Exam Questions

An insured covered by accidental death and dismemberment insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary?

Proceeds would go to the contingent beneficiary.

T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this?

Renewable term coverage

The free look period for life insurance policies issued in Nevada is how many days?

10 days

What is the maximum number of employees earning at least $5000 that an employer can have in order to start a SIMPLE retirement plan?

100 employees

The required free look period in a Medicare Supplement policy is how many days?

30 days

What is the free look period or a Medicare supplement policy?

30 days

Within how many days after policy delivery can a long-term care policy be returned for a 100% premium refund?

30 days

A producer must complete how many hours of continuing education every three years?

30 hours of continuing education, three of which must cover the subject of ethics.

What is the maximum time period that pre-existing conditions can be excluded from a long-term care policy?

Six months

In terms of a health reimbursement arrangement, who funds the HRA entirely?

The Employee funds the HRA entirely.

When engaged in an insurance transaction in Nevada, the producer represents whom?

The Insurer

The investment gains from a universal life policy usually go toward what?

The cash value

What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?

The conversion Privilege.

A non-disabled individual is first eligible for Medicare supplement policy at what age?

65 years old

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 policy should N purchase?

A 30 pay life policy; limited pay whole life policies have level premiums that are limited to a certain period.

In Nevada, And ensure that is incorporated in Arizona and conducts business in Nevada is called what?

A Foreign Insurer

What type of group insurance plan involves employees sharing the cost?

A contributory plan

M purchases a $70,000 life insurance policy with premium payments of $550 a year for the first five years. At the beginning of the sixth year, the premium will increase to $800 per year but will remain level there after. What type of policy has M purchased?

A modified Premium life policy

A producer who is a resident in another state but licensed to transact insurance in Nevada is what kind of producer?

A non-resident Producer

What might be signed by both the producer and applicant when an existing life insurance policy is being re-issued with a reduction in cash value?

A notice regarding replacement

What is Nevada's definition of life insurance replacement?

A transaction in which a new policy is bought an old policy is terminated.

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; An individual is covered under the group policy during the conversion period.

What is the required renewability status of all Medicare supplement Policies?

Guaranteed renewable

Who provides funding for the Nevada life and health guarantee association?

It is funded by assessments on member companies.

Convincing a prospective insured to buy an insurance policy based on exaggerations is called what?

Misrepresentation

Which unfair trade practices involves a Producer suggesting that an insurance policy is like a share of stock?

Misrepresentation

And example of an unfair claims practice would be what?

Misrepresenting insurance policy Provisions affecting a loss.

A policy owner is allowed to pay premiums more than once a year under which provision?

Mode of premium Provision

If an insurance company issues a disability income policy that it cannot cancel or for which it cannot increase minimums, the type of renewability that best describes this policy is what?

Non-cancelable

What is the underlying concept regarding level premiums?

The early years are charged more than what is needed.

True or False: An employer that offers a qualified retirement plan to its employees is eligible to make tax deductible contributions to the plan.

True; The advantage gained by providing a qualified retirement plan is that the employer contributions to the plan are tax deductible.

In Nevada, most life insurance policies have a contestability period of how many years?

Two years

Providing different terms of coverage for different policy owners in the same risk classification would be an example of what?

Unfair discrimination

When is the face amount paid under a joint life and survivor policy?

Upon the death of the last insured

What is the primary factor that determines the benefits paid under a disability income policy?

Wages

A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached?

Waiver of Premium Rider

Is an insured able to borrow against the cash value of a whole life policy?

Yes

A person or company that underwrites an insurance risk and issues an insurance contract is known as what?

An Insurer

Which type of contract liquidates an estate through recurrent payments?

An annuity

S is covered by a whole life policy. Which insurance product can cover his children?

Child term Rider

True or False: A basic hospital policy pays expenses for hospital room and board.

True

T & S are named Co-primary beneficiaries on a $500,000 accidental death and dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?

$0 because T is still alive and the sole primary beneficiary, while the mother is still the contingent beneficiary.

P is self-employed and owns an individual disability income policy. He becomes totally disabled on June 1 and received $2000 a month for the next 10 months. How much of this income is subject to federal income tax??

$0; Disability income benefits that derive from an individual policy which was paid entirely by the policy owner are not subject to federal income tax.

B has a $100,000 accidental death and dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what were the policy pay B's beneficiary?

$300,000

An individual has a major medical policy with a $5000 deductible and an 80/20 coinsurance clause. How much will the insured have to pay if a total of $15,000 in coverage medical expenses are incurred?

$7000; $5000 +20% of the remaining bill

The commissioner must give how many days written notice before holding a hearing regarding a producer is unfair practice?

20 days

A Medicare supplement policy holder has how many days to return the policy and receive a full premium refund?

30 days

What type of insurance company is domiciled in England but conducts business in Nevada?

An alien insurance company.

Which type of life insurance beneficiary requires his or her consent when a change of beneficiary is attempted by the policy owner?

An irrevocable Beneficiary

According to Nevada law, when must a producer deliver the outline of coverage to a Medicare supplement applicant?

At the time of application.

What is the difference between group insurance and blanket health policies?

Blanket health Policies do not issue certificates

Variable whole life insurance can be described as what?

Both an insurance and securities product.

An example of a life insurance policy replacement would be what?

Cash surrender of an existing life policy and the purchase of a new life policy.

The consideration clause in a life insurance contract contains what pertinent information?

The amount of premium payments and when they are due.

Nevada's 10 day free look period for life insurance policies begins on which date?

The date of policy delivery.

A credit life insurance policy covers the life of whom?

The debtor

Essential benefits without annual and lifetime limits are required on any health policy purchased through whom?

The federal marketplace

G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the intoxicants and narcotics exclusion in G's policy, who is responsible for paying the medical bills?

The insured

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?

The insured's contingent beneficiary.

The common disaster clause provides that if both of the insured and the soul named beneficiary were to die in a common accident, the death proceeds would be paid to whom?

The proceeds would be paid to the insured's estate, so long as there is no contingent beneficiary Named.

Who signs a notice regarding replacement form when an application is taken for a new life insurance policy that replaces an existing one?

The producer and the applicant

A disability income policy owner suffers a disability which was due to the same cost as a previous disability. Both disabilities occurred within a five month period. The insurance may cover the second disability without a new elimination period under which provision?

The recurrent Disability Provision

True or False: A Medicare supplement policy covers allowable amount under Medicare part B.

True

True or False: A family income policy is a combination of whole life and decreasing term insurance?

True

True or False: Name of the insurer, name of the insured, and the free look provision are all listed in the policy face.

True

True or False: Participating in the act of twisting would be a valid reason for suspending or revoking and insurance producers license.

True

True or False: Periodic health Claim payment must be made at least monthly.

True

True or False: The Consolidated Omnibus Budget Reconciliation Act, or COBRA, gives workers whose employment has been terminated the right to continue group health benefits.

True

True or False: The amount of benefits available from other sources affects the amount of monthly disability benefits payable under Social Security.

True

True or False: The commissioner is responsible for administering Insurance laws.

True

True or False: Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent only if the child is incapable of employment and chiefly dependent on the policy owner.

True

True or False: Variable annuities involve underlying equity investments in a separate account.

True

True or False: A variable insurance policy does not guarantee a return on it's investment accounts.

True, variable insurance products do not guarantee Contract cash values.

L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of age Provision, the insurer will do what?

Adjust the death benefit to a reduced amount.

Which type of plan normally includes hospice benefits?

Managed care plans

Nevada requires that coverage for newborns begins from the moment of birth and a premium must be paid within how many days?

31 days

What type of insurer would make reimbursement payments directly to the insured individual for covered medical expenditures?

A commercial Insurer

N, age 50, recently bought an annuity that will pay a guaranteed $2000 per month at age 70 for life. What type of annuity did N purchase?

A fixed deferred annuity

Which provision allows the policy owner to change a term life policy to a permanent one without providing proof of good health?

Conversion

K becomes ill after traveling overseas and is unable to work for three months. What kind of policy would cover her loss of income?

Disability income

Who is non-Occupational Disability Coverage design for?

Employees who suffer non-work related disabilities, since work related disabilities are covered by workers compensation.

When an insurer issues a policy that refuses to cover certain risks, this is referred to as what?

Exclusion

A comprehensive major medical health insurance policy contains an eligible expenses provision which identifies the types of healthcare services that are covered. Which healthcare services are not typically covered?

Experimental and investigative services.

True or False: It is the responsibility of the producer replacing an existing policy to notify the replaced insurance company.

False; It is the responsibility of the insurer to notify the replaced company.

How would a contingent beneficiary receive the policy proceeds in an accidental death and dismemberment policy?

If the primary beneficiary dies before the insured.

T, age 70, withdraws cash from a profit sharing plan and purchases a straight life annuity. What will this transaction provide?

Income that cannot be outlived by the owner.

Pre-hospitalization authorization is considered an example of what type of care?

Managed care

A policy owner is able to choose the frequency of premium payments through what policy feature?

Premium Mode

T is covered by an accidental death and dismemberment policy that has an irrevocable beneficiary. What action with the insurance company take if T request a change of beneficiary?

Request of the change will be refused without the written consent of the beneficiary.

A producer must complete how many hours of ethics per continuing education reporting period?

3

A health insurance policy holder has how many days to return the policy and receive a full premium refund?

10 days

When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, it is known as what kind of disability?

A Residual Disability

M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a disability income policy that pays $2000 a month. What is owed to her estate?

Any earned but unpaid benefits.

When is a group health policy required to provide coverage for a newborn child?

At the moment of birth.

J chooses a monthly premium payment mode on his whole life insurance policy. Will his premiums be higher or lower than if the premiums were paid on an annual basis?

His premiums will be higher than if paid annually.

Which statement is correct about the period in which a term policy can be converted?

The conversion period varies according to the contract.

True or False: A modified endowment Contract exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract.

True

True or False: Converting term coverage to a whole life policy is not considered replacement.

True

True or False: Credit life insurance is issued on a debtor to cover outstanding balances on installment loans.

True

True or False: Creditors may have a claim to proceeds from a viatical settlement

True

True or False: Group life insurance policies are generally written as annually renewable term.

True

True or False: In Nevada, a long-term care policy must be guaranteed renewable.

True

True or False: Members of preferred provider Organizations enjoy discounted fees for the patient.

True