Practice Exam #2

A Medicare SELECT policy does all of the following EXCEPT

Prohibit payment for regularly covered services if provided by non-network providers

A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

Proof of insurability is not required.

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to

Purchase a single premium policy for a reduced face amount

Which of the following statements is NOT true concerning Medicaid?

It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income.

All of the following statements about Medicare Part B are correct EXCEPT

It is a compulsory program.

Which of the following settlement options in life insurance is known as straight life?

Life income

Which of the following defines the owner a life insurance policy who seeks to sell the policy due to a terminal or chronic illness?

Viator

The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over what period of time?

2 years

A hospital indemnity policy will pay

A benefit for each day the insured is in a hospital.

Under the 401(k) bonus or thrift plan, the employer will contribute

An undetermined percentage for each dollar contributed by the employee.

Insurers are required to keep records. When may the Department examine these records?

Anytime

Which of the following provisions requires that any policy language that is in conflict with the state statutes of the state in which the insured resides is automatically amended to conform with those of the state of residence?

Conformity with State Statutes

All else being equal, which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverages based on the insured's habits and lifestyle

An agent selling variable annuities must be registered with

FINRA

Which of the following is an example of an unfair claims settlement practice?

Failure to promptly settle a claim when liability has been clearly established

If an insurer changes a form that it uses to transact insurance, it must do which of the following?

File the form with the Commissioner for approval

Lietuya Insurance Company has issued 150 viatical settlement contracts but does not hold the proper certifications to legitimately conduct business. Which of the following terms best describes Lietuya's business practices?

Fraudulent viatical settlement act

An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?

Full benefits

When would a misrepresentation on the insurance application be considered fraud?

If it is intentional and material

In order to minimize adverse selection, employer group dental plans may require employees who enroll after they were initially eligible to participate to do all of the following EXCEPT

Increase benefits for a period of one year

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report

Must be informed of the source of the report

Prior to purchasing a Medigap policy, a person must be enrolled in which of the following?

Parts A and B of Medicare

Which clause allows both the insured and dentist to know in advance which benefits will be paid?

Precertification

Which of the following is NOT a characteristic of a group long-term disability plan?

The benefit can be up to 50% of one's yearly income

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

The customer's associates, friends, and neighbors provide the report's data.

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

When employees are actively at work on the date coverage can be transferred to another insurance carrier, what happens to coinsurance and deductibles?

They carry over from the old plan to the new plan

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

Universal Life - Option A

When is the insurability conditional receipt given?

When the premium is paid at the time of application

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce

Without receiving written consent from an insurance regulatory authority.

Which of the following are the authorities that an agent can hold?

express and implied

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

false advertising

What type of insurance would be used for a Return of Premium rider?

increasing term

Attempting to determine how much insurance an individual would require based upon their financial objectives is known as

needs approach