Close Answer A - Incorrect. Although a Fraternal benefit society exists for the benefit of members and perhaps the public at large, that is not where the test builder is going with this question. In insurance terms, a fraternal benefit society is not a service organization. It is a life insurance company.

Close Answer B - Correct. HMO's, PPOs, and Blue Cross/Blue Shield are what is known as service providers or service organizations. _ They don't issue policies, they write contracts... etc. They are not insurance companies! Therefore: if the question is: "Are Blue Cross and Blue Shield insurance companies or service providers?" you answer "Service Providers." Also, don't ask anyone from Blue Cross and Blue Shield about this. They will tell you exactly what they feel is the company position today. We don't care and you don't either. We only care what is on the state test taken directly from the textbook we are studying. It is our goal at PMReview to prepare you for the exams, and blend what is found in the textbook with what will appear on the state test so you will understand what the questions are asking.

Close Answer C - Incorrect. Although a labor union exists for the benefit of members and perhaps the general public, that is not the intent of the question. In insurance terms, and that is what we are concerned with here, a labor union is not a service organization. This is an example of the test makers using an answer which could "sound right" in the mind of the public, but it is not the correct INSURANCE answer. Answers which "sound right" are used a lot on the exams.

Close Answer D - Incorrect. "All of the above" is not correct in insurance terms. If you asked someone at the local supermarket, they might very well choose this answer, but it won't get you anywhere with the insurance department test. Be careful about "common knowledge" kinds of questions. If they are asking the question, it's most likely an insurance related question.

Close Answer A - Incorrect. Indifference is a hazzard, that's true, but it doesn't fit into the category of moral because moral in LIFE insurance is "legal" or "not legal" issues.

Close Answer B - Incorrect. Indifference is a hazzard all right, but it isn't a physical hazzard. It's a lifestyle hazzard. Look again.

Close Answer C - Incorrect. Indifference is a hazzard and has nothing to do with the four ways of handling risk, one of which is mentioned here.

Close Answer D - Correct. To figure this one out, you need to realize that indifference is a lifestyle attribute, and is a hazzard, and has nothing to do with being "legal" or "not legal." Morale, as defined in Life insurance is or are lifestyle issues. This changes slightly when we get to health insurance.

Close Answer A - Incorrect. No, it sounds good. But it isn't correct. Try again.

Close Answer B - Correct. Yes, that's right. Did you guess? The president and the secretary. This is slightly confusing because the secretary in this case is the corporate secretary. The textbook doesn't have the word "corporate" in the material, but that is what is meant by the question.

Close Answer C - Incorrect. No -- but a good guess! ... it sure sounds like a good possibility. Try again.

Close Answer D - Incorrect. Of course I like this answer. And of course you just clicked on it to see what I was going to say, right? I have a good time teaching the 40 hour course, and a good time with the in-class reviews, so you can expect to have fun in this on-line version as well.

Close Answer A - Incorrect. No, it will be larger.

Close Answer B - Incorrect. This might be true, looking at an actuarial table, but it won't always be true. This is the second best answer. The states provide answers like this constantly. Close, but not the winner.

Close Answer C - Incorrect. No, the reverse is "probably" true.

Close Answer D - Correct. Yes, because the actuarial table says the older annuitant will probably not live as long as the younger person, and therefore, the monthly payment will be larger. It's the actuarial table!

Close Answer A - Incorrect. Yes, it was pre-existing alright, but that doesn't have anything to do with it because he is submitting a claim for something that happened before the policy was in existence. It's like having a car accident and then driving into an auto insurance office and buying auto insurance ... and then claiming on the accident you had before the policy was in effect. The problem is not occurring after the effective date of the policy. With a pre-existing condition, the problem exists before the effective date of the policy and continues after the effective date of the policy. The leg did not break again after the policy was effective.

Close Answer B - Incorrect. Consideration is the application and the initial premium. Nothing to do with a claim.

Close Answer C - Incorrect. This sounds warm, but when you find the right answer, you will see that it is a better choice than this one.

Close Answer D - Correct. Yes... the insuring clause tells what the company is going to do and WHEN. The insuring clause spells out the dates of the coverage, which in this case the event occurred outside of the dates of coverage. He only broke his leg once. It is not an on-going "condition." Read answer (A) for more explanation.