General Practice Exam-MD Accident, Health & Life Producer Practice Exam B
Which of the following best relates to a nontaxable transaction? A. 1035 B. 425 C. 401 D. 1052
1035
A pre-existing condition, is a condition for which an employee has sought Medical advice, diagnosis, or treatment within the previous __ months. A. 24 B. 6 C. 9 D. 12
6
What kind of deductible would apply a single deductible to both medical and dental insurance coverage? A. Limited B. Standard C. Integrated D. Combined
Integrated
Bob wants to pay in more funds to shorten his premium paying period. Which policy will give Bob this flexibility? A. Term B. Interest Sensitive C. Increasing D. Decreasing
Interest Sensitive
If a producer makes untrue statements on an application, it is considered to be a(n): A. Omission B. Warranty breach C. Negligence D. Misrepresentation
Misrepresentation
What is not covered under a Medigap Plan A core policy? A. The first 3 pints of blood each year B. Part A deductible C. 20% Part B coinsurance amount D. Approved hospital costs for an additional 365 days after all Medicare benefits are used
Part A deductible
Sam lost his right arm in an accident covered under his Accidental Death & Dismemberment policy. What will Sam receive from his policy? A. Nothing B. The principal amount in a lump sum C. The capital amount in 6 monthly installments D. The capital amount in a lump sum
The capital amount in a lump sum
Policy benefits that are not assigned will be paid to which of the following? A. Beneficiary B. Spouse C. Dependents D. Insured
Insured
An Industrial Life Insurance Policy has a face amount that is: A. $3,000 or less B. $1,000 or less C. $2,500 or less D. $5,000 or less
$1,000 or less
Larry is a beneficiary of a policy. His designation may only be changed by himself. What kind of beneficiary is Larry? A. Revocable B. Irrevocable C. Cancellable D. Guaranteed
Irrevocable
Which of the following is usually true of a participating Life Insurance Policy? A. An attorney in fact manages the company B. It may be converted to a Term Life policy C. It pays dividends to its stockholders D. It pays dividends to its policy owners
It pays dividends to its policy owners
Which of the following relates to a nonparticipating policy? A. It will provide a return of premium B. It will provide tax advantages C. It will not pay dividends D. It will provide policy owner privileges
It will not pay dividends
A blanket policy would be suited for all of the following except: A. Summer Camp B. College football team C. Girl Scouts D. Manufacturing plant
Manufacturing plant
Jill was in a boating accident and she severely damaged her left hand. She went to the doctor and her injury was not classified as disabled. Which of the following would cover part of Jill's Medical expenses? A. Medical Reimbursement Benefit B. Residual Benefit C. Non-Occupational Benefit D. Rehabilitation Benefit
Medical Reimbursement Benefit
Medicare Supplement policies relate to all of the following except: A. Medigap covers the cost of extended Nursing Care B. Medigap policies supplement Medicare C. Medigap covers some services not covered by Medicare D. Medigap covers some Medicare deductibles
Medigap covers the cost of extended Nursing Care
Tri-Care refers to a Health Care system exclusively designed for which of the following? A. Military personnel B. Needy and impoverished individuals C. Individuals over the age of 65 D. Employees in organizations with fewer than 50 people
Military personnel
What is the Social Security elimination period for disability benefits? A. 2 months B. 3 months C. 4 months D. 5 months
5 months
What does a Fixed Annuity contract provide? A. A level benefit B. A varying benefit C. Protection against inflation D. Increasing payment amounts
A level benefit
Jenny took out a Life insurance policy and six years later she died. While processing her claim, her insurer discovers that Jenny understated her age on her policy's application. In regard to the Misstatement of Age provision, her insurer will do which of the following? A. Pay her benefit in full B. Deny her claim C. Adjust her benefit to a reduced amount D. Pay only part of her death benefit
Adjust her benefit to a reduced amount
Every year Frank's policy's premium increases. What kind of policy does this describe? A. Acquired Age rated B. Issue Age Rated C. Attained Age rated D. Assumed Age rated
Attained Age rated
Employees that are actively working on the date of the transfer of their coverage to another company are covered: A. After a 30 day waiting period B. Automatically and are exempt from a probationary period C. After working 90 days D. Automatically after satisfying a probationary period
Automatically and are exempt from a probationary period
Which of the following is incorrect about an association? A. Hold annual meetings B. Be active for 2 years C. Have 100 members D. Be formed for the purpose of buying coverage
Be formed for the purpose of buying coverage
What happens to premiums of a Graded Premium Whole Life policy after their increase period? A. Continue to increase for 3 to 5 years B. Begin to decrease C. Discontinue D. Become level
Become level
What legal agreement dictates who may buy a deceased business partner's share of their business? A. Key Person B. Buy Sell C. Business Overhead D. Pure Salary
Buy Sell
The IRC Section 125 is what type of plan? A. Cafeteria Plan B. Disability Plan C. Buy Sell Plan D. Business Overhead Plan
Cafeteria Plan
Betty has a health insurance plan that states she must pay a certain amount out of pocket before any benefits are paid in a calendar year. What does this describe? A. Stop loss provision B. Flat deductible C. Integrated deductible D. Calendar year deductible
Calendar year deductible
Which party approves all Medicare Supplement advertisements prior to their use? A. Commissioner B. No one C. Executive officer of the Department of Hygiene D. Department of Health and Hygiene
Commissioner
A unique characteristic of an insurance contract relates to which term? A. Homogeneous B. Law of Large Numbers C. Reinsurance D. Conditional
Conditional
E.R.I.S.A., the Employee Retirement Income Security Act of 1974, was passed by: A. The Governor B. Congress C. Popular Vote D. The Senate
Congress
In regard to an insurance contract, which part generally defines or indicates the value that each party gives to each other? A. Offer and Acceptance B. Legal Purpose C. Competent Party D. Consideration
Consideration
What must an HMO Health plan offer to handle inquires about an insured's Health coverage? A. Customer Service Center B. Gatekeeper Services C. Nonprofit Services D. Extended Services
Customer Service Center
Which is true regarding Immediate Annuity contributions made with before tax dollars? A. Distributions are taxable B. Distributions cannot be before age 70 1/2 C. Distributions cannot be taxed D. Distributions cannot be taken
Distributions are taxable
What best describes the name for non-taxed return of premiums? A. Dividends B. Premiums C. Funds D. Indemnity
Dividends
How is a Hospital Indemnity Policy based? A. On the type of surgery B. On the number of days an insured is confined in a hospital C. On the geographic area D. On the patient's condition
On the number of days an insured is confined in a hospital
Don wants to reinstate his policy instead of applying for a new one. What will be his advantage of reinstating his policy? A. The face amount will be higher B. The cash value will be increased C. Don will not have to pay his premium for three months D. Don's original age will be used for his premium determination
Don's original age will be used for his premium determination
What makes up an application and the printed contract? A. Entire Contract B. Full Contract C. Submitted Contract D. Provisional Contract
Entire Contract
Which of the following group of doctors and hospitals in a specific area contract with an insured to give health care at a prearranged price to an insured? A. HMO B. PPO C. MIB D. POS
PPO
Which life insurance policy issued by a mutual insurer provides a return of divisible surplus? A. Nonparticipating B. Participating C. Divisible D. Earned income
Participating
Partner A and Partner B are in business together. Partner A bought a Life insurance policy on Partner B to protect herself against a financial loss if her partner should die. Two years after their partnership was dissolved Partner B dies. Who will receive the death benefit? A. The beneficiary will be determined by state probate court if Partner B did not have a will B. Estate of Partner B C. Partner A D. No death benefit will be paid because insurable interest didn't exist at their death
Partner A
Who has the authority to change a premium payment, face value, and policy loans? A. Producer B. Beneficiary C. Policyowner D. Contingent Beneficiary
Policyowner
When a replacement is involved, a replacing insurance company is responsible for all of the following EXCEPT: A. Obtain from the producer a list of the applicant's contracts to be replaced B. Include a policy summary on the proposed Life Insurance in the communication with the existing company C. Provide a copy of the Notice Regarding Replacement of Life Insurance to an applicant D. Send the existing insurance company a written notice of replacement
Provide a copy of the Notice Regarding Replacement of Life Insurance to an applicant
Which of the following is the best way to correct a mistake on an application? A. Get a new application B. Use white out C. Draw a line through the mistake D. Insert the correct answer
Get a new application
Bob's insurer accepted his premium and continued his coverage in full force as though it was not late during which period? A. Indemnity B. Grace C. Absolute D. Collateral
Grace
Rick is an insured on a participating Life policy that presently has his premiums waived due to his disability. In regard to his situation, what can Rick do or not do? A. He cannot borrow against the cash value while disabled B. He cannot assign his policy while his premiums are waived C. He can still receive his dividends D. He will pay income taxes on the waived premiums
He can still receive his dividends
What kind of benefits are in eligible Health plans? A. High Maximum benefits B. Low Maximum benefits C. Deductible benefits D. Indemnity benefits
High Maximum benefits
Ed wants a Health Savings Account with his employer. What kind of insurance plan will be most likely associated with the HSA? A. High deductible B. Basic deductible C. No deductible D. First dollar deductible
High deductible
Jerry committed suicide one year after his policy was issued. What will his insurer do in this situation? A. His insurer will not pay anything to his beneficiary B. His insurer will refund his paid premiums C. His insurer will keep the paid premiums D. His insurer will pay the full death benefit to their beneficiary
His insurer will refund his paid premiums
Dean chose a nonforfeiture option by using his life policy's cash value to buy an extended term insurance option. What will happen when his term insurance coverage expires? A. His protection ends B. His remaining cash will be paid to him C. He has the chose to keep his original policy D. He can resume coverage with a premium payment
His protection ends
Old Age Survivors Disability Insurance is the official name of what program? A. Medicaid B. Social Security C. Medigap D. Medicare
Social Security
Kyle and Ken are the owners of a car repair shop. They have a Disability Buy Sell policy. If Ken became disabled, which of the following would most likely occur? A. The policy would provide funds among the partners to accomplish a buy-out B. The funds would pay for the lease of the business C. The policy would pay for Ken's salary D. The policy would pay for Ken's disability
The policy would provide funds among the partners to accomplish a buy-out
In what time must a Section 1035 Exchange take place? A. 10 days B. 15 days C. 30 days D. There is not a required time
There is not a required time
Why does the corridor of a Universal Life policy raise the death benefit? A. To avoid losing tax advantages B. To provide a tax exchange C. To avoid the lapse of the policy D. To provide a beneficiary change
To avoid losing tax advantages
What is the name of the Military Health Care plan? A. Tru-Care B. Military Care C. Tri-Care D. A and M Care
Tri-Care
Fraud is grounds for voiding a Life Insurance contract if it is discovered during the first _____ years. A. Ten B. Three C. Five D. Two
Two
Who makes the final decision regarding a risk? A. Underwriters B. Field Investigators C. Executive Officers D. The Commissioner
Underwriters
Earned income is all of the following except: A. Commissions B. Salary C. Part time wages D. Unemployment benefits
Unemployment benefits
Which of the following wouldn't be a responsible legitimate expense calculated in the Needs Approach for Life Insurance proceeds? A. Tuition B. Housing a family for a funeral C. Vacation after a funeral D. Child Care
Vacation after a funeral
What is a terminally ill person that sells their insurance policy for a percentage called? A. Investor B. Subscriber C. Beneficiary D. Viator
Viator
Mr. J has a Life insurance policy with a rider that ensures to pay his premium if he becomes disabled. What is the name of the rider? A. Cost of Living B. Return of Premium C. Waiver of Premium D. Disability Income
Waiver of Premium
Jenny's husband died. She stopped receiving survivor Social Security benefits when her daughter turned 16. At what age may Jenny be eligible to start receiving benefits again? A. Never B. When she turns age 55 C. When she is 60 D. When her daughter reaches age 21
When she is 60
Larry used a Decreasing Term policy to cover the cost of his car loan of $79,000. What will be his balance at the end of its term? A. $79,000 B. There is not enough information to determine the balance C. Zero D. $9,000
Zero
In regard to replacement of a policy, which of the following is usually the probationary period for a pre-existing condition? A. 10 to 15 days B. 5 to 20 days C. 5 to 15 days D. 15 to 30 days
15 to 30 days
George is 71 years old and he used funds from his Health Savings Account for a Non-Health purpose. Which of the following will most likely occur? A. Nothing will happen B. George will pay a penalty C. George will be taxed on the amount D. George will not be able to use the funds because he is older than age 65
George will be taxed on the amount
When are an employee's Medical benefits exempt from income taxes? A. Never B. Only after satisfying a waiting period C. Group Medical benefits are received tax free to an employee D. After an employee's elimination period has been satisfied
Group Medical benefits are received tax free to an employee
An insurance company incorporated in one state and licensed to conduct business within another state is called? A. Foreign B. Domestic C. Alien D. Surplus
Foreign
What provision will allow Sam to inspect his policy and if dissatisfied, be able to return it for a full refund? A. Grace Period B. Free Look C. Payment of Premium D. Consideration
Free Look
Larry is eligible for full Social Security retirement, disability and death benefits. What type of insured level describes Larry's present status? A. Currently insured B. Fully insured C. Partially insured D. Economically insured
Fully insured
Where are the funds of a fixed annuity placed? A. Separate account B. Mutual account C. General account D. Owner's account
General account
The type of insurance used to indemnify a firm for the loss of earnings brought about by the death of an officer or other significant employee is: A. Business Overhead B. Business Continuation C. Key Person D. Employee Welfare
Key Person
An underwriter's attitude toward group risks can be ____ restrictive than with individual policies, because the group policies are subject to annual reevaluations. A. More B. Less C. Liberally D. Conservatively
Less
Which of the following types of insurance policies would perform the function of cash accumulation? A. Property B. Life C. Stock D. Health
Life
This type of annuity does not have a named beneficiary. What is it called? A. Life with 20 Year Certain B. Life with 10 Year Certain C. Life with 15 Year Certain D. Life without Period Certain
Life without Period Certain
What term relates to a larger group of people that spread a risk for a small specific cost called? A. Loss Sharing B. Indemnity C. Exposure D. Speculative risk
Loss Sharing
Which of the following is a source that releases coded information to insurers for underwriting purposes? A. NAIC B. MIB C. CIA D. Protection Guild
MIB
Policy loans are not represented by which of the following? A. Policy loans can be paid at an owner's death B. Money borrowed is taxable C. Interest is taxed D. An insurer may charge interest on the loan
Money borrowed is taxable
What important information can be found in a Life insurance policy's Consideration Clause? A. Policy summary B. Entire contract C. Indemnity of benefits D. Premium amount and payment due date
Premium amount and payment due date
What kind of protection does a Level Term policy contain? A. Temporary B. Guaranteed Renewable C. Conditional D. Basic
Temporary
Kate had a $50,000 Life policy with a $65.00 premium. Last month, 14 days after her policy premium was due, she died of a heart attack. What will her beneficiary receive from her death benefit? A. Nothing B. $50,000 C. $65.00 D. $49,935
$49,935
Wilson has a stop loss limit of $5,000, a deductible of $500 and an 80%/20% coinsurance. If Wilson has $25,000 of covered losses, how much will he have to pay? A. Nothing B. $5000 C. $5,500 D. $5,400
$5000
Eddie has a health insurance plan with a deductible of $500 and an 80/20 coinsurance. How much will he pay if he has a loss of $1,500? A. $200 B. $400 C. $700 D. $1,200
$700
Larry's is disabled and his group Health policy was terminated. How long will he receive an extension of benefits provided by his employer? A. 3 months B. 6 months C. 12 months D. 18 months
12 months
L&D Insurer can contest Dan's Life insurance contract due to a fraudulent statement made on his application within what time? A. 30 days B. 60 days C. 2 years D. 5 years
2 years
Within how many months must a person be expected to die from a sickness in order to be classified as terminally ill? A. 3 B. 24 C. 6 D. 12
24
A replacing Life insurer must maintain a register for a replaced policy for how many years? A. 2 years B. 4 years C. 5 years D. 3 years
5 years
Benefit periods for Individual Short Term Disability policies vary between what periods of time? A. 1month to 6 months B. 3 months to 9 months C. 6 months to 2 years D. 9 months to 2 years
6 months to 2 years
Within how many days must a rollover be completed to avoid being taxed as current income? A. 10 B. 20 C. 40 D. 60
60
Under the PPACA, the metal bronze tier will cover what percentage of care? A. 20% B. 40% C. 60% D. 80%
60%
Under a group plan, which of the following would qualify as a dependent? A. A 32 year old man incapable of self support B. A 28 year old woman in post graduate school C. A young professional D. A 27 year old young man in technical school
A 32 year old man incapable of self support
When do individuals under a Blanket policy receive their Certificate of Insurance? A. After their policy is delivered B. Within the first two weeks of its delivery C. At the time of their application D. A Certificate of Insurance is not issued to an individual under a Blanket policy.
A Certificate of Insurance is not issued to an individual under a Blanket policy.
Carol is insured under her employer's insurance plan. She works full time and her employer pays the premiums for her coverage. This describes which kind of plan? A. A Comprehensive Plan B. A Contributory Plan C. A Deductible Plan D. A Non-Contributory Plan
A Non-Contributory Plan
Which of the following would not be considered a qualifier for disability income? A. Being confined to one's house B. Be under the care of a doctor C. Proof of a disability D. A certain income status before a disability
A certain income status before a disability
Since an insurance company designs and writes an insurance policy, any resulting ambiguity in the language is typically resolved in the client's favor. This is why an insurance policy is referred to as: A. A contract of Utmost good faith B. A contract of Adhesion C. A contract of Insurable Interest D. A Unilateral Contract
A contract of Adhesion
All of the following qualify to own Group Life insurance except: A. An association B. A Debtor organization C. A Labor Union D. A group desiring low cost coverage
A group desiring low cost coverage
In relationship to advertising, which of the following is not part of it? A. A rating from a rating service company like A.M. Best B. An illustration with pictures C. A presentation of sales D. Direct mailing
A rating from a rating service company like A.M. Best
When an annuitant dies with cash refund option, what will their beneficiary receive? A. Nothing B. A refund of the original amount, minus the payments already made C. Half of the payments made D. Any cash amount made
A refund of the original amount, minus the payments already made
A statement made on an insurance application by a client become a part of an insurance contract and are considered to be: A. A representation B. A hazard C. A warranty D. A binding act
A representation
Which statement best describes the primary difference between a mutual insurance company and a stock insurance company? A. A mutual company is regulated by the state and federal government and a stock company is regulated only by the state B. A mutual company is owned by stockholders and a stock is owned by Surplus Lines C. A stock company is owned by shareholders and a mutual company is owned by policyholders D. A stock company is regulated by an authorized insurer and a mutual company is an unauthorized insurer
A stock company is owned by shareholders and a mutual company is owned by policyholders
What is a living benefit option in a life policy? A. Payor benefit B. Reinstatement C. Indemnity D. Accelerated Death Benefit
Accelerated Death Benefit
Which of the following dividend options does Jill have that results in taxable income to her? A. Accumulation at Interest B. Cash value C. Paid in Option D. Paid up Option
Accumulation at Interest
What is the main factor that a non-contributory plan helps an insurer avoid? A. Taxes B. Adverse Selection C. Underwriting D. Compliance with state laws
Adverse Selection
When will Single Premium Deferred Annuity benefits be paid? A. When the owner is 65 B. When the owner is in a LTC facility C. After a year D. When the owner dies
After a year
An error was made on Susan's life insurance application. Which area listed below is one commonly made on applications for which the incontestable clause does not apply? A. Age B. Marital status C. Income D. Address
Age
A large group plan must provide primary coverage for their disabled employee under which circumstance? A. Age 65 and retired B. Age 59 1/2 and retired C. Age 62 and retired D. Age 65 and not retired
Age 65 and not retired
How is emergency care under an HMO covered for its members? A. An HMO member can only receive emergency care in their service area B. An HMO member can receive emergency care at a higher premium if it is provided outside their service area C. An HMO member can receive emergency care in and out of their service area, but it is preferred in their service area whenever possible D. An HMO member must receive prior permission to receive emergency care outside their service area
An HMO member can receive emergency care in and out of their service area, but it is preferred in their service area whenever possible
In reference to Life Insurance and Contract Law, a person most likely will have an insurable interest in insuring a person's life if: A. Any type of relationship exists between the insured and their beneficiary B. An economic interest exists for the continuance for an insured's life C. If any type of decent family relationship exists with an insured's party D. The interest exists at the time of death, rather than at the time a policy is purchased
An economic interest exists for the continuance for an insured's life
Which of the following would be considered the purest form of Term insurance? A. Annually Renewable Term B. Increasing Term C. Decreasing Term D. Level Term
Annually Renewable Term
The exclusion ratio is used with which of the following? A. Mutual funds B. Stock investments C. Annuities D. Dividends
Annuities
An exclusion ratio is best associated with which of the following? A. Annuity payments B. Dividends C. Mutual funds D. Provisions
Annuity payments
Which of the following is a factor M&B insurer would consider when determining whether to accept a group life plan? A. Average age B. Free Look period C. Dependents of employee D. Beneficiaries
Average age
Barbara has a fixed annuity. Who bears the risk of her account? A. Barbara B. Barbara's beneficiary C. Barbara's annuitant D. Barbara's insurance company
Barbara's insurance company
Which of the following is not considered in recommending a suitable annuity? A. Income B. Taxes C. Financial interest D. Beneficiary's age
Beneficiary's age
Which schedule lists the type and an amount payable in a Medical Plan? A. Benefit Schedule B. Prepaid Schedule C. Comprehensive Schedule D. Profit Schedule
Benefit Schedule
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. Specified Disease policy B. Activity policy C. Blanket Policy D. Certificate of Coverage Policy
Blanket Policy
A Dread Disease policy would be best used for which of the following: A. Prescription Drugs B. Dental C. Vision D. Cancer
Cancer
What does "liquidity" refer to in a Life insurance policy? A. The insured is receiving payments each month in retirement B. The policy owner receives dividend checks each year C. Cash values can be borrowed at any time D. The death benefit replaces the assets that would have accumulated if an insured had not died
Cash values can be borrowed at any time
What would a participant under a group Life policy receive? A. Master Certificate B. Certificate of Insurance C. Beneficiary Certificate D. Contributory Certificate
Certificate of Insurance
All of the following are Long Term Care covered in home services to reduce the admission into a LTC facility except: A. Child Care B. Respite Care C. Adult Day Care D. Custodial Care
Child Care
When advertising, the identity of the insurer shall be: A. Secured B. Capitalized C. Clear D. Guaranteed
Clear
The Waiver of Premium rider allows an insured to waive premium payments during which time of an insured? A. Temporarily disabled B. Completely and permanently disabled C. Insolvent D. Their terminal illness
Completely and permanently disabled
What provision is associated with primary and secondary coverage? A. Coordination of Benefits B. Community Benefits C. Conversion of Benefits D. Certified Benefits
Coordination of Benefits
What provision in a disability policy would be in regard to the value of benefits decreasing over time? A. Cost of Living B. Return of Premium C. Inflation benefit D. Interest growth
Cost of Living
What term describes deductibles, co-payments and out of pocket maximum amounts? A. Cost sharing B. Cost networking C. Cost navigators D. Cost credits
Cost sharing
Leo is receiving Hospice Care. His insurer will pay for painkillers, but not for an operation to reduce the size of his tumor. What term best fits this arrangement ? A. Limited Coverage B. Cost-Containment C. Claims Saving D. Selective Coverage
Cost-Containment
Which of the following is NOT true of Basic Medical plans ? A. First-dollar coverage B. No deductibles C. Coverage for catastrophic Medical expenses D. Low dollar limits
Coverage for catastrophic Medical expenses
Mr. Potter owns a Market Value Adjusted Annuity. He has accumulated a large gambling debt, and some unanticipated Medical expenses, so he made the decision to surrender his annuity. Unfortunately, his annuity is premature. Which of the following will affect the penalty he will have to pay? A. Current interest rates B. Nothing will affect his penalty because he will not be required to pay one C. Minimum interest rate D. The age of Mr. Potter at the time he surrenders his annuity
Current interest rates
Joe has just been diagnosed with a quickly-spreading, fatal form of cancer; his doctor predicts that he will live for a month. He applied for an individual Health Insurance policy. What risk classification will he most likely receive? A. Declined B. Substandard C. Poor D. Provisional
Declined
In regard to an annuity, which term is not associated with an annuitant receiving income? A. Depreciation Phase B. Annuitization Phase C. Liquidation Phase D. Pay Out Period
Depreciation Phase
What term refers to taxes being paid from Life Insurance proceeds, so it isn't necessary to sell assets from an estate, to pay for them? A. Estate Creation B. Estate Conservation C. Estate Compensation D. Estate Calculation
Estate Conservation
Ned has a desire to fly a plan, so he is taking flying lessons. Which of the following would limit his insurer's obligation of his life insurance policy of $300,000 in the event Ned would die as a student pilot? A. Revocation B. Estoppel C. Exclusion D. Stop loss
Exclusion
Michael has an annuity and his insurance company bears its risk. What type of annuity does Michael have in his possession? A. Fixed B. Variable C. Flexible D. General
Fixed
Key Person Life Insurance does NOT reimburse a company for which of the following? A. For a loss of leadership skills resulting from a key person's death B. For a reduction of profits resulting from a key person's death C. For increased future pension liability resulting from a key person's death D. For a loss of previous business results from a key person's death
For increased future pension liability resulting from a key person's death
Which of the following is a health plan that generally covers only services from approved providers in their network? A. HMO B. PPO C. POS D. Medicaid
HMO
Fred, a 58 year old, has a Modified Endowment Contract and he wants to withdraw some money to pay for his son's education. Which of the following will apply to Fred? A. He will not be able to withdraw money for education B. He will not be able to withdraw money for any purpose C. He will have to pay a 10% penalty D. He will have to pay a 10% penalty and a 10% surcharge
He will have to pay a 10% penalty
What approach helps with the prediction of an individual's earning potential and how much of it would be devoted to their dependents? A. Needs B. Human Life C. Retirement D. Social Security
Human Life
Who has jurisdiction with the Commissioner over alleged discrimination factors? A. Human Rights Commission B. Human Resource Commission C. Human Relations Commission D. Human Research Commission
Human Relations Commission
When can a company change the wording of a uniform policy provision? A. If it is approved by their Board of Directors B. If it is directed by an insured C. If the wording is not less favorable to an insured D. Never
If the wording is not less favorable to an insured
What is used the most to determine the extent of disability benefits? A. Income B. Age C. Occupation D. Avocation
Income
Issue age policy premiums will increase in regard to which of the following? A. Increased benefits B. Occupation C. Age D. Inflation
Increased benefits
A Universal Life policy has 2 main components. What are the components of the policy? A. Insurance and a cash account B. Separate account and interest C. General account and interest D. Death benefit and interest
Insurance and a cash account
The special significance of a conditional receipt is that it: A. Is given only to applicants who fully prepay all scheduled premiums in advance of their issued policy B. Is intended to provide coverage on a date earlier than the date of the issuance of the policy C. Guarantees an applicant that a policy will be issued in the amount applied for in their application D. Serves as proof that an agent has determined an applicant to be fully insurable for coverage by the insurance company
Is intended to provide coverage on a date earlier than the date of the issuance of the policy
What happens to the premium of an Annually Renewable Term policy? A. It remains level B. It expires annually C. It increases yearly D. It varies depending on inflation
It increases yearly
Which of the following is most closely related to an Equity Indexed Annuity? A. It is conservatively invested B. It is a security C. It is invested aggressively D. It is tied to the Standard & Poor's Index
It is invested aggressively
M&G Company is disqualified from receiving favorable tax treatment. What is the reason? A. It is temporary B. It has a vesting schedule C. It is formed for its employees and their beneficiaries D. The contributions are applied without regard to income
It is temporary
As the benefit period of a LTC policy lengthens, what happens to the policy's premium? A. It rises B. It remains constant C. It depreciates D. It is lowered
It rises
What is correct about a policy assignment? A. A policy may not have an assignment B. A policy assignment is the policy's beneficiary C. It transfers the owner's rights D. It assigns a contingent beneficiary
It transfers the owner's rights
Which of the following would not be considered in determining the total disability of any occupation? A. Education B. Training C. Experience D. Job interest
Job interest
What type of annuity covers two lives and the payments stop upon the first death? A. Single and Dependent B. Life with 20 Year Certain C. Joint Life D. Joint and Survivor
Joint Life
Dina submitted a claim to her insurance company on May 1, 2013. Her company denied her claim so she talked to her attorney about being legal action against her insurer. When is the earliest she can bring legal action against her insurer? A. May 2, 2013 B. June 1, 2013 C. May 1, 2014 D. July 1, 2013
July 1, 2013
How much tax is on a direct rollover from one IRA to another IRA is withheld? A. 100% B. 50% C. None D. 50% if the amount is over $50,000
None
Which of the following is true about Life Insurance death benefit proceeds? A. Taxed on a LIFO basis B. Not taxed if taken as a lump sum C. Taxed as capital gains D. Not taxed over $100,000
Not taxed if taken as a lump sum
What kind of health care system has private insures that contract with doctors and hospitals to give service at a set price and their insureds may choose among selected doctors and hospitals when medical care is needed? A. HMO B. POS C. PPO D. MIB
PPO
An individual with severe gingivitis should seek what kind of treatment? A. Periodontics B. Orthodontics C. Endodontics D. Restorative
Periodontics
Oliver has a Life policy with a provision that states he can be paid an amount that does not exceed its guaranteed cash value. What provision does this describe? A. Policy Loan Provision B. Consideration Provision C. Indemnity Provision D. Automatic Premium Loan Provision
Policy Loan Provision
Which of the following is not an enrollment period for Part A? A. Special B. Initial C. General D. Preliminary
Preliminary
When an application for Life Insurance is taken that replaces an existing life insurance policy, the applicant must be given a Disclosure Statement. The Disclosure Statement must include all of the following EXCEPT: A. Premium mode B. Insurer's name C. Date of application D. Producer's name
Premium mode
Which of the following best describes Blue Cross Blue Shield? A. Prepaid health care service organization B. Outside networks for hire C. Many offer preventive care D. Offer the lowest health care costs
Prepaid health care service organization
Which of the following must be provided by an HMO plan ? A. Eye Care B. Dental Care C. Long Term Care D. Preventive Care
Preventive Care
Joe has a disability policy with an Accidental Death and Dismemberment Rider. Last week he was involved in a hunting accident. A gun blast caused total permanent loss of hearing in both of his ears. What are the maximum benefits he will receive from his policy? A. Capital Sum B. Relation to Earnings Sum C. 50% of the Principal Sum D. Principal Sum
Principal Sum
Accidental Death and Dismemberment benefits cover ____and ____ amounts. A. Accident and Sickness B. Principal and Capital C. Income and Sickness D. Income and Medical
Principal and Capital
Which term best describes what health plans must be to fit the Affordable Care Act's standards? A. National B. Qualified C. Expert D. Independent
Qualified
Which of the following is not considered in rating a Health policy? A. Occupation of an applicant B. Copayment amount C. Benefits in a policy D. Race of an applicant
Race of an applicant
Disability benefits can be reduced based on an insured's present income. Which provision will allow this to occur? A. Relation of Earnings to Insurance Provision B. Change of Occupation Provision C. Annual Renewable Term Provision D. Medical Reimbursement Benefit Provision
Relation of Earnings to Insurance Provision
Bringing back the functional use of teeth refers to which of the following? A. Restorative B. Orthodontics C. Endodontics D. Prosthodontics
Restorative
S and T are married and have 3 children. S is the primary beneficiary on T's Accidental Death and Dismemberment (AD&D) policy and T's sister U is the contingent beneficiary. S, T and U are involved in a car accident and T and U are killed immediately. Who will get the AD&D benefits? A. S B. No one C. The estate of U D. The estate of U and T
S
Dan cancelled his Life policy and told his insurer to put his policy's cash value into an annuity. What nontaxable transaction does this describe? A. Section 1035 Exchange B. A Distribution of dividends C. Seven Pay Exchange D. An MEC
Section 1035 Exchange
What type of account is associated with a Variable Annuity? A. General B. Separate C. Standard D. Indexed
Separate
A Variable Whole Life policy has an investment feature. What is the sub-account with this policy called? A. Separate account B. Premium account C. General account D. Variable account
Separate account
What determines how long benefits will be received under a Fixed Amount Settlement Option? A. Interest amount B. Income period C. Size of installment D. Length of contract
Size of installment
Which of the following is not a characteristic of a group premium? A. Skill level B. Age C. Sex D. Occupation
Skill level
What type of LTC Care is most likely performed in an institutional setting? A. Respite B. Adult C. Skilled D. Activity related
Skilled
Gambling is an example of what type of risk? A. Pure B. Real C. Loss D. Speculative
Speculative
Which risk refers to applicants with similar lifestyles in the same age category? A. Standard B. Average C. Substandard D. Regular
Standard
Medicaid is a funded needs based program. How does Medicaid receive its funds? A. State Government B. County Government C. FICA payments D. State and Federal Governments
State and Federal Governments
Regardless if an insurer is domestic, alien or foreign, in order to conduct insurance business it must be authorized by which of the following? A. NAIC B. MIB C. Attorney General of their domiciled state D. State where they conduct insurance business
State where they conduct insurance business
In order for a stockholder to receive a dividend resulting from profits of their insurer she must own shares in a: A. Indemnity Insurer B. Stock Insurance Company C. Fraternal Insurance Exchange D. Mutual Insurance Company
Stock Insurance Company
The duties of a producer where replacement is involved include all of the following except: A. Leaving a copy or original of all solicitation material used for presentation to an applicant B. Submit all expenses to creditors C. Provide the replacing insurer a copy of all soliciting material D. Provide the replacing insurer a statement signed by the applicant as to whether or not he or she has existing Life insurance
Submit all expenses to creditors
Federal government _____ assist in the cost of health insurance coverage in several different ways. A. Navigators B. Exchanges C. Subsidies D. Marketplaces
Subsidies
Bob is a heavy chain smoker. Which risk does Bob most likely represent? A. Average B. Standard C. Substandard D. Preferred
Substandard
Tim just purchased a Health policy. How will he receive his benefits? A. Tax Free B. Subject to Federal Tax C. Subject to State Tax D. Subject to State and Federal Tax
Tax Free
Lump sum death benefits received by a beneficiary are: A. Tax free B. Partially taxed for an irrevocable beneficiary C. Fully taxed D. Taxed only for a revocable beneficiary
Tax free
In a Non-Qualified annuity, what is true regarding the tax consequences of a withdrawal during its accumulation period? A. Taxable interest will be withdrawn first and a 10% penalty will be imposed if an annuitant is under age 59 ½ B. There are no tax consequences C. The principal is not taxed D. There is a 15% tax penalty
Taxable interest will be withdrawn first and a 10% penalty will be imposed if an annuitant is under age 59 ½
Large Group Life Insurance underwriting takes all of the following into consideration EXCEPT: A. The nature or purpose of the group B. The level of participation by the group C. The Health of each individual in the group D. The size of the group
The Health of each individual in the group
Information concerning an applicant's prior health is generally provided to an underwriter by: A. A Medical examination B. The Medical Information Bureau C. An Agent's Report D. An Inspection Report
The Medical Information Bureau
Which is correct about a One Year Dividend Option? A. The dividend is used to buy an additional policy B. The dividend is guaranteed for one year C. The dividend's interest is used to buy a 1 year Term policy D. The dividend is given to the beneficiary within 1 year
The dividend is used to buy an additional policy
Who is the owner and the beneficiary of a Key Person Life Insurance Policy? A. The Key Person is the owner and the employer is the beneficiary B. The employer is the owner and beneficiary of the policy C. The employer is the owner and the Key Person is the beneficiary D. The Key Person is the owner and beneficiary
The employer is the owner and beneficiary of the policy
Medicare Supplement Core Benefits will cover how many pints of blood? A. The first pint B. The first three C. The first five D. All pints after the first 5
The first three
What is the main reason that Life policies paid quarterly increase the yearly cost of insurance? A. The interest to the insurer is decreased and the administrative costs go up B. The exposure to a high risk is increased C. Mortality expenses go up D. The interest rates increase and the Law of Large Numbers increase
The interest to the insurer is decreased and the administrative costs go up
What is offered to LTC recipients to account for inflation? A. The option of purchasing coverage that raises their benefit levels B. A 30 day Free Look period C. A Buyer's Guide D. The option of guaranteed interest
The option of purchasing coverage that raises their benefit levels
All of the following are true of Key Person Insurance EXCEPT: A. The key employee is the one insured B. The plan is funded by permanent insurance only C. There is no limitation on the number of key employee plans that can be in force at any time D. The employer is the owner, payor and beneficiary of the policy
The plan is funded by permanent insurance only
Betty applied for a Life policy and submitted the initial premium on March 1. Her policy was issued on April 1, but it was not delivered by her agent until April 12. Betty is dissatisfied and returns her policy on April 14. How will Betty's insurer deal with this action? A. The policy was returned in the free look period so the premium will be fully refunded. B. The policy's premium may not be refunded C. The policy's refund will be pro-rated D. The policy's free look period expired, so the policy is now void and no refund will be dispersed
The policy was returned in the free look period so the premium will be fully refunded.
Which of the following best describes premium payments for a personally owned Disability Income policy? A. The premiums are tax deductible if their amount exceeds 7.5% of an individual's total gross income B. The premiums for personally owned disability income are not tax deductible C. The premiums are eligible for credits within one year D. The premiums are only deductible if they exceed the benefits by 7.5%
The premiums for personally owned disability income are not tax deductible
Which of the following approves Medicare Select policies? A. Governor B. The state C. The Federal Government D. The NAIC
The state
If a Medicare Supplement is replaced with another policy, what happens to the waiting and elimination periods? A. Nothing B. They are denied C. They are carried over D. They are subject to an extension
They are carried over
What is the reason dividends from a mutual insurer are not subject to taxation? A. They are equivalent to returning a premium B. They are already taxed C. They surplus investments D. They are administered by an "attorney in fact"
They are equivalent to returning a premium
Which of the following is not correct about Variable Life policies? A. Those agents that sell it must obtain a Life license B. Variable Life policies pay a death benefit C. Those agents that sell it must obtain a Securities license D. They are guaranteed and fixed
They are guaranteed and fixed
Which of the following can deduct their full contribution to a traditional IRA? A. Joseph, who is covered by his employer's sponsored plan B. Beth, who contributes to her son's educational IRA C. Harvey, who makes $200,000 D. Tim, who is not covered by an employer sponsored plan and has earned income
Tim, who is not covered by an employer sponsored plan and has earned income
Which of the following statements best describes the HMO gatekeeper concept? A. To control costs B. To limit services C. To lower a deductible amount D. To provide equal coinsurance
To control costs
A consumer report was requested by an underwriter during Joe's application process. What would the report be used for? A. To see if he is a drinker B. To determine if he smokes C. To determine the probability of him making his timely premium payments D. To note the overall health of Joe
To determine the probability of him making his timely premium payments
What is the main reason for the target premium of a Universal Life policy? A. To cover the policy's expenses B. To accumulate cash value C. To keep the policy in force D. To pay up the policy at a faster rate
To keep the policy in force
Why is a disability benefit payment less than an insured's income? A. To prevent higher premium rates B. To ensure increased coverage C. To reduce costs of extensive benefits D. To prevent over insurance and malingering
To prevent over insurance and malingering
The federal government's role was increased when Medicaid was created by allowing the state to do which of the following? A. To receive matching funds to expand public assistance programs like offering eyeglasses, prescription drugs and medical supplies. B. To allow low cost deductibles C. To permit all citizens of the state medical assistance D. To avoid income status qualifiers
To receive matching funds to expand public assistance programs like offering eyeglasses, prescription drugs and medical supplies.
Which of the following describes the purpose for a Certificate of Coverage? A. To reduce the 6 month waiting period for pre-existing conditions B. To reduce the 5 month waiting period for pre-existing conditions C. To reduce the 1 year waiting period for pre-existing conditions D. To reduce and discontinue coverage
To reduce the 1 year waiting period for pre-existing conditions
Mary is a single mother with an 8 year old daughter named Amanda. Mary wants her and her daughter to be financially protected if she became disabled. What plan is best suited for Mary's needs? A. Total Disability Plan B. Income Benefit Family Plan C. Residual Family Benefit Plan D. Coordination of Benefits Family Plan
Total Disability Plan
What relates to the analysis of an applicant's personal information to determine whether an insurance policy should be issued? A. Adverse Selection B. Classification C. Gender D. Underwriting
Underwriting
What Universal Life policy would have the IRS require a corridor between the cash value and the death benefit? A. Universal Life Option A B. Universal Life Option B C. Universal Life Option II D. Universal Life Option III
Universal Life Option A
Before Joseph became disabled he bought a Credit Disability policy. Until what point will his creditor make his payments? A. Until he attains age 65 B. 3 months after he is able to work C. 6 months after he is able to return to work D. Until his disability ends or his debt is paid
Until his disability ends or his debt is paid
All of the following correctly apply to a Life policy that provides a straight $50,000 of coverage for a period of 3 years except: A. Term B. Level C. Variable D. Temporary
Variable
Jim forgot to pay his $300 premium last month. He is due a claim of $900. Will his insurer pay his claim? A. No, because he has an outstanding balance B. No, because he is over his grace period C. Yes, but only half of the amount D. Yes, but the $300 will be deducted from the amount and Jim will receive the balance
Yes, but the $300 will be deducted from the amount and Jim will receive the balance
