LAH EXAM QUESTIONS

The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?

2 Years

Adopting parents must inform their insurer that a child has been added to the family within

31 days.

Which of the following is not true of Disability Buy-Sell coverage?

Benefits are considered taxable income to the business.

All of the following would be considered rebating EXCEPT

An agent misrepresents policy benefits to convince a policyowner to replace policies.

All of the following are true regarding Key Employee Disability Income insurance EXCEPT

Benefits are taxable to the employer.

All other factors being equal, the least expensive first-year premium payment is found in

Annually Renewable Term.

Who must sign the notice regarding replacement?

Both the applicant and agent

Which of the following options best depicts how the eligibility of members for group health insurance is determined?

By conditions of employment

A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as

Critical illness.

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

If the father is disabled for more than 6 months

All of the following statements about Medicare Part B are correct EXCEPT

It is a compulsory program.

Which of the following is INCORRECT concerning Medicaid?

It is solely a federally administered program.

Under which plan does preventative dental treatment not apply toward the deductible?

Nonscheduled

If an agent wishes to sell variable life policies, what license must the agent obtain?

Securities

Equity indexed annuities

Seek higher returns.

Which of the following best describes a "viatical settlement purchaser?"

Someone who gives money as consideration for a life insurance policy

Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles?

Standard risk is representative of the majority of people.

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.

What happens if a deferred annuity is surrendered before the annuitization period?

The owner will receive the surrender value of the annuity.

Which of the following is true regarding METs?

They allow several small employers purchase less expensive insurance together.

When an individual purchases insurance, what risk management technique is he or she practicing?

Transfer

Which of the following statements is TRUE concerning irrevocable beneficiaries?

They can be changed only with the written consent of that beneficiary.

During a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. This describes

Twisting.

How soon after the due date should the insurer pay the agent appointment fees?

Within 30 days

Which of the following individuals must have insurable interest in the insured?

cPolicyowne

An applicant has a history of heart disease in his family, so he would like to buy a health insurance policy that strictly covers heart disease. What type of policy is this?

Dread disease coverage

An insured has medical insurance coverage through 2 different providers, both covering the same expenses on an expense-incurred basis. Neither company knows in advance that the insured has coverage through any other insurers. The insured submits a claim to both insurers. How should the claim be handled?

Each insurer should pay a proportionate share of the claim.

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.

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

Loss of two limbs

An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any, would be paid by the secondary insurer?

$500

How long is the right to examine period for new individual annuities issued in this state?

10 days

HIPAA applies to groups of

2 or more.

How many eligible employees must be included in a contributory plan?

75%

If a licensed person is moving to Pennsylvania, he or she may become licensed as a resident if they submit a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state?

90 days

Most policies will pay the accidental death benefits as long as the death is caused by the accident and occurs within

90 days

In underwriting a substandard risk, which of the following is INCORRECT?

A discounted premium would be charged.

The two types of assignments are

Absolute and collateral: absolute assigns the entire policy, collateral assigns a part or all of the benefits

What documentation grants express authority to an agent?

Agent's contract with the principal

Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy?

An individual who was previously covered by group health insurance for 6 months is eligible.

Which of the following is NOT an enrollment period for Medicare Part A applicants?

Automatic enrollment

Which of the following is TRUE about a class designation?

Beneficiaries are not identified by name.

Which of the following would NOT be used in preventive care?

Chemotherapy

A man is 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 the Illegal Occupation provision.

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Concealment

All of the following are true about group disability Income insurance EXCEPT

Coverage applies both on and off the job.

What happens when a policy is surrendered for its cash value?

Coverage ends and the policy cannot be reinstated.

The provision in a 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.

A producer's license must be renewed

Every 2 Years

Which of the following types of LTC is NOT provided in an institutional setting?

Home health care

A man purchased a $90,000 annuity with a single premium, and began receiving payments 2 months after that. What type of annuity is it?

Immediate

Which benefits would a disability plan most likely pay?

Income lost by the insured's inability to work

Which of the following statements best describes the effect the Accelerated Benefit provision would have on the benefits paid to the beneficiary?

It will decrease the benefits paid to the beneficiary.

If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a

Joint life annuity.

Which of the following premium modes would result in the highest annual cost for an insurance policy?

Monthly

Who is involved in completing the agent's report?

Only the agent

An applicant wants to buy a policy that has a cash value element. Which type should she buy?

Permanent

Which of the following must be present in all Medicare supplement plans?

Plan A

Which component increases in the increasing term insurance?

Premium

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

The insurer can increase the policy premium on an individual basis.

What is the purpose of the Insurance Guaranty Association?

To protect policyowners against insurer insolvency

Which of the following products requires a securities license?

Variable annuity

As deductible amounts increase, premium amounts change in what way?

. Decrease

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Accumulation at Interes

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?

Foreign

A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?

Joint life

Which of the following insurance options would be considered a risk-sharing arrangement?

Reciprocal

Which of the following is NOT a characteristic of an insurable risk?

The loss must be catastrophic.

What is the civil penalty for the first violation of the Pennsylvania Insurance Fraud Prevention Act?

$5,000

Once it has been reasonably proven that a person has knowingly violated the Insurance Code regarding unfair methods of competition, the Department may impose a civil penalty of

$5,000 for each violation.

An insured covered by a dread disease policy is confined to a hospital for 2 years as the result of a covered loss. In this situation, what is the minimum amount that the policy must pay?

$50,000

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

$50,000

According to OBRA, what is the minimum number of employees required to constitute a large group?

100

In order to collect Social Security disability benefits, the claimant must be able to demonstrate that the disability will last at least

12 months.

What is the minimum age for obtaining an insurance producer's license in this state?

18

Once a viatical settlement contract has been completed, how long does the viatical settlement provider have to notify the insurance company that the life policy has been viaticated?

20 days

A long-term care policy may NOT lapse because of unpaid premiums, unless the insurer gives at least

30 days' notice.

For the purpose of examination by the department, insurers must keep a record of all financial files for at least

5 years.

.Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within

90 days of a loss.

An individual was just caught acting as an exclusive general agent - even though he is not properly licensed. Assuming that this occurred in a single day, what is the maximum penalty he faces?

A third degree misdemeanor and a $1,000 fine

An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued?

Adjust the claim benefit to reflect the insured's true age

When an insured purchased her disability income policy, she misstated her age to the agent. She told the agent that she was 30 years old, when in fact, she was 37. If the policy contains the optional misstatement of age provision

Amounts payable under the policy will reflect the insured's correct age.

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

In a replacement situation, all of the following must be considered EXCEPT

Assets.

Insurers are required to keep records. When may the Department examine these records?

At any time

Which of the following is INCORRECT regarding a $100,000 20-year level term policy?

At the end of 20 years, the policy's cash value will equal $100,000.

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

Attending Physician's Statement

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an

Authorized insurer.

Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?

Automatic premium loan

Which of the following children related to the insured are NOT eligible for a health insurance plan?

Children of an insured's sibling

A producer who fails to segregate premium monies from his own personal funds is guilty of

Commingling

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?

Common Disaster

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of

Defamation.

The death benefit in a variable universal life policy

Depends on the performance of a separate account.

Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?

Depreciation period

Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?

Disability Buy-Sell

Which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverages based on the insured's habits and lifestyle

OBRA requires which disease to be covered by an employer for 30 months before Medicare becomes the primary mode of coverage?

End-stage renal failure

Which types of insurance companies marketing long-term care insurance coverage must establish procedures to assure that any comparison of policies by its agents will be fair and accurate?

Every company is required to establish marketing procedures.

When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called a(n)

Executive bonus.

Health coverage becomes effective when the

First premium has been paid and the application has been approved.

In insurance transactions, fiduciary responsibility means

Handling insurer funds in a trust capacity.

All of the following are licensing requirements for a business entity, EXCEPT

Having all employees complete continuing education courses once every 2 years.

Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation?

Human life value approach

After a hearing, if the Commissioner finds that a licensee is in violation of the state insurance laws, the Commissioner can do any of the following EXCEPT

Imprison the licensee.

In which of the following locations would skilled care most likely be provided?

In an institutional setting

All of the following are Nonforfeiture options EXCEPT

Interest only

The mode of premium payment

Is defined as the frequency and the amount of the premium payment.

Which of the following does a producer NOT have the authority to do?

Issue policies

What is the benefit of choosing extended term as a nonforfeiture option?

It has the highest amount of insurance protection.

Which of the following is true regarding a single life settlement option?

It provides income the beneficiary cannot outlive.

Which statement is NOT true regarding a Straight Life policy?

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

Concerning Juvenile Life insurance, which of the following statements is INCORRECT?

Juvenile Life is classified as any life insurance purchased by a minor.

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

Which of the following would be the best option that would help the surviving spouse of the insured to put her child through daycare after the insured's death?

Life insurance proceeds

Which Universal Life option has a gradually increasing cash value and a level death benefit?

Option A

Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?

Optionally renewable

Medicare Part A services do NOT include which of the following?

Outpatient Hospital Treatment

With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance?

Payment of premium

Rose bought three policies from the same insurer. Her benefits have exceeded the maximum allowed by the insurer. Which of the following will happen?

Pro rata benefit reduction

Under which provision can a physician submit claim information prior to providing treatment?

Prospective Review

An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this?

Reinstatement provision

All of the following are requirements for producer license renewal EXCEPT

Renewal examination

Guarantee of insurability option in long-term care policies allows the insured to

Replace the existing LTC policy based on the original underwriting

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?

Replacement rule

Which of the following is an example of a producer being involved in an unfair trade practice of rebating?

Telling a client that his first premium will be waived if he purchases the insurance policy today

Which of the following entities must approve all continuing education courses in this state?

The Commissioner

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act

Which of the following entities established the Do-Not-Call Registry?

The Federal Trade Commission

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

The application given to a prospective insured

The Affordable Care Act requires all U.S. citizens and legal residents to have qualifying health care coverage. This is known as

The individual mandate.

When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled?

The insurer is considered to be notified since the notification to agent equals notification to the insurer.

Why do group health providers usually require a certain amount of participation in the plan by eligible employees?

To guard against adverse selection and reduce cost

What is the purpose of coinsurance provisions?

To help the insurance company to prevent overutilization of the policy

When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees

To renew the policy until the insured has reached age 65.

A Straight Life policy has what type of premium?

A level annual premium for the life of the insured

3.When an annuity is written, whose life expectancy is taken into account?

Annuitant

Which nonforfeiture option has the highest amount of insurance protection?

Extended Term

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

Most LTC plans have which of the following features?

Guaranteed renewability

Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance?

Only written statements can be considered fraud.

Which of the following defines the owner a life insurance policy who seeks to sell the policy due to a terminal or chronic illness?

Viatical settlement provider

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

If an employer provides long-term group disability insurance for its employees, what percentage of monthly wages are lower-paid employees eligible to collect?

66 and 2/3%

When the insured purchased his health policy he was a window washer. He has since changed occupations and now manages a library. If the insurer is notified of the insured's change of occupation, the insurer should

Adjust the benefit in accordance with the decreased risk.

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

A tax-sheltered annuity is a special tax-favored retirement plan available to

Certain groups of employees only.

All of the following are duties and responsibilities of producers at the time of application EXCEPT

Change any incorrect statement on the application by personally initialing next to the corrected statement.

Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as

Coercion

An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?

Incontestability

An underwriter may obtain information on an applicant's hobbies, financial status, and habits by ordering a(n)

Inspection report.

Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be?

Installments for a fixed period

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

A 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?

Joint and Survivor

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?

Limited pay whole life

If a dental plan is integrated, it is combined with what type of plan?

Medical

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

Payor Benefit

Which of the following riders would NOT cause the Death Benefit to increase?

Payor Benefit Rider

Which of the following is the most common time for errors and omissions to occur on the part of an insurer?

Policy delivery

All of the following are true regarding insurance policy loans EXCEPT

Policy loans can be made on policies that do not accumulate cash value.

If the policyowner, the insured, and the beneficiary under a life insurance policy are three different people, who has the ownership rights?

Policyowner

Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a

Premium receipt.

All of the following are characteristics of group life insurance EXCEPT

Premiums are determined by the age, sex and occupation of each individual certificate holder.

All of the following are true of the Key Person disability income policy EXCEPT

Premiums are not deductible to the business.

Under a disability income policy, the insurer does not pay a monthly benefit that is equal to the insured's previous income. The reason for paying a benefit amount that is less than the insured's income is to

Prevent overutilization and malingering.

What form of the annuity settlement options provides payments to an annuitant for the rest of the annuitant's life and ceases at the annuitant's death?

Pure Life

All of the following are examples of risk retention EXCEPT

Self-insurance.

A domestic insurer issuing variable contracts must establish one or more

Separate Accounts

Your client is planning to retire. She has accumulated $100,000 in a retirement annuity, and now wants to select the benefit option that will pay the largest monthly amount for as long as she lives. As her agent, you should recommend

Straight life.

A person steps off a street car and trips and breaks his ankle. This type of injury can be described as

Sudden and unforeseen.

All of the following statements are true regarding installments for a fixed amount EXCEPT

The annuitant may select how big the payments will be.

Which of the following is true about the requirements regarding HIV exams?

The applicant must give prior informed written consent.

A man works for Company A and his wife works for Company B. The spouses are covered by health plans through their respective companies that also cover the other spouse. If the husband files a claim,

The insurance through his company is primary

Which of the following is TRUE for both equity indexed annuities and fixed annuities?

They have a guaranteed minimum interest rate.

Which of the following is NOT true regarding partial disability?

This is a form of insurance that covers part-time workers

If an insurer terminates a producer's appointment, the Commissioner must be notified within how many days?

30 days

Insurers must notify the Commissioner's office as to whether or not a life insurance policy will be marketed with illustrations. Certification of that notification must be provided annually within how many days of the anniversary of the original certification?

30 days

When a producer holding a certificate or a broker's license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within

30 days.

In which of the following situations is it illegal for an insurer to disclose privileged information about an insured?

A researcher for marketing purposes

Regarding a PPO, which of the following is correct when selecting a primary care physician?

All of the above are correct The insured may choose medical providers not found on the preferred list and still retain coverage The insured is allowed to receive care from any provider, but if the insured selects a PPO provider, the insured will realize lower out-of-pocket costs. If a non-network provider is used, the insured's out-of-pocket costs will be higherd

Which of the following applicants could the insurer charge a higher rate of premium and not violate regulations regarding unfair discrimination?

An applicant who is a smoker

The minimum interest rate on an equity indexed annuity is often based on

An index like Standard & Poor's 500.

An individual was involved in a head-on collision while driving home one day. His injuries were not serious, and he recovered. However, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again. Which method of risk management does this describe?

Avoidance

Which of the following would NOT be considered an exception to the National Do Not Call List?

Calls for which the consumer has given prior written permission

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?

Capital sum

A small business owner is the insured under a disability policy that funds a buy-sell agreement. If the owner dies or becomes disabled, the policy would provide which of the following?

Cash to the owner's business partner to accomplish a buyout

When the Commissioner suspects that a person is violating an insurance law or other regulation, what can be issued that would order the person to stop committing the act of violation?

Cease and Desist Order

Which of the following is an example of an unfair claims settlement practice?

Failure to promptly settle a claim when liability has been clearly established

Producers are responsible to collect and disperse premiums, and return premiums or other funds. Which insurance term is associated with this?

Fiduciary capacity

The requirement that an agent not co-mingle insurance monies with their own funds is known as

Fiduciary responsibility.

Which provision allows the policyholder a period of time, while coverage is in force, to examine a health insurance policy and determine whether or not to keep it?

Free Look Period

Which is TRUE about the cash surrender nonforfeiture option?

Funds exceeding the premium paid are taxable as ordinary income.

Regarding long-term care coverage, as the elimination period gets shorter, the premium

Gets higher.

A life insurance policy has a legal purpose if both of which of the following elements exist?

Insurable Interest and Consent

Which of the following statements concerning Medicare Part B is correct?

It pays for physician services, diagnostic tests, and physical therapy.

An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?

Material misrepresentation

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. The company is guilty of

Misrepresentation.

If a life insurance policy develops cash value faster than a seven-pay whole life contract, it becomes a/an

Modified endowment contract.

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report

Must be informed of the source of the report.

Which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss?

Notice of Claim

ABC Insurance Company wishes to begin transacting business in Pennsylvania. Before it can do so, it must do which of the following?

Obtain a certificate of authority

An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called

Paid-up additions

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

Paid-up additions option.

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.

Which of the following is TRUE regarding variable annuities?

The annuitant assumes the risks on investment.

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

The customer's associates, friends, and neighbors provide the report's data.

A 40-year old man buys a whole life policy and names his wife as his only beneficiary. His wife dies 10 years later. He never remarries and dies at age 61, leaving 2 grown-up children. Assuming he never changed the beneficiary, the policy proceeds will go to

The insured's estate.

A licensee serving in the military is unable to fulfill her continuing education requirement. What would the licensee have to do to renew the license?

The licensee may submit a request to the department to have requirements and fees waived. The department will then determine if the request is permissible.

All of the following are true of an annuity owner EXCEPT

The owner must be the party to receive benefits.

If an insured continually uses the automatic premium loan option to pay the policy premium,

The policy will terminate when the cash value is reduced to nothing.

All of the following are true about variable products EXCEPT

The premiums are invested in the insurer's general account.

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums.

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

Universal Life - Option A (Level Death Benefit)

An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this?

Unpaid premium

All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT

Upon conversion, the death benefit of the permanent policy will be reduced by 50%

A health insurance policy may cover all of the following risks EXCEPT

War-related injuries.

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

Concerning insurance, the definition of a fiduciary responsibility is

Handling insurer funds in a trust capacity.

Under an extended term nonforfeiture option, the policy cash value is converted to

The face amount equal to the cash value.

Which of the following policies would be classified as a traditional level premium contract?

Straight Life

Should an insurance company deny a claim submitted by an insured without providing to that insured a prompt and reasonable explanation of the claim denial, the insurer would be in violation of

Unfair claims methods and practices regulations.

Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death?

A minor son of the insured

When a policyowner designates a group of individuals as the beneficiary of a life insurance death benefit without specifically naming the individuals, this is called

Class designation.

What option allows the insured to periodically increase benefit levels without providing evidence of insurability?

Guarantee of insurability

A Universal Life insurance policy has two types of interest rates that are called

Guaranteed and Current.

Which of the following is true about the premium on the children's rider in a life insurance policy?

It decreases when the oldest child reaches the age of 21.

Which of the following is NOT true regarding Equity Indexed Annuities?

They earn lower interest rates than fixed annuities.

Which nonforfeiture option provides coverage for the longest period of time?

Extended term

Which of the following is NOT a characteristic of a group long-term disability plan?

The benefit can be up to 66 and 2/3% of one's monthly income.

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

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

A group blanket health policy is best suited for which of the following?

A summer camp

Which of the following is an example of a producer's fiduciary responsibilities?

A producer promptly forwarding premiums to the insurance company

What is a material misrepresentation?

A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company

When the policy premium wasn't submitted with the application, what should the agent obtain from the insured upon policy delivery?

A statement of good health

An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of a report is that?

Agent's Report

Which of the following statements is correct concerning taxation of long-term care insurance?

Excessive benefits may be taxable.

At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called

Guaranteed insurability.

An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?

If the primary beneficiary predeceases the insured

If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur?

The change must be reported to the Commissioner.

Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to

10 years.

When a producer died, his surviving spouse needed to maintain the insurance agency until it could be sold. Without testing, she could qualify for a temporary license for a maximum period of

180 days.

Unless otherwise required, policyholders must be notified of an increase in premium rates that triggers the contingent benefit on lapse. How long does the insurer have to provide this notice?

30 days

Within how many days must a producer respond to an inquiry from the Commissioner?

30 days

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

36 months

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

The Federal Fair Credit Reporting Act

Regulates consumer reports.

Which of the following describes attachments made to policies that either add or modify coverage?

Riders

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

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

Who is the beneficiary in a credit health policy?

The lending institution

Which of the following determines the cash value of a variable life policy?

The performance of the policy portfolio

Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?

Universal life

In individual health insurance coverage, the insurer must cover a newborn from the moment of birth, and if additional premium payment is required, allow how many days for payment?

Within 31 days of birth

The Omnibus Budget Reconciliation Act of 1990 requires that large group health plans must provide primary coverage for disabled individuals under

Age 65 who are not retired.

An insured's disability income policy includes an additional monthly benefit rider. For how many years can the insured expect to receive payment from the insurer before Social Security benefits begin?

1

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

Alien insurer.

A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of

Coercion.

When applying for an individual life insurance policy, an applicant states that he went to the doctor for nausea, but fails to mention that he was also having severe chest pains. This is an example of

Concealment.

Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?

Consumer report

The insurance code identifies all of these as prohibited acts that can cause suspension, revocation or denial of an insurance producer license for a licensee or applicant, with the exception of

Failing to pay child support obligations.

Under which of the following circumstances can financial institutions share insurance coverage information with third parties, for the purpose of soliciting the purchase of insurance?

If a consumer does not sign and return the notice of disclosure within 30 days

Which of the following is another term for the accumulation period of an annuity?

Pay-in period

The premium of a survivorship life policy compared with that of a joint life policy would be

Lower.

After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?

Monthly premium waiver and monthly income

A producer has become disabled. In order to keep his business going, what may his designee do?

Obtain a temporary license

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

Pay a reduced death benefit

Which of the following is an example of a peril covered in an accident and health insurance policy?

Sickness

Which of the following is called a "second-to-die" policy?

Survivorship life

An insurer wishes to compare the information given in an insurance application with previous insurance applications by the same applicant but for different companies. What organization can help the insurer accomplish this?

The Medical Information Bureau

All of the following statements about equity index annuities are correct EXCEPT

The annuitant receives a fixed amount of return.

Which of the following is true regarding health insurance underwriting for a person with HIV?

The person may not be declined for medical coverage solely based on HIV status.

All of the following are general requirements of a qualified plan EXCEPT

The plan must provide an offset for social security benefits.

What must happen when an individual policy or annuity has been personally delivered to the policyowner?

The policy owner must sign a delivery receipt

If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?

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