Practice exam 2
Ken owns a life insurance policy with a $100,000 face amount. Long ago he took a $25,000 loan on the policy, which he never repaid, and the loan accrued $5,000 interest. He recently died in a car crash. How much will be paid to the beneficiaries?
$70,000
Emily, age 48, withdrew $8,000 from her SIMPLE plan to buy a car. How much penalty tax will she owe?
$800
A long-term care insurance policy issued in Nebraska cannot exclude coverage or limit benefits for which of the following?
Alzheimer's disease
Justine leaves her position with her employer on March 1. She wants to convert her employer's group life insurance coverage to an individual policy. In order to convert her group coverage, she must apply for an individual policy no later than what date?
March 31
Which of the following sections of the Tax Code deals with the tax-free exchange of life insurance policies and annuities?
Section 1035
If the insured purchased a term life insurance policy six months and committed suicide today, which of the following best describes the action the insurer will take?
deny the death claim and return the premiums paid to date
The Director of Insurance cannot suspend or revoke a producer's license for which of the following reasons?
failing to meet projected sales goals
Which of the following is NOT an unfair claims settlement practice if committed by an insurance company in Nebraska?
failing to promptly settle a claim for which liability is uncertain
All Medicare supplement policies cover:
first three pints of blood
A person must be totally disabled to qualify for Social Security disability benefits. In addition, a person must satisfy a waiting period of how long before benefits are paid?
five months
Three times a week, Ernest pays for a licensed nurse to come to his house and help with his diabetes management. The nurse also helps with everyday tasks such as bathing and eating. Which type of care is Ernest receiving?
home health care
Persons who commit crimes of dishonesty while engaged in interstate insurance transactions can be sentenced to all of the following EXCEPT:
imprisonment for up to 25 years
While meeting with her insurance customer, Ben, Ann sees that he is chain smoking. Yet he notes on his application that he is a nonsmoker. What should Ann do at this point in the application process?
insist that Ben be truthful and avoid misrepresentation
Which of the following provisions in a health insurance policy prevents the overinsurance of an individual?
insurance with other insurers
Who is the primary care physician (PCP) in a managed care plan?
insured's physician who controls access to specialists
John and Mary, a married couple, want to be assured a stable income to extend over both of their lives. They would likely choose which payout option?
joint and survivor income option
The type of life insurance policy delivery that requires delivery to the client in-person by the producer and an explanation of the conditions to be met is called:
legal delivery
What type of insurance does group life insurance most commonly consist of?
level term life insurance
Jane has insured her child's life under a juvenile policy, and she pays the premiums. In the event that Jane were to die or become disabled, what kind of rider would prevent the policy from lapsing due to nonpayment of the premium?
payor benefit rider
At the end of an indexed annuity (IA) contract's term, what can the owner or annuitant do?
take the accumulated values free of surrender charge or leave them in the contract to continue for another term
When an employee retires, what is the tax treatment of the payments he or she receives under a deferred compensation plan?
taxable to the employee as he or she receives benefits
A viatical settlement provider would buy a life insurance policy from a policyholder who most likely is which of the following?
terminally ill
If a person buys a new life insurance policy to replace an existing one, the producer must give the applicant the Notice Regarding Replacement form no later than when?
when the application is taken
What does the entire contract provision state?
The entire contract consists of the policy, attached riders, and endorsements.
Which of the following statements about deferred compensation plans is correct?
They allow executives to delay receiving current compensation until a future time.
With respect to disability buy-out policies, which of the following statements is correct?
They have a very long elimination period.
Alex sold an insurance policy before his license lapsed and earned a commission on the sale. Is he entitled to a commission if the policy is renewed?
Yes, because he was licensed when the policy was sold.
When meeting with a prospect to discuss life insurance, Agent Tyler makes disparaging comments about the financial stability and reputation of a competitor to dissuade the prospect from purchasing its policies. Which unfair trade practice has Agent Tyler committed?
defamation
An insurable interest will typically be presumed in all of the following types of relationships EXCEPT:
neighbor and friend
When she applied for an individual health insurance policy, Betty neglected to disclose that her parents had undergone open-heart surgery many years ago. Her insurer discovers this misstatement four years after the effective date of coverage. What can it do?
nothing
ABC Insurers orders a consumer report on an applicant for an individual health insurance policy. Which of the following must the applicant receive, according to the Fair Credit Reporting Act?
notice that an investigation and report have been requested
All of the following are common business uses of life insurance EXCEPT:
pay for a company's capital expenditures
If Jack takes a new job that is less hazardous than the job he had when he obtained health coverage, what may the insurer do?
reduce the premium
A health insurance policy that bases benefit payments on the actual value of the loss is called a(n):
reimbursement contract
Robin falls while snow skiing and breaks a leg. She decides to never again attempt this activity. What method is she using to manage this risk of falling?
risk avoidance
Section 457 plans are qualified retirement plans that are reserved for employees of which type of organization?
state and local government units
Unfair discrimination in health insurance transactions can occur when an insurer differentiates charges or benefits among persons of which group?
the same class and risk
Which would NOT be promoted as a service offered by an HMO?
acute onset diabetic care
Which of the following is not an optional provision of health insurance policies issued in Nebraska?
change of beneficiary
Which of the following is a benefit trigger under a long-term care insurance policy?
cognitive impairment
Sally is a 25-year-old clerk employed by Acme, Inc. Under Acme's employer-pay-all group life plan, Sally's coverage is $60,000. The value of what portion of that coverage is taxable to Sally?
$10,000
Jan's adjusted gross income this year is $70,000. She incurs $10,000 in unreimbursed medical expenses, which includes $6,000 in medical insurance premiums. How much will Jan be able to deduct this year?
$3,000
ABC Life Insurance Co. sells term and whole life insurance policies through producers. If it sells a policy, it must give the customer the right to examine the policy for at least how long?
10 days
Long-term care insurance is designed to provide coverage for diagnostic, preventive, rehabilitative, and personal care services for at least how many months?
12 months
Frank's first income payment is $1,950. The value of each accumulation unit in each of the subaccounts in Frank's contract is $10. How many annuity units does Frank have?
195
A claimant on a health insurance policy must give written notice of the claim to the insurer within how many days following a loss?
20
Jake borrowed $300,000 from ABC Capital Company and bought a credit disability insurance policy. Soon afterward, he is injured and unable to work or pay back the loan. Who will receive the policy's benefit payment?
ABC Capital Company only
Abbott Corporation and Taylor Company each apply for the same group PPO plan from the same insurance company. Abbott has 500 employees, and Taylor has 75 employees. Which statement is correct?
Abbott's policy will cost less per member than Taylor's policy.
The premiums paid for life insurance are tax deductible by the premium payer in all of the following situations EXCEPT:
Abby's Restaurant takes out a life insurance policy on its manager, considering him a key executive, and pays the policy premiums.
Bill believes he has a cause of action against his health insurer for its refusal to pay benefits on a claim. He filed written proof of loss on April 1. Not having received a response by May 1, he decides to take legal action. What will his attorney probably do?
Advise him to wait
Ann is beneficiary of an annuity owned by Jim. If Jim annuitizes the contract at retirement and dies shortly afterward, what benefits will Ann receive from the annuity?
Ann's right to any funds will be based on the income payout option Jim selected.
When Bill left Beta Industries on March 1, he received a distribution of the entire account balance from his 401(k) plan. To avoid taxation of the entire amount, he must deposit the funds into a rollover IRA no later than:
April 30
Which statement about maximum benefit periods in disability income policies is NOT correct?
Benefit periods in short-term disability income policies are limited to five years.
Agent Monroe helped her client Brian enter into a viatical settlement agreement with Best Insurers. Which of the following parties will receive the life insurance proceeds at Brian's death?
Best Insurers
All of the following statements about health insurance reinstatement provisions are correct, EXCEPT:
Claims resulting from sickness are covered immediately upon policy reinstatement
Karen transfers all rights in her life insurance policy to her brother, David, in an absolute assignment. Who is typically responsible for paying the policy's premiums from that point forward?
David must pay the premiums.
Which federal law imposes a number of requirements pertaining to coverage, vesting, participation, and funding that retirement plans must comply with to obtain favorable tax treatment?
ERISA
Who determines the length of the waiting period that must pass before a person is eligible for coverage under an employer's group health plan?
Employer and insurer
With respect to the taxation of group and individual disability income (DI) insurance, which of the following statements is correct?
Employer-paid premiums for group DI insurance are deductible by the employer.
Which of the following statements regarding the tax treatment of endowment contracts is correct?
Endowment contracts no longer get the good tax treatment given to life insurance policies.
Adam bought an individual disability income policy with a social insurance supplement (SIS) rider. If he becomes disabled and is eligible for Social Security disability benefits, what will happen?
He will receive benefits under the SIS rider while he is waiting for his Social Security disability benefits to begin.
Which of the following statements about a Medicare supplement policy is NOT correct?
It can indemnify against loss from illness on a different basis than loss from accident.
Which describes the basic concept of the health savings account (HSA)?
It combines a high-deductible, high out-of-pocket cost insurance plan with a tax-favored savings account.
Lydia annuitizes a deferred annuity and selects a 100 percent joint and survivor annuity with John as the joint annuitant. If Lydia dies before John after annuity payments have begun, which one of the following most correctly describes how the annuity payments will be taxed when they are paid to John?
John will continue to exclude from income the same portion of each payment as originally excluded by Lydia.
Karen bought a life insurance policy at age 23. She added the guaranteed insurability rider to the policy. If Karen buys another policy under the rider at age 39, the premium of that policy will be based on which of the following?
Karen's current age
Mary, age 62, has owned a market-value adjusted annuity for four years. The annuity has a ten-year surrender charge period. Interest rates are higher, so she wants to surrender the contract and move the money to a new annuity. Which of the following statements is correct?
Mary can withdraw funds but the amount withdrawn will be effectively reduced by more than just the surrender charge.
Mattie received proceeds from her viatical settlement agreement on May 1. Three weeks later, she decides that she no longer wishes to sell her policy. What are her options?
Mattie may cancel the contract because the cancelation period has not expired.
Margo, who is 52 years old and in good health, is uninsured. She may get health insurance coverage through all of the following EXCEPT:
Medical Information Bureau
A common name for Medicare Part C is:
Medicare Advantage
Which type of policy Medicare supplement policy offers the most basic coverage?
Plan A
Abby purchased a long-term care policy on June 15. Two weeks later, she lost her job and decided that she could no longer afford the policy. What are her options?
She can return the policy for a full refund of premium.
Abby lives in Oklahoma, where she is licensed as an insurance producer. She wants to apply for a nonresident license in Nebraska. Which of the following conditions must she satisfy?
She must show her Oklahoma license to be in good standing
Maxine has a basic hospital expense policy that pays a benefit of $250 per day for up to 30 days. If she is hospitalized for more than 30 days, which of the following statements is correct?
She will be responsible for all hospital costs beyond the first 30 days.
Which statement is correct about insurance regulation?
State governments primarily regulate the insurance industry, and the federal government regulates some aspects of it.
Jill is insured under a $250,000 convertible term policy and would like to convert to a permanent policy. Which of the following statements is most correct?
The amount of the new policy cannot exceed $250,000.
Which of the following characteristics of a potential customer would make an immediate fixed annuity under a straight life income option unsuitable for that person?
The customer is age 75 and in questionable health.
The exclusion ratio applies until all principal in the annuity contract has been paid out. After that, what happens?
The full amount of future annuity payments are treated as taxable income.
Lynn participates in a flexible spending account established by her employer. Which statement is NOT correct?
The funds in the account roll over from year to year.
What was done to fill the gaps in standard Medicare coverage provided by Parts A and B?
The insurance industry created Medicare supplement policies.
In which of the following situations would the facility of payment clause of a life insurance policy NOT be applied?
The insurer learns, when paying the claim, that the designated beneficiary had no insurable interest in the insured at the time of death.
Which statement about children's term riders in life insurance is NOT correct?
The insurer must write separate riders for each child in a family
Under the "transfer-for-value" rule, the portion of a life insurance death benefit recognized as taxable income is calculated in which of the following ways?
The taxable gain is calculated as the death benefit minus the purchase price and premiums paid by the new owner.
To be eligible to receive Social Security disability benefits, a worker must satisfy all of the following requirements EXCEPT:
The worker must satisfy a 12-month waiting period.
On what do basic hospital policies typically base payment for covered expenses?
a maximum per-day benefit for a certain number of days, e.g., a basic hospital policy may provide a hospital benefit of $200 per day for up to 30 days
Which of the following most indicates that a customer is not suited for a fixed annuity?
a need for current liquidity
Tom, a carpenter, applies for an individual disability income insurance policy. Which definition of total disability will the insurer probably use when issuing the policy?
any occupation
ABC Insurance Company fires Renee, a producer. She continues to interview prospects, make sales presentations with company materials, and collect premiums. When dealing with Renee, the prospects believe that she has what kind of authority from ABC?
apparent
An agent for ABC Insurance Company meets with a client. The agent shows the client ABC's sample policies, refers to the ABC rate book, and gives the client an ABC business card. The client assumes that ABC has appointed the agent to represent it. What kind of authority does the agent have?
apparent authority
Insurers use inspection reports to verify the information applicants provide to agents and examiners. Who is most likely to be the subject of an inspection report?
applicants who ask for very high amounts of life insurance or business insurance
A health insurer, at its expense, may conduct a physical examination of the insured how often?
as often as reasonably necessary to investigate a claim
The typical guaranteed insurability rider lets policyowners buy a specified amount of additional insurance on select policy anniversaries until a specified maximum age. The anniversaries are usually at which interval?
at three-year intervals
Delta Inc. pays the premiums on a disability buy-out policy, a business overhead policy, and a key person disability policy. For which policies can it take an income tax deduction for the premiums it pays?
business overhead policy only
HMOs may use which terms to describe their services when in marketing them?
health maintenance organization
A health insurance policy's optionally renewable provision lets the insurer do all the following EXCEPT:
cancel the policy any time if the insured becomes uninsurable
A cancelable health insurance policy allows the insurer to do what?
cancel the policy at any time by providing written notice
The death benefit of a permanent life insurance policy such as a whole life insurance is equal to:
cash value plus the insurer's net amount at risk
An insurable risk is not:
catastrophic
All the following are types of life settlement options that include a life contingency, EXCEPT:
fixed period option
In order for Medicare Part A to pay for hospital services, the services must be:
for any medically necessary and reasonable treatment, with a benefit period that begins on the day of admission to the hospital and ends 60 days after release.
How long must insurers keep files of advertisements used to sell accident and health insurance policies?
four years
When Terry applied for his life insurance policy four years ago, he omitted any information in the application related to treatment he had received several years earlier for a serious chronic illness. Which of the following actions can the insurance company take when it learns of the omission?
nothing
For a life insurance policy to be valid, when must there be an insurable interest between the owner and the insured?
only when the policy is issued
What are annuity interest earnings taxed at?
ordinary income tax rates
Which of the following persons would not qualify for a temporary producer's license in Nebraska?
part-time producer of a licensed agency
Who can NOT deduct the cost of qualified long-term care insurance premiums, subject to the age-based limits?
participants in a group health plan whose employer pays the premium
When a person annuitizes a deferred annuity or buys an immediate annuity, the monthly income payments it generates consist of which of the following?
partly tax-free principal and partly taxable interest earnings
Who might NOT receive funds directly from Medicaid?
patient
Art is interested in purchasing an immediate annuity. What is the maximum number of premium payments he can make towards its purchase?
one
Individual life insurance policies must include a grace period of how long for paying any premium except the first?
one month
In addition to the four basic dividend options, a so-called '5th dividend option' is sometimes available, which basically involves:
one-year term life insurance
The entire contract provision specifies that all statements the policyowner makes in the application are considered which of the following?
representations
Health insurance policies are designed to indemnify, which means their goal is to:
return the insured to the financial position he or she was in before a covered loss
Jennifer purchases an individual health insurance policy on June 1. One week later, she loses her job and decides she can no longer afford the policy. What are her options?
return the policy for a full refund of premiums
HMOs operate within geographic areas that are called:
service areas
An indexed whole life policy ties death benefits and premiums to which of the following?
the Consumer Price Index (CPI)
What is the name of the period during which premium funds are paid into an annuity contract?
the accumulation period
Information that is commonly asked on a health insurance application include all of the following EXCEPT:
the applicant's opinion regarding the risk of disability or illness occurring
The Acme Supply Company, a small corporation, buys life insurance to protect its business interests if any of the key employees die. Which of the following would likely be the beneficiary of this insurance in this situation?
the company
Who completes an attending physician's statement (APS)?
the proposed insured's doctor, who is familiar with how the medical condition is being treated
Each application for health insurance requires the signature of which party?
the proposed insured, the producer, and all adults to be covered by the policy
What is the purpose of disability income insurance?
to replace income lost during disability
A type of permanent life insurance that lets the policyowner increase, reduce or even skip premium payments at will without the policy lapsing best describes:
universal life insurance
Zelda, a producer selling health insurance, assures a prospective applicant that the insurance company she represents is backed by the protections of the Nebraska Life and Health Insurance Guaranty Association. Which of the following statements is true about this kind of assurance?
It is prohibited at all times.
Life insurance settlement options with a life contingency are generally called:
life income settlement options
Which can qualify for group health insurance in the small employer market?
two or more persons
Under the integrated long-term care rider option, what percentage of the base policy's face amount can be used for long-term care expenses?
up to 75 percent, depending on the insurer
Jane asks her insurance agent to stop notifying her when her policy is due for renewal, and to notify her attorney instead. What has Jane done by giving up this right to get this notice?
waived a right
With respect to a policyowner's conversion of a term life insurance policy into a permanent life insurance policy, which one of the following statements is correct?
The face amount of the new policy cannot exceed the amount of the term policy.
Margie owns a fixed life insurance policy. What type of death benefit is Margie guaranteed?
The policy guarantees a fixed amount.
Which of the following does NOT fall within the definition of a life insurance advertisement?
a memo from an insurer's president to employees
Sal loses his sight in a chemical accident in his garage. His group disability insurance plan pays a monthly benefit but does not require proof of ongoing disability to continue benefit payments. Which policy provision exempts him from supplying this proof?
presumptive disability
Which of the following is not a power granted to the Nebraska Director of Insurance?
prosecuting individuals for violating the insurance laws
James and Edwina have a 26-year-old daughter who is mentally handicapped and incapable of self-sustaining employment. To continue their daughter's health insurance coverage after she reaches the limiting age stated in their group policy, what must James and Edwina do?
provide proof of their daughter's incapacity to the insurer within 31 days after she reaches the limiting age
Under Sanjay's individual health insurance policy, the insurer may cancel the policy only on the policy's anniversary date and can also increase the premium. Which type of renewability provision does Sanjay's policy have?
renewable at insurer's option
All the following are factors in determining an individual's life insurance needs using the needs approach EXCEPT:
the applicant's economic value
With a key person life insurance policy, who is the owner of the policy?
the employer
Many payees worry about choosing the straight life income option because they know that if they die after receiving only a single income payment, the insurer makes no further payment. To address this concern, the insurance industry created which of the following?
life income settlement options guaranteeing that a certain minimum number of payments will be made or a specified minimum amount will be paid
Marty receives a $1,000 monthly payment from his annuity, which is guaranteed for life. At his death, the annuity's undistributed accumulated cash value (if any) will be paid to Marty's beneficiary. Under which settlement option did Marty receive benefits?
life income with refund guarantee option
An insurable interest must exist at all times between the policyowner and the insured person or property for all the following types of insurance EXCEPT:
life insurance
The life insurance Buyer's Guide helps prospective buyers determine all of the following EXCEPT:
most qualified insurer
Alana let her life insurance policy lapse two years ago and now wants to reinstate the policy. Which action is she NOT required to take to reinstate the policy?
pay the next year's premium in advance
Corporate-owned life insurance (COLI) insures which of the following?
rank and file as well as key employees
Which of the following is not a required provision in group life insurance policies issued in Nebraska?
right to examine
The federal Risk Retention Act of 1986 applies to which businesses?
self-insuring businesses
How long is the entire initial enrollment period (IEP) under Medicare?
seven months
Master Manufacturers self-insures its health benefits but wants to protect itself from unexpectedly large claims. What type of policy should Master buy?
stop-loss policy
To qualify for the accelerated benefit rider, an insured must prove he or she either has had a permanently disabling injury or a terminal illness that can be expected to result in death within:
24 months
Harold is covered by a group health insurance policy in Nebraska that provides benefits for the treatment of alcoholism. If Harold enters an inpatient treatment center this year, how many days of care must his policy cover?
30
Horace buys a Medicare supplement insurance policy but decides not to keep it. How many days does he have to return it for a full refund of the premium?
30 days
Before delivering a health insurance policy to a client, the producer alters the insuring clause in a way that he believes will benefit the insurance company. Which of the following statements is true about this alteration?
It is prohibited by the entire contract provision.
Max submitted an application for an individual long-term care policy to Statewide Insurers. What are Statewide's options if it determines that Max does not meet its financial suitability standards?
It may reject Max's application.
Which statement is NOT correct about credit disability insurance?
It pays a flat benefit amount over the policy period.
The owner of a universal life insurance policy wants to surrender her policy and apply its cash value to the purchase of extended term coverage. How will the insurance company respond?
It will tell her that she can achieve the same thing with a UL policy by no longer paying premiums and letting the coverage continue as long as the cash value will support it.
Jake and five of his friends are self-employed in different fields. They want to form a group so that they can buy group life insurance. What can they do?
Jake and his friends would probably not be considered an eligible group for insurance purposes.
A policyowner repeatedly declines the opportunity to increase her disability income policy benefits through its benefit increase rider. She suffers a loss that would have been covered under the rider. May she sue the insurance company to increase the policy benefit?
No, because the policyowner waived her right to exercise the rider benefit when the opportunity to do so was available to her.
Sky Corporation pays 80 percent of the premium for its group medical plan each year while the employees pay the remaining 20 percent. Which statement is correct about the deductibility of the premium payments from taxable income?
The employees can deduct the amount of premiums they pay that exceed 10 percent of adjusted gross income.
Brenda owns a nonqualified deferred annuity. Through a Section 1035 exchange, she can exchange her annuity income tax-free for which of the following?
a nonqualified annuity only
Alicia is covered by a Nebraska Health Insurance Pool policy and incurs expenses for the following listed items. Which type of care or services will not be covered by her policy?
a routine physical exam
When completing an application for life insurance, Andrew states that he is 39 years old, though he is actually 45. When the insurer discovers this, what will it probably do?
adjust the benefits
Which type of long-term care is provided outside a person's home for groups of adults who are physically or mentally disabled, on less than a 24-hour basis?
adult day care
In an absolute assignment, what term is used to describe the new policyowner?
assignee
When may a disability income insurance policyowner exercise the future increase option rider?
at specified dates in the future, without the need to provide evidence of insurability
Best Insurers charges all insureds covered by the same type of group health insurance policy the same premium, without regard to age, gender, health status, or occupation. Which method does Best Insurers use to develop its premium rates?
community rating
A typical errors and omissions (E&O) policy covers all the following , EXCEPT:
completing and signing an application for an applicant without that person's knowledge
In converting a term life insurance policy to a permanent policy, the premium for the permanent policy is determined on what basis?
either the attained age basis or original age basis
Daniel is hospitalized with a neck injury. When he checks his disability income policy, he learns that he will not be eligible for benefits for 60 days, which means that his policy has a 60-day:
elimination period
Which of the following health insurance policy provisions is required to be in all health insurance policies?
entire contract
Jerry's life insurance policy instructs him to pay the premium to the insurer's home office. However, he has sent his payments to his agent for many years, and the agent has forwarded them to the insurer. What legal principal will prevent the insurer from now requiring that Jerry send the premiums to the home office?
estoppel
Amy just retired at age 72 and now wants to annuitize her deferred annuity, which is valued at $250,000. She has no surviving family members and wants to find a payout option that will provide her with the largest possible monthly payment. Which annuity settlement option should she select?
straight life option
A worker who is considered currently insured is entitled to which of the following Social Security benefits?
survivors benefits only
Variable life insurers generally charge an annual maintenance fee that is primarily intended to cover which one of the following?
the cost of managing the complex investment element of the contract
In which of the following instances is a disability income insurance policy's 'other insurance with other insurers' provision likely to come into play?
the insured has coverage from a state's workers' compensation program
Ben owns a $100,000 policy on his life. He sells the policy to his younger brother, Bart, for $50,000. Bart names himself beneficiary and is now responsible for paying the policy's annual $1,500 premium. Four years after the sale, Ben dies and Bart receives the policy's $100,000 death benefit. Under the transfer-for-value rule, what is Bart's taxable "gain" on the policy?
$44,000
Eric fails to pay the annual premium on his major medical insurance policy. The grace period provision allows him to pay the premium within how many days after the due date?
31
For purposes of group health insurance, a small employer is defined in Nebraska as any person or entity that employs no more than how many employees?
50
What is the maximum length of time that a Medicare supplement policy can exclude individuals from coverage based on pre-existing medical conditions?
6 months
Which of the following correctly describes the comparison between a family income policy and a family maintenance policy?
A family income policy provides a lump-sum death benefit and a stream of income to a specified date if death occurs before that date, while a family maintenance policy pays a lump-sum death benefit and a stream of income for a fixed period of time upon the insured's death.
This year, Agent Todd earned 20 percent of his total commissions from life and health insurance written for his relatives and friends. Which statement is correct?
Agent Todd has engaged in controlled business.
Which of the following describes an agent's fiduciary responsibilities?
An agent must act in the best interests of insureds, applicants, and appointing insurers.
Holly just turned 65 and purchased a Medicare Select policy. Which statement correctly describes the features of her policy?
It contains restricted network provisions.
Janet is the owner of a small hardware store and is insured under a business overhead expense policy. If Janet became disabled, the policy would cover all of the following EXCEPT:
Janet's salary
Diane invested $6,000 two years ago in a Section 529 college savings plan for her daughter, Cathleen, age 5. The account earned $400 the first year and $450 the second year. Which of the following statements is correct?
No income tax must be paid on the earnings this year.
