Insurance practice exam

What is the period of coverage for events such as death or divorce under COBRA?

36 months (3 years)

As it pertains to group health insurance, COBRA stipulates that

Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense

To sign up for a Medicare prescription drug plan, individuals must first be enrolled in

Medicare Part A

If an insured changes the premium payment mode from monthly to annually, what happens to the total premium?

decreases

An agent license can be issued...

only individuals

An insured died by suicide one year after the life insurance policy was issued. The insurer will

refund the premiums paid

All of the following long-term care coverages would allow an insured to receive care at home EXCEPT

skilled care

The interest earned on policy dividends is

taxable

A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

the insured's premiums will be waived until she is 21.

An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?

$9,800

What is not a benefit of a POS plan?

- It allows guaranteed acceptance of all applicants. * (a different choice can be made every time a need arises for medical services.)

Existing insurers must provide policyowners with a policy summary for the existing life insurance within how many days of receiving the written communication and replacement?

10 days

What is the maximum first year commission that a producer may receive for the sale of a Medicare supplement policy in the state of Georgia?

200% of the commission paid for the policy in the second year

An insurance agent has received a request for a hearing from the commissioner. Within how many days must the hearing be held?

30 days

In the event a policy lapse due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?

45 days

Authorized insurance companies are examined by the commissioner at least once every

5 years

The inflation protection feature in long-term care policies issued in this state must provide protection for inflation for what percentage annually?

5%

What is the waiting period on a Waiver of Premium rider in life insurance policies?

6 months

A paid-up nonforfeiture benefit will become effective as specified in the policy, unless the person entitled elects another available option within how many days after the due date of the premium in default?

60 days

A hospital indemnity policy will pay

A benefit for each day the insured is in the hospital Hospital confinement indemnity policies pay specific amounts that depend on the amount of time the insured is confined to the hospital

Which of the following statements is not true concerning insurance interests as it applies to life insurance?

A debtor has an insurable interest in the life of the lender

Which of the following is a feature of a disability buyout plan?

A lump-sum benefit payment option

The free look provision allows for which of the following?

A right to return the policy for a full premium refund

At age 30, an applicant wants to start an insured ace program, but realizing that his insurance refs will likely change, he wants a policy that can be modified to accommodate those changes as the occur. Which of the following policies would most likely fit his needs?

Adjustable life

In which Medicare supplemental policies are the core benefits found?

All plans

In reference to the standard Medicare supplement benefits plans, what does the term mean?

All providers will have the same coverage options and conditions for each plan

Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?

Any form of life insurance

All of the following apply to short term disability plans except

Both group and individual plans are renewable

Which of the following statements concerning buy-sell agreements is true?

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

After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true?

By law, the new, individual policy must provide the same benefits as the group insurance policy.

Which of the follow is true regarding to inpatient hospital care for hmo members?

Care can be provided outside of the service area

To legally transact insurance in this state, an insurer must obtain which of the following?

Certificate Authority

What term is used for replacing policies for the sole purpose of making commissions?

Churning

a man injured while robbing a convenience store. How does his major medical policy handle the payment of his claim?

Claim is denied if his policy contains illegal occupation provisions

What is the main difference between Co. insurance and copayments?

Copayment is a set dollar amount

All of the following statements concerning Accidental Death and Dismemberment coverage are correct except?

Death benefits are paid only if death occurs within 24 hours of an accident

All of the following could be considered rebates if offered to an insured in the sale of insurance except

Dividends from a mutual insurer.

The provision in health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the

Entire contract clause

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?

Equal to the original policy for as long as the cash values will purchase.

The requirement that agents not commingle insurance monies with their own fund in known as

Fiduciary responsibility

Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid

For 20 years or until death, whichever occurs first.

In direct transfer, how is money transferred from one retirement plan to a traditional IRA?

From trustee to trustee

The annual contribution limit of a Dependent Care Flexible Spending Account is set by

IRS

Underwriting a group health insurance plan that is paid for by the employer requires all of the following EXCEPT

Individual members of the group may select the level of benefits for their own coverage.

In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?

Insurer to the insured

The selection of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the

Insuring clause

Why is an equity indexed annuity considered to be a fixed annuity?

It has a guaranteed minimum interest rate.

Which of the following is not true regarding to certificate of authority?

It is issued to group insurance participants.

Which of the following best describes annually renewable term insurance?

It is level term insurance

Which of the following is incorrect concerning Medicaid?

It is solely a federally administered program

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?

It is the reduced to the mount of what the cash value would buy as a single premium.

Which statement is not true regarding to a straight life policy?

Its premium steadily decreases over time, in response to its growing cash value.

In the Disability income policy, all of the following are considered presumptive disabilities except

Loss of one eye

Which of the following is considered a presumptive disability under a disability income policy

Loss of two limbs

Insurance is a contract by which one seeks to protect another from

Loss. Insurance will protect a person, business or entity from loss.

Which of the following programs expands individual public assistance program for people with insufficient income and resources?

Medicaid

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. What is the company guilty of?

Misrepresentation

An insured is involved in a car accident. In addition to less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improved a month later. To what extend will the insured receive presumptive disability benefits?

No benefits

Which term describes the benefits of a life insurance policy that the policy owner does not automatically relinquish even if the policy lapses?

Nonforfeiture values

The coverage provided by a disability income policy that does not pay benefits for losses occurring as the results of the insured's employment is called

Nonoccupational coverage

What is the official name for social security program?

Old-Age, Survivors, and Disability Insurance

How many pairs of glasses in a 12-month period will a vision expense plan cover?

One

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

Which of the provisions is mandatory for health insurance policies?

Physical examinations and autopsy

A guaranteed renewable health insurance policy allows the

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

Who might receive dividends from a mutual insurer?

Policyholders

Who might recieve dividends from a mutual insurer?

Policyholders

Underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons except

Premiums always stay the same

A Medicare SELECT policy does all of the following EXCEPT

Prohibit payment for regularly covered services if provided by non-network providers

A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

Proof of insurability is not required.

An insured wants to name her husband as the beneficiary to her health policy. she also wished to retain all of the rights of ownership. The insured should have her husband named SS what type of beneficiary?

Revocable

Which of the following groups would most likely be covered under a blanket accident policy?

Students at a public school

Which of the following is not covered under plan A in Medigap Insurance ?

The Medicare Part A deductible

Which of the following would qualify as a competent part in an insurance contract?

The applicant has a prior felony conviction

The commissioner of insurance is

The chief officer of the Department of Insurance

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 issued, what would be the policy's effective date?

The date of medical exam

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 issued, what would be the policy's effective date?

The date of medical exam

Who determines the eligibility and contribution limits with an a HRA?

The employer determines both

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

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

Which of the following is not a feature of guaranteed renewable provision?

The insurer can increase the policy premium on an individual basis

The insuring clause of a disability policy usually states all of the following except

The method of premium payment

Which of the following will vary length of the grace period in health insurance policies?

The mode of the premium payment (The grace period is 7 days on a policy with a weekly premium mode; 10 days if a monthly premium mode; 31 days on other premium modes.)

Which of the following definitions would make it easier to qualify for total disability benefits?

The more liberal "own occupation"

An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?

The old policy should stay in force until the new policy is issued.

All of the following are true key person insurance except?

The plan is funded by permanent insurance only.

The policyowner of a universal life policy may skip paying the premium and the policy will not lapse as long as

The policy contains sufficient cash value to cover the cost of insurance.

All of the following statements concerning the use of life insurance as an executive bonus are correct except

The policy is owned by the company

If an insured issued a policy based on the application that had unanswered questions, which if the following will be true?

The policy will be interpreters as if the insurer waived its right to have an answer on the application

Which of the following is true regarding Medicare supplement policies?

These policies may not contain limitations of coverage except for those permitted by the pre-existing condition clause.

Which provision states that the Insurance company must pay medical expenses claims immediately?

Time of Payment of Claims

What is the purpose of the buyer's guide?

To allow the consumer to compare the costs of different policies

Which of the following terms will be permissible in describing a life insurance policy in company advertisements?

Variable plan

All of the following benefits are available under social security except

Welfare benefits Social Security is an entitlement program, not a welfare program.

When is the earliest a policy may go into effect?

When the application is signed and a check is given to the agent

When would a 20-pay whole life policy endow?

When the insured reaches age 100

Which of the following determines whether disability insurance benefits are taxed?

Whether the premiums were tax deductibles

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than

With the policy

Which of the following components must a life insurance policy have to allow policy loans?

cash value