Insurance Concepts and Terminology, Exams of Nursing

Download Insurance Concepts and Terminology and more Exams Nursing in PDF only on Docsity! MISSOURI LIFE AND HEALTH INSURANCE STATE EXAM 2024/2025 J's Major Medical policy has a $2000 deductible and an 80/20 coinsurance clause. If J is hospitalized and receives a bill for $10,000, j would pay - Precise Answer ✔✔3,600 (2k + 20% of thr remaining bill) Life insurance that covers an insured's whole life with level premiums paid over a limited time is called: - Precise Answer ✔✔Limited Pay Life What is the purpose of the Missouri Life and Health Insurance Guaranty Association? - Precise Answer ✔✔Ensures that claims filed against insolvent insurance companies will be paid M's insurance company denied a reinstatement application for her lapsed 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?? - Precise Answer ✔✔45 days N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase? - Precise Answer ✔✔30 Pay Life V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable? - Precise Answer ✔✔4 months 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: - Precise Answer ✔✔experimental and investigative services Which type of life policy contains a monthly mortality charge as well as self-directed investment choices? - Precise Answer ✔✔Variable Universal Life In order to establish a Health Reimbursement Arrangement (HRA), it MUST: - Precise Answer ✔✔Be established with the employer A term life insurance policy matures: - Precise Answer ✔✔upon the insured's death during the term of the policy Which of the following consists of an offer, acceptance, and consideration? - Precise Answer ✔✔contract On a life insurance policy, who is qualified to change the beneficiary designation? - Precise Answer ✔✔policyowner Which type of policy is considered to be overfunded, as stated by IRS guidelines? - Precise Answer ✔✔Modified Endowment Contract All of these are considered to be a benefit under Social Security, EXCEPT for: - Precise Answer ✔✔Unemployment Chemical dependency coverage is required in which type of policy? - Precise Answer ✔✔Comprehensive Major Medical To be eligible for Social Security disability benefits, an employee must be unable to perform: - Precise Answer ✔✔any occupation A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the: - Precise Answer ✔✔policy loan provision 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? - Precise Answer ✔✔insured's contingent beneficiary What provision in a life insurance policy states that the application is considered part of the contract? - Precise Answer ✔✔Entire Contract Provision What percent of personal life insurance premiums is usually deductible for federal income tax purposes? - Precise Answer ✔✔0% In Missouri, a health insurance policy that is not exempt from state- mandated benefits must cover childhood immunizations and shall not charge any deductible or copayment. The EXCEPTION to this would be - Precise Answer ✔✔HMO's that exclude coverage to subscribers who obtain services by a non-participating provider Which of the following reimburses its insureds for covered medical expenses? - Precise Answer ✔✔Commercial Insurers Under a trustee group life policy, who would be eligible for a certificate of coverage? - Precise Answer ✔✔employee Which of these is NOT relevant when determining the amount of personal life insurance needed? - Precise Answer ✔✔local unemployment rate A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed? - Precise Answer ✔✔company x Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits? - Precise Answer ✔✔5 months Whole Life insurance policies are contractually guaranteed to provide each of the following, EXCEPT: - Precise Answer ✔✔partial withdrawal features beyond a surrender charge period Which Accident and Health policy provision addresses preexisting conditions? - Precise Answer ✔✔time limit on certain defenses The Director of Insurance is authorized - Precise Answer ✔✔to enforce state laws relating to insurance A life insurance policy would be considered a wagering contract WITHOUT: - Precise Answer ✔✔insurable interest Which of the following is NOT allowed in regards to a Medigap (Medicare Supplement) policy? - Precise Answer ✔✔Issuing an additional Medigap policy to ensure no out-of-pocket exposure for the insured 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? - Precise Answer ✔✔Fair Credit Reporting Act When an insurance application is taken by a producer, which of these statements is true? - Precise Answer ✔✔Any changes made on the application require the applicant's initials Any changes made on the application require the applicant's initials - Precise Answer ✔✔Insurance Company Which of these statements regarding health coverage for physically handicapped dependents is FALSE? - Precise Answer ✔✔have been over ten years of age when the handicap was incurred After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? - Precise Answer ✔✔file written proof of loss Information obtained from a phone conversation to the proposed insured can be found in which of these reports? - Precise Answer ✔✔Inspection Report Health insurance plans that cover physical therapy visits may NOT impose a copay that - Precise Answer ✔✔is greater than the copay for primary care office visits All of these statements concerning Settlement Options are true, EXCEPT: - Precise Answer ✔✔Only the Beneficiary may select How are surrender charges deducted in a life policy with a rear-end loaded provision? - Precise Answer ✔✔Deducted when the policy is discontinued Disability policies do NOT normally pay for disabilities arising from which of the following? - Precise Answer ✔✔War Insureds in the same risk classification are being charged different premiums by an insurance company. This insurer is committing the illegal act of - Precise Answer ✔✔Unfair Discrimination The Legal Actions provision of an insurance contract is designed to do all of the following, EXCEPT: - Precise Answer ✔✔Protect the producer An individual has a Major Medical policy with a $5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred? - Precise Answer ✔✔7k (5k + 20% of the remaining bill) All of these insurance products require an agent to have proper FINRA securities registration in order to sell them, EXCEPT for: - Precise Answer ✔✔Modified Whole Life What type of renewability guarantees premium rates and renewability? - Precise Answer ✔✔Non-Cancelable An insurer may exclude pre-existing conditions coverage on a Medicare Supplement policy for up to - Precise Answer ✔✔6 Months 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? - Precise Answer ✔✔Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company The premiums paid by an employer for his employee's group life insurance are usually considered to be: - Precise Answer ✔✔tax deductible to the employer T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this? - Precise Answer ✔✔Life annuity with period certain Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy? - Precise 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 Which unfair trade practice involves making false statements about the financial condition of another insurance company? - Precise Answer ✔✔Defamation Which rider provides coverage for a child under a parent's life insurance policy? - Precise Answer ✔✔Child Term Rider K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? - Precise Answer ✔✔20 k death benefit Which of the following situations does a Critical Illness plan cover? - Precise Answer ✔✔Leukemia What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)? - Precise Answer ✔✔Dread Disease Insurance Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures? - Precise Answer ✔✔Commercial Insurer The suicide provision for life policies would apply to - Precise Answer ✔✔subsequent increases in benefit In a Disability Income policy, which of these clauses acts as a deductible? - Precise Answer ✔✔Elimination Period How many days must the insured wait to take legal action against a health insurer after submitting written proof of loss if the insurer refuses to pay? - Precise Answer ✔✔60 days Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary? - Precise Answer ✔✔Split-Dollar Plan Taking receipt of premiums and holding them for the insurance company is an example of: - Precise Answer ✔✔Fiduciary Responsibility A Business Overhead Expense policy: - Precise Answer ✔✔covers business expenses such as rent and utilities Which of the following Dividend options results in taxable income to the policyowner? - Precise Answer ✔✔accumulation at interest In Missouri, which of the following is considered an Unfair Trade Practice? - Precise Answer ✔✔Coercion What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability? - Precise Answer ✔✔Conversion Which is true concerning a Variable Universal Life policy? - Precise Answer ✔✔Policyowner controls where the investment will go and selects the amount of the premium payment V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable? - Precise Answer ✔✔4 months L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will: - Precise Answer ✔✔adjust the death benefit to a reduced amount Which statement is true regarding a minor beneficiary? - Precise Answer ✔✔Normally, a guardian is required to be appointed in the Beneficiary clause of the contract Which of the following may NOT be issued after the Director of Insurance finds an insurance code violation committed by a licensee? - Precise Answer ✔✔Warrant for arrest What is issued to each employee of an employer health plan? - Precise Answer ✔✔certificate Which of the following is NOT a required provision in a group life policy? - Precise Answer ✔✔Accidental Death and Disbursment A medical care provider which typically delivers health services at its own local medical facility is known as a: - Precise Answer ✔✔HMO (Health Maintenance Organization) The Coordination of Benefits provision: - Precise Answer ✔✔prevents an insured covered by two health plans from making a profit on a covered loss Which of these types of coverage is best described as a short term medical policy? - Precise Answer ✔✔interim coverage Credit life insurance is typically issued with which of the following types of coverage? - Precise Answer ✔✔Decreasing term Which life insurance rider typically appears on a Juvenile life insurance policy? - Precise Answer ✔✔Payor Benefit Rider 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? - Precise Answer ✔✔Revocable S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits? - Precise Answer ✔✔Full benefits are payable under the Master contract An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age? - Precise Answer ✔✔59 1/2 Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? - Precise Answer ✔✔Variable Life Which of these do NOT constitute policy delivery? - Precise Answer ✔✔Policy issued with a rating Medicare Part B does NOT cover: - Precise Answer ✔✔inpatient hospital services When making a recommendation to a consumer to purchase an annuity, the producer must make reasonable efforts to obtain - Precise Answer ✔✔suitability information The part of a life insurance policy guaranteed to be true is called a(n): - Precise Answer ✔✔warranty A primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy. Which of the following will occur when the insured dies? - Precise Answer ✔✔Proceeds will go to the contingent beneficiary Under which circumstance could a child be denied enrollment into a health plan in Missouri? - Precise Answer ✔✔The child is not related to and is not adopted by the plan member Which of these actions should a producer take when submitting an insurance application to an insurer? - Precise Answer ✔✔Inform insurer of relevant information not included on the application Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? - Precise Answer ✔✔Policyowner Which of these is a TRUE statement regarding the regulatory authority of the DIrector? - Precise Answer ✔✔The Director may establish guidelines for continuing education Which Medicare product requires use of specific hospitals and physicians for non-emergency care? - Precise Answer ✔✔Medicare Select P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase? - Precise Answer ✔✔Family Maintenance policy Which mode of payment is NOT used by health insurance policies? - Precise Answer ✔✔single premium All of the following statements about Major Medical benefits are true, EXCEPT: - Precise Answer ✔✔Benefits have no maximum limit Continuing education (CE) providers must report to the Director a licensee's earned credit hours within - Precise Answer ✔✔30 days of course completion Which of these would NOT be an unfair claims practice? - Precise Answer ✔✔Offering payment of approved claims within 30 days after affirming liability An applicant for a nonresident producer license MUST - Precise Answer ✔✔be a producer in good standing in their home state Which type of provider is known for stressing preventative medical care? - Precise Answer ✔✔Health Maintenance Organizations (HMO's) M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year for the first 5 years. At the beginning of the sixth year, the premium will increase to $800 per year but will remain level thereafter. The face amount will remain at $70,000 throughout the life of the policy. The type of policy that M has purchased is: - Precise Answer ✔✔Modified Premium Life A producer must report any personal felony charges within ___ days of a pre-trial hearing. - Precise Answer ✔✔30 days The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is: - Precise Answer ✔✔the cost Health insurance policies in Missouri are REQUIRED to contain coverage for human leukocyte antigen testing for bone marrow transplant - Precise Answer ✔✔with each issued health policy A Health Reimbursement Arrangement MUST be established: - Precise Answer ✔✔by the employer Which of these statements describe a Modified Endowment Contract (MEC)? - Precise Answer ✔✔Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract On January 8, an applicant filled out an application for a life insurance policy but did not include the initial premium. The insurance company approved the application on January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective? - Precise Answer ✔✔January 26 A producer has influenced an existing policyowner to convert an existing whole life policy to Reduced Paid-up insurance. The producer then sells the policyowner a new universal life policy. This transaction is called a(n): - Precise Answer ✔✔replacement Any state-regulated health insurance plan issued in Missouri MUST - Precise Answer ✔✔cover childhood immunization services Which of the following BEST describes how a Preferred Provider Organization (PPO) is less restrictive than a Health Maintenance Organization (HMO)? - Precise Answer ✔✔more physicians to choose from In Missouri, an A&H policy that is paid on a monthly basis requires a grace period of at LEAST - Precise Answer ✔✔10 days Who signs a "Notice Regarding Replacement" form when an application is taken for a new life insurance policy that replaces an existing one? - Precise Answer ✔✔producer and applicant N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take? - Precise Answer ✔✔Claim will be denied 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? - Precise Answer ✔✔The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age What is the consideration given by an insurer in the Consideration clause of a life policy? - Precise Answer ✔✔Promise to pay a death benefit to a named beneficiary When an insured receives chiropractic service, the co-payment may NOT exceed ___ of the total cost of providing the service. - Precise Answer ✔✔50% Which of the following services is NOT covered under a hospitalization expense policy? - Precise Answer ✔✔surgeons fees 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? - Precise Answer ✔✔$0 Which statement is TRUE regarding a group accident & health policy issued to an employer? - Precise Answer ✔✔The employer receives the policy and each employee is issued a certificate An assignment of benefits of a Health Policy: - Precise Answer ✔✔transfers payments to someone other than the policyowner Any changes made on an insurance application requires the initials of whom? - Precise Answer ✔✔Applicant Which of the following statements is CORRECT about an agent who is taking an insurance application? - Precise Answer ✔✔The agent should have the applicant initial any changes made on the application What is considered to be a characteristic of an immediate annuity? - Precise Answer ✔✔Benefit payments start within one payment period of purchase 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? - Precise Answer ✔✔300,000 The difference between group insurance and blanket health policies is: - Precise Answer ✔✔Blanket health policies do not issue certificates A policy of adhesion can only be modified by whom? - Precise Answer ✔✔insurance company Non-occupational disability coverage is designed for: - Precise Answer ✔✔employees who suffer non-work related disabilities, since work- related disabilities are covered by Workers' Compensation Under Missouri law, when one group health plan's contract replaces an existing group health plan with similar benefits, - Precise Answer ✔✔the succeeding carrier shall give credit for the satisfaction of any deductibles or waiting periods satisfied or partially satisfied under the prior carrier's plan What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100? - Precise Answer ✔✔Whole Life Which premium schedule results in the lowest cost to the policyowner? - Precise Answer ✔✔annual Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2? - Precise Answer ✔✔Ordinary income tax and a 10% tax penalty for early withdrawal 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 What type of insurance offers permanent life coverage with premiums that are payable for life? - Precise Answer ✔✔whole life After a life insurance policy has been in force for a MAXIMUM of __ year(s), it becomes incontestable. - Precise Answer ✔✔2 years If an individual has an Accidental Death and Dismemberment policy and dies, an autopsy can be performed in all these situations, EXCEPT: - Precise Answer ✔✔when the state prohibits this by law A licensee must complete ___ hours of continuing education every two years. - Precise Answer ✔✔16 A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value? - Precise Answer ✔✔Life settlement contract What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan? - Precise Answer ✔✔50% Michael the insurance producer is acting in a fiduciary capacity when conducting business with all of these principals EXCEPT - Precise Answer ✔✔the director 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? - Precise Answer ✔✔Guaranteed insurability option rider What kind of special need would a policyowner require with an Adjustable Life insurance policy? - Precise Answer ✔✔flexible premiums Which of the following actions is NOT possible with a Universal Life policy? - Precise Answer ✔✔Premiums may be applied as a credit against income tax S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary? - Precise Answer ✔✔50,000 S is covered by a whole life policy. Which insurance product can cover his children? - Precise Answer ✔✔child term rider Which of the following is considered to be misrepresentation? - Precise Answer ✔✔a producer guaranteeing a policies dividends The Consideration clause of an insurance contract includes: - Precise Answer ✔✔the schedule and amount of premium payments Which of the following types of individual polices does NOT require a policy summary be given? - Precise Answer ✔✔credit life A Renewable Term Policy is renewable at the option of the: - Precise Answer ✔✔insured Health policies that contain coverage for low protein modified food products for treatment of PKU or any inherited disease of amino and organic acids require a coinsurance NOT to exceed ___ of the cost of the formula or food products. - Precise Answer ✔✔50% Jasmine is a salaried employee of an insurance company. Which of the following duties would require her to be licensed as an insurance producer? - Precise Answer ✔✔Soliciting insurance policies Which of these are NOT an example of a Nonforfeiture option? - Precise Answer ✔✔life income What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability? - Precise Answer ✔✔convertible term A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over? - Precise Answer ✔✔Income taxes plus a 10% penalty tax on $30,000