Simulated Exam
The termination of marital property rights may be reversed for all of the following reasons EXCEPT (Choose from the following options) 01. The spouse was named as beneficiary by class. 02. The divorce or annulment decree or judgment is not recognized as valid. 03. The spouse named as beneficiary has obtained or consented to a final decree or judgment of an annulment, divorce or separation. 04. The beneficiary can prove the couple were living together as husband and wife or planning to remarry.
03. The spouse named as beneficiary has obtained or consented to a final decree or judgment of an annulment, divorce or separation.
Which statement best defines a Multiple Employer Welfare Arrangement (MEWA)? (Choose from the following options) 01. A plan that provides hospice care for terminally ill employees 02. A government health plan that provides health care for the unemployed 03. A group health plan that covers medical expenses arising from work related injuries 04. A joining together by employers to provide health benefits for employee
04. A joining together by employers to provide health benefits for employee
Which of the following insurance options would be considered a risk-sharing arrangement? (Choose from the following options) 01. Stock 02. Mutual 03. Surplus lines 04. Reciprocal
04. Reciprocal (When insurance is obtained through a reciprocal insurer, the insureds are sharing the risk of loss with other subscribers of that reciprocal)
Which of the following is true regarding taxation of accelerated benefits under a life insurance policy? (Choose from the following options) 01. They are always taxable to chronically ill insured. 02. They are always taxed. 03. There is a 10% penalty for early distribution of the death benefit. 04. They are tax free to terminally ill insured.
04. They are tax free to terminally ill insured. (When accelerated benefits are paid under a life insurance policy, they are received tax free by terminally ill insured, and tax free up to a limit for chronically ill insured)
Which of the following would describe a legal document which would dictate who can buy a deceased partner's share of a business and for what amount? (Choose from the following options) 01. Profit and loss agreement 02. Key person agreement 03. Split dollar agreement 04.Buy-sell agreement
04. buy-sell agreement
For group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense?
100% (For group medical and dental expense insurance any premium paid by the employer is deductible as a business expense)
Most vision expense insurance plans restrict benefits to one exam and one pair of glasses in what time period?
12 months
What is the minimum age for obtaining an insurance producer's license in this state?
18
When a producer died, his surviving spouse needed to maintain the insurance agency until it could be sold. Without passing an examination, she could qualify for a temporary license for a maximum period of
180 days
An insurance company forwards fixed annuity premiums to their general account, where the money is invested. The guaranteed minimum interest is set at 2.5%. During an economic downswing, the investments only drew 2%. What interest rate will the insurer pay to its policyholders?
2.5%
A policyowner has sold his life insurance policy to a viatical settlement provider. How long does the provider have to inform the policyowner's insurer that his life policy has been viaticated?
20 days
What is the maximum age for qualifying for a catastrophic plan?
30 (Young adults under age 30 and individuals who cannot obtain affordable coverage (have a hardship exemption) may be able to purchase individual catastrophic plans that cover essential benefits)
When a producer holding a certificate or a broker's license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within
30 days
Licensees must make a report of any action taken against them in another jurisdiction or by another governmental agency in Pennsylvania within how many days of the final disposition of the matter?
30 days (Licensees must make a report, of any action taken against them in another jurisdiction or by another governmental agency in Pennsylvania within 30 days of the final disposition of the matter)
In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?
45 Days (If a policy premium is not paid by the end of the grace period, and the policy lapses, an insured may pay the outstanding premium and have the policy reinstated. If the insurer does not refuse reinstatement within 45 days from the date the conditional receipt was issued, the policy will be automatically reinstated)
One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups of
50 or more
A licensed producer moving to Pennsylvania may become licensed as a resident if the producer submits a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state?
90
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the
A Incontestability clause. (If an insurer wishes to contest any statements on an application, they must do so within the first two years)
A provision in a life insurance policy that provides for the early payment of some portion of the policy face amount should the insured suffer from a terminal illness or injury is called
Accelerated Benefit provision.
When the insured purchased his health policy he was a window washer. He has since changed occupations and now manages a library. If the insurer is notified of the insured's change of occupation, the insurer should
Adjust the benefit in accordance with a decreased risk. (Change of occupation provision allows the insurer to adjust benefits if the insured changes occupations)
An insured gave birth to her first child by Caesarean section. Her health insurance covered a stay of up to 96 hours in the hospital, but her doctor allowed her and the baby to leave after only 72 hours. What other coverage must the insured's health insurance now allow her?
At least 1 home health care visit within 48 hours of discharge from the hospital (A health insurance policy may provide for hospital stays shorter than 48 hours for vaginal births and 96 hours for Caesarean section births, but only if the attending physician decides that the mother and newborn can be discharged safely. The policy must provide coverage for at least one home health care visit within 48 hours after discharge when discharge occurs earlier than the prescribed times)
A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?
Automatic premium loan
All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT (Choose from the following options) 01. Fully insured status. 02. Waiting period of 5 months. 03. Being age 65. 04. Inability to perform any gainful work.
Being age 65. (The term fully insured refers to someone who has earned 40 quarters of coverage (the equivalent of 10 years of work), and is therefore entitled to receive Social Security retirement, Medicare, and survivor benefits. The waiting, or elimination period for Social Security disability benefits is 5 months)
A producer's license must be renewed
Biennially (every 2 years)
All of the following apply to short-term disability plans EXCEPT (Choose from the following options) 01. Group plans can provide benefit periods of up to 52 weeks. 02. Individual plans can provide benefit periods of up to 2 years. 03. A benefit period of 26 weeks is most common for group plans. 04. Both group and individual plans are renewable.
Both group and individual plans are renewable. (Short-term disability plans are not renewable)
Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as
Coercion. (These are all considered to be Unfair Trade Practices, which are major violations that can lead to heavy penalties. Coercion, for example, is when the bank won't give you an auto loan unless you agree to buy auto insurance from them)
A producer who fails to separate premium monies from his own personal funds is guilty of
Commingling. (It is illegal for insurance producers to commingle premiums collected from the applicants with their own personal funds)
A key person insurance policy can pay for which of the following? (Choose from the following options) 01. Costs of training a replacement 02. Loss of personal income 03. Workers compensation 04. Hospital bills of the key employee
Costs of training a replacement. (A key person insurance policy will pay for costs of running the business and replacing the employee.)
Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?
Disability Buy-Sell (The Disability Buy-Sell agreement specifies how a business will pass between business owners if one of the owners dies or becomes disabled)
The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the
Entire contract (limits the use of evidence other than the contract and attached application in a test of the contract's validity. This is a MANDATORY provision in life insurance)
Items stipulated in the contract that the insurer will not provide coverage for are found in the
Exclusions clause. (Exclusions are restrictions of coverage as stated in the policy)
Which policy component decreases in decreasing term insurance?
Face Amount (decreasing term policies feature a level premium and a death benefit that decreases each year over the duration of the policy term)
An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?
Fair Credit Reporting Act (The Fair Credit Reporting Act governs what information can be collected and how the information can be used)
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?
Family term rider (A single rider that provides coverage on every family member is called a "family rider")
Health coverage becomes effective when the
First premium has been paid and the application has been approved.
What provision in an insurance policy extends coverage beyond the premium due date?
Grace period (mandatory provision in all life/health policies that provides coverage for a period of time after the premium becomes past due)
Regarding long-term care coverage, as the elimination period gets shorter, the premium
Increases (LTC policies also define the benefit period for how long coverage applies, after the elimination period. The benefit period is usually 2 to 5 years, with a few policies offering lifetime coverage. Obviously the longer the benefit period, the higher the premium will be; and the shorter the elimination period, the higher the premium will be)
An underwriter may obtain information on an applicant's hobbies, financial status, and habits by ordering a(n)
Inspection report. (An inspection report may be ordered about an applicant from an independent investigating firm or credit agency. It is a general report of the applicant's finances, character, work, hobbies, and habits)
A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?
Joint Life (Joint life annuity settlement option pays benefits to two or more annuitants, but stops upon the death of the first)
In group insurance, what is the policy called?
Master policy (In group insurance the policy is called the master policy and is issued to the policyowner, which could be the employer, an association, a union, or a trust)
An insurance company wants to obtain the insurance history of an applicant. Which source releases coded information to insurers regarding information included on previous insurance applications?
Medical Information Bureau (This information alone cannot be used to justify declining a risk, but is helpful in providing insurers with information)
What is the name of a clause that is included in a policy that limits or eliminates the death benefit if the insured dies as a result of war or while serving in the military?
Military service or war (There are two different types of exclusions that may be used by life insurers that limit the death benefit if the insured dies as a result of war or while serving in the military. The status clause excludes all causes of death while the insured is on active duty in the military. The results clause only excludes the death benefit if the insured is killed as a result of an act of war)
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are
Not taxable since the IRS treats them as a return of a portion of the premium paid
In long-term care insurance, what type of care is provided with intermediate care?
Occasional nursing or rehabilitative care (Intermediate care is nursing and rehabilitative care provided by medical personnel for stable conditions that require assistance on a less frequent basis than skilled care)
A guaranteed renewable health insurance policy allows the
Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.
Under the Fair Credit Reporting Act, if a consumer challenges the accuracy of the information contained in a consumer or investigative report, the reporting agency must
Respond to the consumer's complaint. (The consumer has the right to request the information on the report, the reasons for turn down and any adverse underwriting decisions. The reporting agency is required to respond to the consumer's complaint, and, if necessary, to reinvestigate the report)
Your client is planning to retire. She has accumulated $100,000 in a retirement annuity, and now wants to select the benefit option that will pay the largest monthly amount for as long as she lives. As her agent, you should recommend
Straight Life (With the straight life option, the annuity payments cease at death. However, because there are no other guarantees that might incur additional charges, this option provides the highest monthly benefits for an individual annuitant)
Which of the following would an accident-only policy NOT cover? (Choose from the following options) 01. Death from a motorcycle accident 02. Amputation of a leg that was burned during a house fire 03. Surgery to repair a wrist damaged by tendonitis. 04. Hospitalization costs due to a boating accident
Surgery to repair a wrist damaged by tendonitis (only covers accidents, not sickness)
Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to
The insured (Payments for loss of life benefits are to be made to the designated beneficiary. If no beneficiary has been named, payment proceeds are to be paid to the deceased insured's estate. Claims other than death benefits are to be paid to the insured or the insured's estate, unless otherwise assigned by the insured)
How does a member of an HMO see a specialist?
The primary care physician refers the member
Which provision states that the insurance company must pay Medical Expense claims immediately?
Time of Payment of Claims (The Time Payment of Claims provision requires that claims will be paid immediately upon receipt of proofs of loss except for periodic payments, which are to be paid as specified in the policy)
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of
Twisting (Twisting is a misrepresentation that persuades an insured or a policyowner, to his or her detriment, to cancel, lapse, or switch policies)
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?
Universal life (The policyowner has the flexibility to increase the amount of premium going into the policy and to later decrease it again. In fact, the policyowner may even skip paying a premium and the policy will not lapse as long as there is sufficient cash value at the time to compensate for the nonpayment of premium)
An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this?
Unpaid premium
How long will the beneficiary receive payments under the single life settlement option?
Until the beneficiary's death (The Single Life Option can provide a single beneficiary income for the rest of his/her life. Upon the death of the beneficiary, the payments stop)
Who negotiates viatical settlement contracts on behalf of a viator?
Viatical settlement broker
When would a 20-pay whole life policy endow?
When the insured reaches age 100 (A limited-pay whole life policy, just like straight life, endows for the face amount if the insured lives to age 100. The premium is, however, completely paid off in 20 years)
The Commissioner of Insurance is placed in office by which means?
an appointment by the governor.
In disability income insurance, the own occupation definition of disability applies
for the first 2 years of a disability
What are the two components of a universal policy?
insurance and cash account (A universal policy has two components: an insurance component and a cash account The insurance component of a universal life policy is always annually renewable term insurance. The cash account accumulates on a tax deferred basis each year and earns either the guaranteed contract rate)
Which type of misrepresentation persuades an insured, to their detriment, to cancel, lapse, or switch policies from one to another?
twisting
At age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs? (Choose from the following options) 01. Adjustable Life 02. Single Premium Whole Life 03. Interest-sensitive Whole Life 04. Decreasing Term
01. Adjustable Life (Adjustable life policies allow for increases or decreases in the face amount or premium, so long as the premium is sufficient to pay for the mortality. Any increase in face amount requires proof of insurability.)
If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's (Choose from the following options) 01. Ancestry. 02. Credit history. 03. Habits. 04.. Prior insurance.
01. Ancestry. (The Fair Credit Reporting Act regulates what information may be collected and how the information may be used. Consumer Reports include written and/or oral information regarding a consumer's credit, character, reputation, and habits collected by a reporting agency from employment records, credit reports, and other public sources. Ancestry is not a relevant factor assessed in these reports)
What term best describes the act of withholding material information that would be crucial to an underwriting decision? (Choose from the following options) 01. Concealment 02. Withholding 03. Leading 04. Breach of warranty
01. Concealment. (Concealment occurs when a person withholds a material fact that is crucial to making a decision. In insurance, this involves withholding information that would be crucial to underwriting decisions. For instance, if someone omitted a 10-year smoking history from a health insurance application, this person would be guilty of concealment)
All of the following are features and requirements of the Living Needs Rider EXCEPT (Choose from the following options) 01. Diagnosis must indicate that death is expected within 3 years. 02. It is usually available at no additional charge. 03. The remainder of the policy proceeds is payable to the beneficiary at the insured's death. 04. It provides funds for medical and nursing home expenses to a terminally ill insured.
01. Diagnosis must indicate that death is expected within 3 years.
Which of the following will NOT be considered unfair discrimination by insurers? (Choose from the following options) 01. Discriminating in benefits and coverages based on the insured's habits and lifestyle 02. Charging applicants with similar health histories different premiums based on their ethnicit 03. Cancelling individual coverage based on the insured's marital status 04. Assigning different risk classifications to applicants based on gender identity
01. Discriminating in benefits and coverages based on the insured's habits and lifestyle
Which is TRUE about the cash surrender nonforfeiture option? (Choose from the following options) 01. Funds exceeding the premium paid are taxable as ordinary income. 02. After the cash surrender, the insured is covered for a grace period of one month. 03. The policy remains active for some time after the policyholder opts for cash surrender. 04. The policyholder receives the original cash value of the policy.
01. Funds exceeding the premium paid are taxable as ordinary income.
All of the following are examples of risk retention EXCEPT (Choose from the following options) 01. Premiums. 02. Deductibles. 03. Copayments. 04. Self-insurance.
01. Premiums (Retention is a planned assumption of risk, or acceptance of responsibility for the loss by an insured through the use of deductibles, copayments, or self-insurance)
Which is NOT true about beneficiary designations? (Choose from the following options) 01. The beneficiary must have insurable interest in the insured. 02. The beneficiary may be a natural person. 03. The policy does not have to have a beneficiary named in order to be valid. 04. Trusts can be valid beneficiaries.
01. The beneficiary must have insurable interest in the insured. (A beneficiary is the person or interest to whom the policy proceeds will be paid upon the death of the insured. Beneficiaries do not have interest in the policy holder)
Which of the following best describes what the annuity period is? (Choose from the following options) 01. The period of time during which accumulated money is converted into income payments 02. The period of time from the accumulation period to the annuitization period 03. The period of time during which money is accumulated in an annuity 04. The period of time from the effective date of the contract to the date of its termination
01. The period of time during which accumulated money is converted into income payments
Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated? (Choose from the following options) 01. Annuity certain 02. Fixed annuity 03. Refund life 04. Variable annuity
01. annuity certain
Which of the following is an example of prosthodontic dental care? (Choose from the following options) 01. Bridgework 02. Crowns 03. Fillings 04. Braces
01. bridgework
Which of the following premium modes would result in the highest annual cost for an insurance policy? (Choose from the following options) 01. Monthly 02. Quarterly 03. Semi-annual 04. Annual
01. monthly
Which of the following would be required to be licensed as an insurance producer? (Choose from the following options) 01. An insurance company director who performs executive, administrative and managerial duties 02. A salaried employee who advertises and solicits insurance 03. A person whose activities are limited to producing insurance advertisements 04. A salaried full-time employee who furnishes information for group insurance
02. A salaried employee who advertises and solicits insurance
An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued? (Choose from the following options) 01. Pay the full amount of a claim because the contestable period has ended 02. Adjust the claim benefit to reflect the insured's true age 03. Deny any claims and cancel the policy 04. Deny paying a claim based on misrepresentation
02. Adjust the claim benefit to reflect the insured's true age (The Misstatement of Age provision says that if a client has misstated her age, whether intentional or unintentional, they will adjust the benefit being paid. It doesn't matter when the mistake was found)
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT (Choose from the following options) 01. An offer to share in commissions generated by the sale. 02. Dividends from a mutual insurer. 03. An offer of employment. 04. Stocks, securities, or bonds.
02. Dividends from a mutual insurer. (Dividends paid to policyholders of a mutual insurer are not considered to be a rebate because the policy specifies that they might be paid)
Which of the following is TRUE regarding the accumulation period of an annuity? (Choose from the following options) 01. It is limited to 10 years. 02. It is a period during which the payments into the annuity grow tax deferred. 03. It is also referred to as the annuity period. 04. It is a period of time during which the beneficiary receives income
02. It is a period during which the payments into the annuity grow tax deferred.
During replacement of life insurance, a replacing insurer must do which of the following? (Choose from the following options) 01. Send a copy of the Notice Regarding Replacement to the Department of Insurance 02. Obtain a list of all life insurance policies that will be replaced 03. Guarantee a replacement for each existing policy 04. Designate a new producer for a replaced policy
02. Obtain a list of all life insurance policies that will be replace
A Medicare SELECT policy does all of the following EXCEPT (Choose from the following options) 01. Provide for continuation of coverage in the event that Medicare SELECT policies are discontinued due to the failure of the Medicare SELECT program. 02. Prohibit payment for regularly covered services if provided by non-network providers. 03. Make full and fair disclosure in writing of the provisions, restrictions, and limitations of the Medicare SELECT policy to each applicant. 04. Provide payment for full coverage under the policy for covered services not available through network providers.
02. Prohibit payment for regularly covered services if provided by non-network providers
Nonforfeiture values guarantee which of the following for the policyowner? (Choose from the following options) 01. That the policy premiums will never increase 02. That the cash value will not be lost 03. That the dividends will be paid annually 04. That the death benefit will be paid in a lump sum
02. That the cash value will not be lost (Because permanent life insurance policies have cash values, there are certain guarantees built into the policy that cannot be forfeited by the policyowner. Nonforfeiture values give the insured the right to the cash value even if the policy lapses or is surrendered)
With regards to premium rates, which of the following statements is NOT true? (Choose from the following options) 01. If a premium rate is disapproved, the Commissioner must hold a hearing if requested by the insurer. 02. The Commissioner sets all insurance premium rates used in Pennsylvania. 03. Pennsylvania is a "prior approval" state in that premiums rates must be filed with the Insurance Department and approved by the Commissioner. 04. After a premium rate is filed, the insurer must wait 30 days or until approval is received from the Commissioner before using the new rate.
02. The Commissioner sets all insurance premium rates used in Pennsylvania.
Which is NOT true regarding an insured who is considered to be a standard risk? (Choose from the following options) 01. Special restrictions on the policy are not necessary. 02. The insured may have to pay slightly higher premiums. 03. The insured's lifestyle is incorporated into this risk judgment. 04. The insured's level of health is representative of others in the same age
02. The insured may have to pay slightly higher premiums.
Which of the following provisions in annuity contracts allow the owner to surrender the annuity if interest rates drop to a specified level? (Choose from the following options) 01. Annuitization 02. Bail-out 03. Surrender 04. Nonforfeiture
02. bail out
Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage? (Choose from the following options) 01. Basic medical expense plan 02. Health Maintenance Organization plan 03. Group dental insurance plan 04. Medical-surgical expense plan
02. health maintenance organization plan
It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability? (Choose from the following options) 01. Address 02. Sexual orientation 03. Age 04. Occupation
02. sexual orientation
Which of the following persons is required to hold a producer license? (Choose from the following options) 01. A person who takes messages related to claims 02. A person who administers employee benefits 03. A person who negotiates insurance contracts 04. A person who creates insurance advertisements
03. A person who negotiates insurance contracts. (Persons who perform clerical tasks that are not related to soliciting or negotiating insurance contracts are not required to be licensed)
If a beneficiary is NOT named for annuity benefits, to which entity will the benefit be paid? (Choose from the following options) 01. The state government 02. The insurance company 03. The annuitant's estate 04. The next of kin
03. Annuitant's estate
Which of the following is a feature of a variable annuity? (Choose from the following options) 01. Interest rate is guaranteed. 02. Securities license is not required. 03. Benefit payment amounts are not guaranteed. 04. Payments into the annuity are kept in the company's general account.
03. Benefit payment amounts are not guaranteed. (Under a variable annuity, the issuing insurance company does not guarantee a minimum interest rate or the benefit payment amounts. The annuitant's payments into the annuity are invested in the insurer's separate account. Agents selling variable annuities are required to have a securities license in addition to their life agent's license)
A man is still employed at age 65 and is now eligible for Medicare. He wants to know what health insurance coverage he is eligible to receive. Which of the following options are available to him? (Choose from the following options) 01. Reapplication for group health 02. Medicare criy 03. Both group health and Medicare 04. Continuation Group health only
03. Both group health and Medicare
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT (Choose from the following options) 01. Legal purpose. 02. Offer and acceptance. 03. Conditions. 04. Consideration.
03. Conditions (conditions are a part of the policy structure)
According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer EXCEPT (Choose from the following options) 01. Late payments. 02. Failure to pay off a loan. 03. Disputes regarding consumer report information. 04. Tax delinquencies.
03. Disputes regarding consumer report information
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business? (Choose from the following options) 01. Assumed 02. Express 03. Implied 04. Apparent
03. Implied (Implied authority is not written in the agent's contract but is required in order for the agent to conduct business. Implied authority exists because not every single detail of an agent's authority can be written in a contract.)
All of the following statements about Medicare Part B are correct EXCEPT (Choose from the following options) 01. It is financed by monthly premium 02. It is financed by tax revenues. 03. It is a compulsory program. 04. It covers services and supplies not covered by Part A.
03. It is a compulsory program. (Part B is elective. Individuals become eligible for Part B at the same time they become eligible for Part A, however Part B requires that a monthly premium be paid. Compulsory insurance is any type of insurance an individual or business is legally required to buy.)
Which of the following is INCORRECT concerning Medicaid? (Choose from the following options) 01. It pays for hospital care, outpatient care, and laboratory and X-ray services. 02. The federal government provides about 56 cents for every Medicaid dollar spent. 03. It is solely a federally administered program. 04. It provides medical assistance to low-income people who cannot otherwise provide for themselves.
03. It is solely a federally administered program. (Medicaid is assistance program for persons with insufficient income and/or resources to pay for health care. States administer the program that is financed by federal and state funds)
Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance? (Choose from the following options) 01. False statements about financial condition of an insurer are unlawful. 02. Statements made with the intent to deceive are unlawful. 03. Only written statements can be considered fraud. 04. Omissions of material fact on insurance application are fraud.
03. Only written statements can be considered fraud. (According to Title 18, Sections 1033 & 1034 of the US Code, any oral or written statements by any person engaged in the business of insurance that are false or any omissions of material fact are considered unlawful insurance fraud)
Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date? (Choose from the following options) 01. Guaranteed renewable 02. Noncancellable 03. Optionally renewable 04. Conditionally renewable
03. Optionally renewable (in an optionally renewable, it is the insurers OPTION as to whether to renew or not)
Which of the following is called a "second-to-die" policy? (Choose from the following options) 01. Juvenile life 02. Joint life 03. Survivorship life 04. Family income
03. Survivorship life (Survivorship life (also referred to as "second-to-die" or "last survivor" policy) is much the same as joint life in that it insures two or more lives for a premium that is based on a joint age)
All of the following entities regulate variable life policies EXCEPT (Choose from the following options) 01. The SEC. 02. The Insurance Department. 03. The Guaranty Association. 04. Federal government.
03. The Guaranty Association. (Variable life insurance is regulated by both the state and federal government, as well as the Insurance Department, and the SEC)