Life and Health Ins Exam

An individual is approaching retirement age and is concerned about having proper coverage should he have to be placed in LTC facility. His agent told him that LTC policies would provide necessary coverage at all of the following levels except A. Acute B. Custodial C Intermediate D Skilled

A Acute Acute care is provided by medical insurance

When are the agents required to provide the outline of coverage to an applicant for individual long-term policy? A. At the time of policy delivery B. At the time of policy solicitation C. Only upon the applicant's request D After the free-look period

B. At the time of policy solicitation

A whole life policy is surrendered for a reduced-paid up policy. The cash value in the new policy will A. Reduce to the pre-surrendered value B. Continue to increase C. Remain the same D. Decrease over time

B. Continue to increase

The death proceeds for life insurance policies must be paid to the claimant within what time period after proof of death of the insured? A. 10 days B. 30 days C. 2 months D 6 months

C. 2 months

If an insured is not entirely satisfied with policy issued, the insured may return it to the insurance company and receive a refund of the entire premium paid, at which of the following times? A. Before any claim has been filed on the policy B. Within 10 days of when the policy was issued C. Within 10 days of when the insurer received the first premium D. within 10 days of when the policy was delivered

D. within 10 days of when the policy was delivered

HMO's are known as what type of plan? A. Consumer driven B. Reimbursement C. Service D. Health savings

C. Service

Which of the following will NOT be included in the buyer's guide? A. Explanation on how to choose the amount and type of insurance B. Basic information about life insurance policies C. Specific information about the policy D. Comparison of policy costs

C. Specific information about the policy Buyer's guide gives generic information about life insurance polices and explains how a buyer should go about choosing the amount and type on insurance to buy, and saving money by comparing the cost of similar policies.

An agent has created a new advertisement to help expand his business. Prior to use, the advertisement must be approved by A. The agent's supervisor B. The department of Insurance C. The insurer's home office D The NAIC

C. The insurer's home office

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option? A. Paid up additions B. Cash surrender value C. Reduced paid up D. Extended term

D. Extended term

With respect to the entire contract clause in health policies, who has the authority to make changes to an existing policy? A. Solely the producer B. Solely the policyowner C. Changes cannot be made on the policy D. Only an executive officer of the company

D. Only an executive officer of the company

Where are premiums from fixed annuities invested? A general account B A variable annuity C. A hedge fund D. A separate account

D. A separate account

Which of the following statement is INCORRECT concerning Modified Endowment Contracts (MECs) A. An MEC must always pass the 7-Pay test B. A life insurance policy failing the 7-pay test is classified as an MEC C. A primary purpose of the regulations governing MECs was to reduce incentives for the use of life insurance as a short-term investment vehicle D. A distribution from an MEC may be subject to a 10% penalty if withdrawn prior to 59 1/2

A. An MEC must always pass the 7-Pay test

Which of the following is the primary source of information that an insurer uses to evaluate and insured's risk for life insurance? A. Insurance application B. Risk Analysis C. The law of large numbers D. Agent's report

A. Insurance application

Variable insurance and variable annuities are regulated by A. SEC, FINRA, and Department of Insurance B. Department of Insurance only C. NAIC D. DEC, and FINRA only

A. SEC, FINRA, and Department of Insurance

Considering the principles of liquidity, how would the policyowner use today's cash values in a life insurance policy? A. Use it for emergency expenses B. Secure a care loan C. Make a down payment on a home in 5 years D. Fund a retirement

A. Use it for emergency expenses

According to the Common Disaster clause, if the insured and primary beneficiary are killed in the the same accident and it cannon be determined who died first, which of the following will be assumed. A. the primary beneficiary died before the insured B. The deaths occurred at the same time C. Statement of Loss Coverage D. Consideration Clause

A. the primary beneficiary died before the insured

Which of the following would NOT trigger the payment of Accelerated Death Benefits A. Requiring an organ transplant for the insured to survive B. Being permanently institutionalized C. Being permanently disabled D. Terminal illness

C. Being permanently disabled

The owner of a whole life policy with an accidental death rider intentionally kills himself after having the policy for 18 months. What is the insurance company's course of action? A. Deny only payments of the face amount but pay the rider since suicide is an accident B. Pay the face amount only because suicide is not an accident C. Pay twice the face amount D. Deny any payment of death benefits

D. Deny any payment of death benefits If suicide happens within 2 years following the policy effective date, the insurer's liability is limited to a refund of premium.

Which of the following describes the relationship between a capital sum and a principal sum? A. Capital sums are percentages of principal sum B. Principal sums vary, while capital sums do not C. Capital sums vary, while principal sums do not D. Principal sums are percentages of capital sum

A. Capital sums are percentages of principal sum principal sum. : the sum specified to be paid under the terms of an accident or health insurance policy in case of the death of the insured or the loss of limb or sight due to an accidental injury.

Riley reads an agreement on the first page of her policy which includes a list of losses what will be covered by her insurer. What is the name of this agreement? A. Insuring Clause B. Coverage Provisions C. Statement of Loss Coverage D. Consideration Clause

A. Insuring Clause The insuring clause lists the insured, insurance company, what kind of losses are covered, and how much the losses would be compensated.

Answers to questions in an insurance application are called representations and, as such, they are A. Not true B. Warranties C. Believed to be true to the best of the applicant's knowledge D. Absolutely true

C. Believed to be true to the best of the applicant's knowledge

All of the following are changes to health insurance plans introduced by the PPACA except A. Full cost coverage for all medical expenses B. Limiting age for dependent children C. Coverage for pre-existing conditions D Requirement for preventive care without deductibles or copays.

A. Full cost coverage for all medical expenses Under PPACA health insurance plans will receieve a metal level classification according to the percentage of costs covered. The insured will still be required to pay a portion of the costs. All the other are the required changes.

An insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest, so the agent guarantees higher dividends than he knows would be possible. Which term describes what the agent has done. A Twisting B. Defamation C. Misrepresentation D Rebating

C. Misrepresentation

Under the mandatory uniform provision Legal Actions, an insured is prevented from bringing a suit against the insurer to recover on health policy prior to A. One year after the occurrence of a disability B. 30 days after the loss C. 60 days after written proof of loss has been submitted D. 90 days after written proof of loss has been submitted

C. 60 days after written proof of loss has been submitted

Which dividend option increases the death benefit? A. Paid-up additions B. Accumulation C. Extended term D. Reduced paid up

A. Paid-up additions Paid up additions options uses the dividend to purchase small amounts of the same type of insurance as the original policy. The additional insurance is paid up by the dividend.

All of the following are consideration in an insurance policy EXCEPT A. The cash value in the policy B. The statements on the application C. The premium paid at the time of the application D. The promise to pay covered losses

A. The cash value in the policy Consideration is the value offered by the insured to the insurer and vice versa. The insured makes accurate statements in the application and remits premium payments in exchange, the insurer provides benefits as stipulated in the contract

Regarding the PPACA health care tax credit, which of the following is true? A. Tax credits are based upon a taxpayer's or family's expected annual medical expenses. B. All wage earners who purchase a health care insurance are eligible for the tax credit C. Tax credits are sent to the tax payer to reduce monthly insurance premiums D. Persons receiving Medicaid are not eligible

D. Persons receiving Medicaid are not eligible Under PPACA, states can extend Medicaid to people under 138% of the poverty level. People on public coverage programs such as Medicaid are not eligible for the health care tax credit

The provision that sets forth the basic agreement between the insurer and the insured and states the insurer's promise to pay the death benefit upon the insured's death is called the A. Declarations B. Consideration C. Insuring clause D. Payment of claims

C. Insuring clause Insuring clause is the promise to pay the death benefit upon the insured's death and set forth the basic agreement between the insurer and the insured

A core Medicare supplement policy (Plan A) will cover all of the following expenses Except A. 20% of Part B coinsurance amounts for Medicare-approved services B. Part A coinsurance C. Part A deductible D. The first 3 pints of blood

C. Part A deductible Plan A is the core benefits only and does not include coverage for Plan A deductibles

What is the difference between a straight life policy and a 20-pay whole life policy A. The face amount and cash value B. Policy maturity period C. Premium Payment period D. The benefit settlement option

C. Premium Payment period A limited-pay whole life policy, just like straight life, endows for the face amount if the insured lives to age 100. The premium is, however, completely paid off in 20 years.

Which of the following does NOT have to be included on the first page of Medicare Supplement policy? A. Continuation Provision B. The company's rights to change premiums C. Premium rates D. Renewal provision

C. Premium rates Medicare supplement policies must include a renewal or continuation provision that is appropriately captioned and on the first page of the policy. It must include any reservation by the insurance company of the right to change premiums and any automatic renewal premium increases based on the policyholder's age (attained age policies)

If a basic medical insurance plan's benefits are exhausted, what type of plan will then begin covering those losses? A. Social Security B. Supplementary major medical C. Supplementary basic medical D. None, Once benefits are exhausted for a given benefit period, the insurer is responsible for covering the remainder of the expenses

B. Supplementary major medical Supplementary Major Medical Policies are used to supplement the coverage payable under a basic medical expense policy. After the basic policy pays, the supplemental major medical will provide coverage for expenses that were not covered by the basic policy, and expenses that exceed the maximum. If the time limitation is used up in the basic policy, the supplemental coverage will provide coverage thereafter.

A viatical settlement is a transaction outside the life insurance company where the owner sells the life insurance policy for which of the following A. A predetermined multiple of the premium B. The face amount of a policy C. A percentage of the face amount of the policy D. More than the face value

C. A percentage of the face amount of the policy In a viatical settlement, an insured with a reduced life expectancy sells his or her policy to a 3rd party for a percentage of the face amount.

Decreasing term insurance is often used to A. Build up cash value for retirement B. Pay estate taxes C. Cover a mortgage D. Liquidate an estate

C. Cover a mortgage

If an applicant submits the initial premium with an application, which action constitutes acceptance? A. The underwriter approves the application B. The applicant submits a statement of good health C. The producer delivers the policy D. The insurance company receives the

A. The underwriter approves the application

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. 60 days B. 90 Days C. 2 years D. 30 days

B 90 days

What is the purpose of the impairment rider in health insurance policy? A. To identify pre-exisiting conditions B. To exclude coverage for a specific impairment C.To cover impairments that otherwise could not be covered D. To provide disability coverage

B. To exclude coverage for a specific impairment

What is the purpose of a benefit schedule? A To list the insured's copayment and deductibles B. To state what and how much is covered in the plan C. To include the average charges for procedures D. To provide the dates for the payment of benefits.

B. To state what and how much is covered in the plan

Which of the following would NOT be eligible for coverage under key persons A. The pharmacist in a drug store B. The manager of a small store C. the owner of a shop D. The executive officer of a company

C. the owner of a shop The owner is principal not key

When may HIV-related test results be provided to the MIB A. Only if the individual is not identified B. Under all circumstances C. When given authorization by the patient D Only when the test results are negative.

A. Only if the individual is not identified

Which of the following is provided by skilled medical personnel to those who need occasional medical assistance or rehabilitative care? A. Skilled care B. Intermediate Care C. Custodial Care D. Home Health care

B Intermediate Care Intermediate care is occasional nursing and rehab care that is ordered by a Physician and provided by skilled medical personnel for such things as changing a bandage or administering medications.