INSURANCE EXAM
S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?
$50,000
Z is an agent who violated the insurance info. and privacy protection act. Z was then issued and served a settlement of charges along with a notice of hearing by the commissioner of insurance. Z hearing date must be at least __ days after service of charges?
10
a resident agent who moves out of state of NC has ___ business days to notify the commissioner of insurance of the address change?
10
an accident and health policyholder has ___ days to return the policy and receive a full refund on premiums?
10
how long is the free look period for accident and health policies sold in NC?
10 days
a group health policys approved premium rate is guaranteed by the insurer for an initial period of at least ___ months?
12
A proof of loss is required to be submitted within ___ days after the date of loss?
180
A life insurance contract may NOT be voided by the insurance company beginning __ years after the policys issue date?
2
a health insurance policy applicant unintentionally fails to list a previous visit to a neurologist. If the policy is issued and the insurer later decides to contest the policy it must do so?
2 years from the date of issue
If a licensee or person willingly misstates information on any financial document or statement, the entity in which they represent is subject to a fine between:
2,000-10,000
a terminated employee must have been covered for at least __ months under a group health insurance policy immediately prior to termination in order to be eligible for continuation of coverage?
3
Before an insurer can increase the rates for individual accident and health policyowners, the insurer must provide written notice at least __days?
30
an insurance applicant was recently denied insurance coverage. The applicant is requesting access from the insurer to recorded personal info. regarding this decision. Under the information and privacy protection act, the insurer MUST make the info. available within __ business days?
30
an insurance applicant was recently denied insurance coverage. the applicant is requesting access from the insurer to recorded personal info. regarding this decision. Under the info. and privacy protection act the insurer MUST make the info. available within __ business days?
30
before an insurer can increase the rates for individual accident and health policyowners the insurer must provide written notice at least ___ days before the effective rate increase?
30
one becomes eligible for social security benefits after having been disabled for
5 months
an eligible employee has a max. of __ days after their 1st day of employment to be added to group health coverage?
90
what is NC definition of life insurance replacement?
A transaction in which a new policy is bought and an old policy is terminated.
at what point during a transaction does a nonresident agent need a licensed resident agent to countersign any documents, policies, applications, or other insurance forms?
At no point
the difference between group insurance and blanket health policies is?
Blanket health policies do NOT issue certificates
XYZ insurance company would like to begin conducting business in NC. Before XYZ can issue or deliver an insurance policy, the form, classification of risks, and premium rates MUST be filed with the __?
Commissioner of insurance
P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase?
Deferred
any vacancy of the commissioner of insurance position must be filled by an__?
Govenor appointment
if an insurance applicant is being investigated into her/her personal character and mode of living the applicant MUST be notified of his investigation which of the following makes this a requirement?
Insurance info. and privacy protection act
which is NOT an example of a nonforfeiture option?
Life Income
comprehensive major medical policies usually combine?
Major medical with basic hospital/surgical coverage
In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary and be the recipient of any financial benefits from the policy?
Owners rights
in NC which of the following MUST be delivered to a policy owner upon the sale of an individual life insurance policy?
Policy summary and buyers guide
which of these is NOT a type of agent authority?
Principal
D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits?
Residual benefit clause
which of the following are equity indexed annuities typically invested in?
S&P 500
NC insurance law specifically allows the commissioner of insurance to issue a temp. license to which of the following individuals?
a surviving spouse of a deceased agent
who signs a notice regarding replacement form when an application is taken for a new life insurance policy that replaces an existing one?
agent an applicant
the consideration clause in a life insurance contract contains what pertinent?
amount of premium payments and when they are due
an agent soliciting insurance policies in NC MUST be __?
appointed by an authorized insurer in NC
In order to establish a Health Reimbursement Arrangement (HRA), it MUST
be established by the employer
which of these is NOT considered to be a cost connected with an individuals death?
business expenses
a whole life insurance policyowner does NOT have the right to?
change the grace period
N is covered by a term life policy and does not make the required premium payment which was due aug. 1. N dies sep. 15. what action will the insurer take?
claims will be denied
if a dispute arises over an insurance contract, the agent who sold the policy is considered to represent the __?
company
which of the following currently explains the actions an agent should take if a customer wants to apply for an insurance policy?
complete the application and review the info. with the customer prior to obtaining the customers signature then send the application off to the insurance company
Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid.
conditional
insurance policies are offered on a take it or leave it basis which make them?
contracts of adhesion
which of the following features of a group term life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability?
conversion privilege
which of these types of policies may NOT have the automatic premium loan provision attached to it?
decreasing term
The circulation of written literature that is maliciously critical of an insurer's financial condition is called
defamation
what is the purpose of USA patriot act?
detect and deter terrorism
an agent takes an individual disability income application collects the appropriate premium and issues the prospective insured a conditional receipt the next step the insurance company will take is to?
determine if the applicant is an acceptable risk by complating standard underwriting procedures
which of these actions fall under NC definition of rebating?
discounting insurance premium by the agent
which of the following statements BEST describes the intent of a coinsurance clause in a major medical policy?
discourages overutilization of the insurance coverage
T purchased a $100,000 single premium, Straight Life annuity 5 years ago. He has received monthly payments since the inception of the annuity. If T dies, the insurance company
does NOT have to make any further payments
an insurance company formed under NC laws is referred to as a __?
domestic company
the federal income tax treatment of employer provided group medical expense insurance can be accurately described as?
employees premiums paid by the employer is tax deductible to the employer as a business expenditure
how is the life and health insurance guaranty associated funded?
form member companies
if the commissioner of insurance is no longer able to complete the term of office who is REQUIRED to fil this vacancy?
govenor
which of the following provisions specifies how long a policyowners health coverage will remain in effect if the policyowner does NOT pay the premium when it is due?
grace period
which requirement must be met for an association to be eligible for a group life plan?
group was formed for a purpose other than acquiring insurance
NC insurance law permits which of the following practices?
higher rates of male insureds for life insurance based exclusively on gender
which of the following MUST be included with the continuation of coverage of a group hospital, surgical, and major medical policy?
hospital expenses
which of the following expenses does a basic hospital policy pay?
hospital room and board
W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n)
immediate annuity
when 3rd party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have
insurable interest in the proposed insured
which of the following is NOT regulated by the insurance info. and privacy protection act?
insurance regulators
Quarterly premium payments increase the annual cost of insurance because
interest to the insurer is decreased while the administrative costs are increased
A policyowners rights are limited under which beneficiary designation?
irrevocable
if a blank insurance contract application is signed by an agent the agent what?
is guilty of a misdemeanor
An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager?
key person insurance
the life and health insurance guaranty association in NC has regulations that apply ONLY to __?
life and health policies issued by companies authorized in NC
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
life income
1 role of the life and health guaranty association is to what?
maintain public confidence in the promises of insurers
K sent a renewal premium payment to her insurer that would extend her coverage beyond the policy's maximum age limit. If the insurer accepts this premium payment, it
must continue coverage to the end of the period of time for which the premium was accepted
An example of unfair discrimination would be
offering different terms of coverage for different policyowners having the same risk classification
under what condition may a lender require the purchase of insurance as a condition of making a loan?
only if borrower is NOT restricted in his/her choice of insurers
The benefits under a Disability Buy-Out policy are
payable to the company or another shareholder
When an employee is terminated, which statement about a group term life conversion is true?
policy proceeds will be paid if the employee dies during the conversion period
in NC which of the following MUST be delivered to a policyowner upon the sale of an individual policy?
policy summary and buyers guide
Which is true concerning a Variable Universal Life policy?
policyowner controls where the investment will go and selects the amount of the premium payment
consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine?
probability of making timely premium payments.
an agent who illegally discounts insurance premium is said to be engaged in what?
rebating
which of the following issues new insurance coverage intended to replace an existing life insurance policy?
replacing insurer
what does a 401 k plan generally provide its participants?
salary deferral contributions
the commissioner of insurance is NOT permitted to __?
set insurance rates within the state
which of these actions is NOT considered an act of rebating?
sharing commissions with ither licensed and appointed agents
an agent will be personally liable for claims originating from any insurance policies?
sold by the agent for companies NOT authorized to conduct business in NC
which of the following is an effort to influence a person to buy an insurance product from you?
solicitating
which of the following is an effort to influence a person to buy an insurance product from you?
soliciting
what should an insured do if the insurer does NOT send claims forms within the time period set forth in a health policy's claims forms provision?
submit the claim in any form
which of the following is true if the owner of an IRA names their spouse as beneficiary but then dies before any distributions are made?
the account can be rolled into the surviving spouses IRA
A contract owner terminates an annuity before the income payment period begins. The owner will then receive
the current contract surrender value
The advantage of reinstating an original life policy is
the premiums are based on a younger age
an individual who purchases a life annuity is given protection against?
the risk of living longer than expected
The common disaster clause provides that both the insured and the sole named beneficiary were to die in a common accident which of the following is true?
this clause provides the payment of proceeds to the insureds estate
essential benefits without annual and lifetime limits are required on any health policy purchased?
through the federal marketplace
the policy provision that entitles the insurer to establish conditions the insured must meet what is pending is?
time limit on certain defenses
K purchased a Life insurance policy in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much-higher premium is paid because of falling interest rates. This type of policy is known as a(n) _________ life policy.
universal
an agent completes an application with a client for a $50,000 life insurance policy. At what point is the LATEST a policy summary and buyers guide must be given to the applicant?
upon policy delivery
R becomes disabled and owns an individual Disability Income policy. When is R eligible to receive disability benefits?
upon satisfying the elimination period requirement
S is a life insurance policyholder and enters into a written agreement to receive immediate cash in exchange for the sale and transfer of her life insurance policy this agreement is referred to as a what?
viatical settlement
when can a lapsed individual life insurance policy be reinstated?
within 5 years
An agent's license can be suspended or revoked by
writing primarily controlled business