RI Pre-Licensing Life & Health Insurance
Which of the following statements is a producer not allowed to say?
"If my company fails to pay a claim, the Guarantee Association will pay"
An individual working part time has an annual income of $25,000. If this individual has an IRA what is the maximum deductible IRA contribution allowed?
$2,500
K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
$20,000 death benefit
An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a
$25,000 individual whole life policy
S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?
$50,000
In RI the min. rate increase and/or decrease that an insurer may adjust for policy loan interest rates per annum is
.50%
The Director must give how many days notice prior to holding a hearing regarding a producer's unfair or deceptive practices?
10
What is the maximum Social Security Disability benefit amount an insured can receive
100% of the insured's Primary Insurance amount
An insurer must provide an insured with claim forms within ____ days after receiving notice of a loss.
15
Insurers may request a hearing within _______ if their policy is rejected
20 days
What is the "free look" period in RI
20 days
How many hours of continued education must a newly licensed agent complete every 2 years?
24
Within how many days after policy delivery can a Medicare supplement policy be returned for 100% premium refund
30
N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?
30 Pay life
An individual whose producer license request has been denied may appeal the Department's decision within
30 days
How long is the typical free look period for Long Term care insurance policies
30 days
One becomes eligible for Social Security disability benefits after having been disabled for
5 months
A small employer in RI is defined as an employer that is composed of _____ employees
50
Three law partners form a Cross-Purchase Buy Sell Agreement. This agreement is funded with individual life insurance. How many total life policies are needed for this agreement?
6
What is the earliest age a non disabled individual becomes eligible for Medicare Supplement policy?
65 years old
According to RI's rules on disclosure a life insurance applicant is expected to be provided with
A Buyer's Guide and Policy Summary
All students attending a large university could be covered by
A blanket policy
Which statement is TRUE regarding a Variable Whole Life policy?
A minimum guaranteed death benefit is provided
What is RI's definition of Life insurance replacement?
A transaction in which a new policy is bought and an old policy is terminated
What is RI's definition of Life Insurance Replacement?
A transaction in which a new policy is bought and another is terminated
When is the face amount of a Whole Life policy paid?
When the insured dies or the maturity date, whichever comes first
A life insurance policy that provides a policy owner with cash value along with a level face amount is called:
Whole life
A return premium life insurance policy is
Whole life and Increasing term
In a 10 year term life policy contains a renewability provision the policy will renew
Without evidence of insurability
Which of the following activities will NOT result in the suspension of a producer's license
Working for a foreign insurer
A qualified profit sharing plan is designed to
Allow employees to participate in the profits of the company
The amount of monthly disability benefits payable under Social Security is affected by which of the following factors?
Amount of the benefits available from other sources
In Rhode Island, replacement forms are required to be obtained for the replacement of which of the following
Annual Renewable Term (ART) Insurance
Which of the following does the RI Life and Health Insurance Guaranty Association Act apply to?
Annuity Contracts
When a policy owner cash surrenders a Universal Life policy in it's early years this may be considered a red flag for a(n)
Anti-Money laundering violation
When an insurance application is taken by a producer, which of these statements is true?
Any changes made on the application require the applicant's initials
An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the
Applicant's physician
Before a life insurance policy is issued, which of these components of the contract is required?
Applicant's signature on the application
What is the initial source of underwriting for an insurance policy?
Application containing statements from the insured
In RI who is authorized to transact insurance sales for an insurance company?
Appointed producers
Traditional individual retirement annuity (IRA) distributions must start by
April 1st of the year following the year the participant attains age 70.5
Under a Graded Premium policy, the premiums
Are lower during the policy's early years
One major function of RI Guaranty Association is to:
Assess member fees upon all admitted insurers in RI
One major function of the RI guaranty association is to
Assess member fees upon all admitted insurers in RI
What action can a policy owner take if an application for a bank loan requires collateral
Assign policy ownership to the bank
Signed disclosure Der the Fair Credit Reporting Act must be obtained
At the time of sale
Signed disclosures under the Fair Credit Reporting Act must be obtained
At the time of sale
According to RI law when must a producer deliver the outline of coverage to a Medicare supplement applicant
At the time of the application
What action will an insurer take if an interest payment on a policy loan is not made on time?
Automatically add the amount of interest due to the loan balance
Medicare Part C is
Available to those who are enrolled in Medicare part A and B
A pilot applies for Life insurance. The insurer approves the application with a $10 additional monthly premium modification due to the risk involved. The pilot declines the additional premium modification. The insurer will then likely issue the coverage with a(n)
Aviation exclusion
An applicant for a non residential producer license MUST:
Be a producer in good standing in their home state
What is one of the requirements for being an insurance producer in RI?
Be at least 18 y/o
T is the policy owner for a Life Insurance policy with an irrevocable beneficiary designation. If T wishes to change the beneficiary, T must obtain permission from the
Beneficiary
What is considered to be a characteristic of an immediate annuity?
Benefit payments start within one payment period of purchase
T is receiving $3,000/month from a Disability Income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable?
Benefits are taxable to T
Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies
Blanket Accident policy
Defamation may be described as which of the following
Brochures the malign the financial standing of the admitted insurer
This is NOT considered a cost connected to an individual's death
Business expenses
The guarantee of insurability option provides a long term care policy owner the ability to:
Buy additional coverage at a later date
A Health Reimbursement Arrangement MUST be established:
By the employer
When a policy owner exchanges a term policy for a Whole Life policy without providing proof of good health, which of these apply?
Conversion Provision
In the event that an insured's premium is not paid by the due date, the result will be...
Coverage will continue for not more than a maximum of 31 days, beyond which time the policy will lapse
Viatical Settlement death benefit proceeds are payable to the
Current beneficiary
The combination of Whole Life policy and __________ Term insurance is referred to as a family income policy
Decreasing
Credit life insurance is typically issued with which of the following types of coverage?
Decreasing Term
F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?
Decreasing Term Policy
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
Decreasing term
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?
Decreasing term
How are surrender charges deducted in a life policy with a rear-end loaded provision?
Deducted when the policy is discounted
Medicare Part A & Part B do NOT pay for
Dental work
What is the purpose of the USA patriot act
Detect and deter terrorism
Which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual Accident and Health insurance
Disability income policy premiums are tax-deductible
This BEST describes the intent of a Coinsurance clause in a Major Medical policy
Discourages over-utilization of the insurance coverage
Social Security does not provide benefits for:
Dismemberment
How are Roth IRA distributions normally taxed?
Distributions are received tax-free
An insurance company incorporated under the laws of the state in which its home office is located is called a(n)__________ company
Domestic
P owns a $25,000 Life Policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does P own?
Endowment in age 70
"A producer does not have the authority to change a policy or waive any of its provisions" The Health provision that best describes this statement is called the:
Entire Contract
When an individual is planning to protect his family with whole life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve?
Establishes the needs of the individual and their dependents
Which of these statements about a Guaranteed Insurability Option Rider is NOT TRUE
Evidence of insurability is required when the option is exercised
N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot?
Exclusion
An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n)
Exclusion for the medical condition
A Universal Life policy is sometimes referred to as an unbundled life policy because the owner can see the interest earned, cost of insurance and the
Expense charges
Term insurance has which of the following characteristics?
Expires at the end of the policy period
D owns a whole life policy that was purchased 10 years ago. If the premium payments suddenly stop and D takes no additional action which Nonforfeiture Option will the insurer likely proceed with:
Extended term
This is not a characteristic of an Adjustable Life policy
Face amount can be adjusted using policy dividends
An example of an unfair claims practice would be
Failing to effectuate prompt, fair, and equitable settlements of a claim
From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant?
Fair Credit Reporting Act
What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?
Family Maintenance Policy
Which of these is NOT a source of funding for Social Security benefits?
Federal Government
T is a producer, and when hired, is reminded that he has a responsibility to handle client's funds in an honest and ethical manner. This responsibility is referred as:
Fiduciary Responsibility
Taking receipt of premiums and holding them for the company is an example of:
Fiduciary Responsibility
N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase?
Fixed deferred
The payments on Q's annuity are no less than $250 quarterly. Which of the following annuities does Q own?
Flexible Installment Deferred
What action should a producer take if the initial premium is NOT submitted with the application?
Forward the applicant to the insurer without the initial premium
A producer knowingly assists a client in withholding material facts while taking an Accident and Health insurance application. His action may be considered:
Fraud
Under an Individual Health insurance policy, the Time Limit of Certain Defenses provision states that non fraudulent misstatements first become incontestable two years ago
From the date the policy was issued
S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits?
Full benefits are payable under the Master contract
What is considered a valid reason for small businesses to insure the lives of its major shareholders?
Fund for buy-sell agreement
A life insurance application may be rejected on the basis of all of these factors EXCEPT
Gender
Which requirement must be met for an association to be eligible for a group life plan?
Group was formed for a purpose other than selling insurance
Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?
Guaranteed Insurability rider
This is NOT. characteristic of a Health Reimbursement Arrangement (HRA)
HRA is entirely funded by the employee
The Director may issue a Temporary license in order to
Help a deceased producer's family member by allowing time for the sale of business
Under a Basic Medical Expense policy, what does the hospitalization expense portion cover?
Hospital room and board
Which of these is NOT a reason for purchasing life insurance on the life of a minor?
If both parents were to die, it would provide death benefits to the child
In regards to representations or warranties, this statement is TRUE
If material to the risk, false representations will void a policy
This statement of Health Reimbursement Arrangements (HRA) is CORRECT
If the employee paid for qualified medical expenses, the reimbursements may be tax free
How would a continent beneficiary receive the policy proceeds in an Accidental death and dismemberment (AD&D) policy
If the primary beneficiary dies before the insured
The type of annuity that can be purchased with one monetary deposit is called a(n)
Immediate annuity
W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n)
Immediate annuity
A long-term care rider in a life insurance policy pays a daily benefit in the event of
Inability of the insured to perform more than 2 Activities of Daily Living (ADL)
Which of the following actions require a policy owner to provide proof of insurability in an Adjustable Life policy?
Increase face amount
Which of these retirement plans an be started by an employee even if another plan is in existence?
Individual Retirement Account (IRA)
K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n)
Installment refund annuity
A life insurance policy would be considered a wagering contract WITHOUT:
Insurable Interest
When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have
Insurable interest in the proposed insured
When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have:
Insurable interest in the proposed insured
Who makes the legally enforceable promises in a unilateral contract?
Insurance company
If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of?
Insured
In a Key Employee Life Insurance policy the third party owner CANNOT be
Insured
Who has the option to renew a Renewable Term Policy
Insured
What is the initial requirement for an insured to become eligible for benefits under the Waiver of Premium provision?
Insured myst be under a physician's care
If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?
Insured's continent beneficiary
In RI which of the following actions by an insurer is NOT allowed in regards to group life insurance conversion privelages?
Insurer requires evidence of insurability
T was treated for an ailment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterwards.How will the insurer likely consider this condition?
Insurer will likely treat as a pre-existing condition which may not be covered for one year
The ____________ clause identifies which losses resulting from an accident or sickness are insured by the policy
Insuring
The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n)
Insuring agreement
Which of the following health insurance policy provisions specifies the health care services a policy will provide
Insuring clause
How are policy owner dividends treated in regards to income tax
Interest on accumulations is taxed
Which of these types of coverage is best described as short term medical policy
Interim coverage
A life insurance arrangement which circumvents insurable interest statuses is called:
Investor originated life insurance
A policy owner would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation would fulfill this need?
Irrevocable
A policy owner's rights are limited under which beneficiary designation
Irrevocable
Dividends paid from a life insurance policy are
Issued by the insurer
Which statement regarding third party ownership of a life insurance policy is true?
It is used extensively in estate-planning as well as business circumstances
Who owns a stock company?
Its stockholders
What type of policy covers 2 lives and pays the face amount after the first one dies?
Joint life policy
A sole proprietorship may use this plan ONLY if the employees of this business are included
Keogh pension plan
Stranger Originated Life Insurance (STOLI) has been found to be in violation of:
Legal purpose (insurable interest)
Which of these would be considered a Limited Pay Life policy?
Life paid up to age 70
Every HMO conducting business in the state of RI must provide all the following disclosures to newly enrolled subscribers EXCEPT
List of current shareholders of the organization
An insured's inability to perform two or more activities of daily living may trigger which type of policy rider?
Long term care
In the state of RI all individual and group Medical expense plans must provide Mandated Benefits coverage for which of the following conditions?
Lyme's disease
Comprehensive Major Medical policies usually combine:
Major Medical with Basic Hospital/surgical coverage
Pre-hospitalization authorization is considered an example of
Managed care
A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid
Mandatory income tax withholding on the transfer amount
According to RI law which of the following information does NOT need to be obtained by a producer recommending an annuity purchase?
Marital Status
The Health Insurance program which is administered by each state and funded by both federal and state governments is called:
Medicaid
An unemployed Medicare enrollee suffers 3 hospital admissions in the course of a year. Which of the following health plans provides the BEST method of coverage for excess hospital charges?
Medicare Supplement
A long term policy may exclude coverage for which of the following conditions
Mental or Nervous disorders
A Long Term care policy may exclude coverage for which of the following conditions
Mental or nervous disorders
A producer making an unfair comparison of two insurance policies is considered to be engaging in
Misrepresentation
Advising a proposed insured that the required premium is lower than it actually would be, given the current rate classification is an example of
Misrepresentation
When a life insurance policy exceeds certain IRS table values, the result would create which of the following?
Modified Endowment Contract (MEC)
This is not an insurance products requirement of an agent to have proper FINRA Securities registration in order to sell them
Modified whole life
Periodic health claim payments MUST be made at least
Monthly
Which of these is NOT an element of Life Insurance premiums
Morbidity Rate
This best describes how a PPO is less restrictive than a HMO
More physicians to choose from
Which of these statements concerning an individual straight life annuity is accurate?
Payments are made to annuitant for life
Which life insurance rider typically appears on a Juvenile life insurance policy?
Payor Benefit rider
Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policy owner becomes disabled?
Payor Clause
This does NOT constitute policy delivery
Policy issued with a rating
The underwriting process does NOT involve this
Policy loan
The _____________ is authorized to assign a life insurance policy as collateral for a loan
Policy owner
Who has the right to change a revocable beneficiary?
Policy owner
With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period?
Policy owner additional time to pay overdue premiums
Which of the following information is not required to be included in a whole life policy?
Policy's guaranteed dividend table
This characteristic is consistent with a Straight life policy
Premiums are payable for as long as there is insurance coverage in force
Which statement is correct regarding the premium payment schedule for Whole Life policies
Premiums are payable to throughout the insured's lifetime/coverage lasts until death of the insured
This statement BEST describes the Waiver of Premium provision in an Accident and Health policy
Premiums are waived after the insured has been totally disabled for a specified time period
Which of the following actions is NOT possible with a Universal Life policy
Premiums may be applied as a credit against income tax
The Coordination of Benefits provision:
Prevents an insured covered by two health plans from making a profit on a covered loss
What is NOT a type of agent authority
Principal
In a life insurance transaction when must the producer disclose the name of the insurer?
Prior to the sales presentation
K is the insured an P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true
Proceeds will be payable to K's estate if P dies at the same exact time
A retirement plan that sets aside part of the company's net income for distributions to qualified employees is called a
Profit sharing plan
What is the consideration given by an insurer in the Consideration clause of a life policy
Promise to pay a death benefit a named beneficiary
A major medical policy typically:
Provides benefits for reasonable and necessary medical expenses, subject to policy limits
All of these are considered sources of underwriting information about an applicant EXCEPT
Rating Services
The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called
Reinstatement
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?
Request of the change will be refused
In the state of RI Prepaid Legal Services insurance plans
Require that the attorney be licensed in the state of RI or any other state where the attorney provides basic legal services
In order to renew a producer's license in Rhode Island, continuing education credits are required for each of the following EXCEPT:
Residents holding a license for 25 consecutive years and are under the age of 55 at time of renewal
With Optionally Renewable Health policies, the insurer may
Review the policy annually and determine whether or not to renew it
J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used?
Revocable
This is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party
Subrogation
What would the Medical Information Bureau (MIB) identify?
Testing positive for marijuana use from a previous screening
In the course of making a sales presentation, a producer may not say ...
The Rhode Island Guaranty Association will protect you
This statement is CORRECT about an agent who is taking an insurance application?
The agent should have the applicant initial any changes made on an application
Which statement regarding a Key Employee Life Policy is NOT true
The beneficiary is named by the kay employee
The Common Disaster clause provides that if both the insured and sole named beneficiary were to die in a common accident which of the following is true
The clause provides the payment of proceeds to the insured's estate
In the state of RI commissioners may be paid to a non licensed individual if
The commissions were earned on a renewal premium and the individual held the proper license at the time of the original sasle
Who is normally considered to be the owner of a 403(b) tax-sheltered annuity?
The employee
This is TRUE regarding a group accident and health policy issued to an employer
The employer receives the policy and each employee is issued a certificate
J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?
The gross premium is higher on a monthly payment mode as compared to being paid annually
In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and
The initial premium
A policy adhesion can only be modified by whom?
The insurance company
A policy of adhesion can only be modified by whom?
The insurance company
A Medicare Supplement Policy may be cancelled for which of the following reasons?
The insured fails to pay the premium
A Medicare Supplement policy may be cancelled for which of the following reasons?
The insured fails to pay the premium
The amount of coverage on a group credit life policy is limited to
The insured's total loan value
This statement BEST defines usual, customary, reasonable (UCR) charges
The maximum amount considered eligible for reimbursement by an insurance company under a health plan
Health policies sold in RI are REQUIRED to begin medical coverage of a newborn beginning at
The moment of birth
A life insurance policy owner may sell their policy to a(n) ___________ in order to receive a percentage of the policy's face value
Viatical Settlement Provider
The Dept. of Business Regulations may revoke a producer's license for each of the following offenses EXCEPT:
Violating an insurer's internal control requirements
When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take
Void the policy only if it is discovered during the Contestable period and proven to be material
What is the primary factor that determines the benefits paid under a disability income policy
Wages
The provision in a Group Health Insurance policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as:
Waiting Period
The part of a life insurance policy guaranteed to be true is called a(n)
Warranty
Insurers issuing Stop-Loss insurance policies in the state of RI must comply with which of the following?
When advertised the elements of coverage including the amount of stop-loss insurance must be disclosed
At what point does an informal contract become binding?
When one party makes an offer and the other party accepts that offer
When must insurable interest be present in order for a life insurance policy to be valid?
When the application is made
An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?
When the conditions of the receipt are met
When is the face amount of a Whole Life Policy paid?
When the insured dies or at the policy's maturity date, whichever happens first
A level premium indicates
the premium is fixed for the entire duration of the contract
Insurance policies are offered on a "take it or leave it" basis which makes them:
Contracts of Adhesion
C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on her life, which of these statements would be true?
ABC is the policy owner C is the insured ABC is the beneficiary
The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n)
Accidental death and dismemberment (AD&D)
P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount?
Accidental death and dismemberment clause
The director of Business Regulation CANNOT take which of the following actions?
Activate an insurer's financial reserves
A "reimbursement policy" pays what amount of covered Long -Term care expenses
Actual covered expenses up to the daily maximum
B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of
Additional Whole Life coverage at specified times
An Accident and Health policy owner may NOT
Adjust the premium payments
In Health Insurance policies, a waiver of premium provision keeps the coverage in force without premium payment
After an insured has become totally disabled as defined in the policy
According to the Affordable Care Act a dependent child's eligibility status is determined by
Age (up until 26)
How long does coverage normally remain on a limited pay life policy
Age 100
Under a long term care policy this is typically excluded/limited
Alcohol Rehabilitation
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features?
Aleatory
An example of life insurance policy replacement would be which of the following
Cash surrender an existing life policy and purchasing a new life policy
All individuals covered under a group contract will receive a(n)
Certificate
What type of employee welfare plans are not subject to ERISA regulations?
Church plans
Which of these actions is taken when a producer uses Life insurance policy as collateral for a bank loan
Collateral assignment
Advertisement for Accident and Health insurance can be considered all of the following EXCEPT
Company's financial rating
K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?
Conditional
The incontestable clause allows an insurer to:
Contest a claim during the contestable period
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to:
Continue group health benefits
A prospective insured completes and signs an application for health insurance but intentionally conceals information about a pre-existing heart condition. The company issues the policy. Two months later, the insured suffers a heart attack and submits a claim. While processing the claim, the company discovers the pre-existing condition. In this situation, the company will
Continue the coverage and exclude the heart condition
Which of these require an offer, acceptance, and consideration?
Contract
This statement is true regarding a minor beneficiary?
Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
When the Insurance Commissioner deems the public interest would best be served by the issuance of a temporary license the commissioner may issue the license for a period
Not to exceed a max of 180 days without requiring an examination
When the insurance Commissioner deems hat the public interest would best be served by the issuance of a temporary license, the Commissioner may issue this license for a period
Not to exceed a maximum of 180 days without requiring an examination
The Notice of Claims provision requires a policyowner to
Notify an insurer of claim within a specified time
Generally, how long is a benefit period for a Major Medical Expense Plan
One year
This statement concerning Settlement options is NOT true
Only the beneficiary may select
P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability?
P will still receive declared dividends
K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Dividend Option should she choose
Paid-Up Additional Insurance
A Business Disability Buyout plan policy is designed to:
Pay benefits to the corporation or other shareholders
M had an annual life premium payment due January 1st. She died January 10 without making the premium payment. What action will the insurer take?
Pay face amount minus the past due premium
Which of these terms accurately defines an underwriters assessment of information on a health insurance application
Risk Classification
Which factors are taken into consideration when an insurance company determines the premium rate for a whole life policy on an applicant
Risk classification
What is the Suicide provision designed to do?
Safeguard the insurer from an applicant who is contemplating suicide
This statement BEST describes mental care indemnity coverage?
Services are reimbursed after insurer receives the invoice
P is a producer who notices 5 questions on a life application were not answered. What actions should P take?
Set up a meeting with the applicant to answer the remaining questions
Annuity suitability regulations in RI require that a producer obtain each of the following criteria EXCEPT:
Sexual Orientation
Annuity suitability regulations in the state of RI require that a producer obtain each of the following criteria EXCEPT
Sexual orientation
Rebating can be described as which of the following?
Sharing commissions with a client
The Director of Business Regulation may revoke a producer's license upon the finding of
Sharing of commissions
The Director of Business Regulation may revoke a producer's license upon the finding of...
Sharing of commissions
P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA laws, which of the following statements is TRUE?
She DOES need to provide evidence of insurability
An immediate annuity consists of a
Single Premium
Which mode of payment is NOT used by health insurance policies?
Single premium
Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary
Split dollar
Under a Renewable Term policy
The renewal premium is calculated on the basis of the insured's attained age
In RI misappropriation of funds on the part of a licensed producer is defined as
Theft
Stranger Owned Life Insurance (STOLI) is when a person purchases life insurance only to sell to a(n)
Third party with no insurable interest
Medicare is not intended for
Those enrolled as a full time student
How does a typical life variable policy investment account grow?
Through mutual funds, stocks and bonds
Essential Benefits without annual and lifetime limits are required on any health policy purchased
Through the Federal Marketplace
What is the elimination period of an individual disability policy?
Time period a disabled person must wait before benefits are paid
In an insurance contract the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?
Unilateral
Life and health insurance policies are
Unilateral contracts
Which of the following Life insurance policies combine term insurance with an investment element?
Universal Life
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
Universal life
A Life insurance policy owner would like to take out a policy loan against the cash value in his Whole Life policy. The interest rate applied to this loan may vary over time. This is referred to as a(n)__________ rate loan
Variable
A(n)____________ annuity pays benefits based on units rather than stated dollar amounts
Variable
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
Variable life
Term Life Policies that have the ability to be converted by permanent coverage may do so during a specific time period. This conversion period
Varies according to the contract
Which of the following statements is a producer not permitted to say
"If my company fails to pay a claim, the Guarantee Association will pay"
In the course of making a sales presentation, a producer may not say which of the following?
"The Rhode Island Guaranty Association will protect you"
The Director must give how many days notice prior to holding a hearing regarding a producer's unfair or deceptive practice?
10 days
How many hours of continuing education must a newly licensed agent complete by 2 years?
24 hours
RI requires that an insurance producer must complete _______ hours of continuing education on the subject of ethics every 2 years
3 hours
Interest on death benefit proceeds is payable as which of the following?
Interest is assessed at the rate of 9% from the date of the death of the insured and added to the death benefit proceeds
In the state of RI all individual and group Medical Expense plans must provide Mandated Benefits coverage for which of the following conditions?
Lyme's disease
Advising a proposed insured that the required premium is lower than it actually would be, given the correct rate classification, is an example of
Misrepresentation
Convincing a prospective insured to buy an insurance policy based on exaggerations is called
Misrepresentation
When soliciting an Accident and Health insurance plan, a producer advises the applicant that smoker a non smoker rates are the same. The producer's advice is an act of:
Misrepresentation
Which type of insurance company allows their policy owners to elect a governing body?
Mutual
Under RI law, a producer may NOT state which of the following?
Mutual insurers pay dividends just as though you held stock in the company
Under Rhode Island law, a producer may NOT state which of the following
Mutual insurers pay dividends just as though you held stock in the company
An example of rebating would be
Offering a client something of value not stated in the contract in exchange for their business
Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent
Only if the child is incapable of of employment and chiefly dependent on the policy owner
In RI a Fraternal Benefit Society is which of the following?
Order or lodge soliciting insurance from its members
Which of the following correctly describes a certificate of authority?
Permits an insurance company to transact business in RI
Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation?
Policy was returned within the free look period, premium will be fully returned
Life and Health Producers, who hold Property Casualty authority , are required to complete timely continuing education credits in order to renew their license. Which of the following requirements must be satisfied?
Total of 24 credit hours in Life and Health or Property Casualty. 3 of which must be in ethics
Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?
Variable Universal Life
Insurers using stop loss insurance policies in RI must comply with which of the following?
When advertised the elements of coverage including the amount of stop loss insurance must be disclosed
According to the Affordable Care Act, which of the following coverages is not required?
Coverage for cosmetic surgery
At what point does an insurer begin to owe interest on death proceeds payable to a life insurance beneficiary
Date of death
How often must an insurance producer license be renewed?
Every 2 years
An individual whose producer license request has been denied may appeal the department's decision within
30 days
If an application for a producer license is denied, the applicant may make a written request for a hearing to appeal this decision within
30 days
If an application for producer license is denied, the applicant may make a written request for a hearing to appeal this decision within
30 days
Long Term Care insurance applicants are provided the right to return their policy for a full refund of premium within how many days of its delivery?
30 days
In RI, Long Term Care policies may exclude insuring pre-existing conditions for a maximum of _______ after the effective date of coverage?
6 months
The waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond
6 months
In RI all Accident and Health insurance plans are required to provide coverage for the services of properly licensed midwives in accordance with each of the following requirements EXCEPT:
At home birthing services are covered
One definition of replacement is "the act of replacing an existing insurance policy with another" Replacement is
Closely regulated and requires full disclosure
In RI in an insurer licensed to conduct business in RI but domiciled in NJ is called a(n)
Foreign Company
In RI an insurer licensed to conduct business in RI, but domiciled in NJ, is called a(n)
Foreign company
A producer knowingly assists client in withholding material facts while taking in an Accident and Health insurance application. His action may be considered which of the following:
Fraud
The Life and Health Insurance Guaranty Association is
Funded by admitted insurance companies through assessments
A Long-Term policy sold in RI MUST be
Guaranteed renewable
Variable life products require a producer to
Hold a Life insurance license and securities license
Upon finding a producer guilty of misappropriating premium funds, which of the following actions may the Dept. of Business Regulations take?
Impose a $50,000 penalty
Upon finding a producer guilty or misappropriating funds which of the following actions must the Department of Business Regulations take?
Impose a $50,000 penalty
In a life insurance transaction, when must the producer disclose the name of the insurer?
Prior to the sales presentation
RI insurance law requires that a Policy Summary which is a statement of benefit information and policy cost must be disclosed to the insured. According to RI regulations all of the following information must be included with the exception of
Producer Commission Scales
Which of the following is an example of the Unfair Trade Practice known as rebating?
Sharing the commissions with the insured
A mutual insurance company and a stock ins. company have one main difference between them. What is it?
Stock company is owned by shareholders . Mutual company is owned by policyholders
In state of RI commissions may be paid to a non licensed individual if
The commissions were earned on a renewal premium and the individual held the proper license at the time of the original sale
