LAH EXAM QUESTIONS
Most LTC plans have which of the following features?
Guaranteed renewability
All of the following are Nonforfeiture options EXCEPT
Interest only
Which of the following does a producer NOT have the authority to do?
Issue policies
Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?
Optionally renewable
Medicare Part A services do NOT include which of the following?
Outpatient Hospital Treatment
An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called
Paid-up additions
Under which provision can a physician submit claim information prior to providing treatment?
Prospective Review
Which of the following insurance options would be considered a risk-sharing arrangement?
Reciprocal
The Federal Fair Credit Reporting Act
Regulates consumer reports.
All of the following are requirements for producer license renewal EXCEPT
Renewal examination
Which of the following describes attachments made to policies that either add or modify coverage?
Riders
An individual was just caught acting as an exclusive general agent - even though he is not properly licensed. Assuming that this occurred in a single day, what is the maximum penalty he faces?
A third degree misdemeanor and a $1,000 fine
What is the civil penalty for the first violation of the Pennsylvania Insurance Fraud Prevention Act?
$5,000
An insured covered by a dread disease policy is confined to a hospital for 2 years as the result of a covered loss. In this situation, what is the minimum amount that the policy must pay?
$50,000
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?
$50,000
As deductible amounts increase, premium amounts change in what way?
. Decrease
An insured's disability income policy includes an additional monthly benefit rider. For how many years can the insured expect to receive payment from the insurer before Social Security benefits begin?
1
Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to
10 years.
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Accumulation at Interes
The Omnibus Budget Reconciliation Act of 1990 requires that large group health plans must provide primary coverage for disabled individuals under
Age 65 who are not retired.
An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of a report is that?
Agent's Report
An insurer wishes to compare the information given in an insurance application with previous insurance applications by the same applicant but for different companies. What organization can help the insurer accomplish this?
The Medical Information Bureau
All of the following statements about equity index annuities are correct EXCEPT
The annuitant receives a fixed amount of return.
All of the following are true about group disability Income insurance EXCEPT
Coverage applies both on and off the job.
Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?
Consumer report
When a producer died, his surviving spouse needed to maintain the insurance agency until it could be sold. Without testing, she could qualify for a temporary license for a maximum period of
180 days.
Unless otherwise required, policyholders must be notified of an increase in premium rates that triggers the contingent benefit on lapse. How long does the insurer have to provide this notice?
30 days
Within how many days must a producer respond to an inquiry from the Commissioner?
30 days
A long-term care policy may NOT lapse because of unpaid premiums, unless the insurer gives at least
30 days' notice.
What is the period of coverage for events such as death or divorce under COBRA?
36 months
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
For the purpose of examination by the department, insurers must keep a record of all financial files for at least
5 years.
How many eligible employees must be included in a contributory plan?
75%
If a licensed person is moving to Pennsylvania, he or she may become licensed as a resident if they submit a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state?
90 days
Most policies will pay the accidental death benefits as long as the death is caused by the accident and occurs within
90 days
.Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within
90 days of a loss.
In underwriting a substandard risk, which of the following is INCORRECT?
A discounted premium would be charged.
A Straight Life policy has what type of premium?
A level annual premium for the life of the insured
Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death?
A minor son of the insured
In which of the following situations is it illegal for an insurer to disclose privileged information about an insured?
A researcher for marketing purposes
What is a material misrepresentation?
A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company
When an insured purchased her disability income policy, she misstated her age to the agent. She told the agent that she was 30 years old, when in fact, she was 37. If the policy contains the optional misstatement of age provision
Amounts payable under the policy will reflect the insured's correct age.
The minimum interest rate on an equity indexed annuity is often based on
An index like Standard & Poor's 500.
3.When an annuity is written, whose life expectancy is taken into account?
Annuitant
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
Any form of life insurance
In a replacement situation, all of the following must be considered EXCEPT
Assets.
Which of the following would NOT be considered an exception to the National Do Not Call List?
Calls for which the consumer has given prior written permission
If an individual is covered by a policy that includes an Accidental Death & Dismemberment rider, what term describes the maximum benefits he will receive if he loses sight in both eyes as a result of a fire?
Capital sum
When a policyowner designates a group of individuals as the beneficiary of a life insurance death benefit without specifically naming the individuals, this is called
Class designation.
A producer who fails to segregate premium monies from his own personal funds is guilty of
Commingling
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
Decreasing term
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?
Depreciation period
Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?
Disability Buy-Sell
Which of the following will NOT be considered unfair discrimination by insurers?
Discriminating in benefits and coverages based on the insured's habits and lifestyle
Which of the following statements is correct concerning taxation of long-term care insurance?
Excessive benefits may be taxable.
Which nonforfeiture option has the highest amount of insurance protection?
Extended Term
Which nonforfeiture option provides coverage for the longest period of time?
Extended term
Which of the following is an example of an unfair claims settlement practice?
Failure to promptly settle a claim when liability has been clearly established
An applicant wants to buy a life insurance policy in which he can count on receiving the same benefits as stated in the contract. Which type should he buy?
Fixed
When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?
Foreign
What option allows the insured to periodically increase benefit levels without providing evidence of insurability?
Guarantee of insurability
A Universal Life insurance policy has two types of interest rates that are called
Guaranteed and Current.
At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called
Guaranteed insurability.
Under which of the following circumstances can financial institutions share insurance coverage information with third parties, for the purpose of soliciting the purchase of insurance?
If a consumer does not sign and return the notice of disclosure within 30 days
A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?
If the father is disabled for more than 6 months
An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?
If the primary beneficiary predeceases the insured
In which of the following locations would skilled care most likely be provided?
In an institutional setting
A life insurance policy has a legal purpose if both of which of the following elements exist?
Insurable Interest and Consent
Which of the following is true about the premium on the children's rider in a life insurance policy?
It decreases when the oldest child reaches the age of 21.
A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?
Joint life
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 of the following would be the best option that would help the surviving spouse of the insured to put her child through daycare after the insured's death?
Life insurance proceeds
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report
Must be informed of the source of the report.
ABC Insurance Company wishes to begin transacting business in Pennsylvania. Before it can do so, it must do which of the following?
Obtain a certificate of authority
Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance?
Only written statements can be considered fraud.
Which of the following is an example of a peril covered in an accident and health insurance policy?
Sickness
Which of the following policies would be classified as a traditional level premium contract?
Straight Life
Which of the following is called a "second-to-die" policy?
Survivorship life
Which of the following is an example of a producer being involved in an unfair trade practice of rebating?
Telling a client that his first premium will be waived if he purchases the insurance policy today
Which of the following entities established the Do-Not-Call Registry?
The Federal Trade Commission
Which of the following is NOT a characteristic of a group long-term disability plan?
The benefit can be up to 66 and 2/3% of one's monthly income.
If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur?
The change must be reported to the Commissioner.
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.
A 40-year old man buys a whole life policy and names his wife as his only beneficiary. His wife dies 10 years later. He never remarries and dies at age 61, leaving 2 grown-up children. Assuming he never changed the beneficiary, the policy proceeds will go to
The insured's estate.
Which of the following is NOT a feature of a noncancellable policy?
The insurer may terminate the contract only at renewal for certain conditions.
Who is the beneficiary in a credit health policy?
The lending institution
Which of the following is NOT a characteristic of an insurable risk?
The loss must be catastrophic.
Which of the following determines the cash value of a variable life policy?
The performance of the policy portfolio
All of the following are general requirements of a qualified plan EXCEPT
The plan must provide an offset for social security benefits.
If an insured continually uses the automatic premium loan option to pay the policy premium,
The policy will terminate when the cash value is reduced to nothing.
Which of the following is NOT true regarding Equity Indexed Annuities?
They earn lower interest rates than fixed annuities.
What is the purpose of coinsurance provisions?
To help the insurance company to prevent overutilization of the policy
What is the purpose of the Insurance Guaranty Association?
To protect policyowners against insurer insolvency
When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees
To renew the policy until the insured has reached age 65.
Should an insurance company deny a claim submitted by an insured without providing to that insured a prompt and reasonable explanation of the claim denial, the insurer would be in violation of
Unfair claims methods and practices regulations.
Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
Universal life
Which of the following defines the owner a life insurance policy who seeks to sell the policy due to a terminal or chronic illness?
Viatical settlement provider
How soon after the due date should the insurer pay the agent appointment fees?
Within 30 days
In individual health insurance coverage, the insurer must cover a newborn from the moment of birth, and if additional premium payment is required, allow how many days for payment?
Within 31 days of birth