Life Questions
To "furnish with an income" is to:
Endow
Group health plans that are issued by mutual companies usually provide dividends, which are most likely to be paid if __________________ are less than anticipated.
Expenses and claim costs
The type of rating that relies on a group's track record of past claims to determine premiums is called _________ rating.
Experience
Which of the following types of insurance contracts are NOT considered valued contracts?
Medical Expense Plans
The characteristics of common stock make them a suitable form of investment for what type of annuities?
Variable Annuities
Family Income policies are a combination of which two types of policies?
Whole Life and Decreasing Term
The _____________ clause protects the proceeds held under a settlement option from attachment by creditors of the beneficiary.
spendthrift
In 2012, the allowed deferred amount under IRC Section 457 plans is 33 1/3% of the participant's applicable income or $_______, whichever was less.
$17,000
Violation of the Unfair Trade Practices Act can result in license suspension, probation, revocation, fines up to __________ or even imprisonment.
$200,000
Failure to notify the Department within the specified timeframe after a change of name, residence address, principal business street address, or mailing address could result in a fine of ________ for the first offense.
$250
Judy has a Major Medical policy with a $2,000 deductible and an 80/20 coinsurance. If Judy's medical bills totaled $6,000, how much would the insurer pay?
$3,200
Toni decides to take a special vacation on her 40th birthday and withdraws $4,000 from her IRA. What penalty will she be subject to on the amount withdrawn?
$400
An agent engaged in churning as a result of fraudulent conduct is subject to a fine of ________ for each willful violation. (2012)
$50,000
The NAIC Model Provision Law contains _______ optional provisions.
11
The Free Look Period for life insurance contracts is _______ days.
14
According to the NAIC Uniform Policy Provision law regarding health insurance policies, how many days does an insured have to provide Notice of Claim to the insurance company?
20
Disability insurance provides an income stream for an individual who is unable to continue working due to accident or illness. However, if a person is under ______ disabled, he/she does not qualify for benefits.
20%
A person cannot consider disability income expenses tax deductible unless the amount exceeds:
7.5%
A serious condition that, with proper medical treatment, the patient should receive full recovery is known as __________ illness.
Acute
Stock and mutual companies can write ______________ insurance.
All, Life, Health and Property and Casualty
The term "doc-in-a-box" refers to which of the following?
Closed-panel HMOs
What specific word is used to refer to the "money" used to purchase insurance coverage?
Consideration
In health insurance, a ____________ is a stated initial dollar amount that the individual insured is required to pay before insurance benefits are paid.
Deductible
The two categories of retirement contribution plans are _________________ Plans and Defined Contribution Plans.
Defined Benefit
According to the Social Security Department, the inability to engage in any substantial gainful work is known as:
Disability
"ACC" refers to the type of disability that prevents someone from performing the job he was performing prior to the disability.
False
COBRA stipulates that if an employee's employment is terminated, group coverage must be extended for up to 18 months at the employer's expense.
False
If an insurance policy contains an incontestable clause, it means that the insurer CANNOT contest any claim under any circumstances.
False
The purpose of Social Security is to provide retirement income.
False
Supplemental Medical Insurance, Medicaid, and U.S. Armed Services and Veterans Insurance are all examples of what type of insurer?
Government Insurers
COBRA coverage is considered continuous:
Group Health Insurance
Discounting a person's future net earnings at a reasonable rate of interest is known as the ___________________ approach.
Human Life Value
Section 1035 Exchanges are a way to move annuity funds:
Income Tax Free
On a renewable $20,000 decreasing term policy, when the policy renews, the premium payments will typically:
Increase
Most new life insurance policies are purchased by ______________ from life insurance agents.
Individuals
The _______________ bears the investment risk in a fixed annuity.
Insurer
The ____________ designation means that the beneficiary cannot be changed without the named beneficiary's permission.
Irrevocable
Under the surgical schedule method of a basic medical expense plan, every procedure:
Is assigned a dollar amount by the insurer
Group health plans that are issued by stock companies frequently:
Issue experience-rated plans
Which of the following does NOT belong in the category of available life insurance settlement options?
Joint and First Survivor Methods
The ________________ provision of the Insurance Code spells out the terms that allow domestic insurers the right to invest a certain percentage of their total assets in loans or certain other investments.
Leeway or Basket
____________ term insurance provides a level amount of protection for a specified period, after which the policy expires.
Level
The Deficit Reduction Act gives governors more flexibility to design _____________ benefits that efficiently and affordably meet their states' needs.
Medicaid
Knowingly making, issuing, or circulating any estimate, illustration, circular statement, sales presentation, omission, or comparison which incorrectly represents any facet of an insurance policy is called:
Misrepresentation
Terms and coverages available under group health policies are generally _______________ than individual health policies.
More Liberal
Term insurance premiums are based on:
Mortality and Loading
According to the NAIC Uniform Policy Provisions for health insurance policies, the __________________ provision pertains to the timely notice given to the insurer when a claim is being made.
Notice of Claim
In regard to health insurance, the government bestows tax advantages to provide incentive for an employer to:
Offer health insurance to the employees
Each insurance company must file a complete set of annual financial statements with the __________________ on a standardized form and compiled according to specified procedures.
Office of Insurance Regulation
Which renewability provision allows an insurer to terminate a health insurance policy on any date specified in the policy and to increase the premium for any class of insureds?
Optionally renewable
Henry has a Life with Period Certain annuity (life or ten years) in which is wife, Harriet, is beneficiary. If Henry dies after 5 years, what will Harriet receive?
Payments for the remainder five years
The ___________ method disperses proceeds equally among the life policy's living named beneficiaries.
Per Capita
Most group disability policies use the ___________ method to calculate the amount of the insured's earnings prior to the accident.
Percentage
Under a group policy's Coordination of Benefits clause, the member's policy is considered the _________ payor.
Primary
Assessment Mutual Insurers, Reinsurers, and Home Service Insurers are all examples of what type of insurer?
Private Insurers
__________________ is one of the most effective ways of transferring risk.
Purchasing Insurance
Which of the following risks is insurable?
Pure Risks
Retirement plans that meet federal government approval and receive tax benefits are known as __________ plans.
Qualified
Changing one's lifestyle to minimize a known risk is an example of what type of risk?
Risk Reduction
An insured group of doctors and an insured group of pharmacists are typically insured through:
Risk Retention Groups
Which type of insurer insures groups of individuals who are of the same class?
Risk Retention Groups
Which of the following is NOT considered one of the three basic parts of a life insurance contract?
Security Report
The face value on industrial insurance policies is usually ___________ than most.
Smaller
Which of the following is NOT a typical permanent exclusion in life insurance policies?
Suicide
FICA taxes are applied to employees' incomes up to certain limits, called the:
Taxable wage base
When the youngest child reaches age 16 and the surviving spouse has not reached age 60, Social Security death benefits are:
Temporary Suspended
Roland invested $30,000 in a deferred annuity when he was 30 years old, which grew to $60,000 in 20 years. At age 50, he decides to take a partial withdrawal in the amount of $15,000. What are the tax implications?
The $15,000 withdrawal is taxable as ordinary income plus a 10% premature distribution penalty applies
Which answer below best describes the true effective date of a policy?
The date the insurer accepts an offer by the applicant as written
If an insured person does not stipulate a beneficiary on their life insurance policy, what happens to the policy's benefits if the insured dies?
The deceased's estate becomes the beneficiary
In a reciprocal insurer structure, each policyholder insures the risks of:
The other policyholders
What is the minimum number of members required for a group life insurance policy in the State of Florida?
There is no minimum
What is the purpose behind full disclosure requirements?
To help client make an informed decision
"Combination contract" is a term used to describe life insurance programs which combine different forms of life insurance into a single package to produce a desired pattern of benefits.
True
The exclusion ratio is always considered 100% in _________ annuities.
Variable
Not only do ___________ Life policies build cash value, they also mature at age 100 at which time benefits are mandated to be paid.
Whole
HMOs are required to hold an open enrollment period of not less than ______ days in every 18-month period.
30
Florida law requires minimum grace periods of _______ days for health policies with premiums payable weekly.
7
According to agent ethics, it is recommended that agents meet with their clients ________ and complete a review.
Annually
Bob and Ted both have disability income policies. Bob's policy provides a 15 day elimination period and a 10 year benefit period. Ted's policy provides a 30 day elimination period and a 7 year benefit period. Who pays higher premiums?
Bob
The ____________ insurer is licensed and practicing in the same state in which they are incorporated.
Domestic
The type of annuity that provides a guaranteed rate of return is called a variable annuity.
False
When a life insurance policy is reinstated after lapse, a new suicide clause automatically goes into effect.
False
The Statute of Limitations states that if a lawsuit is to be filed, it must be brought within ______ years after Proof of Loss is furnished to the insurance company.
Five
Cliff vesting means that an employee must have ____________ of service before becoming 100% vested.
Five Years
_____________ health plans are sometimes called "wholesale plans" and provide health insurance coverage to members of an association or professional society.
Franchise
Which annuity payout option provides guaranteed payments for a certain period of time and if the annuitant dies before the period has expired, the policy pays the beneficiary through the remainder of the period?
Period Certain Option
Insurance would be unenforceable and considered a wager if the __________ does not have an insurable interest in the insured party.
Policyowner
The actual number of annuity units in a variable annuity contract is determined by the current value of one unit relative to the amount of:
Premiums Paid
Which statement best describes the function of insurance?
The function of insurance is to safeguard against financial loss by having the losses of few paid by the contributions of many who are exposed to the same risk
Why is it important that the agent carefully ask the applicant each question on the application and see that the answers are correctly stated?
The insured or beneficiary may not have a valid claim
Group health insurers must either provide or offer chiropractic coverage.
True
In the process of selling life insurance and when evaluating the needs of your client, the Human Life Value approach has been largely replaced by the more practical Needs Approach.
True
Medigap pays most Medicare deductibles and copayments.
True
Pure risk involves only the chance of loss.
True
Speculative risk involves the chance of loss and gain.
True
The Cost of Living Adjustment (COLA) rider in disability policies is geared toward adjusting the benefit according to an individual's current living conditions after disability benefits have begun.
True
The principal sum in an AD&D policy refers to the stated amount the policy was written for.
True
Under Florida law, group health insurers must offer mental and nervous disorder insurance to policyowners.
True
When a life insurance policy is reinstated after lapse, the incontestable clause is usually regenerated.
True
When a policyowner surrenders his whole life policy for its cash value, he can receive an amount equal to the premiums paid into the policy tax-free.
True