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North Carolina Life and Health Insurance Final
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M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT - ✔✔free-look period has expired Additional coverage can be added to a Whole Life policy by adding a(n) - ✔✔decreasing term rider All of the following actions are considered rebating EXCEPT - ✔✔sharing commissions with other licensed and appointed agents One of the stated purposes of the Life and Health Insurance Guaranty Association is to - ✔✔assist in the prevention of insurer insolvencies Which of the following statements is CORRECT about the period in which a Term Policy can be converted? - ✔✔It varies according to the contracts Insurance agents MUST obtain a license from North Carolina's - ✔✔Commissioner of Insurance An accident policy will most likely pay a benefit for a(n) - ✔✔off-the-job accident K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income? - ✔✔Disability Income
K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered - ✔✔guaranteed renewable M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force? - ✔✔ 45 days B is a teacher who was injured in a car accident and cannot work. She is now receiving monthly benefits as a result of this accident. Which type of policy does B have? - ✔✔Disability Income Which of the following services is NOT covered under a hospitalization expense policy? - ✔✔surgeon's fees Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called - ✔✔representations M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT - ✔✔free-look period has expired Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the - ✔✔marital deduction J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value? - ✔✔ 20 - pay Life
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?
- ✔✔Request of the change will be refused If the Commissioner of insurance finds that a licensed person has used fraudulent, coercive, or dishonest practices or has proved to be incompetent, untrustworthy, or financially irresponsible, the law allows the Commissioner to - ✔✔suspend, revoke, or refuse to renew the agent's license T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay? - ✔✔$50, What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies? - ✔✔Family Maintenance Policy J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy? - ✔✔$25, G purchased a Family Income policy at age 40. The policy has a 20 - year rider period. If G were to die at age 50, how long would G's family receive an income? - ✔✔ 10 years The following acts are examples of unfair methods of competition and deceptive practices in the business of insurance EXCEPT the use of - ✔✔comparisons showing that a policy has higher benefits
According to the Information and Privacy Protection Act, when access to recorded personal information is requested following an adverse underwriting decision, the insurer must make the information available within how many business days? - ✔✔ 30 Under the Affordable Care Act (ACA), health coverage is provided for dependents up to the age of - ✔✔ 26 Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy? - ✔✔Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company The Coordination of Benefits provision - ✔✔prevents an insured covered by two health plans from making a profit on a covered loss An insured covered by Accidental Death and Dismemberment (AD&D) insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary? - ✔✔Proceeds will go to the contingent beneficiary Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation? - ✔✔Policy was returned within the free-look period, premium will be fully refunded If a company accepts a renewal premium payment that would extend coverage beyond the policy's MAXIMUM age limit, the company - ✔✔must continue the coverage to the end of the period of time for which the premium was accepted
The fund that assures policyholders payment of death benefits on Life Policies, if the company is insolvent at the time of the claim, is called the - ✔✔Life and Health Insurance Guaranty Association Under a Group Health Insurance Policy, continuation shall be available only to an employee who has been insured immediately prior to the date of termination for a period of AT LEAST - ✔✔ 3 months The funds used by the Life and Health Insurance Guaranty Association to carry out its purpose are obtained from the - ✔✔member companies T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later. Assuming that T is an acceptable risk, what item is given to T? - ✔✔Conditional receipt Which of the following combination plans is designed to protect an insured from an unpaid mortgage balance upon premature death? - ✔✔Joint Life Group/voluntary long-term care policy premiums are typically deducted from the employee's income and - ✔✔are less costly as compared to individual long term care coverage G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills? - ✔✔The insured Which of the following requires that an applicant for an individual Health Policy be notified of an investigation into his personal character, general reputation, and mode of living? - ✔✔Insurance Information and Privacy Protection Act
An individual who purchases a Life annuity is given protection against - ✔✔the risk of living longer than expected Inducing or attempting to induce any insured person through misrepresentation to lapse, forfeit, or surrender insurance is - ✔✔twisting An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT - ✔✔spouse's occupation A person who is insured within a group contract will be given a - ✔✔certificate Which of the following statements is true about most Blue Cross/Blue Shield organizations? - ✔✔They are nonprofit organizations Which of these options can an individual use their medical flexible spending account to pay for?
- ✔✔Prescription drugs Before a Health Policy is issued or delivered, the form, classification or risks, and premium rates MUST be filed with the - ✔✔Commissioner of Insurance Which of these is NOT relevant when determining the amount of personal life insurance needed? - ✔✔Local unemployment rate Life and health insurance policies are - ✔✔Unilateral contracts
Insurers organized under the laws of North Carolina are called - ✔✔domestic companies If after satisfactory proof of loss, an insurer fails or refuses to pay death proceeds, the insurer must pay interest on the proceeds after how many days? - ✔✔ 30 T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? - ✔✔ 0 Which of the following characteristics is associated with a large group disability income policy? - ✔✔No medical underwriting Every Group Health Policy providing benefits for chemical dependency treatments must include, for the life of the contract, a - ✔✔minimum benefit of $16, K works for XYZ Clothing Store from September through December each year. K works 45 hours a week for this period of time. The employer's Group Policy would consider K - ✔✔not eligible for the insurance because as a seasonal employee K does not meet the definition of "employee" under North Carolina law S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company did not respond to the claim. S can take legal action against the insurer beginning - ✔✔November 1 The policyholder has how many days to return an Accident/Health Insurance Policy and receive a full refund on premiums? - ✔✔ 10
Credit life insurance is typically issued with which of the following types of coverage? - ✔✔Decreasing Term An annuity promises that, if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an amount equal to the contract value has been paid. This type of annuity is called - ✔✔An installment Refund annuity Under which of the following circumstances will the benefits under COBRA continuation coverage end? - ✔✔All group health plans are terminated by the employer Which of the following factors affects the amount of monthly disability benefits payable under Social Security? - ✔✔The amount of the benefits available from other sources An insured must notify an insurer of a medical claim within how many days after an accident? - ✔✔ 20 What must the policyowner provide to the insurer for validation that a loss has occurred? - ✔✔Proof of Loss When L applies for a Health Insurance Policy, L unintentionally fails to list a previous visit to a cardiologist. If the insurance company contests the policy, it MUST do so within 2 years - ✔✔from the date of issue Eligible employees must be added to group health coverage NO LATER than how many days after their first day of employment? - ✔✔ 90 days
To be licensed as an accident and health insurance agent in North Carolina, the applicant MUST
- ✔✔have successfully completed at least 20 hours of instruction approved by the Commissioner of Insurance According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options? - ✔✔Monthly J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this? - ✔✔Nonoccupational coverage An insurance broker in North Carolina is a representative of the - ✔✔insured L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They purchase a Family Policy that covers L's spouse to age 65. A death benefit will NOT be paid in which of the following circumstances? - ✔✔L's spouse dies at age 66. What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan? - ✔✔100% In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and - ✔✔Initial Premium An individual has a Major Medical policy with a $5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred? - ✔✔$7,
Variable Whole Life Insurance can be described as - ✔✔both an insurance and securities product The annuity that represents the largest possible monthly payment to an individual annuitant is a(n) - ✔✔Straight Life annuity Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? - ✔✔Life Income What is the primary factor that determines the benefits paid under a disability income policy? - ✔✔Wages J purchased a Disability Income Policy that ONLY J can terminate and on which the rates will never increase above those illustrated in the policy. Which of the following types of policies did J purchase? - ✔✔Noncancelable What kind of premium does a Whole Life policy have? - ✔✔level The rules and regulations of the Life and Health Insurance Guaranty Association in North Carolina apply to - ✔✔Life and Health Policies issued by companies authorized in North Carolina Information obtained from a phone conversation to the proposed insured can be found in which of these reports? - ✔✔Inspection report
Continuation of coverage of a group Hospital, Surgical, and Major Medical Policy MUST include
- ✔✔hospital expenses Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy? - ✔✔increase face amount If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act? - ✔✔Insured's contingent beneficiary An incomplete life insurance application submitted to an insurer will result in which of these actions? - ✔✔Application will be returned to the writing agent The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n) - ✔✔closed panel What type of life policy covers two people and pays upon the death of the last insured? - ✔✔Survivorship A Disability Income policyowner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a five-month period. The insurer may cover the second disability without a new elimination period under the - ✔✔Recurrent Disability provision The provision that defines to whom the insurer will pay benefits to is called - ✔✔Payment of Claims
Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures? - ✔✔Commercial insurer A written agreement to provide a Life Insurance Policy holder immediate cash in exchange for the sale and transfer of a Life Insurance Policy is a - ✔✔Viatical Settlement S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation? - ✔✔single premium Which of these is NOT considered to be a cost connected with an individual's death? - ✔✔Business expenses A policyowner is able to choose the frequency of premium payments through what policy feature? - ✔✔Premium Mode An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet? - ✔✔Consideration clause Companies in North Carolina may transact solicitations for insurance ONLY through - ✔✔licensed agents In order to establish a Health Reimbursement Arrangement (HRA), it MUST - ✔✔be established by the employer
When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n) - ✔✔exclusion An agent who sells an individual life insurance policy in North Carolina MUST deliver to the policyowner - ✔✔A Policy Summary and Buyer's Guide P received Disability income benefits for 3 months then returns to work. She is able to work one month before her condition returns, leaving her disabled once again. What would the insurance company most likely regard this second period of disability as? - ✔✔A recurrent disability What benefit does the Payor clause on a Juvenile Life policy provide? - ✔✔Premiums are waived if payor becomes disabled
