Final Exam Guide
An employee quits her job, where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another, and what is the tax consequence of a direct transfer
$10,000, no tax consequences
which of the following applicants would NOT qualify for the Keogh Plan?
someone who works 400 hrs per year
An individual purchased a $100,000 Joint Life Policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?
$100,000
A client has a new individual disability income policy with a 20-day probationary period & a 30-day elimination period. 10 days later, the client breaks their leg and is off work for 45 days. How many days of disability benefits will the policy pay?
15 days
For how long are insurers required to maintain records pertaining to life insurance solicitation?
3 years
An insurance agent has received a request for hearing from the commissioner. Within how many days must the hearing be held?
30 days
How long is the free-look period on a Medicare supplement policy?
30 days
How long is the commissioner's term?
4 years
Once the person meets the stringent requirements for disability benefits under Social Security, how long is the waiting period before any benefits will be paid?
5 months
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?
6 credits
Once can individual is licensed as an insurance producer for life or accident & health insurance, how many hours of training must the producer complete initially to sell long-term health care insurance partnership policy?
8 hrs
A willful violation of an agent's fiduciary responsibility that involved funds exceeding $1,000 will be considered
A felony
Which of the following would NOT be a violation of the state insurance regulations?
Agent C uses her license to write only business other than controlled
The death protection component of Universal Life Insurance is always
Annually Renewable Term
An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects a premium check, answers any questions the applicant may have, then leaves. What did he forget to do?
Ask her to sign a statement of good health
In a replacement situation, all of the following must be considered EXCEPT?
Assets
The premium charged for exercising the Guaranteed Insurability Rider is based upon the insured's
Attained Age
A man is injured while robbing a convenience store. How does his medical policy handle the payment of his claim?
Claim is denied if the policy contains illegal Occupation provision
An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in
Consideration Clause
Procedures in GA will be deemed to be using their license primarily to write controlled business if, during any calendar year,
Controlled business accounts for more than 25% of the agent's business
What is an important feature of a dental expense plan that is NOT typically found in a medical expense insurance plan?
Diagnostic & preventive care
Which of the following is considered a qualifying event under COBRA?
Divorse
In the Executive Bonus Plan, who is the owner of the policy, and who pays the premium?
Executive is the owner, Executive pays the premium
An individual is purchasing a permanent life insurance policy w/ 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
An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?
Illegal under any circumstances
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to provide these benefits?
Immediate Annuity
Which of the following riders would NOT increase the premium for a policy owner?
Impairment rider
A return of Premium term life policy is written as what type of term coverage?
Increasing
What type of insurance would be used for a Return or Premium Rider?
Increasing Term
What type of insurance would be used for a return of premium rider?
Increasing Term
Which type of hospital policy pays a fixed amount each day that the insured is in the hospital?
Indemnity
Variable Whole life insurance is based on what type of premium?
Level fixed
All of the following statements concerning Medicaid are correct EXCEPT?
Medicaid is a state-funded program that provides health care to persons over the age of 65 only
An applicant for a health insurance policy returns a complete application to her agent, along with a check for the first premium. She received a conditional receipt 2 weeks later. Which of the following has the insurer done at this point?
Neither approved nor issued the policy
An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant 65 years old and has just enrolled in Medicare Part A & B. What is the insurance company obligated to do?
Offer the supplement policy on guaranteed issue basis
Who might receive the dividends from a mutual insurer?
Policy holders
Under the Accidental Death & Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?
Principle Sum
The Medicare SELECT policy does all of the following EXCEPT?
Prohibit payment for regulatory covered services if provided by non-network providers
What form of the annuity settlement options provides payments to an a annuitant for the rest of their life & ceases at their death?
Pure Life
To sell variable life insurance policies, an agent must receive all of the following EXCEPT
SEC registration
Which of the following types of insurers is owned by stockholders?
Stock
The transfer of the insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses?
Subrogation
If an applicant does not receive a copy of the new insurance policy, who would be held responsible?
The agent
A 60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?
The amount of the distribution is reduced by the amount of a 20% withholding tax
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
The customer's associates, friends, and neighbors provide the report's data
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the year term?
The insured may renew the policy for another 10-years, but at a higher premium rate
A father owns life insurance on his 15 year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disable, what will happen to the life insurance premiums?
The insured's premiums will be waived until she's 21
Which of the following is NOT a responsibility of an insurance agent?
Underwriting the contract
According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT
Unearned premiums are retained by the insurance company
According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy, EXCEPT
Unearned premiums are retained by the insurance company
An insured owns a life policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal & the insurer charges a fee. What type of policy does the insured most likely have?
Universal Life
if the owner of a whole life policy who is also the insured dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary
a full death benefit
An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestible period had expired. The insurance company will take which of the following actions regarding any claim that has been issued?
adjust the claim benefit to reflect the insured's true age
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 the following EXCEPT the applicant's
ancestry
Employer Contributions made to a qualified plan
are subject to vesting requirements
All of the following are TRUE of the federal tax advantages of qualified plan EXCEPT
at distribution, all amounts received by the employee are tax free
the accelerated benefits provision will provide for an early payment of the death benefit when the insured
becomes terminally ill
which of the following statements concerning buy-sell agreements is true?
buy-sell agreements are normally funded with a life insurance policy
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
cash option
to legally transact insurance in this state, an insurer must obtain which of the following
certificate of authority
All of the following are duties & responsibilities of producers at the time of application EXCEPT
change any incorrect statement on the application by personal initiating next to the correct statement
the gatekeeper of HMO helps
control specific costs
A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as
critical illness
The term "fixed" in a fixed annuity refers to all the following EXCEPT
death benefit
Who can provide skilled nursing care?
doctor
In a disability policy, the probationary period refers to the time
during which the illness-related disabilities are excluded from coverage
when the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount
equal to the original policy for as long as the cash value will purchase
How often must the commissioner of insurance examine health maintenance organizations (HMOs) authorized to do business in this state?
every 3 years
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid
for 20 years or until death, whichever comes first
An insured worker has earned 40 quarters of coverage, the worker's status under Social Security disability is
fully insured
in insurance transactions, fiduciary responsibility
handling insurer funds in a trust capacity
fixed annuities provide all the following EXCEPT
hedge against inflation
In long-term care (LTC) policies, as the benefit period lengthens, the premium
increases
all if the following are differences between individual & group health insurance EXCEPT
individual insurance does not require medical examinations, while group insurance does require medical examinations.
what is the function of a Certificate of Authority
it allows an insurer to transact insurance in GA
If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the polcy
it is only taxable if the cash value exceeds the amount paid for premiums
which of the following statements about the reinstatement provision is true?
it requires the policyowner to pay all overdue premiums w/ interest before the policy is reinstated
which of the following statements is TRUE concerning Accidental Death Rider
it will pay double or triple the face amount
The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as
legal actions
which 2 terms are associated directly with the premium
level or flexible
If a business owner becomes totally disabled, a Business Overhead Expense policy will pay all of the following EXCEPT
loss of the owners income
the premium of a survivorship life policy compared with that of a joint life policy would be
lower
Untrue statements on the application unintentionally made by the insured's that, if discovered, would alter the underwriting decision of the insurance company are called
material misrepresentations
premium payments for personally-owned disability income policies are
not tax deductible
What is another name for social security benefits?
old age, survivors, & disability insurance
which of the following provisions is mandatory for health insurance policies?
physical examination & autopsy
what describes the specific info about a policy
policy summary
Which of the following will be included in a policy summary?
premium amounts & surrender values
In respect to the consideration clause, which of the following is consideration on the part of the insurer?
promising to pay in accordance with the contract term
The policy owner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided to use the dividends to help pay for her next premium. What option would allow her to do this?
reduction of premium
In the event of a loss, business overhead insurance will pay for
rent
A man decided to purchase a $100,000 Annually Renewable Term Life Policy to provide additional protection until his children finished college. He discovered that this policy
required a premium increase each renewal
a domestic insurer issuing variable contracts must establish one or more
separate accounts
The Ownership provision entitles the policy owner to do all the following EXCEPT
set premium rates
If policyowners repeatedly replace policies from the same agent, this most likely means
the agent knew that the replacement was intended in connection with the sale and intentionally violated the replacement regulation
In comparison to the consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
the consumer associated, friends, and neighbors
an individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. 5 days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective dates?
the date of the medical exam
Which of the following is NOT a feature of a guaranteed renewable provision?
the insurer can increase the policy premium on an individual basis
which of the following will vary the length of the grace period in health insurance policies
the mode of the premium payment
When would a 20-pay whole life policy endow?
when the insured reaches 100
