Life insurance
The federal Risk Retention Act of 1986 contains guidelines for which of the following entities?
risk retention groups
Fraternal insurance companies
reinsurance companies
surplus lines insurance companies
risk retention groups
The purpose for the Policy Summary, which must be given to every insurance applicant before an application is signed, is to:
- provide buyers with details of the specific insurance contract they are considering for purchase
- explain the step-by-step process involved in purchasing the recommended product
- explain the general features, benefits, and conditions of the type of insurance being considered
disclose all the hidden costs associated with the policy being applied for
provide buyers with details of the specific insurance contract they are considering for purchase
A producer who disobeys a Commissioner's order to cease and desist from an illegal activity is not subject to which of the following?
fine
imprisonment
license revocation
license suspension
imprisonment
Under what circumstance does an accident and health insurer have the right to request an autopsy?
When Not prohibited by state law
Bert's spouse passed away recently. Bert was covered under his spouse's group family health insurance place but now is covered under COBRA. How much of the active-employee cost may be passed on to Bert for continued coverage?
Maxiumum of 120%
To be considered insurable, a risk (and the potential loss it represents) must meet which one of the following requirements?
The loss must be definable as to time, cause, and location.
The loss must be certain to occur.
The loss must be catastrophic.
The loss cannot be measurable.
The loss must be definable as to time, cause, and location.
Which of the following statements about representations and warranties is most correct?
Promises made by the insurer in the insurance contract are deemed representations.
A statement made on the application which is true to the applicant's best knowledge is deemed a misrepresentation if it is later discovered to be inaccurate.
Statements made by the applicant on the application are deemed warranties.
Insurers can rescind (cancel) an insurance contract if a misrepresentation is discovered on the application during the contestability period.
Insurers can rescind (cancel) an insurance contract if a misrepresentation is discovered on the application during the contestability period.
After the first 36-month period following licensure, a producer is required to complete how many hours of continuing education per license renewal period?
45 hours
24 hours
36 hours
12 hours
45 hours
Typically, states will permit the grouping of two or more small employers in order to obtain group health insurance at a favorable rate. This grouping of employers is known as a multiple employer
trust
How is an insured's accident and health claim handled by an insurer if it occurs during the policy's grace period?
The unpaid premium may be subtracted from the reimbursement
Buying life or health insurance is an example of which risk management technique?
risk transfer
risk retention
risk reduction
risk avoidance
Risk transfer
Which of the following contract characteristics is unique to insurance contracts but NOT all contracts?
legal purpose
competent parties
consideration
unilateral
unilateral
When may an insurer cancel either whole life or term life insurance?
The insurer may cancel either type of policy without reason at any time.
The insurer may not cancel either type of life insurance policy under any circumstances.
The insurer may cancel either type of policy only if the insured becomes uninsurable.
The insurer may cancel both types of policies if the policyowner does not pay the premiums.
The insurer may cancel both types of policies if the policyowner does not pay the premiums.
The major medical deductible carryover period normally applies to expenses incurred during the last ___ months of the plan year
3
How are the premiums for an individually-owned disability income policy treated for tax purposes?
Not tax-deductible at all
Lucy is applying for an individual health insurance policy and discloses that she is diabetic, which is considered which of the following?
a morale hazard
a moral hazard
a critical hazard
a physical hazard
a Physical hazard
How often must the Commissioner examine the affairs and transactions of every authorized insurer?
once every two years
once every five years
once every three years
annually
Once every 5 years
Which of the following most accurately describes the basic function of a life insurance policy's net premium?
The net premium is the amount an individual actually pays to provide all the benefits promised in the policy regardless of premium mode.
The net single premium is the amount required to cover the policy's promised benefits, without accounting for the insurer's policy-related expenses.
The net premium is the amount actually charged to the policyowner.
The net premium represents the insurer's mortality charge.
The net single premium is the amount required to cover the policy's promised benefits, without accounting for the insurer's policy-related expenses.
Tony has been diagnosed with Kidney Failure and is covered by group accident and health insurance through her large employer. Which of these accident and health plans will be primary during the months immediately following her diagnosis?
Her employers group accident and health plan
Patrick purchased a long-term care policy. He has a health condition for which medical treatment was recommended by a physician within 6 months prior to the policy's effective date. This condition is called a(n)
Pre-existing condition
An insurance producer tells a life insurance applicant that he has the authority to waive the medical exam that is normally required by the insurer with every application. The insurer may be required to accept the application without a medical exam due to the producer's:
express authority
imputed authority
implied authority
apparent authority
apparent authority
All of the following statements are true about applying for a nonresident producer's license in Massachusetts EXCEPT:
The home state must grant licenses to Massachusetts residents on a reciprocal basis.
An applicant's license must be in good standing in the home state.
An applicant must establish residency in Massachusetts.
An applicant must pay a fee.
An applicant must establish residency in Massachusetts.
Alice wants to spread her life insurance premiums over the year, rather than pay a single annual premium. She asks her agent what that would mean in terms of the sum of premiums paid. Which of the following is the correct response?
Whichever mode of premium she chooses, the sum of premiums over the course of the year is the same.
The sum of premiums will be lower than if she paid a single annual premium.
The sum of premiums may be higher or lower than the single annual premium, depending on whether the annual premium is paid at the start or end of the policy year.
The sum of premiums will be higher than if she paid a single annual premium.
The sum of premiums will be higher than if she paid a single annual premium
An accident and health insurance policy defines an injury as "bodily injury by accidental means." For an injury to be covered on this policy, what is required?
Both the cause and resultant injury must be accidental
Which of the following statements regarding the Pregnancy Provision under the Civil Rights Act of 1964 is true?
Abortion must be covered only if the mother's life is at risk