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Mississippi Life and Health Final Exam
TEST
What kind of life insurance product covers children under their parent's policy? Family Maintenance rider Term rider Family Income rider Payor benefit - answer Term Rider Under a trustee group life policy, who would be eligible for a certificate of coverage? Corporation Employee Employer Labor union - answer employee A producer must report to the Commissioner of Insurance any administrative action or criminal charges taken against the producer within __ days of the final disposition of the matter. 10 15 20 30 - answer 30 The return of all or part of the commission to the insured by an insurance producer as an inducement to purchase the insurance is known as twisting redlining rebating misrepresentation - answer rebating Insurance producer licenses normally must be renewed every six months one year two years
three years - answer two years Which of the following phrases refers to the fees charged by a healthcare professional? Deductible Coinsurance Usual, customary, and reasonable expenses Hospital expense - answer Usual, customary, and reasonable expenses The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n) closed panel open panel co-op panel capitation panel - answer closed panel An accident policy will most likely pay a benefit for a(n) self-inflicted injury critical illness on-the-job accident off-the-job accident - answer off-the-job accident 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? $100, $200, $300, $400,000 - answer $300, An insurance company that replaces existing insurance must provide a copy of which of the following documents to the existing insurance company? The new policy The premium and interest figures for the proposed policy A policy summary The Notice Regarding Proposed Replacement of Life Insurance or Annuity - answer a policy summary An insurance company formed under the laws of Canada would be known in Mississippi as a domestic company
Annual - answer annual 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 the cost the health of the insured the amount of coverage being converted who will be beneficiary - answer the cost The Long-Term Care cost disclosure information MUST appear in bold print on the cover page of which of the following materials? Policy application Declaration page Outline of coverage Rescission reporting form - answer outline of coverage Which of the following BEST describes a short-term medical expense policy? Conditionally renewable Noncancellable Guaranteed renewable Nonrenewable - answer nonrenewable When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n) elimination exclusion limitation exception - answer exclusion All of these statements concerning Settlement Options are true EXCEPT -Increased proceeds can be provided through accumulation of interest -Rapid depletion of proceeds can be avoided -Proceeds can be administered by the insurance company -Only the beneficiary may select - answer only the beneficiary may select Before holding a hearing that may lead to suspension or revocation of a producer's license, the Commissioner of Insurance MUST give oral notice to the producer written notice to the producer oral notice to the producer's insurance company
written notice to the producer's insurance company - answer written notice to the producer How does an indexed annuity differ from a fixed annuity? -Fixed annuity owners receive credited interest tied to the fluctuations of the linked index -Indexed annuity owners receive credited interest tied to the fluctuations of the linked index -Fixed annuity owners have a separate investment account -Indexed annuity owners receive annual dividends - answer Indexed annuity owners receive credited interest tied to the fluctuations of the linked index The PRIMARY purpose of the life insurance replacement regulation is to protect the provisions of policies interests of policyowners commissions of producers assets of insurance companies - answer interests of policy owners In a Life insurance contract, an insurance company's promise to pay stated benefits is called the Insuring clause Consideration clause Entire Contract Owner's rights - answer insuring clause If an annuity is terminated prior to beginning of the income payment period, the contract owner receives No refund of money The contract surrender value at that time All premiums paid up to the date of termination Reimbursement of all expenses deducted from the contract value - answer the contract surrender value at that time The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the Insuring clause Contestable clause Consideration clause Free-look provision - answer insuring clause What is being delivered during a policy delivery?
An investment Modified Endowment Contract (MEC) Endowment - answer Modified Endowment Contract (MEC) S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product would S be advised to purchase? Equity index insurance Endowment Graded whole life policy Return of premium policy - answer equity index insurance Which type of life policy contains a monthly mortality charge as well as self-directed investment choices? Joint Life Adjustable Life Variable Universal Life Universal Life - answer variable universal life A producer may share commissions with which of the following individuals? An unlicensed employee working for the same insurance agency A licensed producer A real estate producer An insured - answer a licensed producer Which statement about a whole life policy is correct? Beneficiary may be changed only with the consent of the premium payor Death benefit can usually be adjusted Cash value may be borrowed against Premiums are flexible - answer cash value may be borrowed against Which of these statements concerning an individual Disability Income policy is TRUE? Premiums are normally tax-deductible Age of the insured determines the amount of the benefits Normally includes an Elimination period Benefits are normally taxable - answer normally includes an Elimination period Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan? Revocable assignment
Beneficiary change Irrevocable assignment Collateral assignment - answer collateral assignment Who is NOT required to sign a life insurance application? Adult insured Policyowner Agent Beneficiary - answer beneficiary 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 immediately within a maximum of three months within a reasonable amount of time at least monthly - answer immediately A producer must notify the Commissioner of Insurance within __ days of an address change. 15 30 45 60 - answer 30 In Mississippi, how long can pre-existing conditions be excluded for in Long-Term Care policies? 6 months 12 months 18 months 24 months - answer 6 months An annuity promises that, if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an amount equal to the contract value has been paid. This type of annuity is called An installment Refund annuity A Straight Life annuity A Cash Refund annuity A Joint Life annuity - answer an installment refund annuity
A lump sum of six times the monthly benefit Nothing Earned, but unpaid benefits - answer earned but unpaid benefits According to the Time Limit of Certain Defenses provision in an Individual Health Insurance Policy, nonfraudulent misstatements first become incontestable two years from the date of the policy was issued two years after collection of the initial premium two years from the date of the first claim two years from the date the policies was delivered - answer two years from the date the policy was issued 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? $2, $1, $1, $400 - answer $1, In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and a Medical Information Report the initial premium forward it immediately to the insurer Attending Physician Statement - answer the initial premium 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 continue coverage but request a corrected application deny coverage and increase premiums continue coverage but exclude the heart condition rescind the coverage and return the premiums - answer continue coverage but exclude the heart condition Premature IRA distributions are assessed a penalty tax of
20% - answer 10% A level premium indicates the premium is fixed for a period stated in the contract, then becomes variable the premium can only be changed with the consent of the insurer the premium stays level until the policy's renewal date the premium is fixed for the entire duration of the contract - answer the premium is fixed for the entire duration of the contract The Life and Health Insurance Guaranty Association becomes involved in an insurance company's affairs when the company enters a lawsuit against a claimant withdraws as an Association member becomes insolvent denies a claim - answer becomes insolvent 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? $100, $50, Refund of premiums paid plus interest No claim will be paid because cause of death was from natural causes - answer $50, Before a life insurance policy is issued, which of these components of the contract is required? Applicant's signature on application Beneficiary's signature A conditional receipt Attending Physician Statement (APS) - answer applicant's signature on application When an insurance application is taken by a producer, which of these statements is true? The applicant should have an attorney present during the application process Any changes made on the application require the applicant's initials Any changes made on the application can later be initialed by the producer if the applicant is unavailable
The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called Reinstatement Grace period Automatic premium loan Waiver of premium - answer reinstatement Which health policy clause specifies the amount of benefits to be paid? Insuring Consideration Free-look Payment mode - answer insuring The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n) Term rider Accidental Death and Dismemberment rider (AD&D) Family rider Annuity - answer Accidental Death and Dismemberment rider (AD&D) A Whole Life Insurance Policy endows when the Premium paid equals the death benefit Death proceeds are paid Cash value equals the death benefit Cash value plus dividends equal the death benefit - answer cash value equals the death benefit Which of the following health insurance policy provisions specifies the health care services a policy will provide? Insuring clause Usual, Customary, and Reasonable clause Consideration clause Benefit clause - answer insuring clause One becomes eligible for Social Security disability benefits after having been disabled for 3 months 5 months 6 months 12 months - answer 5 months
A producer who fails to renew a license may reapply for a license without an examination at which of the following times? Within two years after no renewal Within one year after no renewal Within three years after no renewal At anytime - answer within one year after no renewal An insurance producer's license may be suspended or revoked under which of the following circumstances? The producer has been convicted of a misdemeanor within the past five years The producer unintentionally made a material misstatement on the license application The producer has misappropriated money held in a fiduciary capacity The producer has filed for personal bankruptcy within the last two years - answer The producer has misappropriated money held in a fiduciary capacity A producer who suggests that an insured surrender a life insurance policy in order to purchase a new policy would be subject to which of the following? Mandatory provision Conversion provision Replacement provision Exchange provision - answer replacement provision An insurance company that wants to transact business in Mississippi MUST take which of the following action? Obtain a certificate of authority Hire 10 employees Post a bond Headquarter itself in this state - answer obtain a certificate of authority 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? Entire Contract clause MIB clause Insuring clause Consideration clause - answer consideration clause
making insurance laws administering insurance laws endorsing insurers - answer administering insurance laws The Legal Actions provision of an insurance contract is designed to do all of the following EXCEPT provide the insurer adequate time to research a claim protect the insured from having claim research delayed protect the producer give the insured guidelines for pursuing legal action against and insurer - answer protect the producer What action will an insurer take if an interest payment on a policy loan is not made on time? cancel the policy if not paid within the grace period automatically add the amount of interest due to the loan balance subtract from any dividends owed disallow any further loans - answer automatically add the amount of interest due to the loan balance A variable insurance policy guarantees a minimum rate of return does not allow the policyowner to assume the investment risk does not guarantee a return on its investment accounts does not guarantee an assignment provision - answer does not guarantee a return on its investment accounts A statement made by an insured in an insurance application that must be true to the best of one's knowledge and which becomes a part of the contract is known as an insuring agreement a mutual assent a warranty a representation - answer a representation Which of these factors does NOT influence an applicant's need for life insurance? Lifestyle of the applicant Number of dependents Future educational costs of the dependents Self-maintenance expenses - answer self-maintenance expenses
An insurance company that conducts business in Mississippi and was incorporated in Mississippi is called a(n) alien insurer domestic insurer foreign insurer native insurer - answer domestic insurer Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business? Company becoming insolvent Death of the business owner Business owner becoming disabled Key employee becoming disabled - answer business owner becoming disabled Which of these is an element of a Variable Life policy? A fixed, level premium Insurer assumes the investment risk No investment risk to the policyowner Rate of returns are guaranteed - answer a fixed, level premium Medicare is intended for all of the following groups EXCEPT Those enrolled as a full-time student Those receiving Social Security disability benefits for at least 24 months Those afflicted with chronic kidney failure Those 65 and older - answer those enrolled as a full-time student Which of the following is NOT included in the policy face? Free Look provision Name of the insured Name of the insurer Exclusions - answer exclusions The provision that defines to whom the insurer will pay benefits to is called Entire Contract Proof of Loss Claim Forms Payment of Claims - answer Payment of Claims 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
Negligence Sickness - answer War Each producer who initiates an application for life insurance or annuity for replacement of an existing policy shall submit which of the following as a part of the application? A signed statement by the applicant regarding the replacement A signed replacement statement from the insurance company being replaced A detailed comparison of existing coverage and the proposed coverage A signed replacement statement from the replacing insurance company - answer a signed statement by the applicant regarding the replacement T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide? Income for a fixed period stated in the contract Income that cannot be outlived by the owner Inflation protection Tax-free income - answer income that cannot be outlived by the owner Which of these are NOT an example of a Nonforfeiture option? Extended Term Reduced Paid-up Cash Surrender Life Income - answer Life income Which of the following will a Long Term Care plan typically provide benefits for? disability income death unemployment home health care - answer home health care All of the following statements regarding group health insurance is true EXCEPT Premiums are usually determined by the claims experience of the group A master contract is issued for the group An individual policy is given to each member Group health insurance premiums are typically lower than individual health insurance premiums - answer an individual policy is given to each member ABC Insurance Company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has
waived one of its legal rights issued a voidable policy committed an act of fraud assigned the risk to a reinsurer - answer waived one of its legal rights Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy? Issue the policy with a diabetes exclusion Issue the policy with an altered Time of Payment of Claims provision Issue the policy with a rating Decline the applicant - answer issue the policy with an altered Time of Payment Claims provision S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT type of life insurance S's attained age dividend amount used toward purchase beneficiary's age - answer beneficiary's age What type of policy would offer a 40-year old the quickest accumulation of cash value? Paid-up at 65 20-pay life 30-pay life Straight whole life - answer 20-pay life Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy? -Past due premiums on a lapsed policy are waived and coverage is restored -The insured is paid a monthly benefit to keep insuranmiums current in the event of total disability -Premiums are waived after the insured has been unemployed for a specified time period -Premiums are waived after the insured has been totally disabled for a specified time period - answer Premiums are waived after the insured has been totally disabled for a specific time period What kind of premium does a Whole Life policy have? decreasing adjustable
