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Nevada Life and Health Insurance License
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What are the four required elements of an insurance contract? - ✔✔Agreement, consideration, competent parties, and legal purpose. What two parts make up a life insurance application? - ✔✔General Information and the Medical Information. An agent's report can go in a life insurance application but is not included in the life insurance policy. When must insurable interest exist in life insurance? - ✔✔At the time of application. When does coverage begin, if the premium was submitted with the application, and the policy was issued two weeks later? - ✔✔At the time of the application. If an agent makes a mistake on the application and then corrects it, who must initial that change? - ✔✔The applicant. Insurers may change what on a guaranteed renewable health insurance polity? - ✔✔The rates by class. At what age may an individual make withdrawals from an HSA for nonhealth purposes without being penalized? - ✔✔At age 65.
Which provision states how much time must pass between two like illnesses in order for the second one to be covered under a new set of benefits? - ✔✔Recurrent Disability Provision
What is not true about dividends? - ✔✔Dividend amounts are guaranteed in the policy What is not true about Accidental Death and Dismemberment? - ✔✔Death benefits are paid only if death occurs within 24 hours of an accident When would a 20 - pay whole life policy endow? - ✔✔When the insured reaches age 100 What section of a health policy that states the causes of eligible loss under which an insurance is assumed to be disabled? - ✔✔Insuring Clause The insurance clause of a disability policy usually states what except? - ✔✔The method of premium payment What best describes annually renewable term insurance? - ✔✔It is level term insurance What best describes an annuity period? - ✔✔Period of time during which accumulated money is converted into income payments What is an eligibility requirement for all Social Security Disability Income benefits? - ✔✔Have attained fully insured status What protects the insured from unintentional policy lapse due to a nonpayment of premium? - ✔✔Automatic premium loan
What is the maximum amount that the Nevada Life & Health Insurance Guaranty Association be obligated to pay with respect to life insurance death benefits for one life? - ✔✔$300, What is the penalty for transacting insurance without a proper license? - ✔✔$1,000 for each violation What type of misrepresentation persuades an insured to cancel, lapse, or switch policies from one to another? - ✔✔Twisting The patient protection and affordable care act includes what except? - ✔✔Individual tax deduction for premiums paid What entity determines if an advertisement is deceptive of confusing? - ✔✔The Commissioner How many days does a nonresident procedure have to file a change of address when the agent moves to Nevada from another state? - ✔✔ 30 days What is not considered a misrepresentation? - ✔✔Making comparisons between different policies A producer who has allowed their license to lapse may reinstate the license without retaking the examination within what maximum time period? - ✔✔ 12 months or 1 year Who is a person, other than a viator, that enters into a viatical settlement? - ✔✔Viatical Settlement Provider
When would life insurance death benefits be tax free? - ✔✔If paid as a lump sum to the beneficiary What do individuals use to transfer their risk of loss to a larger group? - ✔✔Insurance What is insurance the transfer of? - ✔✔Risk Insurance is a contract by which one seeks to protect another from - ✔✔Loss What type of report provides information about the applicant's hobbies, habits, and financial status? - ✔✔Inspection Report What law protects consumers from the circulation of inaccurate or obsolete information - ✔✔The Fair Credit Reporting Act What term describes the fee a person pays an insurance company to receive coverage? - ✔✔Premium What is the purpose of the agent's report during the application process? - ✔✔The agent's report discusses the agent's personal observations about the proposed insured that may help in the underwriting process. What two elements are necessary for a life insurance contract to have a legal purpose? - ✔✔Insurable interest and consent
What does it mean when health insurance contracts are unilateral? - ✔✔Only one party makes a legally enforceable promise How is the information obtained for an investigative consumer report? - ✔✔Through interviews with the applicant's associates, friends, and neighbors What is the name of the process that insurance companies use to determine whether or not an applicant is insurable? - ✔✔Underwriting What are the three types of risk rating classifications in life insurance? - ✔✔Standard, substandard, and preferred When would a misrepresentation on an insurance application be considered fraud? - ✔✔When it is intentional and material What entities make up the Medical Information Bureau? - ✔✔Insurers What risk classification would typically qualify for lower premiums? - ✔✔Preferred Risk What is policy replacement? - ✔✔A new policy is issued while an existing policy is terminated or reissued with a reduction in cash value What best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company? - ✔✔Aleatory Contract
What type of life insurance is best suited to cover a mortgage? - ✔✔Decreasing term Who receives income payments from an annuity? - ✔✔Annuitant What type of premium is charged on a straight life policy? - ✔✔A level premium for the life of the insured In variable universal life insurance, to what policy component does the term "variable" refer? - ✔✔Cash value and death benefit A whole policy that requires that the policyowner only pays premiums for a specified number of years is known as what kind of policy? - ✔✔Limited-Pay Whole Life In an annuity, the accumulated money is converted into a stream of income during which phase? - ✔✔Annuitization period Whose life expectancy is taken into consideration in an annuity contract? - ✔✔The annuitant What type of life insurance offers an applicant a cash value element? - ✔✔Permanent Insurance Mortality tables are used by insurance companies to predict what? - ✔✔Life expectancy and the death rates for specific groups of individuals
If there is no named beneficiary for the annuity benefits, to which entity will the benefits be paid? - ✔✔The annuitant's estate How soon can income payments begin in an immediate annuity? - ✔✔No later than 1 year from the time of annuity purchase What type of annuity requires an agent to have a securities license? - ✔✔Variable annuity What policy loans are not available on term insurance? - ✔✔There is no cash value to borrow against An individual has a contract that will provide them with a certain amount of income for the rest of their life, however, this is not a life insurance policy. What type of contract does this person have? - ✔✔Annuity How long will a life annuity with a 15-year period certain pay? - ✔✔For the life of the annuitant unless they die within the first 15 years of the annuitization period; then the payments will last 15 years When does an adjustable life policy accumulate cash value? - ✔✔When the premiums paid are more than the cost of the policy What type of whole life insurance policies only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of the insured, endows at the insured's age 100? - ✔✔Single premium whole life What type of insurance would perform the function of cash accumulation? - ✔✔Whole Life Insurance
What is the purpose of settlement options in life insurance policies? - ✔✔to determine how the death benefit will be paid to the beneficiary What is the life insurance policy rider that provides coverage on the insured's family members?
- ✔✔Other-Insured Rider What is the advantage of reinstating a life insurance policy as opposed to applying for a new one? - ✔✔Policy premium in a reinstated policy will be set according to the insured's original age What life insurance policy rider allows the company to forgo collecting the premium if the insured becomes disabled? - ✔✔Waiver of Premium What beneficiary designation has first claim to the death proceeds of a life insurance policy? - ✔✔Primary beneficiary What life insurance policy provision prevents an insurer from disputing or denying a claim due to misstatements on the application after a certain period of time? - ✔✔Incontestability What is the purpose of the Automatic Premium Loan provision? - ✔✔To prevent the unintentional lapse of a policy because of nonpayment of the premium What happens to the proceeds of a life insurance policy if there is no named beneficiary? - ✔✔The proceeds are paid to the insured's estate With the reduction of premium dividend option, how is the dividend used? - ✔✔The dividend is applied to the next year's premium; it reduces the next year's premium
A policyowner borrowed a portion of cash value from his whole life policy. If the loan is not repaid, how will that affect the death benefit to the beneficiary? - ✔✔The amount of the loan will be subtracted from the death benefit What type of beneficiary is next in line after the primary beneficiary? - ✔✔Contingent beneficiary If a settlement option is not chosen by the policy owner or the beneficiary, what option will be used by the insurer? - ✔✔Lump-sum payment What provision allows the policyowner to reactivate a lapsed life insurance policy within a specified period of time with proof of insurability? - ✔✔Reinstatement Which of the two types of policy assignments requires transfer of all ownership rights in the policy to a third party> - ✔✔Absolute Assignment What are the dividend options in life insurance policy - ✔✔Cash, reduced premium, accumulation at interest, paid-up additions, paid-up option, one-year term, and acceleration of endowment When will a contingent beneficiary receive death benefit from a life insurance policy? - ✔✔When the primary beneficiary dies before the insured What provision in a life insurance policy extends coverage beyond the premium due date? - ✔✔Grace period
Group life insurance policies are written as what type of life insurance? - ✔✔Annually Renewable Term What are the personal uses of life insurance? - ✔✔Survivor protection, estate creation and conservation, cash accumulation and liquidity Who qualifies for tax-sheltered annuities, or 403(b) plans? - ✔✔Employees of nonprofit organizations under Section 501(c)(3) and employees of public school systems What is the general taxation rule for death benefits payable to the beneficiary of a life insurance policy? - ✔✔Death benefits are generally not subject to income taxes Upon surrender of a life insurance policy, what portion of the cash value will be taxed? - ✔✔Only the portion in excess of the premium paid What is the main advantage of converting from group life insurance to individual coverage? - ✔✔Evidence of insurability is not required What is the primary purpose of a 401(k) plan? - ✔✔Provide retirement income Is the death benefit of a life insurance policy taxed to the beneficiary if it's received as a lump sum? - ✔✔No, lump-sum benefits are received tax free What are the characteristics of the group that underwriters will consider before issuing a group life policy? - ✔✔Group's purpose, size, financial strength, and turnover
What is the main purpose of the 7-Pay Test? - ✔✔To determine if a life insurance policy a Modified Endowment Contract (MEC) If the beneficiary of a life insurance policy receives death benefit payments that consist of principal and interest, which portion, if any, will be taxed? - ✔✔The interest payment will be taxed. What does it mean when a retirement plan is qualified? - ✔✔The plan has favorable tax treatment Who may contribute to an HR- 10 plan? - ✔✔A self-employed individual Who would be considered a third - ✔✔An individual or an entity who is not the insured What does liquidity mean in a life insurance policy? - ✔✔Availability of cash value What is required to qualify an individual to contribute to a traditional IRA? - ✔✔Earned income When would life insurance policy proceeds be included in the insured's taxable estate? - ✔✔When there is an incident of ownership at the time of death What type of policy is typically issued without proof of insurability from the insured? - ✔✔Group policy
What document describes an insured's medical history, including diagnosis and treatments? - ✔✔Attending Physician's Statement What must the insurer do before giving the applicant an HIV exams? - ✔✔Get the applicants informed written consent prior to the exam. Results will be disclosed to underwriters but not agents In health insurance, the policy itself and the insurance application form what? - ✔✔Entire Contract Who must sign a health insurance application? - ✔✔The policyowner, the insured (if different), and the agent What is the term used for a written request to issue an insurance contract based on the provided information? - ✔✔Application What information are the members of the Medical Information Bureau required to report? - ✔✔Medical information about the applicants or insured What is the best way to make a change on an application for insurance? - ✔✔Start over with a fresh application When should an agent obtain a Statement of Good Health from the insured? - ✔✔When the premium was paid upon policy delivery and not at the time application
Whose responsibility is it to inform an applicant for health insurance about the insurer's information gathering practices? - ✔✔The agent Who is responsible for paying the cost of a medical examination required in the process of underwriting? - ✔✔The insurer If an insurer decides to obtain medical information from different sources in order to determine the insurability of an applicant, who must be notified of the investigation? - ✔✔The applicant What is the entire contract in health insurance underwriting? - ✔✔The application and the policy issued If an agent makes a correction on the application for health insurance, who must initial the correct answer? - ✔✔The applicant If an underwriter requires extensive information about the applicant's medical history, what report will best serve this purpose? - ✔✔Attending Physician's Statement An agent is in the process of replacing the insured's current health insurance policy with a new one. What would be the proper action? - ✔✔The old policy should stay in force until the new policy is issued An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do? - ✔✔Ask them to sign a statement of good health
