Life Insurance Exam
What is the primary difference between an annuity and universal life
The correct answer is: Universal life has a death benefit
The non-forfeiture option that provides an insured with coverage for a specified period of time can be best described as?
The correct answer is: extended term
A characteristic of Usual Reasonable Customary Costs (URC) would be? a. payments of the insurer to the insured for services b. payments of premium to the insurer from the insured Usual Reasonable c. payments of the physician to the insured for reimbursement d. payments of the insurer to the physician for services
Customary Costs will be how the physician receives payments for services. The correct answer is: payments of the insurer to the physician for services
Which of the following BEST describes a morale hazard? a. Indifference to loss b. Filing an insurance claim c. Lying on an application d. Diabetes
Indifference to loss
Which policy has the most limited choice of providers? a.POS b.Indemnity plan c.HMO d.PPO
The correct answer is: HMO
Which of the following must be included in an insurer's advertisement?
The correct answer is: corporation name
Which of the following is NOT true about key person insurance a. employer is applicant b. benefits tax free c. employee chooses beneficiary d. benefits paid as lump sum
The employee does not choose the beneficiary, key person insurance protects the business. The correct answer is: employee chooses beneficiary
A contract that has multiple parties and requires conditions to be met before consideration may be paid is best described as: a. adhesion b. aleatory c. unilateral d. conditional
The keyword in the question is conditional. Conditional contracts have conditions that must be met. The correct answer is: conditional
In regards to workers compensation, how are benefits handled? a. January 1st through March 31st b. 70 1/2 c. workers compensation pays the benefits d. coverage service within area
Workers compensation pays the benefits.
HMOs must file all complaints lodged against them with which government agency
dept of insurance and commisioner
In regards to an Individual Retirement Account (IRA), which statement best describes this? a. funds are 100% owned immediately after depositing b. funds are 100% owned after age 70 1/2 c. funds are 100% owned upon the death of depositor d. funds are 100% owned after age 59 1/2
funds are 100% owned immediately after depositing
which of the following is true about sharing of commissions between producers?
he correct answer is: must have the same licenses
An absolute assignment can be best described as?
one way transfer
A policy with multiple insureds and pays out upon the last persons death used for estate planning is known as:
survivorship
R has a disability policy without the recurrent disability definition and a 1 month elimination period. R injures his back on January 1st and recovers 3 weeks later. R again injuries his back on June 1st and is disabled until December 31st. When would benefits begin a.July 1st b.December 31st c.June 1st d.January 1st
. The correct answer is: July 1st
The clause in a contract that states a claim in court may not be brought against an insurer for 60 days after Proof of Loss was submitted is known as: a. Time Payment of Claims clause b. Time Limit on Certain Defenses clause c. Legal Actions clause d. Insuring clause
Legal Actions clause
What is the purpose of choosing a contributory vs. noncontributory plan? a. To keep adverse selection down b. To keep every person in America insured c. To increase costs to the insured d. To increase costs on the employer
Noncontributory plans state the EMPLOYEE pays zero of the premiums, but require 100% employee participation. The participation limit lowers adverse selection to the insurance company by requiring all employees to be covered. The correct answer is: To keep adverse selection down
Which of the following is CORRECT if a claims form has not been provided? a. Proof of loss may be submitted on any document as long as it is in writing b. Claims will be denied c. The insured should wait for a claims form d. Proof of loss is not available
Proof of loss may be submitted on any document as long as it is in writing
A producers license would likely not be granted in which scenario? a. they plan to only sell to their friends and family b. they plan to sell with a nonresident license c. they plan to explain policy provisions and quote premiums d. they plan to seek multiple insurance company appointments
Selling insurance only to friends and family is known as controlled business. You can only have 75% controlled business, 25% of your customers must be the public. the correct answer is they only sell to friends and family
Which of the following policies requires a securities license a. annual term b. adjustable life c. interest sensitive whole life d. variable life
The Texas Department of Insurance (TDI) regulates life insurance, the Securities and Exchange Commission (SEC) regulates stock market products. Variable means stock market. The correct answer is: variable life
The clause where the insured may find the "promise to pay" is known as:
The clause where the insured may find the "promise to pay" is known as:
A person has a 25,000 claim and is covered by two health insurance plans. Their primary insurer pays 13,500 of the claim. How much will their secondary insurer pay of this claim? a.11,500 b.25,000 c.13,500 d.0
The correct answer is: 11,500
A person has been receiving disability benefits for 12 months before June 1st 2014 in the amount of $12,000. What amount will they claim as taxable income in 2015? Question 82 Select one:a. $0 b. $9,000 c. $12,000 d. $6,000
The correct answer is: $0
J has an Accidental Death policy in the amount of $100,000 naming Q and H as co primary beneficiaries and his father as a contingent beneficiary. Q dies due to cancer and J dies in an accident. What is the MAXIMUM amount the father will receive? Question 79 Select one:a. $0 b. $66,000 c. $50,000 d. $100,000
The correct answer is: $0
Under a contributory group life insurance plan, when XYZ employer pays $45,000 in premiums, what amount is taxable to the employee? a. $9,200 b. $45,000 c. $5,000 d. $0
The correct answer is: $0
An insured has a 20 Pay Whole Life policy in the amount of $20,000 with an Accidental Death and Dismemberment rider that pays double indemnity. The insured died due to cancer, what amount will the beneficiary receive a.$60,000 b.$40,000 c.$20,000 d.$0
The correct answer is: $20,000
An insured has a flat deductible of $100 and coinsurance of 80/20 on a major medical policy. What amount would the insured be responsible for on a $2,000 claim? a.$380 b.$100 c.$480 d.$500
The correct answer is: $480
A family has a Disability policy paying a $500 monthly benefit with a 31 day elimination period. The insured is in the hospital for 2 1/2 months. What amount will they receive in benefits a. $1,000 b. $1,250 c. $1,750 d. $750
The correct answer is: $750
G owns a business and has a Business Overhead Expense policy that pays $5,000 per month. G sells his business and then files a claim 4 months later. How much will his Business Overhead Expense policy pay a. 5,000 b. 0 c. 3,000 d. 10,000
The correct answer is: 0
j purchased an Accidental Death and Dismemberment policy in the amount of 20,000. Three years later, he becomes severely depressed and takes his own life. Out of these options, what is the MAXIMUM his policy will pay a. 40,000 b. 20,000 c. 0 d. 60,000
The correct answer is: 0
According to the Time Payment of Claims clause on a disability policy, after how many days must the insurer pay claims on a reoccurring basis? a. 90 days b. 2 weeks c. 1 month d. 2 months
The correct answer is: 1 month
K has worked at her job for 7 months and has enrolled in group health insurance. She quit her job, what is the MAXIMUM number of months she has to enroll in COBRA? a.12 months b.20 months c.29 months d.1 months
The correct answer is: 1 months
After how many years will a health insurance policy renew? Question 73 Select one: a. 3 years b. 1 year c. 4 years d. 2 years
The correct answer is: 1 year
long Term Care will pay for skilled care for a minimum of how long? :a. 2 years. b. 180 days c. 100 days. d. 1 years.
The correct answer is: 1 years.
Q has a flat deductible of $500 and coinsurance of 80/20. When Q incurs a claim of $5,000 how much will Q pay total for this claim? a.850 b.1350 c.900 d.1,400
The correct answer is: 1,400
What is the minimum group size to qualify for a group life plan? a.5 b.1 c.10 d.25
The correct answer is: 10
T pays a monthly premium of 100 for her health insurance. What would be the duration of the grace period under her policy? Question 57 Select one:a. 31 days b. 7 days c. 60 days d. 10 days
The correct answer is: 10 days
Should an employer choose to pay all of the premiums under a group health plan, there must be what percentage of participation? a.0% b.100% c.80% d.50%
The correct answer is: 100%
What is the minimum benefit period for Long Term Care? Question 35 Select one:a. 36 months b. 24 months c. 12 months d. 90 days
The correct answer is: 12 months
Which policy would generate cash value quickest out of these options for a 45 year old? a. 15-Pay whole life b. Straight Life c. 20-Pay whole life d. Life paid up @ 65
The correct answer is: 15-Pay whole life
A general lines license must be renewed after how many years in order to remain active a. 2 years b. 5 years c. 1 year d. 4 years
The correct answer is: 2 years
In the state of Texas, suicide may only be excluded for a maximum of how long?
The correct answer is: 2 years
An insured states they would like a policy that earns faster cash value growth in the beginning. What would the agent most likely say? Question 30 Select one:a. Life insurance does not build cash value b. Straight life will build more cash value c. 20 pay life and Straight life build the same cash value d. 20 pay life will build more cash value
The correct answer is: 20 pay life will build more cash value
J purchased a 65-Term-Whole-Life policy in the amount of 20,000. Three years later, he becomes severely depressed and takes his own life. Out of these options, what is the MAXIMUM his policy will pay? a. 20,000 b. 0 c. 30,000 d. 10,000
The correct answer is: 20,000
In this state, how many hours of ethics training is required in continuing education? a. 40 b. 24 c. 3 d. 4
The correct answer is: 3
How many days does a general lines producer have to notify the insurance commissioner upon change of address? Question 9Select one: a. 60 days b. 30 days c. 29 days d. 20 days
The correct answer is: 30 days
A 30 year old wishes to purchase a life policy to plan for their retirement at age 60. This policy needs to be considered permanent and continue to build cash value along with having an adequate death benefit. Which policy should be purchased? Question 48 Select one: a. Ordinary Life b. Term to 60 c. 30 pay life d. Immediate Annuity
The correct answer is: 30 pay life
A person who has a temporary license must receive how much insurance training prior to receiving their general license? Question 34 Select one: a. 24 hours b. 30 hours c. 40 hours d. 20 hours
The correct answer is: 40 hours
Women over what age may receive an annual mammogram paid for by an insurer? a. 35 b. 50 c. 40 d. 25
The correct answer is: 50
TSA (Tax Sheltered Annuity) plans which are also known as 403b plans are for whom a.Small businesses (SIMPLE) b.501c employees (nonprofit) c.Government employees (FELA) d.Family owned businesses (Keogh, SEP)
The correct answer is: 501c employees (nonprofit)
When will the 10% tax penalty disappear on an IRA? a. 70 1/2 b. 66 c. 65 d. 59 1/2
The correct answer is: 59 1/2
Under Nonforfeiture Law, an insurer CANNOT defer payment of cash surrender value past how many months? a. 12 months b. 6 months c. 2 months d. 24 months
The correct answer is: 6 months
At what age does an insured qualify for Old Age Survivors Insurance? Select one: At what age does an insured qualify for Old Age Survivors Insurance? one:a.64 1/2b.65c.59 1/2d.62
The correct answer is: 62
A disability policy has an elimination period of 7 days. If an insured has an illness for 15 days, how long will the benefits paid? Question 47 Select one: a. 15 b. 7 c. 8 d. 0
The correct answer is: 8
Proof of loss must be submitted within how many days after a claim? Question 5Select one: a. 90 b. 120 c. 30 d. 60
The correct answer is: 90
Which of the following would be BEST applicable of a preferred risk? a. A person earning higher interest rates b. A person with lower monthly premiums c. A person with a loan rate of 8% d. A person "rated up"
The correct answer is: A person with lower monthly premium
which of the following would most likely have an insurable interest? a.A brother who has never met his sister b.A bank selling a loan to pay the premiums for life insurance on the debtor c.A wife purchasing insurance on her husband d.A business purchasing insurance on its customers
The correct answer is: A wife purchasing insurance on her husband
The type of policy that combines medical and life insurance aspects would be akin to a.Disability Insurance b.Comprehensive Medical c.Accidental Death and Dismemberment d.Critical Illness
The correct answer is: Accidental Death and Dismemberment
Which of the following is NOT a duty of the commissioner of insurance? a. Investigate agents b. Set claims reserves c. Help create state insurance laws d. Activate claims reserves
The correct answer is: Activate claims reserves
Which of the following COULD cause an agent to lose their license due to controlled business? Question 10Select one:a.An agent only writing the business he is licensed for.b.An agent obtaining a license only to insure their employers business.c.An agent misappropriating funds from an insurer.d.An agent embezzling funds from an insurer.
The correct answer is: An agent obtaining a license only to insure their employers business.
Autopsies may be required: Question 51 Select one: a. Under court order. b. Only once every 7 days. c. As often as reasonably necessary unless prohibited by state law. d. Only if the insured's family consents.
The correct answer is: As often as reasonably necessary unless prohibited by state law
The producer must provide notification that the insureds credit will be pulled under the Fair Credit Reporting Act: Question 43 Select one: a. At the time of initial appointment b. At the time the application is filled out and signed by both parties c. Within 20 days of rating up a policy d. 6 months after the first claim was made
The correct answer is: At the time the application is filled out and signed by both parties
An insurance company able to do business in the state of Texas is known as? a. Accepted b. Authorized c. Domestic d. Foreign
The correct answer is: Authorized
Which of the following is true in a noncontributory long-term nonmedical Key Person policy? a.Premiums are to be shared between the employer and employee b.The employer is covered for all future losses c.Benefits will be shared between the shareholders of the company d.Benefits are received without any taxes needing to be paid
The correct answer is: Benefits are received without any taxes needing to be paid
if a persons age has been misstated during the contestable period, what will most likely happen? Question 28 Select one:a. The policy is voided b. Benefits will be adjusted to reflect the correct age c. The policy remains the same d. The police are notified that fraud has occurred
The correct answer is: Benefits will be adjusted to reflect the correct age
which dividend option on a whole life policy allows for an annual payment to the insured a. One year term option b. Cash payment dividend c. Reduced paid up d. Installment Refund
The correct answer is: Cash payment dividend
Which of the following would still have to take the state exam to become licensed? a. Pre-need Funeral Directors b. Certified Financial Planner (CFP) c. Chartered Life Underwriter (CLU) d. Certified Public Accountant (CPA)
The correct answer is: Certified Public Accountant (CPA)
The form that allows an insured to change whom will receive the payment of claims is known as what? a. Time payment of claims b. Designation of benefits c. Change of beneficiary d. Coordination of benefits
The correct answer is: Change of beneficiary
Which rider will allow a child temporarily covered on their parent's policy to continue coverage on their own after age 18? Question 49 Select one:a. Family Term Rider b. Extended Term Rider c. Child's Term Rider d. Payor Benefit Rider
The correct answer is: Child's Term Rider
V was applying for disability insurance through XYZ corporation and stated she had a bad back on her application. The insurer issues the policy with an exclusion for her bad back, which is true? Question 96 Select one: a. Claims arising from the back will never be covered b. She may appeal the decision after she purchases the policy c. This is an illegal practice and should be reported to the Department of Insurance d. Claims arising from the back are covered after two years
The correct answer is: Claims arising from the back will never be covered
When an insurer places applicants into categories for rating purposes, this is known as:
The correct answer is: Classification of Risks
Which of the following is a characteristic of a Major Medical Plan? Question 65 Select one: a. Gatekeeper Physicians. b. Accidental and Sickness Coverage. c. Coinsurance and Deductibles. d. Discount Prices.
The correct answer is: Coinsurance and Deductibles.
What of the following BEST describes the agent's fiduciary responsibility? a.Utilizing rate books, signs and training material b.Collecting premiums for the insurer c.Explaining the reinstatement provision d.Offering to deliver the policy by hand
The correct answer is: Collecting premiums for the insurer
HMOs file their annual financial report on March 1st to whom?
The correct answer is: Commissioner
if a producer submits a signed application along with an unsigned check, what will the insurer most likely do?
The correct answer is: Complete underwriting but require payment and a statement of good health at the time of delivery
R is purchasing a life insurance policy; the agent states that if R pays the premium at the time of application that coverage would begin at the time of medical exam. Which type of receipt should the agent give to R? Question 44 Select one: a. Unconditional. b. Delivery. c. Conditional. d. Insurable.
The correct answer is: Conditional.
A basic hospital policy will pay for which of the following? Question 60 Select one:a. Birth mark removed from face b. Experimental Surgeries c. Nursing Homes d. Convalescent care for 31 days
The correct answer is: Convalescent care for 31 days
J is insured through his plan and added as a dependent on his wifes plan. Which of the following provisions allows J to file claims under his plan a. Coordination of Benefits b. Contestability c. Payment of Claims d. Time Payment of Claims
The correct answer is: Coordination of Benefits
A person with a Short Term Disability (STD) policy is injured at work. What will most likely happen if they are covered by Workers Compensation? a.Both claims will be fully denied b.Coverage will share with workers compensation c. STD will be primary insurance d. Coverage for STD will be denied
The correct answer is: Coverage for STD will be denied
Which of the following cannot be a renewable policy a. Increasing Term b. Annual Term c. Decreasing Term d. Level Term
The correct answer is: Decreasing Term
Credit life insurance is most similar to what type of policy? a. Increasing Term Life b. Decreasing Straight Life c. Decreasing Term Life d. Increasing Straight Life
The correct answer is: Decreasing Term Life
a statement intended to injure a reputation through either slander or libel is known as
The correct answer is: Defamation
Medicare Part A and B does not provide coverage for?
The correct answer is: Dental and Vision
Medicare will most likely provide for all of the following except: Question 100 Select one:a. Hospitalization b. Dental and Vision c. Prescription Drugs d. Outpatient surgeries
The correct answer is: Dental and Vision
Company A has five stockholders within the company each owning 20% of the company, which of the following policies would be best suited to distribute the shares among the remaining stockholders if one becomes disabled? a. Disability Key person. b. Disability Stock-Purchase. c. Disability Buy-Sell. d. Disability Cross-Purchase.
The correct answer is: Disability Buy-Sell.
A person was traveling on vacation and obtains a sickness that makes them unable to work for 6 weeks. Income benefits would likely be paid under which policy? a. Long Term Care b. Disability Income c. Major Medical d. Workers Compensation
The correct answer is: Disability Income
Paid Up Additions is best described as which of the following? Question 54 Select one: a. Rider Option b. Settlement Option c. Nonforfeiture Option d. Dividend Option
The correct answer is: Dividend Option
A producer selling a participating policy to a prospective insured must disclose which of the following facts prior to the sale? a.Premiums may be cheaper if paid in full b.Dividends are not guaranteed c.The producers commission schedule d.The policy may be more expensive than a nonparticipating policy
The correct answer is: Dividends are not guaranteed
All of the following are attributes of group insurance except: a. Each employee receiving an individual policy b. The purpose of the group is other than the purchase of insurance c. The employer is the owner of the master policy d. Lower premiums due to administrative costs being consolidated
The correct answer is: Each employee receiving an individual policy
To whom is a Profit Sharing Retirement plan supposed to be designed in benefit for? Question 40 Select one:a. Insurer b. Employees c. Internal Revenue Service d. Underwriters
The correct answer is: Employees
A policy that matures upon attaining a certain age or pays out in the event of death is known as a.Endowment contract b.Decreasing Term c.Paid up Additions d.Universal Life
The correct answer is: Endowment contract
Survivorship policies are best used for what purpose? a.Premium waivers (waiver of premium) b.Estate planning (conservation) c.Annuity payment planning d.Profit making
The correct answer is: Estate planning (conservation)
Which of the following is NOT a required provision in life insurance policies? a. Extended term b. Settlement Options c. Grace Period d. Entire Contract
The correct answer is: Extended term
Which of the following states that an applicant is entitled to receive in writing the results of an ordered consumer report? Question 85 Select one: a. Medical Information Bureau b. Legal Actions Clause c. Fair Privacy Act d. Fair Credit Reporting Act
The correct answer is: Fair Credit Reporting Act
An insurer legally formed in Iowa is considered what to Texas? Question 88 Select one:a. Foreign b. Domestic c. Alien d. Nonresident
The correct answer is: Foreign
J submits his application and premium on August 28th, the policy goes through underwriting on September 2nd and is delivered on September 6th. When J returns the policy on September 12th, what will most likely happen? a.Short rate cancellation occurs b.Pro-rata premiums are refunded c.The policy continues on due to the grace period d.Full premiums will be refunded
The correct answer is: Full premiums will be refunded
With regards to a physician, how are reasonable customary charges determined? a. Nationwide. b. A poll of doctors. c. Geographic Area. d. The Association of Medicine.
The correct answer is: Geographic Area.
Medicaid is a form of what type of insurance? a.Government Insurance. b.Self-Funded insurance. c.Blue Cross Blue Shield Plan. d.State facilitated coverage for disabilities.
The correct answer is: Government Insurance.
The type of renewability option that provides for coverage until 65 without premiums increasing would be best described as a. Guaranteed b. Optional c. Cancelable d. Guaranteed - Noncancelable
The correct answer is: Guaranteed - Noncancelable
G purchased a Variable Universal Life Policy from a non-participating insurer with a rider that permits him to add on additional insurance without having to go through medical underwriting again. Which rider is BEST described here? a. Cost of Living Adjustment. b.Return of Premium. c.Guaranteed Insurability rider. d.Paid Up Additions.
The correct answer is: Guaranteed Insurability rider.
Which type of insurer must have an open enrollment period of 31 days every 12 months? a. POS b. Indemnity c. PPO d. HMO
The correct answer is: HMO
H is covered for comprehensive care including accidents and sickness. H lives on a fixed income as a family of 4 and realizes that his family will need to see a doctor on a regular basis. Which type of comprehensive plan would provide lower out of pocket costs as well as lower premiums for H a. Point of Service Plan (POS) b. Health Maintenance Organization (HMO) c. Preferred Provider Organization (PPO) d. Indemnity Plan
The correct answer is: Health Maintenance Organization (HMO)
Which type of insurer most likely has local clinics that provide care for the insured? a.Preferred Provider Organizations b.Indemnity Plans c.Medicare Medical Providers d.Health Maintenance Organizations
The correct answer is: Health Maintenance Organizations
Which of the following plans must be covered by a High Deductible plan a.Long Term Care (nursing homes) b.Medicare (65 and older) c.Health Savings Account (HSA) d.Medicaid (low income
The correct answer is: Health Savings Account (HSA)
Long Term Care insurance provides for which of the following? a.Home care b.prescription drugs c.boarding and meals d.medical expenses
The correct answer is: Home care
A person committing a felony would not be covered under which exclusion? a.Hazardous Hobbies b.Illegal Occupation c.Aviation d.Blanket coverage
The correct answer is: Illegal Occupation
Which type of annuity is most likely to be purchased with a lump sum? a. Deferred annuity b. Life annuity c. Immediate annuity d. Endowment annuity
The correct answer is: Immediate annuity
Which of the following is a feature of a single premium immediate annuity a.It is purchased through periodic payments. b.It is also referred to as a deferred annuity. c.Income payments start at age 65. d.Income payments start within one year.
The correct answer is: Income payments start within one year.
All of the following are non-forfeiture options EXCEPT? a.Cash Surrender Value b.Reduced Paid Up c.Interest Only d.Extended Term
The correct answer is: Interest Only
COBRA benefits would be terminated in which of these scenarios? a.The employee has filed too many claims b.The employer has canceled the health plan c.The employee is eligible for Medicaid d.The employee has made on-time premium payments
The correct answer is: The employer has canceled the health plan
If a person takes a loan against a Variable Universal Life insurance policy, what will most likely happen next year? Question 95 Select one: a. The policy loses nonforfeiture status b. The policy becomes a Modified Endowment Contract c. Interest will accrue on the loan d. The policy will lapse automatically
The correct answer is: Interest will accrue on the loan
Which of the following is NOT true about Long Term Care policies? a.LTC benefits are tax free b.It is written as guaranteed renewable c.It is a government sponsored program d.Qualification relies on performance of ADL's
The correct answer is: It is a government sponsored program
J is the primary beneficiary, K is the insured and L is the contingent beneficiary. J, K and L are involved in a car accident where K and L die immediately. Under the Common Disaster clause, how will benefits be handled?
The correct answer is: J only
J completed his application on April 20th, paid his initial premium and was issued a receipt. On April 29th the underwriter issued the policy and mailed it to the agent. The agent made 3 attempts to deliver the policy but was unsuccessful. On May 20th the agent placed the policy in his desk and forgot about it, which of the following statements is true? a.J was insured on May 20th b.J was insured on April 29th c.The policy is void until delivered d.The agent is liable for this action and will be sued
The correct answer is: J was insured on April 29th
When is the open enrollment period for Medicare Part B? a. January 1st through March 31st b. April 1st through June 31st c. July 1st through September 31st d. October 1st through December 31st
The correct answer is: January 1st through March 31st
D is a small entrepreneur of a 15 person company who is shopping for a retirement plan to add as a benefit for her employees. D wishes to remain a sole proprietor and realizes her options are limited due to this fact. Which type of retirement plan should the agent recommend? a. SEP IRA b. SIMPLE 401k c. Keogh (Unincorporated) d. 403b
The correct answer is: Keogh (Unincorporated)
which of the following is typically used in conjunction with Renewable Term? a. Decreasing Term b. Whole Life c. Increasing Term d. Level Term
The correct answer is: Level Term
Which of the following whole life policies would be the overall lowest cost to an insured? Question 20Select one: a. Annual Renewable b. Life Paid Up @ 65 c. Straight Life d. Adjustable life
The correct answer is: Life Paid Up @ 65
Which of the following is the least expensive whole life policy from these options?
The correct answer is: Life Paid up @ 65
Which policy will generate cash value the quickest out of these options for a 55 year old? a.Straight Life b.15-Pay whole life c.Life paid up @ 65 d.20-Pay whole life
The correct answer is: Life paid up @ 65
A plan that pays a benefits first, then when exhausted has a deductible corridor before more benefits is best described as?
The correct answer is: Major Medical
A policy combining the aspects of Medical insurance and Hospital insurance would be known as: a.Consumer Driven Health Plan b.Managed Care c.Basic Hospital d.Major Medical
The correct answer is: Major Medical
Which type of plan has a corridor deductible after basic benefits are exhausted but before coinsurance begins? a.Hospital Indemnity b.Major Medical c.Disability Insurance d.Long Term Care
The correct answer is: Major Medical
Hospice is covered under which portion of a medical plan? Question 78 Select one: a. Major Medical b. Basic Insurance c. Managed Care d. Consumer Driven Health
The correct answer is: Managed Care
A portion of Medicare provided through HMOs and PPOs is best known as which of the following a.Long Term Care b.Part A & B c.Medicaid d.Medicare Advantage
The correct answer is: Medicare Advantage
What can a person purchase to cover the costs Medicare does not? Question 67 Select one:a. Medicare Part A b. Medicare Part D c. Medicare Advantage d. Medicare Supplement
The correct answer is: Medicare Supplement
Which of the following is a citizen eligible for at 65 without having to prove insurability a.Long Term Care b.Universal Life Insurance c.Medicare Supplement d.Medicaid
The correct answer is: Medicare Supplement
When an insurer makes false claims about their policy in an advertisement, such as telling insured's they are purchasing a comprehensive plan instead of the actual limited policy; the insurer is doing what a.Inducement. b.Misrepresentation. c.Twisting. d.Boycotting
The correct answer is: Misrepresentation
The IRS has deemed a policy that is over-funded will be known as? a.Modified Endowment Contract b.Endowment Contract c.Universal Life d.Annuity
The correct answer is: Modified Endowment Contract
Children would automatically be covered in which of the following scenarios? Question 62 Select one: a. Newborn and foster children b. A neighbors child c. Newborn and adopted children d. All children in the household
The correct answer is: Newborn and adopted children
An insured submits an application with the premium but has left portions of the application unfilled. What will happen if the insured dies during underwriting a.No benefits are paid and premiums refunded b.A new application is required c.No benefits are paid and the insurer keeps the premiums d.Benefits are paid and premiums refunded
The correct answer is: No benefits are paid and premiums refunded
An insured applied for a nonmedical life insurance on February 2nd without paying the initial premium. The underwriter issued the policy and while it was on its way to being delivered the insured died of a heart attack. What will most likely occur a.A statement of good health is required b.Benefits will be paid c.No benefits will be paid d.Premiums will be refunded
The correct answer is: No benefits will be paid
an insured purchased a term life policy in July 2004. On January 13th 2005 the insured commits suicide by prescription drug overdose; which of the following would likely happen? a. The benefits would be pro-rated b. The benefits would be paid c. The claim would be denied d. A lawsuit
The correct answer is: The claim would be denied
X is the primary beneficiary, Y is the insured and Z is named as contingent beneficiary. One day X is driving Y and Z to Austin Texas for the SXSW festival when Y, the front seat passenger, sees a deer jumping across the street. Z tells X to swerve and but X swerves the wrong way into oncoming traffic. X and Z die immediately at the scene, who receives the benefits? Question 89 Select one: a. Z b. Nobody c. Ys estate d. X
The correct answer is: Nobody
Reduced Paid Up is best described as which of the following
The correct answer is: Nonforfeiture Option
N and G are married whereas N has a life insurance policy and G is named as the primary beneficiary, while naming their son P as the contingent beneficiary. If N and G are involved in an accident that kills both and it is unclear who died first; under the Simultaneous Death clause, who will receive the death benefit? Question 83 Select one: a. G's estate b. N's estate c. P d. G's willed heirs
The correct answer is: P
What would be the consideration of an insured in an insurance contract
The correct answer is: Paying the first months premium
Which provision in a HMO will outline who receives payments for services? a. Payment of Claims provision b. Time Limit on Certain Defenses c. Legal Actions Clause d. Time Payment of Claims provision
The correct answer is: Payment of Claims provision
Which of the following riders will waive the insureds premium until a child reaches a certain age? a. Child's Term b. Waiver of Premium c. Payor Benefit d. Disability Rider
The correct answer is: Payor Benefit
An applicant applies for a medical insurance policy and pays the premium upon application, while receiving a conditional receipt. The insured dies before the policy is issued, how will the insurer respond
The correct answer is: Perform appropriate medical underwriting
Which of the following best describes chemical dependency? Question 26 Select one: a. Physiological and Psychological dependence on alcohol and/or drugs b. Psychological dependence on prescription drugs c. Physiological dependence on alcohol d. Physiological and Psychological dependence on drugs
The correct answer is: Physiological and Psychological dependence on alcohol and/or drugs
The Life Insurance Guaranty Fund pays out claims when an insurer is insolvent (bankrupt), who does this fund protect? a. Policyholders and Beneficiaries b. Agents c. The commissioner d. Insurers
The correct answer is: Policyholders and Beneficiaries
D has little or no medical issues and also maintains a healthy lifestyle; when applying for insurance the agent advises him that the underwriter may classify D as which type of risk? a. Preferred Risk b. Best Risk c. Low Risk d. Excellent Risk
The correct answer is: Preferred Risk
An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called? a. HR 10 plan b. 401(k) plan c. Profit sharing plan d. Tax-sheltered account plan
The correct answer is: Profit sharing plan
Which of the following IS a required provision? Question 71 Select one:a. Change of Occupation b. Misstatement of Age c. Proof of Loss d. Illegal Occupation
The correct answer is: Proof of Loss
When a doctor refers to the insurer for the costs of an operation before the procedure, this is an example of what? Question 55 Select one:a. Managed Care b. Prospective Review c. Cost Containment d. Concurrent Review
The correct answer is: Prospective Review
Which type of life insurance policy has an increasing premium
The correct answer is: Renewable Term
Which of the following will NOT cause an agent to lose their license? Question 87 Select one:a. Embezzlement from an insurer. b. Writing threatening letters to the insurer. c. Misrepresenting policy provisions. d. Selling with a non-resident license.
The correct answer is: Selling with a non-resident license.
Y is 45 years old and has a large sum of money from a court settlement. Y would like to structure the settlement to receive income payments until he is eligible for Social Security, which type of product would be best suited for Y a.Single Premium Immediate Annuity with a Fixed Period b.Single Premium Immediate Annuity with a Fixed Amount c.Deferred Annuity with a Fixed Amount d.Deferred Annuity with a Fixed P
The correct answer is: Single Premium Immediate Annuity with a Fixed Period
Old Age Survivorship, Disability and Health Insurance is commonly known as what? Question 42 Select one: a. HMO b. Medicare c. welfare d. Social Security
The correct answer is: Social Security
Which program uses Primary Insurance Amount to determine coverage costs a. Blue Cross Blue Shield b. Medicaid c. Medicare d. Social Security
The correct answer is: Social Security
When an insured has a chance of loss due with a potential gain, what is this an example of? Question 72 Select one: a. Pure Risk b. Speculative Risk c. Transfer of Risk d. Reinsurance
The correct answer is: Speculative Risk
Which of the following would help prevent a fixed or variable universal life policy from lapsing? Question 7Select one: a. Current rate b. Target premium c. Adjustable premium d. Indexed interest
The correct answer is: Target premium
An employer purchases a long term care policy for an insured, how are benefits taxed? Question 63 Select one: a. Tax Deferred. b. Tax Deductible. c. Tax Free. d. Taxable Income.
The correct answer is: Tax Free.
What is the purpose of the Patriot Act?
The correct answer is: Terrorism
Which of the following would NOT have the authority to request to have access to the results of an HIV test? Question 59 Select one: a. Underwriters involved with the claim b. Potential Insured c. Applicant d. Texas Department of Insurance
The correct answer is: Texas Department of Insurance
An employer has decided to offer group insurance for their employees. Upon setting up the group, which of the following options would the employees be allowed to choose? a.The beneficiary of the policy. b.The tax deductible contribution. c.The insurer to purchase from. d.The cost of the policy.
The correct answer is: The beneficiary of the policy.
Which provision states that the application is part of the contract? a. The representations clause b. The entire contract c. The application and renumerification clause d. The policy summary clause
The correct answer is: The entire contract
Which of the following is true if an insured chooses an out-of-network doctor with a PPO? Question 75 Select one: a. The insured picks up 100% of all costs. b. Benefits are reduced on a pro-rata basis. c. The government pays the claims. d. The insured may have higher out of pocket costs.
The correct answer is: The insured may have higher out of pocket costs.
Which of the following is true about HIV and AIDS testing? a. The insured must be notified prior to the testing b. The MIB will receive the results if AIDS is found c. The producer must be notified prior to the testing d. Results must be forwarded to all state and government agencies
The correct answer is: The insured must be notified prior to the testing
Which of the following is CORRECT about waiver of premium? Question 97 Select one:a. The insured will have to satisfy a few months waiting period before it kicks in b. The rider never pays out c. The insured has to prove insurability before purchasing d. The rider guarantees all payments are always waived
The correct answer is: The insured will have to satisfy a few months waiting period before it kicks in
T and L are married; L is named as the primary beneficiary on T's policy and T's sister K is named as contingent beneficiary. If T and L are involved in an accident where T dies immediately and L died 15 days later due to the same cause of loss; who will receive the death benefit? Question 31 Select one:a. The insured's estate (T) b. The tertiary beneficiary (N) c. The insured's contingent beneficiary (k) d. The primary beneficiary's estate (L)
The correct answer is: The insured's contingent beneficiary (k)
A unilateral Accidental Death and Dismemberment policy states which party is bound by legal obligations? Question 6Select one:a.The agentb.The insuredc.The insurerd.The policyowner
The correct answer is: The insurer
Which of the following is CORRECT about an insurer who terminates an appointment of an agent? Question 29 Select one: a. The insurer must notify the commissioner 31 days in advance b. The agents policies are all canceled c. The agent must still service all policies d. The insurer must notify Texas Department of Insurance
The correct answer is: The insurer must notify Texas Department of Insurance
Which of the following best describes where a foreign insurer is incorporated? a. The laws of Texas b. The laws of another state c. The laws of another country d. The laws of another division of the USA
The correct answer is: The laws of another state
When two parents are divorced, under the Coordination of Benefits clause, which policy will cover the child? a. The parent with custody. b. The state. c. The state paying child support. d. The friend of the parent with custody.
The correct answer is: The parent with custody.
What is CORRECT about Variable Universal Life insurances cash value?
The correct answer is: The policyowner directs the cash value investments which may lose value
Which of the following statements is TRUE about Basic Hospital and Surgery policies? a.The policies cover more than comprehensive health insurance b.The premiums are less expensive than comprehensive health insurance c.The policies are only for major medical insurance d.Managed Care organizations (MCOs) only offer basic coverage
The correct answer is: The premiums are less expensive than comprehensive health insurance
A dentist is purchasing a disability overhead expense policy. What would the policy most likely cover
The correct answer is: The rental costs of the building
A woman was purchasing insurance that has been submitted through underwriting. The underwriter pulled her Medical Information Bureau Report and found she had a heart attack two years prior. All of the following will most likely occur, except: a.The underwriter will notify the MIB that she was declined b.The producer will be notified that the policy was declined c.The insured will receive a letter stating why the policy was declined d.The producer will discuss other options with the insured
The correct answer is: The underwriter will notify the MIB that she was declined
Which of the following is true about a revocable beneficiary a.The insurer must notify the beneficiary if any changes are made to the policy. b.They may be changed by the policyowner. c.The insured must notify the beneficiary in writing before any changes. d.The beneficiary has all of the rights to the policy.
The correct answer is: They may be changed by the policyowner.
An applicant must sign an application for insurance for which purpose? a.To attest that answers are guaranteed to be true and are considered warranties. b.To bind the insurer to the risk. c.To agree that the insured filled out the application d.To attest that answers are to the reasonable best of their knowledge and are considered representations.
The correct answer is: To attest that answers are to the reasonable best of their knowledge and are considered representations.
What is the purpose of the two year suicide exclusion? a.To make it harder on the beneficiary to provide a burden of proof b.To protect the insurer from an applicant solely purchasing to commit suicide c.To deny claims and save money d. To distinguish the difference between sane and insane suicides
The correct answer is: To protect the insurer from an applicant solely purchasing to commit suicide
Policy replacement is so strictly regulated for which purpose a.To ensure cash value policies are endowing at correct times b.To protect the sellers of life insurance and annuity products c.To ensure insureds always replace policies with better policies d.To protect the purchasers of life insurance and annuity products
The correct answer is: To protect the purchasers of life insurance and annuity products
N paid for his Long Term Disability policy with a lump sum in 2006. In 2008, N died, which of the following most likely occurred? a.Benefits paid to his child's tertiary revocable b.Unearned premiums are returned c.Absolutely nothing d.Benefits paid to the state reimbursement fund
The correct answer is: Unearned premiums are returned
A woman is searching for a policy with a flexible premium and a flexible death benefit, which policy would she choose? a..Modified Life b.Straight Life c.Universal Life d.Annual Renewable Term
The correct answer is: Universal Life
P has a basic hospital and surgery policy. After being admitted to the hospital, P files a claim with his insurance company. How much will his play pay?
The correct answer is: Up to the limits in the policy
Which of the following investment products have producers who are regulated by the National Association of Securities Dealers (NASD): a. Fixed Annuities b. Straight Life c. Adjustable Life d. Variable Life
The correct answer is: Variable Life
A woman is searching for a life insurance policy where she has a separate account with self directed investments. Which policy would she prefer? : a. Variable Universal Life b. Endowment Contract c. Universal Life d. 10 Pay Life
The correct answer is: Variable Universal Life
Which of the following annuities is most likely used for 401k retirement plans? a. Indexed annuity b. Variable annuity c. Fixed annuity d. Immediate annuity
The correct answer is: Variable annuity
Which type of annuity pays benefits based upon units
The correct answer is: Variable annuity
Of the following choices, which could have a vanishing premium?
The correct answer is: Variable universal life
Y has an ordinary whole life policy with a face value of $100,000. Y was diagnosed with a terminal illness and needs money to help cover the costs of medical bills while Y is still alive. Which of the following could Y use to assign the policy and receive some death benefit while alive? a. Viatical Policy b. Accelerated Living Needs Policy c. Accelerated Living Needs Settlement d. Viatical Settlement
The correct answer is: Viatical Settlement
Which of the following best describes split-dollar insurance? Question 27 Select one:a. When the premiums are split among employer and employee b. When the death benefit is split among contingent and primary beneficiaries c. When the cash value is split among primary policyowners d. When the insurers are split among multiple people
The correct answer is: When the premiums are split among employer and employee
if an insured is injured at work while covered by Workers Compensation, Group Health Insurance and Medicare, which plan would be considered primary under the Coordination of Benefits clause? a. Medicare b. Group Health c. Workers Compensation d. None, they share in costs
The correct answer is: Workers Compensation
Ws wife buys insurance on W and names herself as primary beneficiary while also naming their only son as contingent beneficiary. W has a daughter from a previous marriage. W and his wife are involved in a car accident where they are both killed. Who will receive the death benefit a.Ws wife b.Ws sons estate c.Ws son d.Ws estate
The correct answer is: Ws son
y has a death benefit of $100,000 with naming Z as the primary beneficiary and X as the contingent beneficiary. Z is driving a vehicle where X and Y are the passengers. Z swerves to miss a deer and causes an accident that kills X and Y immediately. Who will receive the death benefit in this scenario? a.Z b.X c.X's estate d.Y's estate
The correct answer is: Z
When a whole life policy is overfunded per IRS guidelines, this best describes: a.Variable Annuity b.an Indexed Universal Life c.Universal Life d.a Modified Endowment Contract (MEC)
The correct answer is: a Modified Endowment Contract (MEC)
An insurer may have which of the following in an advertisement a. a celebrity endorsement b. prices only good for tonight c. policies not authorized in the state d. only their logo but not their name
The correct answer is: a celebrity endorsement
Offer and Acceptance, and Consideration are components of what a.a contract b.a cobra c.an appointment d.a notification
The correct answer is: a contract
a consumer driven health plan most likely has what? Question 52 Select one:a. a high deductible b. a low deductible c. a flexible spending account d. no deductible
The correct answer is: a high deductible
Who would NOT be eligible for marketplace coverage? Question 38 Select one: a. a person eligible for employer coverage b. a part time worker c. an unemployed spouse d. a spouse who exhausted COBRA
The correct answer is: a person eligible for employer coverage
Which of the following would NOT be required to obtain a life insurance license a.a person selling life insurance to their family members b.a person selling viatical settlements c.a person selling life insurance under $25,000 face amount d.a person selling variable annuities
The correct answer is: a person selling life insurance under $25,000 face amount
Which of the following is not true about Universal Life Insurance? a.grows cash value b.flexible premiums c.a tax credit is applied d.benefits tax free
The correct answer is: a tax credit is applied
Which of the following best describes a Modified Endowment Contract? a.an annuity contract with stock market components b.a term life policy with payments made too early c.a whole life policy with payments made too early d.a major medical policy
The correct answer is: a whole life policy with payments made too early
Which of the following best describes a contract written on a "take it or leave it" basis? Question 17Select one: a. aleatory b. unilateral c. adhesion d. conditional
The correct answer is: adhesion
Part C of medicare covers what a. prescription drugs b. advantage (coinsurance) c. medical costs d. hospital costs
The correct answer is: advantage (coinsurance)
A producer is offering a life insurance product to a customer and the customer has questions. After all questions are answered, the customer pays the initial premium and the producer issues the conditional receipt. Later on the policy is issued. When did the insured originally become covered a.at the time of payment b.at the time of application c.after all conditions were met d.after all questions are answered
The correct answer is: after all conditions were met
Which of the following is true if the employer pays all of the premiums? a.employees must earn over $100,000 b.the employee must work overtime hours c. there will be medical underwriting d. all eligible employees must be covered
The correct answer is: all eligible employees must be covered
Which of the following is true if the employer pays all of the premiums? Question 11Select one: a. the insurer is at higher risk b. a payroll account must be established c. there will be medical underwriting d. all eligible employees must be included
The correct answer is: all eligible employees must be included
A healthy young student applies for life insurance at the preferred rate. An underwriter begins to ask about the students avocations and discovers the student is a pilot. The underwriter would still like to insure the student, which of the following will most likely happen a. retirees and senior citizens b. agent's families c.students d.an exclusion will be added for piloting
The correct answer is: an exclusion will be added for piloting
If the insured has a hobby of skydiving and applies for insurance, what would most likely occur? a. coverage accepted immediately b. the policy is denied c. an exclusion would be applied d. more underwriting necessary
The correct answer is: an exclusion would be applied
The purpose of the PATRIOT ACT is: a. american flags in every household b. anti money laundering c. serious and suspicious americans d. licensing of insurance agents
The correct answer is: anti money laundering
Which of the following is true about the taxation of a participating insurer a. dividends are taxed as capital gains b. dividends are taxed pro-rata c. any amount earned in excess of the dividend is taxable each year d. dividends are taxed as ordinary income
The correct answer is: any amount earned in excess of the dividend is taxable each year
Which of the following would likely happen should an insured die while receiving disability benefits? a.benefits will be paid on an earned basis minus any expenses incurred b.any earned benefits will be paid and excess premium will be refunded c.benefits continue on to the contingent disability beneficiary d.unearned premium will be refunded and benefits withheld
The correct answer is: any earned benefits will be paid and excess premium will be refunded
F is purchasing a medical insurance policy and did not pay his premiums. When Fs producer delivers the policy and asks F to sign a Statement of Good Health, F states he had a heart attack last week. What will most likely occur a. the underwriter will personally visit the insured b. application is automatically denied by the agent c. the statement of good health will be signed d. application will need to be underwritten again
The correct answer is: application will need to be underwritten again
Long Term Care and Medicare supplement policies must receive an outline of coverage when a.at the time of issuance b.at the time of premium payment c.at the time of delivery d.at the time of application
The correct answer is: at the time of application
When must an agent notify an insured of their rights under the Fair Credit Reporting Act? a. at the time of application b. at the time of delivery c. never d. within 9 days
The correct answer is: at the time of application
When must an insurable interest exist in life insurance? Question 22Select one:a.at the time of applicationb.at the time of acceptancec.at the time of deathd.at the time of issuance a.at the time of application b.at the time of acceptance c.at the time of death d.at the time of issuance
The correct answer is: at the time of application
Which of the following is NOT a required provision in a life insurance contract? a. incontestability clause b. free look period c. grace period d. automatic policy loan
The correct answer is: automatic policy loan
Which of the following is true about the Social Security waiting period? a.benefits are paid after 1 year of disability b.benefits are paid for only the first 6 months c.benefits begin on the 5th month and paid on the 3rd month d.benefits will not begin until the 5th month and paid on the 6th month
The correct answer is: benefits will not begin until the 5th month and paid on the 6th month
a policy that is used to cover passengers on an airline is known as
The correct answer is: blanket
Z and X are in business together with a value of 100,000. They decide to purchase a policy today, then add 12,500 to the value over time. They ask their agent which policy to purchase, what would the agent MOST LIKELY respond with? a. buy-sell b. contributory policy c. group insurance d. key-person
The correct answer is: buy-sell
Which type of plan is called a section 125 plan? Question 76 Select one:a. retirement plan b. cafeteria plan c. employee benefit plan d. supplemental plan
The correct answer is: cafeteria plan
Withdrawals from a whole life policy while the person is alive is covered under which provision of the policy
The correct answer is: cash value provision
The purpose of reinsurance can be best described as:
The correct answer is: catastrophic coverage
Which of the following does an insurer need to do business in Texas? a.certificate of domestication b.certificate of insurability c.certificate of authority d.certificate of servitude
The correct answer is: certificate of authority
Which provision in a Disability Policy allows an insured to re-evaluate their benefits upon starting a new job?
The correct answer is: change of occupation
Which rider will allow the insured to add their child onto the policy? Question 86 Select one: a. third party ownership b. payor benefit c. guaranteed issue (nonmedical) d. child term rider
The correct answer is: child term rider
M has a major medical policy that she pays her premium once per year in May. M has forgotten to pay her premium for May and June and is involved in an accident on June 28th. How will the insurer respond to this claim? Question 90 Select one: a. claim is paid minus May and June's bill b. claim is paid fully c. claim is paid minus May's bill d. claim is denied
The correct answer is: claim is denied
Performing a credit insurance policy and stating that the insured must purchase the life policy through the creditor is an example of: Question 1Select one a. rebating b. fraud c. defamation d.coercion. Coercion is the practice of scaring an insured into purchasing a policy at the moment
The correct answer is: coercion
Stating a prospective insured must fill out a form or their rights may be impaired is illegal due to a.blank forms b.coercion c.defamation d.rebating
The correct answer is: coercion
Telling an insured that if they do not sign a disclosure agreement they may be unable to obtain the rates at a future date is considered: a. fraud b. coercion c. rebating d. defamation
The correct answer is: coercion
Which of the following best describes the maximum out of pocket cost under the Affordable Care Act? a.copays deductibles b.coinsurance deductibles c.coinsurance deductibles and copay d.copays coinsurance
The correct answer is: coinsurance deductibles and copay
Which type of assignment is best suited for a bank loan? one:a.collateral assignmentb.impending assignmentc.absolute assignmentd.assignment
The correct answer is: collateral assignment
H is the top earning sales person at company Y; to protect itself from losing income in the event of H's death, company Y purchases a key-person policy on H for $100,000. H becomes discontent at work and decides to leave and work for company D. 8 years later H is killed during a robbery; who will receive the death benefit? a. company D b. H's family c. nobody d. company Y
The correct answer is: company Y
All of the following are benefits under Social Security EXCEPT: a..funeral b.retirement c.disability d.compensation
The correct answer is: compensation
Which of the following MUST be completed prior to a contract becoming legal? a. statements on an application are literally true statements b. beneficiaries must be of legal age prior to being named c. offer must be made by the insurer to the insured d. consideration must be exchanged between the parties
The correct answer is: consideration must be exchanged between the parties
A person is seeking care outside of the HMO's service area. What must the insured do?
The correct answer is: contact the insurer for approval
Which of the following allows for a term policy to be switched for a whole life? a.impairment options b.conversion c.contributory d.entire contract
The correct answer is: conversion
Which of the following best describes a term policy exchanged for whole life? a. entire contract b.contributory c.adjustability clause d.convertible
The correct answer is: convertible
Which type of term life insurance could be exchanged for whole life without evidence of insurability? a.convertible term b.decreasing term c.joint term d.increasing term
The correct answer is: convertible term
J and his wife insure each other under two separate major medical policies. Which provision determines the plan that pays first during a claim? Question 64 Select one:a. time payment of claims b. payment of claims c. time limit on certain defenses d. coordination of benefits
The correct answer is: coordination of benefits
A renewable term policy is best described as? a. coverage continues with higher premiums based up the insureds attained age b. coverage ends and then a new policy is purhcased c. coverage ends and then the policy converts to whole d. coverage ends and no policy is offered
The correct answer is: coverage continues with higher premiums based up the insureds attained age
An insureds annual maximum out of pocket costs are considered? Question 61 Select one:a. indemnity plan b. recoupment expenses c. minimum lifetime benefit plan d. deductible/coinsurance
The correct answer is: deductible/coinsurance
Which receipt is the free look period contingent upon a. unconditional receipt b. binding receipt c. conditional receipt d. delivery receipt
The correct answer is: delivery receipt
W has completed an application, paid for his policy and received a conditional receipt for his disability policy. W becomes disabled before the medical exam occurs, what will the insurer most likely do with his claim? Question 53 Select one: a. pay partial benefits b. defer to the commissioner c. deny claim and refund premium d. pay the claim and refund premiums
The correct answer is: deny claim and refund premium
Which of the following would pay a surgeon who is injured and has lost income
The correct answer is: disability income
X works for a large corporation and is the sole breadwinner for her family. Her employer's disability policy does not provide for enough income to provide for her lifestyle. Which policy is best suited for X
The correct answer is: disability income
All of the following are considered transacting insurance EXCEPT: a.discussing mutual funds b.collecting premium c.explaining policy provisions d.delivering policies
The correct answer is: discussing mutual funds
Which of the following is an agent required to tell an applicant when selling a participating policy? a. dividends are paid to stockholders b. premiums may change c. dividends are not guaranteed d. policyholders own the company
The correct answer is: dividends are not guaranteed
A Certificate of Coverage is required to have which of the following a. policy premiums b. effective dates c. renewability options d. coverages and exclusions
The correct answer is: effective dates
The deductible of a Disability Income policy is best described as a. incontestability b. probationary period c. elimination period d. time limit on certain defenses
The correct answer is: elimination period
The time period that an insured must wait while not being paid any benefits under a Group Noncontributory Long Term Disability policy would be best described as: a.time limit on certain defenses b.probationary period c.incontestability d.elimination period
The correct answer is: elimination period
What has the largest impact on a disability insurance premiums? a. presumptive disability b. recurrent disability c. noncancellable renew ability d. elimination period
The correct answer is: elimination period
A contract of adhesion that has confusing statements will be interpreted in the favor of whom? Question 25 Select one:a. producer b. commissioner c. insurer d. insured
The correct answer is: insured
What is CORRECT about a Health Reimbursement Arrangement (HRA)? a.cannot be used with other plans b.employer tax deducts premiums and benefits are tax free to employee c.employee must fund the plan d.must be used with an FSA
The correct answer is: employer tax deducts premiums and benefits are tax free to employee
Which of the following is primarily used for rapid cash accumulation
The correct answer is: endowment contract
A copy of the application and the policy together comprise of which document?
The correct answer is: entire contract
The portion of a contract that states the agent may make no changes to the contract is known as: Question 58 Select one:a. entire contract b. aleatory contract c. unilateral contract d. personal contract
The correct answer is: entire contract
What is the CORRECT name for the documents the agent delivers to the insured? a. entire policy b. policy c. entire contract d. copy of application
The correct answer is: entire contract
Which of the following best described an insured who swaps a term for a whole life policy? Question 50 Select one: a. exchange b. recurrent c. endowment d. deferment
The correct answer is: exchange
Long Term Care benefits are paid on which basis a. usual reasonable b. fee for service c. expense incurred d. prepaid
The correct answer is: expense incurred
A contributory disability policy that is written as guaranteed renewable may not be canceled in all of the following scenarios except
The correct answer is: failure to pay premiums on a timely basis
An agent makes a social media post exagerating an insurers dividend. What has this agent committed a. rebating b. false advertising c. coercion d. twisting
The correct answer is: false advertising
Joint life is also known as which? a. joint and survivorship b. last to die c. survivorship d. first to die
The correct answer is: first to die
Which of the following is not true about a universal life insurance policy? a.flexible premiums b.fixed premiums c.death benefit increases or decreases d.premiums in cash value
The correct answer is: fixed premiums
Which of the following is true about a newly born child being covered under a parents health insurance policy? a.never b.for 21 days after birth and then added onto the policy c.for 31 days after birth and then added onto the policy d.for 14 days after birth and then added onto the policy
The correct answer is: for 31 days after birth and then added onto the policy
An insurance company domiciled in New York is considered in Texas to be what kind of insurer? a.unilateral b.alien c.domestic d.foreign
The correct answer is: foreign
A traditional ira is best described as: a. funded with nonearned income b. funded with earned income only c. funded with earned and nonearned income d. funded with only after-tax dollars
The correct answer is: funded with earned income only
Which of the following is NOT true about a Health Reimbursement Account a. funds are solely contributed by the employee b. funds are contributed by the employer c. the employee is not required to participate d. there must be an employer sponsored health account
The correct answer is: funds are solely contributed by the employee
All of the following may be used by an underwriter to decline a risk EXCEPT: a. weight b. gender c. height d. medical history
The correct answer is: gender
All of the following are business policies except: a. overhead expense b. buy sell c. group d. key person
The correct answer is: group
Mental health and Drug abuse under the Affordable Care Act must be covered under which policies a. mental health and drug abuse are not illnesses b. group and individual c. only group insurance d. only individual insurance
The correct answer is: group and individual
K has a Disability Income policy providing coverage until age 65, but it includes a provision which allows the insurer to adjust rates based off of her class rating. What is the most likely renewability option? a. interim b. noncancelable c. cancelable d. guaranteed renewable
The correct answer is: guaranteed renewable
A Long Term Care policy would provide for which type of care? Question 37 Select one: a. comprehensive care b. preventative care c. home care d. limited care
The correct answer is: home care
A Medicare Supplement policy must cover which of the following? a.hospice services b.hospital services c.home care services d.physician services
The correct answer is: home care services
Which of the following statements is true about a Long Term Care policy a.marijuana is covered under critical illnesses b.skilled nursing is provided for a minimum of 5 years c.renewability options vary between plans d.hospitalization is usually required before benefits can begin
The correct answer is: hospitalization is usually required before benefits can begin
Which of the following best describes the Settlement Option in life insurance? a. how distribution of benefits are paid to an annuitant b. how distribution of benefits are paid to a policyowner c. how distribution of benefits are paid to a beneficiary d. how distribution of benefits are paid to an insured
The correct answer is: how distribution of benefits are paid to a beneficiary
A person committing a felony would be excluded under which provision? a.intoxicants and narcotics b.hazardous occupation c.illegal occupation d.aviation exclusion
The correct answer is: illegal occupation
W is currently 45 and looking to purchase a contract that will provide retirement income for him at the age of 65. Which policy would he most likely not have purchased? a.refund annuity b.immediate annuity c.deferred annuity d.variable annuity
The correct answer is: immediate annuity
When will contributions to an IRA become owned by the insured? :a.59 1/2 b.70 1/2 c.65 d. immediately
The correct answer is: immediately
A characteristic of a prepaid (HMO) plan would be a. insureds are called subscribers and doctors are paid before services b. the insured can go to any doctor they want c. coverage for long term care is provided d. doctors provide discounted services
The correct answer is: insureds are called subscribers and doctors are paid before services
All of the following are a factor for the paid up additions amount added except: a. coverage amount b. dividend amount c. insureds age d. insureds insurability status
The correct answer is: insureds insurability status
Which of the following would not be found on a life insurance illustration?
The correct answer is: insurers mortality table
which clause in an insurance contract will outline the coverages and exclusions a. insuring b. The premiums are less expensive than comprehensive health insurance c. The policies are only for major medical insurance d. Managed Care organizations (MCOs) only offer basic coverage
The correct answer is: insuring
Where can the insured find the benefits and perils listed in a policy? a.entire contract b.insuring clause c.grace period d.consideration clause
The correct answer is: insuring clause
Which settlement option is NOT a systematic liquidation of funds? Question 33 Select one:a. interest only b. fixed amount c. life income d. fixed period a. interest only b. fixed amount c. life income d. fixed period
The correct answer is: interest only
claims form was not furnished to the insured, which of the following is true about Proof of Loss a. claims may be denied due to this b. a claims form must be furnished within 90 days c. claims are not required to be investigated d. it is submitted by any reasonable method
The correct answer is: it is submitted by any reasonable method
Which of the following is true about the suicide clause? a.it increases exposure to the insurer during the time period b.it lowers premiums by excluding all coverage during the first two years c.it is an optional provision d.it prevents against intentional losses
The correct answer is: it prevents against intentional losses
Which of the following is true about a single premium whole life policy? a.less expensive than straight life b.equal cost to convertible term c.more expensive than paid up @ 65 policy d.equal cost to 5 pay policy
The correct answer is: less expensive than straight life
Which of the following would the Medical Information Bureau most likely have within their files on a consumer?
The correct answer is: life insurance applied for within the past 5 years
Which of the following would likely be found on a Medical Information Bureau Report? a.life insurance policies applied for in the past b.the insureds primary care physician c.the policyowners medical records d.all policies ever purchased by the insured
The correct answer is: life insurance policies applied for in the past
Which of the following is a characteristic of whole life insurance? a. coverage continuing for a short period of time b. coverage endowing at age 65 c. loans taken against cash value d. loans not taken against cash value
The correct answer is: loans taken against cash value
Which of the following scenarios would an accidental death & dismemberment policy pay a benefit for a. loss of a kidney due to a car accident b. loss of a toe due to a motorcycle accident c. loss of a leg due to diabetes d. loss of eyesight due to a plane accident
The correct answer is: loss of eyesight due to a plane accident
Which of the following would not occur if the insured made extra payments into an adjustable life policy? a.lower non-forfeiture value b.change length of premium period c.increase length of coverage d.increase death benefit
The correct answer is: lower non-forfeiture value
A plan with coinsurance would most likely be which plan? a.managed care b.major medical c.consumer driven health care d.comprehensive health insurance
The correct answer is: major medical
Hospice is an attribute of which of the following? a. basic plan b. consumer driven health c. managed care d. major medical
The correct answer is: managed care
All of the following may be used for medical underwriting purposes EXCEPT: a. sex b. age c. occupation d. marital status
The correct answer is: marital status
Which of the following cannot be used in underwriting for a disability insurance policy? Question 74 Select one: a. gender b. health status c. marital status and occupation d. spouse's occupation
The correct answer is: marital status and occupation
Which of the following is a requirement of Medicaid?
The correct answer is: need
A person has the aviation exclusion applied to their policy, how will this effect their premiums a.no increased premium b.tax deductible premiums c.flexible premiums d.increased premiums
The correct answer is: no increased premium
An employer offers Group Term Life insurance in the amount of $10,000 for which the employer pays $5 per policy. Which of the following statements is true a.life insurance is always taxed b.no taxes need to be reported in this transaction c.the $5 is a taxable event d.the $10,000 is a taxable event
The correct answer is: no taxes need to be reported in this transaction
Name the renewability option under the National Association of Insurance Commissioners Uniform Policy Provisions that may be purchased with a single premium for the longest amount of time: a.guaranteed renewable b.cancellable c.optional renewable d.noncancellable
The correct answer is: noncancellable
When an insurer terminates an agents appointment, which of the following must the insurer perform? a. notify department of insurance b. cancel all policies sold c. provide commissions for 200% d. notify agent within 30 days
The correct answer is: notify department of insurance
The dividend option that can be used to leave the highest amount of death benefit to a beneficiary can be described as? Question 70 Select one: a. paid up additions b. reduction of premium c. extended term d. one year term
The correct answer is: one year term
Which of the following reasons would a group be denied for coverage
The correct answer is: only insuring blood related or family related people in the company
Which of the following is illegal a.only insuring your family b.writing your own insurance policy c.explaining policy provisions d.insuring multi-faceted companies
The correct answer is: only insuring your family
An agent must NOT obtain a license for which purpose? Question 77 Select one: a. only selling health insurance b. only selling to family c. selling only to businesses d. to obtain a nonresident license
The correct answer is: only selling to family
How is interest earned on dividends taxed? a.not taxable b.ordinary income c.capital gains d.tax deferred
The correct answer is: ordinary income
All of the following are required provisions in a life insurance contract, EXCEPT: a. misstatement of age b. incontestability clause c. outline of coverage d. free look period
The correct answer is: outline of coverage
The provision that explains the exclusions and exceptions in a health policy is known as: Question 99 Select one: a. policy summary b. consideration clause c. payment of claims d. outline of coverage
The correct answer is: outline of coverage
The required uniform provision which states the policyowner may adjust the beneficiary, premium mode and coverages is found in:
The correct answer is: owners rights
All of the following would be paid for under a Business Overhead Expense policy except:
The correct answer is: owners salary
A person in hospice could receive which of the following? a. immunizations b. preventative care c. antibiotics d. pain medicine
The correct answer is: pain medicine
An applicant applies for a nonmedical (No Part 2 of app) insurance and pays the premium 4 days later; before underwriting is complete, the insured dies of an illness. How will the insurer respond?
The correct answer is: pay the claim
Which of the following is a required provision in a Disability Income policy? a. payment of claims b. recurrent disability c. waiver of premium d. residual disability
The correct answer is: payment of claims
All of the following are non-forfeiture options except: a.cash surrender b.extended term c.policy loan d.reduced paid up
The correct answer is: policy loan
Mutual companies are owned by whom? a.agents b.board of trustees c.policyholders d.stockholders
The correct answer is: policyholders
How are premiums on a section 125 plan paid?
The correct answer is: pre-tax
S is purchasing a medical insurance policy and did not pay for his premium at the time of application. When the producer goes to deliver the policy, what must the producer collect? Question 18Select one: a. premium and a conditional receipt b. premium and a statement of good health c. a signed sworn statement for proof of loss d. a statement of good health and a conditional receipt
The correct answer is: premium and a statement of good health
An underwriter decides to reclassify a risk prior to issuing the policy, which of the following would likely happen under this reclassification? Question 91 Select one: a. exclusions will be added b. claims will be reduced c. premiums will go up d. waiting periods will be extended
The correct answer is: premiums will go up
An automatic qualifier under disability insurance with either Any Occupation or Own Occupation provisions is known as: a.any occupation (total disability) b.recurrent disability c.residual disability d.presumptive disability
The correct answer is: presumptive disability
Under the coordination of benefits clause, when an insured has two insurance plans and one pays, this is known as: a.excess earnings b.excess insurance c.prorata d.primary insurance
The correct answer is: primary insurance
All of the following are discussed in the Insuring Clause EXCEPT: a.insured b.producer c.perils d.coverages
The correct answer is: producer
The insuring clause pertains to all of the following parties except: Question 84 Select one: a. applicant b. insured c. policyowner d. producer
The correct answer is: producer
A pre-authorization form is which part of managed care?
The correct answer is: prospective review
What is a unique factor of a Straight Life Fixed Annuity? Question 80 Select one: a. provides monthly income for life b. provides for short term income c. provides income for a specific period of time d. provides a stop-loss for services
The correct answer is: provides monthly income for life
B has been receiving disability payments up until two months ago when he went back to work. Today B's injury has surfaced again, which provision of disability will apply? a.partial disability b.recurrent disability c.total disability d.residual disability
The correct answer is: recurrent disability
U was disabled for 1 month due to an injury. U has been working happily for 6 months after the recovery until all of a sudden the injury returns. Which disability provision would allow U to receive benefits without a medical exam? a.concurrent disability b.recurrent disability c.elimination period d.legal actions clause
The correct answer is: recurrent disability
Which of the following is NOT true about a Managed Care HMO? a. coverage within service area b. focuses on preventative care c. physicians are prepaid d. reimburses insureds for cost
The correct answer is: reimburses insureds for costs
Which provision will allow an insured to resume coverage should an insurer accept premium after the allotted time in the policy?
The correct answer is: reinstatement
Which provision would require proof of insurability through a medical exam in order to resume coverage? a. incontestability b.reinstatement c.grace period d.free look
The correct answer is: reinstatement
Under the Entire Contract provision, statements believed to be true on an application are known as: a.warranties b.misrepresentations c.representations d.concealment
The correct answer is: representations
Stranger originated life insurance usually targets whom? a.retirees and senior citizens b.agent's families c.students d.beneficiaries
The correct answer is: retirees and senior citizens
the insured purchases a policy from a local agent. The agent receives the policy at his office. What would be the MOST LIKELY step? a.have the policy mailed directly to the consumer b.schedule an appointment to deliver the policy and answer any relevant questions that may arise c.write an email to the insured that they may pick it up after hours d.refuse to open the documents and put it in their desk
The correct answer is: schedule an appointment to deliver the policy and answer any relevant questions that may arise
A customer walks into the agents office and wants to take an app home to fill out, what should the agent do?
The correct answer is: schedule an appointment with the customer for a later date
P is the producer and is completing an application for insurance on V's policy. P makes a mistake on the application, what will P most likely do? a.submit the application as is b.scratch out the mistake and use whiteout c.scratch out the mistake and have the insured initial the change d.complete a new application because mistakes cannot be changed
The correct answer is: scratch out the mistake and have the insured initial the change
All of the following are illegal except: a.rebating premiums b.embezzling funds c.selling insurance through surplus lines d.twisting provisions
The correct answer is: selling insurance through surplus lines
Transacting business in insurance would be all of the following actions EXCEPT: Question 45Select one: a. quoting premiums b. explaining policy provisions c. setting appointments for an agent d. collecting premium
The correct answer is: setting appointments for an agent
What would be added to a policy that can cover higher risk hobbies? Question 69 Select one: a. specialized risk b. illegal occupation c. long term care d. impairment rider
The correct answer is: specialized risk
Which of the following best describes statements made on an application by the insured? a. statements are guaranteed true b. statements are literally true c. statements are untrue d. statements are substantially true
The correct answer is: statements are substantially true
An insurer has the right to seek damages from an at-fault party who injured the insured, under which provision? a. contributory b. noncontributory c. subrogation d. adverse selection
The correct answer is: subrogation
What is the best policy for estate planning and business purposes? a.straight life b.credit c.survivorship d.decreasing term
The correct answer is: survivorship
An insured who has access to the conversion privilege will most likely allow an insured to perform which function? a.never switch a policy b.switch to another policy at any time within 31 days upon termination c.switch to another policy within 3 years d.switch to another policy after 5 years
The correct answer is: switch to another policy after 5 years
All of the following are CORRECT about the Grace Period EXCEPT a.the automatic premium loan can never be used in the future b.it is a uniform policy provision designed by the NAIC c.helps prevent the unintentional lapse of policies d.reinstatement may be performed at the conclusion
The correct answer is: the automatic premium loan can never be used in the future
The correct answer is: unable to perform 2 activities of daily living? a.the beneficiary themselves b.the tertiary beneficiary c.the father of the insured d.the policyowner
The correct answer is: the beneficiary themselves
K is a shipping clerk and has a Disability Income policy. To supplement his income K begins driving the delivery truck at night. K is injured in an auto accident, which of the following statements is true? Question 25Select one :a.the claim is denied because it was a supplemental planb.the claim is denied because the job is more hazardousc.the claim is denied because the pay is higherd.the claim is denied because it was an accident
The correct answer is: the claim is denied because the job is more hazardous
A person has lied on their application and the policy is issued. Four years later a claim is filed, what will most likely occur?
The correct answer is: the claim is paid because it is outside of the Contestability clause
The primary beneficiary becomes deceased before the insured. When the insured dies, who will most likely receive the benefits?
The correct answer is: the contingent beneficiary if listed
Which of the following is not true in regards to a noncontributory plan a. Indexed annuity b. Variable annuity c. Fixed annuity d. the employee chooses the amount of coverage
The correct answer is: the employee chooses the amount of coverage
Under a key person policy, which of the following is not true? a. the business is the applicant b. the employee chooses the beneficiary c. the business or stockholders are the beneficiary d. the employee is the insured
The correct answer is: the employee chooses the beneficiary
Able company decides to purchase insurance on their chief executive officer under a Key person contract. Which of the following statements is true? Question 68 Select one:a. the employee receives the benefit b. the employee's family receives the benefit c. the employee's benefit is taxable as ordinary income d. the employee does not name the beneficiary
The correct answer is: the employee does not name the beneficiary
Which of the following best describes the insureds rights in a third party ownership contract a. the insured can cancel the policy b. the insured is the policyowner c. the insured can choose the beneficiary d. the insured has no rights
The correct answer is: the insured has no rights
What is the most flexible policy? Question 81 Select one: a. variable life b. annually renewable term c. universal life d. straight life
The correct answer is: universal life
Which of the following does not apply to the waiver of premium? Question 16Select one:a.the benefit lasts for the life of the policyb.the insured must be on Social Security Disability before receiving the benefitc.there is a waiting period before it beginsd.the benefit costs extra premiums
The correct answer is: the insured must be on Social Security Disability before receiving the benefit
Under the Uniform Simultaneous Death Act, if the insured and primary beneficiary die at the same time, how are the benefits paid? Question 21Select one: a. the supreme court b. the insurance companies estate c. the commissioner d. the insureds estate
The correct answer is: the insureds estate
An agent has a fiduciary responsibility to which party? a. .the commissioner b. the insurer and insured c. their family d. other agents
The correct answer is: the insurer and insured
Which of the following is true about an assignment? Question 15Select one:a.the insurer is not liable for the assignment consequencesb.the assignment must be requested by the insuredc.no assignment may be maded.assignments only apply to beneficiaries
The correct answer is: the insurer is not liable for the assignment consequences
Which of the following best describes the guaranteed renewability provision? a.the insurer must renew at the end of the period but premiums may change based on class basis b.the insurer must cancel the policy due to claims c.the insurer may not renew the policy depending on the circumstances of preexisting conditions d.the insurer must convert to noncancellable at the end of the policy
The correct answer is: the insurer must renew at the end of the period but premiums may change based on class basis
An insurer terminates their appointment with an agent. Which of the following must be completed a. the insurer will notify the insureds immediately b. the insurer will notify the agent immediately c. the insurer will notify the department of insurance immediately d. the insurer will cancel all policies of the producer immediately
The correct answer is: the insurer will notify the department of insurance immediately
j decided to take a policy loan against his cash value policy. After two years, J had been driving to work when he was involved in a car accident that killed him. Which of the following most likely happened to the policy loan a.the loan became taxable to the extent of the cash value b.the loan was forgiven c.the loan was rolled into a new policy for his spouse d.the loan and accrued interest were deducted from the death benefit
The correct answer is: the loan and accrued interest were deducted from the death benefit
Under the Entire Contract provision in regards to an in force policy. When the insurer wishes to change items in the contract, what will most likely occur?
The correct answer is: the policy may not be changed
the change of beneficiary form may only be amended by whom a. the beneficiary b. the policyowner c. the underwriter d. the insured
The correct answer is: the policyowner
The provision of a policy that determines the method of payment would be best described as: a. the premium payment mode b. the insuring clause c. the consideration method d. the scope of coverage
The correct answer is: the premium payment mode
In which of the following scenarios would the insurer cancel a medical policy? a. untimely filing of claims b. the premium was not paid c. the policy was never used d. too many claims were filed
The correct answer is: the premium was not paid
In a Buy Out policy which of the following would you consider to be true? a.the employees will receive income from the policy b.the benefits are paid for over time c.the benefits are used to cover rent and utilities d.the shareholders and owners are the recipients of the benefits
The correct answer is: the shareholders and owners are the recipients of the benefits
When is the consideration satisfied in an insurance contract? a.the time the insurer approves the application b.the time the policy is accepted c.the time medical underwriting is completed d.the time the premium is paid
The correct answer is: the time the premium is paid
A producer selling Medicare Advantage must state they are a representative of whom a. the state government b. their respective insurer c. the federal government d. their own interests
The correct answer is: their respective insurer
When there is incorrect information on a Medical Information Bureau report, which of the following is TRUE? a.there is no method to correct mistakes b.the underwriter must use the incorrect information immediately c.the producer must correct the information d.there is a method to correct the mistakes
The correct answer is: there is a method to correct the mistakes
Why would an insurer check an insureds consumer report? Question 45 Select one:a. to determine their chance of filing a claim b. to determine their ability to pay premiums over time c. to determine their medical status d. to determine their ability of risk retention and reduction
The correct answer is: to determine their ability to pay premiums over time
What is the purpose of the time payment of claims clause? Question 39 Select one: a. to reimburse the insured promptly for surgical services b. to ensure the medical billing CPT codes are correct c. to prevent unnecessary delaying of claims d. to state claims must be paid in 45 days
The correct answer is: to prevent unnecessary delaying of claims
F is a worker at a construction company which does not provide for Workers Compensation benefits. When F becomes disabled, he files a claim under his group disability policy. The insurer determines he is permanently disabled. What best describes his disability status a. residually disabled b. partially disabled c. totally disabled d. chronically disabled
The correct answer is: totally disabled
A long term care rider added onto a life insurance policy would have which of the following provisions? a.disabled for over 5 months b.increasing benefits without proving insurability c.unable to perform 2 activities of daily living d.covers the costs that Medicare does not
The correct answer is: unable to perform 2 activities of daily living
A Major Medical health insurance policy is considered which? a. unilateral b. multifaceted c. multilateral d. bilateral
The correct answer is: unilateral
How long are agent appointments in force between an agent and an insurer? Question 32 Select one: a. until they are terminated b. 2 years c. 3 years d. 1 year
The correct answer is: until they are terminated
Basic Hospital and Surgery policies pay on which basis? Question 2Select one: a. up to the maximum amount listed in the policy b. based on the income of the policy owner c.death benefit reimbursementd.nursing home days
The correct answer is: up to the maximum amount listed in the policy
If a person has a contributory major medical plan through an employer and lives outside the HMOs service area, how will care be treated?
The correct answer is: usual reasonable customary cost basis
A new employee would most likely fall in which of the following categories before coverage begins a.waiting period b.medical period c.elimination period d.payment period
The correct answer is: waiting period
An insurer knowingly accepts an application with unanswered questions and decides to issue the policy anyway has performed which action? a. offerrance of insurance b. waiver of a legal right c. consideration of a contract d. acceptance of insurance
The correct answer is: waiver of a legal right
When would an autopsy not be completed and paid for by an insurer? a. When the costs are too high b. when prohibited by state law c. when the family cannot be reached d. when the agent requests to pay
The correct answer is: when prohibited by state law
An agent sells a policy to Q on July 4th, however they only finish the application process. The agent returns back to Q's house on July 8th, collecting premium and issuing a binding receipt. When would this policy go into effect? a.when the policy is issued b.when the premium is paid c.when the application was completed d.when the policy was accepted
The correct answer is: when the premium is paid
This optional provision is usually standard on whole life policies, which can help prevent it's lapse in the event an insured misses a premium payment: Question 66 Select one:a. Free Look Period b. Accelerated Benefit c. Automatic Premium Loan d. Grace Period
The correct answers are: Automatic Premium Loan, Grace Period
A pre-authorization form is most likely required by which type of organization a. Preferred Provider Organization b. Health Maintenance Organization c. Medical Care Organization d. Managed Care Organization
The correct answers are: Managed Care Organization, Health Maintenance Organization
The promises of an insurer is found in which clause? a.payment of claims clause b.consideration clause c.insuring clause d.time limit on certain defenses
The correct answers are: insuring clause, consideration clause
The provision in disability insurance that describes a person will receive income in the event of a disability that disqualifies them from doing a job for which they are Trained for, Educated for, or Experienced for is known as: a. Residual Disability b. Total disability c. Occupational Disability d. Own occupation disability
Total disability is known as Any Occupation disability insurance, where the person is so disabled they cannot do any job they are trained, educated or experienced for. This is a cheaper disability policy because the person severely disabled to receive benefits. The correct answer is: Total disability
X has a term life insurance with a death benefit if $10,000 and an accidental death rider of $10,000. X has been diagnosed with terminal cancer and succumbs to the illness 6 months later. How much will X's beneficiary receive in this scenario? a. $20,000 b. $10,000 c. $40,000 d. $0
the correct answer is $10,000
K has a 100 deductible and 80/20 coinsurance on her Major Medical POS plan. Upon having a claim of 2,000, how much will K be responsible for? Question 41 Select one: a. 480 b. 400 c. 100 d. 380
the correct answer is 480
J, age 25, is looking for a life insurance policy that will best suited for his retirement age of 55. Which policy should J purchase a.Straight Life b.30-Pay whole life c.Variable life d.Life paid up @ 65
the correct answer is: 30-Pay whole life
An insured applied for life insurance on April 1st without including the initial premium. The policy was issued on April 15th and delivered on April 21st, when the insured paid the first months premium and signed a health waiver. When was the insured initially covered
the correct answer is: April 21st
Which of the following MUST an agent notify an insured of when purchasing a participating policy a.Irrevocable beneficiaries cannot be changed b.Authorized insurers receive a Certificate of Authority c.Dividends are not guaranteed d.Domestic insurers are incorporated in their state
the correct answer is: Dividends are not guaranteed
If the insured gives an insurers health agent notification of a claim, which of the following is true? a. The insurer must pay the claim within 1 year. b. It is not considered notification. c. The health agent pays the claim and is reimbursed by the insurer. d. It is considered notification
the correct answer is: It is considered notification.
All of the following are Whole Life Policies EXCEPT: Question 56 Select one: a. Single Premium b. Joint Life c. Limited Pay d. Straight Life
the correct answer is: Joint Life
A person has a deferred annuity which pays $450 per month until funds are exhausted. Which type of annuity does the insured have? Question 8Select one: a. Variable Retirement Account b. Refund Annuity c. Level Fixed Amount d. Life annuity
the correct answer is: Level Fixed Amount
Which of the following is an option the insured can exercise with a dividend option? a. Nontaxable interest b. Cash Value c. Paid up additions d. Extended Term
the correct answer is: Paid up additions
Which clause specifically applies to Pre-Existing Conditions? a.Payment of Claims b.Time Limit on Certain Defenses c.Grace Period d.Waiver of Premium
the correct answer is: Time Limit on Certain Defenses
The statement that best describes the Guaranteed Insurability Rider would be: Question 98 Select one:a. the benefit requires evidence of insurability b. a person may increase benefits until age 65 c. a higher premium is required upon its use d. the producer must write a new application
the correct answer is: a higher premium is required upon its use
The transfer of ownership of a policy completed by the policyowner is best described under which term
the correct answer is: assignment
Which of the following would likely qualify for Medicaid? a.blind people qualify b.missing one finger c.government officials d.a higher income child
the correct answer is: blind people qualify
A person is going to have blood work for preventative care, which of the following would likely cover all of the costs? a. private health insurance b. health maintenance organization c.blanket insurance d.long term car
the correct answer is: health maintenance organization
Where can you find the insurers promise a. insuring clause b. legal actions c. outline of coverage d. consideration
the correct answer is: insuring clause
All of the following may charge a fee in regards to insurance, EXCEPT: a.insurance counselor b.managing general agent c.legal reserve agent d.certified financial planner
the correct answer is: managing general agent
Which of the following would not necessarily be notified if an insured were to be declined for insurance? a.medical information bureau b.agent c.insured d.policyowner
the correct answer is: medical information bureau
Residual disability is similar to what? a. partial disability b. total disability c. chronic disability d. permanent disability
the correct answer is: partial disability
Which rider would waive premiums until a child reaches a specific age listed in the policy? a. payor benefit b. survivorship life c. return of premium d. accelerated payment
the correct answer is: payor benefit
Which provision in disability will ensure that no premiums are required while receiving payments? Question 49 Select one:a.total disabilityb.waiver of premiumc.residual disabilityd.payor benefit
the correct answer is: waiver of premium
