insurance exam

When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following?

Residual disability

Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant?

Risk classification

Which of the following statements regarding a Tax Sheltered Annuity (TSA) is INCORRECT?

The income from the TSA is received income tax-free

A policy of adhesion can only be modified by whom?

The insurance company

K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?

$20,000 death benefit

B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what will the policy pay B's beneficiary?

$300,000

To be classified as a small employer, an employer must employ

2-50 employees

J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and receives a bill for $10,000, J would pay

3,600

Jay's application for a producer's license has been denied. He may request a hearing within ___ days after receipt of the denial.

30

How long is the typical free lock period for Long Term care insurance policies?

30 days

S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations?

36

M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?

45 days

Which of these individuals may NOT be compensated from an insurance company?

A licensed producer not appointed by the company

Which of these is considered an unfair trade practice?

A producer stating that a policy's dividends are guaranteed

Which of the following is NOT included in an annuity contract?

AD&D rider

When does a Probationary Period provision become effective in a health insurance contract?

At the policy's inception

S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?

Automatic Policy Loan

All of the following statements about Major Medical benefits are true, EXCEPT:

Benefits have no maximum limit

G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is

Business Overhead Expense

An example of life insurance policy replacement would be?

Cash surrender an existing whole life policy and purchasing a new whole life policy

A policy loan is made possible by which of these life insurance policy features?

Cash value provision

Which of the following is considered a producer's fiduciary responsibility?

Collect premiums and remit to the insurance company as soon as reasonably possible

Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy?

Discourages overutilization of the insurance coverage

When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the

Entire Contract Provision

An insurer receives proof of loss for an acceptable medical expense claim under an Individual Health Insurance Policy. Under the Time of Payment of Claims provision, the insurer MUST pay the benefits

Immediately

A young, married teacher has two children and owns a Whole Life policy. If the teacher wants an increasing Death Benefit to protect against inflation, the teacher should select which of the following Dividend Options?

Paid-Up Additional Insurance

K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation?

Reinstatement

What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?

Waiver of Premium rider

Which situation does NOT require a producer to provide a suitability statement to the annuity company?

When a producer discusses annuities in general with a client, but no specific recommendation is made

Under which circumstance MUST a health insurer have an expedited grievance review procedure?

When the enrollee's life or health is jeopardized

All students attending a large university could be covered by

a blanket policy

When making a recommendation to a consumer to purchase an annuity, the producer must make reasonable efforts to obtain suitability information. Suitability information includes

age, annual income, financial experience

A credit life insurance policy covers the life of the

debtor

Life insurance and annuity replacement can be BEST described as

exchanging an existing policy for a new policy

An example of an unfair claims practice would be

failing to effectuate prompt, fair, and equitable settlements of a claim

The type of annuity that can be purchased with one monetary deposit is called a(n):

immediate annuity

Which entity issues Medicare Supplement insurance?

insurance companies

A license may be denied, suspended, or revoked if the licensee

is found guilty of misrepresentation or fraud in obtaining the license

Health insurance plans that cover physical therapy visits may NOT impose a copay that

is greater than the copay for primary care office visits

Credit Life insurance is

issued in an amount not to exceed the amount of indebtedness

Pre-hospitalization authorization is considered an example of:

managed care

Which of the following activities may NOT be granted as credit for continuing education units?

meeting sales quotas

A producer is circulating incorrect information about the benefits of a policy. This producer may be found guilty of

misrepresentation

Periodic health claim payments MUST be made at least:

monthly

The Coordination of Benefits provision:

prevents an insured covered by two health plans from making a profit on a covered loss

The Legal Actions provision of an insurance contract is designed to do all of the following, EXCEPT:

protect the producer

A producer as influenced an existing policyowner to convert an existing whole life policy to Reduced Paid-up insurance. The producer then sells the policyowner a new universal life policy. This transaction is called a(n):

replacement

Which of the following types of life insurance policies involves an investment account that is separate from the insurer's general account?

variable life

A hearing must be held before a producer's license can be suspended or revoked. Prior to this hearing, the Director is required to give

written notice to the producer

Prior to a producer's license being revoked, a hearing must be held. Prior to this hearing, the Director of Insurance is REQUIRED to give

written notice to the producer

K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed?

Daughter

Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?

Decreasing Term

Which Unfair Trade Practice involves making a false statements about the financial condition of another insurance company?

Defamation

Which type of provider is known for stressing preventative medical care?

Health Maintenance Organizations (HMOs)

S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits?

Full benefits are payable under the Master contract

Coverage for human leukocyte antigen testing for bone marrow transplantation is REQUIRED to be provided in all

Group comprehensive health policies

In Missouri, a health insurance policy that is not exempt from state-mandated benefits must cover childhood immunizations and shall not charge any deductible or copayment. The EXCEPTION to this would be

HMO's that exclude coverage to subscribers who obtain services by a non-participating provider

T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take?

Increase her policy's coverage amount

Information obtained from a phone conversation to the proposed insured can be found in which of these reports?

Inspection report

Which health policy clause specifies the amount of benefits to be paid?

Insuring

Which of the following actions will be an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy?

Issue the policy with an altered Time of Payment of Claims provision

What is the purpose of a Policy Summary?

It highlights the critical parts of the policy issued

Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE?

It is taxed as ordinary income

Which licensee faces possible license revocation by the Director of Insurance?

Licensee who commingles monies belonging to policyholders with personal funds

Which of these are NOT an example of Nonforfeiture option?

Life Income

Which of these is NOT considered to be a right given to a policyowner?

Modify a provision in the insurance contract

J purchased a Disability Income Policy that ONLY J can terminate and on which the rates will never increase above those illustrated in the policy. Which of the following types of policies did J purchase?

Noncancelable

What must a producer sign when an existing life insurance policy is being reissued with a reduction in cash value?

Notice Regarding Replacement

Which Long Term Care insurance statement is true?

Pre-existing conditions must be covered after the coverage has been in force for six months

What is the purpose of the Time of Payment of Claims provision?

Prevents delayed claim payments made by the insurer

The individual who provides general medical care for a patient as well as the referral for specialized care is known as a

Primary Care Physician

What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive?

Primary Insurance Amount (PIA)

K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?

Proceeds will be payable to K's estate if P dies within a specified time

A primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy. Which of the following will occur when the insured dies?

Proceeds will go to the contingent beneficiary

Jasmine is a salaried employee of an insurance company. Which of the following duties would require her to be licensed as an insurance producer?

Soliciting insurance policies

The insuring clause

States the scope and limits of the coverage

What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision?

Submit the claim in any form

What type of life policy covers two people and pays upon the death of the last insured?

Survivorship

Which of these is a TRUE statement regarding how Missouri law recognizes an association eligible for group coverage?

The association must NOT have been organized for the purpose of obtaining insurance

Under which circumstance could a child be denied enrollment into a health plan in Missouri?

The child is not related to and is not adopted by the plan member

What is the underlying concept regarding level premiums?

They early years are charged more than what is needed

How does a typical Variable Life Policy investment account grow?

Through mutual funds, stocks, bonds

T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called

Time Limit on Certain Defenses

Which Accident and Health policy provision addresses preexisting conditions?

Time Limit on Certain Defenses

Why is an applicant's signature required on a life insurance application?

To attest that the statements on the application are accurate to the best of the applicant's knowledge

Which of the following types of policies BEST identifies one in which the cash value may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors?

Universal Life

Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?

Variable Life

All of the following statements regarding group health insurance is true, EXCEPT:

an individual policy is given to each member

The guarantee of insurability option provides a long-term care policyowner the ability to:

buy additional coverage at a later date

The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n):

closed panel

Any state-regulated health insurance plan issued in Missouri MUST

cover childhood immunization services

For the treatment of PKU, a health plan MUST cover formula and low protein modified food products for

covered children less than six years of age

With Optionally Renewable Health policies, the insurer may

review the policy annually and determine whether or not to renew it

Which of these factors does NOT influence an applicant's need for life insurance?

self-maintenance expenses

The suicide provision for life policies would apply to

subsequent increases in benefits

Under Missouri law, when one group health plan's contact replaces an existing group health plan with similar benefits,

the succeeding carrier shall give credit for the satisfaction of any deductibles or waiting periods satisfied or partially satisfied under the prior carrier's plan

An insured recently took out a cancer insurance policy. The time limit on certain defenses provision in this policy allows the insurer

to deny the amount of a claim for misstatements on the application occurring prior to the expiration of the first two policy years

According to the Time Limit of Certain Defenses provision in an Individual Health Insurance Policy, nonfraudulent misstatements first become incontestable:

two years from the date of the policy was issued

Life and health insurance policies are:

unilateral contracts