Exam

The amount of the distribution is reduced by the amount of a 20% withholding tax.

A 60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?

The third year of the policy must have a death benefit equal to 65% of the total face amount.

A 71 year old female recently purchased a life insurance policy with graded death benefits. If the policy has graded death benefits for three years, which of the following must be true?

Collateral assignment

A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 life insurance policy to secure the loan. Which provision makes this possible?

The benefit is received tax free.

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

Joint life

A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?

Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.

A guaranteed renewable health insurance policy allows the

12

A health insurance policy that covers a family member of the insured must also offer coverage for child health supervision services until what age?

Costs of training a replacement

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

NAIC

A long-term care insurance shopper's guide must be provided in the format developed by which of the following?

Automatic premium loan

A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?

If the commission for the first year does not exceed double the commission for the second year.

A producer may accept a commission for a Medicare supplement policy

Other-insured rider.

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

Cost of living rider.

A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called

Certain groups of employees only.

A tax-sheltered annuity is a special tax-favored retirement plan available to

Interest only

All of the following are Nonforfeiture options EXCEPT

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

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

The plan must provide an offset for social security benefits.

All of the following are general requirements of a qualified plan EXCEPT

Being age 65.

All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT

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

All of the following are true regarding insurance policy loans EXCEPT

The CEO of a private corporation.

All of the following employees may use a 403(b) plan for their retirement EXCEPT

A retired person age 50.

All of the following individuals may qualify for Medicare health insurance benefits EXCEPT

)Anyone who is willing to pay a premium.

All of the following qualify for Medicare Part A EXCEPT

They cover the cost of extended nursing home care.

All of the following statements about Medicare supplement insurance policies are correct EXCEPT

The payments will stop when the annuitant dies.

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

It is a life contingency option.

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT

Employer contributions are not tax deductible.

All of the following statements are true regarding tax-qualified annuities EXCEPT

They may be issued to anyone who applies for one.

All of the following statements are true regarding temporary licenses EXCEPT

The employer can receive a current tax deduction for any contributions made to the plan.

All of the following statements concerning an employer sponsored nonqualified retirement plan are true EXCEPT

Has at least 50 members.

An association could buy group insurance for its members if it meets all of the following requirements EXCEPT

The PPO will pay reduced benefits.

An employee becomes insured under a PPO plan provided by his employer. If the insured decides to go to a physician who is not a PPO provider, which of the following will happen?

Payments for 15 years

An individual buys a flexible premium deferred life annuity with 20 year period certain. What would his beneficiary receive if he died 5 years after beginning the annuity phase?

Beneficiary's consent.

An insurance contract must contain all of the following to be considered legally binding EXCEPT

Paid-up option

An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?

Full face amount of the policy

An insured has a life insurance policy with graded death benefits. In the first year of the policy, the death benefit is less than 50% of the face amount on the policy. What amount must the policy contain in accidental death benefits during the graded death benefit period?

Occupational

An insured has health insurance that covers them at work and at home. This policy was written on what basis?

Elimination period

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day

No benefits

An insured is involved in a car accident. In addition to less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will the insured receive Presumptive Disability benefits?

Time of Payment of Claims

An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?

$50,000

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?

Aleatory

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

10 days

An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?

Interest-sensitive Whole Life.

An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an

Revocable

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

Rated

Another name for a substandard risk classification is

Rated.

Another name for a substandard risk classification is

First-dollar basis.

Another term used to describe "no deductible" is

Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.

As it pertains to group health insurance, COBRA stipulates that

The insured's right to designate a new beneficiary.

Assignability provision in a life insurance policy relates to

Amanda is 67 and is covered by a basic medical expense policy

Assuming that all of the following people are covered by a High Deductible Health Plan and are not claimed as dependents on anyone's tax returns, which would NOT be eligible for a Health Savings Account?

$50,000

Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits?

No, the group must be formed for a purpose other than obtaining group insurance.

Can a group that is formed for the sole purpose of obtaining group insurance qualify for group coverage?

American Cancer Society

Colorectal screenings performed under individual and group health policies are required to be in compliance with the standards set by which of the following organizations?

Contracts of adhesion.

Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as

Residual disability

Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability?

LTC policies are marketed effectively to prospective insureds.

Every insurer marketing Long-Term Care insurance must establish marketing procedures to ensure all of the following EXCEPT

6 months

For how long is an insurance company allowed to defer policy loan requests?

100

For how many days of skilled nursing facility care will Medicare pay benefits?

The primary care physician refers the member.

How does a member of an HMO see a specialist?

6 months

How long is an open enrollment period for Medicare supplement policies?

3 years

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

First 3

How many pints of blood will be paid for by Medicare Supplement core benefits?

Every 2 years

How often are insurance producers in this state required to fulfill continuing education hours?

Once a year

How often must a health carrier provide a certificate of compliance to the Department of Insurance indicating that the carrier has established grievance procedures for each of its health benefit plans?

Annually

How often must an insurer who delivers variable life insurance policies in Missouri determine any changes in variable death benefits?

A qualified plan for a small business

If a company has a Simplified Employee Pension plan, what type of plan is it?

The company can still be liable for its policies in any court of this state.

If a company has transacted insurance in this state without a Certificate of Authority, which of the following is true of its obligations for the policies sold?

POS

If a health care plan has characteristics of an HMO and PPO, what type of plan is it?

12 credits

If a person is disabled at age 27 and meets Social Security's definition of total disability, how many work credits must he/she have earned to receive benefits?

A contingent benefit

If a policyholder declines the nonforfeiture benefit, what must the insurer provide to the client upon the lapse of the policy?

Whether an insurable interest exists between the individuals.

If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about

Ancestry

If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's

First dollar

If an insured is not required to pay a deductible, what kind of coverage does he/she have?

Common accident provision.

If more than one family member covered under the same major medical policy is injured in the same accident, the family only has to pay one deductible. This is due to the

Assets.

In a replacement situation, all of the following must be considered EXCEPT

Unilateral

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Both are properly licensed for the line of insurance.

In insurance, producers are permitted to share or split commissions if

The insured must have first been hospitalized for 3 consecutive days.

In order for an insured under Medicare Part A to receive benefits for care in a skilled nursing facility, which of the following conditions must be met?

The person must have at least completed secondary education.

In terms of parties to a contract, which of the following does NOT describe a competent party?

The insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible.

Insured Z's health insurance policy year begins in January. His policy contains a carry-over provision. In November, he has a small claim which is less than his deductible. Which of the following is true?

Annually

Insurers that issue individual variable contracts in this state are required to mail the policyowner a statement of the investments. How often must they mail the statement?

Settlement options.

Methods used to pay the death benefits to a beneficiary upon the insured's death are called

Misrepresentation.

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of

Reciprocity

Paul is a producer in Kansas and wants to become a producer in Missouri. The Department will waive certain examination requirements, provided that Kansas would waive these same requirements if a Missouri producer sought licensure in Kansas. What term is used to describe this phenomenon?

50/50

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

Must allow the policyowner to return the policy for a full refund.

Regarding the free-look provision, the insurance company

Considered true to the best of the applicant's knowledge.

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

Disability expected to last for at least 6 months.

Social Security disability definition includes all of the following EXCEPT

Failing to notify the Director of a change of address.

The Director may suspend, revoke, or refuse to renew an insurance producer license for any of the following causes EXCEPT

Regulates consumer reports.

The Federal Fair Credit Reporting Act

Employers are no longer forced to offer HMO plans.

The HMO Act of 1973 required employers to offer an HMO plan as an alternative to regular health plans if the company had more than 25 employees. How has this plan since changed?

Insurance companies from adverse selection by high risk persons.

The Medical Information Bureau (MIB) was created to protect

Becomes terminally ill.

The accelerated benefits provision will provide for an early payment of the death benefit when the insured

The IRS.

The annual contribution limit of a Dependent Care Flexible Spending Account is set by

Major medical coverage.

The corridor deductible derives its name from the fact that it is applied between the basic coverage and the

An index like Standard & Poor's 500.

The current interest rate on an equity indexed annuity is often based on

Gradually increases each year by the amount that the cash value increases.

The death benefit under the Universal Life Option B

A right to return the policy for a full premium refund

The free-look provision allows for which of the following?

Control specialist costs.

The gatekeeper of an HMO helps

Entire contract.

The insurance policy, together with the policy application and any added riders form what is known as a(n)

Part A.

The part of Medicare that helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care, is known as

Reduction of premium

The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

Interest only option

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?

The annuitant must be a natural person.

The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?

The beneficiary

The primary beneficiary of her husband's life policy found that no settlement option was stated in the policy on the date of her husband's death. Who will select the settlement option in this case?

Coinsurance.

The provision that provides for the sharing of expenses between the insured and the insurance company is

Legal actions.

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

A presentation of nonguaranteed elements of a policy.

The term "illustration" in a life insurance policy refers to

2 years.

The time limit of certain defenses provision prohibits insurers from denying a claim due to misrepresentation, as long as the policy has been in force for at least

Absolute and collateral.

The two types of assignments are

Credit life.

The type of insurance sold to a debtor and designed to pay the amount due on a loan if the debtor dies before the loan is repaid is called

SEC registration.

To sell variable life insurance policies, an agent must receive all of the following EXCEPT

Relative Value

Todd has been informed that he has a hernia which requires repair. When Todd researches the cost, he learns that his insurance plan will cover 200 points worth of surgical expenses. Each point represents $10, which means that $2000 of his surgery will be covered by his insurance plan. What system is Todd's insurance company using?

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

Under a Key Person disability income policy, premium payments

Nothing; the payments will cease.

Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive

Respond to the consumer's complaint.

Under the Fair Credit Reporting Act, if a consumer challenges the accuracy of the information contained in a consumer or investigative report, the reporting agency must

90 days of a loss.

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

Signed waiver of premium

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

Signed waiver of premium.

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

Health Care Accounts and Dependent Care Accounts

What are the 2 types of Flexible Spending Accounts?

They offer the option of purchasing coverage that raises benefit levels accordingly.

What do long-term care policies offer to policyholders to account for inflation?

Attending Physician's Statement

What document describes an insured's medical history, including diagnoses and treatments?

The attending physician will be paid a fee for service, but the member patient will have to pay a higher coinsurance amount.

What happens if a non-member physician is utilized under the Point-Of-Service plan?

All paid premiums must be returned.

What is required of an insurer should an insured commit suicide prior to one year elapsing under a life insurance policy?

It has the highest amount of insurance protection.

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

Early detection through regular checkups

What is the goal of the HMO?

Probationary period

What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before a loss can be covered?

Ownership

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

As long as the policy is in force

What is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application?

8%

What is the maximum policy loan interest rate in Missouri?

It allows the insured to reject the policy with a full refund.

What is the purpose of a free-look period in insurance policies?

To help the insurance company to prevent overutilization of the policy

What is the purpose of coinsurance provisions?

Notify the requesting enrollee of the carrier's determination

What must a health carrier do within 72 hours of receiving a request for an expedited review?

The policy application

What must contain a notice of the graded death benefit in a life insurance policy with graded death benefits?

Increasing Term

What type of insurance would be used for a Return of Premium rider?

Cancellable

What type of policy allows the insurance company to cancel a policy at any time?

Interest only

When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income?

10

When a health carrier receives a request for a first-level grievance review, the carrier must acknowledge the receipt of the grievance within how many working days?

30 working days

When a health carrier uses retrospective review procedures, within how many days of receipt of information must the carrier make the determination?

The insured's contingent beneficiary

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

Defamation.

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of

Renewal provision

Which health insurance provision describes the insured's right to cancel coverage?

Retrospective commissions

Which of the following actions is prohibited by the state regulations on producer commissions and compensation?

Present earnings and earnings prior to disability

Which of the following are the main factors taken into account when calculating residual disability benefits?

The insured is not required to pay a deductible.

Which of the following best describes the "first-dollar coverage" principle in basic medical insurance?

Exchange of unequal values

Which of the following best describes the aleatory nature of an insurance contract?

The earnings in a qualified plan accumulate tax deferred.

Which of the following best describes the tax advantage of a qualified retirement plan?

The period of time during which accumulated money is converted into income payments

Which of the following best describes what the annuity period is?

The performance of the policy portfolio

Which of the following determines the cash value of a variable life policy?

The aggregate amount of premiums due

Which of the following does NOT have to be disclosed in a long-term care (LTC) policy?

Insurer

Which of the following entities can legally bind coverage?

Insurer's executive officer

Which of the following entities has the authority to make changes to an insurance policy?

Owner's Rights

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

A person insured under a high-deductible health plan

Which of the following individuals is eligible for a Health Savings Account?

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

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

Have surplus of at least $3,000,000

Which of the following is NOT a requirement for companies that issue variable contracts in this State?

Group health insurance

Which of the following is NOT among the lines of authority for which an insurance producer may qualify in the state of Missouri?

Automatic enrollment

Which of the following is NOT an enrollment period for Medicare Part A applicants?

Elective services

Which of the following is NOT covered by Health Maintenance Organizations (HMOs)?

Routine dental care

Which of the following is NOT covered under Part B of a Medicare policy?

Basic information about supplementary policies

Which of the following is NOT required to be stated in the outline of coverage provided with a long-term care policy?

It does not have limits on contributions.

Which of the following is NOT true regarding a flexible spending account?

Benefits stop at the annuitant's death.

Which of the following is NOT true regarding an annuity certain?

This is a form of insurance that covers part-time workers.

Which of the following is NOT true regarding partial disability?

Money borrowed from the cash value is taxable.

Which of the following is NOT true regarding policy loans?

It does not guarantee that the entire principal amount will be paid out.

Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option?

The creditor can only insure the debtor for the amount owed.

Which of the following is TRUE regarding the insurance amount in a credit life policy?

Annuity certain

Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?

Warranty

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

Admitted

Which of the following is another term for an authorized insurer?

Pay-in period

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

It insures the life of a debtor.

Which of the following is correct regarding credit life insurance?

The insured may choose medical providers not found on the preferred list.

Which of the following is correct regarding selecting a primary care physician in a PPO plan?

Copayment

Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service?

Care can be provided outside of the service area.

Which of the following is true regarding inpatient hospital care for HMO members?

Variable annuity

Which of the following products requires a securities license?

Medicaid

Which of the following programs expands individual public assistance programs for people with insufficient income and resources?

Incontestability

Which of the following provisions in group life policies prevents the insurer from denying a claim due to statements on the application after a certain period of time?

Life income

Which of the following settlement options in life insurance is known as straight life?

The account allows roll-over of unused balances at the end of the year at the employer's discretion

Which of the following statements about HRAs is TRUE?

Excessive benefits may be taxable.

Which of the following statements is correct concerning taxation of long-term care insurance?

The policyowner is entitled to policy loans.

Which of the following statements is correct regarding a whole life policy?

They can be changed only with the written consent of that beneficiary

Which of the following statements is most correct concerning the changing of an irrevocable beneficiary?

They can be changed only with the written consent of that beneficiary.

Which of the following statements is most correct concerning the changing of an irrevocable beneficiary?

Variable universal life insurance

Which of the following types of policies allows for a flexible premium and a variable investment component?

Premium amounts and surrender values

Which of the following will be included in a policy summary?

Chemotherapy

Which of the following would NOT be used in preventive care?

Termination of employment due to downsizing

Which of the following would be a qualifying event as it relates to COBRA?

The applicant has a prior felony conviction.

Which of the following would qualify as a competent party in an insurance contract?

Term rider

Which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members?

Option B

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

Noncancellable and guaranteed renewable

Which renewal provision(s) must be included in a long-term care policy issued to an individual?

The individual must be at least 65 years old.

Which statement regarding qualifications for Social Security disability benefits is NOT true?

Medicare SELECT

Which type of Medicare policy requires insureds to use specific healthcare providers and hospitals (network providers), EXCEPT in emergency situations?

All companies: authorized and unauthorized

Which type of insurers will be held liable for their actions in court?

The employer determines both

Who determines the eligibility and contribution limits in a HRA?

Insurers

Who is required to keep and maintain a register of appointed producers?

30 days

Within how many days are insurers required to notify the Director that a producer's appointment has been terminated?

State government

Workers Compensation benefits are regulated by which entity?