Life and Health Exam

An employee is insured by a group of major medical plan that is provided through her employer. The employer contributes 75% of the premium and the employee contributes the remaining 25%. If the insured received a benefit from this policy in the amount of $1,000, how much of this benefit would be taxed as income? a. $1,000 b. $750 c $250 d. $0

d. $0

An insured has just adopted a child. How soon should she notify the insurer of this adoption? a. Within 30 days. b. Within 31 days. c. Within 1 year. d. Immediately.

b. Within 31 days

An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice known as a. Twisting b. Fraud c. Concealment. d. Misrepresentation

a. Twisting

Which of the following is provided by skilled medical personnel to those who need occasional medical assistance or rehab care? a. Skilled Care b. Intermediate Care. c. Custodial care. d. Home health care.

b. Intermediate care

An insured flexible premium is invested into a separate account. What type of insurance did he purchase? a. Variable Life b. Variable Universal Life c. Universal Life. d. An annuity

b. Variable Universal Life

Variable insurance and variable annuities are regulated by: a. Departments of Insurance only. b. NAIC. c. SEC and FINRA only. d. SEC, FINRA, and Departments of Insurance.

d. SEC, FINRA, and Departments of Insurance.

Whose responsibility is it to ensure that the application for health insurance is complete and accurate? a. the policyowner's b. the underwriter's c. the applicant's d. the agent's

d. the agent's

An agent received some inaccurate information, and, as a result, he publicly misstated the financial condition of another entity 12 times over a period of 3 months. If this fact is revealed, the agent may face a fine up to a. $10,000 b. $12,000 c. $1,000 d. The agent will not be fined due to the unintentional violation.

a. $10,000

An insurer must notify the consumer in writing that an investigative consumer has been requested, within how many days of the initial request? a. 3 days. b. 5 days. c. 10 days. d. 30 days.

a. 3 days

An agent's first-year commissions CANNOT exceed what percentage of the renewal commission for servicing a Medicare Supplement policy in its second year? a. 10% b. 50% c. 100% d. 200%

d. 200%

Contributions to Roth IRAs are a. Always subject to a 6% tax penalty b. Paid with pre-tax dollars. c. Not tax deductible. d. Tax deductible.

c. Not tax deductible.

Under the mandatory uniform provision "Notice of Claim", written notice of a claim must be submitted to the insurer within what time parameters? a. Within 10 days b. Within 20 days c. Within 30 days d. Within 60 days.

b. Within 20 days.

Under the mandatory uniform of provision of Proof of Loss, the claimant must submit proof of loss within what time period after the loss? a. 90 days b. Two years c. 30 days. d. 60 days.

a. 90 days

Which of the following describes the relationship between a capital sum and a principal sum? a. Principal sum vary, while capital sums do not. b. Capital sums vary, while the principals do not. c. Principal sums are percentages of capital sums. d. Capital sums is a percentage of principal sums.

d. Capital sums is a percentage of principal sums.

Which of the following is true regarding a joint life annuity? a. The payments go to a beneficiary upon the last death. b. The payments go to the surviving annuitant after the first death. c. The payments stop at the first death. d. The payments stop at the last death.

c. The payments stop at the first death.

The owner of a whole life policy with an accidental death rider intentionally kills himself after the policy for 18 months. What is the insurance company's course of action? a. Deny any payment of death benefit b. Deny only payment of the face amount but pay the rider since suicide is an accident. c. Pay the face amount because suicide is not an accident. d. Pay twice the face amount.

a. Deny any payment of death benefit

What type of an interest rate is guaranteed in universal life policy? a. Current interest rate b. Contract interest rate c. Nominal interest rate d. Adjustable interest rate

b. Contract interest rate

Which of the following is NOT a Medicaid qualifier? a. Residency b. Insurability c. Income Level d. Age

b. Insurability

What does the Guaranty Association guard against? a. Double indemnity b. Rebating c. Insurer insolvency d. Insurance fraud

c. Insurer insolvency

Which of the following is TRUE of level term insurance? a. The policy endows at age 100. b. the policy offers nonforfeiture values c. It is temporary protection. d. The premium will increase or decrease based on the current interest rates.

c. It is temporary protection.

Which of the following is a provision found in life insurance policies? a. Guaranteed insurability. b. Payor benefit c. Reinstatement d. Return of premium

c. Reinstatement

Where are premiums from fixed annuities invested? a. A variable annuity. b. A hedge fund. c. A separate account d. A general account

d. A general account

If an insured dies, and it is discovered that the insured misstated his/her age or gender, the life insurance company will a. Pay the face amount specified at the time of the policy issue. b. Deny all claims because of the misrepresentation. c. Adjust the back premiums for the proper age or gender. d. Adjust the death benefit to what the premium would have purchased at the actual age or gender.

d. Adjust the death benefit to what the premium would have purchased at the actual age or gender.

Once the initial benefit limit in Medicare Part D is reached, how is the beneficiary affected? a. The beneficiary is no longer responsible for the prescription drug costs. b. Medicare Part A will cover all costs. c. The beneficiary is then responsible for a portion of the prescription drug costs. d. The beneficiary is then responsible for 75% of the prescription drug costs.

c. The beneficiary is then responsible for a portion of the prescription drug costs.

Carlos's health insurance policy pays benefits according to a list which indicates the amount that is payable under each type of covered treatment or procedure. Carlos's policy provides benefits on a a. Service basis. b. Cash basis. c. Scheduled basis. d. Reimbursement basis.

c. Scheduled basis.

An individual acted as an exclusive general agent- even though she was not licensed to do so. Since this offense occurred over a period of 60 days, what is the maximum penalty she faces? a. $600,000 and a third degree misdemeanor b. $600,000 and a second degree misdemeanor c. $60,000 and a third degree misdemeanor d. $60,000 and a second degree misdemeanor

c. $60,000 and a third degree misdemeanor

Which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insured's death was caused by an accident as defined on the policy? a. A Guaranteed insurability rider. b. A covered Peril rider c. An accidental Death Rider d. A double indemnity rider

c. An accidental death rider

An individual buys a disability policy on May 1 with a waiver of premium rider. The insured becomes disabled on June 1. It is determined that the individual is totally disabled on July 1; and he receives his first benefit payment on July 15. When does the wavier of premium provision start? a. May 1 b. June 1 c. July 1 d. July 15

b. June 1

An example of an alien insurer doing business in this state is one formed under the laws of a. District of Columbia. b. Arizona c. Puerto Rico d. Mexico

a. Mexico

Which of the following would be TRUE of both the fixed-period and fixed-amount settlement options? a. The amount of payments is based on the recipient's life expectancy. b. The size of the installments decreases after for the life of the beneficiary. c. Both guarantee payments for the life of the beneficiary. d. Both guarantee that the principal and the interest will be fully paid out.

d. Both guarantee that the principal and the interest will be fully paid out.

Which of the following is NOT true regarding an optionally renewable policy? a. Renewability is at the option of the insurer. b. Nonrenewal can happen on the policy anniversary date. c. Policy premiums can increase at renewal d. Insurer can only cancel the policy for reasons stipulated in the contract.

d. Insurer can only cancel the policy for reasons stipulated in the contract.

A married couple purchases a life insurance policy on their newborn baby. They are concerned about what would happen to the policy if either one of them were unable to continue making the premium payments due to death or disability. Which policy rider should their agent recommend? a. Guaranteed insurability. b. Automatic premium loan. c. Wavier of premium. d. Payor benefit

d. Payor benefit

Conrad receives $50,000 from $100,000 Accidental Death and Disbursement policy as result of the loss of his left arm in an accident. Conrad has received the a. Capital amount b. Contributory amount c. Primary amount d. Principal amount

a. Capital amount

Which method of dealing with risk applied when insurance is purchased? a. Transfer b. Sharing c. Avoidance d. Reduction

a. Transfer

If an insured is not entirely with a policy, the insured may return it to the insurance company and received a refund of the entire premium paid, at which of the following times? a. Within 10 days of when the policy was delivered. b. Before any claim has been filed on the policy. c. Within 10 days of when the policy was issued. d. Within 10 days of when the insurer received the first premium.

a. Within 10 days of when the policy was delivered.

All of the following are characteristics of group health insurance plans EXCEPT a. The benefits under a group are more extensive than those under individual plans. b. The parties that hold a group insurance contract are the employees and the employer. c. The cost of insuring an individual is less than what would be charged for comparable benefits under an individual plan. d. Employers may require the employees to contribute to the premium payments.

b. The parties that hold a group insurance contract are the employees and the employer.

An applicant misstates his age on his application for a health insurance policy. He states that he is 39, but his actual is 49. When he files a claim, what will most likely happen? a. The policy will automatically be dropped. b. If the mistake was found after incontestability period, the benefit will be paid in full. c. Benefits paid will be those that would have been purchased at the correct age. d. Benefits will not be paid.

c. Benefits paid will be those that would have been purchased at the correct age.

If an insurance company issues a policy even though some questions on the application were unanswered, when can the insurer the answer to those questions? a. Within 30 days of issuing the policy b. At any time within the incontestable period c. Never; the insurer has waived its right to those answers by issuing the policy d. Within 3 days of issuing the policy

c. Never; the insurer has waived its right to those answers by issuing the policy.

According to the Time Limit on Certain Defenses provision, no statement or misstatement (except fraudulent misstatements) made in the application at the time of issue will be used to deny a claim after the policy has been in force for a. 5 years. b. 7 years. c. 2 years. d. 3 years.

d. 3 years

Which of the following is NOT true of the agent's implied authority? a. It is incidental to express authority. b. It is given to an agent by the insurance company that is not specifically communicated. c. It is specifically stated in the contract. d. It is assumed by the agent in order to transact the business of insurance.

c. It is specifically stated in the contract.

A producer in another state wants to become a producer in PA. The other state gives the same privileges to PA producers wanting to be licensed in that state as it does its own producers. PA therefore extends the privileges of its producers to the prospective producer of the state. What is this called? a. Equanimity b. Equal Privileges c. Reciprocity d. Fair exchange

c. Reciprocity

A licensee who has moved to PA from out of state must provide which of the following before becoming licensed as a resident in this state? a. Proof of licensing or a letter of clearance from the previous home state. b. A nontarized copy of a PA driver's license. c. A current utilities bill d. A US postal service change-of-address form.

a. Proof of licensing or a letter of clearance from the previous home state.

All of the following are true of annually renewable term insurance EXCEPT a. The policy must be renewed no matter what happens to the one's health. b. Proof of insurability must be provided at each renewal. c. The premium increases each year. d. The death benefit remains level.

b. Proof of insurability must be provided at each renewal.

Which entity has the option of including optional provisions in a health insurance policy? a. The policyholder. b. The federal government c. The insurer d. The state

c. The insurer

An insured's hospital policy states that it will pay him a flat fee of $75 per day for each day he is hospitalized. The policy pays benefits on what basis? a. Reimbursement b. Expense c. Service d. Indemnity

d. Indemnity

Guaranteeing future dividends is considered to be an unfair or deceptive act known as: a. Churning b. False financial statements c. Rebating d. Misrepresentation

d. Misrepresentation

What does an annuity protect the annuitant against? a. Leaving beneficiaries without income. b. Estates taxes. c. The financial impact caused by premature death d. Living longer than expected.

d. Living longer than expected.

All of the following are true of the Survivorship Life policy EXCEPT: a. The premium would be lower than in a joint life policy. b. It can insure more than 2 lives. c. The premium is based on the age of each insured. d. The death benefit is not paid until the last death.

c. The premium is based on the age of each insured.

An agent tells an insured that if he replaces his current insurance policy with a newer one, his dividends will be higher and his premiums will be slightly lower. The policy , however would not offer either one of these things. What type of misrepresentation is being committed? a. Distorting. b. Replacement c. Twisting d. Rebating

c. Twisting