Final
Which of these is NOT considered the responsibility of a producer in the underwriting process?
Selecting the final approval date
Which of the following activities would NOT subject a licensed producer to a penalty under Nebraska law?
Selling a life insurance policy to an individual who already owns a current life policy
Which of the following would NOT be appropriate for an immediate annuity?
Setting up a college savings fund for a young child
Medicare Part A covers what type of care?
Skilled nursing facility care
A life insurance company just paid a $100,000 death benefit to a beneficiary. When the insured died, the cash value was $15,000 and the total premiums-paid equaled $10,000. How much of the proceeds will be added to the beneficiary's gross income for federal income tax purposes?
Nothing
Which of the following would NOT have a restricted ability to enter into a contract?
Small employer
Which of these occurrences could improve an insurer's ability to reduce premiums?
Rate of earnings on investments increase
Which of the following would most likely purchase an immediate annuity?
Retiree having a lump sum to invest
What kind of arrangement gives the policyowner the right to change the beneficiary?
Revocable designation
What does a fixed life annuity offer protection against?
Savings depletion because of longevity
Premature IRA distributions are subject to a penalty tax of
10%
How old must applicants be for a producer's license?
18
What does the term "field underwriting" refer to in the health insurance industry?
A producer's contact with the applicant
What do Limited accident and health policies normally cover?
A specific illness or event
Mike recently lost sight in both eyes. He has a policy that pays a lump sum benefit for this injury. What type of insurance does Mike have?
Accidental death and dismemberment
Based on age criteria only, which of the co-annuitants listed below would receive the largest monthly benefit payments in a joint and 100% survivor annuity?
Ages 71 and 73
All of the following are unfair claims settlement practices EXCEPT
An attempt to settle a claim by arbitration
Which statement is INCORRECT concerning a tax-sheltered annuity (TSA)?
Annual investment gains are included in participant's gross income
An applicant submits a life insurance application where an investigative consumer report is used in the underwriting process. Which of these statements is true?
Applicant has a right to receive a copy of the report
In the event of premium default, which life insurance provision will use the cash value to keep the policy in force?
Automatic premium loan
What are reasonable and customary charges for health insurance primarily based on?
Average charges within a geographic region
Tim had an on-the-job accident and collects benefits from his individual disability income policy. What factor could possibly reduce these benefits?
Benefits he receives from workers compensation
An accident and health insurance policy defines an injury as "bodily injury by accidental means". For an injury to be covered on this policy, what is required?
Both the cause and resultant injury must be accidental
Which would be described as a beneficiary designation by class?
Children of the insured
Which of the following statements is true regarding accident and health insurance claims that reimburse on an indemnity basis?
Claims can be sent directly to the insured
Which of the following can be used to avoid the mandatory withholding tax on qualified plan distributions?
Conduit IRA
Jill has a group health plan with an employer that covers employees in more than one state. Which of the following is NOT affected by the state regulatory jurisdiction established for this plan?
Continuation of coverage under COBRA
Which of the following is NOT an intended use of an annuity?
Create new funds upon the death of a wage-earner
Which of the following disability buy-sell agreements is best suited for businesses with a small number of partners?
Cross-purchase agreement
Which of the following is generally a form of group credit life insurance?
Decreasing term insurance
Which of these is NOT an underwriting responsibility of a life insurance agent?
Determining the final rate classification
For purposes of Disability Income insurance, earned income would include all of the following EXCEPT
Dividends
An employer has a group life insurance plan in place for his employees. How would an employee in poor health be treated in this situation?
Eligible for the same type of coverage as the other employees
Which of the following statements BEST describes employer contributions for employer provided health insurance?
Employer contributions are deductible
Which of these is NOT considered a type of limited payment whole life insurance?
Endowment at age 70
A policyowner fell behind on the premium payments of a whole life policy, and it is now in the grace period. How much will the beneficiary receive if the insured dies during this grace period and the policy also contains an outstanding policy loan?
Face amount minus the loan balance and past-due premium
Which benefit supplement added to a life insurance policy insures an entire family?
Family term rider
Tori has an annuity that pays her a $500 per month income benefit for life or for ten years, whichever is longer. What kind of annuity is this?
Fixed life annuity with period certain
Which life insurance policy provision allows a policyowner to cancel the policy within a limited time period and be given a full refund?
Free-look period
An insured may be required to sign which document at policy delivery to ensure there has not been any adverse medical conditions since the time of the application?
Good health statement
A large corporation purchases an accumulation annuity contract where all of the participating employees receive certificates of participation. What is this contract called?
Group deferred annuity
Which of the following statements is NOT true concerning the relationship between group health insurance plans and Medicare? (assuming the business has more than 20 employees)
Group health coverage is NOT available for workers over the age of 65
What is the name of the rider that provides an additional purchase option in a life insurance policy?
Guaranteed insurability rider
Tonya has been diagnosed with kidney failure and has group accident and health insurance through her large employer. Which of these accident and health plans will be primary during the months following her diagnosis?
Her employer's group accident and health plan
For insurance purposes, similar objects which are exposed to the same group of perils are referred to as
Homogeneous exposure units
Which of the following is NOT subject to the promise to pay in an insuring clause?
How the premium is calculated
Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?
If Tom's employment is terminated, 20% of the funds could be forfeited
When must insurable interest exist for a life insurance contract to be valid?
Inception of the contract
In what way are insurance policies said to be aleatory?
Involves the potential for the unequal exchange of value
A retired couple would like to maximize the income derived from their life savings and have it payable until they both die. Which annuity would be their best choice?
Joint and survivor annuity
Which of these pays an income to two or more annuitants until the death of the last annuitant?
Joint and survivor annuity
What is the guaranteed cash value of a whole life insurance policy when the insured turns 65 years old?
Less than the policy's face amount
Which of these is NOT a common life insurance nonforfeiture option?
Life income annuity
What is covered under a limited accident and health insurance policy?
Limited perils and amounts
Which of these policies is considered to be a comprehensive health policy?
Major medical policy
Medicare Part B excess charges are covered by
Medicare Supplemental insurance
What is considered a valid reason for an insurer's refusal to pay policy proceeds directly to a minor?
Minors are normally not capable of handling money in a reasonable manner
A life policy that has premiums that are lower than normal during the early years is called
Modified life
Which of the following is TRUE about a qualified retirement plan that is "top heavy"?
More than 60% of plan assets are in key employee accounts
How are the premiums for an individually-owned disability income policy treated for tax purposes?
No tax deduction
Insurable interest involves what assumption?
One person benefits from another person's continued life
Which statement most accurately describes a single premium whole life policy?
Paid-up policy that offers lifetime protection
All of these statements concerning universal life insurance are false EXCEPT
Policy indicates how much of the premium is used toward company expenses
These are all accurate statements regarding universal life insurance EXCEPT
Policy loans are not permitted
What happens to a life insurance policy when the policy loan balance exceeds the cash value?
Policy will no longer be in force
If an insured dies during the grace period without having paid the premium, how much will the insurer pay?
Policy's face amount minus any premiums due
Which of the following does NOT fall under "hospital care" in a typical health maintenance organization (HMO) plan?
Private duty nursing
Alan is an enrollee of a health maintenance organization (HMO) which uses a gatekeeper system. If there ever comes a time when he needs emergency health services, what should he do?
Proceed to the nearest emergency room
When a producer submits an application that discloses personal information regarding the applicant, who supplies the privacy notice?
Producer
Which of the following would NOT be a reason for purchasing life insurance on a child's life?
Provide benefits for the child if the parents die
How are qualified Roth IRA distributions normally treated for tax purposes?
Received income tax-free
Which of these is a true statement regarding survivor benefits under a qualified retirement plan?
Survivor benefits can only be waived with the written consent of a married employee's spouse
How does the cost for a survivorship life policy compare to the cost of combining two separate life insurance policies?
Survivorship life policy is lower
Which statement concerning the Entire Contract provision in an individual accident and health insurance policy is TRUE?
The agent doesn't have the authority to change the policy or waive its provisions
Which statement regarding the joint and survivor life insurance settlement option is INCORRECT?
The installment amounts are larger as compared to a single life income option
What is taken into consideration when defining "total disability" in a disability income insurance policy?
The insured's education, training, and experience
Which of the following statements about the installments for a fixed period settlement option in life insurance policies is NOT true?
The periodic payment amount is determined by the beneficiary's age
Taxable income may be the result from all of these modified endowment contract (MEC) transactions EXCEPT for
The policy is surrendered for less than what was paid into it
Which of these statements regarding the extended term insurance nonforfeiture option is accurate?
The premium to purchase the coverage comes from the policy's cash value
Which of these is NOT a reason to buy a term life policy?
To accumulate savings
What is the face amount of a $50,000 graded death benefit life insurance policy when the policy is issued?
Under $50,000 initially, but increases over time
Which of the following statements about universal life insurance is NOT true?
Universal life insurance normally has a minimum guaranteed cash value for duration of the policy
At what point are death proceeds paid in a joint life insurance policy?
When the first insured dies
Which life insurance policy would be eligible to include an automatic premium loan provision?
Whole life
Disclosure requirements in the life insurance solicitation regulation mandate that prospective purchasers be given
a Buyer's Guide and Policy Summary
After an applicant reads and signs an insurance application, he/she should be conscious of the fact that
a false statement could lead to loss of coverage
When dealing with single-life annuities, there is only one
annuitant
The surrender charge on many deferred annuity contracts are waived when the
annuitant dies or becomes disabled
When there is a named beneficiary on a life insurance policy, the death benefits
are paid directly to the beneficiary without interference from the insured's creditors
The guarantee of insurability option provides a long-term care policyowner the ability to
buy additional coverage at a later date
An employee welfare plan exempt from ERISA regulations would be
church plans
The principal source of information concerning an applicant's identity, age, and marital status is found in the
completed application
Interest is credited to a fixed annuity no lower than the
contract guaranteed rate
Notice of information practices must be given to a policyholder at least
every three years
The difference between a doctor's actual charges and the amount approved by Medicare is called a(n)
excess charge
With life insurance, the needs approach is used primarily in determining
how much life insurance a client should apply for
The unwritten authority given to a producer to carry out necessary incidental acts of the agency agreement is called
implied authority
The insurance coverage in a variable life insurance policy may vary based on the value of
its underlying investments
During the early years of a whole life insurance policy, the cash value will normally be
less than the total premiums paid
The owner of a single premium deferred annuity is entitled to do all of these EXCEPT
make multiple premium payments
An employer that offers a qualified retirement plan (as opposed to a non-qualified plan) to its employees is eligible to
make tax-deductible contributions to the plan
James has individual health insurance with two different insurers. The "insurance with other insurers" provision states that an insurer can pay benefits on a pro-rata basis if
no notification was given to the insurer prior to the claim that the insured has other health coverage
The contractual rights that allow the owner of a deferred annuity to surrender the cash value several years before the annuity date are called
nonforfeiture options
The power to change the beneficiary in an individual annuity lies with the
owner
An owner's cost basis for a non-qualified deferred annuity is typically the same as the
premiums paid into the annuity
The absolute assignment of a life insurance policy results in
the assignee receives all incidents of ownership
Purchasing insurance is an example of risk
transference
In an individual retirement account (IRA), rollover contributions are
unlimited by dollar amount
A terminally ill policyowner decides to sell his life insurance policy to help support his family. This sale is called a(n)
viatical settlement
Pat has a disability income insurance policy that covers disabilities arising from a work-related illness or injury. The amount of his disability income payments for an on-the-job injury may be reduced by
workers compensation benefits already paid
The following are all elements of a valid contract EXCEPT
written evidence
An attempt to defraud an insurance company is considered
A felony
An individual working part-time has a gross income of $5,000 for the year. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?
$5,000
Which of the following best describes the tax treatment of medical expense policies for the self-employed?
100% of medical expense plan premiums are tax deductible
EXCEPT for fraud, the time after issuance of a policy during which an insurance company may contest a health insurance claim due to the statements on an application is
2 years
The Director of Health must examine the quality of health care provided by HMOs no less frequently than once every
3 years
Individual Medicare Supplement policies must allow an insured a MINIMUM of how many days after policy delivery to return the policy and receive a refund of premium?
30
Insurers must retain records of insurance transactions for
5 years
One of the prohibited provisions precludes a life insurance policy from taking effect more than how many months before the original application is made?
6
A single premium deferred annuity sometimes contains a bailout feature. Which statement regarding this feature is correct?
If the interest rate falls below a specified level, the surrender charge is waived
A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 for income tax withholding. Which federal taxes apply if none of the funds were rolled over?
Income taxes plus a 10% penalty tax on $30,000
Which of these procedures is NOT designed for ambulatory care centers?
Inpatient surgery
The Medical Information Bureau consists of members from which group?
Insurance companies
A Keogh plan is a(n)
qualified retirement plan for the self employed
During an annuity's liquidation phase, the annuitant normally
receives benefit payments at regular intervals
A life insurance producer's underwriting duties may include
seeking additional information requested by the insurance company
Larry wants to purchase an individual disability income policy to ensure that he will not experience a lapse in income should he become disabled. He has a two-month wage continuation benefit from his employer. What should the policy elimination period be for his individual policy?
60 days
Which element of a contract constitutes a definite and unqualified proposal by one party to another?
Offer
What does a 401(k) plan generally provide its participants?
Salary-deferral option
If an individual would like to enroll in Medicare or seek public information about Medicare, which federal agency handles this?
Social Security Administration
Under a key person disability income policy, benefits will be received as
tax-free income to the business