PA Life and Health Insurance License Test
if an annuitant dies before annuitization occurs, what will the beneficiary receive? a. cash value of the plan b. either the amount paid into the plan or the cash value of the plan, whichever is the greater amount c. either the amount paid into the plan or the cash value of the plan, whichever is the lesser amount d. amount paid into the plan
b. either the amount paid into the plan or the cash value of the plan, whichever is the greater amount
under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid a. until the policyowner's age 100, when the policy matures b. for 20 years or until death, whichever occurs first c. until the policyowner's age 65 d. for 20 years
b. for 20 years or until death, whichever occurs first
which of the following is excluded in a dental insurance plan? a. replacement of a stolen prosthetic device b. lost dentures c. treatment for the surrounding and supporting tissue of the teeth such as for gum disease d. cosmetic treatment due to an accident
b. lost dentures
which of the following licensees is classified as a representative of the insurance company and not allowed to represent an insured or claimant? a. public adjuster solicitor b. producer c. broker d. public adjuster
b. producer
Which of the following will vary the length of the grace period in health insurance policies? a. the term of the policy b. the mode of the premium payment c. the length of any elimination period d. the length of time the insured has been insured
b. the mode of the premium payment
when a producer holding a certificate or a broker's license has a change in their residence or business address, they must notify the Department of Insurance and any company for which the producer holds an appointment within... a. 7 days b.15 days c. 30 days d. 3 days
c. 30 days
which of the following would be required to be licensed as an insurance producer? a. a salaried full-time employee who furnishes information for group insurance b. an insurance company director who performs executive, administrative and managerial duties c. a salaried employee who advertises and solicits insurance d. a person whose activities are limited to producing insurance advertisements
c. a salaried employee who advertises and solicits insurance
Concerning insurance, the definition of a fiduciary responsibility is... a. handling assets or money belonging to others b. being liable for negligence with respect to client's applications c. maintaining an agent's personal funds d. handling insurer funds in a trust capacity
d. handling insurer funds in a trust capacity
to avoid violations of unfair claims settlement regulations, insurers are required to acknowledge the receipt of a claim within how many days? a. 10 days b. 15 days c. 30 days d. 45 days
a. 10 days
how long does a temporary producers license last for the surviving spouse of a deceased producer? a. 180 days b. 1 year c. 90 days d. 150 days
a. 180 days
an agent selling variable annuities must be registered with... a. FINRA b. Department of Insurance c. The Guaranty Association d. SEC
a. FINRA
an insured purchased an insurance policy 5 years ago. last year, she received a dividend check from the insurance company that was not taxable. this year she did not receive a check from the insurer. from what type of insurer did the insured purchase the policy? a. mutual b. reciprocal c. nonprofit service organization d. stock
a. mutual
a 55-year old employee has worked part-time for his new employer for 3 months now, but has not been offered health insurance. what factor has limited the employee's eligibility? a. number of hours worked per week b. the total amount of time worked for the company c. age d. income
a. number of hours worked per week
the ownership provision entitles the policyowner to do all of the following except a. set premium rates b. receive a policy loan c. assign the policy d. designate a beneficiary
a. set premium rates
Insurers must acknowledge the receipt of claims or any other pertinent communication within how many working days? a. 7 days b. 10 days c. 30 days d. 60 days
b. 10 days
An insured had a $10,000 term life policy. the annual premium of $200 was due on February 1; however the insured failed to pay the premium. he died on February 28. how much would the beneficiary receive from the policy? a. $0 b. $200 c. $9,800 d. 10,000
c. $9,800 = FA - Past Due Premium
After receiving notification of a claim, insurers need to provide the necessary claim forms within how many working days? a. 3 days b. 7 days c. 10 days d. 30 days
c. 10 days
Insurers need to accept or deny any claims within how many days of receipt? a. 5 days b. 10 days c. 15 days d. 20 days
c. 15 days
within how many days must a producer respond to an inquiry from the commissioner? a. 3 days b. 10 days c. 15 days d. 30 days
d. 30 days
who is responsible for paying producer appointment fees? a. the appointing insurer b. the commissioner's office c. the department of insurance d. the producer
a. the appointing insurer
Insurers must respond to inquiries from the department within how many working days? a. 10 days b. 15 days c. 30 days d. 60 days
b. 15 days
the minimum number of credits required for partially insured status for Social Security disability benefits is a. 4 credits b. 6 credits c. 10 credits d. 40 credits
b. 6 credits
according to the entire contract provision, a policy must contain a. buyer's guide to life insurance b. listing of the insured's former insurer(s) for incontestability provisions c. a copy of the original application for insurance d. a declarations page with a summary of insureds
c. a copy of the original application for insurance
an applicant wants to buy a policy that has a cash value element. which type should she buy? a. investment b. term c. permanent d. stock
c. permanent
what is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? a. $1,000 b. $100 per violation c. Revocation of License d. $2,500
d. $2,500
which of the following is incorrect regarding a $100,000, 20-year level term policy? a. the policy premiums will remain level for 20 years... b. if the insured dies before the policy expired, the beneficiary will receive $100,000 c. the policy will expire at the end of the 20-year period d. at the end of 20 years, the policy's cash value will equal $100,000
d. at the end of 20 years, the policy's cash value will equal $100,000
when must insurable interest exist in a life insurance policy? a. at the time of policy delivery b. when there is a change of the beneficiary c. at the time of loss d. at the time of application
d. at the time of application
the main difference between immediate and deferred annuities is... a. how the annuity is purchased b. the number of insureds c. the amount of each payment d. when the income payments begin
d. when the income payments begin
which provision states the insurance company must pay medical expenses claims immediately? a. time of payment of claims b. payment of claims c. legal actions d. relation of earnings to insurance
a. time of payment of claims
which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information? a. the guaranty association b. consumer privacy act c. the fair credit reporting act d. unfair trade practices law
c. the fair credit reporting act
all of the following are licensing requirements for a business entity, except a. demonstrating general fitness, competence, and reliability b. maintaining on staff at least 1 licensed person in good standing c. applying for a license in the same lines of authority as held by licensed designees d. having all employees complete continuing education courses once every 2 years
d. having all employees complete continuing education courses once every 2 years
an agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. the agent is guilty of... a. coercion b. twisting c. controlled business d. rebating
d. rebating
which of the following life insurance policies would be considered interest sensitive? a. adjustable life b. whole life c. increasing term d. universal life
d. universal life
the commissioner of insurance is placed in office by which means? a. through a bid process b. by NAIC nomination c. an appointment by the Governor d. an election at the same time that other state officials are selected
c. an appointment by the Governor
a provision in a life insurance policy that provides for the early payment of some portion of the policy face amount should the insured suffer from a terminal illness or injury is called? a. viatical settlement provision b. automatic premium loan provision c. waiver of maturity provision d. accelerated benefit provision
d. accelerated benefit provision
which of the following is not true regarding uniform mandatory provisions concerning claims? a. if the insured is several days late in filing proof of loss form, the claim cannot be denied if the insured can show good cause b. the insured is customarily required to give notice of claim within 20 days c. if the insured is 2 years late in filing a proof of loss, the claim can be denied d. an insured must notify the insurer of a claim on forms prescribed by the insurer
d. an insured must notify the insurer of a claim on forms prescribed by the insurer
when must insurable interest exist in a life insurance policy? a. at the time of loss b. at the time of application c. at the time of policy delivery d. when there is a change of the beneficiary
b. at the time of application
which of the following will not be an appropriate use of a deferred annuity? a. accumulating funds in an IRA b. funding a child's college education c. creating an estate d. accumulating retirement funds
c. creating an estate
concerning juvenile life insurance, which of the following statements is incorrect? a. juvenile life is classified as any life insurance purchased by a minor b. usually a parent or guardian is the applicant for insurance on the life of a minor c. it can be a limited premium payment policy d. juvenile life is classified as any life insurance written on the life of a minor
a. juvenile life is classified as any life insurance purchased by a minor
an insured has a life insurance policy, from a participating company and receives quarterly dividends. he has instructed the company to apply the policy dividends to increase the death benefit. the dividend option that the insured has chosen is called... a. paid up additions b. one year term purchase c. accumulation at interest d. reduction of premiums
a. paid up additions
in respect to the consideration clause, which of the following is consideration on the part of the insurer? a. promising to pay in accordance with the contract terms b. offering a secondary policy to the applicant c. offering an unconditional contract d. explaining policy revisions to the applicant
a. promising to pay in accordance with the contract terms
under the Fair Credit Reporting Act, if the consumer challenges the correctness of the information contained in his/her report, the reporting agency must... a. respond to the consumer's complaint b. defend the report if the agency feels it is accurate c. change the report d. sent an actual certified copy of the entire report to the consumer
a. respond to the consumer's complaint
what type of information is not included in a certificate of insurance? a. the cost the company is paying for monthly premiums b. the policy benefits and exclusions c. the procedures for filing a claim d. the length of coverage
a. the cost the company is paying for monthly premiums
which of the following is not required to be stated in the outline of coverage provided with a long-term care policy? a. basic information about the insurance company b. basic information about supplementary policies c. the policy number d. the right to return the policy for a refund
b. basic information about supplementary policies
a business wants to make sure that if a key employee becomes disabled, the business will be protected from any resulting loss. which kind of insurance will protect the business? a. business loss b. business disability c. individual disability d. management loss
b. business disability
which of the following must be present in all medicare supplement plans? a. plan C coinsurance b. plan A c. foreign travel provisions d. outpatient drugs
b. plan A
if a settlement option is not chosen by the beneficiary or policy owner, which option will be used? a. fixed period b. fixed amount c. lump sum d. life income
c. lump sum
which of the following is true about nonforfeiture values? a. a table showing nonforfeiture values for the next 10 years must be included in the policy b. policyowners do not have the authority to decide how to exercise nonforfeiture values c. they are required by state law to be included in the policy d. they are optional provsions
c. they are required by state law to be included in the policy
how soon after the due date should the insurer pay the agent appointment fees? a. immediately b. within 10 days c. within 30 days d. within 60 days
c. within 30 days
the insured has his wife named as the beneficiary of his life insurance policy. to ensure that his wife had income for life after the insured's death, he chose the life income settlement option. the amount of payments will be determined by taking into account all of the following except? a. the beneficiary's life expectancy b. projected interest rates c. face amount of the policy d. the insured's age at death
d. the insured's age at death
how long will the beneficiary receive payments under the single life settlement option? a. until the insured's death b. for a specified period of time c. until the insured's age 100 d. until the beneficiary's death
d. until the beneficiary's death
Insurers must complete investigations related to claims within how many days of notice? a. 10 days b. 15 days c. 20 days d. 30 days
d. 30 days
within how many days must a producer respond to an inquiry from the commissioner? a. 3 days b. 10 days c. 15 days d. 30 days
d. 30 days
an employee is insured under her employer's group life plan. if she terminates her group coverage, which of the following statements is incorrect? a. the insured would not need to prove insurability for a conversion policy b. the insured may convert to an individual policy within 31 days c. the premium for individual coverage will be based upon the insured's attained age d. the insured may choose to convert to term or permanent individual coverage
d. the insured may choose to convert to term or permanent individual coverage
an insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. the insured is still able to perform his current job. to what extent will he receive Presumptive Disability benefits? a. no benefits b. full benefits c. partial benefits d. full benefits for 2 years
b. full benefits
in an optionally renewable policy, the insurer has which of the following options? a. shorten the notice that the insured receives b. increase premiums c. increase the grace period d. alter the due date so the policy can be cancelled sooner
b. increase premiums
when health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called... a. indemnity plans b. POS plan c. PPO plan d. managed care
c. PPO plan
when the insured initiates the cancellation of a policy, the unearned premium will be refunded on a... a. extended term basis b. per occurrence basis c. pro rata basis d. short rate basis
d. short rate basis
under which of the following circumstances can financial institutions share insurance information with third parties, for the purpose of soliciting the purchase of insurance? a. if a consumer does not sign and return the notice of disclosure within 30 days b. whenever it is requested by the Commissioner c. under no circumstances; nonpublic personal financial information cannot be shared with third parties d. if a consumer decides to opt out
a. if a consumer does not sign and return the notice of disclosure within 30 days
your clients employer does not offer a company-wide annuity contract. what type of annuity contract could your client obtain? a. individual b. independent group contract c. single d. nonqualified
a. individual
an insured receives an annual life insurance dividend check. what term best describes this arrangement? a. accumulation at interest b. cash option c. deduction of premium d. annual dividend provision
b. cash option
according to the provisions of the PPACA, all of the following are required preventive care services EXCEPT... a. screenings for autism and behavioral disorders in children b. cervical cancer exams for all women starting at age 40 c. diet counseling for adults d. well-woman visits and counseling
b. cervical cancer exams for all women starting at age 40
in order to qualify for conversion from a group life policy to an individual policy of the same coverage a person must have been insured under the group plan for how many years? a. 10 b. 1 c. 3 d. 5
d. 5 years
if an insurer appoints a producer, which authority must be notified... a. Federal Directory of Insurers b. State Insurance Regulation Board c. Commissioner d. Department of Insurance
d. Department of Insurance
which of the following authorities monitors the financial strength of insurers? a. NAIC b. FINRA c. Insurance Companies d. Department of Insurance
d. Department of Insurance
which statement best defines a MEWA? a. a plan that provides hospice care for terminally ill employees b. a government health plan that provides health care for the unemployed c. a group health plan that covers medical expenses arising from work related injuries d. a joining together by employers to provide health benefits for employees
d. a joining together by employers to provide health benefits for employees
in a replacement situation, all of the following must be considered except a. assets b. benefits c. limitations d. exclusions
a. assets
which of the following expenses is not covered by a health insurance policy? a. funeral b. hospital c. disability d. dental
a. funeral
what option allows the insured to periodically increase benefit levels without providing evidence of insurability? a. guarantee of insurability b. guarantee renewable c. annual increase d. level premium
a. guarantee of insurability
under a pure life annuity, an income is payable by the company... a. only for the life of the annuitant b. until the principal and interest are exhausted c. for a guaranteed period of time, whether or not the annuitant survives to the end of that period d. for as long as either the annuitant or a named beneficiary is alive
a. only for the life of the annuitant
all of the following are true of the key person disability income policy except a. it is typically written to cover key employees in the event they become disabled and are unable to work b. the income may be used to find a replacement for the key employee c. benefits are considered taxable income to the business d. premiums are not deductible to the business
c. benefits are considered taxable income to the business
when an individual is covered under two health insurance policies that have duplicate benefits which could make a claim for benefits because of an injury or illness profitable, it is called a. pro rate coverage b. over insurance c. double indemnity coverage d. fraternal coverage
b. over insurance
the termination of marital property rights may be reversed for all of the following reasons except... a. the spouse was named as beneficiary by class b. the divorce or annulment decree or judgment is not recognized as valid c. the spouse named as beneficiary has obtained or consented to a final decree or judgment of an annulment, divorce or separation d. the beneficiary can prove the couple were living together as husband and wife or planning to remarry
c. the spouse named as beneficiary has obtained or consented to a final decree or judgment of an annulment, divorce or separation
a banker is ready to close on a customer's loan. the bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. this is an example of... a. loading b. defamation c. twisting d. coercion
d. coercion
A long stretch of economic hardship causes a 7% rate of inflation. a policy owner notices that the face value of her life insurance policy has been raised 7% as a result. which policy rider caused this change? a. value adjustment rider b. return of premium rider c. inflation rider d. cost of living rider
d. cost of living rider
an applicant wants to buy a life insurance policy in which he can count on receiving the same benefits as stated in the contract. which type should he buy? a. any type of annuity b. fixed c. permanent d. variable
b. fixed
all of the following are requirements for producer license renewal except a. record of fingerprints b. renewal examination c. up to date continuing education d. renewal fees
b. renewal examination
twin brothers are starting a new business. they know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. what type of insurance would be the most affordable and still provide a death benefit should one of them die? a. ordinary life b. joint life c. decreasing term d. whole life
b. joint life
an insurance company forwards fixed annuity premiums to their general account, where the money is invested. the guaranteed minimum interest is set at 3%. during an economic downswing, the investments only drew 2.5%. what interest rate will the insurer pay to its policy holders? a. 3% b. 3% this payment. the overpayment this time will be subtracted from the next time the rate exceeds 3% c. 3% regardless of what the investment draws since that's the guaranteed rate d. 2.5%
a. 3%
which of the following hospice expenses would not be covered in a cost-containment setting? a. antibiotics b. tylenol c. morphine d. special hospital bed
a. antibiotics
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? a. send the applicant to a doctor for a physical. nothing can happen until they get the results b. offer the supplemental policy on a guaranteed issue basis c. exclude pre-existing conditions from coverage under the supplement policies d. look at the applicant's medical history to decide what premium to charge
b. offer the supplemental policy on a guaranteed issue basis
which of the following determines the length of time that benefits will be received under the fixed amount settlement option? a. amount of interest b. size of each installment c. predetermined length of time state in the contract d. length of income period
b. size of each installment
if a consumer requests additional information concerning an Investigative Consumer Report, how long does the insurer or reporting agency have to comply? a. 10 days b. 3 days c. 5 days d. 7 days
c. 5 days
according to the entire contract provision, a policy must contain a. buyer's guide to life insurance b. listing of the insured's former insurer(s) for incontestability provisions c. a copy of the original application for insurance d. a declarations page with a summary of the insured
c. a copy of the original application for insurance
which of the following would be required to be licensed as an insurance producer a. a salaried full time employee who furnishes information for group insurance b. an insurance company director who performs executive, administrative and managerial duties c. a salaried employee who advertises and solicits insurance d. a person whose activities are limited to producing insurance advertisements
c. a salaried employee who advertises and solicits insurance
the full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. when does the policy coverage become effective? a. as of the first of the month after the policy issue b. as of the policy issue date c. as of the policy application date d. as of the policy delivery date
c. as of the policy application date
in a POS plan, benefits for covered services when self-referring (without having your primary care physician arrange for the service) are generally... a. the same cost b. self-referral is not allowed c. more expensive d. less expensive
c. more expensive
Shortly after a replacement transaction on a Medicare Supplement policy the insured decided to cancel the policy, but is unsure whether or not the free-look provision applies. the insured could find that information in the... a. buyer's guide b. certificate of coverage c. notice regarding replacement d. policy application
c. notice regarding replacement
in comparison to consumer reports, which of the following describes a unique characteristic of investigate consumer reports? a. they provide information about a customer's character and reputation b. the customer has no knowledge of this action c. the customer's associates, friends and neighbors provide the report's data d. they provide additional information from an outside source about a particular risk
c. the customer's associates, friends and neighbors provide the report's data
the sole beneficiary of a life insurance policy dies before the insured. if the policy owner fails to change the beneficiary before the insured's death, the proceeds of the policy will go to... a. the senate b. the beneficiary's estate c. the insured's estate d. probate
c. the insured's estate
an individual was just caught acting as an exclusive general agent - even though he is not properly licensed. assuming that this occurred in a single day, what is the maximum penalty he faces? a. a second degree misdemeanor and a $1,000 fine b. a third degree felony and a $10,000 fine c. a second degree felony and a $10,000 fine d. a third degree misdemeanor and a $1,000 fine
d. a third degree misdemeanor and a $1,000 fine
when the policy owner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option? a. fixed period b. life income period certain c. extended term d. fixed amount
d. fixed amount
which of the following is not true regarding the life with guaranteed minimum annuity settlement option? a. it is a life contingency option b. the beneficiary receives the remainder of the principal amount upon the annuitant's death c. payments can be made in installments and as a single cash refund d. it provides a higher monthly benefit than a pure life annuity
d. it provides a higher monthly benefit than a pure life annuity
which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary? a. joint and survivor b. single life c. fixed amount d. life income with period certain
d. life income with period certain
which of the following is correct concerning the taxation of premiums in a key-person life insurance policy? a. premiums are tax deductible by the key employee b. premiums are tax deductible as a business expense c. premiums are taxable to the employee d. premiums are not tax deductible as a business expense
d. premiums are not tax deductible as a business expense
which of the following statements about group life is correct? a. the premiums are higher than in an individual policy because there is no medical exam b. the group sponsor receives a certificate of insurance c. the policy can be converted to an individual term insurance policy d. the cost of coverage is based on the ratio of men and women in the group
d. the cost of coverage is based on the ratio of men and women in the group
