Florida 240 License 2024-2025. Questions & Correct Verified Answers. Graded A, Exams of Insurance law

Download Florida 240 License 2024-2025. Questions & Correct Verified Answers. Graded A and more Exams Insurance law in PDF only on Docsity!

Florida 240 License 2024-2025. Questions &

Correct Verified Answers. Graded A

A "reimbursement policy" pays what amount of covered Long-Term Care expenses? - ANSActual covered expenses up to the daily maximum A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary? - ANSHer group health plan A Business Disability Buyout plan policy is designed: - ANSto pay benefits to the Corporation or other shareholders A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled? - ANSUtilities and office rent A Business Overhead Expense policy: - ANScovers business expenses such as rent and utilities A CEO's personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant? - ANSDisability income A characteristic of Preferred Provider Organizations (PPOs) would be: - ANSDiscounted fees for the patient

A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered, EXCEPT for:

• ANSexperimental and investigative services A disability elimination period is best described as a - ANStime deductible A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of the application. How will the insurer handle this claim? - ANSClaim will be paid and coverage will remain in force A Disability Income policyowner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a five-month period. The insurer may cover the second disability without a new elimination period under the: - ANSRecurrent Disability provision A group plan was recently terminated. In Florida, how many days are covered individuals guaranteed coverage after a group plan's termination? - ANS31 days A group-owned insurance company that is formed to assume and spread the liability ricks of its members is known as a: - ANSRisk retention group A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a: - ANSrisk retention group A Health Reimbursement Arrangement MUST be established: - ANSby the employer

A Hospital/Surgical Expense policy was purchased for a family of four in March of

2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013? - ANS$1, A life insurance arrangement which circumvents insurable interest statutes is called: - ANSInvestor-Originated Life Insurance A life insurance policy would be considered a wagering contract WITHOUT: - ANSinsurable interest A major medical policy typically: - ANSprovides benefits for reasonable and necessary medical expenses, subject to policy limits A medical care provider which typically delivers health services at its own local medical facility is known as a - ANSHealth maintenance organization (HMOs) A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as: - ANSA fraternal benefit society A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow? - ANSGuaranteed Insurability Option rider

A policy of adhesion can only be modified by whom? - ANSinsurance company A policy of adhesion can only be modified by whom? - ANSinsurance company A policy owner would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation would fulfill this need? - ANSirrevocable A policyowner's rights are limited under which beneficiary designation? - ANSirrevocable A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take? - ANSSend a notice to the MIB that the applicant was declined A prospective insured completes and signs an application for health insurance but intentionally conceals information about a pre-existing heart condition. The company issues the policy. Two months later, the insured suffers a heart attack and submits a claim. While processing the claim, the company discovers the pre- existing condition. In this situation, the company will - ANScontinue coverage but exclude the heart condition Accidental Death coverage is provided to commercial airline passengers in which of he following types of policies? - ANSBlanket Accident policy

According to Florida Law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy? - ANSThe premiums for the handicapped child are not paid According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid? - ANS According to the Time Limit of Certain Defenses provision in an Individual Health Insurance Policy, non fraudulent misstatements first become incontestable: - ANSTwo years from the date of the policy was issued According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options? - ANSmonthly After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? - ANSFile written proof of loss Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take? - ANSReturn to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company All of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT: - ANSBilateral

All of the following are limited benefit plans, EXCEPT: - ANSLife insurance policies All of the following statements about Major Medical benefits are true, EXCEPT: - ANSBenefits have no maximum limit All of the following statements regarding group health insurance is true, EXCEPT: - ANSAn individual policy is given to each member All of these are considered sources of underwriting information about an applicant EXCEPT - ANSRating Services All students attending a large university could be covered by - ANSa blanket policy An accident policy will most likely pay a benefit for a(n) - ANSoff-the-job accident An agent selling Medicare Supplement policies must provide every applicant with a(n) - ANSSuitability form An agent takes an individual Disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to - ANSdetermine if the applicant is an acceptable risk by completing standard underwriting procedures An agent who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out has committed - ANS"twisting".

Twisting is knowingly making misleading statements that would cause an insured to lapse, assign, or terminate an insurance policy in order to switch companies. An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the: - ANSApplicant's physician An assignment of benefits of a Health Policy - ANStransfers payments to someone other than the policyowner An incomplete health insurance application submitted to an insurer will result in which of these actions? - ANSapplication will be returned to the writing procedure An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT - ANSspouse's occupation An individual has a Major Medical policy with a $5,000 deductible and an 80/ Coinsurance clause. How much will the INSURED have to pay if a total of $15, in covered medical expenses are incurred? - ANS$7, An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the: - ANSFair Credit Reporting Act An insurance company may NOT reject a prospective insured's insurance application on the basis of which of the following factors? - ANSGender An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the: - ANSinsurer dates the policy

An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet? - ANSConsideration clause An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses? - ANSLoss of eyesight due to an accidental injury An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses? - ANS$3, An insured covered by AD&D insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary? - ANSProceeds will go to the contingent beneficiary An insured must notify an insurer of a medical claim within how many days after an accident? - ANS An insured owns an individual Disability Income policy with a 30-day Elimination Period for sickness and accidents and a monthly indemnity benefit of $500. If the insured is disabled for 3 1/2 months, what is the MAXIMUM amount he would receive for an approved claim? - ANS$1,

An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision? - ANS31 days An insurer must provide an insured with claim forms within __ days after receiving notice of a loss. - ANS An insurer receives proof of loss for an acceptable medical expense claim under an Individual Health Insurance Policy. Under the Time of Payment of Claims provision, the insurer MUST pay the benefits - ANSimmediately An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n) - ANSexclusion for the medical condition Any changes made on an insurance application requires the initials of whom? - ANSapplicant At what point does an informal contract become binding? - ANSWhen one party makes an offer and the other party accepts that offer At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? - ANSUpon completion of the application B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what will the policy pay B's beneficiary? - ANS$300,

B is a teacher who was injured in a car accident and cannot work. She is now receiving monthly benefits as a result of this accident. Which type of policy does B have? - ANSDisability Income Basic Hospital and Surgical policy benefits are: - ANSlower than the actual expenses incurred Basic Medical Expense insurance: - ANShas lower benefit limits than Major Medical insurance Before a health insurance policy is issued, which of these components of the contract is required? - ANSApplicant's signature on application Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this? - ANSGuaranteed insurability rider C was injured while deep sea diving and requires a hospital stay. C has a Major Medical policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000? - ANS$ Comprehensive Major Medical policies usually combine: - ANSMajor Medical with Basic Hospital/Surgical coverage

Consumer reports requested by an underwriter during the application process of a health insurance policy can be used to determine: - ANSprobability of making timely premium payments coordination of benefits provision - ANSprevents an insured covered by two health plans from making a profit on a covered loss D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits? - ANSResidual Benefit clause Deductibles are used in health policies to lower: - ANSoveruse of medical services Disability policies do NOT normally pay for disabilities arising from which of the following? - ANSwar During the course of an insurance transaction, if an agent makes a false or incomplete statement, he/she could be found guilty of: - ANSMisrepresentation E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? - ANSIn this situation, the proceeds from E's life insurance policy will go to F. Florida requires that coverage for newborns begins "from the moment of birth" and continues for - ANS18 months

For which of the following expenses does a Basic Hospital policy pay? - ANShospital room and board From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant? - ANSFair Credit Reporting Act G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is - ANSBusiness Overhead Expense G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is - ANSBusiness Overhead Expense G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills? - ANSinsured Group/voluntary long-term care policy premiums are typically deducted from the employee's income and - ANSare less costly as compared to individual long term care coverage Health insurance benefits NOT covered due to an act of war are: - ANSexcluded by the insurer in the contract provisions

Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for: - ANShealth information How does group insurance differ from individual insurance? - ANSPremiums are lower How long is the typical free look period for Long Term care insurance policies? - ANS30 days How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy? - ANSIf the primary beneficiary dies before the insured If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of? - ANSinsured If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses? - ANSMedicare Supplement If an individual has an Accidental Death and Dismemberment policy and dies, an autopsy can be performed in all these situations, EXCEPT: - ANSWhen the state prohibits this by law If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best desribes this policy is called - ANSnoncancellable

If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act? - ANSInsured's contingent beneficiary In a Disability Income policy, which of these clauses acts as a deductible? - ANSElimination period In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this? - ANSunilateral In Florida, an insurer licensed to conduct business in Florida, but domiciled in New Jersey, is called a(n) - ANSforeign company In Florida, which of the following is considered an Unfair Trade Practice? - ANSCoercion Coercion is considered an unfair trade practice under Florida law. In Florida, which of the following practitioners normally do NOT receive payment from health insurance policies? *Optometrists *Pediatricians *Dentists Naturopaths - ANSNaturopaths

(Health insurance policies in Florida must cover payment to all of these practitioners EXCEPT naturopaths.) In health insurance policies, a waiver of Premium provision keeps the coverage in force without premium payments: - ANSAfter an insured has become totally disabled as defined in the policy In Major Medical Expense policies, what is the intent of a Stop Loss provision? - ANSLimits an insured's out-of-pocket medical expenses In order for a domestic, foreign, or alien insurance company to conduct business, it must be authorized by whom? - ANSThe state where they are conducting business In order to establish a Health Reimbursement Arrangement (HRA), it MUST - ANSbe established by the employer In regards to representations or warranties, which of these statements is TRUE? - ANSIf material to the risk, false representations will void a policy Information obtained from a phone conversation to the proposed insured can be found in which of these reports? - ANSinspection report Insurance contracts are known as _____ because certain future conditions or acts must occur before any claims can be paid. - ANSconditional Insurance policies are considered aleatory contracts because: - ANSperformance is conditioned upon a future occurrence

Insurance policies are offered on a "take it or leave it" basis, which make them: - ANSContracts of Adhesion J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this? - ANSNonoccupational coverage J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy? - ANS$25, J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a preset price. What type of plan does J belong to? - ANShealth maintenance organization J purchased a Disability Income Policy that ONLY J can terminate and on which the rates will never increase above those illustrated in the policy. Which of the following types of policies did J purchase? - ANSNoncancelable J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries sustained in an accident. J's age as stated on the application five years ago was found to be understated by ten years. Which of the following actions will the insurance company take? - ANSThe insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and receives a bill for $10,000, J would pay: - ANS$3,

K applies for a health insurance policy on herself and submits the initial premium with the application. She is given a receipt by the producer stating that coverage begins immediately if the application is approved. What kind of receipt was used?

• ANSconditional K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income? - ANSDisability Income K completes an application for a disability policy but does not pay the initial premium. The company approves the policy standard and the agent delivers the policy. K then pays her initial premium 3 days later. At what point does K's policy take effect? - ANSDate the initial premium is collected K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation? - ANSReinstatement K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered - ANSGuaranteed renewable K has an Accidental Death and Dismemberment (AD&D) insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? - ANSdaughter K is the insured and P is the sole beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy. Both are involved in a fatal accident

where K dies before P. Under the Common Disaster provision, which of these statements is true? - ANSProceeds will be paid to P's estate Life and health insurance policies are: - ANSunilateral contracts Long Term Care policies will usually pay for eligible benefits using which of the following methods? - ANSExpense incurred M applies for a health insurance policy and pays the initial premium. When the agent completes the application, a conditional receipt is left with the applicant. The insurance company's underwriting department request's M's medical records and determines that M has had asthma for many years. All of the following are probable underwriting outcomes, EXCEPT: - ANSChanging the policy's provisions M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate? - ANSearned, but unpaid benefits M completes an application for health insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT - ANSfree-look period has expired M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim? - ANS$1,

M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for? - ANSDetermined by the terms of the policy M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son? - ANSRevocable M's insurance company denied a reinstatement application for her lapses health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?

• ANS45 days Major Medical policies typically: - ANScontain a deductible and coinsurance Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is - ANSBusiness Overhead Expense Medicaid was designed to assist individuals who are - ANSbelow a specific income limit Medicare is intended for all of the following groups EXCEPT - ANSThose enrolled as a full-time student Medicare Part A and Part B do NOT pay for - ANSDental work

Medicare Part B does NOT cover - ANSinpatient hospital services Medicare Part C is: - ANSAvailable to those who are enrolled in Medicare Part A and Part B N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as - ANScoinsurance N is covered under an individual Disability policy with a 30-day Elimination period and a monthly benefit of $500. N is totally disabled for 3 1/2 months. N's total benefit received on this claim is - ANS$1, Non-occupational disability coverage is designed for: - ANSemployees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation Nonprofit life insurance providers that are covered by a special section in the Florida insurance code are called - ANSFraternal life insurance organizations Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies? - ANSlong term care On an Accidental Death and Dismemberment (AD&D) insurance policy, who is qualified to change the beneficiary designation? - ANSPolicyowner P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the

contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to - ANSP only P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim? - ANSClaim will be denied P is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period? - ANSSign an enrollment card P is a producer who notices 5 questions on a life application were not answered. What actions should P take? - ANSSet up a meeting with the applicant to answer the remaining questions P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA laws, which of the following statements is TRUE? - ANSShe does NOT need to provide evidence of insurability P is self-employed and owns an Individual Disability Income policy. He becomes totally disabled on June 1 and receives $2,000 a month for the next 10 months. How much of this income is subject to federal income tax? - ANS$0 P received Disability income benefits for 3 months then returns to work. She is able to work one month before her condition returns, leaving her disabled once again. What would the insurance company most likely regard this second period of disability as? - ANSRecurrent Disability

Periodic health claim payments MUST be made at least - ANSmonthly Pre-hospitalization authorization is considered an example of - ANSmanaged care Q is hospitalized for 3 days and receives a bill for $10,100. Q has a Major Medical policy with a $100 deductible and 80/20 coinsurance. How much will Q be responsible for paying on this claim? - ANS$2,100 Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features? - ANSAleatory Qualified Long-Term Care policies may take into consideration an applicant's pre- existing conditions for a maximum of not more than __ month(s) prior to the effective date of coverage. - ANS6 R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity? - ANSResidual disability S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company did not respond to the claim. S can take legal action against the insurer beginning - ANSNovember 1 S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving

spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations? - ANS36 S takes out a health insurance policy which contains a provision that states that the agent does not have the authority to change the policy or waive any of its provisions. Which health policy provision is this? - ANSEntire Contract S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a - ANSHigh Deductible Health Plan Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called - ANSrepresentations Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? - ANSLegal Purpose (Insurable Interest) T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? - ANS$0 T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called - ANSTime Limit on Certain Defenses

T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect? - ANSLess than $5,000 per month benefit regardless of the cause T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary? - ANSRequest of the change will be refused T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. When T submits a claim, his employer's plan is considered what type of carrier under the Model Group Coordination of Benefits provision? - ANSPrimary carrier T is receiving $3,000/month from a Disability Income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable? - ANSBenefits are taxable to T. (When a disability income insurance plan is paid for entirely by the employer, the premiums are deductible to the employer. The benefits, in turn, are taxable to the recipient.) T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take? - ANSIncrease her policy's coverage amount T was insured under an individual Disability Income policy and was severely burned in a fire. As a result, T became totally disabled. The insurer began making monthly benefit payments, but later discovered that the fire was set by T in what

was described as arson. What actions will the insurer take? - ANSThe insurer will rescind the policy, deny the claim, and recover all payments made T was treated for an ailment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterwards.How will the insurer likely consider this condition? - ANSInsurer will likely treat as a pre-existing condition which may not be covered for one year Taking receipt of premiums and holding them for the insurance company is an example of - ANSfiduciary responsibility The benefits under a Disability Buy-Out policy are - ANSpayable to the company or another shareholder The clause identifying which losses resulting from an accident or sickness are insured by the policy is called the - ANSInsuring clause The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the - ANSInsuring clause The Consideration clause in a life insurance contract contains what pertinent information? - ANSThe schedule and amount of premium payments The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to: - ANScontinue group health benefits