to age twenty six no lifetime dollar limit on essential services, policy cannot be canceled due to honest mistakes
197
Provisions required in an individual health and accident policy
Grace period, entire contract , and physical exam and autopsy
198
For a partial disability you are unable to perform
One or more important job duties
199
From the insurance perspective which type of disability coverage is the least restrictive to qualify for benefit payments
Own occupation
200
What disability policy indemnifies the business for certain expenses incurred when the business owner is disabled
Business overhead expense policy
201
To qualify for social security disability benefits, the disability must be the result of a medically determinable physical or mental impairment that can result in blindness or death.Or less at least
12 months
202
Medicare plans k and l are characterized by which features
Is higher co payments and coinsurance
Limit on out of pocket expenditures
Once out of pocket is reached , the policy covers one hundred percent of all cost sharing with plans a and B for the remainder of.
The year
203
Assuming a person has not yet tapped into their lifetime reserve.What is the maximum number of days at medicare will pay for hospital bills
One hundred and fifty days
204
Anyone who commits a fragile and insurance act is guilty of a felony in a subject to
Is four years imprisonment in a fine of $50,000
205
Mandatory provision for individual Health Insurance.Setting insured must furnish a complete claim form to the insurer within ninety days of the date of loss
Proof of loss
206
Nonqualified with draws from the health savings account are subject to a penalty of
20%
207
For a ltc care policy to pay benefits the insured must be
Diagnosed as chronically ill and Benefits expected to last at least 90 days
208
Name of fixed monthly amount fee paid to provider
Capitation
209
210
211
Policies for fraternal societies are called
Certificates
212
213
214
State long term care insurance is a partnership of
State insurance departments
Medicaid
Commercial insurers
215
Owners rights in a health insurance policy
Grace period provision
Incontestible provision
Reinstatement provision
216
217
Partial disability means a worker is unable to
Perform any part of their job for 9-12 months
218
3 levels of long term care
Skilled nursing care custodial care and intermediate nursing care
219
Look back period for ltc is
30 days
220
221
Look.
Back period for health insurance policies
10 days
222
Look back period for better care supplemental plans
30 days
223
To qualify for medicaid nursing home benefits and individuals must meet these qualifications
Age 65
Be blind or disabled
Be u.s citizen or permanent resident alien
Need type of care only provided in nursing home
Meet income and asset
test
224
225
7.
Days per week may only be performed by a license.D nurse under a doctor's horses twenty four hours a day
Skilled nursing care
226
Is provided intermittently by a nurse under a doctor's order. Less than seven days a week or eight hours a day
Intermediate care
227
Care provided by someone.
Without medical training who is hired to help the insured and performing daily life duties
Custodial care
228
To be considered currently insured and eligible for disability you must earn
Six credits in the last thirteen quarters
229
Waiting period first also security disability benefits
consecutive 5 months
230
231
A consumer may make.
A written request for a complete disclosure of the nature and scope of investigative report regarding their credit history.Within how many days must it be provided
Within five days after receipt of the consumer's request
232
The only type of health insurance policy to which a guaranteed insurability writer may be attached to his
A disability income policy
233
What is the lifetime reserve of coverage on top of the ninety day benefit period medicare provides
60 days
234
Apply to each benefit payment.They unit receives to determine the amount that is excluded from taxation
Exclusion ratio
235
236
For this policy the premium is lower during the next few years and then it is increased to a higher constant level
Modified whole life
237
Which annuity settlement arrangement guarantees to pay at least a minimum amount equal to the original investment
Installment refund annuity
238
239
Which of the following options is designed to protect the policy ownership?The policy being danger of lapsing for non payment
Automatic loan premium
240
For which type of insurance is a notice of claim provision
Health insurance
241
A modification provision is for what type of insurance
Life
242
A payment of claims provision is for what type of insurance
Life
243
An assignment is applied to what type of insurance
Life
244
245
What type of annuity payout guarantees and a minimum the entire annuity payout amount
Cash refund
246
When independence is discharged before the scheduled maturity date credit insurance is
Coverage is ended in a refund pay to the insured
247
L 0
248
The principal function of an annuity is too
Liquidate an estate
249
250
Are executive bonuses text deductible to the business
Yes
251
Are buy and sell agreements funded by life insurance tax deductible to the business
No
252
Our Life Insurance policies that reimburse the business for benefits paid under deferred capitation plans.Tax deductible to the business
No
253
Are key person life insurance policies tax deductible to business
No
254
Another name for an entity plan is
Stock redemption plan
255
Two stipulations of limited pay life policy
Must be paid over at least ten years and must be paid up by the age of sixty five
256
Which matures more quickly limited pay policies or whole life policies
Whole life
257
258
Net premium calculation
Mortality minus interest
259
260
261
262
Fix period and fixed amount are types of
Temporary annuities
263
264
Parties to an annuity
Owners
Annuitant
Benefiary
265
Purchased with single premium
Has no accumulation period
Income payments in 12 months
Immediate annuity
266
Bought with single or flexible premium
Has accumulation period
Owners will decide on annuitizaion
Deferred annuity
267
Guarantee income for life
Death stops payment
Large monthly check
Life annuity
268
Income for life
Death before payments equal accumulation money
Lump sum or monthly payment
Life refund annuity
269
Incomefacrors affecting annuity payment
Age
Gender
Length of payment
Interest rate
270
No payment for life
Fixed period fixed amount
Temporary annuity
271
General account
Long term low risk investment
If annuities fixed income payment
Money guaranteed
Fixed annuity
272
Separate account
No guarantee
Owners assume risk
Premium buys accumulation units
Value goes up or down
License state, sec and finra
Variable annuity
273
Fixed annuity
Value is guaranteed by company
Interest earned can go up or down
Interest is tied to stock market index
Not a variable product
Equity indexed annuity
274
Single premium deferred annuity
Interest rate for fixed years
Early surrender has withdrawal penalty
Interest penalty
.market value adjusted annuity
275
4 uses of annuity
Life income
Tax favored savings
Ira funding
Education funds
276
Which annuity is most likely to provide a death benefit if the contract owner dies during the accumulation period
Deferred annuity
277
Penalties assesses against mecs primary affect
Money taken out of policy
278
