insurance exam

Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months?

12 months

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?

2. The beneficiary will only receive payments of the interest earned on the death benefit.

An insured has a Modified Endowment Contract. He wants to withdraw some money in order to pay medical bills. Which of the following is true?

3. He will have to pay a penalty if he is younger than 59½.

Which of the following statements is an accurate comparison between private and government insurers?

3. Private insurers provide insurance in areas where the government will not.

According to the regulations on life insurance policy solicitation, what two documents must be presented to an applicant during the application process?

4. The policy summary and the policy disclosure

Producers will be deemed to be using their license primarily to write controlled business if, during any 12-month period

4. The total premiums on controlled business exceeds the total premiums on all other business written.

If an application for an annuity is gathered any way other than face-to-face, within how many days after the insurer receives the completed application must the applicant be given a Buyer's Guide?

5 business days

Who chooses a primary care physician in an HMO?

A referral physician

If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following?

Adjust the benefit in accordance with the increased risk

all of the following applicants for an insurance producer license are exempt from prelicensing education requirements except

An applicant for a dealer's license.

All of the following qualify for Medicare Part A EXCEPT

Anyone who is at the end stage of renal disease.

all of the following are true of the federal tax advantages of a qualified plan except

At distribution, all amounts received by the employee are tax free.

Which of the following is NOT true regarding partial disability?

Benefit payments are typically 50% of the total disability benefit.

all of the following apply to short term disability plans except

Both group and individual plans are renewable.

which of the following statements concerning buy-sell agreements is true

Buy-sell agreements are normally funded with a life insurance policy.

Which policy component decreases in decreasing term insurance?

Cash value

The Ownership provision entitles the policyowner to do all of the following EXCEPT

Designate a beneficiary.

Concerning group Medical and Dental insurance, which of the following statements is INCORRECT?

Employee benefits are tax deductible the year in which they were received.

Courts will interpret any ambiguity in an insurance contract

In favor of the insured.

Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?

Indemnity

What are the two components of a universal policy?

Insurance and cash account

Which of the following statements regarding HIV testing for life insurance purposes is NOT true?

Insurers are barred from requesting HIV testing.

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

Legal actions.

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

Life income

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

Living need rider.

all of the following are true regarding the medical information buruea except

MIB reports are based upon information supplied by doctors and hospitals.

a woman's health insurance policy dictates which doctor she is allowed to see. hre health providers share an assumed risk for their patients and encourage preventice care. what best describes the health system that the woman is using

Managed care

Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation?

Needs approach

the dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the

One-year term option.

which of the following stipulations that life insurance premiums can be paid in advance of policy issuance

Payment of premium clause

a guaranteed renewable health insurance policy allows the

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

An insured committed suicide one year after his life insurance policy was issued. The insurer will

Refund the premiums paid.

the failure of an authorized insurer to file its annual financial statement with the commisioner when due may result in any of the following actions by the commisioner except

Requesting an audit.

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?

Residual disability

If an agent fails to obtain an applicant's signature on the application, the agent must

Return the application to the applicant for a signature.

It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability?

Sexual orientation

When an applicant applies for Medicare supplement insurance, whose responsibility is it to confirm whether the applicant has an accident or sickness insurance policy in force?

The applicant's

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

The customer's associates, friends, and neighbors provide the report's data.

who determines the eligibility and contribution limits in a HRA

The employer determines both

An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?

The insured may renew the policy for another 10 years, but at a higher premium rate.

what is the advantage of reinstating a policy instead of applying for a new one

The original age is used for premium determination.

which of the following is true regarding a market value adjusted annuity

The owner is guaranteed a fixed interest rate for a specific period of time.

an individual purchased a medical supplement policy in march and decided to replace it 2 months later. his history of coronary artery disease is considered a preexisting condition. which of the following is true?

The pre-existing condition waiting period fulfilled in the old policy will be transferred to the new policy, the new one picking up where the old one left off.

A group of 15 skydivers met at a seminar and began talking about life insurance during a break. Because it was expensive to get individual life insurance, they decided to band together to form a small group so that they could qualify for group life insurance. After they applied for group life insurance, they were rejected. Why?

The purpose of the group was to purchase life insurance.

all of the following statements about medicare supplement insurance policies are correct EXCEPT

They cover the cost of extended nursing home care.

what is the purpose of the buyer's guide

To allow the consumer to compare the costs of different policies

which of the following is NOT a goal in risk retention

To minimize the insured's level of liability in the event of loss

which of the following life insurance policies allows a policyowner to take out a loan from the policy's cash value

Variable universal life

Under which condition would an employee's group medical benefits be exempt from income taxes?

When the premiums and other unreimbursed medical expenses exceed 10% of the employee's adjusted gross income

all of the following could own group insurance except

a group needing low cost insurance

which of the following groups would probably be covered by blanket insurance

a university sports team

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?

aleatory

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

as long as the policy is in force

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

assets

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

becomes terminally ill

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

copayment

In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost

count toward deductible

which is the following is NOT true of basic medical expense plans

coverage for catastrophic medical expenses

An insurance company sells an insurance policy over the phone in response to a TV ad. Which of the following best describes this act?

direct response marketing

Which of the following policies typically combine insurance and savings with a date of maturity earlier than age 100 at great expense to the policyholder?

endowment at age 65

All of the following are personal uses of life insurance EXCEPT

estate creation

ABC Insurance Company receives an incomplete applications and issues the policy anyway. six months later ABC realizes the missing information. What term is used that prevents ABC from forcing the policyowner to answer further questions

estoppel

misrepresenting an insurance policy as a share of stock is an example of which of the following

false advertising

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

guaranteed renewable option

Events or conditions that increase the chances of an insured loss occurring are referred to as

hazards

in which of the following locations would a skilled care most likely be provided

in an institutional setting

which of the following is true of a childrens rider added to an insureds permanent life insurance policy

it is term coverage that is converted to permanent insurance at or prior to the child raeching the maximum coverage age

Which of the following statements is true about a policy assignment

it transfers rights of ownership from the owner to another person

all of the following would be qualified as a dependent under a dependent care flexibility spending account except

jeremy had both legs amputated but helps himself

insurance that would pay for hiring a replacement for an important employee who becomes disables is called

key employee disability

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

legal benefits

which of the following programs expands individual public assistance programs for people with insufficient income and resourses.

medicaid

a 35 year old spouse of the insured collects early distribution from her husbands retirement plan as a result of a divorce settlement. what penalty will she pay

no penalty

Bethany studies in England for a semester. While she is there, she is involved in a train accident that leaves her disabled. If Bethany owns a general disability policy, what will be the extent of benefits that she receives?

none

Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?

paid up addition

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

pay a reduced death benefit

which of the following provisions would not be found in term life insurance

policy loan

which of the following are the main factors taken into account when calculating redidual disability benefits

present earning and earning prior to disability

what is the term for the entity that an agent represents regarding contractual agreements with the third party

principal

An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called?

profit sharing plan

another name for substandard risk classification is

rated

Which nonforfeiture option provides coverage for the longest period of time?

reduced paid up

when an employee is still employes upon reaching age 65 and eligible for medicare, which of the following is the employees option

remain in group health , defer eligibility for medicare until retirement

Which of the following best describes taxation during the accumulation period of an annuity?

taxes are deferred

All of the following are ways in which a Major Medical policy premium is determined EXCEPT

the ammount of the deductible

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

the benefit is received tax free

If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?

the death benefit will be smaller

in insurance policies, contact ambiguities are automatically ruled in the favor of the insured. What privilege does the insurer have in order to balance this?

the right to determine the wording of a policy

which of the following is true regarding optional benefits with long term care policies

they are available for an additional premium

How long will the beneficiary receive payments under the single life settlement option?

until the beneficiary's death

what is another name for interest sensitve whole life insurance

variCurrent assumption lifeable life

What is the name of the clause that limits or eliminates the death benefit the insured dies as a result of war or while serving the military

war or military service