ExamFX Guaranteed Exam Missed/Wrong Answers part 3

all of the following could qualify as a group for the purpose of purchasing group health insurance EXCEPT: -multiple employer trust -single employer with 14 employees -an association of 35 people -labor union

an association of 35 people

When a settlement option is chosen at death, how are the monthly income payments taxed? -the entire amount is taxable since the benefit was not taken in a lump sum -the principal portion is generally income tax free while the interest portion is taxed as ordinary income -the portion of the payment that represents the terminal reserve is income taxable -the total monthly amount is tax free since it derived from death benefits

the principal portion is generally income tax free while the interest portion is taxed as ordinary income

A self employed mechanic operates his own shop. He is considering purchasing health insurance that would protect him financially in the event of a serious sickness or accident. He feels that he can handle any small health care expenses. What type of policy would most likely meet this person's needs? -Dread Disease -Major Medical -Comprehensive Major Medical -Basic Hospital Expense

Major Medical

which of the following is not a personal use of life insurance? -an individual buys insurance to help the family pay off mortgage in case of premature death -an individual buys insurance to fund a buy-sell agreement -an individual buys insurance to provide future income to a surviving spouse -an individual buys cash value insurance to fund his children's college education

an individual buys insurance to fund a buy-sell agreement

which of the following is not true regarding variable life insurance and annuities? -they are regulated by both the SEC and FINRA -they are not regulated by the DOI -agents selling variable products must be registered with FINRA -they are regulated by the state and federal government

they are not regulated by the DOI

Which of the following would be TRUE of both fixed-period and fixed amount settlement options? -both guarantee that the principal and interest will be fully paid out -the amount of payments is based on the recipients life expectancy -the size of installments decreases after certain period of time -both guarantee payments for life of the beneficiary

both guarantee that the principal and interest will be fully paid out

which of the following is a requirement for replacement of health policies -the old policy must stay in force until the new policy is issued -policies must overlap to cover pre-existing conditions -replacements in health insurance are not allowed -the old policy must be canceled before the new policy can be issued

the old policy must stay in force until the new policy is issued

all of the following are characteristics of group health insurance plans EXCEPT: -employers may require the employees to contribute to the premium payments -the benefits under a group plan are more extensive than those under individual plans -the parties that hold a group health insurance contract are the employees and the employer -the cost of insuring an individual is less than what would be charged for comparable benefits under an individual plan

the parties that hold a group health insurance contract are the employees and the employer

which of the following does NOT need to be included on the first page of a medicare supplement policy? -continuation provision -the company's right to change premiums based on policyholder's age -premium rates -renewal provision

premium rates

Which of the following best describes the type of care provided by HMO's? -major medical -fee-for-service -preventive -elective

preventive

what type of an interest rate is guaranteed in universal life policies? -current interest rate -contract interest rate -nominal interest rate -adjustable interest rate

contract interest rate

which of the following is NOT TRUE regarding an optionally renewable policy? -renewability is at the option of the insurer -non renewal can happen on the policy anniversary date -policy premiums can increase at renewal -insurer can only cancel the policy for reasons stipulated in the contract

insurer can only cancel the policy for reasons stipulated in the contract

the purpose of the fair credit reporting act is to -protect the insurer from adverse selection -ensure the consumers receive a copy of investigative consumer reports -ensure coverage for all applicants -protect consumers against the circulation of inaccurate or obsolete personal or financial information

protect consumers against the circulation of inaccurate or obsolete personal or financial information

If the annuitant dies before the annuity start date, which of the following is true? -the interest is taxable -the interest will not be tax deferred -the interest is tax free if the beneficiary is a spouse -the interest is non taxable

the interest is taxable