Guaranteed Exam
Which of the following describes the relationship between the principal sum and a capital sum? (Choose from the following options) O1. The principal sum varies, while the capital sum does not. O2. The capital sum varies, while the principal sum does not. O3. The principal sum is a percentage of a capital sum O4. A capital sum is a percentage of the principal sum.
A capital sum is a percentage of the principal sum
⭐️Partners in a business want to make sure that if one of them were to pass away, their surviving family will receive a fair value for their portion in the business. What life insurance arrangement would be most suited for transitioning the business? (Choose from the following options) O1. Buy-Sell Agreement O2. Deferred Compensation Plan O3. Executive Bonus Plan O4. Split Dollar Plan
01. buy-sell agreement
The Guaranteed Insurability Rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT (Choose from the following options). O1. Marriage. 02. Purchase of a new home. O3. Approximately every 3 years between the ages of 25 and 40. O4. Birth of a child.
02 purchase of a new home
⭐️If an individual willfully violates provisions of the Fair Credit Reporting Act, what is the maximum civil penalty? (Choose from the following options) 01.$1,000 02.$2,500 O3.$5,000 04.$10,000
$2,500 The penalty for willfully violating the Fair Credit Reporting Act cannot exceed $2,500.
What is the maximum civil penalty per violation of the regulations of the insurance Code that define acts that are subject to fines, or license suspension or revocation?
$5,000
An annuity has accumulated the cash value of $70,000, of which $30,000 is from premium payments. The annuitant dies during the accumulation phase. The beneficiary will receive
$70,000
⭐️With a conditionally renewable policy, the premiums are more likely to be (Choose from the following options) 01. Variable. O2. Flexible. O3. Increased. O4. Decreased.
03 increased
A dread disease policy would cover which of the following? (Choose from the following options) O1. Illness caused by exposure to chemicals 02. Infection due to liposuction 03. Cancer O4. Broken leg
03. Cancer
How many days is the free-look period in this state? (Choose from the following options) 01.15 02.20 03.5 04.10
10
An IRA owner who is 57 years old wants to make a withdrawal from her traditional IRA. What penalty will be imposed? (Choose from the following options) O1. No penalty 02.6% 03.10% 04.20%
10%
⭐️A person holds a temporary producer's license because he is the designee of a producer who has been called to active military duty. What is the maximum amount of time that the license will last? (Choose from the following options) O1.360 davs O2. A period deemed to be necessary by the Commissioner 03.150 days 04.180 days
189 days?
All group health insurance policies must cover mammographic examinations. The minimum coverage required must include all costs associated with a mammogram every year for women at least
35
A life insurance policy can be backdated to affect a lower premium for up to a maximum of how many months? (Choose from the following options) 01.12 02.18 03.3 04.6
6
Which of the following describes the relationship between the principal sum and a capital sum?
A capital sum is a percentage of the principal sum
⭐️If an insured decides to reduce the coinsurance amount on her major medical insurance, what can the insured expect? (Choose from the following options) O1. Stop-loss increase O2. A higher monthly premium O3. A higher deductible O4. A lower lifetime benefit payout
A higher monthly premium
⭐️Which of the following types of care could be provided at a community center? (Choose from the following options) O1. Adult day care O2. Respite care O3. Intermediate care O4. Skilled care
Adult day care
What is the latest point at which an Outline of Coverage may be presented? (Choose from the following options) •1. At the time that a prospective insured expresses interest in a specific policy 2. At the time of application O3. At the time of policy delivery O4. Within 30 days after a policy is delivered
At the time of policy delivery
Answers to questions in an insurance application are called representations and, as such, they
Believed to be true to the best of the applicant's knowledge?
A dread disease policy would cover which of the following?
Cancer
Which of the following losses would likely be covered under the Accidental Death rider?
Death caused by a head-on collision
⭐️The owner of a whole life policy with an accidental death rider intentionally kills himself after having the policy for 18 months. What is the insurance company's course of action? (Choose from the following options) O1. Deny any payment of death benefit O2. Deny only payment of the face amount but pay the rider since suicide is an accident O3. Pay the face amount only because suicide is not an accident O4. Pay twice the face amount
Deny any payment of death benefit
An adjustable life policy can assume the form of (Choose from the following options) 01. Only permanent insurance. O2. Either term insurance or permanent insurance. O3. Neither term insurance nor permanent insurance. O4. Only term insurance.
Either term insurance or permanent insurance
Which of the following employee benefits essentially provides the employee with a wage increase and directs that wage increase to be spent on a life insurance policy? (Choose from the following options) O1.401(k) O2. Keogh Plan O3. Split Dollar 04. Executive Bonus
Executive bonus
When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option
Extended term
Premiums collected on behalf of the insurance company by an agent will be held in what capacity? (Choose from the following options' O1. Debit O2. Security O3. Rebate O4. Fiduciary
Fiduciary
⭐️How long is a newborn covered without notification to the insurer? (Choose from the following options) O1. From the moment of birth, and the insurer must be notified within 90 days O2. A newborn is not covered without notification to the insurer. O3. From the moment of birth, and the insurer must be notified within 31 days 4. From the time labor has begun, and the insurer must be notified within 31 days
From the moment of birth, and the insurer must be notified within 31 days
⭐️An insured bought an insurance policy that requires him to pay $150 in premiums on the 15th of leach month. He then takes an extended vacation and forgets to pay the premium. Ten days later, his policy is still in effect and has not lapsed. Which policy provision allowed for this? (Choose from the following options) O1. Automatic premium loan O2. Incontestability O3. Grace period O4. Waiver of premium
Grace Period
⭐️Which of the following is NOT true regarding an optionally renewable policy? (Choose from the following options) O1. Renewability is at the option of the insurer. O2. Nonrenewal can happen on the policy anniversary date. O3. Policy premiums can increase at renewal. O4. Insurer can only cancel the policy for reasons stipulated in the contract.
Insurer can only cancel the policy for reasons stipulated in the contract
Which source of underwriting information includes information on an applicant's character, general reputation, personal habits, and mode of living?
Investigative consumer report
⭐️What happens to the copy of the application for health insurance once the policy is issued? (Choose from the following options) O1. It becomes part of the entire contract. O2. It is filed with the Department of Insurance. O3. It is discarded. O4. It is returned to the insured.
It becomes part of the entire contract
Agents may be found guilty of defamation if they make false statements that are intended to
Maliciously criticize another insurance company
⭐️Which of the following must be listed by producers during replacement? (Choose from the following options) O1. Policies still in force and policies sold during the past 5 years O2. Policies that cannot be replaced O3. Policies still in force O4. Policies sold during the past 5 years
Policies still in force and policies sold during the past 5 years During replacement, producers must provide a list of insurance policies still in force. In addition, they must list policies sold during the past 5 years
⭐️In dental insurance, which of the following terms depicts the replacement of missing teeth with artificial devices like bridgework or dentures? (Choose from the following options) O1. Prosthodontics 02. Restorative O3. Endodontics O4. Periodontics
Restorative?
⭐️An individual purchases a life insurance policy and lists his parents as the beneficiaries. He is lable to change beneficiaries at any time. What type of beneficiary designation does the policy have? (Choose from the following options) O1. Contingent O2. Primary O3. Revocable 04.Irrevocable
Revocable?
⭐️An individual receives a lump-sum inheritance. He'd like to use the money to create a lifetime income since he'll be retiring soon. He purchases an annuity and wishes to receive payments beginning in 2 months. What did he buy?
Single Premium Immediate Annuity Flexible Premium Immediate Annuity Any annuitization in 12 months or less from the effective date is an immediate annuity. A single premium annuity involves depositing one premium payment.
⭐️⭐️Which of the following statements concerning the Medical Information Bureau is correct? (Choose from the following options) O1. The Medical Information Bureau assists underwriters in evaluating and classifying risks. O2. The Medical Information Bureau report must be attached to each life insurance policy issued. O3. All applicants for life insurance receive a copy of the findings of the life insurance medical examination. O4. Information contained in the Medical Information Bureau report is available to all physicians.
The Medical Information Bureau assists underwriters in evaluating and classifying risks.
⭐️Once the initial benefit limit in Medicare Part D is reached, how is the beneficiary affected? (Choose from the following options) O1. The beneficiary is no longer responsible for prescription drug costs. O2. Medicare Part A will cover all costs. O3. The beneficiary is then responsible for a portion of prescription drug costs. O4. The beneficiary is then responsible for 75% of prescription drug costs.
The beneficiary is then responsible for a portion of prescription drug costs
⭐️⭐️What is the only difference between blanket insurance and group health insurance? (Choose from the following options) O1. Blanket insurance is not provided to schools. O2. Membership is not allowed to change in blanket insurance, except on a yearly basis. O3. The insured members are not named. O4. Group health insurance is provided on an employee-only basis.
The insured members are not named
⭐️Who is the annuity owner? A) The person on whose life the annuity is written B) The insurer C) The person who purchases the annuity D) The person who receives the benefits
The person who purchases the annuity
Which department or division of an insurance company is responsible for the selection, evaluation, and distribution of risks?
Underwriting
Two individuals of the same age, health status, and life expectancy apply for individual insurance coverage. When policies are issued by the same insurer, the premium rates are different based on the insured's race. What practice does this describe? (Choose from the following options) O1. Negligent underwriting O2. Misrepresentation O3. Unfair discrimination O4. Defamation
Unfair discrimination
⭐️An insurer who transacts insurance in this state but whose articles of incorporation are registered in Canada is considered what type of insurer?
alien
⭐️During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sounds worse than it is. This is an example of an unfair trade practice of (Choose from the following options) O1. Defamation. O2. Twisting. O3. False advertising. O4. Misrepresentation.
defamation
⭐️Which of the following is NOT a standard exclusion in life insurance policies? (Choose from the following options) O1. Hazardous occupation 2. War and military service O3. Aviation 04. Disability
disability
⭐️Benefits for a Disability Income policy are based on which of the following? (Choose from the following options) O1. Typical wage for similar profession O2. Earnings of the insured O3. Average US wages O4. Minimum wages
earnings of the insured
A producer's license must be renewed
every 2 years
⭐️At what point would an automatic premium loan be generated?
following the grace period
⭐️The Commissioner of Insurance is appointed by which authority?
governor
⭐️Who would be the insured in business disability insurance? (Choose from the following options) O1. All employees O2. The insurer O3. The employer O4. Key employees
key employees
⭐️An annuitant pays the annuity premium on the 14th of each month. Which of the following best describes this arrangement? (Choose from the following options) O1. Level O2. Flexible 03. Lump sum O4. Single
level The main ways to pay an annuities premium are: single premium, which is a single lump-sum payment, and periodic premium, in which the premium is paid in multiple installments. Periodic premiums can be paid either level - the amount is the same for each payment, or flexible - the amount varies from one payment to the next.
⭐️A person has a history of DUIs. To his insurer, this presents what type of hazard? (Choose from the following options) O1. Legal O2. Physical O3. Moral O4. Morale
morale
A stock insurer is defined as an insurer (Choose from the following options) O1. That invests at least 20% of its premium income in the stock market. O2. Who pays dividends to its policyowners. 03. Owned by its stockholders. O4. Owned by its policyowners.
owned by its stockholders
⭐️Annuities Certain limit the amount paid by the annuity to a certain fixed (Choose from the following options) O1. Amount only. O2. Period with a certain fixed amount. O3. Period or fixed amount. O4. Period only.
period or fixed amount
All of the following are true of annually renewable term insurance EXCEPT (Choose from the following options) 01. The policy renews regardless of the insured's health. 02. Proof of insurability must be provided at each renewal. O3 The premium increases each year. O4. The death benefit remains level.
proof of insurability must be provided at each renewal
An insured recently had a new home built and insisted on having smoke detectors installed in multiple places in the house. What method of handling risk is the insured using? (Choose from the following options) O1. Avoidance O2. Sharing O3 Reduction O4. Retention
reduction
⭐️Which of the following terms relates to disability income insurance? (Choose from the following options) O1. Residual benefit O2. Coinsurance stop loss O3. Deductibles O4. Insurable interest
residual benefit
⭐️Which of the following is NOT a characteristic of a Managed Care Plan? (Choose from the following options) O1. Risk retention O2. Comprehensive case management O3. Preventive care O4. Controlled access of providers
risk retention
An agent tells an insured that if he replaces his current insurance policy with a newer one, his dividends will be higher and his premiums will be slightly lower. The policy, however, would not offer either one of these things. What type of misrepresentation is being committed?
twisting
⭐️An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice known as (Choose from the following options) 1. Twisting. O2. Fraud. O3. Concealment. O4. Misrepresentation.
twisting
⭐️Which of the following types of insurance policies would perform the function of cash accumulation? (Choose from the following options) O1. Term life O2. Credit life O3. Increasing term life O4. Whole life
whole life (Life insurance is unique from other types of insurance in that it could perform the function of cash accumulation. Cash values are available in whole life policies)
Which of the following best describes a rebate? (Choose from the following options) O1. A producer returning part of her commission to her client, as an inducement to buy O2. A producer misrepresenting policy provisions or coverages at issue O3. A producer requiring an insured to buy insurance from her as a condition to a loan O4. A producer selling insurance primarily to himself, his family and his friends
A producer returning part of her commission to her client, as an inducement to buy
⭐️Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this policyowner select? (Choose from the following options) O1. Life income O2. Joint and Survivor O3. Fixed-amount installments O4. Fixed-period installments
Joint and survivor
In an employer group health insurance plan, the covered employee receives (Choose from the following options) 01. Certificate of insurance. O2. Nothing. O3. Master contract. O4. Facsimile contract.
certificate of insurance
The policyowner has an option to pledge the life insurance policy as collateral for a bank loan. This is called (Choose from the following options) O1. An insurance pledge. O2. A unilateral agreement. 03. An absolute assignment. O4. A collateral assignment.
collateral assignment
⭐️When comparing a Joint Life Policy to two individual life policies of the same amount on the same insureds, which condition is true? (Choose from the following options) O1. Joint Life has a premium that is identical to the sum of the two individual policies. O2. The Joint Life premium can only be paid monthly. O3. Joint Life has a higher premium than the total of the two individual policies. O4. Joint Life has a lower premium than the total of the two individual policies.
joint life has a lower premium than the total of the two individual policies
⭐️Which of the following riders provides for the payment of part of the policy death benefit if the insured is diagnosed with a terminal illness that will result in death within 2 years? (Choose from the following options) O1. Long-Term Care Rider O2. Cost of Living Rider 03. Accidental Death Rider O4. Living Needs Rider
04 Living Needs Rider
⭐️How many days' notice must an insurer provide to an insured regarding the lapse of a policy due to outstanding loans?
30 days
An individual acted as an exclusive general agent even though she was not licensed to do so. Since this offense occurred over a period of 60 days, what is the maximum penalty she faces? a) $1,000 and a third-degree misdemeanor b) $10,000 and a second-degree felony c) $60,000 and a third-degree misdemeanor d) $60,000 and a second-degree misdemeanor
$60,000 and a third-degree misdemeanor In Pennsylvania, acting as a manager or exclusive general agent without proper licensing is punishable by a third-degre for each day of their offense.
A core Medicare supplement policy (Plan A) will cover all of the following expenses EXCEPT (Choose from the following options) O1. The first 3 pints of blood. 02.20% of Part B coinsurance amounts for Medicare-approved services. O3. Part A coinsurance. O4. Part A deductible.
04 Part A deductible Plan A is the core benefits only and does not include coverage for Part A deductibles.
⭐️Which of the following would be required to become licensed as an insurance producer? (Choose from the following options) 1. Agency supervisor whose actions do not include selling insurance O2. A person whose activities are limited to insurance advertising O3. An officer of an insurer who does not receive commissions O4. A customer service representative who solicits no more than one policy a year
A customer service representative who solicits no more than one policy a year A person does not require an insurance producer license if he or she only performs clerical tasks or advertises without intent to solicit insurance. However, once there is solicitation or commissions, a license is required.
⭐️An agent is hand delivering an insurance policy to a policyowner. What must the agent obtain to complete the transaction?
A signed delivery receipt
⭐️Which of the following best defines the Probationary Period in group health policies? (Choose from the following options) O1. The number of days the insured has to determine if he/she will accept the policy as received O2. The stated amount of time when benefits may be reduced under certain conditions O3. The number of days that must expire after the onset of an illness before benefits will be earned O4. A specified period of time that a person joining a group has to wait before becoming eligible for coverage
A specified period of time that a person joining a group has to wait before becoming eligible for coverage
⭐️Refusing to pay claims without conducting a reasonable investigation based upon all available information is an example of (Choose from the following options) O1. A required practice. 02. An unfair claims practice. O3. A fair trade practice. O4. A typical insurance practice.
An unfair claims practice?
⭐️Which of the following indicates the person upon whose life the annuity income amount is determined? (Choose from the following options) O1. Owner O2. Insured O3. Annuitant O4. Beneficiary
Annuitant
In whole life insurance, when is the policy cash value scheduled to equal the face amount? (Choose from the following options) O1. By the policy's 10th year O2. When the insured paid up all policy loans O3. It depends on the type of whole life purchased. O4. At the insured's age 100
At the insured's age 100
⭐️Which of the following would be an example of an insurer participating in the unfair trade practice of discrimination? (Choose from the following options) 01. Charging different premium rates to the insureds in different insuring classes O2. Charging the insured higher premiums based on life expectancy 3. Charging the insured higher premiums based on their race O4. Making malicious statements about the insured based on their race
Charging the insured higher premiums based on her race
⭐️Decreasing Term insurance is often used to (Choose from the following options) O1. Liquidate an estate. O2. Build up cash value for retirement. O3. Pay estate taxes. O4. Cover a mortgage.
Cover a mortgage Decreasing Term can be designed to reduce its benefit similar to how a mortgage reduces over time.
⭐️⭐️Regarding health insurance, all of the following are tax-deductible EXCEPT (Choose from the following options) O1. Employer paid group Accidental Death and Dismemberment. O2. Employee paid group disability income. 03. Employer paid group health insurance. 4. Employer paid group Long-Term Care.
Employee paid group disability income (When the employer pays for group premiums, they are ta-deductible to the employer. When the employee pays for a portion of the group disability premiums, they are not tax-deductible to the employee)
⭐️All of the following are features of catastrophic plans EXCEPT (Choose from the following options) O1. High premiums. O2. Out-of-pocket costs. O3. High deductibles O4. Essential benefits.
High premiums Catastrophic plans usually have lower monthly premiums and high deductibles.
⭐️An insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest, so the agent guarantees higher dividends than he knows would be possible. Which term describes what the agent has done? (Choose from the following options) O1. Rebating O2. Twisting O3. Defamation 04. Misrepresentation
Misrepresentation Misrepresentation is the act of portraying sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of dividends, etc. This refers to all forms of communication.
⭐️An insured's life expectancy is 6 months. How often may a viatical settlement provider contact the insured and inquire about the insured's health status? (Choose from the following options) O1. Once a month O2. Every other week 03. Once a week 04. As often as deemed appropriate
O1. Once a month The viatical settlement provider may contact an insured to request information regarding the insured's health status. The contacts cannot be made more often than every 3 months If the insured has a life expectancy of more than one year, and no more than once per month if the Insured has a life expectancy of one year or less.
The purpose of the Fair Credit Reporting Act is to
Protect consumers against the circulation of inaccurate or obsolete personal or financial information
Once an insurer receives a claim, within how many days must the insurer provide claim forms to the insured?
10 days
Once an insurer receives a claim, within how many days must the insurer provide claim forms to the insured?
10 working days
Which of the following is NOT an example of the company's location of incorporation? (Choose from the following options) 01. Foreign O2. Alien 03. Authorized O4. Domestic
03. authorized
⭐️All of the following health insurance disability benefits are income tax free EXCEPT (Choose from the following options) 01. Employee-paid group disability. O2. Key-person disability benefits. O3. Personally-owned individual disability insurance. O4. Employer-paid group disability.
Employer-paid group disability (employer-paid group disability benefits are income taxable)
⭐️What is the tax penalty for withdrawing money from an annuity prior to age 59 1/2? (Choose from the following options) 01.5% 02.10% 03.12% 04.20%
10% ??
When life insurance proceeds are used to pay inheritance taxes and federal estate taxes, it is known as
Estate conservation
⭐️The owner of a deferred annuity pays $100 in premium one month, and $130 the next month. Which of the following terms best describes this premium payment arrangement? (Choose from the following options) O1. Level premium O2. Flexible premium O3. Lump-sum premium O4. Single premium
02 Flexible premium
⭐️⭐️An individual has a $200,000 convertible term life insurance policy. If he chooses, he can (Choose from the following options) O1. Convert to a whole life policy for the same face amount without proof of insurability. O2. Convert to another term policy with a lower face amount without proof of insurability. O3. Purchase an individual annuity for any face amount using the 1035 exchange privilege. O4. Purchase another term policy and increase his death benefit without proof of insurability.
Convert to a whole life policy for the same face amount without proof of insurability Conversion allows a term policy to be changed into a cash value policy (often whole life). While the premium will increase for the same amount of death benefit, no evidence of insurability is required.
The Uniform Provision Law that prevents an insurance company from altering its agreement with a policyholder by referring to documents or other items not contained in the policy is called the (Choose from the following options) O1. Grace Period Provision. O2. Reinstatement Provision. O3. Entire Contract Provision. O4. Legal Action Provision.
Entire Contract provision
The party that sells a life insurance policy in order to effectuate a viatical settlement contract is called the
Viator
⭐️An annuity would normally be purchased by an individual who wants to
Provide income for retirement (The main purpose of an annuity is to liquidate an estate and provide income for retirement. Life insurance creates an estate and provides a death benefit to the beneficiaries)
⭐️All of the following are characteristics of group health insurance plans EXCEPT (Choose from the following options) O1. The benefits under a group plan are more extensive than those under individual plans. O2. The parties that hold a group health insurance contract are the employees and the employer. O3. The cost of insuring an individual is less than what would be charged for comparable benefits under an individual plan. O4. Employers may require the employees to contribute to the premium payments.
The parties that hold a group health insurance contract are the employees and the employer The contract for coverage is between the employer and the insurance company. Only one policy is issued (master policy) to the employer; covered employees receive a certificate of insurance.
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? (Choose from the following options) 01. The insured died before the primary beneficiary. 02. The primary beneficiary died before the insured O3. The deaths occurred at the same time. O4. The estate of the primary beneficiary and the contingent beneficiary split benefits equally.
The primary beneficiary died before the insured
An employee may enroll in an employer's group health plan when he/she initially becomes eligible without proof of insurability. Should he/she enroll at another time, evidence of insurability is required EXCEPT at (Choose from the following options) O1. The first year anniversary of higher employment. O2. The request of the employer. O3. The anniversary of the policy. 04. The annual open enrollment period.
d) The annual open enrollment period. Group plans commonly have a 30-day open enrollment period once a year when employees can enroll without evidence of insurability. If enrolling at other time, the employee would find it necessary to provide evidence of insurability and could be declined.
⭐️ If a loan request is for payment of due premiums on the policy, how soon must the insurer issue a loan?
immediately Requests for any other reason may be deferred up to 6 months.
Which of the following is NOT a characteristic of variable insurance and annuities? (Choose from the following options) O1. Benefits are determined solely based on the policy premium. 2. Cash value accumulates based on the performance of stocks. O3. Benefits are not guaranteed. 04. Cash value is adjusted for inflation.
01 Benefits are determined solely based on the policy premium
⭐️Under HIPAA portability, which of the following are NOT protected under required benefits? (Choose from the following options) 01. Mentally ill 02. Groups of one or more O3. Self-employed O4. Pregnant women
02. Groups of one or more
⭐️If it appears that a person has violated an insurance law, the Commissioner would (Choose from the following options) O1. Revoke the licensee's license. O2. Fine the person $10,000. O3. Cash in the licensee's surety bond. 04. Issue a cease and desist order.
04. Issue a cease and desist order If it appears that a person has violated insurance law, the Commissioner would issue a cease and desist order.
What is the minimum age to apply for a resident producer's license in this state?
18?
⭐️⭐️An agent's first-year commission CANNOT exceed what percentage of the renewal commission for servicing a Medicare Supplement policy in its second year?
200%
⭐️How many excess continuing education credit hours may a licensee carry forward from one licensing period to the next? (Choose from the following options) O1. None 02.6 03.12 04.24
24?
⭐️According to the Time Limit on Certain Defenses provision, no statement or misstatement (except fraudulent misstatements) made in the application at the time of issue will be used to deny a claim after the policy has been in force for (Choose from the following options) 01.5 years. 02.7 years. 03.2 years. O4. 3 years.
3 Years The Time Limit on Certain Defenses provision is similar to the Incontestability provision found in life insurance policies. No statement or misstatement (except fraudulent misstatements) made in the application at the time of issue will be used to deny a claim after the policy has been in force for 3 years.
⭐️Which statement below is INCORRECT regarding the type of term insurance that fits best with the applicant's needs? (Choose from the following options) O1. Applicants wishing to pay off a mortgage should they suffer a premature death might buy a decreasing term plan. 02. Employers looking to provide cost effective group life insurance for their employees may choose annual renewable term. O3. Applicants who may require a larger death benefit in the future should buy convertible term insurance. O4. Applicants concerned with the increasing cost of living should purchase increasing term.
Applicants who may require a larger death benefit in the future should buy convertible term insurance
⭐️Which of the following would be TRUE of both the fixed-period and fixed-amount settlement options? (Choose from the following options) O1. The amount of payments is based on the recipient's life expectancy. O2. The size of installments decreases after certain period of time O3. Both guarantee payments for the life of the beneficiary 4. Both guarantee that the principal and interest will be fully paid out.
Both guarantee the principal and interest will be fully paid out (Neither the fixed-period nor fixed-amount settlement options guarantee income for the life of the beneficiary; however, they both guarantee that the entire principle and interest will be fully paid out)
⭐️Which of the following authorities determines whether a Cease and Desist Order should be issued? (Choose from the following options) O1. Federal Insurance Regulation Board O2. Guaranty Association O3. Commissioner O4. NAIC
Commissioner Whenever It appears that someone is violating an insurance law of Pennsylvania or any rule or regulation made by the Commissioner, the Commissioner may issue a cease and desist order.
⭐️What is the purpose of the gatekeeper in an HMO? (Choose from the following options) O1. Establishing strong preventive care O2. Making sure that services are properly prepaid O3. Controlling costs O4. Making sure that patients do not go to physicians outside of the HMO's region
Controlling Costs (Initially the member chooses a primary care physician or gatekeeper. If the member needs the attention of a specialist, the primary care physician must refer the member. This helps keep the member away from the higher priced specialists unless it is truly necessary)
⭐️An applicant may challenge information discovered as a result of an investigative consumer report under which of the following Acts? (Choose from the following options) O1. Privacy Protection Act 02. Consumer Credit Protection Act О3. HIPAA ©4. Fair Credit Reporting Act
Fair Credit Reporting Act
⭐️If a retirement plan or annuity is qualified, this means (Choose from the following options) O1. It has unlimited uses. O2. Dividends will be paid until payments are distributed. O3. It is not permitted by the IRS. O4. It satisfies IRS requirements for favorable tax treatment.
It satisfies all requirements of the Internal Revenue Service for favorable tax treatment.
⭐️Which of the following used to be called Medicare + Choice Plans? (Choose from the following options) O1. Medicare Supplement Plans O2. Original Medicare Plan O3. Medicare Advantage Plans 04. Medical Insurance
Medicare Advantage Plans
⭐️Among the applicants in the same class and life expectancy, which of the following factors can be used to determine premium rates? (Choose from the following options) O1. Race 02. Occupation O3. Ancestry O4. Marital status
Occupation Discrimination in rates, premiums, or policy benefits for persons within the same class or with the same life expectancy is illegal. No discrimination may be made on the basis of an individual's marital status, race, color, national origin, creed, or ancestry unless the distinction is made for a business purpose or required by law.
⭐️Which of the following best describes a presumptive disability? (Choose from the following options) 01. One that requires the insured to submit to physical exams periodically 02. One that a doctor predicts may reoccur in the future O3. One that the insured will fully recover from in the future O4. One that is severe enough that the insured automatically qualifies for full disability benefits
One that is severe enough that the insured automatically qualifies for full disability benefits
⭐️Which of the following individuals would be a likely candidate to purchase a deferred annuity? (Choose from the following options) O1. Someone who needs to start receiving benefit payments within 6 months of the annuity purchase O2. Someone who wants to leave the death benefit to the beneficiaries 03. Someone who cannot afford life insurance O4. Someone who wants to grow retirement funds tax deferred
Someone who wants to grow retirement funds tax deferred
⭐️Insureds have the right to do which of the following if they have NOT received the proper claim forms within 15 days of their notice to the insurer of a covered loss under a major medical policy? (Choose from the following options) O1. Speak with a claims adjuster or another representative from the insurance company. O2. Submit the description in their own words on a plain sheet of paper. O3. Be reimbursed any copayment or deductible on the claim O4. Demand full payment immediately for the claim
Submit the description in their own words on a plain sheet of paper
⭐️Disability benefits are calculated based on (Choose from the following options) O1. The applicant's earned income. O2. The applicant's net worth. O3. The average salary for the applicant's occupation. O4. An amount agreed upon by the insurer and insured.
The applicant's earned income. The amount of benefit that the insurance company will issue is based upon the applicant's net earned income. in order to prevent over-insurance, most companies do not pay benefits that exceed a percentage of the insured's net earned income.
⭐️⭐️Which of the following is a requirement for replacement of health policies? (Choose from the following options) O1. Policies must overlap to cover pre-existing conditions. O2. Replacements in health insurance are not allowed. O3. The old policy must be cancelled before the new policy can be issued. O4. The old policy must stay in force until the new policy is issued.
The old policy must stay in force until the new policy is issued
⭐️Which of the following types of insurance is investment based, has a level fixed premium, and a nonguaranteed cash value? (Choose from the following options) O1. Universal life O2. Credit life O3. Variable whole life O4. Interest-based life
Variable Whole Life
⭐️When an insured terminates membership in the insured group, the insured can convert to (Choose from the following options) O1. Whole life without proof of insurability. O2. Whole life with proof of insurability. O3. Term without proof of insurability. O4. Term with proof of insurability.
Whole life without proof of insurability
⭐️In group insurance, the primary purpose of the Coordination of Benefits provision is to (Choose from the following options) O1. Prevent overinsurance. O2. Prevent lawsuits between insurance companies involved in the claim. O3. Ensure the payment of claims by all policies that are in effect at the time of the claim. O4. Encourage hospitals to keep their charges reasonable.
prevent overinsurance
Health insurance rates may be based upon all of the following EXCEPT (Choose from the following options) O1. Medical history 02. Religion O3. Gender O4. Age
religion
⭐️Which of the following will be eligible for a tax-sheltered annuity? (Choose from the following options) 01. The elderly O2. Dependents under the age of 21 O3. Public school teachers O4. Military personnel
03 public school teachers A tax-sheltered annuity is a special tax-favored retirement plan available only to certain groups of employees (nonprofit charitable, educational, religious, and other 501c(3) organizations, including all employees in public education).
All of the following statements are true regarding an Ordinary (Straight) Life policy EXCEPT (Choose from the following options) O1. It is funded by a level premium. O2. It builds cash value. O3. If the insured lives to age 100, the policy matures, and the face amount is paid to the insured. 04 It does not have a guaranteed death benefit.
04 It does not have a guaranteed death benefit
⭐️When acting as a field underwriter, a producer is (Choose from the following options) O1. Visiting a prospective policyholder in the client's home rather than in the producer's office. O2. Obligated to turn over all premiums to the insurer in a timely fashion. 03. Obtaining all necessary signatures on the application. O4. Seeking credible information about an applicant for health insurance.
04 Seeking credible information about an applicant for health insurance
Which of the following is a permissible reason for an insurance company to contest payment of a claim based on statements in the application? (Choose from the following options) O1. The insurer has already paid out the expected amount of benefits for the year. O2. The application contains a correction. 03. The application contains material misstatements. O4. The insured died too soon after applying for the policy.
The application contains material misstatements
If an annuity has a guaranteed minimum interest rate, this means (Choose from the following options) O1. The interest rate will not fluctuate. O2. There is no interest rate. ©3. The interest rate will never drop below the guaranteed minimum. O4. The interest rate will never rise above the guaranteed minimum.
The interest rate will never drop below the guaranteed minimum
⭐️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? (Choose from the following options) O1. Guaranteed insurability rider 02. Spouse term rider O3. Children's term rider O4. Payor rider
Children's term rider
⭐️All of the following are true regarding a producer's fiduciary responsibilities EXCEPT (Choose from the following options) O1. All monies must be accounted for and paid to the proper party. 02. A producer who fails to pay trust funds to the company represented is guilty of theft. O3. Producers may commingle personal funds with company funds. O4. A producer who receives money for the sale or negotiation of an insurance contract must keep the funds in a separate trust account.
Producers may commingle personal funds with company funds
Which of the following is NOT a personal use of life insurance? (Choose from the following options) O1. An individual buys insurance to fund a buy-sell agreement. O2. An individual buys insurance to provide future income to a surviving spouse. O3. An individual buys cash value insurance to fund his children's college education. O4. An individual buys insurance to help the family pay off the mortgage in case of premature death.
04 an individual buys insurance to fund a buy-sell agreement
During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sounds worse than it is. This is an example of an unfair trade practice of
defamation
⭐️⭐️An individual is approaching retirement age and is concerned about having proper coverage should he have to be placed in a Long-Term Care (LTC) facility. His agent told him that LTC policies would provide necessary coverage at all of the following levels EXCEPT (Choose from the following options) O1. Skilled. O2. Acute. O3. Custodial. 04. Intermediate.
02 acute
Which of the following best describes pure life annuity? (Choose from the following options) O1. It continues payments to the beneficiary when the annuitant dies. O2. It is also known as refund life annuity. O3. It guarantees to pay out all the proceeds. O4. It provides the highest monthly benefits.
04 It provides the highest monthly benefits (The pure life annuity, also known as Life Only or Straight Life, pays the most since it only guarantees to pay for the rest of one's life without a minimum guarantee)
⭐️All of the following are true of group life insurance EXCEPT (Choose from the following options) O1 When the insured terminates membership in the group the coverage can be converted to whole life. O2. The insureds each own their own contract. O3. Evidence of insurability is usually not required. O4 Premium rates are based upon the average age, gender and purpose of the group
The insureds each own their own contract
⭐️If an insured purchases an insurance policy with a large deductible, what risk management technique is the insured exercising? (Choose from the following options) O1. Sharing O2. Retention O3. Transfer only O4. Avoidance
retention
⭐️⭐️An agent received some inaccurate information, and, as a result, he publicly misstated the financial condition of another entity 12 times over a period of 3 months. If this fact is revealed, the agent may face a fine up to (Choose from the following options) 01.$10,000 02.$5,000 03.$1,000 04 The agent will not be fined due to the unintentional violation.
01. $10,000 Making false statements as to the financial condition of another entity may result in fines of up to $1,000 for each unintentional violation, not to exceed $10,000 in any 6-month period.
A licensee who has moved to Pennsylvania from out of state must provide which of the following before becoming licensed as a resident in this state? (Choose from the following options) 01. Proof of licensing or a letter of clearance from the previous home state O2. A notarized copy of a Pennsylvania driver's license O3. A current utilities bill O4. A United States Postal Service change-of address form
01. Proof of licensing or a letter of clearance from the previous home state ?
⭐️Under the long-term care marketing regulations, which of the following questions would a producer NOT have to ask the applicant in order to determine if the purchase is suitable? (Choose from the following options) O1. What is the amount of your existing health or long-term care insurance? 02. How much are you able to pay in premiums? O3. Do you currently have any Medicare supplement policies? O4. Are you planning to replace an existing health insurance?
02 How much are you able to pay in premiums? Every Insurer marketing long-term care insurance coverage must establish marketing procedures to ensure that any comparison of policles will be fair and accurate, excessive insurance will not be sold, and every reasonable effort is made to identify whether a prospective applicant for long-term care insurance already has accident and health or long-term care insurance, and the types and amounts of any such insurance.
Which of the following elements of an insurance contract requires payment of premium? (Choose from the following options) O1. Offer and acceptance O2. Consideration O3. Legal purpose O4. Competent parties
02 consideration The binding force in any contract is consideration. Consideration on the part of the insured is the payment of premiums and representations made in the application. Consideration on the part of the insurer is the promise to pay in the event of loss.
According to the Fair Credit Reporting Act, all of the following statements are true EXCEPT (Choose from the following options) O1. Investigative consumer reports can be used to obtain information on the applicant's character and reputation. 02. If an applicant is declined for an insurance policy, he or she has no right to know what was in the report. O3. It protects consumers against the circulation of inaccurate information. O4. It ensures that consumer reporting agencies are fair in their treatment of consumers.
02. If an applicant is declined for an insurance policy, he or she has no right to know what was in the report
⭐️All of the following are true of a Multiple Employer Trust (MET) EXCEPT (Choose from the following options) O1. The trusts are formed by insurers, agents, brokers, or third party administrators, who are called sponsors. O2. The sponsor develops the plan, sets the underwriting rules, and administers it. O3. The employee has a right of conversion upon leaving the group coverage. O4. METs allow small employers an opportunity to band together and purchase insurance at a lower group rate.
The employee has a right of conversion upon leaving the group coverage Employees that are covered under a MET have no conversion rights when they leave the trust.
What is the purpose of a disability buy-sell agreement? (Choose from the following options) O1. To help the business meet overhead expenses in case of the owner's disability O2. To protect individuals against loss of income due to a disability O3. To allow the business buyout in case of the owner's disability O4. To reimburse the business in case of a key employee's disability
To allow the business buyout in case of the owner's disability
⭐️J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose? (Choose from the following options) O1. Interest Only 02. Joint and Survivor O3. Fixed Amount O4. Fixed Period
03. A fixed amount
⭐️A man is an attorney when he applies for a health policy. He decides to become a professional bungee jumper. He files a claim. What should happen? (Choose from the following options) O1. His coverage will be dropped. O2. The man's workers comp will pay the claim in full. O3. The insurance company will not pay the claim O4. The insurance company will pay the claim according to the benefits available if the correct premium had been paid.
04 The insurance company will pay the claim according to the benefits available if the correct premium had been paid.
⭐️Guaranteeing future dividends is considered to be an unfair or deceptive act known as (Choose from the following options) O1. Twisting. O2. False financial statements. O3. Rebating. 04. Misrepresentation.
Misrepresentation
⭐️An insured undergoes a minor surgical procedure. The insurer owes the insured $500 in medical claims. However, the last premium of $200 due on the policy was never paid. How much should the insured receive in claims? a) $200 b) The claim will not be processed until the premium is paid. c) $500 d) $300
d) $300 If a premium is past due and the insurer owes claim payment, the amount of the premium will be deducted from the amount of the claim. in this case, the claim is worth $500 and the premium costs $200, so the insured would recelve the net total of $300 from his insurer.
⭐️An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request? (Choose from the following options) O1 3 days 02. 5 days O3. 10 days 04. 30 days
3 days
⭐️⭐️ A person receives his Medicare supplement policy and is not satisfied with the provisions. He can return the policy for a full premium refund if he does so within how many days?
30
⭐️Which of the following is a correct statement about annuities? (Choose from the following options) O1. Variable annuities place the funds into the company's general account. O2. Fixed annuities have the annuitant assume the risks of investment. O3. Fixed annuities do not provide protection against inflation. O4. Variable annuities provide minimum guaranteed rate of interest.
Fixed annuities do not provide protection against inflation
Which of the following statements is INCORRECT? (Choose from the following options) O1. The insurer also has the right to conduct an autopsy, if not forbidden by state law. 02. The insurer does not have the right to conduct an autopsy. O3. The physical exam and autopsy provision gives the insurer the right to examine the insured, at its own expense. O4. The physical exam and autopsy provision gives the insurer the right to examine the insured as often as may be reasonably necessary while a claim is pending.
The insurer does not have the right to conduct an autopsy ?
⭐️Policy loan requests, except for loan requests for payment of due premiums, may be deferred for a period of up to (Choose from the following options) O1.30 days. O2.90 days. 03.6 months. 04.9 months.
6 months
⭐️An applicant misstates his age on his application for a health insurance policy. He states that he lis 39, but his actual age is 49. When he files a claim, what will most likely happen? (Choose from the following options) O1. The policy will automatically be dropped. O2. If the mistake was found after incontestability period, the benefit will be paid in full. O3. Benefits paid will be those that would have been purchased at the correct age. O4. Benefits will not be paid.
Benefits paid will be those that would have been purchased at the correct age?
An insured has an individual disability income policy with a 30-day elimination period. He becomes disabled on June 1st for 15 days. When will he collect on his disability income payments? a) He will collect 15 days of payment after 30 days. b) He will begin collect on the 15th day. c) He will begin collecting on June 1st d) He won't collect anything.
d) He won't collect anything. The insured cannot collect anything because he did not satisfy the elimination period.
⭐️When filling out an application for insurance, the applicant makes a mistake. If a fresh application were not available, what could the applicant do to properly correct the mistake? (Choose from the following options) 01. Cross the incorrect answer out, write the correct one beside it, and initial the answer. O2. Either white out the answer or cross it out and write the new answer beside it. O3. Nothing. A fresh application must be obtained. O4. White out the incorrect answer and write the new one over it.
Cross the incorrect answer out, write the correct one beside it, and initial the answer
