Free SC Life & Health Exam Flashcards

Term life covers a stated period and generally has no cash value. Permanent life is designed to remain in force for life if required premiums or policy charges are met, and it commonly builds cash value.

Whole life normally uses fixed premiums, a fixed death benefit, and guaranteed cash-value growth. Universal life separates policy charges from cash value and permits flexible premiums or death benefits within contract limits, but insufficient value can cause a lapse.

The policyowner bears the investment risk because cash value is allocated to separate-account investments and can fluctuate. The producer needs the appropriate insurance authority and securities registration to sell variable products.

No. Interest is credited under a formula linked to an external index, often subject to a floor, cap, or participation rate. The policyowner does not directly own the index securities.

An immediate annuity begins periodic income no later than one payment interval after purchase. A deferred annuity has an accumulation period before annuitization or withdrawals begin.

Joint life pays when the first insured dies. Survivorship, or second-to-die, life pays only after the last insured dies and is often used for estate-liquidity planning.

After the insured satisfies the rider's disability definition and elimination period, the insurer waives covered premiums while qualifying disability continues. It does not provide monthly disability income to the insured.

It lets the insured buy stated amounts of additional coverage at specified dates or events without new evidence of insurability. The added coverage still requires the applicable premium based on the insured's attained age.

The irrevocable beneficiary must consent. A policyowner may ordinarily change a revocable beneficiary without that beneficiary's permission.

The grace period keeps coverage in force briefly after a premium is due. Reinstatement restores a policy that has already lapsed and usually requires overdue premium, interest, and evidence of insurability within the contract's reinstatement window.

Cash surrender, reduced paid-up insurance, and extended term insurance. Each preserves some value when the owner stops the original premium pattern, but only cash surrender ends coverage immediately for cash.

It permits an eligible insured, such as one meeting the rider's terminal-illness trigger, to receive part of the death benefit while living. The payment reduces the amount later payable at death and may also reduce policy values.

A representation is believed true to the applicant's best knowledge; an incorrect answer affects coverage when it is material or fraudulent under applicable law. A warranty is a statement guaranteed literally true, a stricter standard not normally applied to ordinary application answers.

It must exist when the policy is issued. The beneficiary generally does not need insurable interest at the insured's later death if the policy was validly initiated.

No. Any interim coverage depends on the receipt's conditions, commonly payment of the initial premium and the applicant being insurable under the insurer's rules on the specified date. Read the receipt rather than promising unconditional coverage.

STOLI is arranged mainly to benefit an investor who lacks a legitimate insurable interest in the insured. It attempts to use life insurance as a wager on a stranger's life rather than to protect against a genuine loss.

Unilateral means only the insurer makes an enforceable promise to pay when contract conditions are met; the owner is not forced to keep paying premiums. Adhesion means the insurer drafted the standard contract, so genuine ambiguities are generally construed against the drafter.

The death benefit can retain life-insurance tax treatment, but distributions are generally taxed gain-first, and taxable distributions before age 59½ may face a 10% federal penalty. The MEC status does not disappear merely because the owner later reduces funding.

It permits an eligible person losing group coverage to convert to an individual policy during the stated conversion period without proving insurability. The person pays the individual-policy premium at the applicable attained age.

Key-person coverage protects the business from financial loss caused by a crucial person's death; the business is normally owner and beneficiary. Buy-sell funding supplies money to purchase a deceased owner's business interest under an ownership-transfer agreement.

Business-overhead coverage reimburses eligible operating expenses such as rent or employee payroll during the owner's disability. Individual disability income replaces part of the insured's personal earned income; it is not designed to fund the business's routine overhead.

An HMO emphasizes a defined network and coordinated care and may require a primary-care referral. A PPO usually permits both in-network and out-of-network care without referrals, but the member pays more outside the network.

The person must be covered by an HSA-qualified high-deductible health plan and have no disqualifying other coverage. Owning an HSA does not itself provide health insurance.

An HSA is individually owned, portable, and can carry its balance forward. A health FSA is an employer-established arrangement and is generally subject to use-it-or-lose-it rules, subject to any permitted plan grace period or carryover.

Medicare Supplement works alongside Original Medicare to cover specified cost-sharing gaps. Medicare Advantage is a private-plan way to receive Medicare Part A and Part B benefits, often through a network; it is not a supplement to Original Medicare.

Skilled care requires medical or nursing expertise and is ordered for a clinical need. Custodial care primarily assists with activities of daily living such as bathing, dressing, or eating and does not by itself require skilled personnel.

An elimination period is the waiting time after a covered disability or loss begins before benefits become payable. A probationary period begins when the policy starts and delays coverage for specified causes, commonly sickness.

A deductible is the amount the insured pays before specified plan benefits begin. A copayment is a stated dollar charge for a service. Coinsurance is the percentage split of covered expenses between insured and insurer after the deductible, subject to plan terms.

Both prevent the insurer from canceling coverage if premiums are paid. Noncancelable coverage also prevents the insurer from raising that insured's premium during the guaranteed period; guaranteed-renewable premiums may rise for an entire permitted class.

Notice of claim alerts the insurer that a loss occurred. Proof of loss supplies the details and evidence needed to evaluate it. Sending notice does not automatically satisfy the separate proof requirement.

No. It confirms that the plan reviewed the proposed service under its authorization rules, but final payment still depends on eligibility, coverage, medical necessity, coding, and other policy terms when the service is provided.

The insurer adjusts the benefit or premium to the amount the correct age would have purchased under the policy's misstatement provision. A good exam answer does not assume that any age error automatically voids the policy.

Part A primarily covers inpatient hospital, qualifying skilled-nursing-facility, hospice, and certain home-health services. Part B primarily covers physician, outpatient, preventive, and durable-medical-equipment services.

Medicare is federal health insurance chiefly based on age, disability, or end-stage renal disease eligibility. Medicaid is a joint federal-state program based on financial and categorical eligibility under state rules; a person can qualify for both.

Total disability meets the policy's definition of being unable to perform covered work. Residual disability pays a proportionate benefit when the insured can work but suffers a qualifying loss of income because of disability.

It determines which plan pays first and how the secondary plan considers the remaining covered amount. Its purpose is orderly payment without allowing combined benefits to exceed the covered expense.

The producer observes risk information, asks and records application questions accurately, collects required items, and promptly submits the case. The insurer's underwriter—not the producer—makes the final classification and issue decision.

Obtain the missing information and required signatures rather than guessing, changing an answer, or asking the applicant to sign a blank form. Accurate completion protects underwriting and reduces later disputes over material information.

Explain that the issued contract—not the original illustration or expectation—controls, point out the exclusion or increased premium, review key limitations and effective date, and collect any required delivery acknowledgment or premium without altering the contract.

A license authorizes the producer for a line of insurance; an appointment authorizes the producer to act as a particular insurer's agent. An insurer generally files the appointment within 15 days after executing the agency contract or receiving the first submitted application.

Within 30 days. Section 38-43-107 covers changes to the producer's legal name and business, email, mailing, or residential street address.

Complete 24 credit hours in each two-year compliance period, including the required 3 ethics hours. Producers age 65 or older with at least 25 years of South Carolina licensure may apply for the statutory CE exemption.

No. Unlisted premium rebates, special favors, and inducements are generally prohibited, but Section 38-57-130 permits qualifying coverage-related value-added products or services when statutory conditions are met, including reasonable cost and documented objective, nondiscriminatory availability.

A false, misleading, fraudulent, or incomplete policy or insurer comparison intended to induce someone to lapse, forfeit, surrender, terminate, retain, convert, or replace insurance. This conduct is commonly tested as twisting.

Turn over or satisfactorily account for all insurer collections when required. Section 38-43-240 makes failure to do so unlawful; premium money is not the producer's personal operating fund.

Report an administrative action within 30 days of final disposition and a criminal conviction within 30 days of conviction, with the relevant legal documents. Section 38-43-247 does not require reporting a mere arrest under this rule.

Ensure the applicant can recognize and compare a proposed replacement before an existing policy is lapsed, surrendered, forfeited, or otherwise changed. The producer must identify the replacement and use the required notices and disclosures rather than concealing it as a routine new sale.

The policy's true nature, terms, benefits, advantages, dividends, and the insurer's financial condition or business. An untrue, deceptive, or misleading insurance advertisement is prohibited even if it does not appear in the final policy.

Before selling, complete at least 8 hours of long-term-care product training and provide proof to the insurer. Thereafter, complete at least 4 additional hours every two years. LTC authority is included with the life or accident-and-health line.

The required replacement notice tells the applicant that the new policy provides 30 days to decide without cost whether to keep it. This decision period helps the buyer review the replacement before permanently giving up prior Medicare Supplement coverage.