Insurance Test Cheat Sheet

Questions and Answers

What is a Variable Life?

Type of life insurance that allows the policyowner to have level premiums and to also choose from a selection of investment options.

What is a qualified profit-sharing plan?

Allows employees to participate in the profits of the company.

Why must Association Plans that provide health benefits be fully insured?

Because the Association Plans must be fully insured by an authorized insurer.

Under which act are insurers required to report receipt of cash payments in excess of $10,000?

The USA Patriot Act. Signup and view all the answers

How many days does an insurance company have to notify someone of a denial of a reinstatement application?

45 days. Signup and view all the answers

What is the minimum grace period for a life insurance policy to make a premium payment?

30 days. Signup and view all the answers

Why might a business not buy Key Person Life Insurance?

A pension deficiency if the key employee dies. Signup and view all the answers

Why is an applicant's signature required on a life insurance application?

To attest that the statements on the application are accurate to the best of the applicant's knowledge. Signup and view all the answers

If an employee injures themselves off work premises, what insurance plan is generally considered primary?

Her group health plan. Signup and view all the answers

What type of group life plan involves employees sharing the cost of insurance?

Contributory Group Life Plan. Signup and view all the answers

What is required to change an irrevocable beneficiary?

The written consent of the beneficiary. Signup and view all the answers

What is term coverage that allows the continuation of coverage after the initial policy period called?

Renewable (term coverage). Signup and view all the answers

What must agents provide to applicants for Medicare supplement policies?

Sustainability Form. Signup and view all the answers

What does the Health Insurance Portability and Accountability Act (HIPAA) protect?

Health information. Signup and view all the answers

What rights does the Consolidated Omnibus Budget Reconciliation Act (COBRA) provide to terminated workers?

The right to continue group health benefits. Signup and view all the answers

How many years are premium payments limited to in a limited pay life policy?

A specified number of years. Signup and view all the answers

In Florida, what are adjustable rates for life policy loans based on?

Moody's Corporate Index. Signup and view all the answers

Are past due premiums waived during a policy's grace period?

No. Signup and view all the answers

What must an agent do if they make a mistake while filling out an insurance application?

Correct the information and have the prospect initial the change. Signup and view all the answers

A __________ is authorized to assign a life insurance policy as collateral for a loan.

Policyowner. Signup and view all the answers

How are group life insurance policies generally written?

Annually Renewable Term. Signup and view all the answers

What must be collected for a non-medical insurance coverage to take effect the same day?

A signed application and the initial premium. Signup and view all the answers

Who is eligible for coverage under a master group health policy?

All employees, regardless of their individual health history. Signup and view all the answers

What must an individual be unable to perform to qualify for long-term care health benefits?

2 activities of daily living. Signup and view all the answers

What do comprehensive major medical policies usually combine?

Major medical with basic hospital/surgical coverage. Signup and view all the answers

What is the elimination period of an individual disability policy?

The amount of time a disabled person must wait before benefits are paid. Signup and view all the answers

What type of policy pays benefits to a policyholder covered under a hospital expense policy?

Reimbursement. Signup and view all the answers

What is the reason for a business having a business overhead expense disability plan?

To cover fixed business expenses in the event the owner becomes disabled. Signup and view all the answers

What does an employer that offers a qualified retirement plan to its employees provide?

Retirement benefits. Signup and view all the answers

Study Notes

Life Insurance Overview

Variable Life allows policyowners to pay level premiums and choose from various investment options.
A Life Insurance policy's grace period provides a minimum of 30 days for premium payment before risks increase.
An irrevocable beneficiary cannot be changed without written consent from that beneficiary.
Renewable term coverage permits continuation after the initial policy period expires.
Group Life Insurance policies are typically structured as Annually Renewable Term.

Employer and Employee Benefits

Qualified profit-sharing plans let employees share in company profits, distributing a portion of earnings.
Employees contributing to their insurance costs participate in a Contributory Group Life Plan.
Under COBRA, terminated employees have the right to continue group health benefits for themselves and their families.
Master Group Health policies cover all employees without exclusion for individual health history.

Insurance Regulations and Compliance

Association Plans providing health benefits require full insurance from an authorized insurer.
Insurers must report cash payments over $10,000, as mandated by the USA Patriot Act.
Agents selling Medicare supplement policies must provide applicants with a Sustainability Form.
HIPAA ensures privacy protections for health information.

Claims and Coverages

For non-medical insurance to take effect on the same day, both a signed application and the initial premium must be collected.
If an employee injures themselves off-premises and the employer has over 20 employees, their group health plan is typically the primary coverage.
To qualify for Long Term Care benefits, individuals must be unable to perform at least 2 activities of Daily Living.

Policies and Procedures

A policyowner can use their Life Insurance policy as collateral for a loan.
Past due premiums are not waived during a policy's grace period.
Errors in application filling must be corrected and initialed by the applicant.
The elimination period in individual disability policies is the waiting time before benefits are paid.
Business Overhead Expense Disability Insurance covers fixed business expenses if the owner becomes disabled.

Other Important Concepts

Comprehensive Major Medical policies merge Major Medical coverage with Basic Hospital/Surgical coverage.
A limited pay life policy restricts premium payments to a specific number of years.
Adjustable rates for life policy loans in Florida use the MOODY'S Corporate Index for assessment.

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Description

This quiz covers important terms and definitions related to insurance, including variable life insurance and qualified profit-sharing plans. Perfect for students preparing for exams in insurance and financial services. Test your knowledge and ensure you're well-prepared!