Insurance Final Review
Defined Benefit plans are designed to provide a specific Select one: a. vesting schedule b. retirement plan c. Benefit d. Contribution
benefit
Insurance premiums are paid Select one: a. retroactive b. only monthly c. in advance d. in arrears
in advance
Julia has a policy that will pay any expenses that she incurs due to in-hospital medical treatment, as well as some of the expenses she incurs on an outpatient basis. Julia probably has a Select one: a. Disability income policy b. Hospital income insurance policy c. Medical Expense insurance policy d. Long-term care policy
medical exoense insurance policy
All of these Health Care Plan Providers would be considered Service Providers EXCEPT? Select one: a. Blue Cross Blue Shield b. Health Maintenance Organizations c. Medicare d. Preferred Provider Organizations
medicare
What type of policy is offered by private insurers to fill the gaps in Medicare benefits? Select one: a. Major Medical b. Medicare Supplement c. Social Security d. Medicaid
medicare supplement
Who receives the certificate of insurance in group insurance? Select one: a. member and family member b. employer c. sponsor d. member
member
If an applicant for life insurance lies on the application regarding a material fact, it is called? Select one: a. representation b. misrepresentation c. fraud d. concealment
misrepresentation
All of the following are hazards in life insurance EXCEPT? Select one: a. premature death b. not exercising c. overeating d. smoking
premature death
The Louisiana Life & Health Guaranty Association would protect all of the following policies EXCEPT? Select one: a. fixed annuities b. term life c. whole life d. variable annuities
variable annuities
Premature distribution from a qualified plan or an IRA can result in the amount being taxed as income plus a penalty tax of Select one: a. 5% b. 10% c. 15% d. 25%
10%
When a group life insurance plan is written on a contributory basis, the group plan must insure at least Select one: a. 50% of the eligible group members b. 65% of the eligible group members c. 75% of the eligible group members d. 90% of the eligible group members
75% of the eligible group members
Under Uniform Policy Provisions, one of the minimum standards is Proof of Loss. How many days is the insured obligated to file a proof of loss? Select one: a. 15 days b. 90 days c. 20 days d. 180 days
90 Days
All of these are Metallic Plans sold through the exchange EXCEPT Select one: a. Metal b. Bronze c. Gold d. Silver
Metal
The Affordable Care Act's Employer Mandate states that an employer must offer health insurance to their full time employees if the business has Select one: a. 100 or more full-time employees b. 50 or more full-time employees c. 50 employees d. 100 employees
50 or more full-time employees
Shane is a master carpenter in business for himself. His business is probably operated as Select one: a. A sole proprietorship b. A corporation c. A limited liability company d. A partnership
a sole proprietorship
Each of the following is a typical characteristic of group life insurance EXCEPT Select one: a. the plan has a grace period b. the master policy cannot be terminated c. the plan has a conversion privilege d. individual certificates are issued
the master policy cannot be terminated
Richard applies for a policy, pays the initial premium, and receives a BINDING receipt on Friday, September 1. On Monday, September 4, the underwriting department decides not to issue the policy and places the file in a pile for notification letters to be sent out at the end of the week. On Wednesday, September 6, Richard is killed in an auto accident. On Thursday, September 7, the insurer receives the notice of claim. The insurer will Select one: a. Pay the claim, because ANY receipt assures coverage until the potential insured is notified of a rejection. b. Return the premium and not pay the claim, because death occurred before the policy was issued. c. Return the premium and not pay the claim, because the underwriting decision had been made. d. Pay the claim, because a binding receipt assures coverage until the potential insured is notified of a rejection.
Pay the claim, because a binding receipt assures coverage until the potential insured is notified of a rejection
How many standardized Medicare Supplement Plans are available? Select one: a. 12 b. 10 c. 14 d. 16
10
A person who begins receiving retirement benefits at the normal retirement age receives what percentage of PIA as a retirement benefit? Select one: a. 150% b. 50% c. 75% d. 100%
100%
If Anna is licensed to sell both Life/Health and Personal/Commercial insurance, how many hours of continuing education are required every 2 years? Select one: a. 36 b. 8 c. 24 d. 64
24
Adult children must be allowed to be covered under their parents group health plans until they turn age Select one: a. 25 b. 23 c. 27 d. 21
27
At what age can people begin making catch-up contributions to their retirement plans ? Select one: a. 50 b. 65 c. 60 d. 55
50
Which of the following regulates the Medical Information Bureau (MIB)? Select one: a. Louisiana Department of Insurance (LDI) b. Fair Credit Reporting Act c. Policy Replacement Law d. National Association of Insurance Commissioners (NAIC)
Fair Credit Reporting Act
All of the following are true about variable annuities EXCEPT Select one: a. Annuity income varies with the market value of securities. b. Inflation has no effect on the value of the annuity payouts. c. Variable annuities are regulated by the S.E.C. d. Payouts are made in units, not fixed dollar amounts.
Inflation has no effect on the value of the annuity payouts
Jay is insured on an accidental death & dismemberment policy. The policy would NOT provide benefits under which of the following: Select one: a. Jay drowns in a swimming pool after an extended illness b. Jay dies 45 days after an auto accident c. Jay dies of a stroke after viewing his spouse's credit card bill d. Jay dies in an airplane crash
Jay dies of a stroke after viewing his spouse's credit card bill
All have insurable interest in Joe's life EXCEPT? Select one: a. Joe's spouse b. Joe's neighbor c. Joe's employer d. Joe
Joe's neighbor
Simon is age 68 and is employed by a large manufacturing company. How does his Medicare Benefits coordinate with his group health insurance medical coverage? Select one: a. Medicare is secondary and the group health insurance is primary b. Medicare and the group health insurance share the claims on a prorate basis c. Medicare will pay nothing while Simon continues to be employed d. Medicare is primary and the group health insurance is secondary
Medicare is secondary and the group health insurance is primary
Which of the following is NOT likely to be contained in an MIB report? Select one: a. Mr. Smith was turned down for insurance by two companies in the past year b. Mr. Green's information has been requested 14 times in the previous two years c. Mr. Brown reported a hobby as a flight instructor a year ago d. Mr. Jones reported a heart condition on an insurance application two years ago
Mr. Smith was turned down for insurnce by two companies in the past year
Tina has a whole life insurance policy on her life that has been in effect for 15 years. Tina and her husband review their life insurance coverage and decide that this policy, which was purchased before their marriage, is no longer necessary for their financial future. If Tina decides to stop paying the premiums, what will happen? Select one: a. The policy has not been in force long enough to have built up cash values, so when it lapses, Tina will receive nothing. b. The policy has not built up cash values because it is a whole life policy. c. The policy will lapse, and Tina will be able to select a non-forfeiture option to receive value for the cash value built up in the policy. d. The policy will lapse when the grace period expires, and Tina will lose the cash values built up in the policy.
The policy will lapse, and Tina will be able to select a non-forfeiture option to receive value for the cash value built up in the policy.
All of the following statements are true regarding an actuary EXCEPT? Select one: a. They work for the insurer b. They establish rates c. They select the risk to be insured d. They are mathematicians
They select the risk to be insured
Which of the following is true about a Waiver of Premium provision in a Disability Income Policy? Select one: a. It allows the company to increase the premium after the insured has recovered from the disability. b. While an insured is disabled and unable to pay premiums, it allows the insurer to pay the premium. c. The insurance company will deduct the premium from the benefits before they forward the disability check to the insured. d. It is the same as the grace period.
While an insured is disabled and unable to pay premiums, it allows the insurer to pay the premium
Curtis knows that when he retires, he will receive $100 a month for every year of service with his employer. This is an example of Select one: a. a money purchase plan b. a defined-benefit plan c. a profit-sharing plan d. a defined-contribution plan
a defined-benefit plan
An agent's obligation to act in an insurance applicant's or insured's best interest, based on the faith and trust placed on the agent by members of the insurance-buying public, is known as Select one: a. a fiduciary duty b. the duty owed to a principal c. A presumption of agency d. the warranty of the agent
a fiduciary duty
When representing an insurer, a producer acting as an agent has a responsibility to act with the degree of care that Select one: a. A reasonable person would apply under similar circumstances b. A lawyer would apply under similar circumstances c. A licensed insurance producer would apply under similar circumstances d. Any person would apply under similar circumstances
a reasonable person would apply under similar circumstances
The elimination period may be thought of as Select one: a. a dollar amount copayment b. a time copayment c. a dollar amount deductible d. a time deductible
a time deductible
A type of insurance that provides a death benefit and benefits for a permanent loss of sight or limbs is known as Select one: a. Medical expense insurance b. accidental death and dismemberment insurance c. life insurance with coinsurance d. disability income insurance
accidental death and dismemberment insurance
If an employer offers group health coverage to any full-time employees, the employer must offer coverage to Select one: a. all full-time employees b. all part-time employees c. all sub contractors d. just the administrative staff
all full-time employees
All of the following are correct about Long Term Care policies EXCEPT? Select one: a. it has a 30 day free look period b. self-inflicted injuries are excluded c. it must be either guaranteed renewable or non-cancelable d. All mental disorders must be covered
all mental disorders must be covered
Hospital indemnity insurance pays Select one: a. An income for each month the insured spends partially confined to the hospital. b. Medical costs only while the insured is confined to the hospital c. An income for each day the insured is confined to the hospital. d. Supplemental costs, such as television or phone charges, while the insured is confined to the hospital.
an income for each day the insured is confined to the hospital
Under the optional provision of "illegal occupations," an insurer may void the coverage in the event of: Select one: a. an insured person committing suicide b. an insured person involved in an illegal occupation c. an insured in the act of committing any misdemeanor d. an insured person with numerous speeding tickets
an insured person involved in an illegal occupation
Which of the following is not likely to be considered non-routine dental care? Select one: a. Annual checkups and cleaning of teeth, including x-rays to check the health of the teeth b. Treatment of the soft tissue substance located in the center of each tooth c. repairing or restoring dental work that has been damaged in some way d. microscopic analysis of tissue biopsy material for diagnosis of oral diseases, including oral cancer
annual checkups and cleaning of teeth, including x-rays to check the health of the teeth
Individual disability insurance premiums Select one: a. are deductible to the insured, but the benefits are taxed b. are not deductible to the insured, and the benefits are taxed c. are not deductible to the insured, but the benefits are received tax free d. Are deductible to the insured, and the benefits are received tax free
are not deductible to the insured, but the benefits are received tax free
Restrictions applying to the replacement of Medicare Supplement policies Select one: a. are often more restrictive than regulations applying to the replacement of other policies b. are prohibited entirely by federal law c. Are often less restrictive than regulations applying to the replacement of other policies d. Are generally the same as regulations applying to the replacement of other policies
are often more restrictive than regulations applying to the replacement of other policies
Mickey and Minnie are married and both have group health benefits provided by their employers. They also have two children covered by both plans. If one of their children has a covered medical loss, which of the following statements is correct regarding the loss payment? Select one: a. the policy that was first in force will pay b. both would pay, but the policy for the oldest parent would pay first c. both would pay, but the policy of the parent with the birthday first in the year would pay first and the other policy would pay the remaining balance d. both would deny because of the contract of indemnity
both would pay, but the policy of the parent with the birthday first in the year would pay first and the other policy would pay the remaining balance
The main difference between a prepaid dental plan and a comprehensive dental plan is that Select one: a. Comprehensive dental plans pay based on reasonable and customary charges, and prepaid dental plans pay on a capitation basis. b. Comprehensive dental plans pay on a capitation basis, and prepaid dental plans pay based on reasonable and customary charges. c. Comprehensive dental plans cover routine services, but prepaid dental plans do not. d. Comprehensive dental plans do not cover routine services that are covered by prepaid dental plans.
comprehensive dental plans pay based on reasonable and customary charges, and prepaid dental plans pay on a capitation basis
COBRA allows an employee to Select one: a. continue with higher benefits than they had before b. pick whatever health insurance plan they want c. continue the same group health benefits as they had under the group health plan d. convert to an individual health insurance policy
continue the same group health benefits as they had under the group health plan
Under a group life insurance conversion privilege, an employee who terminates membership in the insured group is allowed to Select one: a. Continue to participate in the group plan by taking over premium payment b. Continue to participate in the group plan until covered elsewhere c. Convert to an individual policy if evidence of insurability is given d. Convert to an individual policy without evidence of insurability
convert to an individual policy without evidence of insurability
Long Term Care benefits are paid to the insured on a Select one: a. yearly basis b. quarterly basis c. daily basis d. monthly basis
daily basis
The Affordable Care Act made all of these changes to health insurance EXCEPT? Select one: a. pre-existing conditions must be covered b. company cancellations are only allowed in cases of fraud or misrepresentation c. deductibles are no longer allowed on policies d. important preventative services must be provided for no additional cost to the insured
deductibles are no longer allowed on policies
George has a policy that will provide him an income if he is disabled from illness or injury and recuperating at home. George probably has a Select one: a. Disability income policy b. Long-term care policy c. Hospital income insurance policy d. Medical expense insurance policy
disability income policy
A time period that the insured must be disabled before disability benefits begin is best described as: Select one: a. elimination period b. waiting period c. benefit period d. probationary period
elimination period
Which of the following non-forfeiture values has the highest death benefit? Select one: a. extended term b. Cash c. Reduced paid up d. renewable and convertible
extended term
Julie's husband died 3 years ago, leaving her with two children in grade school. Julie is most likely in which income period? Select one: a. preretirement period b. grieving period c. retirement period d. family dependency period
family dependency period
Which of the following factors best describes the primary requirement to be eligible for Medicaid? Select one: a. age 65 or over b. disabled and eligible for social security c. have young children who need health care d. financially needy
financially needy
Scott is age 45 and wants a tax deferred savings plan for retirement. Scott can afford to make $200 per month payments and plans to retire at age 62. What should the producer recommend? Select one: a. flex premium deferred annuity b. single premium immediate annuity c. single premium deferred annuity d. flex premium immediate annuity
flex premium deffered annuity
An insurer might require personal delivery Select one: a. to ensure the policy goes to the right person b. to ensure the correct policy is delivered c. to verify information listed on the application d. for verification of the continued good health of the insured at the time of delivery
for verification of the continued good health of the insured at the time of delivery
A clause allowing the policyowner to inspect the policy and, if the policyowner is not satisfied with the life insurance policy, return the policy for a full refund is known as: Select one: a. probationary period b. free refund c. free look d. return of premium
free look
What is the name of the provision that allows the insured to return a new policy to the insurance company and get a full refund? Select one: a. cancellation clause b. free-look c. probationary period d. renewability clause
free-look
Regarding the taxation of life insurance policies, which of the following is NOT true? Select one: a. life insurance loans are not income taxable b. life insurance proceeds paid in a lump sum cash settlement are not income taxable c. life insurance premiums are not tax deductible d. life insurance policy dividends are taxable income
life insurance policy dividends are taxable income
For which of the following situations would an AD&D policy NOT pay benefits? Select one: a. loss of a foot b. loss of a finger c. a person dies in an auto accident d. loss of eyesight
loss of a finger
Carol applies for a life insurance policy and pays the initial premium. Carol has Select one: a. Accepted an offer from the insurer b. Accepted a counter offer from the insurer c. Made an offer to the insurer d. Made a counter offer to the insurer
made an offer to the insurer
Which of these plans provides health care benefits to individuals with low income? Select one: a. Medicaid b. Medicare c. Workers Compensation d. Tricare
medicaid
Who receives the certificate in group insurance? Select one: a. employer b. member c. member and family member d. sponsor
member
The penalties assessed against MECs primarily affect Select one: a. the cost basis of the policy b. the death benefits of the policy c. money taken out of the policy d. money put into the policy
money taken out of the policy
The ACA individual mandate requires that most Americans obtain and maintain health insurance Select one: a. 10 months out of the year b. 8 months out of the year c. monthly d. 6 months out of the year
monthly
Essential health benefits must be covered with Select one: a. no annual limits or lifetime maximums b. lifetime maximums c. no deductibles d. annual limits
no annual limits or lifetime maximums
Which provision in a health insurance policy guarantees renewability with constant premiums? Select one: a. cancelable b. fixed-rate guaranteed renewable c. guaranteed renewable d. non-cancelable
non-cancelable
If the Disability Income Insurance premiums were paid by an individual with after-tax dollars, then the benefits are Select one: a. subject to income taxes b. tax deductible c. not tax deductible d. not subject to income taxes
not subject to income taxes
Jane applied for a health policy 7 years ago and misstated her age on the application. At the time of a claim the insurance company discovers Jan's true age. The insurance company will take the following action: Select one: a. pay full benefits because the policy is more than 2 years old b. deny the claim due to material misrepresentation c. pay Jane's claim with reduced benefits d. pay the claim and cancel the policy because she lied on the application
pay Jane's claim with reduced benefits
Medicare benefits are available for which of the following? Select one: a. person age 62 and financially impoverished b. person age 62 and eligible for social security c. person age 62 with permanent kidney failure d. person age 62 with a terminal illness
person age 62 with permanent kidney failure
Life insurance contracts contain all the following EXCEPT Select one: a. Conditions b. Insuring Clause c. Policy folder d. Exclusions
policy folder
What type of disability automatically qualifies for total disability based on the loss of two limbs, eyesight, speech, or hearing? Select one: a. permanent disability b. presumptive disability c. residual disability d. occupational disability
presumptive disability
Which of the following benefits best describes coverage on a Disability Policy when the insured has a permanent loss of eyesight? Select one: a. recurrent disability b. presumptive disability c. residual disability d. blind disability
presumptive disability
Medicare Part A would provide coverage for all of the following EXCEPT? Select one: a. skilled nursing home care post hospital for short period of time b. hospice care c. private duty nursing d. in patient hospital care
private duty nursing
Which of the following organizations would be eligible to offer a 403(b) arrangement? Select one: a. Any small business b. Any corporation c. Public school system d. Fire department
public school system
Life insurance that requires no medical exam and asks only basic medical questions is known as Select one: a. simplified risk b. preferred risk c. simplified issue d. simplified policy
simplified issue
Sally is 45 and wants a tax deferred savings plan for retirement. Sally can afford to make a $20,000 single payment and plans to retire at age 62. What should the producer recommend? Select one: a. flex premium immediate annuity b. flex premium immediate annuity c. single premium deferred annuity d. flex premium deferred annuity
single premium deferred annuity
All of the following information would be included in a Notice of a Hearing by the Louisiana Department of Insurance EXCEPT? Select one: a. provisions in the Insurance Code that have been violated b. state any precedence established by previous orders c. state the purpose of the Hearing d. provide the date and time of the Hearing
state any precedence established by previous orders
Premiums paid by an individual for a qualified Long Term Care Policy are generally Select one: a. tax free b. tax exempt c. not tax deductible d. tax deductible as a medical expense
tax deductible as a medical expense
Premiums paid for a Medicare Supplement Policy are generally Select one: a. tax deductible as a medical expense b. tax exempt c. tax free d. not tax deductible
tax deductible as a medical expense
Premiums paid by a company for a group health plan for its employees are generally Select one: a. tax deductible by the company as a business expense b. tax free c. tax exempt d. not tax deductible
tax deductible by the company as a business expense
Dividends paid by a mutual life insurance company on participating policies are: Select one: a. taxable income b. tax deductible c. tax exempt d. tax deferred
tax exempt
All of the following are true regarding TERM life insurance EXCEPT? Select one: a. term insurance is considered temporary b. term insurance premiums are more costly than other types of insurance c. no cash value when the policy term expires d. term insurance can be converted to other types of insurance
term insurance premiums are more costly than other types of insurance
The sharing of expenses between the insured and the insurer is an example of Select one: a. the stop-loss limit b. the coinsurance c. the maximum benefit d. the deductible
the coinsurance
All of the following are false about recurrent disability EXCEPT? Select one: a. the disability must reoccur within 180 days b. the insured will have a new elimination period c. the recurrent disability must be more severe than the first d. it is a rider that can be added to the policy
the disability must reoccur within 180 days
Who takes the investment risk on a fixed annuity? Select one: a. the insurance company b. the annuitant c. the stock market d. the beneficiary
the insurance company
All of the following are eligible designations on a life insurance policy EXCEPT? Select one: a. the insured b. the estate of the insured c. an old girlfriend d. a minor child
the insured
Health insurance coverage never applies until Select one: a. the policy is delivered b. the insured has paid for the policy c. the application is reviewed by underwriting d. an underwriting decision is made
the insured has paid for the policy
All of the current LTC policies are guaranteed renewable. This means that Select one: a. The insurer cannot cancel the policy or increase policy premiums on specified classes of policies. b. The insurer cannot cancel the policy but does reserve the right to increase policy premiums on specified classes of policies. c. The insurer cannot cancel the policy or increase policy premiums on individual policies. d. The insurer cannot cancel the policy but does reserve the right to increase policy premiums on individual policies
the insurer cannot cancel the policy but does reserve the right to increase policy premiums on specified classes of policies
Which type of risk management techniques are used when the insured buys insurance? Select one: a. Peril b. Transfer c. Avoid d. Reduce
transfer
A Louisiana resident life producer would be required to complete continuing education in the amount of: Select one: a. 24 CE hours to be completed before December 31 each year b. 12 CE hours to be completed before December 31 each year c. 24 CE hours to be completed before biennial renewal date d. 36 clock hours to be completed every year before producer's license renewal
24 CE hours to be completed before biennial renewal date
The minimum number of members required to form a group life insurance policy is: Select one: a. 10 b. 25 c. 5 d. 2
5
Notice of a Hearing involving a producer's misconduct must be made: Select one: a. 20 days in advance of hearing b. 30 days in advance of hearing c. 5 days in advance of hearing d. 45 days in advance of hearing
5 days in advance of hearing
A licensed producer may fulfill continuing education requirements by class instruction or self study. How many minutes of classroom instruction are required to receive one (1) hour of continuing education credit? Select one: a. 45 b. 55 c. 50 d. 60
50
At what age is an individual no longer subject to early withdrawal penalties under an IRA? Select one: a. 59.5 b. 59 c. 55.5 d. 55
59.5
When group insurance is written on a contributory basis, the minimum participation requirement is: Select one: a. 66% b. 75% c. 70% d. 100%
75%
In Louisiana, what is the maximum interest allowed to be charged on a policy loan for a Whole Life policy? Select one: a. 4% b. 12% c. 2% d. 8%
8%
Which of the following statements describe the best use of a producer's time when personally delivering the policy? Select one: a. Mr.Jones delivers a policy and makes a special point of finding out how the insured's son performed in the gymnastics competition. b. Ms. King delivers a policy and reiterates the same sales pitch she used to make the initial sale. c. Mrs. Ross delivers a policy and restates the advantages of the policy and how it can be amended to meet future insurance needs. d. Mr. Bourne delivers a policy early in the morning, before the client is home, so that he can simply leave the policy in the mailbox.
Mrs. Ross delievers a policy and restates the advantages of the policy and how it can be amended to meet future insurance needs
Ann quits paying premiums on her whole life policy that has been in effect for 17 years. She does not select a non-forfeiture option. What happens to the cash value in her policy? Select one: a. The insurer may keep the cash value if a non-forfeiture option is not selected. b. The insurer will issue a paid-up term insurance policy with the same face value as the whole life policy with a term as long as the cash value will purchase. c. The insurer will issue Ann's beneficiary a check for the eligible amount of cash value in the policy. d. The insurer will issue a check for the eligible amount of cash value in the policy.
The insurer will issue a paid-up term insurance policy with the same face value as the whole life policy with a term as long as the cash value will purchase.
All of the following are dividend options EXCEPT? Select one: a. Cash b. accelerated death benefit c. accumulate at interest d. paid up additions
accelerated death benefit
Carol is eligible for a retirement benefit based on her own earnings and also a benefit based on her late husband's earnings. Carol will receive Select one: a. only the benefit based on her husband's earnings b. only the larger benefit c. only the benefit based on her own earnings d. both benefits
only the larger benefit
Bob purchases a policy and tells the producer he wants immediate coverage, regardless of the underwriting outcome. To meet Bob's demand, the producer is most likely to Select one: a. Accept the premium and set up a temporary insurance agreement b. Accept the premium and issue a conditional receipt c. Accept the premium and issue a binding receipt d. Accept the premium and issue an inspection receipt
accept the premium and set up temporary insurance agreement
When the producer delivers the policy, all of the following should be explained EXCEPT? Select one: a. actuarial calculations b. riders c. exclusions d. rating classification
actuarial calculations
Ken has paid only four premiums on his health insurance policy when he is hit by a car. The insurance company pays out nearly half a million dollars to cover his treatment and a lengthy stay in intensive care. This is an example of Select one: a. Aleatory Contract b. Utmost good faith c. Unilateral Contract d. Contract of Adhesion
aleatory contract
Which of the following are costs associated with death? Select one: a. Paying off debts such as credit cards or other loans b. Taxes c. Doctor or hospital bills from a final illness or accident d. All of the above
all of the above
Which of the following are duties of a producer upon the death of an insured? Select one: a. Notify the company b. All of the above c. Send the proof of death documents to the company d. Contact the beneficiary
all of the above
A policy may be issued all of the following ways EXCEPT Select one: a. As an exchange policy, covering someone other than the original applicant b. With a waiver excluding death by a certain cause c. As a modified or amended policy d. As applied for
as an exchange policy, covering someone other than the original applicant
The practice of the Louisiana Life & Health Guaranty Association charging members in order to pay contractual obligations for an insolvent insurer is called? Select one: a. assessment b. audit c. premium adjustment d. your fair share
assessment
In life insurance the "insurable interest" must exist: Select one: a. at the time of application and at the time of loss b. at the time of application or at the time of loss c. at the time of application only d. at the time of loss
at the time of application only
Which of the following statements is true about submitting the application, premium, and other forms to the insurance company? Select one: a. The application and any questionnaires must be signed by the beneficiary b. The producer must keep accurate records of all transactions involving the applicant's money. c. A life insurance policy may be issued only as applied for or rejected. d. Because coverage is effective immediately, it is not necessary to send the forms to the home office underwriter more often than weekly.
because coverage is effective immediately, it is not necessary to send the forms to the home office underwriter more often than weekly
Several producers agree to control the market share of Cajun Mutual Insurance Company. What type of unfair trade practice is this? Select one: a. twisting b. boycott c. unfair discrimination d. this is legal and not a violation of the Insurance Code
boycott
All of the following are true regarding variable annuities EXCEPT? Select one: a. value of a variable annuity is reported in terms of accumulation units b. annuity payments fluctuate with market values of the stock market c. variable annuities are a potential hedge against inflation d. can be sold by producers holding only a life insurance license
can be sold by producers holding only a life insurance license
The policyowner has the right to do all of the following EXCEPT? Select one: a. cancel the policy b. change the conditions of the policy c. sign all policy change forms d. change the beneficiary
change the conditions of the policy
What is the difference between absolute assignment and collateral assignment? Select one: a. collateral assignment is partial and temporary b. collateral assignment is a complete transfer of rights c. absolute assignment is the partial transfer of rights d. absolute assignment is a temporary transfer of rights
collateral assignment is partial and temporary
The initial premium payment sent with an application constitutes which part of the formation of an insurance contract? Select one: a. Legal purpose b. Consideration c. Offer d. Acceptance
consideration
When an employee terminates membership in an insured group plan, the group life conversion privilege provides which of the following: Select one: a. conversion is not an option on group insurance b. convert to individual policy if the employee is over the age of 50 c. convert to individual policy with evidence of insurability d. convert to individual policy without evidence of insurability
convert to individual policy without evidence of insurability
All of the following are true regarding the annuity options EXCEPT? Select one: a. can be used to provide a lifetime income that cannot be outlived b. can be used to provide a lifetime income for two people c. can be used to systematically liquidate a principal sum d. do not use the mortality tables in payout calculations
do not use the mortality tables in payout calculations
All of the following are true about group life insurance EXCEPT Select one: a. Group policy provisions include a grace period. b. It may be written to include dependent coverage. c. Coverage is usually available without medical exams. d. Each individual insured receives an insurance policy
each individual insured recieves an insurance policy
The application of the law of large numbers enables insurers to a. charge higher premiums for insurance b. calculate mortality charges c. predict the future losses of specific individuals d. estimate the future losses of a class or group of people
estimate the future losses of a class or group of people
All of the following are true regarding group life insurance EXCEPT? Select one: a. group life insurance is written as one year level term insurance b. group life insurance can be converted only with evidence of insurability c. the employee determines the beneficiary d. the employer cannot be the beneficiary
group life insurance can be converted only with evidence of insurability
The accelerated death benefit would be available in which of the following? Select one: a. if the insured needs additional retirement income b. if the insured needs cash to pay for medical expenses due to a terminal illness c. if the insured is a death row inmate d. if the insured is confined to a nursing home
if the insured needs cash to pay for medical expenses due to a terminal illness
The death benefit payable in a lump sum to a beneficiary is received: Select one: a. subject to income taxes b. subject to estate taxes c. subject to both income taxes and estate taxes d. income tax free
income tax free
A group life underwriter would be concerned about all of the following EXCEPT? Select one: a. individual health problems b. group participation c. group eligibility d. composition of the group
individual health problems
The term used to describe the individual who is covered by the insurance is Select one: a. insurer b. policyowner c. risk d. insured
insured
The type of estate transfer made while the estate owner is still alive is called a(n) Select one: a. Testamentary transfer b. Inter vivos transfer c. Inter venous transfer d. Trustee transfer
inter vivos transfer
Bill dies without leaving a will. The distribution of her estate will be handled by a(n) Select one: a. Testamentary distribution b. Vivos testate distribution c. Intestate distribution d. Inter vivos distribution
intestate distribution
When a revocable beneficiary is used: Select one: a. it can be changed at any time by the policyowner b. it can never be revoked c. it cannot be changed without the consent of the current beneficiary d. it can be changed after a period of two years
it can be changes at any time by the policyowner
All of the following are considered sources of underwriting information of the applicant EXCEPT? Select one: a. Medical Information Bureau (MIB) b. producer c. mortality tables d. application
mortality tables
Which of the following is correct about the group life conversion privilege? Select one: a. the individual policy written would normally be less expensive b. must be made available for 31 days c. a dependent 23 years of age and a full-time student is not eligible to be covered under the group plan d. if the eligible dependent dies within 31 days of the conversion, the death benefit is denied
must be made available for 31 days
Contributions to a Roth IRA are Select one: a. not deductible b. made with before tax dollars c. not limited d. deductible
not deductible
Billy is receiving the proceeds of a life insurance policy as an income stream over a period of several years. What part of the money will be subject to tax? Select one: a. only the part that represents the original death benefit and not the income earned on the original death benefit b. All of it; it is being paid out in an income stream c. only the part that represents income earned on the original death benefit d. None of it; it is life insurance proceeds
only the part that represents income earned on the original death benefit
Lee applies for a policy, pays the initial premium and receives a conditional receipt on March 14. On March 15, he passes the medical exam with flying colors. On March 16, an undiagnosed brain aneurysm bursts, killing Lee instantly. On March 17, the insurer receives the results of the medical exam, which includes no information about the aneurysm. On March 19, the insurer receives the notice of claim. The insurer will Select one: a. pay the claim minus a processing fee b. pay the claim c. pay the claim plus the amount of the first premium d. return the premium
pay the claim
A family income policy differs from a Whole life policy in that the family income policy: Select one: a. pays a monthly income for a specified number of years b. pays a lump sum settlement upon the death of the insured c. pays a monthly income for a specific number of years in addition to a lump sum settlement d. is less expensive
pays a monthly income for a specific number of years in addition to a lump sum settlement
Which of the following statements regarding Universal Life is true? Select one: a. policy requires level premiums for the life of the policy b. policy consists of annually renewable term insurance and a cash value account c. always provides a level death benefit d. cash value, mortality costs, and insurer expenses are bundled
policy consists of annually renewable term insurance and a cash value account
A "rider" on a life insurance policy is a: Select one: a. dividend option which is in effect for a specified period of time b. settlement option which pays interest while the principal "rides" c. policy provision which is attached to a policy d. policy provision printed in the insuring clause of a policy
policy provision which is attached to a policy
Regarding term life insurance, which of the following is correct? Select one: a. the premium will decrease as cash builds in the policy b. the policy cannot be converted until the end of the policy c. premium will remain level over the term of the contract d. the premium will remain constant when the term is renewed
premium will remain level over the term of the contract
Regarding the "reinstatement provision," all of the following are true EXCEPT? Select one: a. must provide evidence of insurability b. reinstatement must take place within a 3-year period from the lapse date c. premiums will be based on the insured's attained age d. payment of back premiums plus interest is required
premiums will be based on the insured's attained age
To be certain the insurer has the money available to pay claims as they arise, it is required to maintain Select one: a. Reinsurance b. A risk-based capital ratio c. Reserves d. Expense ratios
reserves
Jim has selected to receive only the interest from his mother's life insurance policy. When Jim dies, his children will receive the lump-sum benefit in addition to the benefit from his life insurance policy. Jim has selected Select one: a. the interest-only option b. the fixed-period option c. the life income option d. the fixed-amount option
the intereset-only option
An insurance producer analyzed Ken's life insurance needs, taking into account the amount of money Ken anticipated needing for his funeral and the amount of income that would be required to maintain his family's standard of living in the event of his death, including projected college costs and the costs of supporting his spouse. This producer was using Select one: a. The analytical approach to needs analysis b. The human life value approach to needs analysis c. The needs approach to needs analysis d. The planning approach to needs analysis
the needs approach to needs analysis
Which of the following statements about a reduced paid-up insurance option is NOT true? Select one: a. No further premiums need to be paid on the reduced policy-it is paid up. b. The new policy will build cash values for the policyowner. c. The new protection is for the same amount as the original policy. d. A full share of expense loading is usually not included in the premium on the reduced coverage because the costs of setting up the coverage are greatly reduced.
the new pretection is for the same amount as the original policy
Which is a true statement regarding a Survivorship life policy insuring Ken, a male age 45, and Mary, a female age 40? Select one: a. the premium will be based on Ken b. the premium will be based on Mary c. the premium will be based on the average of the ages d. who knows how an actuary thinks
the premium will be based on Mary
Social Security benefits are expressed as a percentage of Select one: a. the preferred insurance amount b. the primary insurance amount c. the presiding insurance amount d. the potential insurance amount
the primary insurance amount
Certain elements are necessary for a particular risk to be insurable. Which of the following would make a risk uninsurable? Select one: a. the risk can be predicted because of the large number of people exposed b. the risk exposure is of an accidental nature c. the risk of loss can be measured in dollars d. the risk is of a catastrophic (war/nuclear) nature
the risk is of catastrophic (war/nuclear) nature
All of the following are true regarding the sponsor of group insurance EXCEPT? Select one: a. the sponsor is the owner of the policy b. the sponsor receives a copy of the master policy c. the sponsor must pay a portion of the premium d. the sponsor is called the member
the sponsor is called the member
All of the following are true regarding the "life income" option EXCEPT? Select one: a. the total benefits cannot exceed the principal plus interest b. when the annuitant dies, the benefit payments stop c. the annuitant cannot outlive the benefits d. the older the annuitant when the benefit payment begins, the larger the monthly payments
the total benefits cannot exceed the principal plus interest
Regarding renewable and convertible term provisions in life insurance policies, which of the following is correct? Select one: a. these provisions are automatic in all term policies b. these provisions generate cash value c. these provisions allow the insured to renew or convert without proving insurability d. these provisions are what make term insurance less expensive than whole life
these provisions allow the insured to renew or convert without proving insurability
All of the following are personal uses of life insurance EXCEPT? Select one: a. College education for surviving children b. To protect a corporation from the financial loss sustained when a key employee dies c. Peace of mind and financial security for a family d. Cash for funeral costs and related expenses
to protect a corporation from the financial loss sustained when a key employee dies
The "grace period" policy provision provides all of the following EXCEPT? Select one: a. is for a period of one month for whole life policies b. continues the policy coverage if the premiums are late c. protects against an unintentional lapse of coverage d. waives the past due premium if the insured dies during the grace period
waives the past due premium if the insured dies during the grace period
Group life insurance: Select one: a. cannot be converted to an individual policy b. has cash value c. written on a one year level term policy basis d. automatically renews every month
written on a one year level term policy basis
