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A disability income policy social insurance supplement (SIS) benefit rider:
a. Pays benefits only if it turns out the insured is eligible for benefits from social insurance
b. Pays a benefit if the insured is injured on the job and qualifies for workers compensation benefits
c. Provides a payment only when the insured is totally disabled, but not receiving any social insurance benefit plans
d. Provides for a bonus payment that will match social security disability income benefits, if they are paid
(C) Statement of fact about the basic Social Insurance Supplement
A health maintenance organization (HMO) plan contains costs by promoting
a. After-hours care
b. Generic care
c. Preventative care
d. Fee for service care
(C) Preventative care includes regular checkups, and is encouraged by HMOs.
Renewable term insurance can be best described as:
a. A level death benefit with an increase in premium
b. A level death benefit with a decrease in premium
c. A decreasing death benefit with a level premium
d. An increasing death benefit with a level premium
(A) Term insurance premiums increase upon renewal based on attained age.
The basic feature of a managed care indemnity plan is that the participants
a. Select a provider and submit claims to the insurance company
b. Select a provider at work and claims processor
c. Pre-select a physician and third-party claims administrator
d. Pre-select a clinic and submit claims to the insurance company
(A) Indemnity plans utilize claim forms and allow choice of providers.
How do rights of an irrevocable beneficiary differ from those of a revocable beneficiary?
a. An irrevocable beneficiary may be changed by the policy owner without the beneficiary's consent
b. An irrevocable beneficiary has a vested right that neither the policy owner nor his creditors can impair without the beneficiary's consent
c. A revocable beneficiary can become the policy owner at any time by paying the premiums
d. An irrevocable beneficiary has the right to name a contingent beneficiary for the policy
(B) The irrevocable beneficiary has entitlements that the revocable beneficiary does not.
What recourse does an insurer have if a violation of a material warranty on the part of the insured is discovered
a. A hearing by the Insurance Commissioner to determine the severity of the misrepresentation, and to determine an appropriate course of action
b. None, if the policy has been in force for over 12 months
c. Rescission of the policy
d. A hearing by a court of law to determine an appropriate course of action an insurer may take
(C) Rescission is possible during the contestability period.
Which of the following describes an insurer who has enough financial resources only to provide for all its liabilities and for all reinsurance of all outstanding risks?
a. Guaranteed
b. Insolvent
c. Solvent
d. Non-participating
(B) In order to be solvent, the insurer's assets must EXCEED its liabilities, not just meet them.
All of the following statements about the election of a life insurance policy's settlement options are true, except
a. The election is made by the policy owner at the time the application is submitted
b. When no settlement option is chosen, the proceeds are automatically paid to the policy owner's estate
c. The policy owner may change the settlement option after it has been chosen
d. The election may be made by the beneficiary if no settlement option is in force at the time of death of the insured
(B) Proceeds would be paid to the beneficiary.
What is the purpose of "key person" insurance?
a. To provide health insurance benefits to key employees
b. To give a key employee the ability to purchase the business
c. To give retirement benefits to key employees
d. To cover decreased business earnings due to the death of a key employee
(D) Proceeds are paid to the business in order to help carry on the enterprise in the face of a loss of a key person.
What would be the Insurance Commissioner's most likely course of action if an applicant for an insurance license had a previous application for a professional license denied for cause by any licensing authority within five years of the date of the filing?
a. Deny the application probably after a hearing
b. As long as it was not insurance related, the application will be granted
c. Approve only after a review by a panel of insurance professionals
d. Deny the application without a hearing
(D) The key word is "for cause".
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