Life and Health GA #3

To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested? a)When the applicant's credit is checked b)When the policy is delivered c)At the initial interview d)At the time of application

d)At the time of application

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose? a)Interest only option b)Life income with period certain c)Joint and survivor d)Fixed amount option

a)Interest only option

In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost a)Is not covered. b)Must be covered by the insurer. c)Counts toward deductible. d)Counts toward coinsurance

a)Is not covered.

Which of the following answers does NOT describe the principal goal of a Preferred Provider Organization? a)Provide medical services at a reduced cost b)Provide medical services only from physicians in the network c)Provide the subscriber a choice of physicians d)Provide the subscriber a choice of hospitals

b)Provide medical services only from physicians in the network

Which of the following statements is NOT correct concerning the COBRA Act of 1985? a)It covers terminated employees and/or their dependents for up to 36 months after a qualifying event. b)It applies only to employers with 20 or more employees that maintain group health insurance plans for employees. c)COBRA stands for Consolidated Omnibus Budget Reconciliation Act. d)It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.

d)It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.

The violation of a cease and desist order may result in a fine of a)$3,000. b)$5,000. c)$7,500. d)$10,000.

d)$10,000.

The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract? a)Adhesion b)Personal c)Unilateral d)Conditional

d)Conditional

Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled? a)Proprietary Transfer b)Absolute assignment c)Transfer of Ownership d)Disability Buy-Sell

d)Disability Buy-Sell

Which policy component decreases in decreasing term insurance? a)Cash value b)Dividend c)Premium d)Face amount

d)Face amount

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company? a)Consumer Privacy Act b)Conditional receipt c)Disclosure rule d)Fair Credit Reporting Act

d)Fair Credit Reporting Act

An applicant signs an application for a $25,000 life insurance policy, pays the initial premium, and receives a conditional receipt. If the applicant dies the following day, which of the following is TRUE? a)The premium would be returned to the insured's estate because the policy was not issued. b)The death claim will be rejected. c)The application will be voided. d)The beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy.

d)The beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy.

Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance? a)Defamation b)Undercutting c)Twisting d)Slandering

a)Defamation

To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters? a)4 credits b)6 credits c)10 credits d)40 credits

b)6 credits

If an agent changes his residence address, within how many days must the agent notify the Commissioner of the change? a)10 days b)15 days c)30 days d)60 days

c)30 days

The minimum interest rate on an equity indexed annuity is often based on a)An index like Standard & Poor's 500. b)The returns from the insurance company's separate account. c)The annuitant's individual stock portfolio. d)The insurance company's general account investments.

a)An index like Standard & Poor's 500.

Which of the following describes the tax advantage of a qualified retirement plan? a)The earnings in the plan accumulate tax deferred. b)Distributions prior to age 59½ are tax deductible. c)Employer contributions are deductible as a business expense when the employee receives benefits. d)Employer contributions are not taxed when paid out to the employee

a)The earnings in the plan accumulate tax deferred.

Which of the following settlement options in life insurance is known as straight life? a)Life with period certain b)Fixed amount c)Life income d)Single life

c)Life income

Which health insurance provision describes the insured's right to cancel coverage? a)Insuring clause b)Cancellation provision c)Renewal provision d)Policy duration provision

c)Renewal provision

The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change? a)The death benefit can be increased by providing evidence of insurability. b)The death benefit cannot be increased. c)The death benefit can be increased only when the policy has developed a cash value. d)The death benefit can be increased only by exchanging the existing policy for a new one.

a)The death benefit can be increased by providing evidence of insurability.

All of the following statements concerning workers compensation are correct EXCEPT a)Benefits include medical, disability income, and rehabilitation coverage. b)A worker receives benefits only if the work related injury was not his/her fault. c)Workers compensation laws are established by each state. d)All states have workers compensation.

b)A worker receives benefits only if the work related injury was not his/her fault.

Which of the following best defines target premium in a universal life policy? a)The minimum amount to make sure the policy is annually renewable b)The corridor of insurance c)The recommended amount to keep the policy in force throughout its lifetime d)The maximum amount the policyowner may pay on a policy

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

In a Disability Income policy, all of the following are considered presumptive disabilities EXCEPT a)Loss of hearing. b)Loss of two limbs. c)Loss of speech. d)Loss of one eye.

d)Loss of one eye.

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?a)There should be at least a 10-day gap between the policies. b)Policies must overlap to cover pre-existing conditions. c)The old policy must be cancelled before the new one can be issued. d)The old policy should stay in force until the new policy is issued.

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

After an insurer has filed an application for a certificate of authority, how long does the Commissioner have to approve the application? a)15 days b)30 days c)45 days d)90 days

d)90 days

Which of the following statements is TRUE concerning whole life insurance? a)Dividend interest is not taxable. b)Premiums are tax deductible. c)Policy loans are tax deductible. d)Lump-sum death benefits are not taxable

d)Lump-sum death benefits are not taxable

When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit?a)The insurance company b)The insured's estate c)The primary beneficiary's estate d)The insured's contingent beneficiary

d)The insured's contingent beneficiary

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the a)Consideration Clause. b)Insuring Clause. c)Pre-existing Conditions Clause. d)Eligibility Clause.

a)Consideration Clause.

Which of the following statements concerning buy-sell agreements is true? a)Buy-sell agreements pay in the event of a medical emergency. b)Buy-sell agreements are normally funded with a life insurance policy. c)Premiums paid are deductible as a business expense. d)Benefits received are considered income taxable.

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

Which of the following positions is responsible solely for offering advice on insurance policies (for a fee)? a)Broker b)Counselor c)Agent d)Sub-agent

b)Counselor

The term "fixed" in a fixed annuity refers to all of the following EXCEPT a)Amount and length of payments b)Death benefit c)Guaranteed rate of interest d)Equal annuity payments

b)Death benefit

A nonresident agent is allowed to conduct insurance transactions in Georgia because his home state allows Georgia residents to transact insurance business in it. This is known as a/n a)Appointment. b)Reciprocity agreement. c)Nonresident arrangement. d)Overinsurance.

b)Reciprocity agreement.

The paid-up addition option uses the dividend a)To accumulate additional savings for retirement. b)To purchase a smaller amount of the same type of insurance as the original policy. c)To purchase a one-year term insurance in the amount of the cash value. d)To reduce the next year's premium.

b)To purchase a smaller amount of the same type of insurance as the original policy.

In reference to the standard Medicare Supplement benefits plans, what does the term standard mean? a)All plans must include basic benefits A-N. b)Coverage options and conditions are developed for average individuals. c)All providers will have the same coverage options and conditions for each plan. d)Coverage options and conditions comply with the law, but will vary from provider to provider.

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

What happens when a policy is surrendered for its cash value?a)The policy can be reinstated by paying back all policy loans and premiums. b)The policy can be converted to term coverage. c)Coverage ends and the policy cannot be reinstated. d)Coverage ends but the policy can be reinstated at any time.

c)Coverage ends and the policy cannot be reinstated.

Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?a)Paid-up additions b)Dividend Accumulation option c)Paid-up option d)Accumulation at Interest

c)Paid-up option

Which of the following would be considered an unfair claims settlement practice? a)Requesting the insured to submit a signed proof of loss statement, after the insured has already verbally advised the insurer of the claim b)Requesting the insured swear under oath concerning the facts of the claim c)Delaying the settlement of a claim for 30 days in order for the insured to conduct an investigation d)Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

d)Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

Which of the following statements is NOT true concerning Medicaid? a)It is intended to provide medical assistance for certain categories of people who are needy. b)It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income. c)It is a state program. d)It is funded by state and federal taxes.

b)It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income.

Which of the following best describes a misrepresentation?a)Discriminating among individuals of the same insuring class b)Issuing sales material with exaggerated statements about policy benefits c)Making a deceptive or untrue statement about a person engaged in the insurance business d)Making a maliciously critical statement that is intended to injure another person

b)Issuing sales material with exaggerated statements about policy benefits

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?a)The employee can convert from group to individual insurance within 31 days of termination b)The premium of the individual health insurance policy can be higher than the original policy. c)By law, the new, individual policy must provide the same benefits as the group insurance policy. d)Continuation of group coverage need not include dental, vision, or prescription drug benefits.

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

An insured has endured multiple surgeries and hospitalizations for an illness during the summer months. Her insurer no longer bills her for medical expenses. What term best describes the condition she has met?a)Maximum Loss Threshold b)Maximum Loss c)Stop-Loss Limit d)Out-of-Pocket Limit

c)Stop-Loss Limit

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT a)The interest is credited at a rate specified by the policy. b)The policyholder has the right to withdraw the accumulations at any time. c)The interest is not taxable since it remains inside the insurance policy. d)The annual dividend is retained by the company.

c)The interest is not taxable since it remains inside the insurance policy.

When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to a)Purchase a term rider to attach to the policy. b)Pay back all premiums owed plus interest. c)Receive payments for a fixed amount. d)Purchase a single premium policy for a reduced face amount.

d)Purchase a single premium policy for a reduced face amount.