Insurance Policy Provisions and Regulations, Exams of Socialization and the Life Course

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Life and Health Insurance ExamFx Complete

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Which is NOT true regarding the needs approach method of determining the value of an individuals life? - Correct Answer Need is predicted using the number of years until the insured's retirement Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending? - Correct Answer Unlimited An insured stops making payments on a loan taken from his cash value policy. What will most likely happen? - Correct Answer The policy will terminate when the loan amount with interest equals or exceeds the cash value Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to designated beneficiary? - Correct Answer Life income with period certain The death benefit in a variable universal life policy... - Correct Answer Depends on the performance of a separate account Violation of unfair discrimination law may result in all of the following penalties EXCEPT - Correct Answer Fines up to $1,000 for each act Which of the following is true regarding elimination periods and the cost of coverage? - Correct Answer The longer the elimination period, the lower the cost of coverage When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy as well as a refund of all the premiums paid. Which rider is attached to the policy? - Correct Answer Return of premium The Affordable Care Act requires all US citizens and legal residents to have qualifying health care coverage. This is known as... - Correct Answer The individual mandate An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit? - Correct Answer If the primary beneficiary predeceases the insured In a replacement situation, all of the following must be considered EXCEPT - Correct Answer Assets

All of the following are true about group disability income insurance EXCEPT - Correct Answer Coverage applies on and off the job What type of insurance would be used for a Return of Premium rider? - Correct Answer Increasing term Which of the following information regarding an insured is NOT included in an investigative Consumer Report, which is requested by an underwriter? - Correct Answer Medical History An employee quits her job where she has a balance of $10,000 in her qualified plan. The balance was paid out directly to the employee in order for her to move the funds to a new account. If she decides to rollover her plan to a Traditional IRA, how much will she receive from the plan administrator and how long does she have to complete the tax-free rollover?

• Correct Answer $8,000, 60 days Which of the following factors determine the amount of each installment paid in a Life Income Option arrangement? - Correct Answer Recipient's life expectancy and amount of principal All of the following are characteristics of a group life insurance plan EXCEPT... - Correct Answer There is a requirement to prove insurability on the part of the participants All of the following are personal uses of life insurance EXCEPT... - Correct Answer Buy-sell agreement The full premium was submitted with the application for the life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective? - Correct Answer As of the application date An insurer devices an intimidation strategy in order to corner a larger portion of the insurance market. Which of the following best describes this practice? - Correct Answer illegal A producer sold an insurance policy. Subsequently, his license was suspended. In this case, how much of the commission will the producer receive? - Correct Answer All Which of the following reports will provide the underwriter with the information about an insurance applicant's credit? - Correct Answer Consumer report An insurer may provide commissions to an agent for the sale of a long-term care policy only if the first year commission in NOT greater than what percentage of the first year premium?
• Correct Answer 50% Guarantee of insurability option in long-term care policies allows the insured to... - Correct Answer Increase benefit levels without providing proof of insurability

Which of the following programs expands individual public assistance programs for people with insufficient income and resources? - Correct Answer Medicaid A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change? - Correct Answer Cost of living rider When a fixed annuity owner pays a monthly annuity premium to the insurance company, where is this money placed? - Correct Answer The insurance company's general account When a producer holding a certificate or a broker's license has a change in his/her residence or business address, he/she must notify the Department of insurance and any company for which the producer holds an appointment within... - Correct Answer 30 days Which of the following types of agent authority is also called "perceived authority"? - Correct Answer Apparent Which provision states that the insurance company must pay Medical Expense claims immediately? - Correct Answer Time of Payment of claims Which benefits would a disability plan most likely pay? - Correct Answer Income lost by the insured's liability to work When transacting business in this state an insurer formed under the laws of another country is known as a/an - Correct Answer Alien insurer All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy? - Correct Answer Lower The term "illustration" in a life insurance policy refers to - Correct Answer A presentation of non-guaranteed elements of a policy Which of the following would NOT be considered an exception to the National Do Not Call List? - Correct Answer Calls based from outside of the US In a survivorship life policy, when does the insurer pay the death benefit? - Correct Answer Upon the last death Which of the following is NOT true about a group annuity? - Correct Answer It can be owned by individual employees Which of the following is TRUE for both equity indexed annuities and fixed annuities? - Correct Answer They have a guaranteed minimum interest rate

An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this? - Correct Answer Unpaid premium Concerning Medicare Part B, which statement is INCORRECT? - Correct Answer It is fully funded by Social Security taxes (FICA) An absolute assignment is a - Correct Answer transfer of all ownership rights in a policy All of the following are requirements for producer license renewal EXCEPT - Correct Answer Renewal examination What is the civil penalty for the first violation of the Pennsylvania Insurance Fraud Prevention Act? - Correct Answer $5, A return of premium term life policy is written as what type of term coverage? - Correct Answer Increasing Which of the following options best depicts how the eligibility of members for group health insurance is determined? - Correct Answer By conditions of employment In a group policy, who is issued a certificate of insurance? - Correct Answer The individual insured All of the following are licensing requirements for a business entity, EXCEPT - Correct Answer Having all employees complete continuing education courses once every 2 years A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as - Correct Answer Critical illness Individuals who itemize deductions can claim deductions for medical expenses not covered by health insurance that exceed what percent of their adjusted gross income? - Correct Answer 10% Which of the following may NOT be included in an insurance company's advertisement? - Correct Answer That its policies are covered by a state Guaranty Association Who effectuates vatical settlement contracts? - Correct Answer Vatical settlement providers Which of the following is true about the premium on the children's rider in a life insurance policy? - Correct Answer It remains the same no matter how many children are added to the policy Life insurance death proceeds are - Correct Answer Generally not taxed as income

All of the following are true regarding the guaranteed insurability rider EXCEPT - Correct Answer This rider is available to all insureds with no additional premium Which of the following persons is required to hold a producer license? - Correct Answer A person who negotiates insurance contracts Which of the following best describes gross annual premium? - Correct Answer Net premium plus expenses When is the earliest a policy may go into effect? - Correct Answer When the application is signed and a check is given to the agent An insurance company wants to obtain the insurance history of an applicant. Which source releases coded information to insurers regarding information included on previous insurance applications? - Correct Answer Medical Information Bureau A life insurance policy does not have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the policy? - Correct Answer The full death benefit In long-term care insurance, what type of care is provided with intermediate care? - Correct Answer Occasional nursing or rehabilitative care Which of the following statements about a suicide clause in a life insurance policy is TRUE? - Correct Answer Suicide is excluded for a specific period of years and covered thereafter After a hearing, if the Commissioner finds that a licensee is in violation of the state insurance laws, the Commissioner can do any of the following EXCEPT - Correct Answer Imprison the licensee Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care? - Correct Answer Attending physician Insurers are required to keep records. When may the Department examine these records?

• Correct Answer At any time Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under a accident and health policy must contain - Correct Answer A statement that is sufficiently clear to identify the insured and the nature of the claim Ina group health policy, a probationary period is intended for people who - Correct Answer Join the group after the effective date An insured is covered under a Medicare policy that provides a list of network healthcare providers that the insured must use to receive coverage. In exchange for this limitation, the

insured is offered a lower premium. Which type of Medicare Policy does the insured own? - Correct Answer Medicare SELECT Which of the following is an example of limited-pay life policy? - Correct Answer Life Paid- up at Age 65 Under a Key Person disability income a policy, premium payments are - Correct Answer made by the business and are not tax-deductible On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of - Correct Answer Misrepresentation During partial withdrawal from a universal life policy which portion will be taxed? - Correct Answer Interest A provision in a life insurance policy that providers for the early payment of some portion of the policy face amount should the insured suffer from a terminal illness or injury is called - Correct Answer Accelerated benefit provision Which is incorrect about MEWAs? - Correct Answer MEWAs are groups of at least 3 employees Which of the following is true regarding a waiver of a surrender charge on an annuity contract? - Correct Answer The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days Which of the following factors determines the amount of each installment paid in a Life income option arrangement? - Correct Answer Recipient's life expectancy and amount of principal Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation? - Correct Answer Human life value approach All of the following are requirements of eligibility for Social Security income benefits EXCEPT - Correct Answer Being age 65 under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to... - Correct Answer the insured which of the following provisions requires that any policy language that is in conflict with the state statutes of the state in which the insured resides is automatically amended to conform with those of the state residence? - Correct Answer Conformity with state status

Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. which coinsurance arrangement would best fit Ray? - Correct Answer 50/ In an optionally renewable policy, the insurer has which of the following options? - Correct Answer Increase premiums An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. which of the following would be true? - Correct Answer the insured was in compliance with the policy requirements regarding claims an insured owns his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim and pays the insured the difference. What provision allows for this? - Correct Answer unpaid premium the provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the... - Correct Answer entire contract clause