Questions of Insurance Terms Flashcards
What is the purpose of STOLI (Stranger-Originated Life Insurance)
The policy is originated primarily or solely to be sold
How does the per capita rule apply to proceeds from life insurance policy
The proceeds are divided equally among living primary beneficiaries
What problem is universal life supposed to fix
Low interest rate during periods of high inflation
Why is rehab worthy of getting federal help under workers’ comp
It reduces insurance losses and regains workers’ dignity
What advantage does the insured get for reinstatements of policy instead of getting a new policy
The original age is used
When must insurable interest occur for property/casualty and life insurance
P/C: at the time of loss
Life insurance: only at the time of application
In order for group life to be eligible for insurance the group must not…
Be gathered for the purpose of insurance only
What defines the eligibility for Long Term Care
Inability to perform 2 activities of daily living
What is covered by a dread disease policy
Illness that doesn’t occur often but are costly
Why is Long Term Care becoming more important
More people care living longer, more people need it
Why is relying solely on employer’s group life insurance generally not good for person’s needs
It’s financially insufficient to cover end of life expenses
What is not a tax qualified retirement plan
Section 529 plan
What is true of the limited pay whole life policy
Coverage continues after the policy is paid up
Which insurance plans are not commonly offered through worksite
Medicare
What is a characteristic of Preferred Provider Organization (PPO)
Prearranged costs for services rendered
What is not a characteristic of variable whole life
There is no guarantee minimum death benefit
Why is accidental death benefit called double indemnity
It provides twice of the face value in the policy for death due to accident
What is true about a point of service plan (POS)
A patients care is coordinated by an in-network primary care physician
What is the most common method to supplement Medicare coverage
Coverage offered by private insurer
What is true for a flexible premium annity
The purchaser has options to vary the amount of each premium payment falling between min and max amount
Why are insurance policies considered conditional contracts
Certain conditions need to be met to be a legal contract
How do warranties and misrepresentation differ
Warranty: guaranteed to be true
Representation: given to best of knowledge
What does coinsurance mean
The insurer and the insured shared expenses over deduction
What are the 4 types of health insurance policies (HDDL)
Hospital/Medical
Disability Income
Dental
Long-Term Care
In Health Savings Accounts are contributions not tax deducted or tax deducted
Tax deducted
Are earnings within Health Savings Accounts not deferred or tax deferred
Tax deferred
What are the 4 requirements of a legal contract
Agreement
Consideration
Competent Parties
Legal Purpose
When is the right to change the policyowner not allowed without permission
When the beneficiary is irrevocable
In Buy/Sell and Key Person disability insurance premiums are what and benefits are what
Premium: Not deducible
Benefits: Tax-free
In Business Overhead insurance premiums are what and benefit are what in reference to taxes
Premiums: Deductible
Benefits: Tax Free
Can IRA funds be invested in Life Insurance, Collectibles, or Hard Assets
No
Can IRA funds be invested in Flexible Premium Annuities, Banks Accounts, Brokerage Accounts or Mutual Funds
Yes
Which part of Medicare covers hospital, skilled nursing, hospice, and home health
Part A
Which part of Medicare covers medicare provided by physicians and other medical services and requires a paid premium and has a 6 month enrollment period
Part B
Which part of Medicare covers healthcare delivers by managed care plans
Part C
Which part of Medicare covers prescription drugs
Part D
What are the 4 parts of Medicare Advantage Plans (Managed Care)
HMO/POS
PPO
Private Fee-for-Service
Medicare Specialty Plans
What are the five uses of personal life insurance
Survivor Protection Mortgage Payoff Estate Creation Liquidity Cash Accumulation
The “Do Not Call” List does not cover which organization types
Calls with established business relationship
calls not given permission for commercial or unsolicited advertisements
Nonprofits
What consists of an application, insurance policy, and any riders
Entire contract
After 2 years from the date of the policy issue, no misstatements except fraud, shall be used to void or deny a claim for loss after this period
Time Limit on Certain Defenses
Are HSA contributions tax deductions? Earnings tax deferred? Distributions for medical expense tax free?
Yes
What are 6 health optional policy provisions (CMOIRC)
- Change of occupation
- Misstatement of Age
- Other Insurance with this Insurance more than one policy, insurer can limit amount of benefits will be paid under all contracts.
- Insurance with other insurers: if insurers has coverage with another insurer providing benefits for the same things, amount paid by both will be prorated
- Relation of earnings to insurance insurer will pay claim and deduct unpaid premium from unpaid premium from claim
- Cancellation on illegal occupation
What are the 4 types of licenses
Producer: works for an insurance company
Business Entity: corporation, association, partnership
Non-Resident: sell in state you are a non-resident in
Temporary: continuing/changing business for 180 day maximum
What are 5 types of beneficiaries
Individuals, Classes, Estates, Trusts, Minors
What are the methods of handling risk
Sharing: 2 or more pay portion of loss
Transfer: insurer pays if loss as premium for loss
Avoidance: eliminating certain risk
Retention: individual pays loss if occurs
Reduction: lessening chance or extent
