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Final Exam-Michigan Life and Health
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What amount will be paid under a policy where the insured misstated his/her age? ✔✔an amount the premium would have purchased at the correct age
the acceptance of a credit life application requires the submission of a certificate of insurance to the insured within_____ days ✔✔30 days
which of these is considered to be a Living benefit option in a life insurance policy ✔✔Accelerated death benefit
loans obtained by a policy owner against the cash value of a life insurance policy ✔✔would not be treated as taxable income
A long term care policy typically provides all of the following levels of care EXCEPT ✔✔acute care
the elimination period under a hospital indemnity plan is ✔✔the specific # of days an insured must wait before becoming eligible to receive benefits for each hospitalization
what is an insurance policy's grace period? ✔✔Period of time after the premium is due but the policy remains in force
How do interest earnings accumulate in a deferred annuity ✔✔On a tax-deferred basis
a licensee who is required to take continuing education Must include how many ethics coursework hours ✔✔ 3
the automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of ✔✔Past due premiums that have not been paid by the end of the grace period
health insurance involves two perils, accident and ______ ✔✔sickness
Who is responsible for assembling the policy forms for insureds ✔✔Insurance carriers
a securities license is required for a life insurance producer to sell ✔✔variable life insurance
field underwriting preformed by the producer involves ✔✔completing the application and collecting initial premium
Kathy pays a monthly premium on her health insurance policy. How long is her grace period? ✔✔10 days
Pierre is covered by his employer's group major medical plan. His employer pays for 75% of the premium and he pays for 25%. How much would a $10,000 benefit be taxable as income under this plan? ✔✔0$
- benefits that fall under a major medical plan are considered to be a reimbursement for a loss, and is not taxable as income
After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? ✔✔file a written proof of loss
Under long term care insurance, which of the following MUST an insurer offer to each policy owner at the time of purchase? ✔✔An inflation protection feature
What is the primary factor that determines the benefits paid under a disability income policy? ✔✔Wages
What is the tax liability for employer contributions in Health Savings Accounts (HSA's)? ✔✔No tax payment needed
-Employer paid contributions to HSA's are tax free to the employee
In the state of MI, properly filed health claims are not timely paid require the insurer to pay simple interest from a date 60 days from satisfactory proof of loss at the rate of? ✔✔12% annum
In MI, legal action can be taken against an insurer for failure to pay HEALTH insurance claims for a period not to exceed ✔✔3 years
Donald is the primary insured of life insurance policy and adds a children's term rider. What is the advantage of adding this rider? ✔✔Can be converted to permanent coverage without evidence of insurability
Variable life insurance and Universal life insurance are very similar. Which of these features are held exclusively by variable universal life insurance? ✔✔Policyowner has the right to select the investment which will provide the greatest return
Consumer privacy regulations permit the release of an insured's financial information when? ✔✔An authorized agency makes a written request to the insurer during an insurance fraud investigation
Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive? ✔✔Endowment Policy
According to the Michigan Insurance Code, which of the following MUST a producer do when replacing a Life Insurance Policy? ✔✔Submit to the replacing insurer a list of all Life Insurance policies or annuity contracts proposed to be replaced
A policy owner suffers an injury the renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision? ✔✔Partial Disability
A pharmacy benefit covers prescription drugs derived from list called a(n) ✔✔Drug Formulary
All of the following are examples of a Business Continuation Plan except ✔✔Deferred Compensation
Which of the following actions MUST be taken by producers ✔✔Pay premiums due to insurers on a timely basis
Rob has a benefit at work which enables him to defer his current receipt of income and have it paid at a later date, when he will probably be in a lower tax bracket. Which benefit fits his description? ✔✔Deferred Compensation Option
What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allow an employee to do? ✔✔In the event of employment termination, group health insurance can be kept if the employee pays the premiums
Distribution from a Health Savings Account (HSA) for qualified medical expenses are ✔✔Tax Free
Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? ✔✔$4,
A change in an insurance application requires ✔✔an initial made by the applicant
An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of
rebating coercion fraud twisting ✔✔fraud
the period in which there are no social security benefits for the surviving spouse is called the ✔✔blackout period
-the blackout period begins when the youngest. child turns 16 and continues until the spouse reaches age 60, at the earliest. if there are no eligible children with the surviving spouse when the breadwinner dies, the blackout period starts immediately
In the state of MI, a licensed producer ✔✔represents the insurer
when an insurance licensee changes his or her address under the Michigan insurance code, who must be notified? ✔✔The commissioner of the department of insurance
the legal action provision in a health contract is limited to no more than __ years ✔✔ 5
Upon receiving a producer complaint, the commissioner may immediately ✔✔issue a cease and desist order
which of the following services MUST be provided by HMO plans ✔✔home health care
a father has a son who is mentally handicapped but not eligible for Medicare. the son is dependent on his father. under which of the following circumstances can the son remain on the fathers coverage after the age of 26. ✔✔with written proof of disability and dependency
what is the automatic continuance of insurance coverage referred to as? ✔✔renewal
Major Medical insurance will typically cover medical expenses that result from ✔✔a negative reaction to prescribed medication
What is considered to be the primary reason for buying life insurance ✔✔provide death benefits
to qualify for a resident producer license in the state of MI, an individual ✔✔must complete the requires pre-licensing education within 12 months of licensing application
what is issued to each employer health plan ✔✔certificate
which of the following decision would a Health Savings Account owner NOT be able to make? ✔✔the amount contributed by the employee
Group health plans may deny participation based upon the ✔✔members part time employment status
-full time employees are typically eligible
Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Matt ✔✔dies instantly from a car accident
ABC insurance agency is entering each applicant who purchases insurance through their agency into a drawing to win a free trip. this is an unlawful insurance practice known as ✔✔illegal inducement
For what purpose is a life insurance application backdates ✔✔to reduce the premium
An error was made on Mary's life insurance application. Which of the following areas are errors commonly made on applications for which the incontestable clause does NOT apply? ✔✔Age
Dorian exercised a nonforfeiture option by using his life policy's cash value to purchase an extended term insurance option. When the term insurance expires, ✔✔the protection ends
what activity does NOT require an insurance producer's license ✔✔underwriting
When an insured has a major medical plan with first dollar coverage, how does this impact the benefits paid ✔✔No deducible payment is required
Key Person Disability insurance pays benefits to the ✔✔employer
In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST ✔✔provide evidence of insurability to the insurer
Bob and Tom start a business. Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12 months later. The policies continue in force with no change. Both partners are still married at the time of Bob's death. In this situation, who will receive Bob's policy proceeds? ✔✔Tom
if an employee contributes 50% toward the disability plan premium provided by an employer, what would be considered the taxable income of a $1,000 monthly disability benefit ✔✔$
A rider that assures premiums will be paid on a juvenile policy until the child reaches a specific age is called ✔✔Payout rider
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? ✔✔Life income
An example of a presumptive disability would be ✔✔deafness
in MI, legal action can be taken against an insurer for failure to pay LIFE insurance claims for a period not to exceed ✔✔6 years
Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental? ✔✔accidental bodily injury provision
Providing incorrect, misleading, incomplete, or materially untrue information in the license application is ✔✔misrepresentation
All of these are characteristics of a major medical expense policy EXCEPT ✔✔Elimination Periods
When determining the exact cause of death from an accident, which of the following actions by the insurer takes precedence? ✔✔Autopsy
In order to save on premiums, a Life Insurance policy can legally be backdated up to ✔✔ 6 months
What will the beneficiary if an annuitant dies during the accumulation period? ✔✔The greater of the accumulated cash value or the total premium paid
The typical long-term care insurance is designed to provide a minimum of __ year(s) of coverage ✔✔Juan
When calculating the amount of life insurance needed for an income earner, what has to be determined when using the Needs Approach? ✔✔The family's financial objectives if the income earner were to die or become disabled
-When using the Needs Approach to determine the amount fo life insurance needed for the income earner, it is necessary to determine the family's financial objectives in the event of death or disability of the income earner
Which of these statements about Medicaid is CORRECT ✔✔Funded by federal, state and local taxes
Susan is insured through her Group Health Insurance plan and changed her coverage to an individual plan with the same insurer after her employment was terminated. This change is called a(n) ✔✔Conversion
The unfair trade practice of using threat or force to restrict fair trade in the transaction of insurance is called ✔✔Intimidation
James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount? ✔✔The death benefit paid will be what the premium would have purchased at the correct age
Which of the following individuals is REQUIRED to be licensed as an insurance counselor in the State of Michigan? ✔✔A person providing insurance advice to a person or business for a fee
