Insurance Test

What is the primary reason for the State Corporation Commission's examination if an agents insurance records? a) to determine an agent's sales quota b) to determine an agent's solvency c) to determine compliance with state insurance laws and regulations d) to determine an agent's renewal status

to determine compliance with state insurance laws and regulations

Jerry has an indemnity plan which covers dental expenses. Typically, these type of plans: a) has a limited network of dentists to choose from b) cover preventative care once every six months c) never require a deductible for major services d) cover oral surgery as a result from an injury

answer: cover preventative care once every six months

Long-term care insurance policies may contain exclusions for all the following EXCEPT: a) acute care b) care outside the US c) care for intentionally self inflicted injury d)care for incurable conditions

care for incurable conditions

an accident and health insurance policy's premium requirements are set forth in which of the following provisions? a) Insurance clause b) entire contract clause c) consideration clause d) premium mode

consideration clause

Reductions in coverage are one feature of _______ in Health insurance policies. a) optional provisions b) mandatory provisions c) cost containment d) the insuring clause

cost containment

Viatical settlement proceeds may be subject to the claims of: a) creditors b) adjusters c) insurers d) beneficiaries

creditors

What action may the Bureau of Insurance take when it finds that a license applicant is not competent or untrustworthy? a)Report the information to the Attorney General b) Decline to issue the license c) place the applicant on probation d) refuse to renew the license for five years

decline to issue the license

Disability income policies provide protection for which of the following? a) economic death b) Physical death c) Hospital expense d)custodial care

economic death

Which of these statements regarding the extended term insurance nonforfeiture option in a life policy is accurate? a) evidence of insurability is required b) coverage remains until death of the insured c) the premium to purchase the coverage comes from the policy's cash value d) cash value will continue to grow

answer: the premium to purchase the coverage comes from the policy's cash value

An insurer MUST charge the same individual life insurance premium for two individuals who share: a) the same risk class and have equal life expectancy b) the same age c) the same occupation d) the same employer

answer: the same risk class and have equal life expectancy

at what point must a newborn be covered under an individual or group accident and health insurance policy? a) when the policyowner notifies the insurance company b) when the required additional premium is paid c) at the moment of birth d) no more than 10 days after date of birth

at the moment of birth

An insurance policy may be issued with a preferred insurance premium in all of these situations EXCEPT: a) good credit history b) living in a rural area c) good health history d) being a nonsmoker

living in a rural area

In a speech to a local association, an agent incorrectly stated that XYZ Insurance Company is in financial difficulty and not paying claims. The agent may be guilty of a)False advertising b) Defamation c) Commingling d)Alienation

Defamation

Joe is a life insurance policyowner who has failed to pay interest on his policy loan. What will result from this nonpayment? a) The insurer can charge a higher rate of interest b) loan amount is increased to reflect the amount of interest due c) future loan privilege's will be suspended d) the loan balance becomes due immediately

loan amount is increased to reflect the amount of interest due

Which of these is NOT used as selection criteria in the underwriting process of a life insurance? a) credit report b) national origin c) age of applicant d) sex of applicant

national origin

Which of the following health insurance plans charges a premium that cannot be increased? a) guaranteed renewable b) cancelable c) non cancelable d) conditionally renewable

non cancelable

The authority to change the beneficiary in an individual annuity lies with the: a) annuitant b) owner c) beneficiary d) administrator

owner

An insurance company or agent must respond within _______ days to an insured's request to access personal information collected on him/her by the insurer. a) 15 b) 30 c) 45 d) 60

30

Peter, age 50, surrenders his modified endowment contract (MEC). How is the gain treated in terms of federal income taxes? a) The gain is treated as taxable income and a penalty tax is imposed on the gain b)The gain is treated as taxable income but no additional penalties are applied c) The gain is not taxable but a penalty is assessed d) Surrendering an MEC is considered a tax and penalty-free transaction

The gain is treated as taxable income and a penalty tax is imposed on the gain

Which of the following is true regarding a person receiving a waver of premium benefit? a) the insured must expect a total recovery within two years b) the insured will not qualify for short-term disability c) the insured will not qualify for workers compensation d) the insured must be disabled for a period of time

The insured must be disabled for a period of time

Virginia requires advertisements for Accident and Health insurance policies covering ONLY a specified illness to prominently display: a) The premium guarantee b) a statement that the policy is limited c) A schedule of payments d) The policy exclusions

a statement that the policy is limited

An agent who violates the insruance code may, after a hearing, pay up to _________ per violation as a penalty. a) $1,500 b) $3,000 c) $5,000 d) $10,000

answer: $5,000

All of the following are covered under most dental plans EXCEPT for: a) x-rays b) tooth extractions c) cleanings d) mouth cancer

mouth cancer

Which life insurance policy provision prohibits a beneficiary form "commuting, encumbering, withdrawing, and assigning" any portion of the proceeds prior to actual receipt from the company? a) insuring clause b) spendthrift clause c) nonforfeiture provision d)collateral provision

spendthrift clause

What minimum percentage of all eligible employees must participate in a group life insurance plan if the premiums are completely paid for by the employer? a)0% b)50% c)75% d)100%

100%

Which report contains information regarding an individual's general reputation and credit standing?: a) credit report b) Consumer report c) MIB report d) Agent's report

Consumer report

In what situation would disability income insurance premiums be deductible expense? a) Partnership paying for the group disability income coverage for the partners b) Corporation paying for group disability income coverage for its employees c) individual paying for his/her own individual disability policy d) parent paying for a child's individual disability policy

Corporation paying for group disability income coverage for its employees

Mike applied for life insurance and was issued a conditional receipt. He is later found to be insurable and is issued a policy. When does his coverage become effective? a) Date of issuance of the conditional receipt b) Date the policy was approved C) Date of policy delivery d) Date the insurer received the application

Date of issuance of the conditional receipt

Which of these is NOT a factor that influences group health insurance underwriting? a) Physical exams of group members b) Number of individuals in the group c) Group's claims experience d) Type of occupation group is involved in

Physical exams of group members

Virginia offers an extended COBRA insurance plan for companies with: a)100 employees b) 50 employees c) 20 t0 50 employees d) 2-19 employees

answer: 2-19 employees

An insured is covered under a group long-term disability policy. Under this type of policy, the definition of disability based on any occupation typically applies: a) only to part-time employees b) only to white collar employees c) during the probation period d) after two years of disability

after two years of disability

An insured files for an accident and health insurance policy claim eight days after the premium due date. The benefit payable is $500 and the overdue premium is $200. Assuming that the policy pays on a first-dollar basis and contains the unpaid premium provision, how much will the insurer pay? a) $0 b) $200 c) $300 d) $500

answer: $300

Any person who unknowingly violates Bitginia insurance law may be punished for each violation by a penalty to exceed: a) $500, with $10,000 Cap b) $750, with $10,000 Cap c) $1,000 wi8th $5,000 Cap d) 1,000 with $10,000 Cap

answer: 1,000 with $10,000 Cap

The free look period provided in a life insurance policy is usually: a) 10 days b) 31 days c) 45 days d) 60 days

answer: 10 days

A life insurance policy loan in Virginia cannot exceed an interest rate of : a) 2% b) 5% c) 8% d) 10%

answer: 10%

COBRA extends coverage for a surviving spouse but at a rate not more than _____ of the group premium. a) 25% b)50% c)75% c)102%

answer: 102%

Carlos' agent license has been suspended due to non-renewal. He may apply for reinstatement within the ___ month period following the date when the license should have been renewed a) 3 b) 6 c) 12 d) 24

answer: 12

An insured must notify an insurer of a medical claim within how many days after an incident? a) 10 b) 20 c) 30 d)40

answer: 20

Upon meeting company requirements, a lapsed life insurance policy may be reinstated within ____ year(s) a) 1 b) 3 c) 5 d) 7

answer: 3

Social security disability income requirements state that in order to become fully insured on a permanent basis, you must have worked in a covered occupation for: a) 10 quarters b) 20 quarters c) 30 quarters d) 40 quarters

answer: 40 quarters

Larry wants to purchase an induvial disability income policy to provide continuous income while disabled. eh is also covered by a two month wage continuation benefit from his employer. what should the policy elimination period be for this individual policy? a) 30 days b) 60 days c) 90 days d) 120 days

answer: 60 days

At what age do most people become eligible for Medicare? a) 59 1/2 b) 62 c) 65 d) 72

answer: 65

What type of employee welfare plans are not subject to ERISA regulations? a) Church plans b) Major Medical Plans c) Corporate d) qualified plans

answer: Church plans

What must be given to a life insurance applicant when the agent receives an application and the initial premium? a)Agent's report b)Conditional receipt c) Commission disclosure d)Good health statement

answer: Conditional receipt

Which of these is NOT an Unfair Claims Settlement Practice: a)refusing to pay claims without conducting a reasonable investigation b) compelling insureds to z a lawsuit by offering less on insurance claims c) Denying unsubstantiated claims on a timely basis d) failing to acknowledge and promptly with respect o insurance claims

answer: Denying unsubstantiated claims on a timely basis

When an applicant applies for a large amount of life insurance coverage, which of the following would likely NOT be an underwriting requirement? a)Consumer report b)Eye examination c)Urine sample d)Blood sample

answer: Eye examination

Most Medicare Supplement information used by an insurer must be approved by the State. Which of the following types of information does NOT require State approval? a) Billboard advertisements paid for by the insurer b) Brochures issued by the insurer c) Radio advertisements approved by the insurer d) Government publications

answer: Government publications

Which of the following provisions permits an insurer to return a portion of the premium and pay benefits on a pro rate basis if it finds that an insured has duplicate coverage? a) change of occupation b) relation of earning to insurance c) Insurance with other insurers d) other insurance in this insurer

answer: Insurance with other insurers

When a policy loan is requested by a policyowner and it requires the consent of the beneficiary, what kind of beneficiary designation is this? a) collateral beneficiary b) Revocable beneficiary c) Irrevocable beneficiary d) per stripes beneficiary

answer: Irrevocable beneficiary

Custodial care is normally covered under: a) major medical insurance b) Medicare part B c) Long-term disability insurance d) Long-term care insurance

answer: Long-term care insurance

Which of these policies is considered to be a comprehensive health policy? a) Major medical policy b) Surgical policy c) Limited benefit policy d) Health Savings Account

answer: Major medical policy

Skilled nursing facility expenses are sometimes covered by _______, but ONLY if the insured was hospitalized prior to entering the facility. a) HMO's b) Medicare c) Medicaid d)Medicare Supplements

answer: Medicare

Which individual would be best suited for Medicare Supplement insurance? a)Medicare enrollee b) Medicaid enrollee c) social security recipient d) HMO subscriber

answer: Medicare enrollee

Kim is covered under two medical expense plans. Plan A pays up to $5,000. Plan B pays up to $4,000. If she incurs $7,000 in expenses, the coordination of benefits provision dictates that: a) Plan A pays up to $7,000 b) Plan A pays up to $3,500 and Plan B pays up to $3,500 c) Plan A pays $80 and Plan B pays 20% d) Plan A pays up to $5,000 and Plan B pays up to $2,000

answer: Plan A pays up to $5,000 and Plan B pays up to $2,000

When does the producer give a premium receipt for a life insurance application? a) when the application has been approved b) When the initial premium has been paid with the application c) During the medical exam d) when the completed application has been collected

answer: When the initial premium has been paid with the application

Which of these is NOT an advantage of term life insurance? a) the greatest amount of coverage can be provided for the initial premium paid b) it can be provided as a rider to another policy c) a cash benefit will be provided if the insured is alive at the end of the policy period d) temporary insurance needs can be met

answer: a cash benefit will be provided if the insured is alive at the end of the policy period

What is a juvenile life insurance policy? a)coverage normally sold as a term rider b)a life policy that covers the parents of a minor c)a life policy that covers the life of a minor d) a life policy that covers the lives of both the parents and their children

answer: a life policy that covers the life of a minor

Which of the following statements accurately describes the "time limit on certain defenses? a) after a stated period of time, claims cannot be denied due to material misrepresentation on the application b) all claims can be disputed after two years c) an insured cannot file a lawsuit within 90 days of the claim being filed d) The right to return to an accident and health policy must be within 10 days of policy delivery

answer: after a stated period of time, claims cannot be denied due to material misrepresentation on the application

In what situation could an insurance policy's coverage be modified? a) applicant is a preferred risk b) applicant is an substandard risk c) applicant is a standard risk d) applicant is uninsurable

answer: applicant is an substandard risk

In the event of premium default, which life insurance provision will use the cash value to keep the policy in force? a) waiver of premium b) automatic premium loan c) reinstatement d) policy loan

answer: automatic premium loan

In regards to health insurance, employees age 65 or older are typically required to: a) be offered the same group health benefits offered to the younger employees B) provide evidence of insurability for medical insurance offered by the employer c) choose Medicaid as their primary provider d) choose Medicare as their primary provider

answer: be offered the same group health benefits offered to the younger employees

Voluntarily terminating an insurance policy is also known as: a)discontinuation b)elimination c) estoppel d) cancellation

answer: cancellation

An agent does NOT need to notify the Bureau of Insurance of a: a) change of address b) name change c) change in financial status d) felony conviction

answer: change in financial status

An employee welfare plan exempt from ERISA regulations would be: a)church plans b)indemnity plans c) split dollar plans d) accident only plans

answer: church plans

All of these are considered to be a violation of the Federal Fraud and False Statements Act EXCEPT: a) overvaluing land b) abstracting funds c) false entries on reports d) claim reimbursement

answer: claim reimbursement

Which of the following statements is true regarding accident and health insurance claims that reimburse on an indemnity basis? a) no proof of loss is needed b) claims can be sent directly to the insured c) claims are required to be sent to the health provider d) no claim form is needed

answer: claims can be sent directly to the insured

A prospective client was intimidated by an agent to purchase an insurance contract. The agent could be found guilty of: a)coercion b)rebating c)defamation d)sliding

answer: coercion

An agent who attempts to intimidate is engaging in: a)coercion b)twisting c) defamation d) discrimination

answer: coercion

The payment of the first premium, the promise to pay a covered loss, and the agreement to abide by policy conditions are all examples of: a) consideration b) legal purpose c) representation d) acceptance

answer: consideration

The courts will normally interpret a policy in favorof the insured when the meaning of the policy is not clear. This is because an insurance policy is a(n): a) warranty contract b) aleatory contract c) contract of adhesion d) unilateral contract

answer: contract of adhesion

Which of the following reduces the opportunity for over insurance? a) reduction in coverage provision b) coordination of benefits provision c) insuring clause d) conformity with state statues

answer: coordination of benefits provision

Any employee insured under a group life insurance plan is normally: a) given a master certificate b) covered on a noncontributory basis c) required to show proof of insurability d) covered with term life insurance

answer: covered with term life insurance

an agent who makes derogatory remarks about another insurance company during the sale of insurance has engaged in: a) defamation b) misrepresentation c) rebating d) coercion

answer: defamation

Which annuity allows contributions to an IRA? a) single premium Immediate Annuity (SPIA) b) annuity certain c) deferred d) life with period certain

answer: deferred

Which of the following health insurance provisions required that the application becomes part of the policy? a) consideration clause b) insuring clause c) entire contract clause d) application clause

answer: entire contract clause

How often must the Commission examine each domestic insurance company? a) every year b) every two years c) every three years d) every 5 years

answer: every 5 years

How are benefit payments from individually-owned medical expense policies treated for tax purposes? a) exempt from income taxes b) taxes as ordinary income c) taxed as a dividend d) tax credit given for amount of benefit payment

answer: exempt from income taxes

The "Notice to buyer" on the first page of each long-term care policy delivered in Virginia: a)explains that some long-term care costs may not be covered b) provides the addresses of approved long-term care facilities c)states the possible disadvantages of replacing coverage d) states the cost of the coverage

answer: explains that some long-term care costs may not be covered

Major Medical policies typically are characterized by which of the following? a) corridor deductible b) flat deductible c) probationary period d) first dollar coverage

answer: flat deductible

What is considered a valid reason for small corporations to insure the lives of its major stockholders? a) to provide income for the surviving dependents b) reduce the company's tax liability c) to pay for final expenses d) fund a buy-sell agreement

answer: fund a buy-sell agreement

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? a) binding receipt b) good health statement c) agent's report d) MIB disclosure

answer: good health statement

What is the name of the rider that provides an additional purchase option in a life insurance policy? a) Payor Rider b) Cost of living rider c) waiver of premium rider d) guaranteed insurability rider

answer: guaranteed insurability rider

Life Annuity with Period Certain is characterized as a) guaranteeing benefit payments for a stated period of time after reaching age 65 b) guaranteeing a minimum interest rate c) guaranteeing lifetime benefit payments for two or more people d)guaranteeing benefit payments for a stated minimum number of years

answer: guaranteeing benefit payments for a stated minimum number of years

An agent's license may only be suspended or revoked if the agent: a) has been afforded a right to a hearing b) has engaged in replacement of existing policy c) filed for bankruptcy d) did not meet a sales quota

answer: has been afforded a right to a hearing

The type of health insurance in which underwriting procedures are the most restrictive is: a) accidental b) individual c) group d) employer paid

answer: individual

Which of these procedures is NOT designed for ambulatory care centers? a) inpatient surgery b) vaccinations c) outpatient surgery d) physical examinations

answer: inpatient surgery

Which of the following situations would qualify an insured to receive funds from an accelerated (living) benefit rider? a) insured is expected to remain in a nursing home for life b) insured has entered a substance abuse facility c) Insured has declared bankruptcy d) insured recovering from a broken leg

answer: insured is expected to remain in a nursing home for life

Under which circumstance may an insurer discontinue a small employer group medical plan? a) insurer discontinues offering the plan to all employers b) the group's overuse of medical services c) overall health condition of the employees has deteriorated d) employer has filed for bankruptcy

answer: insurer discontinues offering the plan to all employers

A life insurance beneficiary died after receiving only six payments under the policy's life income settlement option. What happens with the remaining balance of the death proceeds? a) transfers to the insured's estate b) transfers to the beneficiaries' estate c) donated to charity d) kept by the insurance company

answer: kept by the insurance company

The owner of a single premium deferred annuity is entitled to do all of these EXCEPT: a) make additional payments into the annuity b) choose the length of the payout period c) choose who will be the recipient of the annuity payments d) cash surrender the contract

answer: make additional payments into the annuity

According to the Affordable Care Act (ACA), the proportion of premium revenues spent on clinical services and quality improvements is called the: a) medical loss ratio b) market essential coverage c) medical rebate d) minimum issue reform

answer: medical loss ratio

What is considered a valid reason for an insurer's refusal to pay policy proceeds directly to a minor? a) minors are not capable of having insurable interest b) minors are normally not capable of handling money in a reasonable manner c) minors are usually not capable of paying for an insurance premium d) minors cannot legally enter into a contract

answer: minors are normally not capable of handling money in a reasonable manner

An agent who informs an applicant that there are no exclusions in an insurance policy has engaged in: a) defamation b) misrepresentation c) coercion d) rebating

answer: misrepresentation

Periodic health claim payments MUST be made at least: a) monthly b) weekly c) daily d) annually

answer: monthly

James the agent has sold a life insurance contract to a client without using an illustration, even though his insurer offers one. For this particular transaction, the applicant: a) must sign a statement that no illustration was provided b) will be automatically declined for coverage c) is not guaranteed the terms of the contract d) is entitled to monetary compensation

answer: must sign a statement that no illustration was provided

Tim is covered by an accident and health insurance policy that may not be changed in any way by the insurer up to a stated age, as long as the premiums are paid. What type of policy is this? a) optionally renewable b) noncancelable c) guaranteed renewable d)conditionally renewable

answer: noncancelable

If a Medicare Supplement policy is cancelled by the insurer, which of these circumstances does NOT require prior approval by the State Corporation Commission? a) multiple Medicare supplement policies on the same person b) nonpayment of premium c) unsuitable coverage d) cancelling a class of insureds

answer: nonpayment of premium

Paul is an agent who is licensed in Virginia but a resident of Maryland. P is considered to be a(n) _____ agent. a) nonresident b) foreign c) alien d) reciprocal

answer: nonresident

An insured is covered with a health insurance policy. If the insured would like to cancel the policy, he/she must: a) wait until the end of the calendar year b) notify the insurance company in writing c) notify the insurance company by telephone d) provide a reason for canceling

answer: notify the insurance company in writing

Which of these is NOT an Unfair Claims Settlement Practice? a) refusing to pay claims without conduction a reasonable investigation b) compelling insureds to initiate lawsuit by offering less on insurance claims c) offering to settle a claim by arbitration d) failing to acknowledge and act promptly with respect to insurance claims

answer: offering to settle a claim by arbitration

Which would NOT be a location where skilled nursing care is provided? a) hospital b) custodial care facility c) nursing home d) personal residence

answer: personal residence

The standard provisions of an accident and health insurance policy require that the: a) policy, endorsements, and attached papers constitute the "entire contact" b) policy summary, conditional receipt, and initial premium constitute the "entire contact" c) change of occupation provision is mandatory d) grace period be no shorter than 60 days

answer: policy, endorsements, and attached papers constitute the "entire contact"

What typically changes at the re-entry option date found in some term life policies? a) beneficiary b) amount of coverage c) premium d) contestable period

answer: premium

a pre-existing condition exclusion in an accident and health insurance policy pertains to: a) prior insurance coverage b) prior financial matters c) prior health matters d) prior occupations

answer: prior health matters

When a producer submits an application that discloses personal information regarding the applicant, who supplies the privacy notice? a) producer b) insurer c) underwriter d) fiduciary

answer: producer

An agent has indicated to a potential client that the proposed life insurance policy is covered by the Virginia Life, Accident, and Sickness Insurance Guaranty Association. This action taken by the agent is: a) permitted and encouraged b) prohibited by law c) legal in every state d) permitted only with the Commissioner's authorization

answer: prohibited by law

According to the State Corporation Commission, the purpose of licensing prospective agents in the state of Virginia is: a) qualifying the agent to represent an authorized insurer for soliciting and negotiating their insurance products b) tracking sales c) permitting the payment of fees to quality agents d) determining those who are eligible for appointment

answer: qualifying the agent to represent an authorized insurer for soliciting and negotiating their insurance products

What effect can be long-term care benefit rider have on a life insurance policy? a) increased cash value b) decreased cash value c) increased death benefit d) reduced death benefit

answer: reduced death benefit

Which of these is NOT an Unfair Claims Settlement Practice? a) misrepresenting pertinent policy provisions relating to coverage after a loss b) refusing to pay persons bringing false or fraudulent claims c) compelling insureds to initiate a lawsuit by offering less on insurance claims d) failing to acknowledge and act promptly with respect to insurance claims

answer: refusing to pay persons bringing false or fraudulent claims

When a lapsed policy's premium has been paid current, it has the potential of being: a) restored b) renewed c) reinstated c) reinstituted

answer: reinstated

The marketing of Medicare Supplements is regulated to prevent all of the following EXCEPT: a) sale of excessive insurance b) replacement of any existing coverage c) inaccurate policy provisions d) failure to display notice of limitations to buyer

answer: replacement of any existing coverage

When an insurer markets its Medicare Supplement products in Virginia, which method is acceptable? a) advertising the insurer's guaranty association coverage b) using methods of intimidation and coercion c) replacing an existing policy with one that has greater benefits d) using cold lead advertising

answer: replacing an existing policy with one that has greater benefits

According to the IRS, a company may NOT do which of the following in regards to funds in a qualified retirement plan? a) Transfer the funds to a new custodian b)Invest the funds in mutual funds c) transfer vested funds to terminated employees d) repossess the funds for business purposes

answer: repossess the funds for business purposes

What is Old Age and Survivors Health Insurance (OASDHI) also known as? a) Medicare b) social security c) Medicaid d) FICA

answer: social security

Licensed agents in Virginia are authorized to: a) rate coverages b) approve coverages c) solicit, receive, and forward applications to the insurer d) classify rates

answer: solicit, receive, and forward applications to the insurer

An example of rebating would be: a) a mutual insurance company paying dividends to its policy owners b) reducing the premiums across the board for a specific risk class c) using intimidation in order to restrain or monopolize the business of insurance d) splitting the commission with the buyer on a sale of insurance

answer: splitting the commission with the buyer on a sale of insurance

Which statement concerning the Entire Contract provision in an individual accident and health insurance policy is TRUE? a) The agent can waive policy provisions and change the policy with the insurer's consent b) The agent has the authority to waive the policy's provisions under certain conditions c) The agent has the authority to change the policy under certain conditions d) the agent doesn't have the authority to change the policy or wave its provisions

answer: the agent doesn't have the authority to change the policy or wave its provisions

What is payable to the policyowner if a whole life policy is surrendered prior to its maturity date? a) the loan value b) the cash value c) the face amount minus any past due premiums and outstanding loans d) nothing

answer: the cash value

Which statement concerning adjustable life insurance is accurate? a) cash value loans are not permitted b) the face amount and premiums can be charged simultaneously by the policyowner c) settlement options are limited d) only the face amount can be changed by the policyowner

answer: the face amount and premiums can be charged simultaneously by the policyowner

The insured's consideration given for a health insurance policy is: a) the first premium payment and the application b) the initial premium payment only c) the application d) the initial premium and an investigative report

answer: the first premium payment and the application

Which disability buy-self insurance benefits exceed a partner's cost basis, which of the following is correct? a) the excess is taxed as a capital gain to the partner b) the excess is taxed as ordinary income to the partner c) the excess is partially taxable to the partner d) the full amount is non-taxable to the partner

answer: the full amount is non-taxable to the partner

James is covered with health insurance by two different insurers. The "insurance with other insurers" provision in an individual health insurance policy allows an insurer to pay benefits to the insured on a pro-rata basis when: a) the policy's maximum lifetime benefit level has been paid b) the policy is beyond the incontestable period c) the insurer was not notified prior to the claim to the claim that the insured has other health coverage d) the policy is beyond the free-lock period

answer: the insurer was not notified prior to the claim to the claim that the insured has other health coverage

The Virginia Life, Accident, and Sickness Insurance Guaranty Fund protects an insured in the event of: a) high inflation b) disability c) unemployment d) the insurer's insolvency

answer: the insurer's insolvency

A material change in a modified endowment contract (MEC) results in: a) the contact becoming void b) the new contestable period c) the seven pay test adjusted for cash value, applies again d) a tax penalty

answer: the seven pay test adjusted for cash value, applies again

What would be the disadvantage of naming a trust as beneficiary of a life insurance policy? a) trusts cannot be formed for life insurance purposes b) trust administration fees would reduce policy proceeds c) trusts cannot be used if a minor is the beneficiary d) Trustee must be a bark or brokerage

answer: trust administration fees would reduce policy proceeds

An agent's insurance records must be provided to the State Corporation Commission: a) within 30 days of the request b) under no circumstances c) upon request of the state corporation commission d) upon approval of the governor

answer: upon request of the state corporation commission

A policyowner with a terminal illness who sells his life insurance policy to a third party is called a: a) viable b) viatical c) viator d) viatee

answer: viator

Which life insurance policy would be eligible to include an automatic premium loan provision? a) increasing term b) level term c) decreasing term d) whole life

answer: whole life

Scott has a life insurance policy in which the dividends are left with the insurance company. This particular policy may be paid up when the cash value plus accumulated dividends: a) equal the net single premium for the same face amount at the insured's attained age b) can purchase extended term coverage for a period of two years or more c) equal the non forfeiture value of the policy d) can purchase a paid-addition

equal the net single premium for the same face amount at the insured's attained age

An example of misrepresentation is: a) making any public statement or advertisement that contains false information or unsubstantiated criticisms about an insurance company b) charging different premiums for policyholders in the same risk classification c) offering a premium rebate or a special advantage of any kind to consumers as an inducement to purchase a contract of insurance d) falsifying the terms, benefits, advantages, or conditions of an insurance policy

falsifying the terms, benefits, advantages, or conditions of an insurance policy

John has a criminal record in which he was convicted of a felony that involved dishonesty. Under Federal law, how would John be able to engage in insurance transactions? a)completing a court-ordered prison sentence b) completing a court-ordered probation period c) paying a fine of up to $50,000 d) given written content by the state insurance regulatory agency

given written content by the state insurance regulatory agency

Dan owns a disability income insurance policy which provides ONLY nonoccupationally coverage. Which of the following circumstances would likely NOT be covered under his plan? a) he is injured in an automobile accident while driving to work b) He suffers third-degree burns while on vacation c) he falls from the roof of his personal residence while replacing shingles d) he falls and breaks his hip at work

he falls and breaks his hip at work

With life insurance, the needs approach is used primarily in determining a)which insurance company to purchase the coverage from b)how much life insurance a client should apply for c)the type of life insurance that should be purchased d)a budget for the surviving dependents to follow in the event of the client's death

how much life insurance a client should apply for

According to the Affordable Care Act, coverage may be rescinded: a) if purchased through the employer b) if obtained by the individual c) if facilitated through the navigator d) if intentionally false statements were offered

if intentionally false statements were offered

If the State Corporation Commission believes that an agent is incompetent or untrustworthy, it has the authority to perform all of the following functions EXCEPT: a) issue a cease and desist order b) subpoena a respondent c) issue monetary fines d) incarcerate the agent

incarcerate the agent

Which health policy clause specifies the amount of benefits to be paid? a)Insuring b)Consideration c) free-look d) payment mode

insuring

How is the insured protected if a payor benefit rider is attached to the life insurance policy? a) premiums are waived if the payor becomes financially insolvent b) policy loan will automatically cover the premiums if payor becomes disabled or dies c) premium payments are waived in the even the premium payor dies or become disabled d) policy loan will automatically cover the premiums if payor becomes financially insolvent

premium payments are waived in the even the premium payor dies or become disabled

Which of the following would NOT be a reason for purchasing life insurance on a child's life? a) Provide benefits for the child if the parents die b) pay for the child's unreal expenses c) provide a start on the child's personal insurance d) help provide funds for the child's education

provide benefits for the child if the parents die

A life insurance policyowner sells her policy to a third party in a viatical settlement. Under this transaction, the policyowner: a) must pay income taxes on the full amount received b) receives an amount more than the policy's death benefit c) receives the policy's full death benefit d) receives an amount less than the policy's death benefit

receives an amount less than the policy's death benefit

An insured covered under a disability income policy is disabled and collecting benefits for a period of two months. He returns to work and is again disabled from the same cause, whereupon benefits continue to be paid. This is an example of which of the following? a) presumptive disability b) concurrent disability c) residual disability d)recurrent disability

recurrent disability

Omar is covered by a disability income policy. He is hurt while performing an occupation more hazardous than the occupation listed in his policy. The policy's change of occupation provision will have what effect? a)increase the benefit level b) reduce the benefit level c) increase the premiums d) decrease the premiums

reduce the benefit level

Which of the following would prevent a person from obtaining a Virginia resident agent license? a) Not graduating from high school b) residing in a state outside of Virginia c) residing in Virginia less than five years d) Being under the age of 25

residing in a state outside of Virginia

The outline of coverage for a Medicare supplement policy provides information about: a) services, benefits, copayments, deductibles, exclusions, premiums, and the insurer b) the policy's beneficiary c) the policyowner's consumer reports used in the underwriting process d) local health providers that are available for this coverage

services, benefits, copayments, deductibles, exclusions, premiums, and the insurer

fee-for-service is a method of administering health insurance benefit payment in which: a) the insurer is reimbursed directly b) the cost of each service is bundled into one payment c) the cost of each service is scheduled d) the insurer pays for services through a voucher system

the cost of each service is scheduled

The Optionally Renewable provision allows what party to cancel the contract? a) the policyowner b) the insured c)the insurer d) either the insurer or the policyowner

the insurer

Who may terminate coverage under a cancelable health insurance policy? a) the insured only b) the insurer only c) the insurer or the insured d) an officer of the insurer

the insurer or the insured

How is a collateral assignment used in a life insurance contract? a) transfers permanent ownership rights to a creditor b) assigns complete ownership rights to a creditor c) transfers specific ownership rights to a creditor d) assigns ownership rights to the primary beneficiary

transfers specific ownership rights to a creditor

Which of the following statements about universal life insurance is NOT true? a) death benefit can be increased b)premiums are fixable c) universal life insurance normally has a minimum guaranteed cash value for duration of the policy d) the cash value interest rate must equal or exceed a guaranteed minimum value

universal life insurance normally has a minimum guaranteed cash value for duration of the policy

How long does protection normally extend to under a limited pay whole life policy? a) It depends on the performance of the underlying investment account b) when premiums are no longer required as stated in the contract c) until age 65 d) until age 100

until age 100

During the application process, a statement made by an applicant that becomes part of the contract is considered to be a(n): a) warranty b) representation c) waiver d) exclusion

warranty