group 1

how much notice must the department of insurance provide to an agent, prior to the agent's license expiring? a) 10 days b) 30 days c) 60 days d) it is not responsibility of department of insurance

b) 30 days

under an HMO, child immunization costs cannot be charged for children under what minimum age? a) 3 b) 6 c) 7 d) 10

b) 6

which of the following is NOT a medicaid qualifier? a) residency b) insurability c) income level d) age

b) insurability

Under the mandatory uniform provision Notice of Claim, written notice of a claim must be submitted to the insurer within what time parameters? a) within 10 days b) within 20 days c) within 30 days d) within 60 days

b) within 20 days

What type of care is Respite care? a)Institutional care b)24-hour care c)Relief for a major care giver d)Daily medical care, given by medical personnel

c)Relief for a major care giver Respite Care is designed to provide relief to the family care giver, and can include a service such as someone coming to the home while the care giver takes a nap or goes out for a while. Adult day care centers also provide this type of relief for the caregiver.

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? a)Indemnity b)Representation c)Warranty d)Concealment

c)Warranty A warranty in insurance is a statement guaranteed to be true. When an applicant is applying for an insurance contract, the statements on the application are generally not warranties but representations. Representations are statements that are true to the best of the applicant's knowledge.

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? a)The PPO will not pay any benefits at all. b)The insured will be required to pay a higher deductible. c)The PPO will pay the same benefits as if the insured had seen a PPO physician. d)The PPO will pay reduced benefits.

d)The PPO will pay reduced benefits. The group health plan will not pay the full amount charged by the non-PPO doctor.

according to the fair credit reporting act, all of the following are true EXCEPT

if declined for an insurance policy, an applicant has no right to the information in the report

how long is the grace period for an individual life insurance policy? a) 1 month b) 2 weeks c) 7 to 10 business days d) 3 months

a) 1 month

a texas resident agent seeking to sell insurance to customers in another state needs a) a nonresident license in that state b) a foreign agent's license in that state c) a resident license in that state d) a certificate of authority in that state

a) a nonresident license in that state

what is it called when a doctor accepts the medicare approved amount? a) assignment b) consent c) verification d) acceptance

a) assignment

if a loan request is for a payment of dues premiums on the policy, how soon must the insurer issue a loan? a) immediately b) within 10 days c) within 30 days d) within 60 days

a) immediately

which of the following terms relates to disability income insurance? a) residual benefit b) coinsurance stop loss c) deductibles d) insurable interest

a) residual benefit

which of the following would NOT be included in the buyer's guide? a) specific info about the policy b) comparison of policy costs c) explanation on how to choose the amount and type of insurance d) basic info about life insurance policies

a) specific info about the policy

All of the following are dividend options EXCEPT a)Fixed-period installments. b)Accumulated at interest c)Reduction of premium. d)Paid-up additions.

a)Fixed-period installments. Fixed-period installments is a settlement option, and not one of the dividend options.

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the a)Other-insured rider. b)Change of insured rider. c)Juvenile rider. d)Payor rider.

a)Other-insured rider. The other-insureds rider is useful in providing insurance for more than one family member. The type of insurance offered by this rider is usually term insurance, with the right to convert to permanent insurance.

Which of the following is NOT covered under Part B of a Medicare policy? a)Routine dental care b)Home health care c)Lab services d)Physician expenses

a)Routine dental care Medicare Part B covers dental expense resulting from an accident only.

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? a)The amount of the distribution is reduced by the amount of a 20% withholding tax. b)No taxes are due since the plan participant is over age 59 1/2. c)There is a 10% early withdrawal penalty. d)The amount distributed is subject to ordinary income tax.

a)The amount of the distribution is reduced by the amount of a 20% withholding tax. Distributions from 401(k) plans are taxable as ordinary income in the year of the distribution. However, if the distribution is rolled over to a Traditional IRA, taxes are deferred until the required minimum IRA distributions begin. Since this client actually took a distribution (instead of making a trustee-to-trustee roll over), the distribution is subject to 20% withholding tax.

Which of the following is a key distinction between variable whole life and variable universal life products? a)Variable whole life has a guaranteed death benefit. b)Variable universal life is regulated solely through FINRA. c)Variable whole life allows policy loans from the cash value. d)Variable universal life has a fixed premium.

a)Variable whole life has a guaranteed death benefit. Variable universal life insurance may or may not have a minimum death benefit, unlike variable whole life insurance which guarantees a minimum death benefit.

which of the following would NOT constitute a policy replacement? a) causing a reduction in the policy's benefit amount b) converting group coverage to individual coverage c) causing a lapse of an existing policy d) changing a policy to reduced paid-up insurance

b) converting group coverage to individual coverage

all of the following must sign an application for health insurance EXCEPT the a) producer b) insurer c) the proposed insured d) the applicant

b) insurer

medicare part b covers all of the following EXCEPT a) outpatient hospital services b) long-term care services c) doctor's visits d) home health visits

b) long-term care services

cash values guaranteed in a whole life policy are called a) dividends b) nonforfeiture values c) living benefits d) cash loans

b) nonforfeiture values

when may HIV-related test results be provided to the MIB? a) only when the test results are negative b) only if the individual is not identified c) under all circumstances d) when given authorization by the patient

b) only if the individual is not identified

regarding the PPACA health care credit act, which of the following are true? a) tax credits are sent to the tax payer to reduce monthly insurance premiums b) persons receiving medicaid are not eligible c) tax credits are based upon a taxpayer's or family's expected annual medical expenses d) all wage earners who purchase a health care insurance are eligible for the tax credit

b) persons receiving medicaid are not eligible

which of the following does NOT have to be included on the first page of the medicare supplement policy? a) the company's rights to change premiums b) premium rates c) renewal provision d) continuation provision

b) premium rates

an insured had a heart attack while jogging, but is expected to return to work in approximately 6 weeks. the insured's disability income policy will a) pay a lump-sum benefit b) replace a percentage of his lost income c) cover injuries only d) not pay

b) replace a percentage of his lost income

all of the following are advantages of a qualified retirement plan EXCEPT a) the funds grow tax deferred b) the income at retirement is tax free c) the contribution is deductible to the employer d) the contribution is not taxable to the employee when made

b) the income at retirement is tax free

which of the following would NOT be eligible for coverage under key person? a) the manager of a small store b) the owner of a shop c) the executive officer of a company d) the pharmacist of a drug store

b) the owner of a shop the owner is the principal, not a key person

an employee covered under COBRA had previous premium payment of $100 per month and now $102.. why extra $2? a) to cover other employees who qualify to bypass premium payment b) to cover the employer's administration costs c) penalty for termination d) premiums go up every year regardless of health conditions

b) to cover the employer's administration costs

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? a)Variable annuity b)Annuity certain c)Fixed annuity d)Refund life

b)Annuity certain Annuity certain option allows the annuitant to select the time period or the amount of the benefits to be paid out. Under the installments for a fixed period, distribution begins on a specific date and stops on a specific date.

Which entity has the authority to grant a temporary insurance agent's license? a)A licensed agent b)Commissioner of Insurance c)Federal Board of Insurance Licensing d)The appointing insurer

b)Commissioner of Insurance The Commissioner of Insurance can issue a temporary life insurance agent's license for 180 days.

What size companies are eligible for health reimbursement accounts (HRAs)? a)Companies with at least 100 employees only b)Companies of all sizes c)Small employers only d)Sole proprietors only

b)Companies of all sizes HRAs are open to employees of companies of all sizes.

Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as a)Binding contracts. b)Contracts of adhesion. c)Unilateral contracts. d)Aleatory contracts.

b)Contracts of adhesion. Insurance policies are written by the insurer and submitted to the insured on a take- it-or-leave-it basis. The insured does not have any input into the contract, but simply adheres to the contract.

Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option? a)Payments can be made in installments and as a single cash refund. b)It does not guarantee that the entire principal amount will be paid out. c)It is a life contingency option. d)The beneficiary receives the remainder of the principal amount upon the annuitant's death.

b)It does not guarantee that the entire principal amount will be paid out. With the Life with Guaranteed Minimum annuity settlement option, if the annuitant dies before the principal amount (the amount paid for the annuity) has been paid out, the remainder of the principal amount will be refunded to the beneficiary. Pure life provides the highest monthly benefits for an individual annuitant.

The insuring clause of a disability policy usually states all of the following EXCEPT a)The types of losses covered. b)The method of premium payment. c)The identities of the insurance company and the insured. d)That insurance against loss is provided.

b)The method of premium payment. The insuring clause, usually on the first page of the policy, is the general statement that defines the insurance agreement and identifies the insured and the insurance company and states what kind of loss (peril) is covered.

Which of the following definitions would make it easier to qualify for total disability benefits? a)The more strict "own occupation" b)The more liberal "own occupation" c)The more strict "any occupation" d)The more liberal "any occupation"

b)The more liberal "own occupation" Total disability is defined differently under some disability income policies. The more liberal "own occupation" definition of disability makes it easier to qualify for benefits.

a medicare supplement policy must have a free look period of at least a) 10 days b) 15 days c) 30 days d) 45 days

c) 30 days

in this state, in order for an employer to obtain group health coverage for small employers, what percentage of employees are required to be covered by the plan? a) 25% b) 50% c) 75% d) 100%

c) 75%

when are the agents required to provide the outline of coverage to an applicant for individual long-term care policy? a) after the free-look period b) at the time of policy delivery c) at the time of policy solicitation d) upon the applicant's request

c) at the time of policy solicitation

what type of health insurance plan provides broad medical expense coverage without requiring an insured to meet a deductible? a) blanket b) comprehensive c) indemnity d) major medical

c) indemnity

which of the following used to be called medicare + choice plans? a) medicare supplement plans b) original medicare plans c) medicare advantage plans d) medical insurance

c) medicare advantage plans

in a life insurance application, all of the following signatures will be required EXCEPT a) the owner b) the agent c) the home office underwriter d) the insured

c) the home office underwriter

who is responsible for covering the expenses associated with the examination of domestic insurers? a) the policyowners b) the insurance guaranty association c) the insurer being examined d) the department of insurance

c) the insurer being examined

If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy? a)It is taxable only if it exceeds the amounts paid for premiums by 50%. b)It is automatically taxable. c)It is only taxable if the cash value exceeds the amount paid for premiums. d)It is not considered to be taxable.

c)It is only taxable if the cash value exceeds the amount paid for premiums. The cash value of a surrendered policy is only considered to be taxable as income if the cash value exceeds the amount of premiums paid for the policy.

During replacement of life insurance, a replacing insurer must do which of the following? a)Designate a new producer for a replaced policy b)Send a copy of the Notice Regarding Replacement to the Department of Insurance c)Obtain a list of all life insurance policies that will be replaced d)Guarantee a replacement for each existing policy

c)Obtain a list of all life insurance policies that will be replaced The replacing insurance company must require from the producer a list of the applicant's life insurance policies to be replaced and a copy of the replacement notice provided to the applicant, and send each existing insurance company a written communication advising of the proposed replacement.

Your client wants to know what the tax implications are for contributions to a Health Savings Account. You should advise her that the contributions are a)Post-tax dollars. b)Subject to capital gains taxes. c)Tax deductible. d)Subject to personal income taxes.

c)Tax deductible. Contributions to HSAs by individuals are deductible, even if the taxpayer does not itemize. Contributions by an employer are not included in the individual's taxable income.

All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT a)The employer pays a bonus to a selected employee to fund the policy. b)It is considered a nonqualified employee benefit. c)The policy is owned by the company. d)Any type of insurance policy may be used.

c)The policy is owned by the company. The policy is owned by the employee.

the max monetary penalty for an agent who violated an insurance law, rule, or order is a) $5,000 b) $10,000 c) $15,000 d) $25,000

d) $25,000

which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insured's death was by an accident as defined in the policy? a) a double indemnity rider b) a guaranteed insurability rider c) a covered peril rider d) an accidental death rider

d) an accidental death rider

the benefits from a business overhead expense insurance policy a) cover all business expenses but are taxable to the business owner b) are received tax free c) are only available upon the business owner's death d) are limited to covered expenses and are taxable to the business

d) are limited to covered expenses and are taxable to the business

which of the following is a correct statement about annuities? a) variable provide min guaranteed rate of interest b) variable place the funds into the company's general account c) fixed have the annuitant assume the risks of investment d) fixed do not provide protection against inflation

d) fixed do not provide protection against inflation

the guaranteed purchase option is also referred to as the a) multiple indemnity rider b) impairment rider c) evidence of insurability rider d) future increase option

d) future increase option

hospital policy states flat fee of $75 per day hospitalized a) reimbursement b) expense c) service d) indemnity

d) indemnity

the patient protection and affordable care act included all of the following provisions EXCEPT a) right to appeal b) coverage for preventative benefits c) no lifetime dollar benefits d) individual tax deduction for premiums paid

d) individual tax deduction for premiums paid

a core medicare supplement policy (plan A) will cover all of the following expenses EXCEPT a) the first 3 pints of blood b) 20% of part B coinsurance amounts for medicare-approved services c) part a coinsurance d) part a deductible

d) part a deductible

which of the following entities is considered the principal? a) the producer or agent soliciting the policy b) the director of the insurance company c) the head of the department of insurance d) the insurer issuing the policy

d) the insurer issuing the policy

what is the purpose of the impairment rider in a health insurance policy? a) cover impairments that otherwise would not be covered b) to provide disability coverage c) to identify pre-existing conditions d) to exclude coverage for a specific impairment

d) to exclude coverage for a specific impairment

How soon from the termination of debt under a credit life insurance policy must a creditor provide notice to the insurer? a)7 days b)10 days c)30 days d)60 days

d)60 days In the event a credit life insurance policy is terminated, a creditor must provide the insurer with a notice of termination of debt within 60 days of the payoff date.

Most HMOs operate through what type of system? a)Individual fee-for-service system b)Individual subscribers c)A group formed principally for the purpose of obtaining HMO coverage d)A group enrollment system either at their place of employment or as a member of an association

d)A group enrollment system either at their place of employment or as a member of an association Most HMOs operate almost exclusively through a group enrollment system, in which each member pays a fixed monthly premium, whether or not they have used the services of the HMO that month.

In insurance, an offer is usually made when a)The insurer approves the application and receives the initial premium. b)The agent hands the policy to the policyholder. c)An agent explains a policy to a potential applicant. d)An applicant submits an application to the insurer.

d)An applicant submits an application to the insurer. In insurance, the offer is usually made by the applicant in the form of the application. Acceptance takes place when an insurer's underwriter approves the application and issues a policy.

The current interest rate on an equity indexed annuity is often based on a)The returns from the insurance company's separate account. b)The annuitant's individual stock portfolio. c)The insurance company's general account investments. d)An index like Standard & Poor's 500.

d)An index like Standard & Poor's 500. Equity indexed annuities are not securities, but they invest on a relatively aggressive basis to aim for higher returns. Interest rates on equity indexed annuities are often tied to a familiar index, such as the Standard and Poor's 500.

Which of the following is NOT true regarding an annuity certain? a)It will pay until a fixed amount is liquidated. b)There are no life contingencies. c)It is a short-term annuity. d)Benefits stop at the annuitant's death.

d)Benefits stop at the annuitant's death. Annuities Certain are short-term annuities which limit the amount paid to a certain fixed period or until a certain fixed amount is liquidated. There are no life contingencies.

Which of the following riders added to a life insurance policy can pay part of the death benefit to the insured to cover expenses incurred in a nursing or convalescent home? a)Accidental death b)Guaranteed insurability c)Payor benefit d)Long-term care

d)Long-term care Long-term care rider provides for the payment of part of the death benefit (called accelerated benefits) in order to take care of the insured's health care expenses, which are incurred in a nursing or convalescent home.

Which of the following applies to partial disability benefits? a)An insured is entitled to a principal sum benefit for the partial loss of a limb. b)Payment is based on termination of employment. c)Benefits are reduced once an insured is no longer under a doctor's care. d)Payment is limited to a certain period of time.

d)Payment is limited to a certain period of time. The partial disability benefit is typically 50% of the total disability benefit, and is limited to a certain period of time.

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? a)Payments for 20 years b)Payments for life c)Nothing d)Payments for 15 years

d)Payments for 15 years With any period certain, death of the annuitant within the stated period will provide payments to the beneficiary only for the remainder of the period certain.