PSI Insurance Exam

Which of the following is common in an increasing term life policy?1. Insurance protection decreases over time.2. The premium increases over time.3. It begins with little or no insurance protection.4. It is used as mortgage credit insurance.

It begins with little or no insurance protection.

What is the minimum grace period for monthly accident and health insurance policies?1. 7 days2. 10 days3. 31 days4. 90 days

31 days

A patient may see any provider for any condition for the same cost and does not need to consult a primary care physician.

A patient's care is coordinated by an in-network primary care physician.

Which is the major reason why long term care insurance is becoming increasingly important?

As life expectancy increases, the chances of needing long term care also increase

At which point are contractual death benefit settlement options determined and by whom?1. At the time the policy is purchased by the owner of the policy2. At the time the policy is purchased by the insurer3. Upon the insured's death by the beneficiaries4. Upon the insured's death by the insurer

At the time the policy is purchased by the owner of the policy

What is the major reason that insurance regulators are often critical of dread disease insurance policies?

Buyers often think they are getting broader coverage than they actually purchase.

All of the following are nonforfeiture options EXCEPT

Cash dividend option

Which of the following is TRUE of the limited pay whole life policy?

Coverage continues after the policy is paid-up.

Which of the following coverage types pays a monthly cash benefit following the elimination period for total disability due to accident or sickness? 1. Disability income insurance2. Credit disability insurance3. Recurrent disability insurance4. Workers compensation disability insurance

Disability income insurance

Obtaining consumer information reports under false pretenses is prosecutable by which of the following?1. USA Patriot Act2. Fair Credit Reporting Act3. State laws where the applicant resides4. Securities and Exchange Commission

Fair Credit Reporting Act

Which is the difference between participating and non-participating policies?1. Participating policies pay dividends while non-participating policies do not.2. Participating policies have lower premiums than non-participating policies3. Participating policy dividends are like stock dividends, non-participating dividends are not.4. Participating policy owners do not share in the divisible surplus of a company while non-participating policies do share in this surplus

Participating policies pay dividends while non-participating policies do not.

Which of the following is considered the major advantage of HIPAA?1. portability2. increased coverage3. qualified beneficiaries4. tax deductibility of certain medical expenses

Portability

Which of the following is defined as the dollar amount beyond which the insured no longer participates in the payment of medical expenses?1. Deductible2. Stop Loss Limit3. Maximum Benefit4. Coinsurance

Stop Loss Limit

Which of the following amends the Social Security Act to make Medicare secondary to group health plans? 1. ADEA2. ERISA3. OBRA4. TEFRA

TEFRA

When a policy or certificate containing an accelerated benefit provision is applied for or delivered, the producer is responsible for providing the applicant a summary of coverage that includes all of the following EXCEPT

a detailed and comprehensive summary of the accelerated benefit

Which of the following policy types is considered double indemnity?1. accidental death2. key employee3. term life4. whole life

accidental death

Which one of the following is particularly important for an insurance producer to explain to a client upon delivery of a life insurance policy?1. the effective date2. any exclusions3. premium due dates4. loan interest rates

any exclusions

All of the following are characteristics of COBRA EXCEPT 1. qualifying events.2. notification statements.3. continuation of coverage.4. change in medical privacy procedures.

change in medical privacy procedures.

In a level term life policy, which ALWAYS remains constant?1. premium2. beneficiary3. death benefit4. maximum age of the insured

death benefit

Which of the following may be thought of as a time deductible rather a dollar deductible in a disability income policy because benefits are not payable during that time?1. elimination period2. probationary period3. benefit period4. grace period

elimination period

Replacement refers to which of the following?1. replacing an existing policy with a new one2. replacing a beneficiary3. replacing one insured with another4. replacing the original policy with a copy

replacing an existing policy with a new one

Which one of the following represents an advantage of obtaining a policy loan vesus a withdrawal?

the loan is not taxed while a withdrawal is taxed for amounts above the contract cost basis

States generally define a true "group" for insurance as requiring a minimum of how many participants?1. 52. 103. 504. 100

10

In noncontributory plans, which percentage of eligible members must participate?

100%

What is the maximum amount of time an insurer has to provide the claimant the forms for filing proof of loss?1. 7 days2. 15 days3. 30 days4. 90 days

15 days

How long after being entitled to disability benefits will an individual be eligible to receive Medicare benefits? 1. immediately2. 1 year3. 2 years4. at age 65

2 years

Upon the issuance of a conditional receipt for a renewal when the premium is paid AFTER the time granted by the insurer, what is the maximum amount of time for reinstatement of the policy? 1. 10 days2. 30 days3. 45 days4. 60 days

45 days

Which of the following is the most common method to supplement Medicare coverage?1. Medicaid2. Group health insurance3. Employer Health Insurance4. Coverage offered by private insurers

Coverage offered by private insurers

Which is a primary difference between individual and group health insurance?1. Individual insurance requires evidence of insurability.2. Group insurance requires evidence of insurability.3. Group insurance usually has a lower adverse selection rate.4. Individual insurance includes an eligibility period.

Individual insurance requires evidence of insurability.

What does it mean if a health policy is conditionally renewable? 1. Insurer may elect NOT to renew based on the health of the insured.2. Insurer may elect NOT to renew for any reason only on the policy anniversary or premium due date.3. Insurer may elect NOT to renew only under conditions specified in the policy.4. Insurer may elect NOT to review if the insured exceeds the maximum number of claims.

Insurer may elect NOT to renew only under conditions specified in the policy

Why is the accidental death benefit referred to as double indemnity?1. It provides for both the actual death as well as other losses from the accident2. It provides twice the face value in the policy for death due to accident.3. The beneficiaries have twice the amount of time to provide proof of loss.4. The beneficiaries must provide proof of death due to multiple causes.

It provides twice the face value in the policy for death due to accident.

Which insurance plans are commonly offered through the worksite (employer sponsored) EXCEPT?1. Medicare2. Dental Insurance3. Long Term Care Insurance4. Supplemental Disability Insurance

Medicare

Which of the following was specifically designed to address STOLI and IOLI practices?

NCOIL Act

Short term disability insurance generally only covers injuries due to which of the following?Occupational injuries 2. Non-occupational injuries3. injuries covered during the enrollment period4. injuries not covered by other insurance

Non-occupational injuries

All life insurance and health insurance contracts contain all of the following EXCEPT1. Policy face2. Insuring clause3. Conditions4. Representations

Representations

All of the following are tax qualified retirement plans EXCEPT 1. Keogh.2. 401(k).3. Section 529 plan.4. SEP.

Section 529 plan.

Under normal conditions which of the following is TRUE for proof of loss when a single loss is claimed?

The insured has 90 days from the date of loss to provide proof of loss.

What does coinsurance mean?1. The insurer and the insured share ALL expenses.2. The insurer and the insured share expenses over the deductible.3. A policy covers the insured and any additional named persons.4. The policyowner holds multiple policies through the same insurer.

The insurer and the insured share expenses over the deductible.

What is the order in which beneficiaries receive proceeds from a life insurance policy?1. classification of beneficiaries2. line of beneficiaries3. progression of beneficiaries4. succession of beneficiaries

The proceeds are divided equally among living primary beneficiaries

Which of the following lists the three common types of permanent individual life insurance?1. Variable Life, Whole Life, Universal Life2. Whole Life, Incidental Life, Term Life3. Universal Life, AD&D,Term Life4. Group Life, Whole Life, Variable Life

Variable Life, Whole Life, Universal Life

Under which situation must insurable interest exist between the applicant and insured at the time of application?1. When a third-party applicant names themselves beneficiary.2. When the applicant and the insured are the same person.3. When the beneficiary is a member of the applicant's immediate family4. When a third-party applicant names the insured's company as beneficiary.

When a third-party applicant names themselves beneficiary.

Which type of receipt makes the insurer liable for the risk from the date of application, regardless of the applicant's insurability? 1. binding receipt2. conditional receipt3. inspection receipt4. temporary receipt

binding receipt

The group conversion option is allowed for all of the following EXCEPT 1. termination of the master policy.2. loss of group coverage due to termination of employment.3. upon the loss of eligibility on the part of a class of insureds.4. during the annual benefits enrollment period.

during the annual benefits enrollment period.

Which of the following is covered by a dread disease policy?

illnesses that do not occur frequently but incur significant costs when they do occur

Which of the following refers to how often a premium is paid?

mode

Which of the following is a characteristic of Preferred Provider Organizations (PPOs)?1. prearranged costs for services rendered2. providers receive a flat monthly amount for each user3. ability to receive care at the same cost from any provider4. emergency treatment is restricted to pre-selected hospitals

prearranged costs for services rendered

An employee is laid off and converts a group health plan to an individual policy. In this situation, the new policy1. will include a probationary period.2. will exclude preexisting conditions for 6 months.3. premium rate will be higher than the group rate.4. requires evidence of insurability.

premium rate will be higher than the group rate

How might someone cover the extra expenses of child care and home-related costs?1. adding coverage of a grandparent2. adding cost of living coverage3. purchasing family term insurance4. purchasing a substitute insured rider

purchasing family term insurance

Group AD&D policies may be deducted by whom and under which deduction category?1. the employee under business expenses2. the employee under medical expenses3. the employer under business expenses4. the employer under workers' compensation deduction

the employer under business expenses

All of the following are required signatures on a life insurance application EXCEPT

the minor in a juvenile policy.

When the suicide clause is inserted in a life insurance contract, death by suicide is not covered during the policy's initial:

2 year period

In which of the following does a covered employee agree to a reduction in compensation so the amount can be used to cover medical expenses?1. Consumer Driven Health Plan (CDHP)2. Health Reimbursement Account (HRA)3. Flexible Spending Account (FSA)4. Healthcare Savings Account (HSA)

Flexible Spending Account (FSA)

Which policy provision permits the policyowner to take a specified number of days to examine the contract, and allows for cancellation and a full refund if the policyowner rejects the terms or costs?1. Exclusions2. Free look3. Grace period4. Insuring Clause

Free look

Which plan is most commonly paired with a High Deductible Health Plan?1. Emergency Medical Account (EMA)2. Flexible Spending Account (FSA)3. Health Reimbursement Account (HRA)4. Health Savings Account (HSA)

Health Savings Account (HSA)

What is the waiver of premium provision?1. In a long term care contract, the premium is waived after the insured has been confined for a specific period of time.2. In a life insurance policy, the insured may request a waiver of premium during times of financial hardship.3. In a disability policy, the premium is waived after the insurance benefit period has been passed4. In a health insurance policy, the premium is waived after the maximum out of pocket has been paid by the insured.

In a long term care contract, the premium is waived after the insured has been confined for a specific period of time.

How are issues of ambiguity usually resolved because insurance contracts are contracts of adhesion?1. In favor of the insured because the insurance company drafts the language in the contract.2. in favor of the insured because insurance companies often do not adhere to the more specific contract principles.3. In favor of the insurer because most issues arise from misrepresentation on the part of the insured.4. In favor of the insurer because the insured frequently does not adhere to the requirements of the contract.

In favor of the insured because the insurance company drafts the language in the contract.

What is an impairment rider?1. It indefinitely extends the time to provide the proof of loss until after an impairment is resolved.2. It allows the reinstatement of a policy when an impairment is deemed to have caused the policy lapse.3. It lists specific conditions in the contract that are excluded from the contract4. It states that a contract can be cancelled and premiums refunded if the policyholder was mentally impaired at time of issue.

It lists specific conditions in the contract that are excluded from the contract

Which annuity settlement option provides a stated monthly amount to the annuitant and upon the annuitant?s death the same or a lesser amount paid for the lifetime of the survivor?1. Joint life option2. Joint and survivorship option3. Life annuity certain option4. Refund life annuity option

Joint and survivorship option

In which type of insurance is individually purchased coverage commonly more economical than group offered coverage?1. Disability insurance2. Major medical insurance3. Long term care insurance4. Medicare supplemental insurance

Long term care insurance

How does a noncancelable policy differ from a guaranteed renewable policy?

With the noncancelable policy the insurer may increase premiums only based on the terms of the policy.

An insured and the beneficiary are both killed in a fatal accident. Which provision presumes the insured survived the beneficiary?1. common disaster clause2. irrevocable beneficiary3. contingent beneficiary4. endorsement method

common disaster clause

Which whole life policy premium type is the most common?1. continuous premium2. non-participating3. limited payment4. single premium

continuous premium

Which of the following term insurance types provides temporary protection that can be changed to some type of permanent protection without evidence of insurability?1. convertible2. decreasing3. level4. reentry

convertible

Which is a common approach to addressing the problems inherent in naming a minor as a beneficiary to a life insurance policy? 1. using class designations2. using contingent beneficiaries3. naming the estate as the beneficiary4. establishing a trust to administer proceeds

establishing a trust to administer proceeds

Which of the following is exempted from the incontestability provision in insurance policies? 1. fraudulent misstatements2. pre-existing conditions3. change in health4. changes in the insurance code

fraudulent misstatements

Which of the following, by definition, provides benefits for expenses incurred as a result of in-hospital medical treatment and surgery as well as certain outpatient expenses such as doctor's visits, laboratory tests, and diagnostic services?1. blanket insurance2. dread disease insurance3. hospitalization insurance4. long term care insurance

hospitalization insurance

What is the primary advantage for obtaining a reinstatement of a policy rather than obtaining a new one? 1. No proof of insurability is required2. insured original issue age is used3. No application is required4. outstanding loans are cancelled

insured original issue age is used

How do most disability policies handle the case of a recurrent disability occurring at least 90 days after the first claim?1. It is handled as a continuation of the existing claim.2. it is excluded from coverage because benefits have already been paid.3. it must be handled as a new claim for a new period of disability, requiring a new elimination period.4. it must be handled as a new claim for a new period of disability, without requiring a new elimination period.

it must be handled as a new claim for a new period of disability, requiring a new elimination period.

In which of the following cases are premiums paid by a business NOT tax deductible as a business expense?1. key person disability income insurance2. group disability income coverage for its employees3. individual disability income coverage for its employees4. when benefits received by employees are taxable as income.

key person disability income insurance

Which type of rider reimburses health and social service expenses incurred in a convalescent or nursing home facility?

long term care ride

A consumer report used to determine eligibility for insurance may include all of the following EXCEPT 1. character.2. reputation.3. credit information.4. medical underwriting exam.

medical underwriting exam.

Which of the following is characteristic of a nonqualified plan?1. defined vesting schedule2. plan established by the employer3. plan does not meet federal guidelines for tax benefits4. employer contributions are deductible business expenses

plan does not meet federal guidelines for tax benefits

In which of the following must a beneficiary change request be filed in writing to the insurer and is made effective by the insurance company recording the change in its records?1. designation option2. recording method3. endorsement method4. succession of beneficiaries

recording method

Which type of life policy can be continued year after year without a required medical examination but rates are dependent on the insured's current age? 1. whole life2. variable life3. flexible term4. renewable term

renewable term

Some states require life insurance policies to include a provision that gives the insurer the right, at its own expense, to do which of the following?1. require an autopsy2. perform a financial audit of the insured3. investigate the claims made on the application4. perform a medical examination on the beneficiary

require an autopsy

A basic vision care package includes all of the following EXCEPT

safety glasses.

In order to AVOID being classified as an MEC, a policy must pass which of the following?1. five-pay test2. seven-pay test3. policy loan test4. accelerated benefits test

seven-pay test

Which of the following determines whether a person passes the financial test to qualify for Medicaid?1. state law2. federal guidelines3. American with Disabilities Act4. The Social Security Administration

state law

What is it called when an insurance company tries to recover from a different insurance policy all or part of its losses resulting from a claim?1. secondary beneficiary2. subrogation3. coordination of benefits4. conversion

subrogation

All of the following are features of the spendthrift clause EXCEPT1. proceeds are paid in some other way than a single lump sum.2. proceeds are protected by the insurer from the beneficiary's creditors.3. transfer of proceeds to creditors is prohibited.4. the beneficiary may encumber the proceeds.

the beneficiary may encumber the proceeds.

When the courts look at a contract to determine the intent of the parties which of the following is considered?1. the entire contract2. the relevant portions of the contract3. any material added to the basic contract4. any words that have ambiguous definitions

the entire contract

All of the following are TRUE regarding incomplete applications EXCEPT 1. the underwriting department will return the application to the agent.2. the applicant will have to wait additional time before coverage begins.3. there will be a delay in the underwriting process.4. the incomplete application can be accepted with the missing information added later.

the incomplete application can be accepted with the missing information added later.

What must the policy summary in a life insurance policy include?1. conditional receipt and the insurer?s home office address2. reserve deposits.3. the name and address of the insurance agent or broker4. definition of replacement.

the name and address of the insurance agent or broker

What is the purpose of Stranger-originated life insurance (STOLI)?1. the policy is originated primarily or solely for the purpose of resale2. the policy is written so as to avoid proof of insurable interest3. it is a method of insuring a person who has been previously declined.4. it is a fraudulent policy meant for financial gain of someone unknown to the insured.

the policy is originated primarily or solely for the purpose of resale

All of the following are requirements to qualify for Social Security disability benefits EXCEPT when 1.credited with the appropriate number of quarters of coverage. 2. total and permanent disabled for at least 5 months. 3. disability expected to last for 12 months or end in death. 4. unable to work in occupation in which the worker was trained or educated.

unable to work in occupation in which the worker was trained or educated.

Which type of annuity attempts to offset inflation by providing a benefit linked to an underlying investment account?1. deferred2. fixed3. immediate4. variable

variable

When does insurable interest come into play in a life insurance policy?1. when the applicant for the policy is not the insured2. when a charity is named beneficiary of the policy3. when a beneficiary is irrevocable4. when the free look period ends

when the applicant for the policy is not the insured

An insured MUST present evidence of insurability and pay all overdue premiums with interest after a policy has lapsed in order to exercise which policy provision?1. Conversion.2. Reinstatement.3. Ownership.4. Guaranteed Renewability.

Reinstatement.

What procedure is used by an insurer to protect itself in the event a dispute arises and the applicant and the agent do not recall the changes that were made in a completed application? 1. The applicant and possibly the agent initial any changes made.2. The applicant and the agent sign a document that outlines changes made.3. An arbitration agreement is signed at the time of the signing of the application.4. All changes must be approved by the underwriter prior to the submission of the application.

The applicant and possibly the agent initial any changes made.

Which of the following is true about a decreasing term life policy? 1. The cash value of the policy decreases over time.2. The face amount reaches zero at policy expiration.3. Premiums decrease over time but the amount of coverage remains constant.4. Commonly sold as a rider to another type of policy to provide an additional death benefit.

The face amount reaches zero at policy expiration.

Why is rehabilitation considered worthy of federal help under workers' compensation?1. it reduces insurance losses and helps regain the worker's dignity2. the costs to states are prohibitive so federal funding is required3. states do not have the means to provide rehabilitative services4. because under the Americans with Disabilities Act it is required

it reduces insurance losses and helps regain the worker's dignity

What type of insurance should a company purchase if it wants to insure the life of its CEO?

key person insurance

Which problem was universal life insurance designed to address? 1. low interest rates during periods of high inflation2. high interest rates during periods of low inflation3. increased risk of death due to aging4. lack of a fixed death benefit

low interest rates during periods of high inflation

Compared to basic hospital, medical and surgical policies, which type of insurance provides broader coverage, fewer gaps, higher individual benefits, and higher policy maximums? 1. medicaid insurance2. major medical insurance3. supplemental medical insurance4. long term care insurance

major medical insurance

What is a MIB report? 1. credit information on an applicant used in the underwriting process2. medical information on an applicant for assessing life or health insurance risk3. information on an applicant's moral character collected from interviews of associates4. information on an applicant's medical condition collected via a physician's physical examination.

medical information on an applicant for assessing life or health insurance risk

If the insurer wishes to share an applicant's HIV status, the applicant must be given full notice of all of the following EXCEPT 1. insurer's practices with respect to the treatment of this information.2. the applicant's rights to maintain privacy.3. an opportunity to refuse the dissemination of the information.4. the treatment procedures that are covered by the policy

the treatment procedures that are covered by the policy.

Which of the following occurs immediately after the application is submitted and the initial premium paid?1. the underwriting process begins2. the applicant's references are checked3. the beneficiaries are selected4. the insurance goes into effect.

the underwriting process begins

In order for an insurer to increase the premium on a noncancelable policy, which of the following MUST be true?1. The premium increase must be in the contract at the time it is issued.2. The insured develops a medical condition that increases risk.3. The insured reaches the age of 65.4. The premium increase must be in line with current inflation rates.

The premium increase must be in the contract at the time it is issued

How does the per capita rule apply to proceeds from a life insurance policy? 1. The proceeds are divided equally among living primary beneficiaries.2. The secondary beneficiary receives the proceeds if the primary beneficiary is no longer living.3. The proceeds go to the policyholder's estate when no beneficiary is living.4. The proceeds go to the descendants of the primary beneficiaries

The proceeds are divided equally among living primary beneficiaries.

The company promises to pay the annuitant an amount each period beginning after a single lump sum payment.

The purchaser has the option to vary the amount of each premium payment falling between a minimum and maximum amount.

What is the maximum amount of time the insured has to file legal action against the insurer after written proof of loss is provided?1. 1 year2. 3 years3. 5 years4. 10 years

3 years

Which of the following statements is CORRECT about Medicare Supplement Insurance?1. An agent must provide an outline of coverage to an insured at the time of policy delivery.2. If an applicant has an existing Medicare Supplement Policy, the information does not have to be mentioned on the new application.3. Replacement of a Medicare Supplement Policy is prohibited unless approved by the Commissioner of Insurance.4. Duplication of Medicare Supplement coverage is prohibited.

Duplication of Medicare Supplement coverage is prohibited.

What specific new procedures does the USA Patriot Act require of insurance companies?1. Establish an anti-money laundering program2. Investigate applicants for potential terrorist links3. Report large transactions by charitable organizations4. To take action against employees for failure to implement the Act.

Establish an anti-money laundering program

Why are insurance policies considered conditional contracts? 1. Certain conditions need to be met to make the contract legally enforceable. 2. The policy is conditional upon approval from the underwriting process. 3. There are conditions included that can make the policy invalid. 4. They can be deemed invalid at a future date if misrepresentations were made.

Certain conditions need to be met to make the contract legally enforceable.

When replacing existing life insurance, what must an agent do?1. Collect the in-force policies and send them to the replacing company.2. Specify what constitutes the replacement.3. Notify the producer whose policy is being replaced.4. Inform the applicant that the new policy face amount must be higher than the replaced policy.

Inform the applicant that the new policy face amount must be higher than the replaced policy.

Which of the following is TRUE of an equity-indexed annuity?1. It is a variable annuity.2. It may decrease in value.3. It requires a securities license to sell.4. It has a guaranteed minimum interest rate.

It has a guaranteed minimum interest rate.

Why is relying solely on employer group life insurance generally considered inadequate for most individual's needs?1. It is financially insufficient to cover end of life expenses.2. It is meant to cover funeral expenses only.3. It does not pay off the insured's mortgage.4. It is based on salary amounts that are too low.

It is financially insufficient to cover end of life expenses.

In order for an insurer to increase the premium on a noncancelable policy, which of the following MUST be true?

The premium increase must be in the contract at the time it is issued

A group conversion option may be used in all the following instances EXCEPT1. the termination of the master policy.2. loss of coverage due to loss of employment.3. loss of eligibility on the part of a class of insureds.4. a life-changing event, such as marriage, divorce, or childbirth.

a life-changing event, such as marriage, divorce, or childbirth.

How do warranties differ from representations? 1. a warranty is guaranteed to be true, a representation is believed to be true to the best of one's knowledge.2. a representation is guaranteed to be true, a waranty is believed to be true to the best of one's knowledge.3. a warranty is issued by the insurer, a representation is a statement provided by the applicant.4. an incorrect representation automatically voids a contract, whereas an incorrect waranty must be proven.

a warranty is guaranteed to be true, a representation is believed to be true to the best of one's knowledge.

For an individual long-term care policy there is an annual dollar limit for tax deductions that is based on which of the following? 1. age2. cost of care3. policy value4. premium cost

age

An insurance agent is defined as an individual who transacts business on behalf of1. a client.2. his/her agency.3. an insured.4. an insurance company.

an insurance company

Under the misstatement of age provision, what happens if it is determined at death that the insured's age or gender was misstated on a life insurance policy application?1. the application is considered fraudulent and no benefits are paid.2. the proceeds of the policy must be determined by a probate court proceeding3. if the death is two years after originally policy purchase, complete benefits are paid4. benefits are adjusted to an amount that the premium would have purchased at the correct age or gender

benefits are adjusted to an amount that the premium would have purchased at the correct age or gender

In a home healthcare benefit, all of the following are eligible expenses EXCEPT 1. intermittent part-time nursing care;2. physical, occupational, or speech therapy;3. blood transfusions4. medical social services;

blood transfusions

Current assumption whole life policies are sensitive to which of the following? 1. interest rates2. age of the insured3. health of the insured4. current cash value of the policy

interest rates

All of the following are classifications of risk EXCEPT 1. substandard.2. preferred.3. declined.4. non-nicotine.

non-nicotine

Which of the following must be given to the insurer within 20 days after occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible?1. evidence of insurability2. notice of claim3. proof of loss4. supporting evidence for the claim

notice of claim

An agent who offers to pay the first insurance premium as an inducement for an applicant to purchase a policy may be found guilty of1. rebating.2. twisting.3. controlled business.4. unfair discrimination.

rebating

Which is a disadvantage to a flexible premium annuity? 1. the purchaser does not determine the premium amount2. the actual amount of the annuity benefit cannot be determined in advance3. it makes assumptions about future premium payment amounts4. the tax implications are less favorable for the purchaser

the actual amount of the annuity benefit cannot be determined in advance

All of the following are characteristics of variable whole life EXCEPT 1. the premium is level2. there is no guaranteed cash value3. there is no guaranteed minimum death benefit.4. the agent must be licensed in both insurance and securities.

there is no guaranteed minimum death benefit.

Managed care plans increase efficiency by all of the following means EXCEPT1. increasing beneficiary cost sharing.2. controlling inpatient admissions and length of stay.3. selectively contracting with health care providers.4. transferring the management of costs to the insureds.

transferring the management of costs to the insureds.

When can the premiums of an individually owned health insurance policy be deducted from the individual's income tax?1. when the taxpayer's medical expenses exceed 5.0% of adjusted gross income during a taxable year2. when the taxpayer's medical expenses exceed 7.5% of adjusted gross income during a taxable year3. any taxpayer who itemizes deductions may deduct their health insurance premiums4. never because only group owned health insurance premiums may be deducted.

when the taxpayer's medical expenses exceed 7.5% of adjusted gross income during a taxable year

The right to change the beneficiary or dispose of the policy or its benefits in any manner one chooses is reserved to the policyowner UNLESS which of the following is true?

The policyowner has named an irrevocable beneficiary.

In a case where an individual's health is insured by both their own policy and their spouse's policy, which policy pays in the event of an illness?1. Only the individual's policy pays. 2. Both policies pay the full amount. 3. The individual's policy pays first, the spouse's policy pays the remaining up to coverage amount. 4. The policy that was purchased first pays first, the second policy pays the remaining up to coverage amount.

The individual's policy pays first, the spouse's policy pays the remaining up to coverage amount.

Which of the following is TRUE regarding assignment rights for irrevocable beneficiaries? 1. They are MORE likely to receive a loan based on the expectations of the proceeds.2. They are LESS likely to receive a loan based on the expectations of the proceeds.3. They can be changed without the beneficiary's consent after a life changing event.4. They are responsible for premium payment when the policyholder fails to pay.

They are MORE likely to receive a loan based on the expectations of the proceeds.

Which is the primary purpose of Health Reimbursement Accounts (HRAs)?1. To assist covered employees with the payment of medical expenses on a high deductible plan funded through pre-tax contributions.2. To assist covered employees on standard group health insurance plans by using post tax contributions to fund an account to pay medical expenses.3. To assist employees who work for small companies to pay medical expenses on high coinsurance policies.4. To reimburse employees who choose not to participate in the group health coverage provided by their employer.

To assist covered employees with the payment of medical expenses on a high deductible plan funded through pre-tax contributions.

When should a buy-sell agreement include a provision for the buy-out of an owner's business interest in the event of a disability?1. When a company is newly purchased and it is likely the new owner will be disabled within a year.2. When a takeover of a company with an owner who is in ill-health occurs.3. When there is a buy-sell agreement funded with disability insurance to buyout the interest of a deceased owner or partner.4. When there is a buy-sell agreement funded with life insurance to buyout the interest of a deceased owner or partner.

When there is a buy-sell agreement funded with life insurance to buyout the interest of a deceased owner or partner.

Which of the following is an example of a premium payment mode?1. annual premium payment2. payment by check3. automatic deduction of premium4. $200 per policy year

annual premium payment

All of the following statements define preexisting conditions EXCEPT 1. any health condition that existed before the effective date of the policy for which the insured sought treatment.2. any symptom that would cause a reasonable and prudent person to seek diagnosis and medical treatment.3. any chronic health condition disclosed on the application that coverage is excluded for.4. any chronic health condition that presents symptoms and which was unknown at the time of application.

any chronic health condition that presents symptoms and which was unknown at the time of application.