Aflac Exam
Major medical insurance will typically cover medical expenses that result from
A negative reaction to prescribed medication
Of the following dividend options, which of these is taxable?
Accumulation at interest
A policy owner may change two policy features on what type of life insurance?
Adjustable life
The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as
Aleatory
Liquidity
An insurer's ability to make unpredictable payouts to policy-owners is _________
Which of these factors would an insurer consider when determining whether to accept a group life plan?
Average age
Why are dividends from a mutual Insurer not subject to taxation
Because dividends are considered to be a return of premium
The period in which there are no Social Security benefits for the surviving spouse is called the
Blackout period
Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled?
Business overhead expense policy
What kind of policy covers two or more people with the death benefit payable upon last persons death?
Last Survivor Life Insurance
The authority given to a licensed producer via the
Law of Agency
Which contract element is the insurable interest a part of?
Legal Purpose
Insurance policy that has premiums fully paid up within a certain amount of time is know as
Limited Payment Insurance
A permanent life insurance policy where the policy owner pays premiums for a specified number of years is called
Limited pay policy
The premium for a modified whole-life policy is
Lower than the typical whole life policy during the first five years and then higher than typical for the remainder
Pre-death distributions from a modified endowment contract (MEC) receive different tax treatment than other life insurance policies because
MEC tends to be an investment vehicle
The election of COBRA for continuation of health coverage will?
Maintain the same coverage and increase premium
All of these are considered key factors in underwriting life insurance EXCEPT
Marital Status
Which of the following is medicare part B also known as?
Medical insurance
Shirley has a Medigap policy, which is designed to pay costs associated with
Medicare parts A & B
The premium payment mode that results in the highest overall cost would be
Monthly
A policyowner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision?
Partial disability
What is an insurer required to do when faced with an error made under the Misstatement of Age provision?
Pay age-corrected benefits
Which annuity payout option allows the policy owner to choose a pre-determined number of benefit payments?
Period Certain
In what form do disability income policies typically pay benefits?
Periodic income
Variable life insurance and universal life insurance are very similar. Which of these features are held exclusively by variable universal life insurance?
Policy-owner has the right to select the investment which will provide the greatest return
Which of these describes a MEC contract that failed to meet the seven-pay test
Pre-death distribution are typically taxable
Which of the following is a reinstatement condition?
Proof of insurability
Which of the following are appropriate uses of life insurance for business EXCEPT
Protecting business by covering entry-level employees with benefits
The role of the federal government was expanded when Medicaid was established by allowing the state to
Recieve matching funds to expand public assistance programs
A policy owner may exercise which of these dividend options that use the dividend to pay all or part of the next premium due?
Reduction of premium dividend option
An annuitant dies during the distribution period. What kind of annuity will return to a beneficiary the difference between the annuity value and the income payments already made?
Refund annuity
Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence?
Section 1035 Exchange
Who is qualified to participate in a Keogh Plan (HR-10s)?
Small business owners, self-employed individuals as long as the employees are included.
Typically, Long-Term Disability benefits are coordinated with which benefit plan?
Social Security
Justin is receiving disability income benefits from a group policy paid for his employer. how are these benefits treated for tax purposes?
Taxable income
Which of these statements regarding the annuitant is CORRECT?
The annuitant's life expectancy determines the annuity payments
A tax-free Section 1035 Exchange of a life insurance policy to a different policy is permitted if it occurs
from insurer to insurer and no cash is received by the policy owner
Level premium term life insurance policies
have premiums that are averaged over the policy period
A nonparticipating policy will
not pay dividends
What happens to interest earned if the annuitant dies before the payout start date?
It is taxable
Which of the following statements regarding Group Disability Income insurance is TRUE?
It provides benefits for nonoccupational illnesses and injuries
All of these are considered sources of information that can assist an underwriter in determining whether or not to accept a risk EXCEPT
National Association of Insurance Underwriters (NAIU) + The National Association of Insurance Underwriters is NOT a source of information that may aid an underwriter in determining whether to underwrite a risk.
How do interest earnings accumulate in a deferred annuity?
On a tax-deferred basis
What kind of life insurance policy issued by a mutual insurer provides a return of divisible surplus?
Participating life insurance policy
Which of these ensures that the proceeds of a life insurance policy will be free from attachment or seizure by the beneficiary's creditors?
Spendthrift Clause
Which of these will have the highest monthly payout upon annuitization?
Straight life
An Insurer has the right to recover payment made to the insured from the negligent party. These rights are called
Subrogation
Distributions from a health and savings account (HSA) qualified for medical expenses are
Tax free
Key person disability insurance pays benefits to
The employer
What is a corridor in relation to Universal life insurance policies
The gap between the total death benefit and the policys cash value
A disability elimination period is best described as
Time deductible
A life insurance policy that is subject to a contract interest rate is referred to as
Universal Life
A change in an insurance application requires
an initial made by the applicant
An example of a tax-qualified retirement plan would be a(n)
defined contribution plan
The waiting period for a disability insurance policy
excludes payments for a short-term illness or injury
A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT
fare-paying passenger
The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid
minus indebtedness and without interest
A provision in a whole life policy that allows a policy owner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n)
nonforfeiture provision
Tonya has replaced her whole life policy with an annuity without incurring a tax penalty. This transaction is called a(n)
1035 Exchange
How long must an individual be unable to engage in any gainful activity due to physical or mental disability in order to qualify for Social Security Total Disability?
12 months
Within how many days must a traditional IRA be rolled into another IRA in order to avoid tax consequences?
60 Days
At what age will a person normally enroll with an insurance carrier under a Part C Medicare Advantage Plan?
65
A fee for service health insurance plan will normally cover
A disease
Which of these is considered to be a Living Benefit option in a life insurance policy?
Accelerated death benefit
Medicare Part B covers?
Doctors charges
What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?
Dread disease insurance
Under group health insurance, a certificate of coverage is issued to the
Employee
Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. What kind of policy is this?
Equity index whole life
When principal gives the agent authority in writing it is know as
Express Authority
A spouse and child can be added to the primary insured's coverage as what kind of rider?
Family term
A health care provider claim may be settled using which of the following payment methods?
Fee-for-service
Elizabeth is the beneficiary of a life insurance policy. She is receiving the death benefit in payments of $10,000 per month until the principal and interest have been paid out. Which option was chosen?
Fixed amount
An insured's status under Social Security can be described as _______.
Fully insured
How are annuities given favorable tax treatment?
Gains are taxed at distribution
Tom has a rider on his disability income policy that guarantees the right to increase his benefits without a medical exam. What kind of rider is this?
Guaranteed insurability rider
An annuitant is guaranteed to NOT outlive their benefits with a(n)
Guaranteed lifetime withdrawal benefit
All of the following plans allow for employee contributions to be taken on a pre-tax basis EXCEPT
Health Reimbursement Arrangement Plan
Medicare part A covers?
Hospital charges or inpatient hospital stay
Which of these is a method of determining the level of funds required for ongoing support in the event of the breadwinner's death?
Human Life Value
Which approach predicts a person's earning potential and determines how much of that would be devoted to dependents?
Human life value approach
Which of the following types of deductibles would apply a single deductible to both medical and dental insurance coverage?
Integrated deductible
Which settlement option involves having the proceeds remain with the insurer and earnings paid on a monthly basis to the beneficiary?
Interest only
How soon can the benefit payments begin with a deferred annuity?
A minimum of 12 months after date of purchase
A Modified Endowment Contract (MEC) is best described as
A life insurance contract which accumulates cash values higher than the IRS will allow
Which of the following employers is required to follow ERISA regulations
A local electrical supply company with 12 employees
A provision that allows a policy owner to temporarily give up ownership rights to secure a loan is called a(n)
Collateral assignment
Which of these is affected by the frequency of an insurance policy's premium payments?
Cost
Which is not subject to taxation under the modified endowment contract (MEC)
Death Benefit
In what part of an insurance policy are policy benefits found?
Declaration
Julie has a $100,000 30-year mortgage on her new home. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period?
Decreasing Life insurance
All of the following are examples of Business Continuation Plan EXCEPT
Deferred Compensation
All of these are typically sources of underwriting information for life or health insurance EXCEPT
Disclosure authorization response
Lisa has recently bought a fixed annuity. Which of these is considered to be a disadvantage of owning this type of annuity?
During periods of inflation, annuitants will experience a decrease in the purchasing power of their payments
Under the Health Insurance Portability and Accountability Act (HIPAA), the employee's new Group Health Plan will verify Creditable Coverage so that the
Employees waiting period for coverage period for coverage of a preexisting condition can be reduced under the new employer's health plan
When a preferred provider organization (PPO) insured goes out-of-network, which of the following actions occur?
The insurer will pay a reduced amount
Which situation accurately describes a reduced paid-up nonforfeiture option?
The policy has a decreased face amount
An example of naming a beneficiary by class would be:
To the children born in the union by Ned Jackson
A life insurance policy which contains cash values that vary according to its investment performance of stocks is called
Variable Whole Life
A securities license is required for a life insurance producer to sell
Variable life insurance