Insurance State exam Pt 1

Each insurer must maintain a complete file containing a copy of each document used in solicitation and sale of life insurance products for how long following the date of its last authorized use?

3 years

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a

30-day Elimination period.

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

36 months

A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?

Immediate annuity

All of the following are differences between individual and group health insurance EXCEPT

Individual insurance does not require medical examinations, while group insurance does require medical examinations.

Which of the following entities can legally bind coverage?

Insurer

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

Insurers are barred from requesting HIV testing.

An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/ an

Interest-sensitive Whole Life.

Which of the following may NOT be included in an insurance company's advertisement?

That its policies are covered by a state Guaranty Association

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?

The amount of the distribution is reduced by the amount of a 20% withholding tax.

The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?

The annuitant must be a natural person

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

The applicant has a prior felony conviction.

When a producer's appointment with the insurer is terminated, who must notity the Commissioner?

The appointing insurer

Who chooses a primary care physician in an HMO?

The individual member

The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT

The insured's age at death.

Which of the following is NOT a feature of a noncancellable policy?

The insurer may terminate the contract only at renewal for certain conditions.

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?

$10,000

What is a penalty tax for nonqualified distributions from a health savings account?

20%

In a group health policy, a probationary period is intended for people who .

Join the group after the effective date

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as

Legal actions.

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

Medicare Part A.

Doug decided to retire at age 62. When he applied for Social Security Retirement Benefits, he discovered

Medicare coverage was not available until the month of his 65th birthday.

An insured purchased an insurance policy 5 years ago. Last year, the insured received a dividend check from the insurance company that was not taxable. This year, the insurer did not send a check. From what type of insurer did the insured purchase the policy?

Mutual

A Medicare supplement policy can exclude coverage based on

None of the above

Which of the following documents must be provided to the policyowner or applicant during policy replacement?

Notice Regarding Replacement

Which of the following applies to partial disability benefits?

Payment is limited to a certain period of time.

In which of the following instances would the premium be tax deductible?

Premiums paid by an employer on a $30,000 group term life insurance plan for employees

In respect to the consideration clause, which of the following is consideration on the part of the insurer?

Promising to pay in accordance with the contract terms

Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as

Rebating

To sell variable life insurance policies, an agent must receive all of the following EXCEPT

SEC registration.

Which two terms are associated directly with the way an annuity is funded?

Single payment or periodic payments

Which of the following is NOT the consideration in a policy?

The application given to a prospective insured

What does credit life and health insurance cover?

The life and disability of a debtor during the time a loan is outstanding

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

The mode of the premium payment

Which of the following best defines target premium in a universal life policy?

The recommended amount to keep the policy in force throughout its lifetime

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation?

They are tax deductible.

All of the following are requirements for life insurance illustrations EXCEPT

They must be part of the contract.

Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner?

Third-party ownership

Which provision states that the insurance company must pay Medical Expense claims immediately?

Time of Payment of Claims

What is the purpose of coinsurance provisions?

To help the insurance company to prevent overutilization of the policy

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral

Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?

Universal life

Which of the following products requires a securities license?

Variable annuity

Which of the following is NOT an example of a business use of Life Insurance

Workers Compensation

What is NOT a benefit of a POS plan?

allows guaranteed acceptance of all applicants.

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are Not taxable since the IRS treats them as a

return of a portion of the premium paid

Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain

statement that is sufficiently clear to identify the insured and the nature of the claim.

Under a straight life annuity, if the annuitant dies before the principal amount is paid out,

the beneficiary will receive Nothing; the payments will cease.

A life producer applying for a viatical settlement broker license may be exempt from the prelicensing education and examination requirement if the producer has held an active life license for at least how many years?

1 year

L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay?

$900 (deductible + 20% of the bill after the deductible [20% of $2,000])

Which of the following is NOT true regarding a nonqualified retirement plan It needs

IRS approval.

Group health insurance is characterized by all of the following EXCEPT

Adverse selection.

Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?

Aleatory

When transacting business in this state an insurer formed under the laws of another country is known as a/an

Alien insurer.

if an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

An unfair trade practice.

The death protection component of Universal Life Insurance is always

Annually Renewable Term

What type of life insurance is most commonly used for group plans?

Annually renewable term

What document describes an insured's medical history, including diagnoses and treatments?

Attending Physician's Statement

All of the following statements are correct regarding credit life insurance EXCEPT .

Benefits are paid to the borrower's beneficiary

A small hardware store owner is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability?

Business overhead expense policy

Which of the following must be obtained by someone who intends to function as an administrator?

Certificate of registration

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident

Common Disaster Clause

Under which of the following employer-provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer?

Disability Income

In a disability policy, the probationary period refers to the time

During which illness-related disabilities are excluded from coverage.

In disability income insurance, the time between the onset of an injury or sickness and when benefits begin is known as the

Elimination period.

Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?

Fixed amount

Which of the following would NOT be considered rebating?

Giving a client a $100 gift certificate to thank them for buying an insurance policy

Under the Fair Credit Reporting Act, if a consumer challenges the accuracy of the information contained in a consumer or investigative report,

the reporting agency must Respond to the consumer's complaint.

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

Long term care insurance policies can Limit coverage for

the treatment of alcoholism.