Guarantee Exam missed Q from 5/16/23

A Certificate of authority in NE, which must be renewed annually expires on the last day of

APRIL

which of the following statements is INCORRECT concerning Modified Endowment Contracts?

An MEC must always pass the 7-day pay test. ( LI contracts must pass the 7 day pay test, otherwise, they become classified as MEC, and policy loans or withdrawals will be subject to taxation and provided by regulation. If investment funds are withdrawn or borrowed prior to age 591/2 they will also be subject to a 10% penalty.

individual who violates the FAIR CREDIT REPORTING ACT, what is the max penalty?

2,500

what is the MAX fine the director may impose on an insurer found guilty of involuntarily engaging in an unfair trade practice?

30,000 for all aggregate violations (if an insurer involuntarily engages in an unfair trade practice, the Director may issue a cease and desist order, along with a penalty of no more than 1,000 per violation or 30,000 for all aggregate violations)

a disability income policy has a waiting period of 7 days. if the insured is disabled for 15 days, how many days of benefits will the policy pay?

8 days (15-7)

If a person qualifies for SS disability benefits after the 5 month elimination period, when will the benefits begin?

Benefits begin at the beginning of the 6th month and are not retroactive to the beginning of the disability.

What type of an interest rate is guaranteed in universal life policies?

Contract interest rate

J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all the benefits are paid; the remaining amount will go to the contingent beneficiary. What settlement option did J choose?

Fixed amount

an insured and his spouse recently had a child. which of the following riders would allow the couple to insure the child for a limited period of time at a specified amount?

children's term rider

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/ accident. He feels that he can handle small expenses. What type of policy would likely meet this person's needs?

Major medical (major medical has high max limits, copayments, blanket coverage and a deductible)

a core Medicare Supplement Policy (planA) will cover all of the following expenses EXCEPT

Part A Deductible

the purpose of the Fair Credit Reporting Act is to

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

variable life insurance is regulated by all of the following entities EXCEPT

The US Dept. of Treasury

If the annuitant dies before the annuity start date, which of the following is true?

The interest is taxable

all of the following are true of the survivorship life policy EXCEPT

The premium is based on the age of the insured. (similar to joint life in that insures the lives for a premium that is based on joint age) 1

which of the following is required to provide a notice of information practices to applicants and policyholders?

The producer

an agent who knowingly misrepresents material info for the purpose of inducing an insured to lapse, forfeit, change or surrender a LI policy or annuity has committed an illegal practice known as

Twisting (def of twisting)

a whole life policy is surrendered for a reduced paid up policy. the cash value in the new policy will

continue to increase. (the new policy continues to build its own cash value and will remain in force until the insured's death/ maturity)

according to the payment of claims provision in group life insurance policies issued in the state, if the insured dies during the conversion period, the death benefit will

be payable as a claim under the group policy

an employee dies having 6 quarters of coverage during the previous 13 quarter period. What status of coverage does the employee have under Social Security?

currently insured (workers may achieve the status of currently insured and by that qualify for certain benefits. An individual is considered partially insured if he or she has earned 6 credits or quarters during the 13 quarter period.

slippery floors, reckless driving or providing false information are examples of

hazards (any factor that increases the likelihood that a loss may occur - provided are examples of physical, moral and morale hazards)

who would be allowed catch up contributions into an IRA plan?

individuals 50 or older

all of the following are considerations under the needs approach planning for life insurance EXCEPT

insured's income

which of the following is not true regarding a noncancellable policy

insurer can increase the premium above what is stated in the policy if claims experience is greater than expected. (insurance company cannot cancel a noncanc. policy nor can the premium be increased beyond what is stated. The insured has the unilateral right to renew the policy for the life of the contract, but in effect, may cancel the policy at any time by discontinuing premium payments)

which of the following is NOT true regarding an optionally renewable term?

insurer can only cancel the policy for reasons stipulated in the contract (insurer may cancel the policy for any reason)

which of the following is provided by a skilled medical personnel to those who need occasional medical assistance or rehabilitative care?

intermediate care

which of the following is true regarding pure life annuity settlement option?

it provides the highest monthly benefit (pure life annuity pays the most since it guarantees to pay for the rest of one's life without a minimum guarantee)

guaranteeing future dividends is considered to be an unfair or deceptive act known as

misrepresentation

Which statement best describes agreement as it relates to insurance contracts?

one party accepts the exact terms of the other party's contract (there must be a definite offer by one party, and this offer must be accepted in its exact terms by the other party. Agreement includes both and offer and its acceptance)

with respect to the entire contract clause in health policies, who has the authority to make changes to an existing policy

only an executive officer of the company.

Who is the annuity owner?

person who purchases the annuity

utilization management consists of an evaluation of the appropriateness, necessity and quality of health care, and may include

prospective and concurrent review

which of the following is a provision found in LI policies

reinstatement

in contrasting stock insurers with mutual insurers, which statement is true?

stock insurers are owned by the shareholders and issue nonparticipating policies. (stockholders/ shareholders. It is labeled as nonparticipating since the insured's do not share in the divisible surplus aka dividends)

once the initial benefit limit in Medicare Part D is reached, how is the beneficiary affected

the beneficiary is then responsible for a portion of prescription drug costs. (once the benefit is reached, the beneficiary is responsible for paying 255 of drug costs)

all of the following are true about key person insurance EXCEPT

the death benefit is taxable to the business

what is the only difference between blanket insurance and group health insurance?

the insured members are not named

according to the Common Disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?

the primary beneficiary died before the insured