Pre license mastery exam test 2

In conjunction with the sale of a long term care insurance policy, the policy buyer must be given all of the following EXCEPT

"Notice regarding replacement of accident and sickness or long term care coverage"

How many hours of continuing education must agents complete during every two-year license term to renew their licenses?

24 hours

Under variable life insurance plans, policy loans can be as high as what percent of the cash value?

75-90 percent

Which one of the following statements regarding simplified employee pension (SEP) plans is most correct?

A SEP plan is the most common type if qualified plan sponsored by small employers

Which of the following can be used either to limit or expand coverage by adding optional benefits?

A health insurance policy rider

Which of the following would provide instant liquidity upon the death of an estate owner?

A life insurance policy in the owner's life, payable to his estate

Regarding a group life insurance policy issues in California, which on if the following statements is correct?

All employees or all those of a class of employees must be insured

Like a plan for group life insurance, group health insurance coverage is issues to the plan sponsor. What do the group sponsor and insurer have to indicate their agreement to this arrangement?

An insurance contract

The other insurance with other insurers provision extends to coverage with multiple insurers of which the primary insurer had prior knowledge. When is multiple coverage typically an issue?

An insured has coverage from a state's workers' compensation program

The main purpose for errors and omissions insurance is to

Cover damages that arise due to services a producer non-willfully failed to render

Which of the following can be funded with a single premium payment, a series of fixed premium payments, or flexible premium payments?

Deferred annuities

Jerry owns a life insurance policy with premiums payable directly to the insurers home office. However, for the past five years Jerry has sent his payments to his agent who then forwards them to the insurer. The insurer has accepted this arrangement but later requires Jerry to send payments directly to the home office. The insurer will probably not be able to insist that Jerry pay directly because of which of the following legal principles?

Estoppel

Sam is planning to buy a deferred annuity. When will he select a settlement option?

He can choose the settlement option when the deferred contract annuitizes or when he buys the annuity

Under HIPAA which of the following types of non public personal information can be disclosed only with specific permission from consumers and customers?

Health or financial information

The health insurance portability and accountability act of 1996 (HIPAA) requires that specific permission be obtained from the customer before which one of the following types of personal information can be disclosed?

Health or medical information

All of the following statements about the delivery of health insurance policies are correct, EXCEPT

If an applicant applies for a policy without paying the first premium, the producer must collect the first premium along with a surcharge when delivering the policy

Which of the following statements best describes health savings account (HSA) plans?

If the account holder takes money out of the fund but does not use it to pay qualified medical expenses, the withdrawal may be taxed

Under what basis is a false representation grounds for an insurer to rescind an insurance contract?

If the misrepresentation is material

When a deferred annuity is annuitized, which one of the following most correctly describes the tax treatment of the contract's "gain" portion of each payment?

It is taxable!!!

Which of the following statements is correct regarding an insurer that picks up and assumes coverage for a discounted employee group medical insurance policy within 60 days of the discontinuance?

It may not impose its pre-existing exclusion provision upon those who were covered under the discontinued policy

Which statement about credit disability insurance is NOT correct?

It pays a flat benefit amount over the policy period

When an insured dies, what are the two main categories of needs that arise?

Lump-sum needs and ongoing income needs

Which of the following statements regarding the way whole life insurance differs from term life insurance most correct?

Only whole life insurance builds cash value

Paul reached age 70 1/2 this year and has a Roth IRA worth $100,000. Which of the following statements best describes his distribution options?

Paul is not required to take any distributions from his Roth IRA

Which of the following is allowed under cancelable policies?

Premium increases

All the following statements regarding the tax advantages that self-employed people receive on their health insurance expenses are correct EXCEPT

Self-employed persons cannot deduct the premiums paid for medical insurance, though they can deduct their costs of medical care received

California's health insurance and counseling advocacy program is funded by

State and federal governments

Why are ambiguities in an insurance contract most often interpreted in favor of the insured or the policy owner?

The contract's terms are drafted by the insurer without input by the policy owner

In order to be grounds for ending a contract, what must a misrepresentation on an insurance application involve?

The deliberate withholding of material facts

Under an insured executive bonus plan, the employer pays some or all of the premiums ona life insurance policy covering the life of an executive. Which statement is true about this type if plan?

The executive is the policyowner

In an insurance transaction, what does the applicant give as consideration?

The initial premium

Which statement about children's term riders in life insurance is NOT correct?

The insurer must write deprecate riders for each child in the family

All of the following statements about participating policies are correct EXCEPT

The owner can only take the dividend as cash

Under medical expense insurance the insurer assigns a price-a certain dollar amount or unit value- to each specific medical cost, procedure, charge or aspect of coverage. What is this system?

The policy's benefits schedule

Which of the following statements is correct about the replacement of a group health insurance policy?

The replacement policy must cover eligible employees and dependents

Which statement about current declared interest rates in deferred fixed annuities is NOT correct?

They extend for the life of the contract

What is the typical life insurance contracts reinstatement provision period?

Three years, but may be longer depending on the case and the laws of the state that control the policy

What is the purpose of health insurance?

To provide financial protection against the financial risks posed by certain hazards

Eric's medical expense plan requires he and his family to get medical care from certain providers of the cost of the care is to be covered. Given this information, what type of insurance does Eric NOT have?

Traditional medical expense plan

Under the integrated long-term care option, what percentage of the base policy's face amount can be used for long-term care expenses?

Up to 70 to 75 percent, depending on the insurer

Questions that Re commonly asked on a health insurance application include all of the following EXCEPT:

What is the applicants opinion regarding the possibility of disability it illness occurring?

Under a joint life insurance policy, when does the insurer pay the death benefit?

When the first insured dies

When a person applies for Medicaid, the limits and the types of income and assets counted vary depending on which of the following?

Whether the applicant has a spouse who requires support

All of the following statements regarding reinsurance are correct EXCEPT

claims are paid to policy owner separately by each insurer participating in the reinsurance agreement