l&h practice test questions

Usual, customary and reasonable. The usual, customary and reasonable approach for determining insurance benefits is based upon the fees normally charged for specific procedures in the geographic location where the services are provided.

A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as a)Relative-value schedule. b)Benefit schedule. c)Gatekeepers. d)Usual, customary and reasonable.

d)12

How many consecutive months of coverage (other than in an acute care unit of a hospital) must LTC insurance provide in this state? a)24 b)36 c)6 d)12

First 3 Medicare supplemental policies cover costs of deductibles and coinsurance for Parts A and B. Since Medicare will not pay for the first 3 pints of blood, a Medicare Supplement plan will cover that. This is considered to be a core benefit.

How many pints of blood will be paid for by Medicare Supplement core benefits? a)Everything after first 3 b)1 pint c)First 3 d)None; Medicare pays for it all

Income assistance for work-related injury. Medicaid covers a variety of medical costs, from eyeglasses to hospitalization.

Medicaid provides all of the following benefits EXCEPT a)Home health care services. b)Eyeglasses. c)Family planning services. d)Income assistance for work-related injury.

Absolute and collateral Absolute assigns the entire policy. Collateral assigns a part or all of the benefits.

The two types of assignments are a)Absolute and collateral. b)Absolute and partial. c)Complete and partial. d)Complete and proportionate

c)Principal sum

Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death? a)Double the amount of the death benefit b)Refund of premiums c)Principal sum d)Capital sum

The date of medical exam If the company acknowledges receipt of the premium with a conditional receipt, the policy is in effect on the date of the application or the date of the medical exam (whichever is later), provided that the applicant is found insurable at the rate applied for.

An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date? a)The date of policy delivery b)The date of issue c)The date of application d)The date of medical exam

50,000 The life policy would pay the face amount, but because of the settlement option selected on the annuity, payments would cease upon the annuitant's death. Straight life annuity payments stop at death of the annuitant regardless of the principal left in the account.

Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits? a)$50,000 b)$62,500 c)$75,000 d)Nothing

b)20 employees.

COBRA applies to employers with at least a)50 employees. b)20 employees. c)80 employees. d)60 employees.

5 months If a LTC policy lapses as a result of the policyowner having a cognitive impairment or loss of functional capacity, the policyowner may request reinstatement within 5 months of the lapse.

If an insured's cognitive impairment results in the lapse of a long-term care policy, how long from the policy lapse may the insured request reinstatement? a)30 days b)3 months c)5 months d)6 months

February 28th, or 10 days after the time the policy is delivered. The 10-day free-look period begins when the policy is delivered.

J applied for a life insurance policy on January 10. The policy was issued on January 31. J's agent was vacationing at the time the policy was issued, so J did not receive the policy until February 18. J decides that he does not want the policy. When would J need to return the policy to the insurer in order to receive a full refund of premium paid? a)February 28th, or 10 days after the time the policy is delivered. b)The time varies from one policy to another. c)It was already too late when J received the policy because the 10-day free-look period had expired. d)Anytime, because the agent did not deliver the policy promptly. The 10-day free-look period begins when the policy is delivered.

c)90 days.

Most policies will pay the accidental death benefits as long as the death is caused by the accident and occurs within a)30 days. b)60 days. c)90 days. d)120 days.

Not taxable since the IRS treats them as a return of a portion of the premium paid. With participating policies, policyowners are entitled to dividends, which, in the case of mutual companies, are nontaxable because they are considered a return of excess premiums.

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are a)Not taxable since the IRS treats them as a return of a portion of the premium paid. b)Paid at a fixed rate every year. c)Taxable as ordinary income. d)Guaranteed.

Stays with the employer. HRAs remain with the originating employer and do not follow an employee to new employment.

When an employee covered under a health reimbursement account changes employers, the HRA a)Follows the employee. b)Returns to the insurer. c)Is split between the employee and employer. d)Stays with the employer.

Indemnity A Hospital Indemnity policy pays a fixed amount each day the insured is hospitalized, unrelated to medical expenses.

Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital? a)Medigap b)Indemnity c)Surgical d)Blanket

Single Premium Like other types of whole life policies, Single Premium Whole Life (SPWL) endows for the face amount of the policy if the insured lives until the age of 100. The distinguishing feature of a SPWL is the fact that it generates immediate cash value, due to the lump-sum payment made to the insurer.

Which type of life insurance policy generates immediate cash value? a)Decreasing Term b)Continuous Premium c)Single Premium d)Level Term

An independent examination as often as reasonably required. While a claim is pending, an insurance company may require an independent exam as often as reasonably required.

While a claim is pending, an insurance company may require a)An independent examination as often as reasonably required. b)The insured to be examined only within the first 30 days. c)The insured to be examined only once annually. d)An independent examination only once every 45 days.

Interest only Nonforfeiture values include cash surrender, extended term and reduced paid-up. Interest only is a settlement option.

All of the following are Nonforfeiture options EXCEPT a)Reduced paid-up b)Interest only c)Cash surrender d)Extended term

b)The plan is funded by permanent insurance only.

All of the following are true of key person insurance EXCEPT a)The key employee is the insured. b)The plan is funded by permanent insurance only. c)There is no limitation on the number of key employee plans in force at any one time. d)The employer is the owner, payor and beneficiary of the policy.

a)Premium amounts and surrender values A policy summary must be delivered along with the policy and will provide the producer's name and address, the insurance company's home office address, the generic name of the policy issued, and premium, cash value, surrender value and death benefit figures for specific policy years.

Which of the following will be included in a policy summary? a)Premium amounts and surrender values b)Copies of illustrations and application c)Comparisons with similar policies d)Primary and secondary beneficiary designations

Immediately Coverage for accidents is immediate when reinstatement occurs, but coverage for sickness may have a waiting period of about 10 days.

A Health insurance policy lapses but is reinstated within an acceptable timeframe. How soon from the reinstatement date will coverage for accidents become effective? a)Immediately b)After 14 days c)After 21 days d)After 31 days

Separate accounts

A domestic insurer issuing variable contracts must establish one or more a)General accounts. b)Separate accounts. c)Liability accounts. d)Annuity accounts.

a)Critical illness

A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as a)Critical illness .b)Major medical. c)AD&D. d)Medical expense.

Level term A 20-year term policy is written to provide a level death benefit for 20 years.

A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this? a)Ordinary life policy b)Limited pay whole life c)Level term d)Term to specified age

Other-insured rider. The other-insureds rider is useful in providing insurance for more than one family member. The type of insurance offered by this rider is usually term insurance, with the right to convert to permanent insurance.

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the a)Juvenile rider. b)Payor rider c)Other-insured rider. d)Change of insured rider.

c)Cost of living rider. A "cost of living" rider adjusts the face amount of a policy to maintain the relationship of the face amount and increases in the cost of living.

A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called a)Living need rider. b)Payor rider. c)Cost of living rider. d)Accelerated benefit rider.

c)A felony.

A willful violation of an agent's fiduciary responsibility that involved funds exceeding $1,000 will be considered a)Subject to imprisonment. b)A misdemeanor. c)A felony. d)A minor violation.

Copy of the original application An insurance contract must contain a copy of the original application.

According to the entire contract provision, what document must be made part of the insurance policy? a)Copy of the original application b)Buyer's Guide c)Agent's report d)Outline of coverage

d)The interest is not taxable since it remains inside the insurance policy. The interest credited under this option is TAXABLE, whether or not the policyowner receives it.

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT a)The annual dividend is retained by the company. b)The interest is credited at a rate specified by the policy. c)The policyholder has the right to withdraw the accumulations at any time. d)The interest is not taxable since it remains inside the insurance policy.

They must be part of the contract. An illustration may not be altered by an agent and must clearly state that it is not part of the contract. It is legal to list nonguaranteed values in the contract, but they must be specifically labeled as projected, not guaranteed values.

All of the following are requirements for life insurance illustrations EXCEPT a)They may only be used as approved. b)They must identify nonguaranteed values. c)They must differentiate between guaranteed and projected amounts. d)They must be part of the contract.

The payable premium amount steadily declines throughout the duration of the contract. Premiums remain level with a decreasing term policy; only the face amount decreases.

All of the following are true regarding a decreasing term policy EXCEPT a)The payable premium amount steadily declines throughout the duration of the contract. b)The death benefit is $0 at the end of the policy term. c)The contract pays only in the event of death during the term and there is no cash value. d)The face amount steadily declines throughout the duration of the contract.

Rebates are allowed if it is in the best interest of the client. A rebate is an illegal act which involves returning something of value to the client as an inducement to buy, such as the commission. Rebates are only allowed if specifically stated in the policy. Insurance dividends are not considered rebates as the IRS considers it as a return of overpaid premium.

All of the following are true regarding rebates EXCEPT a)Rebates are allowed if it is in the best interest of the client. b)Rebates are only allowed if specifically stated in the policy. c)Rebating can be anything of monetary value given as an inducement to purchase insurance. d)Dividends are not considered to be rebates.

d)Rebates are allowed if it is in the best interest of the client.

All of the following are true regarding rebates EXCEPT a)Rebates are only allowed if specifically stated in the policy. b)Rebating can be anything of monetary value given as an inducement to purchase insurance. c)Dividends are not considered to be rebates. d)Rebates are allowed if it is in the best interest of the client.

a)Welfare benefits. Social Security is an entitlement program, not a welfare program.

All of the following benefits are available under Social Security EXCEPT a)Welfare benefits. b)Old-age and retirement benefits. c)Disability benefits. d)Death benefits.

d)It is a life contingency option. Under the installments for a fixed period annuity settlement option, the annuitant selects the time period for the benefits; the insurer determines how much each payment will be. This option pays for a specific amount of time only, and there are no life contingencies.

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT a)It will pay the benefit only for a designated period of time. b)The payments are not guaranteed for life. c)The insurer determines the amount for each payment. d)It is a life contingency option.

Reduced paid-up The reduced paid-up nonforfeiture option would provide protection until the insured reaches 100, but the face amount is reduced to what the cash would buy.

Which nonforfeiture option provides coverage for the longest period of time? a)Paid-up option b)Accumulated at interest c)Reduced paid-up d)Extended term

Misdemeanor Any willful violation will be considered a misdemeanor unless the amount involved exceeds $1,000, in which case the violation will be considered a felony.

An agent commingled $500 of insurance premiums collected with new applications with his personal funds. The agent could be found guilty of a a)Misdemeanor. b)Felony. c)Fiduciary crime. d)Breach of contract.

d)No coverage will apply, since the injury could have been foreseen.

An insured is covered by a disability income policy that contains an accidental means clause. The insured exits a bus by jumping down the steps and breaks an ankle. What coverage will apply? a)No coverage will apply, since disability income policies cover sickness only. b)Coverage will apply since the break was accidental. c)Coverage will apply, but will be reduced by 50%. d)No coverage will apply, since the injury could have been foreseen.

500 Once the primary insurer has paid the full available benefit, the secondary insurer will cover what the first company will not pay, such as deductibles and coinsurance. The insured will, then, be reimbursed for out-of-pocket costs.

An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any, would be paid by the secondary insurer? a)$0 b)$500 c)$1,000 d)$2,000

Revocable If her husband is named as the revocable beneficiary, the insured would be the policyowner and could make changes to the contract. Her husband would receive any death benefit.

An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?a)Contingent b)Irrevocable c)Revocable d)Primary

The time of initial solicitation. An outline of coverage must be delivered to a prospective applicant for a long-term care insurance contract or certificate at the time of initial solicitation.

An outline of coverage must be given to the applicant for a long-term care policy no later than a)The delivery of the policy. b)5 days after the initial solicitation. c)10 days upon request. d)The time of initial solicitation.

Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense. COBRA requires employers with 20 or more employees to continue group medical insurance for terminated workers and dependents for up to 18 months to 36 months. The employee can be required to pay up to 102% of the coverage's premium.

As it pertains to group health insurance, COBRA stipulates that a)Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense. b)Retiring employees must be allowed to convert their group coverage to individual policies. c)Terminated employees must be allowed to convert their group coverage to individual policies. d)Group coverage must be extended for terminated employees up to a certain period of time at the employer's expense.

d)Control health insurance claims expenses. Managed care is a system of delivering health care and health care services, characterized by arrangements with selected providers, programs of ongoing quality control and utilization review and financial incentives for members to use providers and procedures covered by the plan.

The purpose of managed care health insurance plans is to a)Provide for the continuation of coverage when an employee leaves the plan. b)Give the insured an unlimited choice of providers. c)Coordinate benefits. d)Control health insurance claims expenses.

100 Treatment in a skilled nursing facility is covered in full for the first 20 days. From days 21 to 100, the patient must pay the daily copayment. There are no Medicare benefits provided for treatment in a skilled nursing facility beyond 100 days.

For how many days of skilled nursing facility care will Medicare pay benefits? a)30 b)60 c)90 d)100

Assets In a replacement situation the agent must be careful to compare the benefits, limitations and exclusions found in the current and the proposed replacement policy.

In a replacement situation, all of the following must be considered EXCEPT a)Exclusions. b)Assets. c)Benefits. d)Limitations.

10 Existing insurers must provide policyowners with a policy summary for the existing life insurance within 10 days of receiving the written communication and replacement.

In replacement, an existing insurer must provide policyowners with a policy summary for existing life insurance within how many days of receiving the written communication and replacement? a)3 b)10 c)31 d)60

That the cash value will not be lost Because permanent life insurance policies have cash values, there are certain guarantees built into the policy that cannot be forfeited by the policyowner. Nonforfeiture values give the insured the right to the cash value even if the policy lapses or is surrendered.

Nonforfeiture values guarantee which of the following for the policyowner? a)That the dividends will be paid annually b)That the death benefit will be paid in a lump sum c)That the policy premiums will never increase d)That the cash value will not be lost

d)As of the application date If the full premium was submitted with the application and the policy was issued as requested, the policy coverage effective date would generally coincide with the date of application.

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective? a)As of the policy delivery date b)As of the first of the month after the policy issue c)As of the policy issue date d)As of the application date

Interest only option With the interest-only option, the insurance company retains the policy proceeds and pays interest on the proceeds to the recipient (beneficiary) at regular intervals.

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose? a)Joint and survivor b)Fixed amount option c)Interest only option d)Life income with period certain

Extended Term The Extended Term nonforfeiture option has the same face amount as the original policy, but for a shorter period of time.

Which nonforfeiture option has the highest amount of insurance protection? a)Conversion b)Decreasing Term c)Reduced Paid-up d)Extended Term

Death benefit A fixed annuity is fixed in the sense that it provides a guaranteed minimum rate of interest and income payments that do not vary from one to the next. The company also guarantees the specified dollar amount for each payment and the length of the payout period. Annuities do not provide a death benefit.

The term "fixed" in a fixed annuity refers to all of the following EXCEPT a)Equal annuity payments b)Amount and length of payments c)Death benefit d)Guaranteed rate of interest

6 credits To be considered currently (or partially) insured, an individual must have earned 6 credits during the last 13-quarter period.

To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters? a)4 credits b)6 credits c)10 credits d)40 credits

Owner's income Traditional IRA contributions are tax deductible, but may be limited if the owner's income exceeds a certain level.

Traditional IRA contributions are tax deductible based on which of the following? a)How long the plan has been in force b)Owner's age c)IRA limit d)Owner's income

Discrimination Permitting individuals of the same class to be charged a different rate for the same insurance is the unfair trade practice of discrimination.

Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called? a)Law of large numbers b)Misrepresentation c)Adverse selection d)Discrimination

The same face amount as in the whole life policy. Under this option the insurer uses the policy cash value to convert to term insurance for the same face amount as the former permanent policy.

Under an extended term nonforfeiture option, the policy cash value is converted to a)A lower face amount than the whole life policy. b)A higher face amount than the whole life policy. c)The same face amount as in the whole life policy. d)The face amount equal to the cash value.

b)Legal benefits Under Workers Compensation, medical and rehabilitation benefits, income benefits, and death benefits are all included.

Under workers compensation, which of the following benefits are NOT included? a)Death benefits b)Legal benefits c)Medical and rehabilitation benefits d)Income benefits

Individual members of the group may select the level of benefits for their own coverage. In group health insurance, all individuals are covered under the master policy for the same coverages.

Underwriting a group health insurance plan that is paid for by the employer requires all of the following EXCEPT a)The plan is based on other than individual selection. b)All eligible employees must be covered. c)Coverage for plan participants is uniform. d)Individual members of the group may select the level of benefits for their own coverage.

The original age is used for premium determination. The reinstatement provision allows the policyowner an opportunity to put a lapsed policy back in force, subject to proving continued insurability. If the policyowner elects to reinstate the policy, as opposed to purchasing a new policy, the reinstated policy is restored to its original status.

What is the advantage of reinstating a policy instead of applying for a new one? a)Proof of insurability is not required. b)The face amount can be increased. c)The cash values have gained interest while the policy was lapsed. d)The original age is used for premium determination.

It has the highest amount of insurance protection. Under this option the insurer uses the policy cash value to convert to term insurance for the same face amount as the former permanent policy. The duration of the new term coverage lasts for as long a period as the amount of cash value will purchase.

What is the benefit of choosing extended term as a nonforfeiture option? a)It matures at age 100. b)It allows for coverage to continue beyond maturity date. c)It can be converted to a fixed annuity. d)It has the highest amount of insurance protection.

c)It allows an insurer to transact insurance in Georgia.

What is the function of a certificate of authority? a)It is given to the Department of Insurance by the Federal Insurance Regulation Board to allow it to enforce the provisions of the Insurance Code b)It is presented to all agents when they receive their licenses. c)It allows an insurer to transact insurance in Georgia. d)It gives the Commissioner of Insurance his or her authority.

36 months The maximum period of coverage under COBRA is 36 months, in the event of the covered employee's death or divorce.

What is the period of coverage for events such as death or divorce under COBRA? a)60 days b)31 days c)12 months d)36 months

To provide a guaranteed income for a certain amount of time When the fixed-period installments option is selected, the insurer agrees to pay the proceeds in equal installments over a specified period of time.

What is the purpose of a fixed-period settlement option? a)To provide a guaranteed income for a certain amount of time b)To settle the insurance company's liability c)To provide a guaranteed income for life d)To provide a guaranteed amount of money each month

Within 30 days of initial discovery Relevant SAR reports must be filed with FinCEN within 30 days of initial discovery of a suspicious transaction.

What is the timeframe for filing relevant Suspicious Activity Reports? a)Within 90 days of initial discovery b)Within 90 days of the suspicious transaction c)Within 30 days of initial discovery d)Within 30 days of the suspicious transaction

6 months Most insurers impose a 6-month waiting period from the time of disability until the first premium is waived.

What is the waiting period on a Waiver of Premium rider in life insurance policies? a)30 days b)3 months c)5 months d)6 months

d)When the application is signed and a check is given to the agent

When is the earliest a policy may go into effect? a)When the first premium is paid and the policy has been delivered b)When the insurer approves the application c)After the underwriter reviews the policy d)When the application is signed and a check is given to the agent

c)Unlimited access to providers There are five distinguishing features of managed care: controlled access to providers, comprehensive case management, risk sharing, preventive care, and high-quality care.

Which characteristic does NOT describe managed care? a)Shared risk b)Preventive care c)Unlimited access to providers d)High-quality care

a)Both the principal and interest will be liquidated over a selected period of time.

Which of the following best describes fixed-period settlement option? a)Both the principal and interest will be liquidated over a selected period of time. b)Only the principal amount will be paid out within a specified period of time. c)The death benefit must be paid out in a lump sum within a certain time period. d)Income is guaranteed for the life of the beneficiary.

c)Size of each installment The size of each installment determines the length of time that benefits are received under the Fixed Amount settlement option. It logically follows that larger installments translate into shorter benefit periods.

Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option? a)Length of income period b)Amount of interest c)Size of each installment d)Predetermined length of time stated in the contract

Those who have been insured under the plan for at least 5 years If the master contract is terminated, every individual who has been on the plan for at least 5 years will be allowed to convert to individual insurance of the same coverage.

Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated? a)Those who have worked in the company for at least 3 years b)Those who have dependents c)Those who have no history of claims d)Those who have been insured under the plan for at least 5 years

b)Insurer

Which of the following entities can legally bind coverage? a)Agent b)Insurer c)The insured d)Federal Insurance Board

The insurer can increase the policy premium on an individual basis.

Which of the following is NOT a feature of a guaranteed renewable provision? a)The insured has a unilateral right to renew the policy for the life of the contract. b)Coverage is not renewable beyond the insured's age 65. c)The insured's benefits cannot be reduced. d)The insurer can increase the policy premium on an individual basis.

a)The Medicare Part A deductible Medicare Supplement Plan A provides the core, or basic, benefits established by law. All of the above are part of the basic benefits, except for the Medicare Part A deductible, which is a benefit offered through nine other plans.

Which of the following is NOT covered under Plan A in Medigap insurance? a)The Medicare Part A deductible b)Approved hospital costs for 365 additional days after Medicare benefits end c)The 20% Part B coinsurance amounts for Medicare approved services d)The first three pints of blood each year

Acute care in a hospital A long-term care policy may provide coverage for home health care, adult day care, hospice care or respite care. Acute care is not covered under a long-term care policy

Which of the following is NOT covered under a long-term care policy? a)Adult day care b)Hospice care c)Home health care d)Acute care in a hospital

Beneficiaries are not identified by name. A class of beneficiary is using a designation such as "my children". This can be a vague term if the insured has been married more than once, or has adopted or illegitimate children. Many insurers encourage the insured to name each child specifically and to state the percentage of benefit they are to receive.

Which of the following is TRUE about a class designation? a)Beneficiaries are not identified by name. b)Beneficiaries must be part of the insured's immediate family. c)It is not allowed. d)It determines the succession of beneficiaries.

Life Paid-up at Age 65

Which of the following is an example of a limited-pay life policy? a)Renewable Term to Age 70 b)Level Term Life c)Straight Life d)Life Paid-up at Age 65

Admitted

Which of the following is another term for an authorized insurer? a)Certified b)Licensed c)Legal d)Admitted

Admitted Insurers who meet the state's financial requirements and are approved to transact business in the state are considered authorized or admitted into the state as a legal insurer.

Which of the following is another term for an authorized insurer? a)Certified b)Licensed c)Legal d)Admitted

c)HRAs

Which of the following is available to employers of all sizes? a)LPAs b)HSAs c)HRAs d)MSAs

c)To create an estate

Which of the following is the best reason to purchase life insurance rather than an annuity? a)To create regular income payments b)To liquidate a sum of money over a lifetime c)To create an estate d)To liquidate a sum of money over a period of years

d)Variable universal life

Which of the following life insurance policies allows a policyowner to take out a loan from the policy's cash value? a)Increasing term life b)Credit term life c)Decreasing term life d)Variable universal life

c)A person who negotiates insurance contracts

Which of the following persons is required to hold a producer license? a)A person who takes messages related to claims b)A person who administers employee benefits c)A person who negotiates insurance contracts d)A person who creates insurance advertisements

Impairment rider The impairment rider excludes a specified condition from coverage, therefore, reducing benefits. An insurance company will not charge extra for a rider that reduces benefits.

Which of the following riders would NOT increase the premium for a policyowner? a)Payor benefit rider b)Waiver of premium rider c)Multiple indemnity rider d)Impairment rider

d)Impairment rider

Which of the following riders would NOT increase the premium for a policyowner? a)Payor benefit rider b)Waiver of premium rider c)Multiple indemnity rider d)Impairment rider

Life income The life-income option, also known as straight life, provides the recipient with an income that he or she cannot outlive. It pays the benefit while the beneficiary is alive; however, the payments stop at the beneficiary's death.

Which of the following settlement options in life insurance is known as straight life? a)Fixed amount b)Life income c)Single life d)Life with period certain

Universal life With universal life policies, the policyowner has the flexibility to increase the amount of premium going into the policy and to later decrease it again. In fact, the policyowner may even skip paying a premium, and the policy will not lapse as long as there is sufficient cash value at the time to compensate for the nonpayment of premium.

Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?a)Variable life b)Adjustable life c)Universal life d)Flexible life

d)Premium amounts and surrender values A policy summary must be delivered along with the policy and will provide the producer's name and address, the insurance company's home office address, the generic name of the policy issued, and premium, cash value, surrender value and death benefit figures for specific policy years.

Which of the following will be included in a policy summary? a)Copies of illustrations and application b)Comparisons with similar policies c)Primary and secondary beneficiary designations d)Premium amounts and surrender values

d)Term rider

Which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members? a)Accidental death and dismemberment rider b)Guaranteed insurability rider c)Change of insured rider d)Term rider

Fully insured status Social Security Disability benefits are available only if the worker is fully insured. Benefits are provided only after a 5-month waiting period.

Which one of the following is an eligibility requirement for Social Security disability income benefits? a)Experiencing at least one year of disability b)Being at least 50 years of age c)Currently employed status d)Fully insured status

Face amount Decreasing term policies feature a level premium and a death benefit that decreases each year over the duration of the policy term.

Which policy component decreases in decreasing term insurance? a)Dividend b)Premium c)Face amount d)Cash value

Nonforfeiture values Nonforfeiture values are the benefits of a life insurance policy that the policyowner does not forfeit (lose) even if the policy lapses.

Which term describes the benefits of a life insurance policy that the policyowner does not automatically relinquish even if the policy lapses? a)Nonforfeiture values b)Permanent values c)Cash values d)Guaranteed values

c)Medicare SELECT

Which type of Medicare policy requires insureds to use specific healthcare providers and hospitals (network providers), EXCEPT in emergency situations? a)Medicare Part A b)Preferred c)Medicare SELECT d)Medicare Advantage