Free DC Insurance Licensing and Regulation Questions and Answers 1 — Questions and Answers
Question 1: A disability income policy social insurance supplement (SIS) benefit rider:
- Pays benefits only if it turns out the insured is eligible for benefits from social insurance
- Pays a benefit if the insured is injured on the job and qualifies for workers compensation benefits
- Provides a payment only when the insured is totally disabled, but not receiving any social insurance benefit plans (Correct answer)
- Provides for a bonus payment that will match social security disability income benefits, if they are paid
Correct answer: Provides a payment only when the insured is totally disabled, but not receiving any social insurance benefit plans
A disability income policy's Social Insurance Supplement (SIS) benefit rider is designed to fill potential gaps in coverage related to government social insurance programs. This rider provides a benefit payment to the insured when they are totally disabled but are not yet receiving, or are ineligible for, benefits from social insurance plans like Social Security Disability. It ensures a more consistent income stream during the waiting period or if government benefits are denied.
Question 2: A health maintenance organization (HMO) plan reduces costs by promoting?
- After-hours care
- Generic care
- Preventative care (Correct answer)
- Fee for service care
Correct answer: Preventative care
Health Maintenance Organizations (HMOs) primarily reduce costs by emphasizing and promoting preventative care. By focusing on regular check-ups, screenings, and health education, HMOs aim to keep members healthy and detect potential health issues early, before they become more serious and expensive to treat. This proactive approach minimizes the need for costly hospitalizations and specialized treatments, leading to overall lower healthcare expenditures.
Question 3: Renewable term insurance can be best described as :
- A level death benefit with an increase in premium (Correct answer)
- A level death benefit with a decrease in premium
- A decreasing death benefit with a level premium
- An increasing death benefit with a level premium
Correct answer: A level death benefit with an increase in premium
Renewable term insurance allows the policyholder to renew the coverage at the end of each term without needing to undergo a new medical exam. While the death benefit typically remains level throughout the renewed terms, the premium will increase with each renewal. This increase reflects the insured's advancing age and the higher risk of mortality, making the coverage more expensive over time.
Question 4: The basic feature of a managed care indemnity plan is that the participants:
- Select a provider and submit claims to the insurance company (Correct answer)
- Select a provider at work and claims processor
- Pre-select a physician and third-party claims administrator
- Pre-select a clinic and submit claims to the insurance company
Correct answer: Select a provider and submit claims to the insurance company
Managed care indemnity plans offer participants the freedom to choose any healthcare provider they prefer, without being restricted to a specific network or requiring referrals. After receiving services, the participant typically pays the provider directly and then submits a claim to the insurance company for reimbursement. This model provides flexibility but often involves deductibles and coinsurance, with the insurer reimbursing a portion of the approved costs.
Question 5: How do rights of an irrevocable beneficiary differ from those of a revocable beneficiary?
- An irrevocable beneficiary may be changed by the policy owner without the beneficiary's consent
- An irrevocable beneficiary has a vested right that neither the policy owner nor his creditors can impair without the beneficiary's consent (Correct answer)
- A revocable beneficiary can become the policy owner at any time by paying the premiums
- An irrevocable beneficiary has the right to name a contingent beneficiary for the policy
Correct answer: An irrevocable beneficiary has a vested right that neither the policy owner nor his creditors can impair without the beneficiary's consent
An irrevocable beneficiary holds a vested right in the life insurance policy, meaning their claim to the policy's benefits cannot be altered or revoked by the policy owner without their explicit consent. This vested interest protects the beneficiary's rights, preventing the policy owner from changing beneficiaries, surrendering the policy, or taking out loans against it unilaterally. Furthermore, this right often shields the policy proceeds from the policy owner's creditors, ensuring the death benefit is paid to the designated beneficiary.
Free DC Insurance Licensing and Regulation Questions and Answers 1
A disability income policy social insurance supplement (SIS) benefit rider: