Louisiana Life and Health Simulator

A producer didn't realize that he had committed an act in violation of the Insurance Code. How much would he probably be penalized?

$1,000

An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?

$100,000

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

$50,000

What percentage of individually-owned disability income benefits is taxable?

0%

What is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly Benefit rider?

1 year

According to OBRA, what is the minimum number of employees required to constitute a large group?

100

A licensee just renewed his license. How much time will pass before he will have to renew it again?

2 years

The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over what period of time?

2 years

How long must an insurer retain an advertisement for its long-term care policies?

3 years

What is the duration of the free-look period for Medicare supplement policies?

30 days

Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months?

30 months

Insurers must keep files of all advertisements used in Louisiana for how many years?

4

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

What is the elimination period for Social Security disability benefits?

5 months

According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan?

60%

How many eligible employees must be included in a contributory plan?

75%

Insurance companies may be classified according to the legal form of their ownership. The type of company organized to return any surplus money to their policyholders is

A mutual insurer.

All of the following are correct about the required provisions of a health insurance policy EXCEPT

A reinstated policy provides immediate coverage for an illness.

Which of the following Medicare supplement plans would be available to a reasonably healthy 91-year-old female?

A-N

A producer's license has been revoked a second time for violating the Insurance Code. When can the producer apply for a new license?

After the revocation period

In which Medicare supplemental policies are the core benefits found?

All plans

Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?

Any form of life insurance

Which of the following types of agent authority is also called "perceived authority"?

Apparent

What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided?

Application

Under a Key Person disability income policy, premium payments

Are made by the business and are not tax-deductible.

In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is

Broader in general.

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

Common Disaster

A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change?

Cost of Living Rider

Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance?

Defamation

All of the following are features and requirements of the Living Needs Rider EXCEPT

Diagnosis must indicate that death is expected within 3 years.

Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?

Disability Buy-Sell

Under which of the following employer-provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer?

Disability Income

Which of the following would most directly affect the purchasing power of benefits paid on a fixed annuity?

Economic inflation

How often must producer licenses renew in Louisiana?

Every 2 years

Insurer X charges the premium from its insured customers, passing on operating expenses for the company. The operating expenses plus the premium equals the "gross" premium. What is another name for the operating costs for Insurer X?

Expense loading

An agent selling variable annuities must be registered with

FINRA.

Which of the following expenses is NOT covered by a health insurance policy?

Funeral

Which of the following is an eligibility requirement for all Social Security Disability Income benefits?

Have attained fully insured status

Which benefits would a disability plan most likely pay?

Income lost by the insured's inability to work

Credit Life insurance

Insures the life of a debtor.

All of the following are Nonforfeiture options EXCEPT

Interest only

What is the benefit of choosing extended term as a nonforfeiture option?

It has the highest amount of insurance protection.

Which of the following best describes the MIB?

It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.

Which of the following statements is NOT correct concerning the COBRA Act of 1985?

It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.

A Louisiana insurance company ran an advertisement in June 2008. When could the company discard the file on this advertisement?

June 2012

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as

Legal actions.

Which of the following would be the best option that would help the surviving spouse of the insured to put her child through daycare after the insured's death?

Life insurance proceeds

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?

Limited pay whole life

Which of the following statements pertaining to Medicare Part A is correct?

Medicare Part A is automatically provided when an individual qualifies for Social Security benefits at age 65.

Which of the following is NOT true regarding the needs approach method of determining the value of an individual's life?

Need is predicted using the number of years until the insured's retirement.

An insured neglected to pay his premiums, so his policy lapsed. He filed a reinstatement application and another premium and was reinstated shortly thereafter. Five days after the reinstatement, he had a consultation with a general physician. Which part of the consultation costs will be covered?

None

During replacement of life insurance, a replacing insurer must do which of the following?

Obtain a list of all life insurance policies that will be replaced

An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A and Part B. What is the insurance company obligated to do?

Offer the supplement policy on a guaranteed issue basis

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

Other-insured rider.

What is the major difference between a stock company and a mutual company?

Ownership

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

Payor Benefit

Which renewability provision are you most likely to see on a travel accident policy?

Period of time

Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a

Premium receipt.

Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?

Premiums are not tax deductible as a business expense.

All of the following are examples of risk retention EXCEPT

Premiums.

Medicare Part D provides

Prescription drug benefit

Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?

Principal sum

Which of the following would not be a violation of Louisiana insurance regulations?

Producer C uses her license to write uncontrolled business only.

Which of the following would be a violation of life policy illustration regulation?

Providing a customer with an incomplete illustration

Which of the following insurance options would be considered a risk-sharing arrangement?

Reciprocal

Which nonforfeiture option provides coverage for the longest period of time?

Reduced paid-up

Which of the following is NOT provided by an HMO?

Reimbursement

Equity indexed annuities

Seek higher returns

Children's riders attached to whole life policies are usually issued as what type of insurance?

Term

Which of the following entities established the Do-Not-Call Registry?

The Federal Trade Commission

An individual wants to purchase a life insurance policy. His agent asks if the transaction will involve replacing any existing life insurance policies. If the customer replies, "Yes," which of the following best describes the agent's next step?

The agent must provide a replacement notice to the applicant.

A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then

The benefit is received tax free.

An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy?

The capital amount in a lump sum

In insurance, an offer is usually made when

The completed application is submitted.

The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

The death benefit can be increased by providing evidence of insurability.

In a group policy, who is issued a certificate of insurance?

The individual insured

The Affordable Care Act requires all U.S. citizens and legal residents to have qualifying health care coverage. This is known as

The individual mandate.

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to

The insured.

Which of the following is NOT a feature of a noncancellable policy?

The insurer may terminate the contract only at renewal for certain conditions.

An insurer conducts business in Louisiana without a certificate of authority. Hundreds of policies are sold, and claims start rolling in. Which of the following is true?

The insurer will have to pay the claims anyway.

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT

The interest is not taxable since it remains inside the insurance policy.

All of the following are true regarding a decreasing term policy EXCEPT

The payable premium amount steadily declines throughout the duration of the contract.

All of the following statements are true regarding installments for a fixed amount EXCEPT

The payments will stop when the annuitant dies.

All of the following are true of key person insurance EXCEPT

The plan is funded by permanent insurance only.

Which is true about a spouse term rider?

The rider is usually level term insurance

Under an extended term nonforfeiture option, the policy cash value is converted to

The same face amount as in the whole life policy.

In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT

The type of investment.

Which of the following is TRUE about nonforfeiture values?

They are required by state law to be included in the policy.

Why should the producer personally deliver the policy when the first premium has already been paid?

To help the insured understand all aspects of the contract

Evaluating information that establishes adverse selection risk is the purpose of which stage of insurance?

Underwriting

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

Universal Life - Option A

Which of the following Life Insurance policies would be considered interest sensitive?

Universal life

Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?

Universal life

How long will the beneficiary receive payments under the single life settlement option?

Until the beneficiary's death

A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as

Usual, customary and reasonable.

An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?

Variable

Which of the following products requires a securities license?

Variable annuity

When can a Long-Term Care policy deny a claim for losses incurred because of a pre-existing condition?

Within 6 months of the effective date of coverage

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce

Without receiving written consent from an insurance regulatory authority.