Indiana State Life & Health Exam, Exams of Business Economics

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INDIANA STATE LIFE & HEALTH EXAM Individual disability income policies typical include an elimination period (t/f) - answer- True A producer's license may be denied, suspended, or revoked if the licensee: - answer- is found guilty of misrepresentation in obtaining the license Which of the following actions is NOT possible with a Universal Life policy? - answer- premiums may be applied as a credit against income tax How long is the typical free look period for long term care insurance policies? - answer- 20 days Equity indexed annuities are invested in: - answer- The S&P 500 Group life policies in Indiana are required to contain a conversion privilege that allows for conversion: - answer- to an individual policy for a stated period of time What is a key requirement for accelerated death benefit policy? - answer- Must have a terminal illness to qualify Qualified LTC 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 - answer- 6 An insured must qualify for social security disability income to be accepted for the waiver of premium provision? (t/f) - answer- false What type of annuity has a cash value that based upon the performance of it's underlying investment funs? - answer- Variable What requires insurers to disclose when an applicant's consumer or credit history is being investigated? - answer- 1970 - Fair Credit Reporting Act Under the ACA, consumers must have health insurance as of January 1, 2014 that contains Minimum Essential Coverage (MEC). Individuals who exempt from this law include: - answer- Those who cannot afford or have religious objections A person who is insured within a group contract will be given a: - answer- certificate When must insurable interest exist for a life insurance contract to be valid? - answer- Inception of the contract What kind of special need would a policy owner require with an adjustable life insurance policy? - answer- Flexible premiums The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the - answer- Insuring clause With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period? - answer- Gives the policy owner additional time to pay overdue premiums What type of group insurance plan involves employees sharing the cost? - answer- contributory plan A policy of adhesion can only be modified by whom? - answer- The insurance company An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable? - answer- $2,500 All of the following are considered to be typical characteristics describing the nature of an insurance contract, Except? - answer- Bilateral Insureds in the same risk classification are being charged different premiums by an insurance company. The insurer is committing the illegal act of: - answer- unfair discrimination An insurance company that has qualified and received a Certificate of Authority from the Department of Insurance to sell insurance in this state is considered to be a(n) ________ insurer. - answer- Admitted Which Accident and Health policy provision addresses preexisting conditions? - answer- Time Limit on Certain Defenses What does the ownership clause in a life insurance policy state? - answer- Who the policy owner is and what rights the policy owner is entitles to Insurance policies are considered aleatory contracts because - answer- performance is conditioned upon a future occurrence 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? - answer- Disability Income N purchases an annuity by making payments in an amount no less than $100 quarterly. This describes which of the following annuities? - answer- Flexible Installment Deferred answer- All of the employees must be notified of the cancellation either by the insurance company or through J A life policy loan in Indiana cannot charge a fixed rate of interest higher than ___% - answer- 8 Comprehensive Major Medical policies usually combine: - answer- Major Medical with Basic Hospital/Surgical coverage Which of the following is NOT a situation that involves life insurance policy replacement? - answer- Converting a term policy to a permanent policy with the same insurer A group life insurance policy can be converted to an individual whole life policy under which circumstance? - answer- Employment termination Which of these statements is incorrect regarding the federal income tax treatment of life insurance? - answer- Entire cash surrender value is taxable 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? - answer- Insured's contingent beneficiary The premiums paid by an employer for his employees group life insurance are usually considered to be: - answer- tax-deductible to the employer What does a Certificate of Authority allow? - answer- An insurance company to conduct insurance business in Indiana? What type of insurance company is domiciled in England, but conducts business in Indiana? - answer- Alien Which of the following would be a valid reason for suspending or revoking an insurance producer's license? - answer- The producer has misappropriated money held in a fiduciary capacity If a producer commits an act of coercion or intimidation, how would the producer's insurance company be held responsible for this act? - answer- If the insurer approvers of the act Post-tax dollar contributions are found in: - answer- Roth IRA investments Which Unfair Competition Practice involves a producer suggesting that an insurance policy is like a share of stock? - answer- Misrepresentation During a life insurance sales transitions, which of the following forms must be completed by a producer if the customer has existing life insurance coverage that is being replaced? - answer- Notice regarding replacement of life insurance or annuity How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy? - answer- If the primary beneficiary dies before the insured Which of the following statements regarding a tax sheltered annuity (TSA) is incorrect? - answer- The income from the TSA is received income tax-free Which of the following will happen if a licensed resident insurance producer moves to another state? - answer- Producer's license shall terminate immediately Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? - answer- Life income The Notice of Claims provision requires a policyowner to - answer- notify an insurer of a claim within a specified time T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase? - answer- Ten-Year Endowment At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid? - answer- At the time of the application S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made? - answer- Automatic Policy Loan Which of the following situations does a Critical Illness Plan cover? - answer- Leukemia What type of plan normally include hospice benefits - answer- Managed care plans Indiana's 10-day free-look period for life insurance policies begins on the: - answer- date of delivery Which of these life insurance riders allows the applicant to have excess coverage? - answer- Term rider Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies? - answer- Long-Term Care Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? - answer- Policyowner Insureds in the same risk classification are being charged different premiums by an insurance company. The insurer is committing the illegal act of: - answer- Unfair Discrimination With a Basic Medical Expense policy, what does the hospitalization expense cover? - answer- hospital room and board Insurance companies that are organized in countries outside the United States are referred to as: - answer- Alien What is the initial requirement for an insured to become eligible for benefits under the Waiver of Premium provision? - answer- Insured must be under a physician's care Which of the following best describes a contingent beneficiary? - answer- Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy? - answer- Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company How often must the Commissioner examine each domestic insurance company? - answer- Every 5 years A life insurance policy would be considered a wagering contract without: - answer- Insurable interest What is the purpose of the Indiana Life and Health Insurance Guaranty Association? - answer- Ensures that claims filed against insolvent insurance companies will be paid Which of the following consists on an offer, acceptance, and consideration? - answer- Contract What is Medicare? - answer- a hospital and medical expense insurance program Long-Term Care policies in Indiana may exclude coverage for pre-existing conditions for how many months? - answer- 6 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 - answer- Business Overhead Expense A "reimbursement policy" pays what amount of covered LTC expenses? - answer- Actual covered expenses up to the daily maximum Which of the following statements about a Guaranteed Renewable Health Insurance policy is correct? - answer- Premiums normally increase at time of renewal What year was the McCarran-Ferguson Act enacted? - answer- 1945 The Life & Health Insurance Guaranty Association is: - answer- funded by admitted insurance companies through assessments When must insurable interest be present in order for a life insurance policy to be valid? - answer- When the application is made The _________ must provide an insured with proper disclosure concerning the replacement of a life insurance policy. - answer- Producer A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a - answer- risk retention group Which of the following is not considered rebating? - answer- Sharing commission with an agent licensed in the same line of business the most important factor to consider whether to convert term insurance at the insured's attained age or the insured's original age is: - answer- the cost What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled? - answer- Waiver of Premium rider Which of the following provides funding for the Indiana Life and Health Guaranty Association? - answer- Member company assessments An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age? - answer- 59.5 LTC policies will usually pay for eligible benefits using which of the following methods? - answer- Expense incurred Which of the following statements is correct about the Indiana Life and Health Insurance Guaranty Association? - answer- It protects Indiana insurance policyowners in the event an insurance company becomes insolvent which of these statements is incorrect regarding a Preferred Provider Organization (PPO)? - answer- PPO's are not a type of managed care care systems B owns a while life policy with guaranteed insurability options that allows him to purchase, without evidence of insurability, stated amounts of - answer- additional whole life coverage at specified times One becomes eligible for Social Security disability benefits after having been disabled for how many months? - answer- 5 T is a producer who forgot to renew her license. She may reapply for a license without an examination: - answer- within one year after no renewal Consumers who purchase Health Insurance through a marketplace/exchange: - answer- do not have their health history taken into account Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deductible? - answer- Carryover provision Deductibles are used in health policies to lower - answer- overuse of medical services Which statement regarding the Change of Beneficiary is true? - answer- The policyowner can change the beneficiary The guarantee of insurability option provides a long-term care policyowner the ability to - answer- buy additional coverage at a later date a level premium indicates: - answer- the premium is fixed for the entire duration of the contract Under the Indiana LTC Partnership Program (LTCP), producers are required to have an additional ___ hours of education after they receive their license in order to sell policies under this program. - answer- 15 P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount? - answer- AD&D Which of the following statements is true about most Blue Cross & Blue Shield Organizations? - answer- They are nonprofit organizations T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this? - answer- Renewable Which of these do NOT constitute policy delivery? - answer- Policy issued with a rating An example of an Unfair Claims Settlement Practice would be: - answer- Failing to effectuate prompt, fair, and equitable settlements of a claim How many days is a temporary producer's license valid? - answer- 180 Which of these is considered a statement that is assured to be true in every respect? - answer- Warranty An underwrite determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n): - answer- exclusion for the medical condition P is a producer who is licensed in Indiana, but a resident of Michigan. In Indiana, P is considered to be a(n) ________ producer. - answer- nonresident The conversion provision in a group health insurance policy: - answer- is mandated by the state government According to Indiana law, which party is responsible for determining the appropriateness of a LTC policy presented to a potential applicant? - answer- Producer A licensee must notify the commissioner within ____ days of an address change. - answer- 30 Why would the Commissioner examine the records of an insurance company? - answer- To determine the solvency of the company When a life insurance application is completed, a Policy Summary must be given to the applicant. The Policy Summary must include: - answer- The premium cost for basic coverage applied for A LTC policy sold in Indiana must provide benefits for a minimum of ______ months? - answer- 12 To continue health coverage for a newborn, the policyowner must notify the insurer of birth and provide the first premium payment within _____ days of birth. - answer- 31 A life policy loan in Indiana cannot charge a fixed rate of interest higher than ___%. - answer- 8 A domestic insurance company in Indiana must: - answer- be incorporated and formed in Indiana If a new medicare supplement policy involves the replacement of existing coverage, it must be verified on a question located: - answer- On the application In the event of employment termination, a person covered by a group policy also has the right to convert such coverage to an individual policy within ____ days without proving insurability - answer- 31