Life Policy Provisions and Options
No assignment of a policy will be binding on the insurer, unless:
It is in writing and received at the insurer's home office
The net amount at risk in an Ordinary Whole Life Insurance Policy _________ over the life of the policy.
Decreases
Benefit payments made on a ____________ basis are not scheduled, but are based on the average fee charged by all doctors in a given geographical area.
Usual, customary, and reasonable (UCR)
A(n) _________ is issued to the sponsor of the group, and employees receive an outline of coverage or other summary of benefits, which offers information about the plan’s major benefits and principal exclusions.
Master policy
Interest earned on premiums paid to an insurer helps to ________ the premiums charged.
Lower
The bank may require its borrowers to have a life insurance policy to secure a loan in the event of the borrower's death. Which provision gives the bank proportional protection but not control of the policy?
Collateral Assignment
*Double Jeopardy*
A client wants coverage for himself as well as coverage for his wife and children all under one policy at an affordable price. Which of the following would best meet the need?
Family Rider
Fred's group health plan offers prepaid routine medical exams to provide early treatment and preventive care. He most likely has what type of coverage?
HMO
In noncontributory group health plans, how many eligible employees must be covered by the plan?
100%
An applicant's signature on an application indicates what?
That their statements are true
True or False: Extended Term is a Dividend Option
False: Extended term is a nonforfeiture option, not a dividend option.
If a policyowner of a convertible term life insurance policy exercises his/her right to convert, which of the following will happen?
The term policy will be replaced by a permanent life insurance policy
This type of policy covers various expenses that an insured may incur due to a routine accident or sickness.
Medical expense
True or False: Any Benefits received ARE taxable to the recipient.
False: Any benefits received ARE NOT taxable to the recipient
What is the correct insurance term for a statement that is guaranteed to be true
Warranty
Taxation applies to any ________ on the cash value paid out as a withdrawal of a Universal Life policy.
Interest
What pays a current interest rate and also guarantees a minimum interest rate that will be credited to the cash values of the life insurance policy?
Universal Life
*Double Jeopardy*
PPO plans pay providers based on a:
Discounted fee for service negotiated in advance
The employees of a corporation must each pay a portion of the premium for their group insurance. This means they are members of a _____________.
Contributory group plan
Ultimately it is up to the _______ to determine if the proposed insured is an acceptable risk.
Home office underwriter
Lucy uses her dividends to purchase single premium additional permanent benefits at her attained age. Which Dividend Option is Lucy exercising?
Paid-up Additions
An insured owns a whole life policy that ends at age 100 and lives to be 100 years of age. Why does the insurer pay the face value to the insured?
Because the policy endows
Wayne incurs a $2,000 medical bill. If his health policy has a $1,000 deductible and an 80/20 coinsurance percentage, how much will the insurer pay?
$800: Wayne will first have to pay his deductible of $1,000. Then, Wayne will pay 20% of the remaining $1,000 and the insurer will pay 80%, or $800.
*Double Jeopardy*
Until yesterday, J. J. worked for his father's company and was covered by the company's large group health plan. He stopped working to go to college. He is 26 years of age and wants to keep the same coverage until he earns his degree in approximately 24 months. A good option for J.J. is to exercise ______________
The COBRA option under his father's group plan
**Triple Jeopardy**
K meets with an insurance producer, completes an application, and writes a check for the initial premium. The producer submits the application and the premium to the insurer, and a policy is issued and mailed to the producer. Two weeks later, K has still not shown up to pick up the policy. Is the policy in force and why?
The policy is in force and was legally delivered when the insurer sent the policy to the producer