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Questions and Answers
What amount will be paid under a policy where the insured misstated his/her age?
What amount will be paid under a policy where the insured misstated his/her age?
An amount the premium would have purchased at the correct age
The acceptance of a credit life application requires the submission of a certificate of insurance to the insured within _____ days.
The acceptance of a credit life application requires the submission of a certificate of insurance to the insured within _____ days.
30
Which of these is considered to be a Living benefit option in a life insurance policy?
Which of these is considered to be a Living benefit option in a life insurance policy?
Accelerated death benefit
Loans obtained by a policy owner against the cash value of a life insurance policy would be treated as taxable income.
Loans obtained by a policy owner against the cash value of a life insurance policy would be treated as taxable income.
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A long term care policy typically provides all of the following levels of care EXCEPT:
A long term care policy typically provides all of the following levels of care EXCEPT:
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What is the elimination period under a hospital indemnity plan?
What is the elimination period under a hospital indemnity plan?
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What is an insurance policy's grace period?
What is an insurance policy's grace period?
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How do interest earnings accumulate in a deferred annuity?
How do interest earnings accumulate in a deferred annuity?
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How many hours of ethics coursework must a licensee take for continuing education?
How many hours of ethics coursework must a licensee take for continuing education?
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The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of:
The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of:
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Health insurance involves two perils, accident and ______.
Health insurance involves two perils, accident and ______.
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Who is responsible for assembling the policy forms for insureds?
Who is responsible for assembling the policy forms for insureds?
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A securities license is required for a life insurance producer to sell:
A securities license is required for a life insurance producer to sell:
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Which of the following is NOT an illegal inducement?
Which of the following is NOT an illegal inducement?
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Which of the following is NOT a federal requirement of a qualified plan?
Which of the following is NOT a federal requirement of a qualified plan?
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Which dividend option would an insurer invest the policy owner's money and add any interest earnings as the dividends accrue?
Which dividend option would an insurer invest the policy owner's money and add any interest earnings as the dividends accrue?
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A health insurance policy will typically cover:
A health insurance policy will typically cover:
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What rider would pay a monthly amount because of total and permanent disability?
What rider would pay a monthly amount because of total and permanent disability?
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In addition to the actual policy, an entire contract includes which of the following?
In addition to the actual policy, an entire contract includes which of the following?
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Field underwriting performed by the producer involves:
Field underwriting performed by the producer involves:
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How long is Kathy's grace period if she pays a monthly premium on her health insurance policy?
How long is Kathy's grace period if she pays a monthly premium on her health insurance policy?
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Under employer's group major medical plan, how much would a $10,000 benefit be taxable as income if Pierre pays 25% of the premium?
Under employer's group major medical plan, how much would a $10,000 benefit be taxable as income if Pierre pays 25% of the premium?
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After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?
After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?
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What must an insurer offer to each policy owner at the time of purchase under long term care insurance?
What must an insurer offer to each policy owner at the time of purchase under long term care insurance?
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What is the primary factor that determines the benefits paid under a disability income policy?
What is the primary factor that determines the benefits paid under a disability income policy?
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What is the tax liability for employer contributions in Health Savings Accounts (HSAs)?
What is the tax liability for employer contributions in Health Savings Accounts (HSAs)?
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In the state of MI, properly filed health claims not timely paid require the insurer to pay simple interest from a date 60 days from satisfactory proof of loss at the rate of:
In the state of MI, properly filed health claims not timely paid require the insurer to pay simple interest from a date 60 days from satisfactory proof of loss at the rate of:
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In MI, legal action can be taken against an insurer for failure to pay health insurance claims for a period not to exceed:
In MI, legal action can be taken against an insurer for failure to pay health insurance claims for a period not to exceed:
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What is the advantage of adding a children's term rider?
What is the advantage of adding a children's term rider?
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When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates?
When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates?
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What is the unfair trade practice of replacing an insurance policy from one insurer to another based on misrepresentation called?
What is the unfair trade practice of replacing an insurance policy from one insurer to another based on misrepresentation called?
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Which type of coverage pays an amount per day for hospitalization directly to the insured, regardless of the insured's other health insurance?
Which type of coverage pays an amount per day for hospitalization directly to the insured, regardless of the insured's other health insurance?
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What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death?
What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death?
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Which of these premium payment frequencies is not typically available to a policyowner?
Which of these premium payment frequencies is not typically available to a policyowner?
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Which features are held exclusively by variable universal life insurance?
Which features are held exclusively by variable universal life insurance?
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Consumer privacy regulations permit the release of an insured's financial information when?
Consumer privacy regulations permit the release of an insured's financial information when?
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Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive?
Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive?
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According to the Michigan Insurance Code, what must a producer do when replacing a Life Insurance Policy?
According to the Michigan Insurance Code, what must a producer do when replacing a Life Insurance Policy?
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Which provision would make a policyholder eligible for benefits if a decrease in income results from an injury?
Which provision would make a policyholder eligible for benefits if a decrease in income results from an injury?
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A pharmacy benefit covers prescription drugs derived from list called a(n):
A pharmacy benefit covers prescription drugs derived from list called a(n):
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All of the following are examples of a Business Continuation Plan except:
All of the following are examples of a Business Continuation Plan except:
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Which actions must be taken by producers?
Which actions must be taken by producers?
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What is Rob's benefit at work that allows him to defer income for later payment?
What is Rob's benefit at work that allows him to defer income for later payment?
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What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allow an employee to do?
What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allow an employee to do?
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Distributions from a Health Savings Account (HSA) for qualified medical expenses are:
Distributions from a Health Savings Account (HSA) for qualified medical expenses are:
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An indemnity plan limitation that will pay the dental bills after a small amount is paid by the insured is called:
An indemnity plan limitation that will pay the dental bills after a small amount is paid by the insured is called:
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A notice of cash surrender value must be sent to a Universal Life policy owner:
A notice of cash surrender value must be sent to a Universal Life policy owner:
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The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as:
The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as:
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Which of the following gifts from a producer would NOT be considered rebating?
Which of the following gifts from a producer would NOT be considered rebating?
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Which of these riders will pay a death benefit if the insured's spouse dies?
Which of these riders will pay a death benefit if the insured's spouse dies?
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Which form of insurer has shareholders?
Which form of insurer has shareholders?
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A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called:
A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called:
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If Ron has a life insurance policy with a face value of $100,000 and a cost of living rider, how much may he increase the face value if the consumer price index has gone up 4%?
If Ron has a life insurance policy with a face value of $100,000 and a cost of living rider, how much may he increase the face value if the consumer price index has gone up 4%?
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A change in an insurance application requires:
A change in an insurance application requires:
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An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of:
An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of:
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The period in which there are no social security benefits for the surviving spouse is called the:
The period in which there are no social security benefits for the surviving spouse is called the:
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In the state of MI, a licensed producer:
In the state of MI, a licensed producer:
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When an insurance licensee changes his or her address under the Michigan insurance code, who must be notified?
When an insurance licensee changes his or her address under the Michigan insurance code, who must be notified?
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The legal action provision in a health contract is limited to no more than __ years.
The legal action provision in a health contract is limited to no more than __ years.
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Upon receiving a producer complaint, what may the commissioner immediately issue?
Upon receiving a producer complaint, what may the commissioner immediately issue?
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Which of the following services must be provided by HMO plans?
Which of the following services must be provided by HMO plans?
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Under which circumstances can a mentally handicapped son remain on his father's coverage after the age of 26?
Under which circumstances can a mentally handicapped son remain on his father's coverage after the age of 26?
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How long must an individual be unable to engage in any gainful activity due to physical or mental disability in order to qualify for Social Security Total Disability?
How long must an individual be unable to engage in any gainful activity due to physical or mental disability in order to qualify for Social Security Total Disability?
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Health insurance will typically cover which of the following perils?
Health insurance will typically cover which of the following perils?
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A person who is a nonsmoker, of average weight, and excellent health would most likely be in which risk classification?
A person who is a nonsmoker, of average weight, and excellent health would most likely be in which risk classification?
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What can a disability income policy utilize to prevent an insured from earning a higher income than if he/she were working?
What can a disability income policy utilize to prevent an insured from earning a higher income than if he/she were working?
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Which method is used to determine the level of funds required for ongoing support in the event of the breadwinner's death?
Which method is used to determine the level of funds required for ongoing support in the event of the breadwinner's death?
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To receive proceeds from a death benefit, a minor must have:
To receive proceeds from a death benefit, a minor must have:
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A partial surrender is allowed in which of the following policies?
A partial surrender is allowed in which of the following policies?
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What is the automatic continuance of insurance coverage referred to as?
What is the automatic continuance of insurance coverage referred to as?
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Major Medical insurance will typically cover medical expenses that result from:
Major Medical insurance will typically cover medical expenses that result from:
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What is considered to be the primary reason for buying life insurance?
What is considered to be the primary reason for buying life insurance?
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To qualify for a resident producer license in the state of MI, an individual must:
To qualify for a resident producer license in the state of MI, an individual must:
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What is issued to each employer health plan?
What is issued to each employer health plan?
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Which of the following decisions would a Health Savings Account owner NOT be able to make?
Which of the following decisions would a Health Savings Account owner NOT be able to make?
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Group health plans may deny participation based upon the:
Group health plans may deny participation based upon the:
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If Matt requests a double indemnity rider, what benefit will be payable to his beneficiary if he:
If Matt requests a double indemnity rider, what benefit will be payable to his beneficiary if he:
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ABC Insurance Agency is entering each applicant who purchases insurance through their agency into a drawing to win a free trip. This is an unlawful insurance practice known as:
ABC Insurance Agency is entering each applicant who purchases insurance through their agency into a drawing to win a free trip. This is an unlawful insurance practice known as:
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For what purpose is a life insurance application backdated?
For what purpose is a life insurance application backdated?
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An error was made on Mary's life insurance application. Which areas are errors commonly made on applications for which the incontestable clause does NOT apply?
An error was made on Mary's life insurance application. Which areas are errors commonly made on applications for which the incontestable clause does NOT apply?
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What happens to Dorian's protection when he uses his life policy's cash value to purchase an extended term insurance option?
What happens to Dorian's protection when he uses his life policy's cash value to purchase an extended term insurance option?
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Which activity does NOT require an insurance producer's license?
Which activity does NOT require an insurance producer's license?
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Making a statement that is false or maliciously critical of the financial conditions of an insurer is known as:
Making a statement that is false or maliciously critical of the financial conditions of an insurer is known as:
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If Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits, he would choose which benefit option?
If Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits, he would choose which benefit option?
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How many employees must an employer have for a terminated employee to be eligible for COBRA?
How many employees must an employer have for a terminated employee to be eligible for COBRA?
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A hospital or medical expense policy will typically cover dental treatment expenses under which circumstance?
A hospital or medical expense policy will typically cover dental treatment expenses under which circumstance?
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HIPAA considers which of the following as 'individually identifiable health information'?
HIPAA considers which of the following as 'individually identifiable health information'?
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Who assumes the investment risk with a fixed annuity contract?
Who assumes the investment risk with a fixed annuity contract?
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Medical Expense insurance would cover:
Medical Expense insurance would cover:
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When an insured has a major medical plan with first-dollar coverage, how does this impact the benefits paid?
When an insured has a major medical plan with first-dollar coverage, how does this impact the benefits paid?
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Who does Key Person Disability insurance pay benefits to?
Who does Key Person Disability insurance pay benefits to?
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To activate the reinstatement clause of a lapsed life insurance policy, what must the insured provide?
To activate the reinstatement clause of a lapsed life insurance policy, what must the insured provide?
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If Bob and Tom have life insurance policies on each other and Bob dies, who will receive the policy proceeds?
If Bob and Tom have life insurance policies on each other and Bob dies, who will receive the policy proceeds?
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If an employee contributes 50% toward the disability plan premium provided by an employer, what would be considered the taxable income of a $1,000 monthly disability benefit?
If an employee contributes 50% toward the disability plan premium provided by an employer, what would be considered the taxable income of a $1,000 monthly disability benefit?
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A rider that assures premiums will be paid on a juvenile policy until the child reaches a specific age is called:
A rider that assures premiums will be paid on a juvenile policy until the child reaches a specific age is called:
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Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
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Study Notes
Insurance Policies and Provisions
- Misstated age on a policy results in payout adjusted to what the premium would have provided at the correct age.
- Acceptance of a credit life application requires a certificate of insurance to be delivered within 30 days.
- Living benefit option in life insurance includes an accelerated death benefit.
- Loans against the cash value of a life policy are not considered taxable income.
Long Term Care and Health Insurance
- Long term care policies do not typically cover acute care.
- The elimination period in hospital indemnity plans is how long one must wait before benefits are available.
- Health insurance primarily covers accidents and sickness.
- Preventative health services are typically covered by health insurance policies.
Premiums, Claims, and Riders
- Grace period allows continuation of coverage after premium due date.
- After a loss notice, written proof of loss must be submitted if forms are not provided.
- Disability income rider pays benefits for total and permanent disability.
- A children’s term rider can be converted to permanent insurance without proof of insurability.
Laws and Regulations
- Ethics coursework requirement for continuing education is 3 hours.
- Michigan health claims not processed in a timely manner require 12% interest after 60 days.
- Insurers must provide inflation protection in long term care policies.
- COBRA allows employees to retain group health insurance post-employment if premiums are covered by them.
Tax Implications
- Employer contributions to Health Savings Accounts (HSAs) are tax-free for employees.
- Disability income benefit taxation depends on premium contributions; employee-contributed amounts are taxable.
- Death benefits from life insurance are generally not taxable when paid out.
Types of Coverage
- Major Medical plans cover a wide range of medical expenses, including reactions to medications and dental repairs necessitated by injuries.
- Hospital indemnity coverage pays set amounts per day during hospitalization, irrespective of other insurances.
- Variable life insurance allows policyholders to determine investment allocations for policy performance.
- Endowment policies pay out face amounts at the end of the term if the insured survives.
Policyholder Rights and Responsibilities
- A notice of cash surrender value must be sent to Universal Life policy owners annually.
- Insurers must submit a list of replaced life policies when a new policy is issued.
- A Change of Occupation provision allows benefits to be adjusted for more hazardous jobs.
- The reinstatement clause of a lapsed life policy requires evidence of insurability for activation.
Miscellaneous Information
- Family Term Insurance Rider pays a death benefit for the spouse’s death.
- Preferred risk classification typically applies to nonsmokers in good health.
- Indemnity plans with coinsurance require insured contributions to be covered by the insurer.
- Misrepresentation on insurance applications can have legal penalties and implications.
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Description
Test your knowledge on insurance policies, long-term care, and health insurance provisions. This quiz covers important topics such as premium adjustments, health coverage details, and the handling of claims and riders. Perfect for those studying or working in the insurance industry.
