Insurance Exam
In a group policy, who is issued a certificate of insurance? a) The individual insured b) The health care provider c) The insurance company d) The employer
The individual insured
The Affordable Care Act requires all U.S. citizens and legal residents to have qualifying health care coverage. This is known as a) Safe Harbor mandate. b) Special enrollment. c) The individual mandate. d) The Insurance Marketplace
The individual mandate
On a major medical insurance policy, the amount that an insured must pay on a claim before the insurer will pay is known as a) Deductible. b) Copayment. c) Inside limit. d) Coinsurance.
Coinsurance
Most scheduled plans provide first-dollar benefits without a) Coinsurance and deductibles. b) Premiums c) Copays. d) Exclusions and conditions
Coinsurance and deuctibles
Chris, who is unlicensed, works part-time in her father's insurance agency. She may perform all of the following activities EXCEPT a) Assist her father in completing applications for insurance. b) Call prospects and collect expiration data of their existing policies for her father. c) Collect premium for in-force policies and explain coverages to clients that have existing policies written by her father. d) Make appointments with clients and prospective clients to meet with her father
Collect premium for in-force policies and explain coverage to clients that have existing policies written by her father
In disability income insurance, the own occupation definition of disability applies a) During the elimination period. b) As long as an individual is unable to work. c) For the first 2 years of a disability. d) During the waiting period
For the first 2 years of a disability
A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis? a) Noncancellable b) Nondiscriminatory c) Indemnity d) Guaranteed
Guaranteed
An association could buy group insurance for its members if it meets all of the following requirements EXCEPT a) Holds annual meetings. b) Is contributory. c) Has at least 50 members. d) Has a constitution and by-laws.
Has at least 50 members
Which of the following best describes a misrepresentation? a) Making a deceptive or untrue statement about a person engaged in the insurance business b) Making a maliciously critical statement that is intended to injure another person c) Discriminating among individuals of the same insuring class d) Issuing sales material with exaggerated statements about policy benefits
Issuing sale material with exaggerated statements about policy benefits
Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds? a) Cancellable b) Guaranteed renewable c) Optionally renewable d) Conditionally renewable
Optional renewable
Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds? a) Cancellable b) Guaranteed renewable c) Optionally renewable d) Conditionally renewable
Optionally renewable
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? a) Dividend Accumulation option b) Paid-up option c) Accumulation at Interest d) Paid-up additions
Paid up option
An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use? a) Reduction of premium b) Accumulation at interest c) Paid-up option d) One-year term
Paid-up option
A core Medicare supplement policy (Plan A) will cover all of the following expenses EXCEPT a) 20% of Part B coinsurance amounts for Medicare-approved services b)Part A deductible c) Part A coinsurance d) the first 3 pints of blood
Part A deductibile
What type of policy contains a coverage that is only activated upon the insured's losses reaching a certain level? a) Fully-funded plan b) Modified fully-insured plan c) Partially-funded plan d) Modified coverage
Partially-funded plan
In order to reinstate a life insurance policy the insured must do all of the following except a) Repay any outstanding loans and interest b) pay next year's premium in advance c) pay back premiums d) pay any interest due on back premiums
Pay next year's premium in advance
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will a) Pay the policy proceeds up to an established limit. b) Not pay the policy proceeds under any circumstances. c) Automatically pay the policy proceeds. d) Pay the policy proceeds only if it would have issued the policy
Pay the policy proceeds only if it would have issued the policy
Which of the following is another term for the accumulation period of an annuity? a) Premium period b) Liquidation period c) Annuity period d) Pay-in period
Pay-in period
Which of the following factors would be an underwriting consideration for a small employer carrier? a) Health status b) Medical history of the employees c) Percentage of participation d) Claims experience
Percentage of participation
All of the following are covered by Part A of Medicare EXCEPT a) Home health services. b) Physician's and surgeon's services. c) In-patient hospital services. d) Post-hospital nursing care
Physician's and surgeon's services
Which type of funding plan is developed through collective bargaining? a) immediate-balanced funds b) premium-delay arrangement c) reserved funding plan d? docked-funds
Premium - delay arrangement
All of the following are examples of risk retention EXCEPT a) Self-insurance. b) Premiums. c) Deductibles. d) Copayments
Premiums
Which type of Medicare policy requires insureds to use specific healthcare providers and hospitals (network providers), EXCEPT in emergency situations? a) Limited b) HMO c) Preferred d) SELECT
Select
Which of the following would provide an underwriter with information concerning an applicant's health history? a) The Medical Information Bureau b) A medical examination c) The agent's report d) The inspection report
The medical inspection bureau
An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation? a) They are taxed as income. b) They are tax deductible. c) They are considered pre-tax. d) They are not deductible
They are tax deductible
Are insurance company underwriters allowed to discriminate? a) No, higher risks pay higher premium b) No, discrimination is an unfair practice c) Yes, but only for gender d) Yes, but not unfairly
Yes, but not unfairly
An insured wants to transfer his personal insurance policy to a friend. Under what conditions would this be possible? a) The insured will need a written consent of the insurer. b) It is impossible to transfer a policy. c) The insured would have to surrender his policy to the insurer, and his friend could then ask to buy it. d) The insured can transfer the policy to his friend and then notify the insurer of the change
he insured will need a written consent of the insurer
An agent delivers a policy to an applicant, who pays the initial premium but refuses to submit a statement of good health. Which of these describes what the applicant has violated a)contractual agreement b) consideration c) representation d) adhesion
consideration
What is the advantage of an open enrollment period to the insured a) it occurs several times a year for the benefit of the insured b) the premiums for coverage are lower during this period c) coverage will be provided regardless of the insured's health status d) the insured may change providers as frequently as deemed necessary
coverage will be provided regardless of the insured health status
The Insurance Director shall examine every authorized insurer. How long must insurers keep records pertaining to the insurance transactions under the license? a) 3 years b) 5 years c) 7 years d) 1 year
3 years
What is the penalty for IRA distributions that are below the required minimum for the year? a) 10% b) 25% c) 50% d) 60%
50%
Most health insurance policies exclude all of the following EXCEPT a) Intentional injury. b) Injury due to war. c) Accidental injury. d) Occupational injury
Accidental injury
What is the same as an authorized user
Admitted
Which of the following long-term care benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis? a) Residential care b) Assisted living c) Home health care d) Adult day care
Adult Care
What is a characteristic of a 501(c)(9) trust? a) To provide group insurance to small employers within a trust b) 501(c)(9) trusts can be contributory plans c) 501(c)(9) trusts can be non-contributory plans d) All of the above are characteristics of a 501(c)(9) plan
All of the above
A tax-sheltered annuity is a special tax-favored retirement plan available to a) Certain age groups only. b) Certain groups depending on factors such as race, gender, and age. c) Certain groups of employees only. d) Anyone
Certain groups of employees only
On a major medical insurance policy, the amount that an insured must pay on a claim before the insurer will pay is known as
Coinsurance
When must an IRA be completely distributed when a beneficiary is not named? a) Due date of the deceased owner's final tax return including extensions. b) December 31 of the year that contains the fifth anniversary of the owner's death. c) Due date of beneficiary's tax return including extensions. d) December 31 of the year following the year of the owner's death
December 31 of the year that contains the fifth anniversary of the owner's death
The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the a) Total contract. b) Aleatory contract. c) Complete contract. d) Entire contract.
Enitre contract
As it pertains to group health insurance, COBRA stipulates that a) Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense. b) Retiring employees must be allowed to convert their group coverage to individual policies. c) Terminated employees must be allowed to convert their group coverage to individual policies. d) Group coverage must be extended for terminated employees up to a certain period of time at the employer's expense
Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense
What method of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement and inflation?
Human life value approach
If a person qualifies for Security disability benefits after the 5 month elimination period, when will benefits begin? a) a lump sum of benefits will be paid at the beginning of the 6th month which are retroactive to the beginning of the disability b) benefits begin at the beginning of the 6th month and are not retroactive to the beginning c) benefits begin at the beginning of the 6th month and are retroactive d) benefits will begin after the 6th month are are retroactive
benefits begin at the beginning of the 6th month and are not retroactive
An insurance company forwards fixed annuity premiums to their general account, where the money is invested. The guaranteed minimum interest is set at 3%. During an economic downswing, the investments only drew 2.5%. What interest rate will the insurer pay to its policyholders? a) 3% this payment. The overpayment this time will be subtracted from the next time the rate exceeds 3%. b) 3% regardless of what the investment draws since that's the guaranteed rate c) 2.5% d) 3%
d) 3%
When life insurance proceeds are used to pay inheritance taxes and federal estate taxes, it is known as what a) life settlement b) estate conservation c) estate creation d) liquidity
estate conservation
Which of the following is not a Medicaid qualifier a) insurability b) income level c) age d) residency
insurability
Which of the following does not have to be included on the first page of a medicare supplement policy a) outline of coverage b) renewal provision c) continuation provision d) free-look provision
outline of coverage
Who determines if a particular group of employees can be excluded from group health coverage a) the employee union b) the department of insurance c) the insurer d) the employer
the employer
What is the maximum civil penalty for individual producers for violating the Insurance Code? a) $500 b) $1,000 c) $5,000 d) $10,000
$1,000
When a group health insurance plan is terminated, how long is an extension of benefits provided for any totally disabled employee or dependent? a) 6 months b) 12 months c) 18 months d) 3 months
12 months
Every small employer carrier must actively offer to small employers at least how many health benefit plans? a) One plan b) 2 plans c) 3 plans d) There is no minimum
2 plans
Which of the following statements is incorrect concerning MECs a) a primary purpose of the regulations governing MECs was to reduce incentives for the use of life insurance as a short term investment vehicle b) a distribution from a MEC may be subject to a 10% penalty if withdrawn prior to 59 1/2 c) A MEC must always pass the 7-pay test d) a life insurance policy failing the 7 pay test is classified as a MEC
A MEC must always pass the 7 pay test
All other factors being equal, the least expensive first year premium payment is found in
Annually renewable term
Which of the following is a feature of a variable annuity? a) Securities license is not required. b) Benefit payment amounts are not guaranteed. c) Payments into the annuity are kept in the company's general account. d) Interest rate is guaranteed
Benefit payment amounts are not guaranteed
All of the following are true regarding Key Employee Disability Income insurance EXCEPT a) The employer owns the policy. b) Benefits are paid to the employer to retrain a new person. c) Premiums are not tax deductible for the employer. d) Benefits are taxable to the employer
Benefits are taxable to the employer
Which of the following would be true of both the fixed-period and fixed-amount settlement options? a) The size of installments decreases after certain period of time b) Both guarantee that the principal and interest will be fully paid out c) Both guarantee payments for the life of the beneficiary d) The amount of payments is based on the recipient's life expectancy
Both guarantee that the principal and interest will be fully paid out
Which of the following entities is in charge of making sure that producers follow the Insurance Code properly? a) State law enforcement b) Governor c) NAIC d) Director
Director
Which of the following must an agent receive in order to sell variable life insurance policies? a) Variable products license b) Certificate of authority c) SEC registration d) FINRA registration
FINRA registration
Circulating deceptive sales material to the public is what type of Unfair Trade Practice? a) Defamation b) Coercion c) Misrepresentation d) False advertising
False advertising
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member? a) Children's rider b) Additional insured rider c) Family term rider d) Spouse rider
Family term rider
An applicant wants to buy a life insurance policy in which he can count on receiving the same benefits as stated in the contract. Which type should he buy?
Fixed
Which of the following statements is TRUE concerning irrevocable beneficiaries? a) They may be changed at any time. b) They can never be changed. c) They may be changed only on the anniversary date of the policy. d) They can be changed only with the written consent of that beneficiary.
They can be changed only with the written consent of that beneficiary
Regarding Medicare SELECT policies, what are restricted network provisions? a) They determine premium rates. b) They help avoid adverse selection. c) They condition the payment of benefits. d) They determine who can be insured
They condition the payment of benefits
Which of the following is NOT true regarding Equity Indexed Annuities? a) The insurance company keeps a percentage of the returns. b) They have guaranteed minimum interest rates. c) They are less risky than variable annuities. d) They earn lower interest rates than fixed annuities.
They earn lower interest rates than fixed annuities
Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated? a) Those who have worked in the company for at least 3 years b) Those who have dependents c) Those who have no history of claims d) Those who have been insured under the plan for at least 5 years
Those who have been insured under the plan for at least 5 years
Which provision states that the insurance company must pay Medical Expense claims immediately? a) Legal Actions b) Relation of Earnings to Insurance c) Time of Payment of Claims d) Payment of Claims
Time payment of claims
Premiums paid by self-employed sole proprietors or partners for medical expense insurance are a) Not tax deductible. b) Partially tax deductible. c) Totally tax deductible. d) Taxable
Totally tax deductible
Under the long term care marketing regulation, which of the following questions would a producer not have to ask the applicant in order to determine if the purchase is suitable a) how much are you able to pay in premiums b) do you currently have an Medicare supplement policies c) are you planning to replace an existing health insurance d) what is the amount of your existing health or long-term care insurance
how much are you able to pay in premiums
in order to minimize adverse selection, employer group dental plans may require employees who enroll after they were initially eligible to participate to all of the following except a) satisfy a longer probationary period b) reduce benefits for a period of 1 year c) increase benefits for a period of 1 year d) submit evidence of insurability
increase benefits for a period of 1 year
The Patient Protection and Affordable Care Act (PPACA) included all of the following provisions except a) Coverage for preventative benefits b) No lifetime dollar limits c) individual tax deduction for premiums paid d) right to appeal
individual tax deduction for premiums paid
Which of the following is provided by skilled medical personnel to those who need occasional medical assistance or rehabilitative care a) intermediate care b) custodial care c) home health care d) skilled care
intermediate care
In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost a) Counts toward coinsurance. b) Is not covered. c) Must be covered by the insurer. d) Counts toward deductible
is not covered
An employee is on an extended leave of absence when the employer group health plan changes from one carrier to another. Before the employee returns to work, what might the employee most likely notice? a) Increased benefits b) No change in coverage c) Suspended coverage d) Limited coverage
limited coverage
A self-employed mechanic operates his own shop. He is considering purchasing health insurance that would protect him financially in the event of a serious illness or accident. He feels that he can handle any small health care expense. What type of policy would likely meet this person's needs? a) comprehensive major medical b) basic hospital c) dread disease d) major medical
major medical
All of the following are true of a Multiple Employer Trust (MET) except a) The sponsor develops the plan, sets the underwriting rules and administers it b) The employee has a right of conversion upon leaving the group coverage c) METs allow small employers an opportunity to band together and purchase insurance at a lower group rate d) the trusts are formed by insurers, agents, brokers or third party administrators
the employee has the right of conversion upon leaving the group coverage
According to the common disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed? a) the insured died before the primary beneficiary b) the primary beneficiary died before the insured c)the deaths occurred at the same time d) the estate of the primary beneficiary and the contingent beneficiary split benefits equally
the primary beneficiary died before the insured
If both the primary and contingent beneficiaries of a life insurance policy have died before the insured's death, who will received the death benefits a) the tertiary beneficiary b) the insured's heir c) the primary beneficiary's spouse d) the government
the tertiary beneficiary
An insured pay a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?
10 days
An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. What kind of penalty would the IRA owner pay? a) 50% tax on the amount not distributed as required b) No penalties, since the owner is older than 59 ½ c) 10% for early withdrawal d) 15
50% tax on the amount not distributed as required
Notice of a hearing for a cease and desist order must be given at least how many days in advance? a) 10 b) 15 c) 30 d) 7
7
Which of the following describes self-insurance? a) A business engages in the same types of activities as a commercial insurer and deals with its own risks. b) A plan to which the law of large numbers does not apply. c) A company purchases a participating policy. d) An individual funds his or her own insurance policy
A business engages in the same types of activities as a commercial insurer and deals with its own risks
Which of the following would be considered a nonmedical insurance application? a) An application submitted with the Agent's Report b) Any application for life insurance c) An application on which the medical information is completed by the applicant and the agent only d) An application that does not ask any questions about the applicant's medical history
An application on which the medical information is completed by the applicant and agent only
All of the following could qualify as a group for the purpose of purchasing group health insurance except a) An association of 35 people b) labor union c) Multiple employer trust d) single employer with 14 employees
An association of 35 people
Who can make changes to the policy once it is in effect? a) An executive officer of the insurer b) The insured c) The policyowner d) The agent
An executive officer of the insurer
Who can make a fully deductible contribution to a traditional IRA? a) Someone making contributions to an educational IRA b) A person whose contributions are funded by a return on investment c) An individual not covered by an employer-sponsored plan who has earned income d) Anybody: all IRA contributions are fully deductible regardless of income level
An individual not covered by an employer-sponsored plan who has earned income
To which of the following policies would the State regulations on illustrations NOT apply? a) A group life policy b) An individual variable life policy c) A whole life policy with a guaranteed death benefit of $20,000. d) An individual term policy
An individual variable life policy
To which of the following policies would the State regulations on illustrations NOT apply? a) An individual term policy b) A group life policy c) An individual variable life policy d) A whole life policy with a guaranteed death benefit of $20,000
An individual variable life policy
An insured's premium increases as a result of her age. Which type of policy does she have? a) Increasing term b) Age-Based c) Attained age d) Issue age
Attained Age
An underwriter is reviewing the medical questions in the application and needs further information due to a medical situation the applicant had in the past. What will the underwriter require? a) A complete medical record b) Sworn health affidavit from the applicant c) Statement of Continued Good Health d) Attending Physician Statement
Attending Physician Statement
An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision? a) Survivor Life b) Second-to-Die c) Common Disaster d) Accidental Death
Common disaster
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is a) Aleatory. b) Personal. c) Unilateral. d) Conditional
Conditional
An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the a) Consideration Clause. b) Insuring Clause. c) Pre-existing Conditions Clause. d) Eligibility Clause
Consideration Clause
Which of the following provisions must be included on the first page of a Medicare supplement policy and states the insurer's right to change premium amounts? a) Premium Provision b) Insurer's Rights c) Coverage Limitations d) Continuation Provision
Continuation Provision
What is the purpose of the gatekeeper in an HMO? a) Making sure that services are properly prepaid b) Controlling costs c) Making sure that patients do not go to physicians outside of the HMO's region d) establishing strong preventative care
Controlling costs
Which of the following will NOT be an appropriate use of a deferred annuity? a) Accumulating funds in an IRA b) Funding a child's college education c) Creating an estate d) Accumulating retirement funds
Creating an estate
In order to minimize adverse selection, employer group dental plans may require employees who enroll after they were initially eligible to participate to do all of the following EXCEPT a) Increase benefits for a period of one year. b) Submit evidence of insurability. c) Satisfy a longer probationary period. d) Reduce benefits for a period such as one year
Increase benefits for a period of one year
Issue age policy premiums increase in response to which of the following factors? a) Increased benefits b) Increased deductible c) Inflation d) The insured's age
Increased benefits
When the director of the state's insurance department leaves office, which of the following may occur a) all existing producers will need to really for a license b) insurance rates are subject to change c) temporary licenses will automatically be renewed for 180 days d) all of the above
Insurance rates are subject to change
When a person applies for Medicare supplement insurance, whose responsibility is it to confirm that the applicant does not already have accident or sickness insurance in force? a) Active physician b) Agent c) Insurer d) State government
Insurer
The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose? a) Fixed amount option b) Interest only option c) Life income with period certain d) Joint and survivor
Interest only option
What is the purpose of a conditional receipt? a) It is intended to provide coverage on a date earlier than the date of the issuance of the policy. b) It guarantees the applicant that a policy will be issued in the amount applied for in the application. c) It serves as proof that the agent has determined the applicant to be fully insurable for coverage by the insurance company. d) It is given by the agent only to applicants who fully prepay all scheduled premiums in advance of policy issue
It is intended to provide coverage on a date earlier that the date of the issuance of the policy
An insurer invests the money it receives from premiums paid by its insureds. Which of the following is TRUE regarding the interest earned on these investments? a) It is used to fund executive bonuses b) It is used to increase the death benefit. c) It is used to lower premiums. d) It is paid out as dividends
It is used to lower premium
Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option? a) It provides a higher monthly benefit than a pure life annuity. b) It is a life contingency option. c) The beneficiary receives the remainder of the principal amount upon the annuitant's death. d) Payments can be made in installments and as a single cash refund
It provides a higher monthly benefit than a pure life annuity
Which statement is NOT true regarding a Straight Life policy? a) The face value of the policy is paid to the insured at age 100. b) It usually develops cash value by the end of the third policy year. c) It has the lowest annual premium of the three types of Whole Life policies. d) Its premium steadily decreases over time, in response to its growing cash value.
Its premium steadily decreases over time, in response to its growing cash value
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die? a) Ordinary Life b) Joint Life c) Decreasing Term d) Whole Life
Joint Life
couple near retirement is planning for their golden years. They want to make sure that their retirement annuity provides monthly benefits for the rest of their lives. Should one of them die, the other would still like to continue receiving benefits. Which settlement option should they choose? a) Joint and Survivor b) Joint life c) Life with period certain d) Straight life
Joint and Survivor
The form of life annuity which pays benefits throughout the lifetime of the annuitant and also guarantees payment for a minimum number of years is called a) Life income with period certain. b) Life income with refund. c) Joint and survivorship. d) Joint life annuity
Life income with period certain
policyowner is reading a statement on the first page of his health insurance policy, which says "this is a limited policy." What is the name of this statement? a) Policy Limitation Notice b) Statute of Limitations c) Limited Benefit Statement d) Limited Policy Notice
Limited Policy Notice
In group insurance, what is the policy called? a) Master policy b) Entire contract c) Certificate of authority d) Certificate of insurance
Master policy
Which of the following programs expands individual public assistance programs for people with insufficient income and resources? a) Unemployment compensation b) Medicaid c) Medicare d) Social Security
Medicaid
Which of the following used to be called Medicare + Choice Plans? a) Original Medicare Plan b) Medicare Advantage Plans c) Medical Insurance d) Medicare Supplement Plans
Medicare Advantage Plans
Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is a) Biweekly. b) Monthly. c) Within 45 days. d) Weekly.
Monthly
Producer A is prosecuted for a crime. He must notify the Director within what time frame after the initial pretrial hearing date? a) No later than 30 days b) 3 months c) Immediately d) 10 days
No later than 30 days
After a brief emergency room visit, an insured discovered that his plan required a larger copayment for an out-of-network provider than for a local, in-network provider. Under the PPACA provisions, this is a) Reasonable and customary. b) Part of the plan's benefit schedule. c) Not permitted. d) Counted as part of the insured's annual deductible.
Not premitted
In long-term care insurance, what type of care is provided with intermediate care? a) Occasional nursing or rehabilitative care b) Nonmedical daily care c) Daily care, but not nursing care d) Intensive care
Occasional nursing or rehabilitative care
An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A and Part B. What is the insurance company obligated to do
Offer the supplement policy on a guaranteed issue basis
How often may a life settlement provider contact an insured regarding the insured's health status if the insured's life expectancy is more than one year? a) Once every 3 months b) Not more often than once a year c) Any time d) Once a month
Once every 3 months
Under most dental plans, what limitations are posed for denture replacement? a) Once every 10 years b) No limitations c) Only the initial dentures are covered. d) Once every 5 years
Once every 5 years
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured? a) Corridor option b) Variable option c) Option A d) Option B
Option B
Which of the following describes taxation of individual disability income insurance premiums and benefits? a) Premiums are tax-deductible and benefits are taxable b) Premiums are not tax-deductible and benefits are not taxable c) Premiums are not tax-deductible but benefits are taxable d) Premiums are tax-deductible but benefits are not taxable
Premiums are not tax-deductible and benefits are not taxable
Which of the following describes taxation of individual disability income insurance premiums and benefits? a) Premiums are tax-deductible but benefits are not taxable b) Premiums are tax-deductible and benefits are taxable c) Premiums are not tax-deductible and benefits are not taxable d) Premiums are not tax-deductible but benefits are taxable
Premiums are not tax-deductible and benefits are not taxable
Which of the following is correct regarding the taxation of group medical expense premiums and benefits? a) Premiums are not tax deductible and benefits are not taxed. b) Premiums are tax deductible and benefits are taxed. c) Premiums are tax deductible and benefits are not taxed. d) Premiums are not tax deductible and benefits are taxed
Premiums are tax deductible and benefits are not taxed
If an individual is covered by a policy that includes an Accidental Death & Dismemberment rider, what term describes the maximum benefits he will receive if he loses sight in both eyes as a result of a fire? a) Principal sum b) Reciprocal amount c) Capital sum d) Percentage of full amount
Principal Sum
Insurers may change which of the following on a guaranteed renewable health insurance policy? a) Rates by class b) Coverage c) Individual rates d) No changes are permitted
Rates by class
Which of the following is NOT true regarding Equity Indexed Annuities? a) The insurance company keeps a percentage of the returns. b) They have guaranteed minimum interest rates. c) They are less risky than variable annuities. d) They earn lower interest rates than fixed annuities.
Reciprocal
Paul is a producer in Washington and wants to become a producer in Oregon. The Director will waive certain examination requirements, provided that Washington would waive these same requirements if an Oregon producer sought licensure in Washington. What term is used to describe this phenomenon? a) Equality b) Fair exchange c) Equanimity d) Reciprocity
Reciprocity
What type of care is Respite care? a) 24-hour care b) Relief for a major care giver c) Daily medical care, given by medical personnel d) Institutional care
Relief for a major care giver
Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance? a) Replacement rule b) Reinstatement rule c) Conversion rule d) Disclosure rule
Replacement Rule
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must a) Respond to the consumer's complaint. b) Defend the report if the agency feels it is accurate. c) Change the report. d) Send an actual certified copy of the entire report to the consumer
Respond to the consumer's complaint
A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the a) Secondary beneficiary. b) Primary beneficiary. c) Irrevocable beneficiary. d) Revocable beneficiary
Revocable beneficiary
Roland had $500 left in his Health Reimbursement Account when he quit his job. What happens to that money? a) Roland can have access to the $500 at his previous employer's discretion b) Roland's previous employer must issue a check for $500 payable to him c) Roland may roll the $500 over into a HRA with his new employer d) Roland can use up the $500 as long as he has qualified medical expenses
Roland can have access to the $500 at his previous employers discretion
In major medical insurance policies, when the insured's share of coinsurance reaches a certain amount, the insured is no longer obligated to pay it. This feature is known as a) Stop-loss. b) Maximum benefits. c) Deductible. d) Coordination of benefits
Stop-loss
Which of the following would help prevent a universal life policy from lapsing? a) Corridor of insurance b) Target premium c) Face amount d) Adjustable premium
Target premium
All of the following would be different between qualified and nonqualified retirement plans EXCEPT a) Taxation of withdrawals b) Taxation of contributions c) IRS approval requirements d) Taxation on accumulation
Taxation on accumulation
Which of the following is an example of apparent authority of an agent appointed by an insurer? a) The agent puts up a sign with the insurer's logo without express permission. b) The agent accepts a premium payment after the end of the grace period. c) The agent accepts a premium payment during the grace period. d) The agent has business cards and stationery printed.
The agent accepts a premium after the end of the grace period
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 distributed is subject to ordinary income tax. b) The amount of the distribution is reduced by the amount of a 20% withholding tax. c) No taxes are due since the plan participant is over age 59 1/2. d) There is a 10% early withdrawal penalty
The amount of the distribution is reduced by the amount of a 20% withholding tax
Which of the following is TRUE regarding variable annuities? a) A person selling variable annuities is required to have only a life agent's license. b) The annuitant assumes the risks on investment. c) The funds are invested in the company's general account. d) The company guarantees a minimum interest rate
The annuitant assumes the risks on investments
Under the ACA, health insurance can no longer be underwritten based on which of the following factors? a) The applicant's tobacco use b) The applicant's health condition c) The applicant's family composition d) The applicant's age
The applicant's health condition
All of the following are ways in which a Major Medical policy premium is determined EXCEPT a) The stop-loss amount. b) The average age of the group. c) The amount of the deductible. d) The coinsurance percentage
The average age of the group
Which of the following statements about group life is correct? a) The premiums are higher than in an individual policy because there is no medical exam. b) The group sponsor receives a Certificate of Insurance. c) The policy can be converted to an individual term insurance policy. d) The cost of coverage is based on the ratio of men and women in the group
The cost of coverage is based on the ratio of men and women in the group
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date? a) The date of policy delivery b) The date of issue c) The date of application d) The date of medical exam
The date of the medical exam
Which of the following statements concerning group health insurance is CORRECT? a) Each employee receives a policy. b) Under group insurance, the insurer may reject certain individuals from coverage. c) The employer is the policyholder. d) Only the employer receives a certificate of insurance.
The employer is the policy holder
For an individual who is eligible for Medicare at age 65, and who is still employed and covered under the employer's plan, which of the following is true? a) The employer plan is secondary coverage, and Medicare is primary coverage. b) The employer plan is discontinued, and Medicare is primary coverage. c) The employer plan continues, and Medicare is not available until the individual is retired. d) The employer plan is primary coverage, and Medicare is secondary coverage
The employer plan is primary coverage and Medicare is secondary coverage
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT? a) The insured may choose to convert to term or permanent individual coverage. b) The insured would not need to prove insurability for a conversion policy. c) The insured may convert coverage to an individual policy within 31 days. d) The premium for individual coverage will be based upon the insured's attained age
The insured may choose to convert to term or permanent coverage
Which of the following is NOT a feature of a guaranteed renewable provision? a) The insured has a unilateral right to renew the policy for the life of the contract. b) Coverage is not renewable beyond the insured's age 65. c) The insured's benefits cannot be reduced. d) The insurer can increase the policy premium on an individual basis.
The insurer can increase the policy premium on an individual basis
Which of the following statements is true regarding the cash value in a Universal life policy? a) The insurer backs the cash value with a nonguaranteed interest rate. b) The insurer backs the cash value with a current interest rate. c) The insurer credits the cash value in the policy with a current interest rate. d) The insurer credits the cash value in the policy with a guaranteed interest rate.
The insurer credit the cash value in the policy with a current interest rate
All of the following are characteristics of a Universal Life policy EXCEPT a) The insurance company reserves the right to adjust the mortality charges and/or interest rate. b) The cash account accumulates on a tax-deferred basis. c) Universal Life is a combination of term insurance and a separate savings account joined in a single contract. d) The planned premium pays for mortality charges and expenses and any excess is returned to the policyowner
The planned premium pay for mortality changes and expenses and any excess is returned to the policyowner
All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT a) Any type of insurance policy may be used. b) The employer pays a bonus to a selected employee to fund the policy. c) It is considered a nonqualified employee benefit. d) The policy is owned by the company
The policy is owned by the company
An individual purchased a Medicare supplement policy in March and decided to replace it 2 months later. His history of coronary artery disease is considered a pre-existing condition. Which of the following is true? a) Because this is a new policy, the pre-existing condition waiting period starts over. b) 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. c) Coronary artery disease coverage will be permanently excluded from the new policy. d) In replacement, pre-existing conditions must be waived, so sickness relating to coronary artery disease will be covered upon the policy's effective date.
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.
Under an extended term nonforfeiture option, the policy cash value is converted to a) The same face amount as in the whole life policy. b) The face amount equal to the cash value. c) A lower face amount than the whole life policy. d) A higher face amount than the whole life policy
The same face amount as in the whole life policy
According to the life insurance replacement regulations, which of the following would be an example of policy replacement a) term insurance is changed to whole life b) a lapsed policy is reinstated within a specific timeframe c) a policy is reissued with a reduction in cash value d) a policy term expires, and the insured buys another term life policy
a policy is reissued with a reduction in cash value
Which of the following would not be eligible for coverage under key person a) the owner of a shop b) the executive office of a company c) the pharmacist in a drug store d) the manager of a small store
the owner of a shop
