General Insurance

Question 1

Premium Elements

Answer 1

• Mortality
• Interest
• Expenses
• Net Premium

Question 2

Net Premium

Answer 2

Mortality minus interest

Net Single

Question 3

Gross Premium

Answer 3

Net premium plus expenses

Gross annual

Question 4

Dividend Options

Answer 4

CARPPO 
Cash 
Accumulate with interest
Reduce next premium 
Paid up policy 
One year term - attained age

Question 5

Non Forfeiture Options

Answer 5

Surrender for cash
Reduced paid up insurance
Extended term

Question 6

Backdating

Answer 6

Usually no more than 6 months

Question 7

Conditional Receipt

Answer 7

• Premium paid with application
• Insurance effective - later of - date of application completed and signed or medical exam if required
• Must be standard or preferred risk

Question 8

Binding Receipt

Answer 8

Temporary - not common in life insurance

Question 9

Underwriting Sources

Answer 9

Application - primary source
Medical exams and testing
Attending Physician Statement (APS)
AIDS testing - cannot be in MIB
MIB - application cannot be denied solely on this, insured must be informed
Consumer reports - Insured must be informed
Investigative Reports - Insured must give consent

Question 10

Fair Credit Reporting Act: Penalty and Fines

Answer 10

Max of $5,000
Or imprisonment (one year)

Question 11

Moral Hazard

Answer 11

A belief that intentionally causing a loss is acceptable. Habits or lifestyle included

Question 12

Morale Hazard

Answer 12

Carelessness

Question 13

Business Overhead Expense Plan

Answer 13

Deductible

Taxable

Question 14

Dental Expense Plan

Answer 14

Offered through PPO

Question 15

Skilled Nursing Care for Medicare

Answer 15

100 Days

Question 16

Medicare

Answer 16

Hospital Stays
Skilled Nursing Care
Home Health

Question 17

Cobra Continuation Notice For Qualifying Events

Answer 17

14 Days

Question 18

Executive Bonus Plan

Answer 18

EE Access to policy living benefits
ER Pays Premium
EE Owns Policy

Question 19

Disability Buy Sell

Answer 19

Cannot Deduct

Benefits not taxed

Question 20

Limited Pay

Answer 20

Stop paying premiums at a specified time

No reduction of death benefits

Question 21

LTC Insurance

Answer 21

Assisted living facilities
Home health care
Adult day care
Respite care

Question 22

Hospital Indemnity Plan / Hospital Income Plan

Answer 22

Payment directly to insured
Flat dollar daily benefit
Used toward deductible and coinsurance payments

Question 23

Non Contributory

Answer 23

100%

Employer pays entire premium

Question 24

Contributory

Answer 24

75%

Employees pay part of premium

Question 25

Blanket Coverage

Answer 25

Covers accidents Volunteer groups No application needed for new members Group exposed to same risks

Question 26

Underwriting is the process of

Answer 26

Selecting, classifying, and rating risks

Question 27

Cold Lead Advertising

Answer 27

Illegal marketing practice

Question 28

Appointment

Answer 28

A written agreement in which an insurer authorizes a producer to sell its products

Question 29

LTC Group Plan

Answer 29

Excluded from EE income | ER deducts

Question 30

Reduced Paid Up

Answer 30

Face value is reduced | Cash values continue to increase

Question 31

Insurers must maintain advertisements on file for

Answer 31

4 years (Four Advertisements)

Question 32

Insurance Application

Answer 32

Part 1: Personal and Occupational history | Part 2: Insureds Medical History

Question 33

Life Insurance Premium Factors

Answer 33

Interest earnings Expenses Mortality

Question 34

Producers Report

Answer 34

- character - habits - financial status The report is not attached to the application and never seen by the insured

Question 35

Reciprocal Exchange

Answer 35

Cooperative Insurance Each Insured is an Insurer Managed by attorney in fact

Question 36

Reinstating a lapsed policy

Answer 36

3 Years from missed premium payment

Question 37

Reinsurance

Answer 37

Act of one insurer selling part of a policy to another Original company = ceding company Second insurer = assuming company

Question 38

Treaty Reinsurance

Answer 38

Agreement of a reinsurer to underwrite certain class of business submitted by a ceding company

Question 39

Consideration Clause

Answer 39

The amount and frequency of premium payments

Question 40

Speculative Risk

Answer 40

Chance of both loss and gain

Question 41

Representations

Answer 41

Believed to be true and the time it has been given

Question 42

Misrepresentations

Answer 42

Information given that is false | Does not affect insurance companies decision in the contract

Question 43

Material Misrepresentations

Answer 43

Can void a contract | Does impact the insurer's decision in the contract

Question 44

Binding Coverage

Answer 44

Coverage is guaranteed until insurer formally rejects the application

Question 45

Currently Insured

Answer 45

6 credits in the last 13 quarters

Question 46

Facility of Payment

Answer 46

Exists to expedite payment if unable to locate the beneficiary

Question 47

Basic Form of Health Insurance

Answer 47

Medical Accident Only Disability