Download Louisiana Life, Accident & Health Insurance Exam Practice Questions and Answers and more Exams Insurance law in PDF only on Docsity!
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What is the automatic continuance of insurance coverage referred to as? - Answer: >>renewal Which of these is NOT considered to be a nonforfeiture option in a whole life insurance policy? - Answer: >>Interest only Tom has a home health care benefit and is confined to his home. Which of these benefits is NOT typically covered? - Answer: >>Full-time nursing care What is the purpose for having an accelerated death benefit on a life insurance policy? - Answer: >>It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies? - Answer: >>Payor benefit For policyholders in the same risk classification, it is unlawful to - Answer:
Charge different premiums In order to solicit insurance, an individual MUST achieve all of the following EXCEPT - Answer: >>be at least 21 years of age
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Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive? - Answer: >>Endowment policy The Louisiana Health Plan is best described as - Answer: >>A health insurance plan for individuals who have been denied coverage elsewhere An insured would include the proceeds from his life insurance policy when doing estate planning because - Answer: >>Of possible tax implications & liquidity of the proceeds The cash value accumulation in a life insurance policy - Answer: >>Can be used for loans or later as retirement income Decreasing term insurance is most often used for - Answer: >>Credit or Mortgage insurance When does cash value normally start accruing in whole life polices. - Answer:
7 Years How long does coverage continue on a limited - pay whole life policy - Answer: 100 years
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When the benefits paid from a joint life policy - Answer: >>When the insurer dies If a person owns an adjustable life policy & wants to increase the death benefits - Answer: >>The death benefits can be increased by providing evidence of insurability True Statements about universal life insurance - Answer: >>It can be used to provide coverage over the entire lifetime of the insured A mortality charge is subtracted from each cash value accumulations each month Policy loans affect the amount of inters the is applied to cash valued accumulations The risk management method - Answer: >>STAR What are the four parts of the risk management method? - Answer: >>Sharing Transfer Avoidance Reduction Retention
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Law of large numbers - Answer: >>predicts how many dollars in claims a company will have to pay out based on the past. The larger the group, the more predictable the number Exposure unit - Answer: >>item/property of the person insured ex. 1 economic value of ind. person's life - life insurance ex. 2 # of cars or homes in property and casualty insurance 3 types of insurers - Answer: >>private commercial private noncommercial US government Stock insurers - Answer: >>stockholders who own shares; nonparticipating company because policy holders do not participate in dividends from stock ownership Mutual insurer - Answer: >>ownership rests with policy owner and funds that are not paid out are returned to the policyowners as dividends Fraternal insurers - Answer: >>like a social org; operate under special section of state insurance and receive some income tax advantages
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3 channels of insurance business - Answer: >>federal regulation state regulation self-regulation What are the 7 types of insurers - Answer: >>Stock insurers Mutual insurers Reciprocal insurers Fraternal insurers Lloyds Reinsurers Pretext interview - Answer: >>someone pretends to be someone else to obtain info about another person, pretends to b someone else, misreps the purpose of interview, refuses to properly identify themselves Producer of insurance who is not an agent of an insurer who solicits, negotiates, or produces is... - Answer: >>a broker Corporation/limited liability association that assumes and spreads liability exposure - Answer: >>Risk retention group
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Health coverage issued to members of an association or professional society - Answer: >>Franchise health plans To control costs, medical insurance plans available from commercial insurers and fraternal organizations are likely to provide care through: - Answer: >>An open network When an employer allows an employee to deposit a paycheck into an account before paying income taxes--employee is reimbursed for eligible health care and dependent care expenses - Answer: >>flexible spending Not classified as a service organization - Answer: >>health insurance company A health care plan designed to combine small employers together into a group to purchase medical expense coverage for their employees is called - Answer:
MEWA - multiple employer welfare association Under the laws of most states, how often may a disabled employee receive workers' compensation benefits? - Answer: >>Monthly This type of policy requires that both the cause and the result of an accident be unintentional - Answer: >>A&D
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Regular notices sent to policyowners for payment of their life insurance policy premiums reflect: - Answer: >>gross premium Authorized insurer - Answer: >>Admitted insurer that has qualified and received a Certificate of Authority from the Department of Insurance to transact insurance in the state. Agent has authority through words, actions, or deeds - Answer: >>Apparent authority Authority an agent may have in the transaction part of signing a policy - Answer: >>Implied authority The indemnity policy will pay based on - Answer: >>number of days in the hospital The difference between group and individual medical insurance plans - Answer:
Underwriting What is not needed when writing group life insurance - Answer: >>Medical examinations and employees do not need to be in good health
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Establishing a premium for group based on previous claims experience in group insurance is called what - Answer: >>Experience rating Three equal partners in a business worth $600,000 decide to set up a insured cross-purchase buy-sell agreement. How large a policy would each partner buy to insure the lives of the other partners? - Answer: >>$100,000 for each because when the other dies $200,000 would be covered for the two What does Not need to be known to determine proper amount of insurance protection in needs analysis? - Answer: >>Projected future earnings What needs to be known in human life approach? - Answer: >>Average future earnings according to the number of years the person expects to work until retirement What can life insurance not be used for? - Answer: >>Providing a retirement plan When replacement is involved, to whom must the agent provide the Notice Regarding Replacement of Life Insurance - Answer: >>The applicant If Gus does not start taking payments from his annuity at 59 1/2, what will be the tax penalty be? - Answer: >>10% of the total cash value
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If Joseph wants the annuity that would usually provide the highest annuity payment for the lowest premium, what type of of annuity should he chose? - Answer: >>Life Only If Edward misstates material information about himself on an application and dies within 12 months and the misstatement is exposed, what provision or clause protects the insurance company if it decides not to cover the claim? - Answer:
Incontestability Period Riders do all of the following except: - Answer: >>Explain the terms of the policy Dividends from an insurance policy - Answer: >>Represents the excess premium being returned to the policy owner Reduced paid up policies are the result of - Answer: >>Using Non-forfeiture Options If Harold would like his life insurance policy to also provide benefits to help with the cost if he needs to enter a nursing home while his is still alive, he may consider: - Answer: >>A LTC Rider
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The Aviation Clause would cover Ian if he was - Answer: >>A passenger on a commercial flight Accelerated benefits are benefits that one can receive: - Answer: >>a. While alive. b. Because one is terminally ill c. Because one needs to enter a nursing home d. All of the above Waiver of cost of insurance is a disability rider found on a: - Answer:
Universal Life Policy Suicide is covered by a life policy: - Answer: >>Only after the first two years Backdating is allowed if the person's birthday occurred: - Answer: >>In the last six months Which of the following is a reason for suspension of revocation of a producer's license by the Commissioner? - Answer: >>Failing to pay child support The Commissioner's duties do not include: - Answer: >>Reviewing the financials of a software company
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The question is describing a Long-Term Care Policy. Medicare Supplement is incorrect as it covers skilled nursing care only, and then on a limited basis by number of days. Which statement would be considered inaccurate regarding the underwriting of a group plan? - Answer: >>Contributory plans require that the employer pay the premium with 100% participation. Contributory Plans require both the employee and employer contribute to the premium, and 75% participation is required. Which provision of group health plans is used to determine primary and secondary coverage when covered by more than one plan to help reduce overinsurance? - Answer: >>Coordination of Benefits Coordination of Benefits is the method of determining primary and secondary coverage when an insured is covered by more than one group policy to help reduce overinsurance. A group Medical Expense Policy is terminated. The benefits to a disabled employee are extended for 3 months with Basic Medical Expenses and 12 months for Major Medical Expenses, due to the: - Answer: >>Extension of Benefits
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Since the disability occurred while covered by the terminated policy, benefits are extended for either 3 or 12 months, depending on whether the plan is Basic Medical or Major Medical. Which is not a rating factor for small employer carriers? - Answer: >>They use anticipated claim experience. Small employer carriers utilize actual claim experience, not anticipated claim experience. COBRA is a federal law requiring employers with _____ or more employees to provide the option to continue the employee's existing health coverage for dependents for up to _____ months following qualifying events. - Answer:
20, 36 The question specifies coverage for dependents (36 months), not employee and dependents (18 months). Select from the choices below the best description of a speculative risk? - Answer: >>Involving the possibility of a gain in addition to the uncertainty of loss
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The following are examples of Qualified Retirement Plans except: - Answer:
501c(3) Which of the following is not correct regarding Long Term Care - Answer: >>It provides different benefits for different levels of care Medicare Select is a type of? - Answer: >>Medicare Supplement plan offered by an HMO Which of the following statements is correct regarding Medicare Advantage - Answer: >>It can offer benefits that ate not covered by regular Medicare Which of the following is correct with regards to the hospital insurance Part A plan of Medicare - Answer: >>Insured must satisfy a deductible Which of the following statements is correct about Part B of Medicare - Answer: >>An annual deductible is required All of the following examples of groups that purchase group health insurance except: - Answer: >>MEWA The following are example of limited health plans except: - Answer: >>HMO
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Ally wants a rider that will pay disability that social security will pay for one year, assuming that social security should begin then. What type of rider should she consider? - Answer: >>Additional monthly benefit (AMB) How many QCs are necessary to be fully funded? - Answer: >> 40 If Bill has a type of disability plan that has benefits set at a percentage of income, what type is it? - Answer: >>Employer Group Ally wants to make sure that her benefits for her disability policy keep up with the rate of inflation, what type of rider should she consider - Answer: >>COLA How many QCs are necessary to be deemed partially insured - Answer: >>6 in the last 13 If Jill has a type of disability plan that has benefits set at a flat amount per month, what type is it? - Answer: >>Individual The period before benefits begin is termed as all of the following except: - Answer: >>Pre-benefit period
