The waiver of premium provision of a life policy allows the insurer to take which of the following actions?
waiver an insured's premiums if the insured becomes totally disabled before a certain age
Wen an insured reaches age 65, the cash value of a 20-pay endowment t age 65 policy is equal to what?
the face amount of the policy
Which of the following policy provisions states a company's promise to pay benefits?
insuring clause
A client needs a substantial amount of protection but has limited financial resources; what insurance policy would best meet the client's needs?
term life insurance
If a life insurance policy applicant is classified as a substandard risk, the insurance company will most likely:
charge an extra premium
If an adjustable life policyowner makes an additional premium payment, the policy may be affected in all of the following ways except?
-premium paying period may decrease
-value of the nonforfieture option may decrease
-face amount may increase
-length of
value of the nonforfeiture options may decrease
At what point in the life insurance application is the applicant informed of their rights under the fair credit reporting act?
when the policy is delivered
A contract that has as its basic function the systematic liquidation o accumulated assets through periodic payments is called?
annuity
If a policy contains a guaranteed insurability rider, the insured has the right to purchase:
additional coverage at specified ages
R has just graduated from law school. R knows that her future earnings will be much higher than they are now, but wants to purchase a permanent policy now to cover future needs; what policy would best suit her needs?
modified whole life policy
In life insurance, the free look provision begins on the:
policy delivery date
An insurance producer takes an application for life insurance policy but does not collect the initial premium. On delivery of the policy to the proposed insured, the producer must collect the initial premium and:
the insured's signed statement of continued good health
What policy is an interest-sensitive form of permanent protection?
universal life
Two business partners own life insurance on each other, if one partner dies, what contract will allow the other party to buy 100 percent of the business interest?
buy and sell agreement
In life insurance, insurable interest must exist at the time the:
producer writes an application on a proposed insured
The PRIMARY purpose of an inspection report is to assess an applicant's:
personal characteristics
Federal income tax laws generally treat proceeds of life insurance policies as:
nontaxable
What provision in a life policy specifics the manner in which proceeds will be paid to a beneficiary on the death of the insured?
settlement options
What policy provision provides for continuation of coverage despite nonpayment of premium?
nonforfeiture options
Which of the following statements is CORRECT about the paid-up additions in a participating whole life policy?
-they are subject to underwriting approval
-they do not generate dividends
-they are considered term polices
-they are purchased on an attained
they are purchased on an attained age basis
In which of the following contracts is the death benefit called the principal sum?
-survivorship annuity
-accidental death and dismemberment (AD&D)
-decreasing term
-joint life
accidental death and dismemberment (AD&D)
A policyowner names his wife as the primary beneficiary of his universal life policy on a revocable basis. He also names his three children as his secondary beneficiaries and his estate as his tertiary beneficiary. If the poliyowner's wife predecreases hi
the children
P wants to name her husband as the beneficiary of her life policy, she wishes to retain all of the rights of ownership. P should have her husband named as the:
revocable beneficiary
The right to change a beneficiary designation is reserved for the:
policyowner
What policy provision states that the application is part of the policy:
entire contract
A payor benefit rider provides what benefit?
a temporary waiver of premium should the payor die, until the insured reaches a predetermined age
A life policy is usually contestable due to material misrepresentation on the application for a period of:
2 years
A contract the promises to pay an income to an insured until his/her death is called:
life annuity
What group life plan requires at least 75 percent of the eligible members to participate?
contributory
A life insurance application is incomplete if it is missing the signature of who?
the proposed adult insured
An applicant's statements on an application are considered to be legal:
representations
An employer can deduct premium payments as an ordinary business expense for what life coverages?
group life coverages
A producer takes applications from identical twines who want to buy the same type of polices in the same amount. The insurer issues the policies as applied for, but charges a 25% higher premium for one of the polices. The difference in premiums is probabl
risk classification
A type of annuity in which the cash values are invested in securities are:
variable annuities
Under the social security retirement benefits, all of all the following factors will influence how much a retiring individual will receive as a monthly income benefit EXCEPT:
-age
-PIA
-insured status
-sex
sex
All of the following policies may be examples of third party ownership EXCEPT:
-modified life
-group life
-split-dollar life
-key employee life
modified life
What amount must increase in an increasing term policy?
death benefit
What is true of group life conversion privileges?
death during the conversion period is covered even if a departing employee chooses not to convert their policy
What is true of a renewable term policy?
it is renewable at the option of the insured
An insured owns a $10,000 policy with a $4,000 cash value and a 6% interest rate. On Jan 1, the insured borrows $500 and pays one year's interest in advance. During the year, the insured does not repay any of the loan or interest. If the insured dies of D
$9,500
What annuity would best suit the needs of a 35 year old factory worker is concerned about inflation and wants to establish a retirement plan?
a flexible premium variable annuity
If an applicant for life insurance submits a completed application to a producer without paying the first premium, coverage becomes effective when the:
policy is delivered and the premium is paid
In the event of an insured's death, what provides income for the family during a designated period of time followed by a lump sum death benefit?
family income rider
Reinstatement of a life policy requires an insured to take all of the following actions:
#NAME?
What definition of disability would cover a permanent partial disability?
residual disability
The insurance policy clause that identifies the contracting parties and defines the scope and limits of coverage is called:
insuring clause
An insured becomes disabled three years after his disability income policy is issued. The disability is caused by a condition that existed prior to the policy issue date but was not specifically excluded from coverage. In this situation, the insurer will
pay the full claim
What provision explains that the producer does not have the authority to waive the provisions of an insurance contract?
entire contract provision
An individual who has had a heart murmur since birth is likely to be issued an individual health policy that includes:
an exclusionary/ impairment rider
What is true of a waiver of premium in a disability income policy?
it allows the insured to maintain a policy in force while disabled and unable to pay premiums
An insured whose disability income policy contains a change of occupation clause takes a new jobs in more hazardous occupation and fails to notify the insurer of the change. One year later, the insured becomes disabled. The insurer will most likely:
settle the claim according to what the premiums would have purchased under the more hazardous occupation
In what health policy are both renewability and the premiums guaranteed?
noncancellable policy
Under the claims form provision of a health policy, if the insurance company fails to send claim forms within the time period required, the insured should:
submit the claim in any form, which must be accepted by the company as adequate proof of loss
When delivering a policy to the client, the producer should:
#NAME?
The social security program provides all of the following benefits:
#NAME?
Medicare supplement policies are primarily designed to:
provide additional benefits beyond those provided by medicare
A health care plan that reimburses a flat fee for medical care it provides at a clinic it owns and operates is referred to as:
a health maintenance organization (HMO)
The consideration clause in an accident and health policy states the:
applicant pays the initial premium
The group long-term disability plan is integrated with social security when:
social security and group benefits pay a combined maximum limit
Under a group health plan, an employer may offer benefits to classes of employees on the basis of:
#NAME?
The purpose of the medical information bureau (MIB) is to:
share medical data among member companies
A precertification review prior to a nonemergency hospitalization is an example of:
managed care
The primary purpose of Medicaid is to:
provide medical expense coverage to persons meeting certain minimum income requirements
When periodic claim payments are required under a long-term disability income policy, an insurer must make payments to an insured at least once every
month
What is true of a disability income policy with guaranteed insurability rider?
the insured may periodically increase the amount of benefits payable under the policy
Medicare Part A covers what?
hospital room and board
Under a guaranteed renewable accident and health policy, an insurer retains the right to:
increase the premium rate for an entire glass of insureds
The coordination of benefits clause found in group health master contracts is used to:
avoid double payment of benefits to an insured who has duplicate group coverages
An eligible expense provision in a comprehensive major medical policy commonly identifies all of the following types of covered health care services:
#NAME?
The elimination period in most disability income policies applies:
to each disability income policy separately
The internal revenue service (IRS) considers disability income benefits paid under an employer-paid group disability income to be:
fully taxable
An applicant for insurance submits an application to an insurer for underwriting but DOES NOT forward any premium payments with the application. Legally, the applicant is:
making an inquiry for an offer
Under an accidental death and dismemberment (AD&D) policy, insurable interest must exist when?
at the inception of the policy
What is an accurate definition of the probationary period in the context of group health coverage through work?
the waiting period a new hire must satisfy prior to becoming eligible for group health coverage
What health policy requires a beneficiary designation?
travel accident
What type of provision guarantees renewability to a specified date or age unless certain specified events occur?
conditionally renewable
Group health insurance specifies that what percentage of eligible individuals must be offered coverage under a noncontributory plan?
100%
An accident and health policy notice of claims provision requires that an insured give written notice to the insurer with a MAXIMUM of how many days after a loss?
20 days
A health care plan designed to combine small employers together into a group to purchase medical expense insurance for their employees is called:
multiple employer trust (MET)
What is the purpose of coinsurance?
it helps control overutilization of benefits
In an accidental death and dismemberment (AD&D) policy, the term "CAPITAL SUM" refers to:
a lump sum payment made for an accidental dismemberment
An insurer must provide claims forms to an insured within a MAXIMUM of how many days after receiving notice of an accident and health claim?
15 days