Insurance Exam 3

#40. Which of the following would provide an underwriter with information concerning an applicant's health history? a) The Medical Information Bureau b) A medical examination c) The agent's report d) The inspection report

The Medical Information Bureau

#14. An insurance agent has received a request for a hearing from the Commissioner. Within how many days must the hearing be held? a) 10 days b) 15 days c) 30 days d) 45 days

30 days

#13. What type of premium do both Universal Life and Variable Universal Life policies have? a) Increasing b) Flexible c) Level fixed d) Decreasing

Flexible

#3. For how long are insurers required to maintain records pertaining to life insurance solicitation? a) 2 years b) 3 years c) 4 years d) 5 years

3 years

#38. Which of the following best describes the aleatory nature of an insurance contract? a) Ambiguities are interpreted in favor of the insured b) Policies are submitted to the insurer on a take-it-or-leave-it basis c) Exchange of unequal values d) Only one of the parties being legally bound by the contract

Exchange of unequal values

#32. Which of the following would NOT be a violation of state insurance regulations? a) Agent A uses her license to write only insurance for herself and her immediate family. b) Agent B charges his clients a consulting fee, in addition to the premium for placing a policy. c) Agent C uses her license to write only business other than controlled. d) Agent D collects premiums due on policies and deposits the funds in his own personal account.

Agent C uses her license to write only business other than controlled.

#9. An insured receives an annual life insurance dividend check. What term best describes this arrangement? a) Cash option b) Reduction of Premium c) Annual Dividend Provision d) Accumulation at Interest

Cash option

#15. Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of a) Rebating. b) Twisting. c) Defamation. d) Misrepresentation.

Twisting.

#18. Which of the following is an eligibility requirement for all Social Security Disability Income benefits? a) Have permanent kidney failure b) Be at least age 50 c) Have attained fully insured status d) Be disabled for at least 1 year

Have attained fully insured status

#28. The paid-up addition option uses the dividend a) To reduce the next year's premium. b) To accumulate additional savings for retirement. c) To purchase a smaller amount of the same type of insurance as the original policy. d) To purchase a one-year term insurance in the amount of the cash value.

To purchase a smaller amount of the same type of insurance as the original policy

#1. Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled? a) Waiver of Premium b) Payor Benefit c) Jumping Juvenile d) Juvenile Premium Provision

Payor Benefit

#26. Which of the following best describes the MIB? a) It is a rating organization for health insurance. b) It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. c) It is a government agency that collects medical information on the insured from the insurance companies. d) It is a member organization that protects insured against insolvent insurers.

It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.

#8. On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are a) Paid at a fixed rate every year. b) Taxable as ordinary income. c) Guaranteed. d) Not taxable since the IRS treats them as a return of a portion of the premium paid.

Not taxable since the IRS treats them as a return of a portion of the premium paid.

#5. The policyowner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as a) The policyowner cannot skip premiums without the policy lapsing. b) The next month's premium is sufficient to cover both the current premium amount and the skipped amount. c) The policy contains sufficient cash value to cover the cost of insurance. d) The previous premium payments were high enough to create an excess of premium.

The policy contains sufficient cash value to cover the cost of insurance.

#7. If an insurance premium is paid by the policyowner to the agent, and the agent fails to remit that premium to the insurer, which of the following statements is true? a) The policy will not lapse since payment to the agent is the same as a payment to the insurer. b) The premium will be taken out of the Guaranty Association funds. c) The agent's license will be automatically revoked. d) The policy will lapse since the premium was not received by the insurer.

The policy will not lapse since payment to the agent is the same as a payment to the insurer.

#30. What is the purpose of Life Insurance Solicitation regulation? a) To identify the required and prohibited actions for insurance advertising b) To help producers understand different insurance policies c) To help consumers compare life insurance products in regard to their relative cost d) To provide information regarding replacement of policies

To help consumers compare life insurance products in regard to their relative cost

#20. All of the following are the most common variations in a Long-Term Care policy EXCEPT a) Number of family dependents. b) The amount paid for nursing home care. c) Number of days of confinement covered. d) Number of home health visits covered.

Number of family dependents.

#33. A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will a) Automatically pay the policy proceeds. b) Pay the policy proceeds only if it would have issued the policy. c) Pay the policy proceeds up to an established limit. d) Not pay the policy proceeds under any circumstances.

Pay the policy proceeds only if it would have issued the policy.

#22. The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose? a) Fixed amount option b) Interest only option c) Life income with period certain d) Joint and survivor

Interest only option