Concepts in Life and Health Insurance, Exams of Nursing

Download Concepts in Life and Health Insurance and more Exams Nursing in PDF only on Docsity! Texas life and health FINAL EXAM and answers 2024 If, at the time of an insured's death, the insurance company discovers that the insured's age was misstated on the application for life insurance, the company will most likely \ CORRECT ANSWER IS pay the policy proceeds in the amount the premiums would have purchased at the insured's actual age The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the: \ CORRECT ANSWER IS Waiver of Premium P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to: \ CORRECT ANSWER IS P only Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy? \ CORRECT ANSWER IS *Premiums are waived after the insured has been totally disabled for a specified time period (The Waiver of Premium provision waives the payment of premiums after the insured has been totally disabled for a specified period of time.) All of the following provisions must be included in life insurance policies EXCEPT \ CORRECT ANSWER IS All of the following provisions must be included in life insurance policies EXCEPT Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation? \ CORRECT ANSWER IS olicy was returned within the free-look period, premium will be fully refunded Who can purchase a plan through the Marketplace? \ CORRECT ANSWER IS Any legal resident except those incarcerated A major medical policy typically: \ CORRECT ANSWER IS provides benefits for reasonable and necessary medical expenses, subject to policy limits Which of the following BEST describes a short-term medical expense policy? \ CORRECT ANSWER IS Nonrenewable A Whole Life Insurance Policy endows when the \ CORRECT ANSWER IS Cash value equals the death benefit The insuring clause \ CORRECT ANSWER IS States the scope and limits of the coverage An insurer must provide an insured with claim forms within __ days after receiving notice of a loss. \ CORRECT ANSWER IS 15 A Family Income Policy is a combination of Whole Life and \ CORRECT ANSWER IS Decreasing term insurance T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? \ CORRECT ANSWER IS $0 Which of these statements describe a Modified Endowment Contract (MEC)? \ CORRECT ANSWER IS Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability? \ CORRECT ANSWER IS conversion An insurance company may be judged guilty of false advertising if it \ CORRECT ANSWER IS exaggerates its dividends in a newspaper advertisement A policy of adhesion can only be modified by whom? \ CORRECT ANSWER IS the insurance company Variable Whole Life Insurance can be described as: \ CORRECT ANSWER IS both an insurance and securities product Which type of contract liquidates an estate through recurrent payments? \ CORRECT ANSWER IS annuity Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is: \ CORRECT ANSWER IS business overhead expense What is the elimination period of an individual disability policy? \ CORRECT ANSWER IS time period a disabled person must wait before benefits are paid The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the: \ CORRECT ANSWER IS insuring clause 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? \ CORRECT ANSWER IS Full face amount minus any past due premiums The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the: \ CORRECT ANSWER IS initial deductible According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid? \ CORRECT ANSWER IS 31 days Which of the following BEST describes a Hospital Indemnity policy? \ CORRECT ANSWER IS coverage that pays a stated amount per day of a covered hospitalization Which of these is NOT relevant when determining the amount of personal life insurance needed? \ CORRECT ANSWER IS local unemployment rate Under which of the following circumstances will the benefits under COBRA continuation coverage end? \ CORRECT ANSWER IS all group health plans are terminated by the employer What is the consideration given by an insurer in the Consideration clause of a life policy? \ CORRECT ANSWER IS promise to pay a death benefit to a named beneficiary Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies? \ CORRECT ANSWER IS long term care Which of the following services is NOT covered under a hospitalization expense policy? \ CORRECT ANSWER IS surgeons fees Which of these life insurance riders allows the applicant to have excess coverage? \ CORRECT ANSWER IS term rider 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? \ CORRECT ANSWER IS disability income The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs? \ CORRECT ANSWER IS social security disability income What benefit does the Payor clause on a Juvenile Life policy provide? \ CORRECT ANSWER IS premiums are waived if the payor becomes diabled Z owns a Disability Income policy with a 30-day Elimination period. Z contracts pneumonia that leaves him unable to work from January 1 until January 15. Z then becomes disabled from an accident on February 1 and the disability lasts until July 1 the same year. Z will become eligible to receive benefits starting on: \ CORRECT ANSWER IS march 1 A Long-Term Care policy must offer a MINIMUM benefit period of how many months? \ CORRECT ANSWER IS 12 A Limited-Pay Life policy has: \ CORRECT ANSWER IS premium payments limited to a specific number of years. Group/voluntary long-term care policy premiums are typically deducted from the employee's income and, \ CORRECT ANSWER IS are less costly as compared to individual long term care coverage Which premium schedule results in the lowest cost to the policyowner? \ CORRECT ANSWER IS Annual Additional coverage can be added to a Whole Life policy by adding a(n): \ CORRECT ANSWER IS decreasing term rider Who is normally considered to be the owner of a 403(b) tax-sheltered annuity? \ CORRECT ANSWER IS the employee L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They purchase a Family Policy that covers L's spouse to age 65. A death benefit will NOT be paid in which of the following circumstances? \ CORRECT ANSWER IS L's spouse dies at 66 An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n): \ CORRECT ANSWER IS exclusion for the medial condition P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim? \ CORRECT ANSWER IS claim will be denied What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability? \ CORRECT ANSWER IS convertible term Which of these do NOT constitute policy delivery? \ CORRECT ANSWER IS policy issued with a rating Taking receipt of premiums and holding them for the insurance company is an example of: \ CORRECT ANSWER IS fiduciary responsibility Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured? \ CORRECT ANSWER IS PPO When does a Probationary Period provision become effective in a health insurance contract? \ CORRECT ANSWER IS at the policies inception An individual life insurance policy issued in Texas MUST have a grace period for premium payment of how many days? \ CORRECT ANSWER IS 31 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? \ CORRECT ANSWER IS $50,000 Why is an applicant's signature required on a life insurance application? \ CORRECT ANSWER IS to attest that the statements on the application are accurate to the best of the applicants knowledge Which of the following types of care is typically not covered in a Long-Term Care policy? \ CORRECT ANSWER IS acupuncture A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following? \ CORRECT ANSWER IS aviation exclusion With Optionally Renewable Health policies, the insurer may: \ CORRECT ANSWER IS review the policy annually and determine whether or not to renew it After the initial enrollment period, an HMO must hold an open enrollment period of how many days at LEAST once in every 12-month period? \ CORRECT ANSWER IS 31 To be eligible for Social Security disability benefits, an employee must be unable to perform: \ CORRECT ANSWER IS any occupation Insurance company agent appointments remain in force for which of the following maximum periods of time, if any? \ CORRECT ANSWER IS until terminated or withdrawn In a qualified retirement plan, the yearly contributions to an employee's account: \ CORRECT ANSWER IS as restricted to maximum levels set by the IRS J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries sustained in an accident. J's age as stated on the application five years ago was found to be understated by ten years. Which of the following actions will the insurance An agent may legally share commissions only with \ CORRECT ANSWER IS another agent who is licensed in the same line of insurance From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant? \ CORRECT ANSWER IS Fair credit reporting act Which of the following health insurance policy provisions specifies the health care services a policy will provide? \ CORRECT ANSWER IS Insuring clause Which of the following circumstances would cause a Medicare Supplement policy to be cancelled? \ CORRECT ANSWER IS the insured fails to pay the premium T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take? \ CORRECT ANSWER IS increase her policy's coverage amount 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: \ CORRECT ANSWER IS Entire contract provision An agent MUST give a prospective insured an Outline of Coverage when taking an application for a \ CORRECT ANSWER IS Medicare supplement policy M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son? \ CORRECT ANSWER IS Revocable Insurance agent licenses normally must be renewed every \ CORRECT ANSWER IS two years A Return of Premium life insurance policy is \ CORRECT ANSWER IS whole life and increasing term Which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT? \ CORRECT ANSWER IS If the employee paid for qualified medical expenses, the reimbursements may be tax-free M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son? \ CORRECT ANSWER IS Revocable Which of these is NOT a type of agent authority? \ CORRECT ANSWER IS Principal Life insurance that covers an insured's whole life with level premiums paid over a limited time is called: \ CORRECT ANSWER IS Limited pay life An insurance company may NOT reject a prospective insured's life application on the basis of which of the following factors? \ CORRECT ANSWER IS Gender The type of annuity that can be purchased with one monetary deposit is called a(n): \ CORRECT ANSWER IS immediate annuity Benefits for drug and alcohol treatment under a group health policy must include all of the following services EXCEPT \ CORRECT ANSWER IS transportation to and from an outpatient facility Boycott, coercion, and intimidation that result in the unreasonable restraint of trade are prohibited under the Texas Insurance Code covering \ CORRECT ANSWER IS unfair methods of competition Which type of policy is considered to be overfunded, as stated by IRS guidelines? \ CORRECT ANSWER IS modified endowment contract What is the underlying concept regarding level premiums? \ CORRECT ANSWER IS the early years are charged more than what is needed An agent MUST do which of the following during a sales presentation for a participating life insurance policy? \ CORRECT ANSWER IS includes a statement that dividends are not guaranteed Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? \ CORRECT ANSWER IS risk classification C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most? \ CORRECT ANSWER IS the cost Which health policy clause specifies the amount of benefits to be paid? \ CORRECT ANSWER IS insuring A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take? \ CORRECT ANSWER IS send a notice to the MIB that the application was declined E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? \ CORRECT ANSWER IS F Which of the following reimburses its insureds for covered medical expenses? \ CORRECT ANSWER IS commercial insurers An insurance company must do which of the following to terminate an agent's appointment? - send notice of the termination to the Texas Department of insurance \ CORRECT ANSWER IS send notice of the termination to the Texas Department of insurance In Major Medical Expense policies, what is the intent of a Stop Loss provision? \ CORRECT ANSWER IS limits an insured out-of-pocket medical expenses Which of the following BEST describes Credit Life insurance? \ CORRECT ANSWER IS Insurance issued on a debtor to cover outstanding balances on installment loans What does the ownership clause in a life insurance policy state? \ CORRECT ANSWER IS Who the policyowner is and what rights the policyowner is entitled to returning a portion of a premium as inducement to purchase insurance \ CORRECT ANSWER IS Which of the following is an example of rebating? All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death, EXCEPT: \ CORRECT ANSWER IS interest only Which of these factors does NOT influence an applicant's need for life insurance? \ CORRECT ANSWER IS self-maintenance expenses According to the Time Limit of Certain Defenses provision in an Individual Health Insurance Policy, nonfraudulent misstatements first become incontestable: \ CORRECT ANSWER IS two years from the date of the policy was issued Which of the following will a Long Term Care plan typically provide benefits for? \ CORRECT ANSWER IS home health care