Final

Which of these is NOT considered the responsibility of a producer in the underwriting process?

Selecting the final approval date

Which of the following activities would NOT subject a licensed producer to a penalty under Nebraska law?

Selling a life insurance policy to an individual who already owns a current life policy

Which of the following would NOT be appropriate for an immediate annuity?

Setting up a college savings fund for a young child

Medicare Part A covers what type of care?

Skilled nursing facility care

A life insurance company just paid a $100,000 death benefit to a beneficiary. When the insured died, the cash value was $15,000 and the total premiums-paid equaled $10,000. How much of the proceeds will be added to the beneficiary's gross income for federal income tax purposes?

Nothing

Which of the following would NOT have a restricted ability to enter into a contract?

Small employer

Which of these occurrences could improve an insurer's ability to reduce premiums?

Rate of earnings on investments increase

Which of the following would most likely purchase an immediate annuity?

Retiree having a lump sum to invest

What kind of arrangement gives the policyowner the right to change the beneficiary?

Revocable designation

What does a fixed life annuity offer protection against?

Savings depletion because of longevity

Premature IRA distributions are subject to a penalty tax of

10%

How old must applicants be for a producer's license?

18

What does the term "field underwriting" refer to in the health insurance industry?

A producer's contact with the applicant

What do Limited accident and health policies normally cover?

A specific illness or event

Mike recently lost sight in both eyes. He has a policy that pays a lump sum benefit for this injury. What type of insurance does Mike have?

Accidental death and dismemberment

Based on age criteria only, which of the co-annuitants listed below would receive the largest monthly benefit payments in a joint and 100% survivor annuity?

Ages 71 and 73

All of the following are unfair claims settlement practices EXCEPT

An attempt to settle a claim by arbitration

Which statement is INCORRECT concerning a tax-sheltered annuity (TSA)?

Annual investment gains are included in participant's gross income

An applicant submits a life insurance application where an investigative consumer report is used in the underwriting process. Which of these statements is true?

Applicant has a right to receive a copy of the report

In the event of premium default, which life insurance provision will use the cash value to keep the policy in force?

Automatic premium loan

What are reasonable and customary charges for health insurance primarily based on?

Average charges within a geographic region

Tim had an on-the-job accident and collects benefits from his individual disability income policy. What factor could possibly reduce these benefits?

Benefits he receives from workers compensation

An accident and health insurance policy defines an injury as "bodily injury by accidental means". For an injury to be covered on this policy, what is required?

Both the cause and resultant injury must be accidental

Which would be described as a beneficiary designation by class?

Children of the insured

Which of the following statements is true regarding accident and health insurance claims that reimburse on an indemnity basis?

Claims can be sent directly to the insured

Which of the following can be used to avoid the mandatory withholding tax on qualified plan distributions?

Conduit IRA

Jill has a group health plan with an employer that covers employees in more than one state. Which of the following is NOT affected by the state regulatory jurisdiction established for this plan?

Continuation of coverage under COBRA

Which of the following is NOT an intended use of an annuity?

Create new funds upon the death of a wage-earner

Which of the following disability buy-sell agreements is best suited for businesses with a small number of partners?

Cross-purchase agreement

Which of the following is generally a form of group credit life insurance?

Decreasing term insurance

Which of these is NOT an underwriting responsibility of a life insurance agent?

Determining the final rate classification

For purposes of Disability Income insurance, earned income would include all of the following EXCEPT

Dividends

An employer has a group life insurance plan in place for his employees. How would an employee in poor health be treated in this situation?

Eligible for the same type of coverage as the other employees

Which of the following statements BEST describes employer contributions for employer provided health insurance?

Employer contributions are deductible

Which of these is NOT considered a type of limited payment whole life insurance?

Endowment at age 70

A policyowner fell behind on the premium payments of a whole life policy, and it is now in the grace period. How much will the beneficiary receive if the insured dies during this grace period and the policy also contains an outstanding policy loan?

Face amount minus the loan balance and past-due premium

Which benefit supplement added to a life insurance policy insures an entire family?

Family term rider

Tori has an annuity that pays her a $500 per month income benefit for life or for ten years, whichever is longer. What kind of annuity is this?

Fixed life annuity with period certain

Which life insurance policy provision allows a policyowner to cancel the policy within a limited time period and be given a full refund?

Free-look period

An insured may be required to sign which document at policy delivery to ensure there has not been any adverse medical conditions since the time of the application?

Good health statement

A large corporation purchases an accumulation annuity contract where all of the participating employees receive certificates of participation. What is this contract called?

Group deferred annuity

Which of the following statements is NOT true concerning the relationship between group health insurance plans and Medicare? (assuming the business has more than 20 employees)

Group health coverage is NOT available for workers over the age of 65

What is the name of the rider that provides an additional purchase option in a life insurance policy?

Guaranteed insurability rider

Tonya has been diagnosed with kidney failure and has group accident and health insurance through her large employer. Which of these accident and health plans will be primary during the months following her diagnosis?

Her employer's group accident and health plan

For insurance purposes, similar objects which are exposed to the same group of perils are referred to as

Homogeneous exposure units

Which of the following is NOT subject to the promise to pay in an insuring clause?

How the premium is calculated

Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?

If Tom's employment is terminated, 20% of the funds could be forfeited

When must insurable interest exist for a life insurance contract to be valid?

Inception of the contract

In what way are insurance policies said to be aleatory?

Involves the potential for the unequal exchange of value

A retired couple would like to maximize the income derived from their life savings and have it payable until they both die. Which annuity would be their best choice?

Joint and survivor annuity

Which of these pays an income to two or more annuitants until the death of the last annuitant?

Joint and survivor annuity

What is the guaranteed cash value of a whole life insurance policy when the insured turns 65 years old?

Less than the policy's face amount

Which of these is NOT a common life insurance nonforfeiture option?

Life income annuity

What is covered under a limited accident and health insurance policy?

Limited perils and amounts

Which of these policies is considered to be a comprehensive health policy?

Major medical policy

Medicare Part B excess charges are covered by

Medicare Supplemental insurance

What is considered a valid reason for an insurer's refusal to pay policy proceeds directly to a minor?

Minors are normally not capable of handling money in a reasonable manner

A life policy that has premiums that are lower than normal during the early years is called

Modified life

Which of the following is TRUE about a qualified retirement plan that is "top heavy"?

More than 60% of plan assets are in key employee accounts

How are the premiums for an individually-owned disability income policy treated for tax purposes?

No tax deduction

Insurable interest involves what assumption?

One person benefits from another person's continued life

Which statement most accurately describes a single premium whole life policy?

Paid-up policy that offers lifetime protection

All of these statements concerning universal life insurance are false EXCEPT

Policy indicates how much of the premium is used toward company expenses

These are all accurate statements regarding universal life insurance EXCEPT

Policy loans are not permitted

What happens to a life insurance policy when the policy loan balance exceeds the cash value?

Policy will no longer be in force

If an insured dies during the grace period without having paid the premium, how much will the insurer pay?

Policy's face amount minus any premiums due

Which of the following does NOT fall under "hospital care" in a typical health maintenance organization (HMO) plan?

Private duty nursing

Alan is an enrollee of a health maintenance organization (HMO) which uses a gatekeeper system. If there ever comes a time when he needs emergency health services, what should he do?

Proceed to the nearest emergency room

When a producer submits an application that discloses personal information regarding the applicant, who supplies the privacy notice?

Producer

Which of the following would NOT be a reason for purchasing life insurance on a child's life?

Provide benefits for the child if the parents die

How are qualified Roth IRA distributions normally treated for tax purposes?

Received income tax-free

Which of these is a true statement regarding survivor benefits under a qualified retirement plan?

Survivor benefits can only be waived with the written consent of a married employee's spouse

How does the cost for a survivorship life policy compare to the cost of combining two separate life insurance policies?

Survivorship life policy is lower

Which statement concerning the Entire Contract provision in an individual accident and health insurance policy is TRUE?

The agent doesn't have the authority to change the policy or waive its provisions

Which statement regarding the joint and survivor life insurance settlement option is INCORRECT?

The installment amounts are larger as compared to a single life income option

What is taken into consideration when defining "total disability" in a disability income insurance policy?

The insured's education, training, and experience

Which of the following statements about the installments for a fixed period settlement option in life insurance policies is NOT true?

The periodic payment amount is determined by the beneficiary's age

Taxable income may be the result from all of these modified endowment contract (MEC) transactions EXCEPT for

The policy is surrendered for less than what was paid into it

Which of these statements regarding the extended term insurance nonforfeiture option is accurate?

The premium to purchase the coverage comes from the policy's cash value

Which of these is NOT a reason to buy a term life policy?

To accumulate savings

What is the face amount of a $50,000 graded death benefit life insurance policy when the policy is issued?

Under $50,000 initially, but increases over time

Which of the following statements about universal life insurance is NOT true?

Universal life insurance normally has a minimum guaranteed cash value for duration of the policy

At what point are death proceeds paid in a joint life insurance policy?

When the first insured dies

Which life insurance policy would be eligible to include an automatic premium loan provision?

Whole life

Disclosure requirements in the life insurance solicitation regulation mandate that prospective purchasers be given

a Buyer's Guide and Policy Summary

After an applicant reads and signs an insurance application, he/she should be conscious of the fact that

a false statement could lead to loss of coverage

When dealing with single-life annuities, there is only one

annuitant

The surrender charge on many deferred annuity contracts are waived when the

annuitant dies or becomes disabled

When there is a named beneficiary on a life insurance policy, the death benefits

are paid directly to the beneficiary without interference from the insured's creditors

The guarantee of insurability option provides a long-term care policyowner the ability to

buy additional coverage at a later date

An employee welfare plan exempt from ERISA regulations would be

church plans

The principal source of information concerning an applicant's identity, age, and marital status is found in the

completed application

Interest is credited to a fixed annuity no lower than the

contract guaranteed rate

Notice of information practices must be given to a policyholder at least

every three years

The difference between a doctor's actual charges and the amount approved by Medicare is called a(n)

excess charge

With life insurance, the needs approach is used primarily in determining

how much life insurance a client should apply for

The unwritten authority given to a producer to carry out necessary incidental acts of the agency agreement is called

implied authority

The insurance coverage in a variable life insurance policy may vary based on the value of

its underlying investments

During the early years of a whole life insurance policy, the cash value will normally be

less than the total premiums paid

The owner of a single premium deferred annuity is entitled to do all of these EXCEPT

make multiple premium payments

An employer that offers a qualified retirement plan (as opposed to a non-qualified plan) to its employees is eligible to

make tax-deductible contributions to the plan

James has individual health insurance with two different insurers. The "insurance with other insurers" provision states that an insurer can pay benefits on a pro-rata basis if

no notification was given to the insurer prior to the claim that the insured has other health coverage

The contractual rights that allow the owner of a deferred annuity to surrender the cash value several years before the annuity date are called

nonforfeiture options

The power to change the beneficiary in an individual annuity lies with the

owner

An owner's cost basis for a non-qualified deferred annuity is typically the same as the

premiums paid into the annuity

The absolute assignment of a life insurance policy results in

the assignee receives all incidents of ownership

Purchasing insurance is an example of risk

transference

In an individual retirement account (IRA), rollover contributions are

unlimited by dollar amount

A terminally ill policyowner decides to sell his life insurance policy to help support his family. This sale is called a(n)

viatical settlement

Pat has a disability income insurance policy that covers disabilities arising from a work-related illness or injury. The amount of his disability income payments for an on-the-job injury may be reduced by

workers compensation benefits already paid

The following are all elements of a valid contract EXCEPT

written evidence

An attempt to defraud an insurance company is considered

A felony

An individual working part-time has a gross income of $5,000 for the year. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?

$5,000

Which of the following best describes the tax treatment of medical expense policies for the self-employed?

100% of medical expense plan premiums are tax deductible

EXCEPT for fraud, the time after issuance of a policy during which an insurance company may contest a health insurance claim due to the statements on an application is

2 years

The Director of Health must examine the quality of health care provided by HMOs no less frequently than once every

3 years

Individual Medicare Supplement policies must allow an insured a MINIMUM of how many days after policy delivery to return the policy and receive a refund of premium?

30

Insurers must retain records of insurance transactions for

5 years

One of the prohibited provisions precludes a life insurance policy from taking effect more than how many months before the original application is made?

6

A single premium deferred annuity sometimes contains a bailout feature. Which statement regarding this feature is correct?

If the interest rate falls below a specified level, the surrender charge is waived

A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 for income tax withholding. Which federal taxes apply if none of the funds were rolled over?

Income taxes plus a 10% penalty tax on $30,000

Which of these procedures is NOT designed for ambulatory care centers?

Inpatient surgery

The Medical Information Bureau consists of members from which group?

Insurance companies

A Keogh plan is a(n)

qualified retirement plan for the self employed

During an annuity's liquidation phase, the annuitant normally

receives benefit payments at regular intervals

A life insurance producer's underwriting duties may include

seeking additional information requested by the insurance company

Larry wants to purchase an individual disability income policy to ensure that he will not experience a lapse in income should he become disabled. He has a two-month wage continuation benefit from his employer. What should the policy elimination period be for his individual policy?

60 days

Which element of a contract constitutes a definite and unqualified proposal by one party to another?

Offer

What does a 401(k) plan generally provide its participants?

Salary-deferral option

If an individual would like to enroll in Medicare or seek public information about Medicare, which federal agency handles this?

Social Security Administration

Under a key person disability income policy, benefits will be received as

tax-free income to the business