Exam study

Which of the following entities can legally bind coverage? a)Agentb)Insurerc)The insuredd)Federal Insurance Board

Insurer

Which of the following entities has the authority to make changes to an insurance policy? a)Producerb)Insurer's executive officerc)Department of Insuranced)Broker

Insurer's executive officer

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

Insuring clause

Which of the following is TRUE of a qualified plan? a)It may discriminate in favor of highly paid employees.b)It may allow unlimited contributions.c)It has a tax benefit for both employer and employee.d)It does not need to have a vesting schedule.

It has a tax benefit for both employer and employee.

Under workers compensation, which of the following benefits are NOT included?

Legal benefits

If a settlement option is not chosen by the policyowner or the beneficiary, which option will be used?

Lump sum

If one takes Social Security retirement benefits at age 62, what needs to be done at age 65 to qualify for Medicare?

Nothing

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

The two types of assignments are

Absolute and collateral.

Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe?

Adhesion

All of the following are examples of third-party ownership of a life insurance policy EXCEPT a)A company purchases a life insurance policy on their manager, who is an important part of the operation.b)When an insured purchased a new home, the insured made an absolute assignment of a life insurance policy to the mortgage company.c)An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan.d)An insured couple purchases a life insurance policy insuring the life of their grandson.

An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan.

A Universal Life Insurance policy is best described as a/an

Annually Renewable Term policy with a cash value account.

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.

At the end of 20 years, the policy's cash value will equal $100,000.

If an annuitant dies before annuitization occurs, what will the beneficiary receive?

Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount

All of the following are advantages of an HMO or PPO for a Medicare recipient EXCEPT a)Elective cosmetic procedures are covered.b)Prescriptions might be covered, unlike Medicare.c)Health care costs can be budgeted.d)There are no claims forms required.

Elective cosmetic procedures are covered.

When an employee terminates coverage under a group insurance policy, coverage continues in force

For 31 days.

Which of the following is available to employers of all sizes?

HRAs Health Reimbursement Accounts (HRAs) consist of funds set aside by employers to reimburse employees for qualified medical expenses; they are available to all sizes of employers.

Which of the following policies would be classified as a traditional level premium contract?

Straight Life

Which of the following is NOT true regarding the annuitant? The annuitant's life expectancy is taken into consideration for the annuity.b)The annuitant receives the annuity benefits.c)The annuitant must be a natural person.d)The annuitant cannot be the same person as the annuity owner.

The annuitant cannot be the same person as the annuity owner.

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

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

The insuring clause of a disability policy usually states all of the following EXCEPT

The method of premium payment.

If an insured continually uses the automatic premium loan option to pay the policy premium,

The policy will terminate when the cash value is reduced to nothing.

Which of the following is TRUE about nonforfeiture values? a)Policyowners do not have the authority to decide how to exercise nonforfeiture values.b)They are required by state law to be included in the policy.c)They are optional provisions.d)A table showing nonforfeiture values for the next 10 years must be included in the policy.

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

All of the following are requirements for life insurance illustrations EXCEPT a)They may only be used as approved.b)They must identify nonguaranteed values.c)They must differentiate between guaranteed and projected amounts.d)They must be part of the contract.

They must be part of the contract.

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

Warranty

All of the following are true regarding a decreasing term policy EXCEPT a)The payable premium amount steadily declines throughout the duration of the contract.b)The death benefit is $0 at the end of the policy term.c)The contract pays only in the event of death during the term and there is no cash value.d)The face amount steadily declines throughout the duration of the contract.

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

Which of the following is NOT an example of a business use of Life Insurance?

d)Workers Compensation