Which of these statements accurately describes the waiver of premium provision in an accident

What kind of life insurance beneficiary requires his/her consent when a change of beneficiary is made?

Circulation of any oral or written statement or any pamphlet, circular, article, or literature that is false or maliciously critical of or derogatory to the financial condition of an insurer is known as

"defamation". Circulation of any oral or written statement or any pamphlet, circular, article, or literature that is false or maliciously critical of or derogatory to the financial condition of an insurer is known as defamation.

Inducing or attempting to induce any insured person through misrepresentation to lapse, forfeit, or surrender insurance is

Inducing or attempting to induce any insured person through misrepresentation to lapse, forfeit, or surrender insurance is twisting.

Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy?

Premiums are waived after the insured has been totally disabled for a specified time period

A Health Reimbursement Arrangement MUST be established

"by the employer". HRAs are employer-established benefit plans that must be funded by the employer.

An insured must notify an insurer of a medical claim within how many days after an accident?

"20". Notice of a claim is typically required within 20 days after the occurrence or a commencement of the loss.

K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, 

"The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured

What is the maximum Social Security Disability benefit amount an insured can receive?

The MAXIMUM Social Security Disability benefit an insured may receive is equal to 100% of the insured's Primary Insurance Amount (PIA).

Non-occupational disability coverage is designed for

"employees who suffer non-work related disabilities, since work-related disabilities are covered by Workman's Compensation"

Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated

1970 - Fair Credit Reporting Act requires the fair and accurate reporting of information about consumers. Insurers must inform applicants about any investigations being made.

All of the following are considered to be typical characteristics describing the nature of an insurance contract EXCEPT

"Bilateral". Unilateral, aleatory, and adhesion are all special features of insurance contracts. Bilateral is not.

What is the primary factor that determines the benefits paid under a disability income policy

"Wages". The major factor in determining the benefit amount paid under a disability income policy is wages.

Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?

"Guaranteed insurability rider". 

What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?

Dread disease insurance". Dread disease insurance provides benefits for ONLY specific types of illnesses such as cancer or stroke.

After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?

"File written proof of loss". The insured may file written proof of loss in any form if the insurer does NOT furnish forms after the insured gives notice of loss.

When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates?

"Change of occupation provision". The change of occupation provision allows an insurer to adjust policy benefits and/or rates if the insured has changed to a more hazardous occupation.

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?

"Subrogation". Subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured.

Which mode of payment is NOT used by health insurance policies?

"Single premium" . Single premium is not used when paying for health insurance policies.

The individual who provides general medical care for a patient as well as the referral for specialized care is known as a

Primary Care Physician The individual who provides general medical care for a patient as well as the referral for specialized care is known as a Primary Care Physician.

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 an altered Time of Payment of Claims provision

Which of the following BEST describes how pre-admission certifications are used?

Used to prevent nonessential medical costs" . Pre-admission certification is used to prevent unnecessary medical costs.

The provision in a health insurance policy that interrupts premiums being paid to the insurer while the insured is disabled is called the

Waiver of Premium" . The Waiver of Premium provision in a health insurance contract suspends the insurer's right to receive premiums during a covered period of disability.

When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits?

Recurrent Disability". In this situation, the insurer will provide the same benefits without a new elimination period under the Recurrent Disability benefit.

T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?

Less than $5,000 per month benefit regardless of the cause". In a $5,000 per month Disability Income Policy, a covered partial disability will typically result in less than $5,000 per month regardless of the nature of the disability

An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be

"converted to an individual permanent policy at an individual rate". the insured can convert to a permanent policy at the individual rates.

Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance?

"Entire cash surrender value is taxable". This is incorrect. The total cash surrender value is NOT taxable. The interest gained is taxable.

Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?

Collateral assignment" A policyowner using the Life Insurance policy as collateral for a bank loan normally would make a collateral assignment.

The Consideration clause of an insurance contract includes

The Consideration clause of a Life or Health policy includes the schedule and amount of premium payments.

All students attending a large university could be covered by

"a blanket policy". Blanket health insurance is issued to cover a group who may be exposed to the same risks, but the composition of the group

A CEO's personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant?

Disability Income policy would pay monthly benefits.

Disability policies do NOT normally pay for disabilities arising from which of the following?

"Act of war". Disability policies do NOT normally pay for disabilities arising from an act of war.

An agent who tells claimants that their rights may be impaired if they fail to complete a release form within a given period of time could be guilty of

"coercion". In this situation, the agent may be guilty of coercion.

AT LEAST how many days before the effective date of a rate increase must an insurer provide written notice to individual accident and health policyowners?

"30". An insurer must provide written notice at least 30 days before the effective date of a rate increase.

Insurers organized under the laws of North Carolina are called

"domestic companies". Insurers organized under the laws of North Carolina are called domestic companies.

The Insurance Information and Privacy Protection Act is designed to limit or direct the information collection activities of all of the following EXCEPT

"insurance regulators". The Insurance Information and Privacy Protection Act is designed to limit or direct the information collection activities of all of the following EXCEPT insurance regulators.

When L applies for a Health Insurance Policy, L unintentionally fails to list a previous visit to a cardiologist. If the insurance company contests the policy, it MUST do so within 2 years

"from the date of issue". In this situation, the insurance company must contest the policy within 2 years from the date of issue.

Every Group Health Policy providing benefits for chemical dependency treatments must include, for the life of the contract, a

Every Group Health Policy providing benefits for chemical dependency treatments must include a minimum benefit of $16,000 for the life of the contract.

An agent who sells an individual life insurance policy in North Carolina MUST deliver to the policyowner

"A Policy Summary and Buyer's Guide". An agent who sells an individual life insurance policy in North Carolina MUST deliver to the policyowner a Policy Summary and Buyer's Guide.

Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?

Variable Universal Life is comprised of monthly mortality charges and self directed investment choices.

C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on her life, which of these statements would be true?

"ABC is the policyowner, C is the insured, and ABC is the beneficiary".

A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?

"20-Pay Life accumulates cash value faster than Straight Life". In this situation, the statement "20-Pay Life accumulates cash value faster than Straight Life"

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT

The Interest Only option does NOT involve the systematic liquidation of the death proceeds.

The insurance company approved the application on January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective?

"January 26". In this situation, coverage became effective on the date the policy was delivered and first premium collected.

Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?

"Variable Life". A life insurance policy that has a level premium but allows the policyowner to choose from a selection of investment options is known as Variable Life.

Which of these statements concerning an individual Disability Income policy is TRUE?

Disability Income policies typically contain an Elimination period.

Approved premium rates for group health insurance shall be guaranteed by the insurer for an initial period of not LESS than how many months?

"12". Approved premium rates for group health insurance shall be guaranteed by the insurer for an initial period of not less than 12 months.

One of the stated purposes of the Life and Health Insurance Guaranty Association is to

"assist in the prevention of insurer insolvencies". One of the stated purposes of the Life and Health Insurance Guaranty Association is to assist in the prevention of insurer insolvencies.

An employer pays the premium for a health policy covering an employee. If the employee is disabled and unable to work, the employer will receive the policy benefits. This type of coverage is known as:

"Key Employee Disability Income." The type of coverage where an employer pays the premium for a health policy covering an employee and receives the policy benefits when an employee becomes disabled and is usable to work is known as Key Employee 

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".
Under the Time of Payment of Claims provision, the insurer must pay the benefits immediately after receiving proof of loss.

Which of the following health insurance coverages is BEST suited for meeting the expenses of catastrophic illness?

Major Medical health insurance coverage is best suited for meeting catastrophic illness expenses.

Which of the following statements about Business Overhead Expense Disability Insurance is INCORRECT?Term

"Owner's salary and profits are part of the overhead expenses." Business Overhead Expense Disability Insurance does not consider the owner's salary and profits as part of the overhead expenses.

The Probationary Period in a Health Policy is best described as the time period after

"the policy is issued, during which no benefits would be provided for illness." A Probationary Period in a Health Policy is the time period after the policy is issued, during which no benefits would be provided for illness.

The automatic premium loan provision is designed to

A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached?

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?

An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period?

Full face amount minus any past due premiums

Which statement regarding the Change of Beneficiary provision is true?

The policyowner can change the beneficiary

Which statement is true regarding a minor beneficiary

Normally, a guardian is required to be appointed in the Beneficiary clause of the contract

What is the underlying concept regarding level premiums?

The early years are charged more than what is needed

A level premium indicates

the premium is fixed for the entire duration of the contract

If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?

Insured's contingent beneficiary

A policyowner is allowed to pay premiums more than once a year under which provision?

hly basis builds quicker than one paid on an annual basis The face amount of a life policy paid on a monthly basis is higher than one paid on an annual basis

J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used?

K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed?

J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?

The gross premium is higher on a monthly payment mode as compared to being paid annually

An incomplete life insurance application submitted to an insurer will result in which of these actions?

Application will be returned to the writing agent

At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid?

At the time of application

Which Federal law allows an insurer to obtain an inspection report on a potential insured?

Fair Credit Reporting Act

K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?

An underwriter determines that an applicant's risk should be recategorized due to a health issue. This life insurance policy may be issued with a(n)

M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT

free-look period has expired

What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?

W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n)

What type of annuity has a cash value that is based upon the performance of it's underlying investment funds?

An individual who purchases a Life annuity is given protection against

the risk of living longer than expecte

An immediate annuity consists of a

All of these are considered to be a benefit under Social Security EXCEPT for

To be eligible for Social Security disability benefits, an employee must be unable to perform

Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits?

Which of these retirement plans can be started by an employee, even if another plan is in existence?

Individual Retirement Account (IRA)

Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company?

A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. he die and the policy is still in force and unchanged, where would the death proceeds be directed?

Company X With Key Person Insurance, the company purchases, owns, pays the premiums and is the beneficiary of the life insurance policy on the key person.

Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require?

Each partner must own a policy on the other partners

Who elects the governing body of a mutual insurance company?

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

When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n)

Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself?

Entire Contract provision ""Nothing may be "incorporated by reference," meaning that the policy cannot refer to any outside documents as being part of the contract.""

What is the Suicide provision designed to do?

safeguard the insurer from an applicant who is contemplating suicide

The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called

The incontestable clause allows an insurer to

contest a claim during the contestable period

All of these statements about the Waiver of Premium provision are correct EXCEPT

Insured must be eligible for Social Security disability for claim to be accepted"

T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?

50,000 The suicide occurred outside the Suicide clause period (normally 1-2 years), thus the face amount will be paid.

P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount?

Accidental Death and Dismemberment provision loss of one or more hands, feet, arms, legs, or loss of sight.

Whose life is covered on a life insurance policy that contains a payor benefit clause?

D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive?

What does the ownership clause in a life insurance policy state?

Who the policyowner is and what rights the policyowner is entitled to The ownership clause in a life insurance policy is a provision that indicates who is the policyowner and provides a general description of the owner's rights.

An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the

ion is NOT a requirement in a group life policy? Conversion Grace period Incontestable period Accidental

Which type of policy is considered to be overfunded, as stated by IRS guidelines?

Modified Endowment Contract

How long does the coverage normally remain on a limited-pay life policy?

What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?

All of these statements about Equity Indexed Life Insurance are correct EXCEPT

The premiums can be lowered or raised, based on investment performance

A variable insurance policy

does not guarantee a return on its investment accounts

Which of these would be considered a Limited-Pay Life policy? 10 yr renewable, life paid up to age 70, st8 whole life, renewable term to 100

Term insurance has which of the following characteristics?

Expires at the end of the policy period

What type of life insurance incorporates flexible premiums and an adjustable death benefit?

T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase?

What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death?

Face amount plus the policy's cash value

K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?

S is covered by a whole life policy. Which insurance product can cover his children?

D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed?

What kind of life insurance product covers children under their parent's policy?

A life insurance policy that provides a policyowner with cash value along with a level face amount is called

A policy of adhesion can only be modified by whom?

Which of these require an offer, acceptance, and consideration?

Which of these arrangements allows one to bypass insurable interest laws?

Investor-Originated Life Insurance his is done when an investor (or stranger) persuades an individual to take out life insurance specifically for the purpose of selling the policy to the investor.

When must insurable interest be present in order for a life insurance policy to be valid?

At the time if the application 

Who makes the legally enforceable promises in a unilateral contract?

Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called

The part of a life insurance policy guaranteed to be true is called a(n)

Warranty A warranty that is not literally true in every detail, even if made in error, is sufficient to render a policy void.

Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?

Business owner becoming disabled designed to assist in the sale of a business when one of the owners becomes disabled.

Which statement is TRUE regarding a group accident & health policy issued to an employer?

The employer receives the policy and each employee is issued a certificate a master policy is issued to the employer and each employee receives a certificate of insurance

T is covered by two health insurance plans: a group plan through his employer and his spouse’s plan as a dependent. Under the Model Group Coordination of Benefits provision, when T files a claim, his employer's plan is considered the

Primary carrier In double coverage situations, the insurer covering the employee who has the claim is called the primary insurance company.

J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?

$25,000". The maximum sum payable would be the capital sum, or $25,000.

When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?

Which of the following statements is correct regarding an employer/employee group health plan?

the employer receives a master policy and the employees receive certificates

The difference between group insurance and blanket health policies is

Blanket health policies do not issue certificates

Which of the following statements BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition?

The reason for a business having a Business Overhead Expense Disability Plan is to cover

The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the

A medical care provider which typically delivers health services at its own local medical facility is known as a

Health Maintenance Organization

Which of the following BEST describes how a Preferred Provider Organization is less restrictive than a Health Maintenance Organization?

More physicians to choose from PPO's normally provide a wider choice of physicians and hospitals.

The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n)

closed panel A closed panel is when an HMO is represented by a group of physicians who are salaried employees and work out of the HMO's facility.

C was injured while deep sea diving and requires a hospital stay. C has a Major Medical policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000?

$720- $400 deductible+20% of remaining medical bill

J’s Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and the covered medical expenses total $10,000, J would pay

$3,600 $2,000 + 20% of the remaining bill = $3,600.

Which of the following situations does a Critical Illness plan cover?

The first portion of a covered expense that the insured is required to pay before Major Medical Coverage applies is called the

initial deductible" . A provision that requires the insured to pay the first portion of covered expenses before Major Medical coverage applies is called an initial deductible.

In Major Medical Expense policies, what is the intent of a Stop Loss provision?

Limits an insured's out-of-pocket medical expenses purpose of a Stop Loss provision in Major Medical Expense policies is to limit the amount of an insured's out-of-pocket medical expenses.

Basic Medical Expense insurance

has lower benefit limits than Major Medical insurance

Q is hospitalized for 3 days and receives a bill for $10,100. Q has a Major Medical policy with a $100 deductible and 80/20 coinsurance. How much will Q be responsible for paying on this claim?

$2,100 $10,000 x 20% coinsurance + $100 deductible = $2,100.

"$1,000". In this situation, the insured's maximum out-of-pocket expenses for 2013 would be $1,000.

"$1,000". In this situation, the insured's maximum out-of-pocket expenses for 2013 would be $1,000.

Which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT?

If the employee paid for qualified medical expenses, the reimbursements may be tax-free". Under a Health Reimbursement Arrangement, reimbursements may be tax free if the employee paid for med expenses

Basic Hospital and Surgical policy benefits are

lower than the actual expenses incurred". Basic Hospital and Surgical policy benefits are typically lower than the actual expenses incurred.

Consideration clause". A health insurance contract is valid only if the insured provides consideration in the form of the full minimum premium and the statements made in the application.

Consideration clause". A health insurance contract is valid only if the insured provides consideration in the form of the full minimum premium and the statements made in the application.

An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision?

The grace period is a minimum of 31 days for policies that are paid for on an annual basis.

When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the

Entire Contract provision" . The Entire Contract provision states that the application and policy contain all provisions and constitute the entire contract.

With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period?

Gives the policyowner additional time to pay past due premiums

Health insurance benefits NOT covered due to an act of war are

excluded by the insurer in the contract provisions

If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best desribes this policy is called

noncancellable A non cancellable policy is one which the insurance company cannot cancel and which premiums cannot be increased.

What is the waiver of premium provision quizlet?

Which of the following provisions prevents the insurer from denying a claim due to statements on the application after a certain period of time?

Which of the following health insurance policy provisions specifies the health care services a policy will?

Is waiver of premium a mandatory uniform provision?