Insurance Training

M has a whole life policy with a return of premium rider and a face amount of $100,000. At age 80 M died and to that point had paid $50,000 in premium. M's beneficiary will receive:

$100,000

N applied for a policy without paying initially. If N's policy is approved, the agent will have to collect:

1)The premium at delivery 2)A signed statement of good health

Which of the following statements pertaining to a Premium Fund Trust Account is accurate when a producer handles the premium funds of more than one insurance company?

Co-mingling the premium funds of more than one insurer into a single account is only allowed with the written consent of each company whose funds will be placed into the single PFTA

P is applying for a individual health insurance policy and has chronic respiratory problems. The only way that the insurer will issue P a policy is if the policy does not cover P's respiratory issues. The name of the rider that will exclude P's condition from being covered is:

Impairment Rider

At annuitization, which settlement option will give the highest possible fixed income?

Life Annuity

Which of the following would be an example of a Limited Pay Whole Life policy?

Life Paid @ Age 65

An insured has recently joined the Marine Corp and their insurance company has indicated to the insured that an increase in premium will result from this action. The insurance company.

May face action by the Director because this is an example of unfair discrimination.

All of the following statements are CORRECT about Medicaid EXCEPT:

Medicaid is available to anyone 65 or older and provides doctors services only.

According to many state laws, Viatical Settlement Providers:

Must be appropriately licensed to transact such business

Which type of policy may pay a policyholder a dividend when there is a surplus?

Mutual

$250 every two years is the license renewal fee for which of the following?

Non-resident producer

M has a policy that names N as a primary beneficiary and O as a contingent. N dies in a car accident and two weeks later M dies from an unexpected illness. Who will receive the proceeds?

O only

To enroll into Medicare Supplements a recipient must be covered by ______.

Parts A and B

H has suffered a covered disability away from her job and will shortly begin collecting benefits. The insurer sends a letter to H stating that she will not receive any benefit amounts greater than her income. This clause is known as:

Relation of earning to insurance

N is applying for a life policy. N is in the best shape that a individual can be in and does not smoke cigarettes. Although N has been healthy her entire life, she had a sister survive cancer. N's policy will be:

Standard Risk

R and D are a wealthy married couple and are planning for how their estate will be handled once they die. A concern for R and D is estate tax. Which policy would be a great option to help pay estate taxes when the last spouse dies?

Survivorship Life

Under Regulation 919, what is the length of time an insurance company is required to keep detailed claims records?

The current and past two years.

Which of the following statements applies when an insured dies during the Grace Period of a life insurance contract?

The face amount of the policy less unpaid premium is paid to the beneficiary.

An insured commits suicide after the suicide clause expires. Which of the following is true?

The face amount of the policy will be paid

If a producer demands a hearing to challenge the reasonableness of a license suspension, when will the hearing take place?

The hearing takes place within 20 to 30 days from the date the Director's mailing of the hearing notification.

In a fixed annuity, who bears all investment risk?

The insurer

H is 65 and enrolled into Part A and Part B of Medicare. Three months into enrollment H applies for a Medigap Plan A. Which of the following is most likely to happen?

The insurer will most likely approve the supplement, provided that H is insurable

An individual life insurance application must bear the name and signature of which of the following entities?

The licensee who solicited and wrote the application.

Health insurance policy master application must bear the name and signature of which of the following entities?

The licensee who solicited and wrote the application.

Each of the following is true regarding a level term policy EXCEPT:

The premium remains level throughout the policy

A producer who makes misleading comparisons between a product an insured owns and a policy the producer is trying to sell as a replacement is an activity known as

Twisting

T has had a whole life policy for 50 years and is now 70 years old. Because of the tough economy, T can no longer afford his annual premiums but still wants permanent insurance. T's agent should advise her to:

Use the existing cash value to pay up the policy and reduce the face amount, but still have permanent coverage and build cash value

D bought a policy and has become terminally ill. Which of the following will allow D to sell a portion of his death benefit before he dies to help pay medical bills?

Viatical Settlement

The trust officer of a bank, while performing the incidental duties of his employment, advises bank customers from time to time about maters related to insurance policies. This trust officer

is exempted from any producer licensing requirements based on these activates.

If a company charges two separate prospective insureds a different premium rate without a sound actuarial basis, this is an example of

unfair discrimination

The most limited form of Limited Pay Whole life is:

Single Premium Whole Life

If the Director discovers a person has violated the controlled business statute, which of the following may happen as a result?

The Director may not grant a renewal of producer license.

If producer Y receives a $175 premium payment on behalf of insurance Company B and keeps the money instead of turning the funds over to the Company B, which of the following is TRUE?

The law says that the premium is considered to have been received by Company B.

An annuitant is deferring their income payments until a later date. What are the tax considerations during the accumulation period?

The principal and interest grows tax deferred until annuitization.

Which of the following circumstances may lead to the renewal of a producer license without the requirement of completing continuing education requirements?

The producer is called up to military duty and secures a military waiver.

An incomplete application is likely to do all of the following EXCEPT:

be ignored during underwriting

Insurable interest in a third-party ownership situation must exist at:

inception

A contract of adhesion is a:

take it or leave it contract

All of the following are characteristics of a Group Life policy EXCEPT:

the group policy can never be converted

Which of the following policy death benefit amounts would not warrant an illustration for a product that may normally require one?

$10,000

K is age 56 and has a HSA plan through her employer with a $8,000 annual family deductible. The IRS limits annual contributions at $7,000. How much can K save in her HSA per calendar year?

$8,000

Which of the following contracts are not covered under Guarantee Association law?

1)Burial life 2)HMO 3)Variable Life

If an employer is notified of discontinuance of a group carrier, the policyholder has ______ to notify covered enrollees.

10 Days

When a non-financial conduct examination is held and the party examined makes a written request for a hearing, at least how many days notice must the Director provide of time and place of a hearing as designated in the notice?

10 days

A notice of discontinuance is provided by the carrier to the contract holder. The contract holder then has to notify all enrolled insureds within:

10 working days

Company A has just filed for bankruptcy and notified the Director. When must the Director notify the board of directors for the Guaranty Association of insolvency of Company A

3 days

If a long term care policy is approved for a group or individual policy, the issuer must deliver the contract no later than:

30 days after approval

T has an HMO policy through his employer. T's wife just gave birth to their first child. Although T's child is covered immediately, how many days does T have to notify the HMO of the childbirth?

31

If an agent has completed the initial continuing education for long term care, next renewal they must complete ongoing education that is ____ of continuing education.

4 hours

The insured wants to file a lawsuit against an insurer. Under the Legal Actions provision, how long must the insured wait before filing the lawsuit?

60 days

Of the following statements regarding a producer hearing to determine whether or not rebating was occurring, which is FALSE?

A participant in such a hearing is immune from perjury charges even if perjury is committed in the hearing.

A 180 temporary licensee MAY NOT be granted under which of the following circumstances?

A producer needs their spouse to help explain differences in insurance coverages to prospective customers.

Before the insurer pays proceeds to a beneficiary, they find that the insured misstated their age. The insurer will:

Adjust the death benefit to the insured's true age and pay proceeds accordingly

Which of the following losses are most likely to be excluded by a health policy?

An insured who decides to have cosmetic surgery on their nose

Major Medical Policies:

Are reimbursement, expense-based policies, with high maximum coverage.

If a policy is being replaced, when must the agent forward the notice regarding replacement form to the replacing insurer?

At the time of replacement application.

If an insured has a Basic Surgical policy, the amount of benefit paid for a covered loss is specified in the:

Benefit Schedule

R is about to annuitize and wants a settlement option that would pay any unallocated income to a beneficiary if he were to die prematurely. R should select:

Cash Refund Annuity

Which of the following situations best represents an Aleatory Contract:

Company N is paying a $500,000 claim after only collecting 1 year of premium from a deceased insured.

Rebating would include all of the following property offered in exchange for the purchase of an insurance policy, EXCEPT:

Dividends paid on a mutual policy to the policy owner.

When a 67 year old full-time employee incurs medical expenses from a nonoccupational injury, expenses will be covered by:

Employee Group Insurance

Under a BOE policy, all of the following losses will be insured EXCEPT:

Employer Salary

To establish if a policy is a Modified Endowment Contract a policy must:

Fail the 7 pay test

Which policy rider would offer an insured the option to increase their benefits of the original policy?

Guaranteed Insurability Rider

The entity that protects HMO subscribers against personal loss because of entity insolvency is:

HMO Guarantee Association.

If a producer charges a service fee in addition to being paid a commission for a sale of insurance, what is required of the producer in such an instance?

If the total compensation will exceed 10% of the annual premium amount there must be a written disclosure document signed by the producer and the applicant for insurance.

An insured suffers a loss while committing a felony and the insurer will deny payment of claim. Which of the following provisions is in effect?

Illegal Occupation

All of the following interest sensitive life insurance policies are considered to be Variable EXCEPT:

Interest Sensitive Whole Life

The policyholder has a contract that requires a signature of a beneficiary to make any changes. This is known as a:

Irrevocable Beneficiary

The trust officer of a bank, while performing the incidental duties of his employment, advises bank customers from time to time about maters related to insurance policies. This trust officer:

Is exempted from any producer licensing requirements based on these activates.

An organization that arranges for one or more limited health care plans under a system which cause any part of limited health care delivery to be borne by the organization or its providers is known as:

LHSO

B no longer needs her policy because she has won the lottery. B has explored a possible transaction where she can sell her policy for more than the cash value, but less than the death benefit while she is still alive. This transaction is known as a(an):

Life Settlement

H has Disability Insurance through her employer. H has suffered a covered disability and has been informed by the group insurer that she is eligible to received benefits for up to 3 years maximum. H has:

Long-Term Group Benefits

Producer K is convicted of a felony on March 1 and the conviction judgment is entered officially on August 1. By which date must K report this felony conviction to the Director?

No later than August 31.

Which of the following is the term for when the group sponsor is responsible for paying all the premiums in a group life policy?

Non-contributory

C has a LTC policy that cannot be terminated and has guaranteed premiums. C has which of the following rights of renewability?

Noncancelable

What action must the Director take toward the subject of a completed market conduct examination?

Notify the person examined of the contents of a verified report before it is made public.

Is it allowable for an insurance producer with a PFTA to co-mingle producer personal funds into a PFTA?

Only with the written consent of the insurer on whose behalf the premium funds are being held.

An applicant for a life insurance policy may NOT have a whole life insurance policy denied solely for which one of the following reasons?

Past lawful foreign travel

Which dividend option will lower total annual premium cost?

Premium Application

A producer offers to take a prospective insured's mother to the doctor every week for the next six months if the prospective insured will purchase a large insurance policy in exchange for this personal service. The producer may be guilty of:

Rebating

B owns and is insured by a policy that has one premium but also provides coverage for her spouse. B has:

Spouse coverage under an Other Insured Rider

K has a wife, three children and two business partners. Which of the following parties do not have insurable interest in K's life?

The agent K just met that wrote the policy

A term life policy has the return of premium (ROP) rider. All of the following are true EXCEPT:

The returned premium is income and fully taxable.

K has a life insurance policy that allows him to skip premium payments but still keeps the policy in force. What type of policy does K have?

Universal Life

A policy that provides limited benefits that are no cost to the employer is called a:

WIP's

All of the following are true about the Waiver of Premium with Disability Income Rider EXCEPT:

When the insured is disabled, the benefit is paid immediately after loss.

A Survivorship life policy insures two or more lives and the same time and pays death benefit:

When the last insured dies

The resident licensing fee for a Limited Lines Car Rental license is

$180 every two years

The maximum that insurers must keep records and books of all advertising information is:

1)4 years 2)Next examination

All of the following are characteristics of a Long Term Care policy with Intermediate care EXCEPT:

Care can only be provided in a hospital.

Which of the following statements about a conditional receipt is CORRECT?

It specifies the timing and terms of the insurance coverage.

The statute that requires disclosure provisions is:

Minimum Standards

The entire contract provision of a health policy states

The policy and the application are elements of the contract

The purpose of a disability policy is to:

To replace income

A producer who places insurance with an insurer, either directly or indirectly, with whom the producer does not have an agent contract

requires that the producer must post a surety bond in favor of the people of Illinois.

The sale, solicitation or negotiation of legal expense insurance requires

requires the appropriate limited lines producer license.

What percentage of interest may an insurer charge during a grace period?

6%

Which of the following rights of renewability give the insurer the most control over a policy?

Cancelable