tfia exam practice 2

An insured owns a $50,000 whole life policy. At age 46, the insured decides to cancel their policy and exercise the extended term option for the policy's cash value which is currently $20,000. What is the face amount of the new term policy?

$50,000

A general disability policyowner is injured during a war, rendering her disabled. What will be the extent of the benefits that she will receive?

0%

According to the Entire Contract provision, a policy must contain?

A copy of the original insurance application.

Under the mandatory uniform Notice of Claim provision, the first notice of sickness or injury covered under an accident and health policy has to include?

A statement that is adequately clear to identify the insured and the nature of the claim.

Representations are oral or written statements made by the applicant that are?

Considered to be true to the best of the applicants knowledge.

Which of the following is NOT an example of insurable interest?

Debtor in creditor

Which of the following must a producer receive in order to sell variable life insurance policies?

FINRA registration

Which of the following policy components includes the insurer's promise to pay?

Insuring clause

All of the following are Nonforfeiture options EXCEPT?

Interest only

When a beneficiary receives payments that consist of both principal and interest, which portions of the payments are taxable as income?

Interest only

Which of the following products has a securities license requirement?

Variable annuity

The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to their average income over the last

24 months

On a Waiver of Premium rider in life insurance policies, what is the waiting period?

6 months

Under the uniform required provisions, proof of loss under a health insurance policy typically should be filed within?

90 days of a loss

Rob has an individual major medical policy that requires a coinsurance payment. Rob very rarely visits his physician and would like to pay the lowest premium possible. Which coinsurance would be best for Rob?

90/10

Which of the following does the insuring clause NOT specify?

A list of available doctors

Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurance provider in the event of the insured's death?

A minor son of the insured

The two types of assignments are?

Absolute and collateral

Under a disability income insurance policy, if the insured changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurer should do which of the following?

Adjust the benefit commensurate with the increased risk.

Level term insurance provides a level premium and a level death benefit during the policy term. If the policy renews at the conclusion of a specified period of time, the policy premium will be?

Adjusted to the insured's age at the time of renewal.

Group health insurance is characterized by all of the following EXCEPT?

Adverse selection

Which of the following terms best describes the concept that the insured pays a small premium for a large amount of risk on the part of the insurance provider?

Aleatory

While a claim is pending, an insurer can require?

An independent examination as often as reasonably required.

The equity in an equity index annuity is linked to?

An index like the Standard and Poor's 500.

The full premium was collected with the application for life insurance, and the policy was issued two weeks later. When does the policy's coverage become effective?

As of the application date

An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium payment, answers any questions, and then leaves. What did the agent forget to do?

Ask the applicant to sign a statement of good health

In a replacement situation, all of the following have to be considered EXCEPT?

Assets

A person is insured under her employer's group Disability Income policy. The insured suffered an accident while on vacation that left her unable to work for 4 months. Which of the following would be true if the disability income policy pays the benefit?

Benefits that are traceable to employer contributions are fully taxable as income to the employee.

What license or licenses are needed to sell variable annuities?

Both a life insurance license and a securities license

Under a disability policy, a small business owner is the insured that funds a buy-sell agreement. If the owner becomes disabled or dies, the policy would provide which of the following?

Cash to the owner's business partner to achieve a buyout.

Since an insurance policy is a legal contract, it is required to conform to the state laws governing contracts which require all of the following elements EXCEPT?

Conditions

When Steve purchased his health policy he was a roofer. He has since changed occupations and now manages a book store. Upon notifying the insurance provider of his change of occupation, the insurer should?

Consider decreasing the premium.

Which of the following includes information regarding an individual's credit, reputation, character, and habits?

Consumers Report

In a relative value system of determining coverage for a given procedure, what term best describes the total amount payable per point?

Conversion factor

Which type of policy can be changed from one that does not accumulate cash value to the one that does?

Convertible Term Policy

A key person insurance policy can pay for which of the following?

Costs of training a replacement

In medical expense insurance policies, which of the following is NOT an exclusion?

Coverage for dependents

A partnership buy-sell agreement in which every partner buys insurance on the life of each of the other partners is called a?

Cross-purchase plan

Which of the following is NOT a term for the period of time during which the beneficiary or the annuitant receives income?

Depreciation period

What is a key feature of a dental expense insurance plan that is NOT usually found in a medical expense insurance plan?

Diagnostic and preventative care

Under a group life plan, which of the following insured employees would be allowed to convert to an individual insurance of the same coverage once the plan is terminated?

Employees (EE) who have been insured under the group life plan for at least 5 years.

The provision in a health insurance policy that ensures that the insurance company cannot refer to any document that is not found in the contract is the?

Entire contract clause

A husband and wife both incur medical expenses that are credited to a single major medical insurance deductible. Which type of policy do they have?

Family

When attached to a permanent life insurance policy, which rider provides an amount of insurance on all family members?

Family term rider

How many pints of blood will a Medicare supplement's core benefits pay for?

First 3

Which of the following is NOT a dividend option?

Fixed-premium installments

Alison is buying a permanent life insurance policy with a face value of $25,000. While this is all the insurance that she can afford at this time, Alison wants to be sure that additional coverage will be available in the future. Which of the following options should be found in the policy?

Guaranteed insurability option

Health Savings Accounts (HSAs are designed to?

Help people save for qualified health expenses

At what point would a misrepresentation that is made on an insurance application be considered fraud?

If it is intentional and material

The life income joint and survivor settlement option guarantees?

Income for 2 or more recipients until their death.

Which type of hospital policy pays a specified amount every day that the insured is in a hospital?

Indemnity

An insurance provider receives a report regarding a potential insured that includes the insured's habits, hobbies, and financial status. What type of report is that?

Inspection Report

The two components of universal policy are?

Insurance and cash account

Which of the following entities has the authorization to revise or make changes to an insurance policy?

Insurer's executive officer

A guaranteed renewable disability insurance policy?

Is renewable at the insured's discretion to a specified age.

With respect to the free-look provision, the insurer?

Is required to allow the policyowner to return the policy for a full refund.

Which of the following is INCORRECT regarding Medicaid?

It is a program solely administered by the federal government.

What is the purpose of an agent providing a conditional receipt to an applicant?

It is provided by the agent only to applicants who prepay all premiums in advance of policy issue

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

Legal Action

Which of the following is an example of a limited-pay life policy?

Life-paid up at 65

What kind of life insurance policy requires an insured to only pay premiums for a specified number of years until the policy is paid up?

Limited-pay Life

Which of the following insureds is eligible for a health savings account?

Marley is insured by a High Deductible Health plan (HDHP)

Which of the following statements regarding Medicare is NOT correct?

Medicare advantage has to be provided through HMO's

An insured is involved in an auto accident. Besides general, less serious injuries, the insured permanently loses the use of their leg and is completely blind. The blindness improves one month later. To what extent will the insured receive Presumptive Disability benefits?

NO benefits

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

Other-insured rider

A heart surgeon has an accident and develops tremors in his right arm. Which definition of total disability will cover him for all losses under a disability income policy?

Own occupation- less restrictive than other definitions.

Which of the following explains the right of the policyowner to choose options, change beneficiaries, and receive proceeds of a policy?

Owners Rights

Which of the following is another term for an annuity's accumulation period?

Pay-in period

Which of the following provisions would prevent an insurer from paying a claim to somebody other than the policyowner?

Payment of claims

Which of the following provisions is required for health insurance policies?

Physical examination and autopsy

All of the following are true about insurance policy loans EXCEPT?

Policy loans can be made on policies that do not accumulate cash value.

Which disability policy provision describes certain conditions, such as total and permanent blindness or dismemberment, that automatically qualify the insured for full disability benefits?

Presumptive disability

Before a loss can be covered, what is the initial period of time stated in a disability income policy that has to pass after the policy is in force?

Probationary period

The policyowner pays for her life insurance annually. Until now, she has received a nontaxable dividend check every year. She has decided to use the dividends to help pay for her next premium. Which of the following options would allow her to do this?

Reduction of premium

The main purpose of disability income insurance is to?

Replace income lost because of a disability

An insured wants to name his wife as the beneficiary of his health policy. He also wishes to retain all of the rights of ownership. The insured should have his wife named as what type of beneficiary?

Revocable

Upon the insured's death, methods used to pay the death benefits to a beneficiary are called?

Settlement option

What is the best way to change an application?

Start over with a new application

An insured has endured multiple hospitalizations and surgeries for an illness during the summer months. His insurance provider no longer bills him for medical expenses. What term best describes the condition he has met?

Stop-Loss Limit

Which of the following is referred to as a second to die policy?

Survivorship life

In a business life insurance policy, the premiums paid by the employer are?

Tax-deductible by the employer (ER)

Whose responsibility is it to make sure that all of the questions on an application have been answered?

The agent

Before a costumer's agent delivers their policy, the insurance provider makes a last minute change to the policy. The agent informs the customer of this change, and it is accepted. What must the agent do next?

The agent should ask the customer to sign a statement acknowledging that they are aware of the change.

Regarding variable annuities, which of the following is TRUE?

The annuitant assumes all the risk on the investment

All of the following statements about equity index annuities are correct EXCEPT?

The annuitant receives a fixed return.

An insurance provider is attempting to determine an applicant's insurability and decides to obtain medical information from several different sources. Which entity is required to be notified of the investigation?

The applicant

An applicant signs an application for a $25,000 life insurance policy, pays the initial premium and is given a conditional receipt. If the applicant is killed in a car accident the next day, -?

The beneficiary would receive the $25,000 death benefit if it was determined that the insured qualified for the policy.

Which statement accurately describes group disability income insurance?

The extent of benefits is settled upon by the insured's income.

The cost for an autopsy covered under the physical exam and autopsy provision is paid by?

The insurance provider

An insured provided their insurance company with a notice of claim but did not receive any claim forms. The insured submits proof of loss and describes the extent of the loss in a hand-written letter to the insurance company. Which of the following would be true?

The insured is compliant with the policy requirements regarding claims.

When a life insurance policy was issued, the policyowner specified a primary and a contingent beneficiary. A few years later, both the insured and the primary beneficiary died in the same auto accident, and it was impossible to determine who was the first to die. Which of the following would receive the death benefit proceeds?

The insured's contingent beneficiary

What is the advantage of reinstating a lapsed policy instead of applying for a new one?

The original age is used for determining the premium.

The life settlement broker represents whom in a life settlement contract?

The owner

With respect to a decreasing term policy, all of the following are true EXCEPT?

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

Regarding optional benefits with long-term care policies, which of the following is true?

They are available for an added premium.

The purpose of managed care health insurance plan is?

To control health insurance claims expenses

All of the following are correct about the cancellation of an individual insurance policy according to the rights of renewability rider for cancellable policies EXCEPT?

Unearned premiums are retained by the insurance provider.

If only one party to an insurance contract makes a legally enforceable promise, what type of contract is it?

Unilateral

When is the earliest a policy is able to go into effect?

When the application is signed and a check is provided to the agent.

Can a person who belongs to a POS plan use an out-of-network physician?

Yes, and they have to use any preferred physician, even if not part of the HMO