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Pa Life, Accident, and Health Insurance > Questions of Insurance Terms > Flashcards

Questions of Insurance Terms Flashcards

1
Q

What is the purpose of STOLI (Stranger-Originated Life Insurance)

A

The policy is originated primarily or solely to be sold

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2
Q

How does the per capita rule apply to proceeds from life insurance policy

A

The proceeds are divided equally among living primary beneficiaries

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3
Q

What problem is universal life supposed to fix

A

Low interest rate during periods of high inflation

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4
Q

Why is rehab worthy of getting federal help under workers’ comp

A

It reduces insurance losses and regains workers’ dignity

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5
Q

What advantage does the insured get for reinstatements of policy instead of getting a new policy

A

The original age is used

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6
Q

When must insurable interest occur for property/casualty and life insurance

A

P/C: at the time of loss

Life insurance: only at the time of application

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7
Q

In order for group life to be eligible for insurance the group must not…

A

Be gathered for the purpose of insurance only

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8
Q

What defines the eligibility for Long Term Care

A

Inability to perform 2 activities of daily living

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9
Q

What is covered by a dread disease policy

A

Illness that doesn’t occur often but are costly

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10
Q

Why is Long Term Care becoming more important

A

More people care living longer, more people need it

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11
Q

Why is relying solely on employer’s group life insurance generally not good for person’s needs

A

It’s financially insufficient to cover end of life expenses

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12
Q

What is not a tax qualified retirement plan

A

Section 529 plan

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13
Q

What is true of the limited pay whole life policy

A

Coverage continues after the policy is paid up

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14
Q

Which insurance plans are not commonly offered through worksite

A

Medicare

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15
Q

What is a characteristic of Preferred Provider Organization (PPO)

A

Prearranged costs for services rendered

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16
Q

What is not a characteristic of variable whole life

A

There is no guarantee minimum death benefit

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17
Q

Why is accidental death benefit called double indemnity

A

It provides twice of the face value in the policy for death due to accident

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18
Q

What is true about a point of service plan (POS)

A

A patients care is coordinated by an in-network primary care physician

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19
Q

What is the most common method to supplement Medicare coverage

A

Coverage offered by private insurer

20
Q

What is true for a flexible premium annity

A

The purchaser has options to vary the amount of each premium payment falling between min and max amount

21
Q

Why are insurance policies considered conditional contracts

A

Certain conditions need to be met to be a legal contract

22
Q

How do warranties and misrepresentation differ

A

Warranty: guaranteed to be true
Representation: given to best of knowledge

23
Q

What does coinsurance mean

A

The insurer and the insured shared expenses over deduction

24
Q

What are the 4 types of health insurance policies (HDDL)

A

Hospital/Medical
Disability Income
Dental
Long-Term Care

25
Q

In Health Savings Accounts are contributions not tax deducted or tax deducted

A

Tax deducted

26
Q

Are earnings within Health Savings Accounts not deferred or tax deferred

A

Tax deferred

27
Q

What are the 4 requirements of a legal contract

A

Agreement
Consideration
Competent Parties
Legal Purpose

28
Q

When is the right to change the policyowner not allowed without permission

A

When the beneficiary is irrevocable

29
Q

In Buy/Sell and Key Person disability insurance premiums are what and benefits are what

A

Premium: Not deducible
Benefits: Tax-free

30
Q

In Business Overhead insurance premiums are what and benefit are what in reference to taxes

A

Premiums: Deductible
Benefits: Tax Free

31
Q

Can IRA funds be invested in Life Insurance, Collectibles, or Hard Assets

A

No

32
Q

Can IRA funds be invested in Flexible Premium Annuities, Banks Accounts, Brokerage Accounts or Mutual Funds

A

Yes

33
Q

Which part of Medicare covers hospital, skilled nursing, hospice, and home health

A

Part A

34
Q

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

A

Part B

35
Q

Which part of Medicare covers healthcare delivers by managed care plans

A

Part C

36
Q

Which part of Medicare covers prescription drugs

A

Part D

37
Q

What are the 4 parts of Medicare Advantage Plans (Managed Care)

A

HMO/POS
PPO
Private Fee-for-Service
Medicare Specialty Plans

38
Q

What are the five uses of personal life insurance

A 
Survivor Protection
Mortgage Payoff
Estate Creation
Liquidity
Cash Accumulation
39
Q

The “Do Not Call” List does not cover which organization types

A

Calls with established business relationship
calls not given permission for commercial or unsolicited advertisements
Nonprofits

40
Q

What consists of an application, insurance policy, and any riders

A

Entire contract

41
Q

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

A

Time Limit on Certain Defenses

42
Q

Are HSA contributions tax deductions? Earnings tax deferred? Distributions for medical expense tax free?

A

Yes

43
Q

What are 6 health optional policy provisions (CMOIRC)

A
  1. Change of occupation
  2. Misstatement of Age
  3. Other Insurance with this Insurance more than one policy, insurer can limit amount of benefits will be paid under all contracts.
  4. Insurance with other insurers: if insurers has coverage with another insurer providing benefits for the same things, amount paid by both will be prorated
  5. Relation of earnings to insurance insurer will pay claim and deduct unpaid premium from unpaid premium from claim
  6. Cancellation on illegal occupation
44
Q

What are the 4 types of licenses

A

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

45
Q

What are 5 types of beneficiaries

A

Individuals, Classes, Estates, Trusts, Minors

46
Q

What are the methods of handling risk

A

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

Pa Life, Accident, and Health Insurance (4 decks)

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