Missed Test Questions Flashcards
The reinsurance agreement that automatically accepts all new risks presented by the company seeking or requesting reinsurance from the reinsurer is know as a _______ agreement.
Treaty
The relationship of a person who acts on behalf of a company whereby the person’s actions can bind the company is known as _______
The Law of Agency
A contract that is drafted by an insurer and receives no input or alteration from the insured, is considered a _______
Contract of adhesion
If an applicant or insured discovers errors in their Credit Report, the Fair Credit Reporting Act requires the reporting agency to ______
Provide inaccurate information given out within the previous 2 years
What are Fiduciary Responsibilities?
Anyone acting as an insurance producer or agent for agent for an insurer shall be held responsible in a trust or fiduciary capacity for any money collected or received for the insurer
When the insured is not contractually obligated to do anything other than keep the policy in force
Unilateral Contract
Each of the following choices are true of whole life, except:
A. The policy can be converted into a term life insurance plan at anytime
B. The death benefit and cash values are guaranteed
C. As an insured ages, the premiums remain the same
D. They have nonforfeiture values and options are offered
A. The policy can be converted into a term life insurance plan at anytime
Which of the following policies must be sold by prospectus? Universal Life Variable Whole Life Ordinary Whole Life Equity Indexed Whole Life
Variable Whole Life
A universal life policy has a death benefit of $125,000 and a cash accumulation value of $15,000. Generally, what will happen to the policy if there is a $5,000 partial withdrawal?
The death benefit and cash accumulation will be reduced by the partial withdrawal
The surrender charge schedule for a variable universal life policy generally _____ over time
Decreases
Which Nonforfeiture Option allows the owner to forego the premiums and retain the same face amount until the cash surrender value is exhausted?
Extended Term
The period of time over which distributions of the accumulated balance is made to the annuitant is referred to as the ____ Period
Annuitization Period
Surrender charges typically ______ over time.
Decrease
Which of the following Annuities is generally not backed by the insurer's general account assets? Fixed Market Value Adjustment Indexed Variable
Variable
Buy-Sell agreements are used for all of he following entities, except: Partnership Sole Proprietorship Large Public Corporations Closely held Businesses
Large Public Corporations
How many times can you move funds in an IRA directly from one financial institution to another while still maintaining the assets within an IRA account
As often as you want
The basis of a life insurance policy is ________
Premiums paid less dividends or withdrawals
A SEP uses employer funded _______ accounts
IRA
What must you do to open an IRA
Earn income or be married to a spouse that has earned income
Information about an applicant’s work behavior or character gathered from neighbors or co-workers would be included on an?
Inspection Report
The specified period that must elapse before new coverage is effective for non-accidental losses is known as the ______ period
Probationary period
Reimbursement benefits may be paid directly to the medical providers under which condition?
Assignment of benefits
The ______ alerts insurer home office underwriters of errors, omissions, or misrepresentation made on insurance applications
MIB
which is not correct concerning a Blue Cross and Blue Shield Plan?
A.In most states, they are considered not-for-profit
B. They are fee for service plans
C. Benefits are paid directly to the insured individual
D. They offer both individual and group coverage
C. Benefits are paid directly to the insured individual
Clarice pays a $99 monthly health insurance premium, due on the first day of each month. After paying her premium on April 1, how much of her premium has been earned by the insurance company on April 10.
$33
What provides dental services for an insured?
Endodontist
Prosthodontist
Periodontist
A procedure used by dental insurance carriers to determine the benefit to be paid is known as
Precetification
Medical Expense Policy would continue to cover their unemployed 25-year-old child who is habitually unemployed.
True it provides dependent coverage up to age 26
Benefits are funded by a combination of taxes and premium dollars and coverage is elective
Medicare Part B
How many pints of blood does Medicare Part A cover for inpatient blood transfusions
3 Pints
Managed Health Care attempts to contain cost by controlling the behavior of participants in all of the following ways
Controlled Provider Access
Copayments and/or coinsurance
Preventive Care
Once issued, the application becomes part of the ______, when attached.
Entire Contract
An insured should receive necessary claim forms within _____ days of notice of claim
15
How many employers do you have to have for COBRA to apply?
Applies to employers with 20 or more employees
When a group member terminates employment, he or she has 31 days to purchase an individual policy without proof of insurability.
Conversion Privilege
Who isn’t eligible for group rates?
Groups formed to reduce premiums
COBRA covers participants who have resigned for 36 months following the date of their resignation
False
An insured with an individual LTC policy is deducting premiums he is paying for the plan on his income taxes. Once he begins to receive benefits from this plan what will be the tax consequences on this income?
Not taxable. LTC benefits are usually not subject to federal income tax
All insurers transacting insurance in Hawaii are required to be members of the _______
Association
_______ may require, as a condition to the lending of money or extending credit, that the debtor obtain insurance through a particular insurer or group of insurers, or producer or group of producers.
No person
A person who violates a cease and desist order is not subject to ______
a specified period of imprimsonment
A person may act as producer for an unauthorized insurer if it is a transaction for which a ________ to do business is not required of an insurer.
Certificate of Authority
What is not among the powers and duties of the Commissioner?
Act to protect the best interests of authorized insuers
A producer must report any change in name or address within _____ days
30
Permitting individuals of the same class and equal life expectancy to be charged different rates for life insurance or annuities is an example of what type of unfair trade practice?
Discrimination
Property insurers must have ______ and Health insurers must have ______ in capital and surplus.
$750,000 and $450,000
A nonresident licensee may only be authorized for the line(s) of insurance for which the licensee is ________
Authorized in his/her home state
It is illegal for a producer to give any part of his/her ______ to an insured
Commission
The interest on policy loans for a personal whole life policy is not tax-deductible
True
Required Minimum Distributions must begin from traditional IRAs by April 1st of the year following the year the account owner turns ___.
70 1/2
Defined Benefit plan’s retirement check is usually based on ________
The length of time the employee was with the firms and his/her highest salary
What is the main purpose that IRC section 1035 was enacted?
To allow for continued tax-deferral on any gains in an existing policy when a policy owner moves into a new one
If a non qualified variable annuity owned for 15 years is surrendered, what is the income tax consequence?
Any amount received in excess of its cost basis is taxable as ordinary income
Earnings in a 403(b) are deducted from ____ and grow ________
a teacher’s salary, tax-deferred
Any funds distributed in a MEC are subject to a _______ treatment,
Last-in, first-out tax (LIFO) meaning gains will be taxed before principal
