Free IA Life & Health Exam Flashcards

Both endow at the stated maturity age and build guaranteed cash value. Ordinary whole life spreads premiums across the insured's entire lifetime, while limited-pay forms such as 20-pay, paid-up at 65 and single premium compress the same funding into fewer, larger payments. That compression is why single-premium and short-pay contracts are the likeliest to fail the federal 7-pay test.

Option A pays a level face amount, so the insurer's net amount at risk shrinks as cash value grows and cost-of-insurance charges stay lower. Option B pays the face amount plus the accumulated cash value, holding the net amount at risk level, which makes the same face amount more expensive to carry.

Level term fixes both the face amount and the premium for the term. Decreasing term keeps the premium level while the death benefit declines, which is why it is sold against a mortgage balance. Annually renewable term keeps the face amount level while the premium climbs each year with attained age. None builds cash value.

A fixed annuity leaves the investment risk with the insurer, which guarantees a minimum interest rate. A variable annuity shifts that risk to the owner through separate-account subaccounts and requires a securities registration plus the Iowa variable line of authority. An indexed annuity credits interest tied to an index while guaranteeing a floor.

Joint life pays at the first death, so it funds a buy-sell agreement or replaces the lost earnings of a two-income household. Survivorship life pays only after both insureds have died, which makes it cheaper per dollar of face amount and the usual vehicle for estate-tax liquidity.

Premiums paid in the first seven years exceed the federal 7-pay limit, the cumulative premium a comparable seven-pay policy would require. The death benefit stays income-tax-free, but lifetime loans and withdrawals switch to last-in-first-out gain-first taxation and add a 10% penalty before age 59 1/2. The classification is permanent.

In a cross-purchase plan each owner buys a policy on every other owner, so n owners need n times n-minus-one policies, but surviving owners receive a stepped-up basis in the interest they buy. In an entity plan the business owns one policy per owner, which is simpler to administer but gives survivors no basis increase.

Cash surrender pays the accumulated value in cash and ends coverage. Reduced paid-up buys a smaller permanent policy with no further premiums due. Extended term buys the original face amount as term insurance for a limited period. Extended term is the automatic option in most policies when the owner elects nothing and stops paying.

The owner may take cash, reduce the next premium, leave dividends to accumulate at interest, buy paid-up additions, or buy one-year term. A dividend is treated as a return of overpaid premium and is not taxable income, but interest credited on accumulated dividends is taxable in the year it is earned.

Waiver of premium keeps the policy in force when the insured becomes totally disabled, normally after a waiting period of about six months. The payor benefit sits on a juvenile policy and waives premiums when the adult who pays them dies or becomes disabled, usually until the child reaches a stated age.

The insurer does not void the contract or deny the claim. It adjusts the death benefit to the amount the premium actually paid would have purchased at the correct age or gender. The correction applies whenever the error is discovered, including long after the contestable period has closed.

An accelerated death benefit is paid by the issuing insurer to an insured facing a qualifying terminal or chronic illness, and it reduces the remaining death benefit. A life settlement sells the policy outright to a third-party investor who becomes owner and beneficiary and keeps paying premiums. Iowa regulates settlements under Iowa Code chapter 508E.

Only if the applicant paid the initial premium and the insurer would have issued the policy as applied for under its normal underwriting rules. Coverage then dates back to the application or the medical examination, whichever came later. If no premium was collected, coverage begins only at policy delivery.

A warranty is guaranteed literally true, and any breach can void the contract. Applicant statements are treated as representations, believed true to the best of the applicant's knowledge. Only a material misrepresentation, one that would have changed the underwriting decision, lets the insurer rescind during the contestable period.

Only at the moment the policy is issued, between the applicant and the insured. It does not have to continue until death, which is why a former spouse can remain a valid beneficiary. Stranger-originated life insurance fails precisely because the investor never held insurable interest at inception.

The producer must give written notice that an investigative consumer report may be ordered, and the applicant may request disclosure of its nature and scope. If the insurer declines, rates or cancels because of information in the report, it must send an adverse-action notice naming the reporting agency.

An HMO pays only in network except for emergencies and usually routes care through a primary-care gatekeeper. A PPO pays out of network at a reduced benefit level and needs no referral. A POS plan keeps the HMO gatekeeper but adds out-of-network coverage at higher cost sharing.

The insured must be covered by a qualifying HDHP with no other disqualifying coverage and no Medicare enrollment. Contributions are deductible, growth is tax-deferred, and withdrawals for qualified medical expenses are tax-free. Nonmedical withdrawals before age 65 are taxable and carry a 20% penalty. The account belongs to the individual.

Business overhead expense reimburses rent, staff salaries and utilities while the owner is disabled, and its benefits are taxable because the premium is deductible. Disability buy-out funds the purchase of a disabled owner's interest. Key person disability pays the employer for the lost contribution of a critical employee.

No. Medigap fills the deductibles, coinsurance and copayments left by Original Medicare Parts A and B, so it has nothing to fill alongside a Part C plan. Selling a Medigap policy to a person enrolled in Medicare Advantage is prohibited unless that person is disenrolling from the Advantage plan.

The insured is unable to perform at least two of the six activities of daily living, which are bathing, dressing, eating, toileting, transferring and continence, or has a severe cognitive impairment. A licensed health care practitioner must certify the condition as expected to last at least 90 days.

The elimination period is a deductible measured in time. It runs after each covered disability begins, and no benefit is paid for those days. The probationary period runs once from the policy's effective date and excludes sickness that first appears inside it. Accidents are normally covered from day one.

Both bar the insurer from cancelling while premiums are paid to the stated age. Guaranteed renewable lets the insurer raise the premium for an entire class of policyholders, never for one insured alone. Noncancelable locks in both the renewal right and the premium schedule, which is why it costs more.

The deductible is what the insured pays before the plan pays anything. Coinsurance is the percentage split of covered charges after the deductible, often 80/20. The out-of-pocket maximum caps the insured's combined deductible, coinsurance and copayments for the year, after which the plan pays 100% of covered charges.

After the policy has been in force two years from its date of issue, no misstatement in the application except a fraudulent one may be used to void it or deny a claim for a loss beginning after that period. Iowa prints this wording in the required provisions at Iowa Code section 514A.3.

The plan covering the person as an employee or named insured pays before the plan covering that same person as a dependent. For a child covered by both parents, the birthday rule makes the parent whose birthday falls earlier in the calendar year primary. The secondary plan then pays the remaining allowable expense.

Part A is hospital insurance covering inpatient stays, skilled nursing care after a qualifying hospital stay, home health and hospice, and is usually premium-free through prior payroll taxes. Part B is medical insurance covering physician services, outpatient care, durable medical equipment and preventive services, and charges a monthly premium.

Part C, Medicare Advantage, delivers Part A and Part B benefits through a private plan, usually with a provider network and often with drug coverage bundled in. Part D is standalone outpatient prescription drug coverage sold by private insurers. Joining an Advantage plan does not by itself end the Part B premium.

The claimant must be unable to engage in any substantial gainful activity because of an impairment expected to last at least 12 months or to result in death. Benefits begin only after a five-month waiting period, so the first payment covers the sixth full month of disability.

Own-occupation pays when the insured cannot perform the material duties of their own job, even if they are earning money elsewhere, and is the costlier, more insured-friendly definition. Any-occupation pays only when the insured cannot perform any job for which they are reasonably fitted by education, training or experience.

It depends entirely on who paid the premium. Benefits from an individual policy bought with the insured's after-tax dollars are received income-tax-free. Benefits from employer-paid group disability are taxable income to the employee, because the employer deducted the premium. When both contribute, benefits are taxable in proportion.

Record the applicant's answers accurately and completely, never steering the applicant or omitting adverse information, obtain every required signature, and explain any HIPAA authorization or medical release being signed. An incomplete application is returned and delays underwriting; falsified answers expose the producer to license discipline and fraud charges.

Iowa Code section 522B.6 makes a producer license valid for three years, and it stays in effect while fees are paid and continuing education is met. A producer who lets it lapse may reinstate the same license without passing a written examination within twelve months of the renewal fee due date by paying a reinstatement fee.

Iowa Administrative Code 191-11.3 requires at least 36 approved credits per continuing education term, and 3 of them must be in ethics. One credit equals 50 minutes of instruction. Excess credits cannot be carried into the next term, and proof must reach the Division by the last business day of the term.

Within thirty days from the date the agency contract is executed or the first insurance application is submitted, under Iowa Code section 522B.13. A producer who is not acting as an agent of an insurer needs no appointment at all, and a business entity is never required to be appointed.

Under Iowa Code section 522B.16 a producer reports any administrative action taken in another jurisdiction within thirty days of the final disposition, attaching the order. A criminal prosecution in any jurisdiction must be reported within thirty days of the initial pretrial hearing date, not thirty days after a conviction.

Iowa Code section 522B.10 allows up to 180 days with no examination so an existing book of business stays serviced; rule 191-10.11 issues it for 90 days with extensions. Grounds include the death or disability of a licensed producer, a producer entering active military service, or an applicant whose license has not issued within ten business days of submitting fingerprints.

Rebating, in Iowa Code section 507B.4(3)(i), is giving an applicant a premium rebate, a special dividend favor or any thing of value not specified in the contract as an inducement to buy. Twisting, defined in 191-15.2, is inducing a lapse, surrender or replacement of existing coverage to the client's overall detriment.

Iowa Code section 507B.7 allows up to $1,000 per violation, capped at $10,000 in the aggregate. If the person knew or reasonably should have known of the violation, the ceiling rises to $5,000 per act and $50,000 in any six-month period. Violating the Commissioner's order adds up to $10,000 per act.

Presenting a document or statement to an insurer that contains false material information, with intent to defraud, is a class D felony under Iowa Code section 507E.3. Fraudulent sales practices under section 507E.3A are also a class D felony, rising to a class C felony when the loss exceeds $10,000.

Per life, Iowa Code section 508C.5 caps $300,000 in life death benefits with no more than $100,000 in net cash surrender value, $250,000 in present-value annuity benefits, and $500,000 for health benefit plans. The aggregate is $350,000 per life, except $500,000 for health plans. Section 508C.18 bars using the association's existence to sell insurance.

Iowa Code section 521A.1: a domestic insurer is organized or created under the laws of this state. Section 521E.1: a foreign insurer is not domiciled in Iowa but is licensed here, meaning organized under another state's laws. Section 515.70: an alien insurer is incorporated or organized under the laws of any country other than the United States.

Iowa Administrative Code 191-15.9 gives the owner ten days after receiving a life policy or annuity to return it for a full premium refund, leaving the parties as if it had never been issued. If the sale replaced existing coverage, the replacement rules in 191-Chapter 16 extend that window to thirty days.

Under 191-16.24 the producer submits a statement signed by both applicant and producer stating whether existing coverage is in force, and if it is, presents and reads the replacement notice no later than at the time of application and leaves all sales material. The replacing insurer must then notify each existing insurer within five business days.

Iowa Code section 508.28 makes an individual policy incontestable after it has been in force during the insured's lifetime for two years from its date, except for nonpayment of premium. Group life under section 509.2 carries the same two-year clause plus a 31-day grace period and a 31-day right to convert to an individual policy after coverage ends.

Iowa Administrative Code 191-15.75 requires the producer to satisfy four obligations, care, disclosure, conflict of interest and documentation, without placing the producer's or insurer's financial interest ahead of the consumer's. A one-time four-credit annuity training course must be completed before any annuity sale, and records are kept ten years.

Iowa Code section 514A.3 sets a grace period of at least 7 days for weekly-premium policies, 10 days for monthly-premium policies and 31 days for all others. The same section gives the insured ten days after receiving the policy to return it for a full refund, and that right must be printed on the first page.

Under 191-37.21 an issuer may not deny, condition or price a Medigap policy on health status during the six-month period beginning the first month in which the applicant is both age 65 or older and enrolled in Medicare Part B. Rule 191-37.28 requires a 30-day right to return, noticed on page one.

Iowa Administrative Code 191-39.15(4) requires a one-time classroom course of at least eight credits plus ongoing training of at least four credits every continuing education term. The producer must hold an accident and health or sickness line of authority, and the insurer must verify the training before allowing any sale.

HAWK-I, Healthy and Well Kids in Iowa under Iowa Code chapter 514I, is the state children's health program that covers eligible children under age nineteen. HIPIOWA is the Iowa Comprehensive Health Insurance Association under chapter 514E, and section 514E.11 makes carriers notify anyone rejected for coverage that association coverage exists.