Exam
In an annuity, the accumulated money is converted into a stream of income during which time period? A Annuitization period B Payment period C Amortization period D Conversion period
A Annuitization period
Employer contributions made to a qualified plan A) Are subject to vesting requirements. B) May discriminate in favor of highly paid employees. C) Are after-tax contributions .D) Are taxed annually as salary
A) Are subject to vesting requirements.
What is the shortest possible elimination period for group short-term disability benefits provided by an employer? a. 0 days b. 30 days c. 60 days d. 90 days
a. 0 days
Which of the following individuals must have insurable interest in the insured? A.Producer B. Policyowner C. Beneficiary D. Actuary
B. Policyowner
the automatic premium loan provision is activated at the end of the a. grace period b. free-look period c. elimination period d. policy period
a. grace period
which of the following is not true of life settlements ? a.the seller must be terminally ill b.they could be used for key person coverage c.they could be sold for amount greater than the cash value d.they involve insurance policies with large face amounts
a.the seller must be terminally ill
All of the following are beneficiary designations EXCEPT a. contingent b. primary c. specified d. tertiary
c. specified
When a policy premium wasn't submitted with the application, what should the agent obtained from the insured upon policy delivery? a. medical report b. conditional conrtact c. unilateral contract d. statement of good health
d. statement of good health
An insurance company forwards fixed annuity premiums to their general account, where the money is invested. The guaranteed minimum interest is set at 2.5%. During an economic downswing, the investments only drew 2%. What interest rate will the insurer pay to its policyholders? A 2% B 2.5% C 3% D Whatever interest rate the company deems appropriate
B 2.5%
Which is true regarding the Uniform Individual Accident and Sickness Policy Provision Law? A) There are twelve optional policy provisions. B) Provisions may be reworded by the insurer C) The purpose of the provision is to define the right of the policyholder; there is a separate law outlining the rights of insurers D) There are ten mandatory provisions
B) Provisions may be reworded by the insurer
The automatic premium loan provision is activated at the end of the A Free-look period B Elimination period. C Policy period. D Grace period.
D Grace period.
Which is true about a spouse term rider? A. The rider is usually level term insurance B. Coverage is allowed for an unlimited time C. The rider is decreasing term insurance D. Coverage is allowed up to age 75
A. The rider is usually level term insurance
Life Settlement contracts must be approved by which of the following ? a.the state attorney's general b.the superintendent of insurance c.the policyowner d.the NAIC
b.the superintendent of insurance
the superintendent may refuse to issue a license in all of the following situations except if the proposed licensee a.is not trustworthy b.is not competent c.is from another state d.has not completed the prelicensing education
c.is from another state
Which document helps ensure that full and fair disclosure is provided to the recipient of a policy? A) Outline of coverage B) Benefit of limitations C) Policy Summary D) Statute of limitations
A) Outline of coverage
If taken a lump sum, life insurance proceeds to beneficiaries are passed? A. Free of Federal Income Taxation B Tax-Deductible C Part tax free and part taxable D. Without interest
A. Free of Federal Income Taxation
which of the following ultimately determines the interest rate pay to the owner of a fixed annuity. A. investment performance of the company B. investment performance of the insured C. statewide predetermined annual interest rate D. Insurers guaranteed minimum rate of interest
D. Insurers guaranteed minimum rate of interest
Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance? a. replacement rule b. reinstatement rule c. conversion rule d. disclosure rule
a. replacement rule
If an employee terminates her employment, which of the following provisions would allow her to continue health coverage under an individual policy, if requested within 31 days? a.Renewability b. Conversion c. Replacement d. Grace period
b. Conversion
An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits? a. no benefits b. full benefits c. partial benefits d. full benefits for 2 years
b. full benefits
which of the following defines the owner of a life settlement contract ? a.an insurance provider b.a person who is selling the contract c.a person licensed under the contract d. a fiduciary for the contract
b.a person who is selling the contract
In individual health insurance coverage, the insurer must cover a newborn from the moment of birth, and if additional premium of payment is required, how many days should be allowed for payment? a. 10 calendar days b. 15 working days c. Within 30 days of birth d. a reasonable period of time
c. Within 30 days of birth
A producer who fails to segregate premium monies from his own personal funds is guilty of a)Larceny. b)Embezzlement c)Theft. d)Commingling
d)Commingling
a policyowner is reading a statement on the first page of his health insurance policy, which says "this is a limited policy" what is the name of this statement? a. policy limitation notice b. statue of limitations c. limited benefit statement d. limited policy notice
d. limited policy notice
The requirement that agents not commingle insurance monies with their own funds is known as A. Express B. Accepted accounting principal C. Fiduciary responsibility D. Premium accountability
C. Fiduciary responsibility
In life insurance policies, cash value increases A Grow tax deferred. B Are income taxable immediately. C Are taxed annually. D Are only taxed when the owner reaches age 65.
A Grow tax deferred.
Which of the following is NOT true about a joint and survivor annuity benefit option? A Payments stop after the first death among the annuitants. B A period certain option may be included. C This option guarantees income for two or more recipients. D The surviving annuitant may receive reduced payments.
A Payments stop after the first death among the annuitants.
A key person insurance policy can pay for which of the following? A. costs of training a replacement B. loss of personal income C. workers compensation D. hospital bills of the key employee
A. costs of training a replacement
which option for universal life allows the beneficiary to collect both the death benefit and cash value apon the death of the insured? A. option B B. Corridor option C. Variable option D. Option A
A. option B
Which of the following is NOT an example of a business use of Life Insurance? A. Key Person B. Worker's Compensation C. Buy-Sell funding D. Executive Bonuses
B. Worker's Compensation
all other factors being equal, the least expensive first-year premium payment is found in A. level term B. annually renewable term C. increasing term D. decreasing term
B. annually renewable term
what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy? A. half the amount B. lower C. higher D. as high
B. lower
All of the following are true of key person insurance EXCEPT A. the key employee is the insured B. the plan is funded by permanent insurance only C. there is no limitation on the number of key employee plans in force at any one time D. the employer is the owner, payor and beneficiary of the policy
B. the plan is funded by permanent insurance only
Which of the following is true regarding inpatient hospital care for HMO members? A) Services for treatment of mental disorders are unlimited. B) Inpatient hospital care not part of HMO services. C) Care can be provided outside of the service area. D) Care can only be provided in the service area.
C) Care can be provided outside of the service area.
The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT A) No lifetime dollar limits B) Coverage for preventive benefits C) Individual tax deductions for premiums paid. D) Right to appeal.
C) Individual tax deductions for premiums paid.
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that? A. Second-to-Die B. Family Income Policy C. Joint Life Policy D. Survivorship Life Policy
C. Joint Life Policy
What method do insurers use to protect themselves against catastrophic losses? A. Pro rata liability B. Risk management C. Reinsurance D. Indemnity
C. Reinsurance
Which of the following products requires a securities license? A. Equity Indexed annuity B. Deferred annuity C. Variable annuity D. Fixed annuity
C. Variable annuity
An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a(n) A) Keogh Plan. B) Roth IRA. C) SEP. D) 403(b) Plan (TSA)
D) 403(b) Plan (TSA)
What documentation grants express authority to an agent? A. Agent's insurance license B. Fiduciary contract C. State provisions D. Agent's contract with the principal
D. Agent's contract with the principal
All of the following are business uses of life insurance EXCEPT A. Compensating executives B. Funding against financial loss caused by the death of a key employee C. Funding business continuation agreements D. Funding against general company financial loss.
D. Funding against general company financial loss.
An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it? A. fixed B. flexible premium C. immediate D. deferred
D. deferred
An insured is covered by a disability income policy that contains an accidental means clause. The insured exits a bus by jumping down the steps and breaks an ankle. What coverage will apply? a No coverage will apply, since the injury could have been foreseen. b. No coverage will apply, since disability income policies cover sickness only c. Coverage will apply since the break was accidental. d. Coverage will apply, but will be reduced by 50%.
a No coverage will apply, since the injury could have been foreseen.
How long does a licensee have to deliver information requested by the superintendent of financial services? a. 10 days b. 15 days c. 25 days d. 30 days
b. 15 days
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective? a) As of the first of the month after the policy issue b) As of the policy issue date c) As of the application date d) As of the policy delivery date
c) As of the application date
A policyowner cancels his life policy but instructs the insurance company to transfer the cash value of his policy to an annuity. This nontaxable transaction is called a)Qualified distribution. b)Premature distribution. c)Rollover. d)1035 exchange.
d)1035 exchange.
Bethany studies in England for a semester. While she is there, she is involved in a train accident that leaves her disabled. If Bethany owns a general disability policy, what will be the extent of benefits that she receives? a Full b- 50% c- 25% d- None
d- None
If a company has a Simplified Employee Pension plan (SEP), what type of plan is it? A) The same as a 401(k) plan. B) An undefined contribution plan for a large business. C) The same as a 403(b) plan. D) A defined contribution plan for a small business.
D) A defined contribution plan for a small business.
SIMPLE Plans require all of the following EXCEPT A) No other qualified plan can be used. B) No more than 100 employees. C) Employees must receive a minimum of $5,000 in annual compensation. D) At least 1,000 employees
D) At least 1,000 employees
Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices? A) Stating that the insurance policy is a share of stock B) Exaggerating the benefits provided in the policy C) Stating that the competitors will arbitrarily increase their premiums each year D) Making comparisons between different policies
D) Making comparisons between different policies
Which of the following is NOT specifically prohibited by state law as an unfair-trade practice? A) Using misleading representations to induce uncalled for action by the insured B) Using incomplete comparisons of policy to induce uncalled-for action by the insured C) Failing to disclose that the solicitations of an insurance contract are the result of a marketing method D) Reducing the premiums paid by employers by group insurance based on loss experience
D) Reducing the premiums paid by employers by group insurance based on loss experience
All of the following are general requirements of a qualified plan EXCEPT A) The plan must be communicated to all employees. B) The plan must be for the exclusive benefits of the employees and their beneficiaries. C) The plan must be permanent, written and legally binding. D) The plan must provide an offset for social security benefits
D) The plan must provide an offset for social security benefits
How are contributions to a tax-sheltered annuity treated with regards to taxation A) They are taxed as income for the employee, but are tax free upon withdrawal. B) They are not included as income for the employee, but are taxable upon distribution. C) They are never taxed. D) They are taxed as income for the employee
D) They are taxed as income for the employee
All of the following are essential benefits required to be included in all health insurance plans purchased in the Market place EXCEPT? A) hospitalization B) maternity care C) pediatric vision care D) adult dental care
D) adult dental care
When an applicant purchased a life insurance policy, the agent dated the application 4 months prior. When asked by the applicant, the agent said he was allowed to backdate policies up to 6 months if it would A. Shorten the contestability period B. Eliminate pre-existing conditions C. Help him meet a sales quota for that period D. Lower the insured's premium
D. Lower the insured's premium
Which of the following statements regarding Business Overhead Expense policies is NOT true? a) Benefits are usually limited to six months. b) Premiums paid for BOE are tax-deductible. c) Any benefits received are taxable to the business. d) Leased equipment expenses are covered by the plan.
a) Benefits are usually limited to six months.
An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the a) Consideration Clause. b) Insuring Clause. c) Pre-existing Conditions Clause. d) Eligibility Clause.
a) Consideration Clause.
An insurance company sells an insurance policy over the phone in response to a TV ad. Which of the following best describes this act? a) Direct response marketing b) Independent agency marketing c) Illegal d) Insurance telemarketing
a) Direct response marketing
Which of the following statements is NOT correct concerning the COBRA Act of 1985? a) It requires all employers, regardless of the number or age of employees, to provide extended group health coverage. b) It covers terminated employees and/or their dependents for up to 36 months after a qualifying event c) It applies only to employers with 20 or more employees that maintain group health insurance plans for employees. d) COBRA stands for Consolidated Omnibus Budget Reconciliation Act
a) It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.
To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan? a. 18 mos b. 5 yrs c. 12 mos d. 63 days
a. 18 mos
If payment of a premium is required to provide health coverage for a child of the insured, the insured may be required to notify the company of the child's birth and pay the premiums within a. 30 days b. 60 days c. 90 days d. 180 days
a. 30 days
What is the period of coverage for events such as death or divorce under COBRA? a. 36 months b. 60 days c. 31 days d. 12 months
a. 36 months
Which of the following is an example of a limited-pay life policy? a. Life paid-up at age 65 b. Renewable term to age 70 c. Level term life d. Straight life
a. Life paid-up at age 65
When is the annual open enrollment for state insurance exchanges? a. November 1 through January 31 b. December 1 through December 31 c. January 1 through February 28 d. December 1 through march 1
a. November 1 through January 31
Which of the following factors would be an underwriting consideration for a small employer carrier? a. Percentage of participation b. Claims experience c. Health status d. Medical history of the employees
a. Percentage of participation
Regarding the taxation of Business Overhead policies, a. Premiums are deductible and benefits are taxed b. premiums are not deductible but benefits are c. premiums are not deductible but expenses paid are d. premiums are not deductible and benefits are taxed
a. Premiums are deductible and benefits are taxed
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true? a. The annuitant must be a natural person b. a corporation can be an annuitant as long as it is also the owner c. a corporation can be an annuitant as long as the beneficiary is a natural person d. the contract can be issued without an annuitant
a. The annuitant must be a natural person
which of the following protects insured from an unintentional policy lapse due to a nonpayment of premium? a. automatic premium loan b. extended term c. reinstatement d. reduced-paid up
a. automatic premium loan
Because of the history of cancer in her family, Julie purchased a policy that specifically covers the expense of treating cancer. Her policy would be classified as what type of policy? a. dread disease policy b. family history cancer policy c. specified health policy d. term health policy
a. dread disease policy
Under the privacy rule for HIPAA, protected information includes all individually identifiable health information a. held or transmitted in any form b. transmitted electronically only c. held in a computer format d. held or transmitted in paper form
a. held or transmitted in any form
welfare benefits include all of the following EXCEPT a. holiday pay b. day care benefits c. health care benefits d. workers compensation
a. holiday pay
A health insurance plan which involves financing, managing, and delivery of health care services and involves a group of providers who share in the financial risk of the plan or who an incentive to deliver cost of effective service, is called a. managed care plan b. self-insurer c. preferred care plan d. limited care plan
a. managed care plan
what part of the Internal Revenue Code allows an owner of a life insurance policy or annuity to exchange or replace their current contract with another contract without creating adverse tax consequences a.section 1035 policy exchange b.modified endowment exchange c.401(k)plan d.section 457 deferred compensation plan
a.section 1035 policy exchange
Which of the following is true regarding optional benefits with long-term care policies? a.they are available for an additional premium b. only standard benefits are available with LTC policies c. they are offered at no addition cost d. they are included in all policies
a.they are available for an additional premium
If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's a) Prior insurance. b) Ancestry. c) Credit history. d) Habits.
b) Ancestry.
In which of the following scenarios will repayment of funds take place per the Medicaid Estate Recovery Act? a) The mother of a 10-year-old died after receiving 8 months of Medicaid payments b) Before her death, a 23-year-old was living in a long-term nursing facility paid for with Medicaid funds c) A Medicaid recipient is survived by his wife d) The 22-year-old son of a Medicaid recipient is blind
b) Before her death, a 23-year-old was living in a long-term nursing facility paid for with Medicaid funds
The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose? a) Fixed amount option b) Interest only option c) Life income with period certain d) Joint and survivor
b) Interest only option
Janie is on bed rest for a brain injury. She is finally released to return to some of her normal activities but is only allowed to work on a part-time basis. Which of the following could help Janie recover the portion of income lost by working only part-time? a) Recovering Worker's Compensation b) Residual Disability Benefit c) Income Compensation d) Disability Income Differential
b) Residual Disability Benefit
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT? a) Employer contributions are not included in the employee's gross income. b) SEPs are suitable for large companies. c) SEPs allow the employer to make annual tax deductible contributions up to 25% of an employee's earned income. d) SEPs have a higher tax deductible contribution limit than an IRA.
b) SEPs are suitable for large companies.
When a health insurance policy is purchased in NY, the insured may return the policy to the insurer and receive a premium refund within the maximum period of a. 10 days b. 20 days c. 30 days d. 90 days
b. 20 days
An applicant has a history of heart disease in his family, so he would like to buy a health insurance policy that strictly covers heart disease. What type of policy is this? a. scheduled benefit coverage b. dread disease coverage c. single indemnity protection d. term health coverage
b. dread disease coverage
Which of the following statements is TRUE of a defined benefit plan? a. contributions are made in regular fixed amounts b. high salaried employees with only a few years until retirement receive the highest contribution c. low salaried employees are excluded from the plan d. all participating employees are vested immediately following a contribution to the plan
b. high salaried employees with only a few years until retirement receive the highest contribution
annually renewable term policies provide a level death benefit for a premium that a. fluctuates b. increases annually c. decreases annually d. remains level
b. increases annually
which of the following is another term for the accumulation period of an annuity? a. annuity period b. pay-in period c. premium period d. liquidation period
b. pay-in period
death benefits payable to a beneficiary under a life insurance policy are generally a.exempt from income taxation b.not subject to income taxation by the federal government c.subject to income taxation by the federal government d.exempt from income taxation if under $7000
b.not subject to income taxation by the federal government
A brain surgeon has an accident and develops tremors in her right arm. Which disability income policy definition of total disability will cover her for all losses? a) "Any occupation" - less restrictive than other definitions b) "Any occupation" - more restrictive than other definitions c) "Own occupation" - less restrictive than other definitions d) "Own occupation" - more restrictive than other definitions
c) "Own occupation" - less restrictive than other definitions
What would a physician utilize if he/she wanted to know if a treatment is covered under an insured's plan and at what rate it will be paid? a) Comprehensive review b) Supplementary chart c) Prospective review d) Concurrent review
c) Prospective review
Which of the following is true regarding the annuity period? a)It is also referred to as the accumulation period. b)It is the period of time during which the annuitant makes premium payments into the annuity. c)It may last for the lifetime of the annuitant or for a shorter period of time. d)During this period of time the annuity payments grow interest tax deferred.
c)It may last for the lifetime of the annuitant or for a shorter period of time.
The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive? a. $0 b. $50,000 (50% of the policy value) c. $100,000 d. $300,000 (triple the amount of policy value)
c. $100,000
Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to: a. 3 years b. 5 years c. 10 years d. 12 years
c. 10 years
when must insurable interest exist in a life insurance policy? a. when there is a change of the beneficiary b. at the time of loss c. at the time of application d. at the time of policy delivery
c. at the time of application
The rider that may be added to a Disability Income policy that allows for an increase inthe benefit amount under certain conditions is called a. double indemnity b. residual benefits c. cost of living d. waiver of premium
c. cost of living
In disability income insurance, the own occupation definition of disability applies: a. during the eliminating period b. as long as an individual is unable to work c. for the first 2 years of a disability d. during the waiting period
c. for the first 2 years of a disability
Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be? a. installment refund b. cash refund c. installments for a fixed period d. installments for a fixed amount
c. installments for a fixed period
which of the following is NOT true regarding policy loans? a. an insurer can charge interest on outstanding policy loans b. a policy loan may be repaid after the policy is surrendered c. money borrowed from the cash value is taxable d. policy loans can be repaid at death
c. money borrowed from the cash value is taxable
if an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy? a. taxable only if it exceeds the amounts paid for premiums by 50% b. automatically taxable c. only taxable if the cash value exceeds the amount paid for premiums d. not considered to be taxable
c. only taxable if the cash value exceeds the amount paid for premiums
An insured has a major medical policy with a $500 deductible and 80/20 coinsurance. The insured is hospitalized and sustains a $4,000 bill. What is the maximum amount that the insured will have to pay? a. $3500 b. $2500 c.2800 d. 3200
c.2800
Which of the following does NOT have to be disclosed in a long term care (LTC) policy? a. any limitations or conditions of eligibility for LTC benefits b. any riders or endorsements c.The aggregate amount of premiums due d. the meaning of the terms "reasonable" and "customary"
c.The aggregate amount of premiums due
which entity determines the amount of accelerated death benefits that will be paid to an insurer a.federal law b.state law c.the insurer d.employers offering plans that include accelerated death benefits
c.the insurer
In a life settlement contract who does the life settlement broker represent ? a.the beneficiary b.the life settlement intermediary c.the owner d.the insurer
c.the owner
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?a) 7 days b) 10 days c) 3 days d) 5 days
d) 5 days
What is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application? a) 90 days after the effective policy date b) 6 months after the effective policy date c) 1 year after the effective policy date d) As long as the policy is in force
d) As long as the policy is in force
An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an a) Credit Life. b) Annual Renewable Term. c) Adjustable Life. d) Interest-sensitive Whole Life.
d) Interest-sensitive Whole Life.
What is the purpose of establishing the target premium for a universal life policy? a) To accumulate cash value faster b) To pay up the policy faster c) To cover all policy expenses d) To keep the policy in force
d) To keep the policy in force
Kevin and Nancy are married, Kevin is the primary breadwinner and has a health insurance policy that covers both him and his wife. Nancy has an illness that requires significant medical attention. Kevin and Nancy decide to legally separate, which means that Nancy will no longer be eligible for health insurance coverage under Kevin. Which of the following options would be best for Nancy at this point? a)Apply for social security benefits b)Apply for coverage under the same group policy that covers Kevin c)Convert to an individual insurance policy with 31 days so she won't have to provide evidence of insurability d)COBRA
d)COBRA
Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe? a. Transfer b. Avoidance c. Retention d. Reduction
d. Reduction
Which of the following would provide an underwriter with the information concerning an applicant's health history? a. a medical examination b. the agents report c. the inspection report d. The medical information Bureau
d. The medical information Bureau
What type of benefit plan is a MANAGED plan developed in conjunction with the Health Benefit plan committee? a. catastrophic coverage benefit plan b. small employee carrier plan c. open care plan d. basic coverage benefit plan
d. basic coverage benefit plan
A man bought an individual health insurance policy for himself. Which of the following roles does he now legally have? a. broker b. subscriber only c. insured only d. both subscriber and insured
d. both subscriber and insured
All of the following apply to defined benefit plans EXCEPT a. benefits are based on a specified formula that incorporates years of service, salary, and age of retirement b. the employer is responsible for providing promised retirement benefits c. they are qualified plans and cannot discriminate d. contributions are tied to the company profits
d. contributions are tied to the company profits
Which of the following is not true regarding basic medical expense coverage? a. there is no deductible b. first dollar coverage c. low dollar limits d. coverage for catastrophic medical expenses
d. coverage for catastrophic medical expenses
if an annuitant dies before annuitization occurs, what will the beneficiary receive? a. either the amount paid into the plan or the cash value of the plan, whichever is the lesser amount b. amount paid into the plan c. cash value of the plan d. either the amount paid into the plan or the cash value of the plan, whichever is the greater amount
d. either the amount paid into the plan or the cash value of the plan, whichever is the greater amount
an insured has a life insurance policy from a participating company and receives quarterly dividends. he has instructed the company to apply the policy dividends to increase the death benefit. the dividend option that the insured has chosen is called a. one-year term purchase b. accumulation at interest c. reduction of premiums d. paid-up additions
d. paid-up additions
all of the following are considered to be supplemental benefits under an HMO plan except a. long term care b. mental health care c. prescription drugs d. preventive services
d. preventive services
What method is used to determine the taxable portion of each annuity payment? a. the excise ratio b. the annuity to age ratio c. the marginal tax formula d. the exclusion ratio
d. the exclusion ratio
an insured decides to surrender his 100,000 whole life policy. the premium paid into the policy added up to 15,000. At policy surrender the cash surrender value was 18,000. What part of the surrender value would be income taxable a.50,000 b.18,000 c.15,000 d.3,000
d.3,000
An investor buys a life policy on an elderly person in order to sell it for a life settlement . This is an example of a.a pre-arranged funeral plan b.a viatical settlement c.third-party ownership d.a STOLI policy
d.a STOLI policy
which of the following terms means as a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors ? a.mortality rate b.risk exposure c.morbidity d.life expectancy
d.life expectancy
Life expectancy is used in the calculation of which of the following ? a.cash values b.extended term c.dividends d.life settlements
d.life settlements
What do long-term care policies offer to policyholders to account for inflation? a. they don't account for inflation b. they automatically increase premiums c. they pay an increasing dividend every 7 years d.they offer the option of purchasing coverage that raises benefit levels accordingly.
d.they offer the option of purchasing coverage that raises benefit levels accordingly.
A group policy used to provide accident and health coverage on a group of persons being transported by a common carrier, without naming the insured persons individually is called A Blanket Policy. B Activity policy. C Specified disease policy. D Certificate of Coverage Policy.
A Blanket Policy.
Which of the following is used to determine the annuity amounts that are not taxable? A Exclusion ratio B Pro rata ratio C Exclusion index D Market-adjusted annuities index
A Exclusion ratio
Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance? A) Defamation B) Undercutting C) Twisting D) Slandering
A) Defamation
A Health insurance policy lapses but is reinstated within an acceptable time frame. How soon from the reinstatement date will coverage for accidents become effective? A) Immediately B) After 14 days C) After 31 days D) After 31 days
A) Immediately
A waiver of premium provision may be included with which kind of health insurance policy?A)Disability income. B)Hospital indemnity. C)Basic medical. D)Major medical.
A)Disability income.
Which of the following is NOT a cost-saving service in a medical plan? A)denial of coverage B) preventive care C) second surgical opinions D) risk sharing
A)denial of coverage
HIPAA applies to groups of A. 2 or more B. at least 10 C. at least 100 D. more than 2 fewer than 50
A. 2 or more
Which of the following is NOT a term for the period of time during which the annuitant or beneficiary receives income? A. Depreciation period B. Annuitization period C. Pay-out period D. Liquidation period
A. Depreciation period
Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount? A. Universal life B. Flexible life C. Variable life D. Adjustable life
A. Universal life
The annuity owner dies during the accumulation period of his annuity. The cash value of his annuity exceeds the premiums he paid. There is no named beneficiary. Which of the following is true? A. the cash value will be paid to the annuitant's estate B. the premium value will be paid to the annuitant's estate C. the state government will receive the amount of premiums paid D. the state government will receive the cash value of the annuity
A. the cash value will be paid to the annuitant's estate
For a retirement plan to be qualified, it must be designed for the benefit of A) IRS. B) Employees. C) Key employee. D) Employer
B) Employees.
The reduction, decrease, or disappearance of value of the person or property insured in a policy is known as what? A) Hazard B) Loss C) risk d exposure
B) Loss
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT A) Employer contributions are not included in the employee's gross income. B) SEPs are suitable for large companies. C) SEPs allow the employer to make annual tax deductible contributions up to 25% of an employee's earned income. D) SEPs have a higher tax deductible contribution limit than an IRA
B) SEPs are suitable for large companies.
Under a SIMPLE plan, which of the following is TRUE regarding taxation on both contributions and earnings A) 75% of employee's contributions are taxed. B) They are tax deferred until withdrawn. C) Taxes must be paid in full. D) Employer's matching contribution can be 50% of employee's salary
B) They are tax deferred until withdrawn.
Which of the following is NOT true regarding the annuitant? A. The annuitant must be a natural person. B. The annuitant cannot be the same person as the annuity owner. C. The annuitant's life expectancy is taken into consideration for the annuity. D. The annuitant receives the annuity benefits.
B. The annuitant cannot be the same person as the annuity owner.
All of the following are examples of risk retention EXCEPT A. Self-insurance B. Premiums C. Deductibles D. Copayments
B. premiums
Which of the following statements about occupational vs. nonoccupational coverage is TRUE? A Individual disability policies never cover nonoccupational injuries. B Only group disability income policies can be written on an occupational basis. C Disability insurance can be written as occupational or nonoccupational. D Group medical expense policies and individual medical expense policies always cover both occupational and nonoccupational injuries.
C Disability insurance can be written as occupational or nonoccupational.
When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option? A Life income period certain B Extended term C Fixed amount D Fixed period
C Fixed amount
Under the 401(k) bonus or thrift plan, the employer will contribute A) 30% of what the employee contributes. B) 75% of what the employee contributes. C) An undetermined percentage for each dollar contributed by the employee. D) All of the money to the plan
C) An undetermined percentage for each dollar contributed by the employee.
Which of the following entities has the authority to make changes to an insurance policy? A) Broker B) Producer C) Insurer's executive officer D) Department of Insurance
C) Insurer's executive officer
A man works for Company A and his wife works for company B. The spouses are covered by health plans through their respective companies that also cover the other spouse. If the husband files a claim, A) The insurance plans will split the coverage evenly B) Both plans will pay the full amount of the claim C) The insurance through his company is primary D) The insurance through the wife's company is primary
C) The insurance through his company is primary
Can an individual who belongs to a POS plan use an out-of-network physician? A) Yes, but they must use the POS physician first B) Yes, but they must the HMO physician first C) Yes, and they may use any preferred physician, even if not part of the HMO D) NO
C) Yes, and they may use any preferred physician, even if not part of the HMO
A health insurance plan that covers all accidents and sicknesses that are not specifically excluded form the policy is referred to as A) service plan B) broad plan C) comprehensive plan D) general plan
C) comprehensive plan
Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe? A. Conditional B. Personal C. Adhesion D. Unilateral
C. Adhesion
Which of the following would be the beneficiary in credit life insurance? A. Company B. Borrower C. Creditor D. Insured
C. Creditor
which of the following is true about the mandatory free look in a life insurance policy? A. It is optional on all life insurance policies B. It commences when the policy is delivered C. It commences when the application is assigned D. It applies only to term life insurance policies
C. It commences when the application is assigned
Which of the following would describe a legal document which would dictate who can buy a deceased partner's share of a business and for what amount? A. key person agreement B. split dollar agreement C. buy-sell agreement D. profit and loss agreement
C. buy-sell agreement
What is the benefit of choosing extended term as a nonforfeiture option? A It matures at age 100. B It allows for coverage to continue beyond maturity date. C It can be converted to a fixed annuity. D It has the highest amount of insurance protection.
D It has the highest amount of insurance protection.
In terms of social security, what is the name for the time period after the youngest child of a family turns 16 and before the surviving spouse may start receving retirement benefits? A. Accumulation period B. Blackout period C. Nonpayment interval D. Benefit reduction
B. Blackout period
An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium? A. It will increase each year during the next 5 years as the face amount increases each year. B. It will increase because the insured will be 5 years older than when the policy was originally purchased C. It will remain the same for the new 5-year term. D. It will decrease for the new 5-year term since the insured is now a lesser risk to the company.
B. It will increase because the insured will be 5 years older than when the policy was originally purchased
Under which of the following circumstances would an insurer pay accelerated benefits? A An insured is looking for a way to put her daughter through college. B A couple wants to build a house and would like to make a larger down payment C An insured is diagnosed with cancer and needs help paying for her medical treatment. D A couple is nearing retirement and needs a steady stream of income.
C An insured is diagnosed with cancer and needs help paying for her medical treatment.
Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation A) Needs approach B) Blackout approach C) Lump-sum approach D) Human life value approach
D) Human life value approach
After 3 years of making payments into a flexible premium deferred annuity, the owner decides to surrender the annuity. The insurer returns all the premium payments to the owner, except for a predetermined percentage. What is this percentage called? a) Inflation adjustment b) Surrender charge c) Termination penalty d) Bail out charge
b) Surrender charge
To sell variable life insurance policies an agent must receive all of the following except: A. A life Insurance license b. a SEC registration c. a FINRA registration d. A securities license
b. a SEC registration
When applying for an individual life insurance policy, an applicant states that he went to the doctor for nausea, but fails to mention that he was also having severe chest pains. What is this act called? a. misrepresentation b. fraud c. warranty d. concealment
d. concealment
Which of the following is true regarding variable annuities? a. A person selling variable annuities is required to have only a life agent's license b. The annuitant assumes the risks on investment c. The funds are invested in the company's general account d. The company guarantees a minimum interest rate.
b. The annuitant assumes the risks on investment
What is the purpose of a conditional receipt A) It is intended to provide coverage on a date earlier than the date of the issuance of the policy B) It guarantees the applicant that a policy will be issued in the amount applied for in the application C) It serves as proof that the agent has determined the applicant to be fully insurable for coverage by the insurance company D) It is given by the agent only to applicants who fully prepay all scheduled premiums in advance of policy issue
A) It is intended to provide coverage on a date earlier than the date of the issuance of the policy
A Universal Life insurance policy has two types of interest rates that are called a) Fixed and Variable. b) Minimum and Target. c) Guaranteed and Current. d) Option A and Option B.
c) Guaranteed and Current.
Which of the following statements is an accurate comparison between private and government insurers? a) Private insurers provide insurance in areas where the government will not. b) Private insurers may be authorized to transact insurance by state insurance departments. c) Insurance provided by the government is called "federal insurance." d) Private insurers offer fewer lines of insurance than government insurers.
b) Private insurers may be authorized to transact insurance by state insurance departments.
all of the following are characteristics of a universal life policy EXCEPT a. the planned premium pays for mortality charges and expenses and any excess is returned to the policyowner b. the insurance company reserves the right to adjust the mortality charges and./or interest rate c. the cash amount accumulates on a tax-deferred basis d. universal life is a combination of term insurance and a separate savings account joined in a single contract
a. the planned premium pays for mortality charges and expenses and any excess is returned to the policyowner
For what reason may a life insurance producer backdate a life insurance policy A) To avoid an increase in premium rate for the insured B) To meet sales quotas established by the insurer C) To make a policy effective during a period when the agent's appointment was in force D) To shorten the period of contestability
A) To avoid an increase in premium rate for the insured
A group of 15 skydivers met at a seminar and began talking about life insurance during a break. Because it was expensive to get individual life insurance, they decided to band together to form a small group so that they could qualify for group life insurance. After they applied for group life insurance, they were rejected. Why? A. The purpose of the group was to purchase life insurance. B. Their profession poses too high of a risk for the insurer. C. There are not enough people in the group to qualify for group life insurance. D. The group has not been established for long enough.
A. The purpose of the group was to purchase life insurance.
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount? A. equal to the original policy for as long as the cash values will purchase b. in lesser amounts for the remaining policy t3rm age of 100 c. equal to the cash value surrendered from the policy d. the same as the original policy minus the cash value
A. equal to the original policy for as long as the cash values will purchase
Which of the following types of insurance policies would perform the function of cash accumulation A) Credit life B) Increasing term C) Whole life D) Term life
C) Whole life
For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become A. More active B. Larger C. Smaller D. Older
B. Larger
Peril is most easily defined as A. Something that increases the chance of loss B. The cause of loss insured against C. An unhealthy attitude about safety D. The chance of a loss occurring
B. The cause of loss insured against
An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history 1 year later. What will probably happen? A. Because the insured is currently not a drug user, his policy will not be affected B. The policy will not be affected C. The policy will be voided D. The insurer will sue the insured for committing fraud
B. The policy will not be affected
In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment? A The annuitant will receive the higher of either the guaranteed minimum rate or current rate. B The annuitant will always receive the current interest rate. C The annuitant will receive the lower of either the guaranteed minimum rate or current rate. D The annuitant will only receive the guaranteed minimum specified in the contract.
A The annuitant will receive the higher of either the guaranteed minimum rate or current rate.
Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy? A. premiums are not tax deductible as a business expense B. premiums are tax deductible by the key employee C. premiums are tax deductible as a business expense D. premiums are taxable to the employee
A. premiums are not tax deductible as a business expense
which of the following is not true regarding the accumulation period of an annuity? a. it would not occur in a deferred annuity b. it is the period during which the annuity payments earn interest c. it is the period over which the annuitant makes payments into an annuity d. it is also known as the pay in period
a. it would not occur in a deferred annuity
Under a Straight Life Annuity, if an annuitant dies before the principal amount is paid out, the beneficiary will receive which of the following? a. nothing, the payments will cease b. guaranteed minimum benefit c. the amount paid into the annuity d. the remainder of the principal
a. nothing, the payments will cease
Which of the following types of agent authority is also called "perceived authority"? a.Fiduciary b. Apparent c. Express d. Implied
b. Apparent
An underwriter may obtain information on an applicant's hobbies, financial status, and habits by ordering a(n) a. Attending Physician Statement. b. Inspection report. c. Medical Information Bureau report. d. Medical examination.
b. Inspection report.
When the partners of a business develop an arrangement whereby should one of them die or become permanently disabled, the other partners would purchase the interest of the deceased or disabled partner at a predetermined price, this is called a/an A. Business continuation plan. B. Key person plan. C. Business overhead expense plan. D. Executive bonus plan.
A. Business continuation plan.
Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value A) Effect of inflation on income over time. B) Predicted needs of the family after the insured's death C) Insured's current and future income. D) Insured's annual expenses.
B) Predicted needs of the family after the insured's death
Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company? a. Warranty b. Aleatory c. Adhesion d. Subrogation
B. Aleatory
which of the following best describes annually renewable term insurance? A. neither the premium nor the death benefit is affected by the insured's age B. it provides an annually increasing death benefit C. it is level term insurance D. it requires proof of insurability at each renewal
C. it is level term insurance
An absolute assignment is a A Transfer of some ownership rights in a policy. B Change of beneficiary. C Change of insurer. D Transfer of all ownership rights in a policy.
D Transfer of all ownership rights in a policy.
In insurance transactions, fiduciary responsibility means A. Maintaining a good credit record B. Being liable with respect to payments of claims C. Commingling premiums with agent's personal funds D. Handling insurer funds in a trust capacity
D. Handling insurer funds in a trust capacity
Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost? A. Stop-loss b. consideration c. reasonable exceptions d. indemnity
D. Indemnity
A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then A. The benefit is subject to the exclusionary rule B. IRS has no jurisdiction C. The benefit is received as taxable income D. The benefit is received tax free.
D. The benefit is received tax free.
Pertaining to insurance, what is the definition of a fiduciary responsibility? a) Promptly forwarding premiums to the insurance company b) Helping insureds to file claims c) Performing reviews of insured's coverage d) Offering additional coverage to clients
a) Promptly forwarding premiums to the insurance company
If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a a. Joint life annuity. b. Joint and survivor annuity. c. pure annuity d. deferred annuity
a. Joint life annuity.
when an annuity is written, whose life expectancy is taken into account? a. annuitant b. beneficiary c. life expectancy is not a factor when writing an annuity d. owner
a. annuitant
when a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy? a. it is reduced to the amount of what the cash value would buy as a single premium b. it is increased when extra premiums are paid c. it decreases over the term of the policy d. it remains the same as the original policy, regardless of any differences in value
a. it is reduced to the amount of what the cash value would buy as a single premium
Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy? a. the employer is the owner and the Key Person is the beneficiary b. The Key Person is the owner and beneficiary c. The Key Person is the owner and the employer is the beneficiary d. the employer is the owner and beneficiary
d. the employer is the owner and beneficiary
What is the purpose of key person insurance? a. to provide health insurance to the families of key employees b. to insure retirement benefits are available to all key employees c. to maintain an account that insures the owner of a company remains solvent d. to lessen the risk of financial loss because of the death of a key employee
d. to lessen the risk of financial loss because of the death of a key employee
what are two components of a universal policy? a. insurance and investments b. mortality cost and interest c. separate account and policy loans d. insurance and cash account
d. insurance and cash account
Which of the following is TRUE regarding the accumulation period of an annuity? A It is limited to 10 years. B It is a period during which the payments into the annuity grow tax deferred. C It is also referred to as the annuity period. D It is a period of time during which the beneficiary receives income
B It is a period during which the payments into the annuity grow tax deferred.
Which of the following best defines target premium in a universal life policy? A. The corridor of insurance B. The recommended amount to keep the policy in force throughout its lifetime C. The maximum amount the policyowner may pay on a policy D. The minimum amount to make sure the policy is annually renewable
B. The recommended amount to keep the policy in force throughout its lifetime
Which of the following types of insurance policies is most commonly used in credit life insurance? A. Whole Life B. Equity Indexed Life C. Decreasing Term D. Increasing Term
C. Decreasing Term
Attempting to determine how much insurance an individual would require based upon their financial objectives is known as A. human life value approach B. estate planning C. viatical approach D. needs approach
D. needs approach
which of the following is TRUE concerning irrevocable beneficiaries? a. can be changed only with the written consent of that beneficiary b. may be changed at any time c. can never be changed d. may be changed only on the anniversary date of the policy
a. can be changed only with the written consent of that beneficiary
What is the time period called during which the surviving spouse does not receive benefits? a) Waiver of premium b) Retention of capital c) No-benefit d) Blackout period
d) Blackout period
A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called a. accelerated benefit rider b. living need rider c. payor rider d. cost of living rider
d. cost of living rider
An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use? a. one-year term b. reduction of premium c. accumulation at interest d. paid up option
d. paid up option
which statement is NOT true regarding a straight life policy? A. its premium steadily decreases over time, in response to its growing cash value B. the face value of the policy is paid to the insured at age 100 C. it usually develops cash value by the end of the third policy year D. it has the lowest annual premium of the three types of whole life products
A. its premium steadily decreases over time, in response to its growing cash value
Partners in a business enter into a buy-sell agreement to purchase life insurance which states that should one of them die prematurely, the other would be financially able to but the interest of the deceased partner, What type of insurance policy may be used to fund this agreement A) Term insurance only B) Permanent insurance only C) Universal life insurance only D) Any form of life insurance
D) Any form of life insurance
twin brothers are starting a new business. they know it will take years to build the business to the point that they can pay off debt incurred in starting the business. what type of insurance would be the most affordable and still provide a death benefit should one of them die? a. whole life b. ordinary life c. joint life d. decreasing term
c. joint life
If the annuitant dies during the accumulation period, who will receive the annuity benefits? a. the insurance company b. the annuitant's estate c. the beneficiary d. the annuity owner
c. the beneficiary
Which of the following policies would be classified as a traditional level premium contract? a) Adjustable Life b) Universal Life c) Variable Universal Life d) Straight Life
d) Straight Life
an insured misstates her age at the time the life insurance application is taken. this misstatement may result in a. automatic lapse b. recession of the policy c. adjustment in the amount of death benefit d. no change whatsoever
c. adjustment in the amount of death benefit
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. What insurance principle has the insurer violated? a. representation b. adhesion c. consideration d. good faith
c. consideration
In a group life insurance policy, the employer may select all of the following EXCEPT a) The type of insurance .b) The amount of insurance. c) The premium payor. d) The beneficiary
d) The beneficiary
Which statement regarding insurable risk is NOT correct? a. Insurance cannot be mandatory. b. The insurable needs to be statistically predictable. c. An insurable risk must involve a loss that is definite as to cause, time, and place. d. Insureds cannot be randomly selected.
d. Insureds cannot be randomly selected.
Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be A. determined by the health of the insured b. based on the age of the insured c. discounted d. adjusted to the insured's age at the time of renewal
d. adjusted to the insured's age at the time of renewal
Which of the following applicants would NOT qualify for a Keogh Plan A) Someone who works for a self-employed individual B) Someone who works 400 hours per year C) Someone who has been employed for more than 12 months D) Someone who is over 25 years of age
B) Someone who works 400 hours per year
Which benefits would a disability plan most likely pay A) medical expenses associated with a disability B) income lost by the insureds ability to work C) rehabilitation costs D) copayments
B) income lost by the insureds ability to work
A tax-sheltered annuity is a special tax-favored retirement plan available to A) Anyone. B) Certain age groups only. C) Certain groups depending on factors such as race, gender, and age. D) Certain groups of employees only
D) Certain groups of employees only
All of the following would be different between qualified and nonqualified retirement plans EXCEPT A) Taxation of withdrawals B) Taxation of contributions C) IRS approval requirements D) Taxation on accumulation
D) Taxation on accumulation
An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true? A) The group plan will pay B) The group plan will pay a portion of the employee's expenses C) The group plan will pay depending on the employee's recovery D) The group plan will not pay because the employee was injured at work
D) The group plan will not pay because the employee was injured at work
An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstance would NOT be a reason for the insurance company to cancel the policy/ A) The insured does not pay the premium B) The insured reaches the maximum age limit specified in the policy C) Within two years of the application, the insurer discovers a misrepresentation D) The insured is in an accident and incurs a large claim
D) The insured is in an accident and incurs a large claim
When an annuity is written, whose life expectancy is taken into account? a) Annuitant b) Beneficiary c) Life expectancy is not a factor when writing an annuity. d) Owner
a) Annuitant
Which of the following components of dental insurance does NOT require the payment of a deductible? a) Routine and preventive maintenance b) Routine and major restorative care c) Orthodontic care d) 1 & 2
a) Routine and preventive maintenance
Which concept i associated with "exclusion ratio"? a)Annuities payments b)Dividend distribution c)How exclusion riders affect an insurance premium d)Policy provisions
a)Annuities payments
when an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees a. To renew the policy until the insured has reached age 65 b. to charge a lower premium every year the policy is renewed c. not to change the premium rate for any reason d. to renew the policy indefinitely
a. To renew the policy until the insured has reached age 65
which of the following individuals must pass the written examination to be licensed as an insurance agent? a. a producer previously licensed in NJ who is applying for a NY license 120 days after becoming a resident of this state b. a nonresident licensee currently licensed in another state c. a ticket selling airline representative for one-time issuance of baggage or accidental insurance d. an applicant who has passed the written exam for an insurance agent's license in the past if he applies within 2 years following the date of license termination
a. a producer previously licensed in NJ who is applying for a NY license 120 days after becoming a resident of this state
Which renewal provision(s) must be included in a long-term care policy issued to an individual? a. noncancellable and guaranteed renewable b. renewable and convertible c. cancellable and conditionally renewable d. renewable at option of insurer
a. noncancellable and guaranteed renewable
What is another name for an Administrative-Services Only arrangement? a. third-party administrator b. a modified fully insured plan c. modified endowment contract d. self funding
a. third-party administrator
All of the following are true about the Insurance Frauds Prevention Act EXCEPT a.Every insurer must file a fraud prevention plan within 150 days. b. the act is intended to permit the superintendent and department to utilize their epertise to investigate and discover insurance fraud c. the superintendent has the power to designate one or more units for the purpose of preventing fraud d. the superintendent has the power to conduct investigations outside of the state
a.Every insurer must file a fraud prevention plan within 150 days.
which of the following is not considered business of life settlement ? a.a producer discusses the advantages of a universal life policy and how the flexible premium allows the owner to control the cash value and death benefit income b.a producer mails life settlement advertising to a client outside of the state c.a producer tracks the progress of a life settlement contract he has submitted to a life settlement provider d.a producer discusses the advantages and disadvantages of a life settlement contract to a client
a.a producer discusses the advantages of a universal life policy and how the flexible premium allows the owner to control the cash value and death benefit income
Insurers may change which of the following on a guaranteed renewable health insurance policy?a) No changes are permitted. b) Rates by class c) Coverage d) Individual rates
b) Rates by class
Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called? a. Law of Large Numbers b. discrimination c. adverse selection d. misrepresentation
b. discrimination
What type of benefit helps to pay for accidental injuries that are not bad enough to qualify as disabilities? a. accidental death and dismemberment b. medical reimbursement benefit c. partial disability d. basic accidental injury
b. medical reimbursement benefit
After the elimination period, a totally disabled insured qualified and started receiving benefits from his disability income policy that has a waiver of premium rider. What will most likely happen to the premiums paid into the policy during the elimination period? a. premiums will be waived b. premiums will be refunded c. premiums will be prorated d. premiums will be retained by the company, but no further premium will be required for the duration of the disability
b. premiums will be refunded
all of the following are true of an annuity owner EXCEPT a. the owner is the party who may surrender the annuity b. the owner must be the party to receive the benefits c. the owner pays the premiums on the annuity d. the owner has the right to name the beneficiary
b. the owner must be the party to receive the benefits
If an association is applying for a life settlement broker's license which of the following requirements must the association meet ? a.establish a board of directors b.authorize a natural person to act individually as a broker c.employ a minimum of 10 individual brokers d.maintain an active life license for 1 year
b.authorize a natural person to act individually as a broker
Stranger-orientated life insurance policies are in direct opposition to the principle of a.indemity b.insurable interest c.law of large numbers d.good faith
b.insurable interest
the form used to establish the terms for both parties when a person sells his life insurance to a 3rd unrelated person is called a a.living benefits form b.life settlement contract c.unilateral contract d.certificate of authority
b.life settlement contract
How can a new physician be added to the PPO's approved list?a) Pay an annual fee for being on the PPO list. b) New physicians are only added once a year, and are selected by the PPO's Board of Directors. c) Agree to follow the PPO standards and charge the appropriate fees. d) Fill out the appropriate paperwork and wait the 12 month pre-certification period.
c) Agree to follow the PPO standards and charge the appropriate fees.
All of the following are true about group disability Income insurance EXCEPT a) The waiting period starts at the onset of the injury or sickness .b) The longer the waiting period, the lower the premium. c) Coverage applies both on and off the job. d) Benefits are usually short term.
c) Coverage applies both on and off the job.
What is the benefit of experience rating? a) Experience rating helps employees with low claims experience become exempt from group premiums b) Experience rating helps employers with high claims experience because they get lower premiums c) Experience rating helps employers with low claims experience because they get lower premiums d) Experience rating helps employers with high claims experience get group coverage.
c) Experience rating helps employers with low claims experience because they get lower premiums
Which of the following best describes annually renewable term insurance? a) Neither the premium nor the death benefit is affected by the insured's age. b) It provides an annually increasing death benefit. c) It is level term insurance. d) It requires proof of insurability at each renewal.
c) It is level term insurance.
What is the other term for the cash payment settlement option? a) Face amount b) Proceeds c) Lump sum d) Principal amount
c) Lump sum
Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean? a) The beneficiary will receive the lump sum, plus interest. b) The primary beneficiary will receive the death benefit and the secondary beneficiaries will share the interest payments. c) The beneficiary will only receive payments of the interest earned on the death benefit. d) The beneficiary must pay interest to the insurer.
c) The beneficiary will only receive payments of the interest earned on the death benefit.
An individual buys a flexible premium deferred life annuity with 20 year period certain. What would his beneficiary receive if he died 5 years after beginning the annuity phase? a. payments for life b, nothing c. payments for 15 years d. payments for 20 years
c. payments for 15 years
A man's physician submits claim information to his insurer before she actually performs a medical procedure on him. She is doing this to see if they procedure is covered under the patient's insurance plan and for how much. This is and example of a. claims-delayed treatment b. suspended treatment c. prospective review d. concurrent review
c. prospective review
What process will the insurance company use to monitor the insured's hospital stay to make sure that everything is proceeding according to schedule? a) Prospective review b) Corridor deductible c) Precertification review d) Concurrent review
d) Concurrent review
In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost a) Must be covered by the insurer. b) Counts toward deductible .c) Counts toward coinsurance. d) Is not covered.
d) Is not covered.
Which of the following applies to partial disability benefits? a) An insured is entitled to a principal sum benefit for the partial loss of a limb. b) Payment is based on termination of employment. c) Benefits are reduced once an insured is no longer under a doctor's care. d) Payment is limited to a certain period of time.
d) Payment is limited to a certain period of time.
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries? a) The beneficiary will receive 2/3 of the lump sum up front, and the remaining 1/3 will be paid over time. b) The beneficiary will receive 2/3 of the total benefit, with the final 1/3 payable when the first beneficiary dies. c) One of the beneficiaries will receive 1/3 and the other 2/3 of the proceeds when the insured dies. d) The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.
d) The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.
an employee quits her job where she has a balance of $10,000 in her qualified plan. if she decides to do a direct transfer from her plan to a traditional IRA, how much will be transferred from one plan adminstrator to another and what is the tax consequence of a direct transfer? a. $8000, no tax consequence b. $8000, tax on growth only c. $10,000, tax on growth only d. $10,000, no tax consequences
d. $10,000, no tax consequences
What is the source of funding for Medicaid? a. Federal only b. State only c. City and State d. Federal and State e. Federal and National
d. Federal and State
the insurance policy, together with the policy application and any added riders form what is known as a. certificate of coverage b. contact of adhesion c. whole life policy d. entire contract
d. entire contract
a man purchased a $90,000 annuity with a single premium, and began receiving payments 2 months after than. What type of annuity is it? a. flexible b. deferred c. variable d. immediate
d. immediate
