Licensing Exam Review
Which of the following statements BEST describes what the Legal Actions provision of an accident and health policy requires?
"An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed".
T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?
$0
An insured owns an individual Disability Income policy with a 30-day Elimination Period for sickness and accidents and a monthly indemnity benefit of $500. If the insured is disabled for 3 1/2 months, what is the MAXIMUM amount he would receive for an approved claim?
$1,250
N is covered under an individual Disability policy with a 30-day Elimination period and a monthly benefit of $500. N is totally disabled for 3 1/2 months. N's total benefit received on this claim is
$1,250
E and F are business partners. Each steaks out $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business and four months later E dies. Although he wasn't married with three children at the time of death the primary beneficiary is still F. However on insurable interest no longer exist. Where will the proceeds from E's life insurance policy be directed to?
F
An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the?
Fair Credit Reporting Act
What is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained?
Fair Credit Reporting Act
P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase?
Family maintenance policy
A life insurance application may be rejected on the basis of all these factors EXCEPT:
Gender
Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?
Guaranteed insurability rider
A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?
Her group health plan
Which of these is NOT a reason for purchasing life insurance on the life of a minor?
If both parents were to die, it would provide death benefits to the child
In regards to representations or warranties, which of these statements is TRUE?
If material to the risk, false representations will void a policy
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?
If the primary beneficiary dies before the insured
Which of the following actions will an insurance company most likely NOT take if an applicable, who has diabetes, applies for a disability income policy?
Issue the policy with an altered Time of Payment of Claims provision
An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager?
Key Person Life Policy
An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager?
Key-person Insurance
How do insurers predict the increase of individual risks?
Law of large numbers
Insurance companies determine risk exposure by which of the following?
Law of large numbers and risk pooling
Which of the following situations does a critical illness plan cover?
Leukemia
T has an annuity that guarantees and income payments for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?
Life Annuity with period Certain
Which of the following is NOT a limited benefit plan?
Life insurance policy
A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value?
Life settlement contract
Which of these would be considered limited-pay life policy?
Life-paid up at age 70
Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies?
Long-term care
Which of the following types of health coverage frequently uses a deductible?
Major medical policy
P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to
P only
Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured?
PPO
Which of these statements is INCORRECT regarding a Preferred Provider Organization (PPO):
PPO's are NOT a type of managed care systems
What does Medicare parts a and b cover?
Part A covers hospitalization; Part B covers doctor's services
Which is not a type of agent authority?
Principal
A Medical Information Report (MIB) report may disclose which of the following
Prior use of marjuana
K is the insured and P is the sole beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?
Proceeds will be paid to P's estate.
Insurance addresses what type of risk?
Pure
The free-look period for life insurance policies issued in Indiana is ___ days.
10
Which of the following types of Term Life policies most likely contains a Renewability feature?
10 year convertible
All of the following statements about traditional individual retirements accounts are false EXCEPT:
10% penalty is applied to withdrawals before age 59 1/2
A non-contributory plan requires _______ participation of all eligible employees
100%
To be classified as a small employer, an employer must employ:
2-50
An insured must notify an insurer of a medical claim within how many days after an accident?
20
If a new life insurance policy is replacing an existing one, the insured is given the right to return for a full refund of at least __ days after policy delivery
20
K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
20,000 death benefit
A producer must complete ____ hours of continuation education biennially to maintain the license
24
A Medicare supplement policy may be returned for a 100% premium refund within ____days after policy delivery
30
A licensee must notify the commissioner within ___days of an address change
30
ABC insurance company fails to pay death proceeds after satisfactory proof of loss was submitted. ABC must then begin paying interest on the death proceeds ___days of receiving proof of loss.
30
According to Indiana law, how long is the right of return for a long term care policy?
30 days
An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision?
31
In the event of employment termination, a person covered by a group policy also has the right to convert such coverage to an individual policy within ____days without proving insurability
31
To continue health coverage for a newborn, the policyowner must notify the insurer of birth and provide the first premium payment within ___ days of birth
31
According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid?
31 days
What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?
50%
Qualified Long-Term Care policies may take into consideration an applicant's pre-existing conditions for a maximum of not more than __ month(s) prior to the effective date of coverage.
6
A life insurance policy can be backdated before the application date for up to
6 months
An insurer normally delay the payment of a cash value loan or surrender value for up to
6 months
The individual most likely to buy a Medicare Supplement policy would be a(n):
68-year old male covered by Medicare Medicare Supplements are available to those covered by Medicare
Eligible employees must be added to group health coverage NO LATER than ____ days after their first day of employment.
90
Which of the following statements about noncontributory employee group life insurance is FALSE?
A minimum number of employees is required to participate
All of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT:
Bilateral
Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is
Business Overhead Expense
Whose life is covered on a life insurance policy that contains a payor benefit clause?
Child
Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?
Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company.
Which of these require and offer, acceptance, and consideration?
Contract
which of the following BEST describes a Hospital Indemnity policy?
Coverage that pays a stated amount per day of a covered hospitalization.
Which statement regarding the Misstatement of Age provision is considered to be true?
Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered
Which premium schedule results in the lowest cost to the policyowner?
Annual
Which type of contract liquidates an estate through recurrent payments?
Annuity
Group/voluntary long-term care policy premiums are typically deducted from the employee's income and?
Are less costly as compared to individual long term care coverage.
Which of the following medical expenses does cancer insurance NOT cover?
Arthritis
S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?
Automatic Policy loan
The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the:
waiver of premium
when is the face amount of a whole life policy paid?
when the insured dies or at the policy's maturity date, whichever happens first
Which of the following would be a valid reason for suspending or revoking an insurance producer's license?
writing primarily controlled business
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?
Request of change will be refused
Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?
Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company
post-tax dollar contributions re found in:
Roth IRA investments
Which of the following is NOT considered rebating?
Sharing commission with a producer licensed in the same line of business
Whole life insurance sometimes referred to as "straight life". What does the word "straight" indicate when using this phrase?
The duration of premium payments
Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?
Variable Universal Life
A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as?
a fraternal benefit society
What is Medicaid?
a hospital and medical expense insurance premiums
What is required for a producer to be in compliance with rule 13, life insurance advertising?
a potential applicant must be told that Life Insurance is the exclusive subject of the sale
Which of these is an example of twisting?
a producer misrepresents a policy to induce a policyowner to surrender an existing policy
What is Indiana's definition of Life insurance replacement?
a transaction in which a new policy is brought and an old policy is terminated
Which of the following types of care is typically not covered long-term care policy?
acupuncture
A cost of living rider gives the insured
additional death benefits
A term life riders offers the insured
additional life coverage
People with higher loss exposure have the tendency to purchase insurance more often than those at average risk. This is called?
adverse selection
common exclusions to continuation of group coverage include:
all of the above (dental care, other prescription drugs
A qualified profit-sharing plan is designed to:
allow employees to participate in the profits of the company
The consideration clause in a life insurance contract contains what pertinent information?
amount of premium payments and when they are due
All of the followings statements regarding group health insurance are true, EXCEPT:
an individual policy is given to each other
group life insurance policies are generally written as:
annually renewable term
To be eligible for social security disability benefits, an employee must be unable to perform:
any occupation
What action can a policyowner take if an application for a bank loan requires collateral?
assign policy ownership to the bank
A(n) _____________ of benefits of a health policy transfers payments to someone other than the policyowner.
assignment
under a small group health plan , babies are covered:
at birth
Medicare part c is:
available to those who are already enrolled in part A and B
The Automatic Premium loan provision is designed to:
avoid a policy collapse
Medicaid was designed to assist individuals who are
below a specific income limit
T is the policyowner for a life insurance policy with and irrevocable beneficiary designation. If T wishes to change the beneficiary, T must obtain permission from the?
beneficiary
P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim?
claim will be denied
The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n):
closed panel
As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?
coercion
On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take?
collect initial premium long with a signed health statement
Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?
complete the application and review the information with the customer prior to obtaining the customers signature, then send the application off to the insurance company
K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?
conditional
An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet?
consideration clause
Major medical policies typically:
contain a deductible and coinsurance
The incontestable clause allows insurer to:
contest a claim during the contestable period
The consolidated omnibus budget reconciliation act (COBRA) gives workers (and their families) whose employment has been terminated the right to:
continue group health benefits
Insurance policies are offered on a "take it or leave it" basis, which make them:
contracts of adhesion
If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?
contributory
When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?
contributory
What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?
conversion
The Universal Life Policy is called an unbundled Life Policy because the policyholder can see the expense charges, the interest earned, and the
cost of insurance
Indiana's 10-day free-look period for life insurance policies begins on the:
date of delivery
Which of these types of policies may NOT have the automatic premium loan provision attached to it?
decreasing term
An insurer distributes public brochures that contain a false statemnt regarding a competitor's ability to pay claims. This act is considered an example of:
defamation
An agent takes an individual Disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to
determine if the applicant is an acceptable risk by completing standard underwriting procedures
B is a teacher who was injured in a car accident and cannot work. She is now receiving monthly benefits as a result of this accident. Which type of policy does B have?
disability income
In the event of an illness, a (n) _________ ___________ policy would reimburse and insured for loss of earnings.
disability income
Which of the following does social security NOT provide benefits for?
dismemberment
What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?
dread disease insurance
Who is normally considered to be the owner of a 403(b) tax-sheltered annuity?
employee
Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance?
entire cash surrender value is taxable
"A producer does not have the authority to change a policy or waive any of its provisions". The health provision that best describes this statement is called the
entire contract
Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract?
entire contract
How often must the commissioner examine each domestic insurance company?
every 5 years
Which of the following is an important underwriting principle of group life insurance?
everyone must be covered in the group
D owns a whole life policy that was purchased 10 years ago. If the premium payments suddenly stop and D takes no additional action, which nonforfeiture option will the insurer likely proceed with?
extended term
An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n)
extra premium
ALL of these are characteristics of adjustable life policy, EXCEPT:
face amount can be adjusted using policy dividends
This type of deductible provisions waives the deductible for all family members after some of them have satisfied individual deductibles within the same year:
family maximum deductible
N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase?
fixed deferred
Which of these is considered a true statement regarding Medicaid?
funded by both state and federal governments
The commissioner is appointed by the:
governor
Which of the following is a requirement to be eligible for a group health policy?
group must be formed for a purpose other than obtaining insurance
Which of the following is a requirement to be eligible for a group life policy in Indiana?
group must be formed for a purpose other than obtaining insurance
Which type of renew-ability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate for the overall risk class?
guaranteed renewable
A nonforfeiture clause gives the policy owner
guaranteed values even if the policy has lapsed
Which of the following will long term care plan typically provide benefits for?
home health care
For which of the following expenses does a basic hospital policy pay?
hospital room and board
under a basic medical expense policy, what does the hospitalization expense portion cover?
hospital room and board
T sends proof of loss to her insurer for an acceptable medical expense claim under her individual health insurance policy. Upon receipt, the insurer must pay the benefits
immediately
When determining the monthly benefit amount for a disability income policy, the factor that limits the amount a prospective insured may purchase is:
income
All of the following statements regarding a Tax Sheltered Annuity (TSA) are true EXCEPT
income derived from the TSA is received income tax-free
Which of these actions should a producer take when submitting an insurance application to an insurer?
inform insurer of relevant information not included on the application
in order for coverage on a non medical insurance application to take effect the same day, the producer must collect a signed application and ?
initial premium
Medicare Part B does NOT cover
inpatient hospital services
A life insurance policy would be considered a wagering contract WITHOUT:
insurable interest
If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of?
insured
an insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the:
insurer dates the policy
the ________ clause identifies which losses resulting from an accident or sickness are insured by the policy
insuring
How are policyowner dividends treated in regards to income tax?
interest on accumulations is taxed
Which of these types of coverage is best described as a short term medical policy?
interim coverage
what is the purpose of policy summary?
it highlights the critical parts of the policy issued
Which of the following combination plans is designed to protect an insured from an unpaid mortgage balance upon premature death?
joint life
Kathy has a family health insurance policy where any dependent children she has are removed from the policy once they have reached a certain age. This policy is known as:
limiting age
Basic Hospital and Surgical policy benefits are:
lower than the actual expenses incurred
Pre-hospitalization authorization is considered an example of
managed care
Which type of plan normally includes hospice benefits?
managed care plans
Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the
marital deduction
Maternity coverage is required in which type of policy?
medical expense
Which of the following provides funding for the Indiana Life and Health Insurance Guaranty Association?
member company assessments
Which unfair competition practice involves a producer suggesting that an insurance policy is like a share of stock?
misrepresentation
Periodic health claim payments MUST be made at least
monthly
Which of these is NOT considered to be and element of an insurance contract?
negotiating
T is covered by a major medical policy with his employer. He leaves his employer and converts the coverage to an individual policy. All of these statements about the new policy are true EXCEPT:
new policy pays the same benefits as the group policy
Which of the following characteristics are associated with a large group disability income policy?
no medical underwriting
A Disability Income Policy that only the policyowner can terminate and on which the rates will never increase is
noncancelable
What type of renewability guarantees premium rates and renewability?
noncancelable
Which of the following BEST describes a short-term medical expense policy?
nonrenewable
In an individual retirement account (IRA), rollover contributions are
not limited dollar amount
An example of rebating would be:
offering a client something of value not stated in the contract in exchange for their business
If a new Medicare supplement policy involves the replacement of existing coverage, it must be verified on a question located:
on the application form
According to Indiana's Mammography Coverage statue, which of these benefits are considered mandator in every medical expense policy?
one mammogram every year for women aged 40 and older
Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2
ordinary income and a 10% tax penalty for early withdrawal
K owns a whole life policy. If she wants an increasing death benefit to protect against inflation, which dividend option should she chose?
paid up additional insurance
The provision that to whom the insurer will pay benefits to is called:
payment of claims
A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?
payor provision
Insurance policies are considered aleatory contracts because:
performance is conditioned upon a future occurrence
Which of the following is NOT a valid reason for the Insurance Commissioner to suspend or revoke a producer's license?
producer represents more than one insurance company
All of these are considered sources of underwriting information about an applicant EXCEPT
rating services
When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits?
recurrent disability
Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called:
representations
According to Indiana law, group life insurance conversion privligeges must NOT:
require evidence of insurability
J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used?
revocable
Which factors are taken into consideration when an insurance company determines the premium rate for whole life policy on an applicant
risk calssification
Which of these factors does NOT influence and applicant's need for life insurance?
self-maintenance expenses
P is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period?
sign an enrollment card
Upon delivery of a rated life insurance policy, the Producer must obtain each of the following EXCEPT:
signed HIPAA disclosure
What is Old Age and Survivors Health Insurance (OASDHI) also known as?
social security
Which of thee following best describes a warranty?
statement believed to be true to the best of one's knowledge
Which of the following statements about the classification of applicants is INNCORRECT?
substandard applicants are never declined by underwriters
What would the Medical Information Bureau (MIB) identify?
testing positive for marijuana use from a previous screening
What is the underlying concept regarding level premiums?
the early years are charged more than what is needed
Health policies sold in Indiana are REQUIRED to begin medical coverage of a newborn beginning at:
the moment after birth
Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until feb 7. Q is dissatisfied and returns the policy feb 13. How will the insurer handle this situation
the policy will be returned within the free-look period, premium will be fully refunded.
When a life insurance application is completed, a policy summary must be given to the applicant. The policy summary MUST include
the premium cost for basic coverage applied for
P's individual health policy is now in the grace period. P's coverage will remain in force if:
the premium is paid
An individual who purchases a Life annuity is given protection against
the risk of living longer than expected
Why would the insurance commissioner issue a temporary license?
to allow the personal representative of a deceased producer to provide service to existing policyowners
Why would the commissioner examine the records of an insurance company?
to determine the solvency of the company
The reason for backdating a policy is
to obtain a premium rate based on an earlier age
A producer who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out has committed
twisting
A variable Annuity has which of the following characteristics?
underlying equity investments
ALL of these are considered to be a benefit under social security, EXCEPT for:
unemployment
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?
unilateral
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
universal life
How long does an insurance company appointment remain in force?
until terminated
When is the face amount paid under a joint life and survivor policy?
upon death of last insured
R becomes disabled and owns an individual disability income policy. When is R eligible to receive disability benefits?
upon satisfying the elimination period requirement
Which of the following BEST describes how pre-admission certification is used?
used to prevent nonessential medical costs
Which of the following phrases refers to the fees charged by a healthcare professional?
usual, customary, and reasonable expenses
A business overhead expense policy would cover which of the following if a business owner becomes disabled?
utilities and office rent
A(n) ______ Life policy offers the owner investment in products such as money-market funds, long-term bonds and equities.
variable
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
variable life
S is a life insurance policyowner who enters into a written agreement to receive immediate cash in exchange for the sale and transfer of her life insurance policy. This agreement is referred to as a(n)
viatical settlement
P purchases a $50,000 whole life insurance policy in 2005. One of the questions on the application asks if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary?
$50,000 minus any outstanding policy loans
C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on her life, which of these statements would be true?
ABC is the policyowner, C is the insured, and ABC is the beneficiary
Which of the following types of policies pays a benefit if the insured goes blind?
AD&D
Which of the following is NOT included in an annuity contract?
AD&D rider
A "reimbursement policy" pays what amount of covered long=term care expenses?
Actual covered expenses up to the daily maximum
The amount of monthly disability benefits payable under social security is affected by which of the following factors?
Amount of the benefits available from other sources
At the age of 45, an individual withdraws $50,000 from his Qualified Profit-Sharing Plan and then deposits this amount into a personal savings account. This action would result in
Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan
A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over?
Income taxes plus a 10% penalty tax on $30,000
T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide?
Income that cannot be outlived by the owner
How does an indexed annuity differ from a fixed annuity?
Indexed annuity owners receive credited interest tied to the fluctuations of the linked index
K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until and amount equal to the contract value has been paid. This is called a(n)
Installment refund annuity
Who makes the legally enforceable promises in a unilateral insurance policy?
Insurance company
In a Key Employee life insurance policy, the third-party own can be all of the following, EXCEPT:
Insured
Which type of policy is considered to be overfunded, as stated by IRS guidelines?
Modified Endowment contract
Which of these is NOT an element of life insurance premiums?
Morbidity rate
Which statement is true regarding a minor beneficiary?
Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
Which of the following provisions guarantees that premiums will be waived if a juvenile life policyowner becomes disabled?
Payor Clause
If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?
Portion of the premiums paid for by the employer may be a tax deduction
Which Long Term Care insurance statement is true?
Pre-existing conditions must be covered after the coverage has been in force for six months
Which of the following is a requirement for a risk to be considered insurable?
Predictability of loss
Which statement is correct regarding the premium payment schedule for whole life policies?
Premiums are payable throughout the insured's lifetime/ coverage lasts until death of the insured
a noncontributory group term life plan is characterized by:
The entire cost of the plan is paid for by the employer
D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive?
The full face amount
J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?
The gross premium is higher on a monthly payment mode as compared to being paid annually
The guarantee of insurability option provides a long-term care policyowner the ability to
The guarantee of insurability option provides a long-term care policyowner the ability to
ALL of these statements about equity indexed life insurance are correct, EXCEPT:
The premiums can be lowered or raised, based on the investment performance.
The Consideration clause of an insurance contract includes?
The schedule and amount of premium payments
Which of the following statements is true about most blue cross/blue shield organizations?
They are nonprofit organizations
When is the face amount of a whole-life policy paid?
When the insured dies or at the policy's maturity date, whichever happens first
If an individual is covered under an accidental death policy and dies, an autopsy can be performed in all these situations, EXCEPT:
When the state prohibits this by law
T is receiving $3,000/month from a Disability Income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable?
benefits are taxable to T
All of the following statements about Major Medical benefits are true EXCEPT
benefits have no maximum limit
accidental death coverage is provided to commercial airline passengers in which of the following types of policies?
blanket accidental policy
variable whole life insurance can be described as:
both an insurance and securities product
Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deductible
carryover provision
What is issued to each employee of an employee of an employer health plan?
certificate
ALL individuals covered under a group contract will receive a(n)
certificated
XYZ corp was issued a group health policy for its employees. Under this plan a:
policy must be issued to XYZ, and a certificate must be issued to each employee
When an employee is terminated, which statement about a group term life conversion is true?
policy proceeds will be paid if the employee dies during the conversion period
In Indiana, which of the following MUST be delivered to a policyowner upon the sale of an individual life insurance policy?
policy summary and buyer's guide
Who elects the governing body of a mutual insurance company?
policyholders
On a life insurance policy, who is qualified to change the beneficiary designation?
policyowner
Which of the following statements about a guaranteed renewable health insurance policy is CORRECT?
premiums normally increase at the time of renewal
A primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also names in the policy. Which of the following will occur when the insured dies?
proceeds will go to the contingent beneficiary
The ____ must provide an insured with proper disclosure concerning the replacement of a life insurance policy
producer
The insurance commissioner may suspend, revoke, or refuse to renew a producer's license for which of the following reasons?
producer has used fraudulent, coercive, or dishonest practices
Which of the following is NOT a reason for the commissioner to reoke a producer's license?
producer is insolvent
Which of the following actions by a producer would NOT result in a license suspension or revocation?
producer represents more than one insurance company
