Stimulation Test #8

Which of the following best describes a misrepresentation?

A statement intended to distract, mislead, or decieve a party to a contract

Which of the following would qualify as an implied warranty in an insurance contract?

An oral representation by the applicant

Which of the following life insurance policies is designed to cover two people and pay benefits after both insureds have died?

Survivorship Universal life

Which of the following is correct about Medicare?

The program is divided into four parts A-D

The interest earned on policy dividends is

taxable

When an individual purchases insurance, what risk management technique is he or she practicing?

transfer

An insurer has been found guilty of a Code violation regarding replacement. The insurer repeats the violation. What will be the minimum penalty?

$30,000

An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. What kind of penalty would the IRA owner pay?

50% tax on the amount not distributed as required

What do Modified Life and Straight Life policies have in common?

Accumulation of cash value

If an insured is unhappy regarding his or her Medicare services, what may he or she do?

Appeal the decision

All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT

At distribution, all amounts received by the employee are tax free

When must insurable interest exist in a life insurance policy?

At the time of application

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?

Common disaster clause

Life insurance death proceeds are

Generally not taxed as income

Which of the following must be disclosed in all advertisements and policies of term life insurance for individuals 55 years of age or older?

Insurance monetary value index

Which of the following best defines earned surplus?

Insurer's unassigned funds

Which of the following is true regarding a term health policy?

It is nonrenewable

Which of the following will be covered by a nonoccupational policy?

John gets hurt in a car accident during his lunch break

A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?

Joint and survivor

An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?

Limited pay life

Which of the following would NOT be considered a primary risk factor in underwriting individual health insurance policies?

Marital status

Which of the following statements is NOT correct regarding Medicare?

Medicare Advantage must be provided through HMOs

An insured is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits?

No benefits

Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date?

Optionally renewable

Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?

Premiums are not tax deductible as a business expense

Which of the following is NOT covered under Part B of a Medicare policy?

Routine dental care

The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is TRUE?

The beneficiary will receive the greater of the money paid into the annuity of the cash value

Who is the owner and who is the beneficiary on a Key Person Life Insurance policy?

The employer is the owner and beneficiary

The owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producer say?

The policy owner can specify the way proceeds are split in the policy

If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?

The policy will be interpreted as if the insurer waived its right to have an answer on the application

Which of the following is true regarding taxation of accelerated benefits under a life insurance policy?

They are tax free to terminally ill insured

An insured wants to change from an annual premium mode to a monthly premium mode. Which of the following is true?

This change can only be made on the policy's anniversary

All of the following statements are true of a nonqualified retirement plan EXCEPT

contributions are tax exempt

A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as

critical illness

Selection of coverage in employee benefits plans refers to

employee choosing benefits

Which of the following is NOT a type of information that needs to be gathered in order to determine the value of someone's life when using the needs approach?

estimated longevity

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

fixed period

An Insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?

full benefits

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

guaranteed insurability option

A typical Accidental Death & Dismemberment policy covers all of the following losses EXCEPT

income

The type of term insurance that provides increasing death benefits as the insured ages is called

increasing term

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death benefits will be paid?

insuring clause

What are the consequences of a failure to comply with the Commissioner's office while it is executing a seizure order?

it is a misdemeanor punishable by a fine of $1,000, one year imprisonment, or both

Issuance of health policies to insureds with chronic or ongoing conditions could result in all of the following EXCEPT:

lower overall costs and premiums

What is the other term for the cash payment settlement option?

lump sum

Qualified medical expenses paid for participants in a Medical Savings Account (MSA) are

not taxable

The written instrument, in which a contract of insurance is set forth, is known as the

policy

Which of the following are the main factors taken into account when calculating residual disability benefits?

present earnings and earnings prior to disability

A Medicare SELECT policy does all of the following EXCEPT

prohibit payment for regularly covered services if provided by non-network providers

All of the following are beneficiary designations EXCEPT

specified

Which of the following is TRUE regarding variable annuities?

the annuitant assumes the risks on investment

Which of the following sources would provide a list of HICAP's in each county in California?

www.calmedicare.org