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95 Cards in this Set
- Front
- Back
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If you are denied coverage, the Fair Credit Reporting Act mandates that insurers provide the name of any reporting agency used (T/F).
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True
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Determines whether or not a company will insure a risk.
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risk selection
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A producer for a direct legal reserve life insurance company must have what kind of a license?
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Life Accident and Health
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A contract that is prepared by one party rather than negotiated between contracting parties is what type of contract?
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Contract of adhesion
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What two things will differ between a participating life insurance policy and a comparable non-participating life insurance policy?
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Premiums and dividends
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What or who is the principal in the law of agency?
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The insurance company
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Mike was shown a brochure and a company prospectus by the producer during the insurance presentation. Mike's conclusion was that the agent had what type of authority from the principle?
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Apparent or perceived authority
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What good faith concept says that a statement by an insurer in a contract is absolutely true?
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A warranty
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A company that has received approval from an Insurance Commissioner to transact insurance business in its state is called what type of company?
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Admitted company
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Which contract element is voided by an illegal activity?
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Legal purpose
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Mike did not disclose on his insurance application that he was diagnosed with heart disease. What would Mike's action be called?
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Concealment
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What are the powers called that are not given to an insurance agent in the agreement between the agent and the principal?
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Implied powers
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What is the risk management term that refers to the cause of a loss such as an accident or illness that can cause death or disability?
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Peril
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Mary had her new business cards printed with Mutual Life's logo on her cards. Her agency agreement did not authorize her to use their logo. What type of authority allows Mary to use the insurance company's logo on her business cards?
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Implied authority
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These individuals work with mortality tables to predict losses for his insurance company.
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Actuaries
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Dean is 50 years old, married with 2 children. He earns $50,000 per year in his current job and expects to retire at age 65. What is Dean's Human Life Value?
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$750,000
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a Human Life Value calculation what is the agent trying to accomplish?
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Replacement of lost income
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When planning a family’s financial obligations all available funds, goals and retirement plans are taken into consideration. This is called:
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Needs approach
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Who is responsible for verifying insurable interest?
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The insurance company
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What is the death benefit feature of a Variable Life policy?
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May increase or decrease but never fall below the policy's face amount.
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When are disability income benefits received as nontaxable income to the disabled individual?
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When the employee has paid the premium
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It is the period of time when Social Security provides no income to a widow, and it starts when the youngest child becomes 16 and continues until, at the earliest, the widow reaches the age of 60 years old.
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blackout period for Social Security
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Social Security disability benefits become available to eligible workers after a waiting period of?
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5 months
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In a contributory group what percentage of eligible employees must be willing to pay for coverage?
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75%
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. A deductible where the insured pays a new deductible amount for each different event when a new medical expense is incurred
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A per-cause deductible
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What is the tendency for a poor risk to seek out insurance coverage more than an average risk called?
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Adverse selection
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Margie was covered under her spouse's health insurance when her spouse was killed in an accident. How long is Margie eligible to continue coverage under COBRA?
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36 months
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If the employer pays the whole premium on a group policy, what kind of plan is it?
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Non-contributory
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The use of a primary care physician or PCP in a Health Maintenance Organizations is a part of the:
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Gatekeeper duties
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The concept of a fixed monthly fee that Health Maintenance Organizations use to pay their service providers is called?
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Capitation
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What is it called when a Health Maintenance Organization chooses a limited number of health care providers to exclusively provide services to its subscribers?
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A Closed panel
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What is the contract called that limits the employer's liability in a self-funded health care plan?
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A stop-loss contract
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Molly's disability income policy defines her total disability as "the insured's inability to perform the duties of any occupation for which he or she is reasonably qualified by education, training or experience." What would Molly's occupational definition be known as?
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This is the definition of 'any occupation' and is more restrictive than other definitions.
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In the required Health Provision 11, the insured is prevented from filing suit against the insurer within what period of time?
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60 days and not longer than 3 years from the date of proof of loss
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What is the legislation that requires any ongoing claims under the former insurance coverage to be paid under a new policy when a health insurance policy is replaced?
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No loss-no gain legislation
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To avoid adverse selection, health insurance policies carry _____________:
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An exclusion for preexisting conditions
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What does the consideration clause of a health insurance contract have?
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Premium payment section
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How are miscellaneous medical expense benefits normally expressed in a health insurance policy?
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As a multiple of the per-day room and board limit.
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What type of disability, under Workman's Compensation, is a permanent physical impairment leaving the individual incapable of performing his current occupation, but capable of performing some other type of work?
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Permanent partial disability
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What does Hospital Income insurance normally pay?
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A specific dollar amount paid directly to the insured for every day he's in the hospital.
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If the IRS considered an insurance contract or an annuity not to be a MEC in 5 years, how much longer is it under scrutiny by the IRS?
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Two (2) years
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shares the cost of insurance for an employee between employee and the company.
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split-dollar plan
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With an immediate annuity, the annuity payments begin when what period of time has elapsed?
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Equal to the period of time between payments
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What is the difference between an annuity accumulation unit and an annuity unit?
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Accumulation units are the value of a variable annuity when the funds are being accumulated.
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What is the annuity type called that guarantees to pay out to the annuitant income that is equal to the purchase price of the annuity?
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Refund life annuity
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What amount is taxable if you are paid $600 a month from an annuity that was purchased for $20,000 with an expected return of $40,000?
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$300
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How many annuity units does an annuitant receive if the value of each annuity unit is $10 at $1,600 a month?
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160
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What is the accounting measure used to calculate an annuity contract owner's interest in a variable annuity's separate account before the payments begin
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Accumulation unit
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What would the exclusion ratio be for a fixed annuity that was purchased for $12,000 and has an expected return of $15,000?
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80%
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Part III of the application contains what?
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The agent's report
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This is a condition where the policy owner is someone other than the insured
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third-party ownership
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Larry, a widower dies, and his sons Jeff and Mark share a $4,000 monthly check. When Mark dies, Jeff no longer receives his $2,000 check. What is this type of income settlement option called?
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Joint life income option
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Harry was a struggling businessman, with a significant life insurance policy, who died with some enormous debts. His son was beneficiary, but his son only receives a monthly benefit check. Harry could have selected all of the following settlement options except for which of the following?
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Lump sum distribution
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In this situation the named beneficiary has died, and the deceased beneficiary's heirs do not receive a portion of the proceeds from the insurance policy. What type of beneficiary designation is this called?
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Per capita beneficiary designation
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Any premiums paid for supplementary benefits, loans received or any dividends minus the total premiums paid
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How to determine the cost basis for accumulated cash values in a life insurance policy for a policy owner
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what purpose is a voluntary assignment of a life policy used?
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To make a gift of the policy
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Offers a low beginning premium with subsequent premiums based on the company's investment returns, mortality and expenses.
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Indeterminate Premium policy
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If a participating whole life policy is cash surrendered, what is taxable?
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the surrender amount less the premiums paid
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Morgan and Betty have a Joint Life Insurance policy. When Betty dies the policy pays nothing to the beneficiary. Morgan dies later and the policy death benefit is then paid to the beneficiary. What is this type of policy called?
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Joint life and Survivorship or second-to-die policy
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What type of policy will an insurance company issue to an individual who has substandard health?
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Rated policy
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What is the required length for the free look, for Medicare Supplements in the state of Florida?
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30 days
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What system provides medical benefits for certain low income people, for the disabled, and for families with dependent children?
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Medicaid
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What is a “non insurance” company called that is chosen to administer a companies self insured plan?
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TPA
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A policy that the issuing company will not refuse renewal or cancel the policy, but may change the premium based on classes of insured, is what type of policy?
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A guaranteed renewable policy
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After a Major Medical policies basic benefits are exhausted a _________deductible must be satisfied before more benefits would be paid.
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Corridor
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. How long does an insured have to wait before legal action can be taken against the insurance company after proof of loss has been submitted in writing?
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60 days
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The 2-year or 3-year time period in health policies after which the insurer cannot deny a claim or void the policy because of pre-existing conditions or misstatements on the application is called?
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Time limit on certain defenses
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How many policies and at what face value, would be purchased when three partners enter into an entity disability buy out and the company is worth $600,000?
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3 at $200,000
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According to the "time of payment of claims" provision in a major medical policy, when an insured submits a valid documented claim, what is the time frame in which the company must pay the claim?
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45 days
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If there is a non-cancelable health policy in place the company is prevented from doing?
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Increasing premiums or canceling the policy
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How many days notice must a company give upon canceling a policy in Florida?
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45 days
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The Social Security Act was amended to add health insurance protection for the aged and disabled in what year?
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1965
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A condition that manifested prior to the policy's effective date
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pre-existing condition
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prospect's statement on an application that is held to be substantially true is described as:
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A representation
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Blue Cross Blue Shield participants are?
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Subscribers
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A physician, registered physical therapist and a hospital are all considered what, under the typical HMO contract?
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Provider
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may the company increase premiums in a guaranteed renewable health policy?
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Only for an entire class of insured
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The required amount of uniform provisions contained in a health policy is:
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12
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When do social security disability benefits begin after becoming totally disabled?
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5 months
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Which clause prevents the beneficiary from voluntarily or involuntarily transferring any current or future rights?
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Spendthrift trust clause
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When does coverage begin on a standard risk application?
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When the Insurance Company has received the first month's premium and mails the policy for delivery.
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With a 20 year family maintenance plan, how are the benefits paid if the insured dies at age 49?
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The benefits are paid for 20 from the date of death if the death happens before age 50
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Michael works in a large city as a police officer and Angel, his wife, is a customer service representative for a small call center. Which one of the two would be covered under social security?
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Angel
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What two things will differ between a participating life insurance policy and a comparable non-participating life policy?
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Premium and dividends
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made the application of anti-trust laws possible as well as mandated that states would regulate insurance?
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McCarran-Ferguson
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How long is a maximum benefit period for a preliminary term for interim coverage policy?
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11 months
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In the State of Florida, the minimum number of members required for a group life insurance plan is:
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No minimum
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Part III of the application contains what?
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Agent's report
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person can start to collect from his traditional IRA without penalty at what age?
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59 1/2
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The beneficiary of a key employee policy is typically?
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The business
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Tax Deferred Annuity plans is typically used by ___________ organizations?
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Public school systems and other Not for profit groups
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The fiduciary responsibility of an agent is to both his client and to his company (T/F).
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TRUE
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How long does a policy holder have to return their policy and receive a full refund if they decide not to keep it?
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10 Days
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Reserves are usually invested in ___________ with a universal life policy:
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Long term securities
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What is it called when a company purchases life insurance on its partners?
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An entity type
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