Health Flashcards by josue moreno

Y has an ordinary whole life policy with a face value of $100,000. Y was diagnosed with a terminal illness and needs money to help cover the costs of medical bills while Y is still alive. Which of the following could Y use to assign the policy and receive some death benefit while alive?

a.Accelerated Living Needs Settlement

b.Viatical Settlement

c.Accelerated Living Needs Policy

d.Viatical Policy

viatical statement

-allows an insured with a life-threatening condition to ASSIGN his/her existing policy to receive benefits when they are most needed.

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An accidental death and dismemberment policy will generally pay what amount of the principal for the loss of a hand?

a.1/2

b.1/3

c.100

d.1/4

a.1/2

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J is the primary beneficiary, K is the insured and L is the contingent beneficiary. J, K and L are involved in a car accident where K and L die immediately. Under the Common Disaster clause, how will benefits be handled?

a. L’s estate

b. J and L will split

c. J only

d. K’s estate

c. J only

J only would receive the money because J is the primary beneficiary. The common disaster clause does not apply.

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G purchased a Variable Universal Life Policy from a non-participating insurer with a rider that permits him to add on additional insurance without having to go through medical underwriting again. Which rider is BEST described here?

a. Paid Up Additions.

b. Return of Premium.

c.Guaranteed Insurability rider.

d. Cost of Living Adjustment.

c.Guaranteed Insurability rider.

If included at the time of application, permits the insured to increase the face amount without proof of insurability (typically every 3 years, or upon marriage). Paid-up Additions is a dividend option, NOT a rider.

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Under the Uniform Policy Provisions, what is the MAXIMUM amount of time that may go by before a policy is considered to lapse?

a.31 days

b.90 days

c.1 year

d.15 days

a.31 days

The grace period for the premium payment mode of Annually is 31 days. That is the maximum time-frame. Chapter 4, page 42ish

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An agent obtaining a nonresident license is an example of?

a.The agent may not obtain a non-resident license.

b.An agents licensing mandate.

c.A reinsurance treaty.

d.A reciprocal agreement.

Non-resident licenses are based off of reciprocity where the agent must only satisfy the requirements for licensing in their home state.

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Which receipt is the free look period contingent upon?

a.binding receipt

b.delivery receipt

c.conditional receipt

d.unconditional receipt

b.delivery receipt

The free look period begins at the time of delivery; this is contingent upon the delivery receipt being signed.

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Which of the following is NOT true about the Commissioner of Insurance?

a.he is the chief executive of the department of insurance

b.he is elected by the constituents within the state

c.he can be a former employee of the department of insurance

d.he educates the governor on insurance matters

b.he is elected by the constituents within the state

The commissioner is appointed by the governor, not elected. The question says NOT true.

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Which of the following is NOT used during underwriting?

a.inspection report

b.actuarial justification

c.a fair credit report

d.medical information bureau

b.actuarial justification

Actuarial Justification is not used by the underwriter. It is used by the insurer to justify rate increases; by justifying them with statistics.

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Under HIPAA, what is the lowest amount of members for any group health plan?

a.50 members

b.1 member

c.20 members
The smallest group that can be formed is two members.

d.2 members

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Premiums under the Affordable Care Act are based off of:

a.amount of preexisting conditions of every person

b.The 3rd child in a 2 parent household

c.The 2nd parent off a 3 child household

d.per person

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The insured has a disability policy including the payment of claims provision. What is the purpose of this provision?

a.to determine if the insured is totally disabled

b.to determine who gets paid in a claim

c.to determine when benefits are paid in a claim

d.to determine material misrepresentations in an application

b.to determine who gets paid in a claim

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The insured, P, and the primary beneficiary, J, die in the same car accident. No contingent beneficiary is listed. According to the Simultaneous Death Act, where will the death benefit go?

a.P’s next of kin

b.J’s next of kin

c.J’s estate

d.P’s estate

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A characteristic of a prepaid (HMO) plan would be?

a.doctors provide discounted services

b.coverage for long term care is provided

c.the insured can go to any doctor they want

d.insureds are called subscribers and doctors are paid before services

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The deductible of a Disability Income policy is best described as

a.incontestability

b.time limit on certain defenses

c.probationary period

d.elimination period

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Which of the following statements is not true about the legal actions clause?

a.lowers the insurers risk level

b.begins at the time proof of loss is submitted

c.suit cannot be brought for the first 60 days after proof of loss

d.protects the agent

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At what age would a retirement annuity no longer have the 10% penalty?

a.59 1/2

b.60

c.70 1/2

d.65

a.59 1/2

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Which social program uses the Primary Insurance Amaount (PIA) to determine retirement benefits?

a.Medicaid

b.Social Security

c.Medicare

d.Tricare

b.Social Security

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Which of the following is a characteristic of term?

A.retirement income

B. ceases at end of time period

C. coverage for life

D. endows at specific age

B. ceases at end of time period

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Which of the following would still have to take the state exam to become licensed?

a.Pre-need Funeral Directors

b.Certified Public Accountant (CPA)

c.Certified Financial Planner (CFP)

d.Chartered Life Underwriter (CLU)

C. Certified Public Accountant (CPA)

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P lists his bad back under Part 2 Medical Information on his Short Term Disability application. What will the insurer most likely do with his policy?

a.Add an impairment rider

b.Issue the policy because of the contestable clause

c.Never issue the policy

d.Include more exclusions about aviation

a.Add an impairment rider

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An insurer may have which of the following in an advertisement?

a. a celebrity endorsement

b. only their logo but not their name

c. policies not authorized in the state

d. prices only good for tonight

a. a celebrity endorsement

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What must an agent keep records of?

a.agent’s reports

b.their own home address

c.address of the insurance company

d.marketing materials from competitors

a.agent’s reports

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When an insurer places applicants into categories for rating purposes, this is known as:

a. Dividend Options

b. Nonforfeiture Options

c. Classification of Risks

d. Settlement Options

c. Classification of Risks

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Which of the following is a limited-pay life policy? a.Universal Life b.Life Paid-Up @ Age 65 c.Adjustable Life d.Straight Life

b.Life Paid-Up @ Age 65

An absolute assignment can be best described as? a. transferring a policy b. a temporary transfer c. a two way transfer d. a one way transfer

d. a one way transfer

How many days does a general lines producer have to notify the insurance commissioner upon change of address? a. 30 days b. 60 days c. 20 days d. 29 days

a. 30 days

All of the following may enter into a buy-sell agreement EXCEPT: a.stockholders b.officers c.directors d.employees

d.employees

Which of the following is true about a Health Reimbursement Account? a. employers must discriminate on all aspects b. employees contribute c. it must accompany a major medical plan d. it must be established by an employer

d. it must be established by an employ

A person must be considered unable to work for how long in order to qualify for Social Security Disability Benefits? a.3 months b.12 months c.6 months d.8 months

b.12 months

A policy that may cover all of the passengers on an airliner would be known as: a. Basic Hospital b. Critical Illness c. Blanket Accident d. Health Maintenance Organization

c. Blanket Accident

Q has a flat deductible of $500 and coinsurance of 80/20. When Q incurs a claim of $5,000 how much will Q pay total for this claim? a. 850 b. 1350 c. 900 d. 1,400

d. 1,400

Which provision in disability will ensure that no premiums are required while receiving payments? a.waiver of premium b.residual disability c.payor benefit d.total disability

a.waiver of premium

Which of the following would the Medical Information Bureau most likely have within their files on a consumer? a. all medical conditions ever had b. absolutely nothing c. the name of the insureds primary care physician d. life insurance applied for within the past 5 years

d. life insurance applied for within the past 5 years

Which rider will allow the insured to add their child onto the policy? a. guaranteed issue (nonmedical) b. third party ownership c. child term rider d. payor benefit

c. child term rider

Transacting business in insurance would be all of the following actions EXCEPT: a. quoting premiums b. setting appointments for an agent c. collecting premiums d. explaining policy provisions

b. setting appointments for an agent

Under a group life conversion, the death benefit may be reduced to a minimum of what amount? a. $100,000 b. $0 c. $5,000 d. $10,000

d. $10,000

An insured, J, has a policy that they pay semi-annually. They are supposed to pay on the 1st, and they file a claim on the 31st. Which of the following is true about this claim? a. the claim will be paid due to the grace period being 60/61 days. b. the claim will be denied due to the grace period being 10 days. c. the claim will be denied due to the grace period being 7 days. d. the claim will be paid due to the grace period being 30/31 days.

d. the claim will be paid due to the grace period being 30/31 days.

What is the waiting period for Social Security disability? a. 6 months b. 90 days c. 5 months d. 30 days

. 5 months

The commissioner of insurance must schedule a hearing within how many days of an agent responding to a cease and desist order? a. 90 days b. 30 days c. 5 days d. 10 days

d. 10 days

HMO's are required to have an open enrollment period of at least how many days? a.10 b. 15 c. 31 d. 20

c. 31

What percentage of a producers continuing education credits must be done in classroom or by classroom equivalent? a. 50% b. 100% c. 25% d. 75%

a. 50%

What must be signed by the applicant if no premium was collected and the agent is delivering the policy? a. Statement of Good Health b. Conditional Receipt c. Unconditional Receipt d. Medical Information Bureau

a. Statement of Good Health

Which of the following best describes a comprehensive PPO plan? a. choose any doctor b. lowest choice of providers c. lowest out of pocket cost expenses d. prepaid health contracts

a. choose any doctor

Which of the following is true about HIV and AIDS testing?' a. The producer must be notified prior to the testing b. The insured must be notified prior to the testing c. Results must be forwarded to all state and government agencies d. The MIB will receive the results if AIDS is found

b. The insured must be notified prior to the testing

Under the coordination of benefits clause, when an insured has two insurance plans and one pays, this is known as: a. excess earnings b. prorata c. excess insurance d. primary insurance

d. primary insurance

A statement that may or may not be true, but is assumed to be true is best described as which term? a. Warranty b. Representation c. Misrepresentation d. Utmost truthful statements

b. Representation

All of the following may be used for medical underwriting purposes EXCEPT: a. age b. marital status c. sex d. occupation

b. marital status

K has a Disability Income policy providing coverage until age 65, but it includes a provision which allows the insurer to adjust rates based off of her class rating. What is the most likely renewability option? a. noncancelable b. cancelable c. Interim d. guaranteed renewable

d. guaranteed renewable

Which type of insurance has a corridor? a. straight life b. Interest sensitive life c. universal life d. adjustable life

c. universal life

Under a medical insurance contract, the insurer pays an insured for the amount of benefits and then seeks to be reimbursed from an at-fault third party would be best described as: a. coordination of benefits b. subrogation c. surplus lines d. adverse selection

b. subrogation

An insurer legally formed in Iowa is considered what to Texas? a. Nonresident b. Domestic c. Alien d. Foreign

d. Foreign

An agent who states that dividends are guaranteed to be paid is guilty of which of the following? a. concealment b. fraud c. rebating d. misrepresentation

d. misrepresentation

A group plan where the premiums are decidedly shared between employees and employers is known as: a. noncontributory b. nonoccupational c. contributory d. occupational

c. contributory

Joint life is also known as which? a. last to die b. joint and survivorship c. first to die d. survivorship

c. first to die

H is a surgeon who was working full-time until he became disabled. H can only see half of his clients now due to his disability. Which disability policy would be best for H? a. Residual Disability b. Recurrent Disability c. Any Occupation d. Own Occupation

a. Residual Disability

Which of the following best describes chemical dependency? a. Physiological and Psychological dependence on drugs b. Physiological dependence on alcohol c. Psychological dependence on prescription drugs d. Physiological and Psychological dependence on alcohol and/or drugs

Physiological and Psychological dependence on alcohol and/or drugs

Mental health and Drug abuse under the Affordable Care Act must be covered under which policies? a. mental health and drug abuse are not illnesses b. only individual insurance c. only group insurance d. group and individual

d. group and individual

Which rider ensures that all premiums will be paid back to the insured at the end of the policy? a. return of premium b. payor benefit c. waiver of premium d. childs rider

a. return of premium

X is searching for a survivorship permanent policy to provide for estate taxes in the event of death. X meets with producer Y to purchase the policy, tells producer Y that he is price conscious and would like to save as much money as possible. What can Y advise X to do for the lowest annual premium that still meets his needs? a. add waiver of premium rider b. purchase term instead c. backdate policy d. include binding receipt

c. backdate policy

All of the following may charge a fee in regards to insurance, EXCEPT: a. legal reserve agent b. insurance counselor c. managing general agent d. certified financial planner

c. managing general agent

The dividend option if used will create a taxable event is known as: a. Paid Up Additions b. Cash Payment c. One Year Term d. Accumulation of Interest

d. Accumulation of Interest

XYZ employer offers a contributory group life insurance plan for their employees for which XYZ pays $90,000 in premiums. Which statement is true about this contributory plan? a. The death benefit is received tax free b. The employee will pay taxes on all premiums c. The employer will need to file an IRS form 1049 d. Contributions made by the employee are considered taxable

a. The death benefit is received tax free

Which of the following has investment components? a. straight life b. variable universal life c. adjustable life d. Fixed universal life

b. variable universal life

How long are newborns covered automatically for? a. 30 days b. 15 days c. 20 days d. 31 days

d. 31 days

An architect is looking to protect his business in the event he becomes disabled and cannot cover his employees salary. Which policy would suit his needs? a. buy sell b. business overhead expense c. key person insurance d. group

b. business overhead expense

How many hours prelicensing course does an agent with a temporary license need to take before their test? a. 40 b. 37 c. 39 d. 38

a. 40

A dentist is purchasing a disability overhead expense policy. What would the policy most likely cover? a. The dentists income b. Retirement benefits for employees c. The rental costs of the building d. A buy-out agreement

c. The rental costs of the building

W has completed an application, paid for his policy and received a conditional receipt for his disability policy. W becomes disabled before the medical exam occurs, what will the insurer most likely do with his claim? a. pay partial benefits b. deny claim and refund premium c. pay the claim and refund premiums d. defer to the commissioner

b. deny claim and refund premium

Which of the following is an agent required to tell an applicant when selling a participating policy? a. dividends are not guaranteed b. policyholders own the company c. dividends are paid to stockholders d. premiums may change

a. dividends are not guaranteed

A contract of adhesion that has confusing statements will be interpreted in the favor of whom? a. insurer b. producer c. commissioner d. insured

d. insured

When is a person considered covered with a nonmedical conditional receipt? a. when the premiums are paid b. when the application is filled out c. when all of the conditions are met d. when a medical exam is taken

c. when all of the conditions are met

Part C of Medicare covers what? a. medical costs b. hospital costs c. prescription drugs d. Advantage (coinsurance)

d. Advantage (coinsurance)

All of the following could qualify for Medicare except: a. full-time college student b. a 25 year old with a disability c. A 31 year old with kidney failure d. a 68 year old on Old Age Survivors Insurance

a. full-time college student

How does an insured know that a policy does not cover nuclear disasters? a. It is written in the provisions of the policy b. It is verbally disclosed by the agent c. It is included in the declarations page d. It must be confirmed by a claims adjuster

a. It is written in the provisions of the policy

An outline of coverage typically shows which of the following: a. a history of the insurer’s claims payments b. only the premium payment schedule c. only the covered services in detail d. terms and exemptions of the policy

d. terms and exemptions of the policy

Why would an insurer check an insureds consumer report? a. to determine their chance of filing a claim b. to determine their ability to pay premiums over time c. to determine their ability of risk retention and reduction d. to determine their medical status

b. to determine their ability to pay premiums over time

Which type of assignment is best suited for a bank loan? a. impending assignment b. collateral assignment c. assignment d. absolute assignment

b. collateral assignment

HMO out-of-network emergencies are: a. not covered b. paid as if they were in-network c. only covered the first time d. charged double

b. paid as if they were in-network

B has been receiving disability payments up until two months ago when he went back to work. Today B’s injury has surfaced again, which provision of disability will apply? a. recurrent disability b. partial disability c. residual disability d. total disability

a. recurrent disability

XYZ company purchases Key-Person insurance on employee M to cover training costs. Which of the following is true? a. XYZ company names M’s family as beneficiary b. XYZ company is the applicant c. M is the applicant and insured of the policy d. M is able to name the beneficiary

b. XYZ company is the applicant

HMOs must file all complaints lodged against them with which government agency? a. Department of Health b. Mayor of the City c. The Attorney General d. Department of Insurance and Commissioner

d. Department of Insurance and Commissioner

The insured may change all of the following on an adjustable life policy EXCEPT: Question 83Answer a. Premium payments b. Cash value growths c. Length of coverage d. Irrevocable beneficiary

d. Irrevocable beneficiary

Long Term Care insurance provides for which of the following? a. prescription drugs b. medical expenses c. Home care d. boarding and meals

c. Home care

The document an employee receives in a group contract is known as: a. deposit b. policy provisions c. policyholder d. certificate

d. certificate

The transfer of ownership of a policy completed by the policyowner is best described under which term? a. collateral assignment b. one way assignment c. absolute assignment d. assignment

d. assignment

Old Age Survivorship, Disability and Health Insurance is commonly known as what? a. Social Security b. welfare c. Medicare d. HMO

a. Social Security

How many credits are needed for full Social Security benefits? a. 60 b. 40 c. 12 d. 24

b. 40

An insurer knowingly accepts an application with unanswered questions and decides to issue the policy anyway has performed which action? a. offerrance of insurance b. waiver of a legal right c. consideration of a contract d. acceptance of insurance

b. waiver of a legal right

A portion of Medicare provided through HMOs and PPOs is best known as which of the following? a. Long Term Care b. Part A & B c. Medicare Advantage d. Medicaid

c. Medicare Advantage

A person has lied on their application and the policy is issued. Four years later a claim is filed, what will most likely occur? a. the claim is paid because it is inside of the Contestability clause b. the claim is denied because it is outside of the Contestability clause c. a grace period is reinstated d. the claim is paid because it is outside of the Contestability clause

d. the claim is paid because it is outside of the Contestability clause

A person with a high deductible most likely has which of the following? a. Medicaid b. Whole life c. Health Savings Account d. Social Security

c. Health Savings Account

What would be added to a policy that can cover higher risk hobbies? a. impairment rider b. illegal occupation c. long term care d. specialized risk

d. specialized risk

Which type of insurer most likely has local clinics that provide care for the insured? a. Medicare Medical Providers b. Preferred Provider Organizations c. Health Maintenance Organizations d. Indemnity Plans

c. Health Maintenance Organizations

A disability policy has an elimination period of 7 days. If an insured has an illness for 15 days, how long will the benefits paid? a. 7 b. 15 c. 8 d. 0

c. 8

Under the Uniform Provisions developed by the National Association of Insurance Commissioners (NAIC), after an insurer receives notice of claim, how long does the insurer have to furnish documents to the insured for reporting? a. 15 days b. 20 days c. 45 days d. 30 days

a. 15 days

The type of insurance policy contingent upon being ineligible to complete 2 Activities of Daily Living (ADL's) is known as: a. Medicaid b. Long Term Care c. Medicare Supplement d. Critical Illness

b. Long Term Care

An insured completes an application and the producer submits it to underwriting. The underwriter issues the policy. What is still needed for this to become a legal contract? a. offer (applicant filling out application) b. acceptance (insurer accepting application) c. legal duty (legality) d. consideration (money)

d. consideration (money)

All of the following are considered transacting insurance EXCEPT: a. explaining policy provisions b. delivering policies c. Collecting premium d. discussing mutual funds

d. discussing mutual funds

An agent makes a social media post exagerating an insurers dividend. What has this agent committed? a. coercion b. rebating c. false advertising d. twisting

c. false advertising

Health Flashcards

Life (100 cards)