L&H Practice Exam

The Individual Health Insurance policy that offers the broadest protection is a(n) ________ ________ policy. -Surgical Benefit -Indemnity Medical -Major Medical -Hospital Expense

Major Medical

If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses? -Long-term care -Indemnity -Medicare Supplement -Medicaid

Medicare Supplement

When will a hearing be held after a notice of hearing, alleging participation in an unfair or deceptive act, is served to a licensee or insurer by the Commissioner? -No sooner than 30 days -No sooner than 15 days -No sooner than 10 days -No sooner than 6 days

No sooner than 6 days

Which of the following BEST describes a short-term medical expense policy? -Conditionally renewable -Noncancellable -Guaranteed renewable -Nonrenewable

Nonrenewable

All of these statements concerning Settlement Options are true, EXCEPT:

Only the beneficiary may select

The provision that defines to whom the insurer will pay benefits to is called: -Entire Contract -Proof of Loss -Claim Forms -Payment of Claims

Payment of Claims

Which of the following actions does the Commissioner of Insurance NOT have the power to conduct?

activate insurance companies' financial reserves

How long does the coverage normally remain on a limited-pay life policy?

age 100

When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have: -All statements be warranties -Insurable interest in the proposed insured -The agent complete a third-party application -All those involved be family related

insurable interest in the proposed insured

Credit Life Insurance is: -illegal in this state -insurance issued on a debtor to cover outstanding loan balances -not regulated in this state -insurance issued to a creditor to cover outstanding loan balances

insurance issued on a debtor to cover outstanding loan balances

B receives yearly dividends and interest from a participating life insurance policy. Which of these should B include as gross income for federal income tax purposes?

interest only

J was reviewing her Health Insurance policy and noticed the phrase "This policy will only pay for a semi-private room". This phrase is considered to be a(n)

internal limit

A Universal Life policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, cost of insurance, and the: -inherent risk -commission rate -inflation factor -expense charges

expense charges

An employee is covered under a company group life plan with a $50,000 death benefit. What is the MAXIMUM amount a spouse may be insured for under this program? -$10,000 -$25,000 -$40,000 -$50,000

$25,000

Every 12-months after the initial enrollment period, an HMO must hold an open enrollment period of

31 days

__% of continuing education MUST be completed in the classroom or classroom equivalent

50%

A plan through the Marketplace may be purchased by

Any legal resident (except those imprisoned)

Any changes made on an insurance application requires the initials of whom? -Insured -Agent -Applicant -Beneficiary

Applicant

In order to establish a Health Reimbursement Arrangement (HRA), it MUST: -Be offered in conjunction with other employer provided health benefits -Limit the benefits to prescription drugs only -Be established by the employer -Limit the amount of money the employee can contribute toward the account

Be established by the employer

A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim? -Claim will be paid and coverage will remain in force -Claim will be denied and coverage will remain in force -Claim will be denied and coverage will be cancelled -Claim will be denied, the coverage cancelled, and all premiums paid will be refunded

Claim will be paid and coverage will remain in force

How often must an insurance agent license normally be renewed? -Every 6 months -Each year -Every 2 years -Every 3 years

Every 2 years

D owns a Whole Life policy that was purchased 10 years ago. If the premium payments suddenly stop and D takes no additional action, which Nonforfeiture Option will the insurer likely proceed with? -Extended term -Loan provision -Reduced Paid-up -Cash Surrender

Extended term

After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? -File a lawsuit -Contact the insurer again requesting forms -Nothing -File written proof of loss

File written proof of loss

In life insurance, the needs approach is used mostly to establish: -Which type of life insurance a client should apply for -How much life insurance a client should apply for -Which company a client should use when applying for life insurance -What the maximum amount the client can spend on life insurance

How much life insurance a client should apply for

The _______ clause identifies which losses resulting from an accident or sickness are insured by the policy. -Identification -Benefit -Payment -Insuring

Insuring

J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?

Reinstatement provision

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: -Insuring -Time Limit on Certain Defenses -Grace Period -Free-look

Time Limit on Certain Defenses

Life insurance companies are required to establish and maintain an anti-money laundering compliance program according to which federal regulation?

USA Patriot Act

Which of the following policies is characterized by a flexible premium and death benefit and allows the policyowner control of the investment aspect of the plan? -Variable life -Universal life -Variable universal life -Adjustable life

Variable universal life

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? -Accidental Death and Dismemberment rider -Disability Income rider -Guaranteed Insurability rider -Waiver of Premium rider

Waiver of Premium rider

A prospective insured completes and signs an application for health insurance but intentionally conceals information about a pre-existing heart condition. The company issues the policy. Two months later, the insured suffers a heart attack and submits a claim. While processing the claim, the company discovers the pre-existing condition. In this situation, the company will

continue coverage but exclude the heart condition

The benefits under a Disability Buy-Out policy are

payable to the company or another shareholder

A policy that becomes a Modified Endowment Contract (MEC): -will no longer allow for policy loans -must be places in an irrevocable trust -can never be reinstated after a lapse -will lose many of its tax advantages

will lose many of its tax advantages