Insurance Contracts: Types, Provisions, and Exclusions, Exams of Nursing

Download Insurance Contracts: Types, Provisions, and Exclusions and more Exams Nursing in PDF only on Docsity! Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) 2024 An annuity promises that, if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an amount equal to the contract value has been paid. This type of annuity is called An installment Refund annuity A Straight Life annuity A Cash Refund annuity A Joint Life annuity - ANS An installment Refund annuity One becomes eligible for Social Security disability benefits after having been disabled for 3 months 5 months 6 months 12 months - ANS 5 months 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? Straight life accumulates faster than Limited-pay Life 20-Pay Life accumulates cash value faster than Straight Life Cash value accumulation of both 20-Pay Life and Straight Life depend on the insurer's financial rating 20-Pay Life and Straight Life accumulate cash value at the same rate - ANS 20-Pay Life accumulates cash value faster than Straight Life Who makes the legally enforceable promises in a unilateral insurance policy? Beneficiary Insurance company Insured Applicant - ANS Insurance company The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and the initial premium agreeing to a physical examination delivery of policy disclosure of any medical conditions - ANS the initial premium Which parts of a life insurance policy are guaranteed to be true? Rating Representation Statement Warranty - ANS Warranty A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered EXCEPT for hospital charges physician fees experimental and investigative services nursing services - ANS experimental and investigative services If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses? Long-term care Indemnity Medicare Supplement Medicaid - ANS Medicare Supplement S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits? No benefits are payable under the Master contract Full benefits are payable under the Master contract Full benefits are payable under the converted policy Benefits less required premium are payable under the converted policy - ANS Full benefits are payable under the Master contract All of the following are limited benefit plans EXCEPT cancer policies life insurance policies dental policies critical illness policies - ANS life insurance policies A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow? Extended Term rider Cost of Living Adjustment rider Guaranteed Insurability Option rider Waiver of Premium rider - ANS Guaranteed Insurability Option rider Contingent Irrevocable - ANS Irrevocable Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take? Deposit the applicant's check into his account and make a personal check out to the insurance company from his personal account Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company Cross off his name on the "pay to" portion of the check, write the name of the insurance company, and send the check back to the insurance company Deposit the check in to his personal account, use the funds to purchase a cashiers check, and send the new cashiers check back to the insurance company - ANS Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company Variable Whole Life Insurance can be described as both an insurance and securities product an insurance product only a securities product only the insurance company assumes the investment risk - ANS both an insurance and securities product A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary? Medicaid Long-term care Medicare Her group health plan - ANS Her group health plan Medicare is a disability program is a hospital and medical expense insurance program offers assistance in making health insurance premiums Part D provides payment for surgeon expenses - ANS is a hospital and medical expense insurance program 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? Allow her to take a tax deduction on unearned premiums Increase her policy's coverage amount Decrease her policy's coverage amount Nothing - ANS Increase her policy's coverage amount All of the following statements about health coverage for newborns are correct EXCEPT coverage begins and benefits are payable from the moment of birth coverage includes necessary care and treatment of congenital defects coverage during the first year is limited to congenital defects continued coverage after the first 31 days is dependent on notification - ANS coverage during the first year is limited to congenital defects 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? Policy Exclusion Incontestable Entire Contract Provision Assignment - ANS Entire Contract Provision An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a $125,000 individual whole life policy $25,000 modified whole life policy $25,000 individual term life policy $25,000 individual whole life policy - ANS $25,000 individual whole life policy M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year for the first 5 years. At the beginning of the sixth year, the premium will increase to $800 per year but will remain level thereafter. The face amount will remain at $70,000 throughout the life of the policy. The type of policy that M has purchased is Adjustable Life Indeterminate Premium Life Grader Premium Life Modified Premium Life - ANS Modified Premium Life 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 type of life insurance S's attained age dividend amount used toward purchase beneficiary's age - ANS beneficiary's age Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy? Have the customer sign a blank application, then take the application back to his office to complete prior to sending it off to the insurance company Complete the application over the phone with the customer, sign the application for the customer, then send the application off to the insurance company Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company Have the customer fill out the application and send it to his office for him to sign, then send it off to the insurance company - ANS Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company Which of the following statements is CORRECT about the period in which a Term Policy can be converted? It is the same in all contracts It is set by state regulation It can be changed by the insured It varies according to the contracts - ANS It varies according to the contracts 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 deny the claim for policy proceeds on the basis of fraud collect the correct premiums and pay the claim pay the policy proceeds in the amount the premiums would have purchased at the insured's actual age pay the policy proceeds less a penalty not to exceed 12% of those proceeds - ANS pay the policy proceeds in the amount the premiums would have purchased at the insured's actual age 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, however the check was never signed by the applicant. If the application is approved, when will coverage be effective? The date the sales appointment was made The date the application was submitted to the insurance company The date of application The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured - ANS The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured An assignment of benefits of a Health Policy transfers payments to someone other than the policyowner is prohibited by state law is allowed only on policies dates after 1992 She will be paying exactly the same premium for the individual plan as she did the group plan - ANS She does NOT need to provide evidence of insurability A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value? Cash surrender Life settlement contract Buy-sell arrangement 1031 Exchange - ANS Life settlement contract Who can purchase a plan through the Marketplace? Anyone Any legal resident except those incarcerated Only those who do not have access to employer-sponsored coverage Only those who might be eligible for tax credits - ANS Any legal resident except those incarcerated What is Old Age and Survivors Health Insurance (OASDHI) also known as? Medicare Social Security Medicaid FICA - ANS Social Security Which of these require an offer, acceptance, and consideration? Warranty Estoppel Contract Representation - ANS Contract How does a typical Variable Life Policy investment account grow? Tied to price of gold Through mutual funds, stocks, bonds Based on returns from insurer's general account Tied to Treasury Bills - ANS Through mutual funds, stocks, bonds An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the agent applicant's spouse National Association of Insurance Commissioners (NAIC) applicant's physician - ANS applicant's physician 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? 15 31 45 90 - ANS 31 Which of the following is NOT included in the policy face? Free Look provision Name of the insured Name of the insurer Exclusions - ANS Exclusions A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following? Guaranteed Insurability rider Aviation exclusion Impairment rider Accidental Death Benefit rider - ANS Aviation exclusion In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy? Nonforfeiture Entire Contract Insuring Clause Owner's Rights - ANS Owner's Rights A Renewable Term Policy is renewable at the option of the Owner Company Insured Assignee - ANS insured Which of these is considered a true statement regarding Medicaid? Funded by both state and federal governments Intended to be used by individuals age 65 and older Provides disability income benefits Automatically covers those receiving Social Security disability benefits - ANS Funded by both state and federal governments Which is true concerning a Variable Universal Life policy? Policyowner controls where the investment will go and selects the amount of the premium payment Policyowner has no say where the investment will go but can choose the premium mode The investment vehicle for this type of policy is held in the insurer's general portfolio The death benefit can vary but the policyowner has no say in the premium amount paid - ANS Policyowner controls where the investment will go and selects the amount of the premium payment In life insurance, the needs approach is used mostly to establish which type of life insurance a client should apply for how much life insurance a client should apply for which company a client should use when applying for life insurance what the maximum amount the client can spend on life insurance - ANS how much life insurance a client should apply for A life insurance illustration is NOT required to include the name of the insurer underwriting or rating classification upon which the illustration is based initial death benefit company's mortality table - ANS company's mortality table Which of these characteristics is consistent with a Straight Life policy? Owner can adjust both premium and death benefit Premiums are lower for the first five years, increase the sixth year, then levels off for the remaining length of the contract Owner has the option of converting to term insurance Premiums are payable for as long as there is insurance coverage in force - ANS Premiums are payable for as long as there is insurance coverage in force Under the Texas insurance code, which of the following statements about the Suicide clause is CORRECT? The Commissioner of Insurance must review insurance companies' Suicide clauses every five years for discrimination A Suicide clause must apply equally to Life and Accidental Death and Dismemberment (AD&D) policies An insurance company must actuarially justify any suicide limitation Suicide may not be a defense against payment after the second year - ANS Suicide may not be a defense against payment after the second year Which of the following best describes a contingent beneficiary? Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured Person designated by the primary beneficiary's executor to receive policy proceeds make tax-deductible contributions to the plan make tax deductible contributions to key employees only make partial tax-deductible contributions to the plan - ANS make tax-deductible contributions to the plan What action can a policyowner take if an application for a bank loan requires collateral? Utilize accelerated benefits provision Borrow against policy cash value and use as a down payment Assign policy ownership to the bank Name bank as beneficiary - ANS Assign policy ownership to the bank Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due? Grace Period Consideration Waiver of Premium Reinstatement - ANS Grace Period The Consideration clause in a life insurance contract contains what pertinent information? Summary of benefits Offer and acceptance Entire Contract Amount of premium payments and when they are due - ANS Amount of premium payments and when they are due 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? The total premiums paid minus any policy loans Nothing $50,000 $100,000 - ANS $50,000 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? $1,000,000 $500,000 $250,000 $0 - ANS $0 The clause identifying which losses resulting from an accident or sickness are insured by the policy is called the Entire Contract provision Consideration clause Benefit clause Insuring clause - ANS Insuring clause What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100? Term Life Whole Life Credit Life Universal Life - ANS Whole Life What is the purpose of the Time of Payment of Claims provision? Requires the insured to wait 60 days after submitting Proof of Loss before filing a lawsuit Prevents delayed claim payments made by the insurer Requires a probation period for each claim filed by the insured Protects the insurer from frivolous lawsuits - ANS Prevents delayed claim payments made by the insurer A long-term care rider in a life insurance policy pays a daily benefit in the event of which of the following? Critical illness Terminal illness Inability of the insured to perform more than 2 Activities of Daily Living (ADL's) Inability of the insured to maintain insurance premiums due to unemployment - ANS Inability of the insured to perform more than 2 Activities of Daily Living (ADL's) Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability? Owner's Rights clause Incontestable Period Insuring Agreement Conversion privilege - ANS Conversion privilege The Insurance Commissioner may examine the records of an insurance company in order to determine the solvency of the company determine the trust deposits of the company approve the claims records of the company for tax purposes assess the company's value on behalf of a prospective client - ANS determine the solvency of the company What does Medicare Parts A and B cover? Part A covers hospitalization; Part B covers long-term care Part A covers doctor's services; Part B covers hospitalization Part A covers hospitalization; Part B covers doctor's services Part A covers prescription drugs; Part B covers disability - ANS Part A covers hospitalization; Part B covers doctor's services What is issued to each employee of an employer health plan? Provision Receipt Policy Certificate - ANS Certificate A 42-year-old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his/her needs change. Which of the following policies will best meet this need? Endowment at Age 75 Universal Life Graded Benefit Whole Life Modified Whole Life - ANS Universal Life When a life insurance policy exceeds certain IRS table values, the result would create which of the following? 1035 Exchange An investment Modified Endowment Contract (MEC) Endowment - ANS Modified Endowment Contract (MEC) Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges? The maximum premium an insurer can charge for their health insurance based on geography The maximum amount an employer can contribute to a contributory health plan The maximum deductible an insured can be charged The maximum amount considered eligible for reimbursement by an insurance company under a health plan - ANS The maximum amount considered eligible for reimbursement by an insurance company under a health plan K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? Return of premiums paid A group life insurance policy may NOT insure groups consisting exclusively of persons who are salaried, clerical, or administrative employees hourly paid laborers or their supervisors administrative, managerial, or sales personnel related by marriage, blood or legal adoption - ANS related by marriage, blood or legal adoption Credit Life insurance is issued in any amount at the discretion of the applicant used in the event of loss of income issued in an amount not to exceed the amount of the loan coverage that waives the premiums on a loan payment in the event of total disability - ANS issued in an amount not to exceed the amount of the loan 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 conditionally renewable cancellable guaranteed renewable - ANS noncancellable All of the following may charge fees for insurance advice EXCEPT Legal reserve agents Financial planners Life and Health insurance counselors Managing general agents - ANS Legal reserve agents An agent MUST give a prospective insured an Outline of Coverage when taking an application for a Whole life policy Variable Annuity Medicare Supplement policy Term Life policy - ANS Medicare Supplement policy A creditor who requires a debtor to obtain insurance from a particular company or agent as a condition for a loan is guilty of coercion fraud rebating boycotting - ANS coercion Which of the following circumstances would cause a Medicare Supplement policy to be cancelled? A claim greatly exceeds the benefits payable The insured fails to pay the premium The attending physician dies before the claim is settled The insured is no longer in good health - ANS The insured fails to pay the premium Benefits for drug and alcohol treatment under a group health policy must include all of the following services EXCEPT treatment in a certified facility transportation to and from an outpatient facility outpatient treatment through a public hospital or clinic group therapy prescribed by a physician - ANS transportation to and from an outpatient facility V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable? 6 months 5 months 4 1/2 months 4 months - ANS 4 months A foreign insurance company is one that is incorporated under Texas law under the laws of another state is a territory of the United States outside the United States - ANS under the laws of another state A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a treaty insurer risk retention group risk assumption group captive insurer - ANS risk retention group What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision? File a lawsuit Submit the claim in any form Wait for the claim form to arrive Resubmit the request for a claim form - ANS Submit the claim in any form Which of these is considered a mandatory provision? Payment of Claims Insurance with Other Insurers Misstatement of Age Change of Occupation - ANS Payment of Claims N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as Assignment of Benefits Coinsurance Indemnity Co-deductible - ANS Coinsurance A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision? Payor provision Accelerated Benefits provision Assignment provision Waiver of Premium provision - ANS Payor provision The sections of an insurance contract which limit coverage are called waivers riders exclusions limitations - ANS exclusions Which of the following is NOT a limited benefit plan? cancer policies life insurance policies dental policies critical illness policies - ANS life insurance policies All of the following provisions must be included in life insurance policies EXCEPT Incontestability Entire Contract Extended Term Misstatement of Age - ANS Extended Term In a life insurance policy, which feature states that the policy will not cover certain risks? Exception Exclusion Ejection Expulsion - ANS Exclusion Gives an agent authority to represent a specific insurance company Permits an agent to solicit insurance in Texas Permits a decreased agent's relative to act as an agent for a limited period of time Permits an insurance company to transact business in Texas - ANS Permits an insurance company to transact business in Texas 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 within a maximum of three months within a reasonable amount of time at least monthly - ANS immediately The Notice of Claims provision requires a policyowner to provide proof of loss to an insurer within a specified time notify an insurer of a claim within a specified time wait 60 days after filing a claim to initiate a lawsuit against an insurer notify their physician of a claim within a specified time - ANS notify an insurer of a claim within a specified time P purchases a $50,000 whole life insurance policy in 2005. One of the questions on the application asks if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary? Premiums paid plus interest Nothing. Claim will be denied $50,000 minus any outstanding policy loans $100,000 because the cause of death was accidental - ANS $50,000 minus any outstanding policy loans The Misstatement of Age provision requires that if the age of the insured is misstated, then any amount payable is forfeited an amount that the premiums paid would have purchased at the current age or ages an amount consists of the premiums paid for the policy if the policy was issued for over three years reduced by a specified percentage of the face amount - ANS an amount that the premiums paid would have purchased at the current age or ages T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary? Request will be accepted only if in writing by the insured Change will be made only if premiums are paid current Change will be made immediately Request of the change will be refused - ANS Request of the change will be refused Which of the following health insurance coverages is BEST suited for meeting the expenses of catastrophic illness? Major Medical Hospital Expense Surgical Expense Hospital Income - ANS Major Medical An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n) delayed effective date exclusion for the medical condition extended Contestable period Concealment clause - ANS exclusion for the medical condition What provision in a life insurance policy states that the application is considered part of the contract? Application provision Policy Exclusions provision Entire Contract provision Incontestability provision - ANS Entire Contract provision 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? Joint Noncontributory Contributory Participating - ANS Contributory In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and a Medical Information Report the initial premium forward it immediately to the insurer Attending Physician Statement - ANS the initial premium A newly licensed General Lines agent must complete a MINIMUM of how many hours of continuing education within 24 months after initial license? 10 15 20 24 - ANS 24 A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as a fraternal benefit society a stock insurer a mutual insurer the Life and Health Insurance Guaranty Association - ANS a fraternal benefit society An enrollee of a Health Maintenance Organization (HMO) may be cancelled or nonrenewed for which of the following reasons? Failure to pay for coverage Marriage to a person with a pre-existing condition Excessive use of health care benefits Refusing HMO advice to quit smoking - ANS Failure to pay for coverage Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? Consideration Competent Parties Offer/Acceptance Legal Purpose (Insurable Interest) - ANS Legal Purpose (Insurable Interest) Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the marital deduction death benefits Section 1035 exchange capital gains tax rate - ANS marital deduction An organization that solicits insurance only among its members is known as a specific order specialized company limited insurance company fraternal benefit society - ANS fraternal benefit society K purchased a $10,000 Life Policy that will pay the face amount to her if she lives to age 65, or to her beneficiary if she dies before age 65. K purchased which of the following types of policies? Limited-Pay Life Term to Age 65 Whole Life Paid-Up at Age 65 Endowment at Age 65 - ANS Endowment at Age 65 N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase? 30 Pay Life Term to Age 70 Universal Life Adjustable Life - ANS 30 Pay Life Which statement is TRUE in regards to a policy loan? Past-due interest payments not paid after 3 months will void the policy Past-due interest on a policy loan is added to the total debt Insurance companies can send delinquent interest accounts to a collection agency Insurance companies can charge an interest rate based on the policyowner's credit report - ANS Past-due interest on a policy loan is added to the total debt P is self-employed and owns an Individual Disability Income policy. He becomes totally disabled on June 1 and receives $2,000 a month for the next 10 months. How much of this income is subject to federal income tax? $20,000 $14,000 $6,000 $0 - ANS $0 What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability? Entire contract Owner's rights Nonforfeiture options Conversion - ANS Conversion Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy? Discourages overutilization of the insurance coverage Minimizes the need for deductibles Discourages adverse selection Minimizes the waiting period - ANS Discourages overutilization of the insurance coverage At the age of 45, an individual withdraws $50,000 from his Qualified Profit-Sharing Plan and then deposits this amount into a personal savings account. This action would result in Only income tax on the amount withdrawn Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan Continued tax-free accumulations in the bank savings account Only a 10% penalty on the withdrawal of funds - ANS Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan Before holding a hearing regarding an agent's unfair or deceptive practice, the Insurance Commissioner MUST give how many days notice? 3 5 10 30 - ANS 30 Which of the following is an important underwriting principle of group life insurance? Physical examinations are required Everyone must be covered in the group Employer must pay for the entire premium The group must be formed for the purpose of getting affordable insurance - ANS Everyone must be covered in the group The Consideration clause of an insurance contract includes the buyer's guide a summary of the coverage provided the named beneficiaries the schedule and amount of premium payments - ANS the schedule and amount of premium payments 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? Daughter Husband's estate K's estate Trust fund - ANS Daughter The Commissioner of insurance may suspend, revoke, or refuse to renew the license of an agent who is convicted of a misdemeanor is found guilty of misrepresentation or fraud in obtaining the license files for bankruptcy fails to write any business for six consecutive months - ANS M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for? Claim payment is equal to physician's actual charges Claim payment is negotiated between physician and patient Determined by the schedule of benefits from the hospital Determined by the terms of the policy - ANS Determined by the terms of the policy If X wants to buy $50,000 worth of permanent protection on his/her spouse and $25,000 worth of 10-year Term coverage on X under the same policy, the applicant should purchase An Estate Builder Policy A Whole Life Policy with Extended Term A Whole Life Policy with an Other Insured Rider A Whole Life Policy with a Payor benefit - ANS A Whole Life Policy with an Other Insured Rider The insuring clause Specifies the additional time given to pay past due premiums States the scope and limits of the coverage States the amount of premium to be collected Prohibits the insured from suing the insurer for at least 60 days after filing a written proof of loss - ANS States the scope and limits of the coverage How does group insurance differ from individual insurance? Evidence of insurability is required Premiums are higher Premiums are lower Pre-existing conditions not covered - ANS Premiums are lower A Long-Term Care policy must offer a MINIMUM benefit period of how many months? 12 18 24 30 - ANS 12 What percent of personal life insurance premiums is usually deductible for federal income tax purposes? 100% 75% 50% 0% - ANS 0% Why is an applicant's signature required on a life insurance application? To attest that the statements on the application are warranties To attest that the statements on the application are accurate to the best of the applicant's knowledge