Life and Health (Practice Questions)
The premium charged for exercising the Guaranteed insurability rider is based upon the insured's... a) average age b) issue age c) attained age d) assumed age
c
All of the following are covered by Part A of medicare except? a) physicians and surgeons services b) in-atient hospital services c) post-hospital nursing care d) home health services
a
An agent who collects a premium payment from a client must hold such funds in which of the following types of accounts? a) a separate account from the agent't personal or business account b) as long as records are kept, any federally insured account c) an equity indexed account d) a business account
a
Concerning group medical and dental insurance, which of the following statements is INCORRECT? a) employee benefits are tax deductible the year in which they were received b) benefits received by the employee are free from federal income tax c) premiums paid by the employer are deductible as a business expense d) employee paid premiums may be deducted if certain conditions are met
a
During replacement of an individual health insurance policy, who must sign a replacement form? a) the insured and the agent b) the insurer c) the agent and the existing insurer d) the replacing insurer
a
How long is an open enrollemnt period for medicare supplement policies? a) 6 months b) 1 year c) 30 days d) 90 days
a
One method that insurers have incorporated into many life insurance policy contracts to assist policyholders with terminal conditions in paying for living expenses under certain conditions is called? a) accelerated benefits provisions b) mortuary provisions coverage c) pre-paid funeral expenses coverage d) last right protection
a
The legal process that gives the insurer, after payment of a loss, the right to seek recovery from a third party that was responsible for the loss is known as? a) subrogation b) at fault reasoning c) Witness view d) none
a
The primary eligibility requirement for Medicaid benefits is based upon... a) need b) whether the claimant is insurable on the private market c) age d) number of dependents
a
What is the minimum age for obtaining an agent license in this state? a) 18 b) 19 c) 21 d) 25
a
What is the minimum number of employees that a small employer can have? a) 2 b) 3 c) 4 d) 5
a
What time frame must an individual apply and then pay the first premium for a life insurance policy converted from group to individual coverage? a) 31 days b) 180 days c) 1 year d) 10 days
a
When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income? a) interest only b) both principal and interest c) neither principal nor interest d) principal only
a
If an insured's eligibility for group health insurance terminates and the person is not yet eligible to receive medicare, coverage can be extended for 12 months if the person was covered under the plan for atleast.... a) 2 months b) 3 months c) 6 months d) 12 months
b
In which medicare suplemental polcies are the core benefits foud? a) plans A-D only b) all plans c) plans a and B only d) plan A only
b
The patient protection and affordable care act includes all of the following provisions EXCEPT? a) coverage for preventative benefits b) individual tax deduction for premiums paid c) right to appeal d) no lifetime dollar limits
b
What authority issues a cease and desist order? a) federal board of insurance fraud b) commission c) law enforcement officials d) NAIC
b
Which of the following is NOT an Activity of Daily Living? a) bathing b) sleeping C) eating d) dressing
b
Which of the following is NOT required in the outline of coverage provided with a LTC policy? a) basic information about the insurance company b) basic information about supplementary policies c) the policy number d) the right to return the policy for a refund
b
Which type of care is NOT covered by Medicare? a) hospital b) long-term care c) hospice d) respite
b
Which type of life insurance policy allows the policy owner to pay more or less than the planned premium? a) straight whole life b) universal life c) variable life d) decreasing term
b
An agent has moved from virginia to another state. When will his license authority be terminated? a) 30 days after the change of residence b) within 10 business days c) immediately d) 30 days after the commission receives the notification of the move
c
What is another name for social-security benefits? a) disability and long term care insurance b) survivor benefits c) old, age , survivors and disability insurance d) medicare benefits
c
What is the maximum penalty that could be on an agent for an unintentional violation of Virginia insurance law? a) 5,000 b) 500 c) 1,000 d) 2,000
c
Which of the following applies to partial disability benefits? a) payments is based on termination of employment b) benefits are reduced once an insured is no longer under a doctor's care c) payment is limited to a certain period of time d) an insured is entitled to a principal sum benefit for the partial loss of a limb
c
Prior to purchasing a mediga policy, a person must be enrolled in which of the following? a) all four parts of medicare b) any private insurance policy c) only part A of medicare d) parts A and B of medicare
d
When a consumer refuses to provide the information necessary for the agent to make a suitable recommendation for a life insurance product for that consumer, which of the following is true? a) the insurer is still responsible for the suitability of the recommendation b) the agent may be sued by the consumer for the recommendation c) the insurer may refuse to provide service to that consumer d) neither the agent nor the insurer has any further obligation to the consumer regarding suitability
d
When must emergency care services be available to the insured under HMO in this state? a) during regular business hours only b) from 6-12 am, night services are not required c) only at night d) 24/7
d
Which of the following is true regarding conversion from a group health plan to an individual policy? a) pre-existing conditions may apply in the new policy b) coverage will cease after 90 days c) evidence of insurability is required d) the individual must pay the premium
d
Which of the following programs expands individual public assistance programs for people with insufficient income and resources? a) medicare b) social security c) unemployment compensatio d) medicaid
d
A LTC shopprs guide must be presented at which point? a) prior to the time of the application b) at the time of application c) between the completion of the applicant and the delivery of the policy d) at the time of the policy delivery
a
When an insurance producer is to charge an administrative fee to an insured, all of the following must be done except? a) the insured must provide a signature on any fee disclosure b) a schedule of fees must be posted in the office c) a cop of the fee disclosure must be provided to the insured d) the agent must disclose the fees in writing
c
Which of the following entities can legally bind coverage? a) federal insurance board] b) agent c) insurer d) the insured
c
Which of the following is INCORRECT concerning taxation of disability income benefits? a) if paid by the individual, the premiums are tax deductible b) if the employer paid the premiums, income benefits are taxable to the insured as ordinary income. c) if the insured paid the premiums, any disability income benefits are tax free d) if the benefits are for a permanent loss, the benefits paid to the employee are not taxable.
a
Which of the following is NOT covered under part B of a medicare policy? a) routine dental care b) home health care c) lab services d) physician expenses
a
Which of the following is NOT covered under plan A in medigap insurance? a) the medicare part A deductible b) aproved hospital cost for 365 additional days after medicare benefits end c) the 20% Part B coinsurnace amounts for medicare sproved services d) the first three pints of blood each year
a
Which of the following is NOT true regarding partial disability? a) this is a form of insurance that covers part-time workers b) the insured can still report to work and receive benefits c) benefit payments are typically 50% of the total disability benefit d) an insured would qualify if he couldn't perform some of his normal job duties
a
Which of the following is the policyholder of a labor unions group health policy? a) labor union b) members of the union c) the officials of the labor union d) all of the above
a
Which of the following statements about occupational vs. nonoccupational coverage is TRUE? a) disability insurance can be written as occupational or nonoccupational b) group medical expense policies and individual medical expense policies always cover both occupational and nonoccupational injuries c) individual disability policies never cover nonoccupational injuries d) only group disability income policies can be written on an occupational basis
a
Which of the following types of risk will result in the highest premium? a) substandard risk b) standard risk c) preferred risk d) all risks pay equal premiums
a
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT... a) an offer to share in commissions generated by the sale b) dividends from a mutual insurer c) an offer of employment d) stock, securities, or bonds
b
An agent willfully violates an insurance law. What is the maximum fine for each offense? a) 2,000 b) 5,000 c) 7,500 d) 1,500
b
An insured is covered under 2 group health plans-under his own and his spouse's . He has suffered a loss of 2,000. After the insured paid the total of 500 in deductibles and coinsurance, the primary insurance covered 1,500 of medical expenses. What amount, if any would be paid by the secondary insurer. a) 0 b) 500 c) 1500 d) 2000
b
Following hospitilization because of an accident , Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many Days? a) 3 b) 20 c) 10 d) 80
b
How long is an insurer required to maintain records in Virginia? a) permanently b) 3 years c) 5 years d) 10 years
b
How often must continuing education requirements be met? a) every year b) every 2 years c) every 3 years d) every 4 years
b
A renewal provision in an individual LTC policy must be ... a) conditionally renewable b) optional c) guaranteed renewable d) cancellable
c
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the... a) juvenile rider b) payor rider c) other-insured rider d) change of insured rider
c
All of the following forms of policies from the standard policy regulations for insurers EXCEPT? a) structured settlements b) credit life insurance c) group life or annuities where there is direct solicitation d) group life and annuities used to fund funeral services
c
All of the following statements concerning medicaid are correct EXCEPT? a) individuals claiming benefits must prove they do not have the abiity or means to pay for their own medical care. b) persons , at least 65 years of age, who are blind or disabled and financially unable to pay, may qualify for medicaid nursing home benefits c) medicaid is a state funded program that provides health care to persons over age 65 only d) Individual states design and adminster the medicaid program under the broad guidelines established by the federal governement
c
An aplicant is discussing his options for medicare supplemental coverage with his agent. The applicant is 65 years old and has enrolled in medicare part A and part B. What is the insurance company ibigated to do? a) look at the aplicant's medical history to decide what premium to charge b) send the aplicant to a doctor for a physical. Nothing can happen until they get the results c) offer the supplemental olicy on a guaranteed issue basis d) exclude re-existing conditions from coverage under the supplemental policies
c
An applicant for an insurance license passed his state licensing exam 7 months ago. He applied for his license yesterday. Which of the following is true? a) The fees remain valid, but the exam results will be forfeited b) the exam score is still valid, the applicant only has to pay a license processing fee c) the applicant must retake the exam and submit a new application and processing fees d) the exam score and fees are good for 1 year, the applicant just needs to wait for his license
c
An individual wants to purchase a life insurance policy. His agent asks if the transaction will involve replacing any existing life insurance policies. If the customer replies yes which of the following best describes the agent's next step? a) the agent must get his supervisor involved in the transaction b) the agent has no further duties c) the agent must provide a replacement notice to the applicant d) the agent must collect the existing policies and turn them over to the replacing insurer
c
An insurance agent changed his residential address, Within what time period must the agent notify the commission of the change? a) immediately b) 10 days c) 30 calendar days d) there is no requirement for the residential address
c
An insured is covered by a partially contributory group disability income plan that pays benefits of 4,000 a month. If the insured pays 25% of the monthly premium , how much of the monthly benefit would be taxed? a) none b) 1,000 c) 3,000 d) 4,000
c
During a conversion from a group policy to an individual policy 15 days after an employee's termination, the employee who was terminated dies. which of the following scenarios is most accurate? a) the individual policy will pay the death benefit that the employee would have received from the group policy as long as the first premium payment was made. b) the individual policy will pay the death benefit that the employee would have received from the group policy as long as the application was made. c) the group policy will pay the death benefit that the employee would have received regardless of whether the application for coverage or premium payment was made? d) the group policy will pay the death benefit that the employee would have received as long as the first premium payment for the individual policy was made.
c
During replacement of the life insurance, a replacing insurer must do which of the following? a) designate a new producer for a replaced policy b) send a copy of the notice regarding replacement to the department of insurance c) obtain a list of all life insurance policies that will be replaced d) guarantee a replacement for each existing policy
c
How often will the commissioner examine an insurer's book and records? a) annually b) only upon request from the insurer or a complaint from a customer c) at least once every 5 years d) every 3 years
c
Which of the following is NOT a responsibility of the replacing insurer in life insurance policy replacement? a) provide a free look period b) notify the existing insurer about the replacement c) read the notice regarding replacement to the applicant d) verify receipt of the replacement forms
c
Which of the following persons is NOT allowed to act as a viatical settlement broker in Virginia? a) a nonresident broker b) a business entity c) an unlicensed person d) a licensed producer
c
Which of the following would best describe total disability? a) a person's total loss of income b) a person's inability to qualify for insurance coverage c) a person's ability to work is significantly reduced or eliminated for the rest of his/her life d) a person's inability to perform one of the regular duties of his/her occupation
c
Who is the beneficiary of a credit life and health policy? a) the state and government b) the borrower c) the lending institution d) the federal government
c
Who owns an employer group health policy? a) the employees b) both the employer and employees c) the employer only d) the agent
c
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, a) the insurance through his wife's company is primary b) the insurance plans will split the coverage evenly c) both plans will pay the full amount of the claim d) the insurance through his company is primary
d
A medicare supplement policy may not exclude or limit benefits for losses incurred more than how many months from the affective date of coverage because it involved a pre-existing condition? a) 12 b) 24 c) 0 d) 6
d
A noncontributory group disability income plan has a 30-day waiting period and offers benefits of 2,000 a month. If an employee is unable to work for 7 months due to covered disability, the employee will receive. a) 14,000, none of which is taxable b) 14,000 all of which is taxable c) 12,000 none of which is taxable d) 12,000 all of which is taxable
d
All of the following may occur to a person who knowingly and willfully obtains information about an individual from an insurance institution, agent or insurance-support organization under false pretenses, EXCEPT? a) The person may be fined 5,000 or be confined to jail for no more than 12 months. b) the person may be fined 10,000 c) the person may be punished by confinement in jail for 6 months d) the person may be fined 20,000
d
Which of the following would be required to be licensed as an insurance producer? a) a person whose activities are limited to producing insurance advertisements b) a salaried full-time employee who furnishes information for group insurance c) an insurance company director who performs executive, administrative and managerial duties d) a salaried employee who advertises and solicits insurance
d
Which of the following would describe a legal document which would dictate who can buy a deceased partner's share of a business and for what amount? a) profit and loss agreement b) key person agreement c) split dollar agreement d) buy and sell agreement
d
Which rule would apply if an agent knows an application is going to cash in an old policy and use the funds to purchase new insurance? a) reinstatement rule b) conversion rule c) disclosure rule d) replacement rule
d
Who is protected from financial loss by the life, accident and sickness insurance guaranty association? a) the state b) insurance companies c) insurance producers d) policyholders
d
Workers compensation benefits are regulated by which entity? a) employer b) insurer c) federal government d) state government
d
Your client was insured under her employees group life insurance plan at her place of employment. She contacted you as she was terminated from her job.She wants to convert her group policy to an individual policy. All of the following statements about her situation are correct EXCEPT? a) she would not need to prove insurability for a conversion policy b) application for an individual policy and the first premium payment must be made within 31 days of termination of employment c) should she convert to individual coverage, the premium will be based upon her age and health risk class d) she will be able to convert to term insurance
d
All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy? a) lower b) higher c) as high d) half the amount
a
Insurers may change which of the following on a guaranteed renewable health insurance policy? a) coverage b) individual rates c) no changes are permitted d) rates by class
d
Most LTC plans have which of the following features? a) no elimination period b) variable premiums c) open enrollment d) guaranteed renewability
d
The insured's health policy only pays for medical costs related to accidents. Which of the following types of policies does the insured have? a) restrictive b) accidental death c) comprehensive d) accident-only
d
The premiums paid by the employer in a business life insurance policy are... a) tax deductible by the employee b) always taxable to the employee c) never-taxable to the employee d) tax deductible by the employer
d
Under the fair credit reporting act, if the consumer challenges the accuracy of the information contained in his or her report, the repoting agency must. a) defend the report if the agency feels it is accurate b) change the report c) send an actual certified copy of the entire report to the consumer d) respond the consumers complaint
d
In which of the following locations would skilled care most likely be provided? a) in an outpatient setting b) at a physicians office c) in an institutional setting d) at the patient's home
c
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term? a) the insured may renew the policy for another 10 years, but at a higher premium rate b) the insured must provide evidence of insurability to renew the policy c) the insured may only convert the policy to another term policy d) the insured may renew the policy for another 10 years at the same premium rate.
a
If a conumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? a) 5 days b) 7 days c) 10 days d) 3 days
a
If an agent wishes to sell variable life policies, what license must the agent obtain? a) securities b) adjuster c) surplus lines d) personal lines
a
All other factors being equal, the least expensive first-year premium payment is found in? a) level term b) annually renewable term c) increasing term d) decreasing term
b
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 applicant will be voided b) the beneficiary will receive the full death benefit if it is determined that the applicant is qualified for the policy. c) the premium would be returned to the insured's estate because the policy was not issued. d) the death claim will be rejected
b
An insured had a 10,000 term life policy. The annual premium of 200 was due on Feb. 1st; however, the insured failed to pay the premium. He died on February 28, How much would the beneficiary receive from the policy? a) 0 b) 200 c) 9,800 d) 10,000
c
What is the purpose of establishing the target premium for a universal life policy? a) to accumulate cash value faster b) to pay up the policy faster c) to cover all policy expenses d) to keep the policy in force
d
What is the waiting period on a Waiver of Premium rider in life insurance Policies? a) 30 days b) 3 months c) 5 months d) 6 months
d
In LTC insurance, what type of care is provided with intermediate care? a) occasional nursing or rehabilitate care b) non medical daily care c) daily care, but not nursing care d) intensive care
a
What document describes an insured's medical history, including diagnoses and treatments? a) attending physicians statement b) physician review c) individual medical summary d) comprehensive medical history
a
Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital? a) indemnity b) surgical c) blanket d) medigap
a
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective? a) as of the policy delivery date b) as of the first of the month after the policy issue c) as of the policy issue date d) as of the application date
d
What percentage of a company's employees must take part in a noncontributory group life plan? a) 0% b)25% c)75% d)100%
d
When would a 20-pay whole life policy endow? a) at the insureds age 65 b) after 20 payments c) in 20 years d) when the insured reaches age 100
d
All of the following are TRUE statements regarding the accumulation of interest option EXCEPT? a) the policyholder has the right to withdraw the accumulations at any time b) the interest is not taxable since it remains inside the insurance policy c) the annual dividend is retained by the company d) the interest is credited at a rate specified by the policy
B
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 a) incontestability clause b) legal action against us clause c) entire contract clause d) time limit on certain defenses clause
c
Under whihc of the follwing organizations are the practicing providers compensated on a fee-for-service basis? a) blue cross/ blue shield b) open panel c) PPO d) HMO
c
The purpose of the life, accident and sickness guaranty associations is to... a) help protect policy-owners and beneficiaries against financial loss caused by the insolvency of an insurance company b) encourage life insurers to write standard business c) allow producers to continue to solicit insurance, even if the company they represent is financially impaired d) protect the reputation of the insurance department if they issue a certificate of authority to a company that becomes insolvent
a
The transformer of an insured's rights to seek damages from a negligent party to the insurer is found in which of the following clauses? a) subrogation b) arbitration c) salvage d) appraisal
a
Which of the following does the insuring clause NOT specify? a) a list of available doctors b) covered perils c) the insurance company d) the name of the insured
a
Which of the following concerning buy-sell agreements is true? a) benefits received are considered income taxable b) buy-sell agreements pay in the event of a medical emergency c) buy-sell agreements are normally funded with a life insurance policy d) premiums paid are deductible as a business expense
c
Medicare supplement policies have a notice prominently printed on the first page stating the applicant is entitled to a 30-day free look period, which allows the applicant to return the policy for which of the following reasons? a) renewal provisions b) any reason c) unsatisfactory premium rates d) pre-existing condition limitations
b
Most methods used to determine the suitability of a particular annuity recommendation to a client are based on information regarding all of the following EXCEPT? a) the clients financial status b) the clients insurability c) the clients tax status d) the clients investment objections
b
Under the affordable care act, which classification applies to health plans based on the amount of covered costs? a) risk classification b) metal classification c) guaranteed and non-guaranteed d) grandfathered and non-grandfathered
b
What is the purpose of the regulations on life and annuity marketing practices? a) to provide consumers with choices in life insurance products b) to establish minimum standards for advertisement, solicitations and replacement of policies c) to establish minimum rates for life insurance policies and annuities d) to eliminate unfair trade and unfair competition practices
b
Which of the following is true regarding benefits offered by medicare supplement policies, in relation to medicare benefits? a) there are no restrictions for benefit b) the supplemental benefits cannot duplicate medicare benefits c) the supplemental benefits must duplicate medicare benefits d) some supplemental benefits can duplicate medicare benefits
b
Which of the following must be present in all MEdicare supplemental plans? a) Plan c coinsurance b) plan A c) foreighn travel provisions d) outpatient drugs
b
Which of the following best describes fixed-period settlement option? a) the death benefit must be paid out in a lump sum within a certain time period b) income is guaranteed for the life of the beneficiary c) both the principal and interest will be liquidated over a period of time d) only the principal amount will be paid out within a specified period of time
c
Most policies will pay the accident death benefits as long as the death is caused by the accident and occurs within... a) 30 days b) 60 days c) 90 days d) 120 days
c
Which of the following statements is NOT true concerning insurable interest as if it applies to life insurance? a) Business partners have an insurable interest in each other b) a husband or wife has an insurable interest in their spouse c) an individual has an insurable interest in his or her own life d) a debtor has an insurable interest in the life of a lender
c
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 known as.... a) loading b) defamation c) twisting d) coercion
d
A woman obtains health coverage through the marketplace on October 1st. Two weeks later she finds out she finds out that she is 3 months pregnant. Which of the following is true about coverage for pregnancy? a) pregnancy will only be covered if additional premium is paid b) pregnancy will not be covered as a pre-existing condition c) pregnancy may be covered with the insurers special approval d) pregnancy will be covered immediately
d
A woman's health insurance policy dictates which of the doctors she is allowed to see. Her health providers share an assumed risk for their patient and encourage preventive care. What best describes the health system that the woman is issued? a) comprehensive health b) major medical c) group health d) managed care
d
All of the following must be included in the report to the commissioner after any felony conviction or administrative action is taken against a licensed insurance agent except? a) consent to the order b) general facts and circumstances surrounding the conviction/action c) specific facts and circumstances surrounding the conviction/action d) a copy of the agents license
d
All of the following statements about medicare part A and B are correct except? a) it covers services and supplies not covered by Part A b) it is financed by monthly premium c) it is financed by tax revenes d) it is compulsory program
d
All of the following would qualify as an eligible insured group life insurance coverage under a group plan EXCEPT? a) a credit union employee b) an employee of a non-profit institution who works on a full-time basis c) an employee of a public works facility d) former member of an eligible association
d
An adverse underwriting decision may be based on which of the following? a) personal information received from an insurance-support organization whose primary source of information is insurance institutions b) that an individual previously obtained insurance coverage from a particular insurance agent c) that an individual previously obtained insurance coverage through a residual market mechanism d) information obtained from an insurance institution responsible for a previous adverse underwriting decision.
d
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of? a) unfair claims b) twisting c) defamation d) false advertising
d
An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act? a) legal, provided that the information can be verified b) illegal until the endorsed by the guaranty association c) legal, provided that the other insurers are paid royalties for the usage of their names d) illegal under any circumstances
d
Every insurer or entity provided LTC benefits in this state most provide a copy of any advertisements to which entity for review? a) federal regulation of insurance advertising b) consumer protection agency c) guaranty association d) commission
d
How long must agents keep records of LTC partnership training? a) 12 months b) 24 months c) 3 years d) 5 years
d
How long must an insurer keep the records of marketing communication pertaining to the life insurance for each year? a) until the report on the insurer's examination 2 rears from now b) 7 years c) until the commission inspects that communication d) 5 years
d
Simply stated, the purpose of regulating life insurance and annuity contract replacement is... a) to establish and provide minimum standards of sales production quota for major insurers b) to enable agents to maintain a continual marketing process with exiting clients c) to allow insurers an opportunity to market products with enhanced benefits to a larger market d) to ensure that minimum standards of marketing conduct are being met by the insurers and their agents
d
What is the purpose of HIPPA? a) to protect the insured against insolvent insurers b) to provide health coverage to low-income individuals and families c) to standardize health plans across the providers d) to provide health benefits to individuals who terminate employment
d
Which of the following terms is used to describe a person, other than aviator, that enters into or effective or effectuates a viatical settlement contract? a) viatical settlement purchaser b) viatical settlement broker c) viatical settlement effectuator d) viatical settlement provider
d
A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her 250,000 life insurance policy to secure the loan. Which provision makes this possible? a) collateral assignment b) insurable interest c) modification clause d) ownership provision
a
According to the rights of renewability rider for cancellable polcies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT... a) unearned premiums are retained by the insurance company b) the insurer must provide the insured a written notice if the cancellation c) claims incurred before cancellation must be honored d) an insurance company may cancel the policy at anytime
a
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 would indicate that his policy was probably written with a 30-day... a) elimination period b) black-out period c) probationary period d) disability period
a
Which of the following is INCORRECT concerning a noncontributory group plan? a) the employee receive individual policies b) they help reduce adverse selection against the insurer c) they require 100% employee participation d) the employer pays 100% of the premiums
a
Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium? a) automatic premium loan b) extended term c) reinstatement d) reduced paid-up option
a
Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policy-owner? a) payment of claims b) change of beneficiary c) entire contract clause d) proof of loss
a
Which of the following statements regarding business overhead expense policies is NOT true? a) benefits are usually limited to six months b) premiums paid for BOE are tax deductible c) any benefits received are taxable to the business d) leased equipment expenses are covered by the plan
a
Which of the following, when attached to a permanent life insurance policy, allows the policy owner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members? a) term rider b) accidental death and dismemberment rider c) guaranteed insurability rider d) change of insured rider
a
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? a) limited pay whole life b) interest sensitive whole life c) life annuity with period certain d) increasing term
a
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 premium? a) the insured will have to pay premiums for 6 months. If at the end of this period the father is still disabled, the insured will be refunded the premiums. b) the insured's premiums will be waived until she is 21 c) the premiums will become tax deductible until the insured's 18th birthday d) since the policy-owner, and not the insured, who has become disabled, the life insurance policy will not be affected.
b
A key person insurance policy can pay for which of the following? a) hospital bills b)cost of training a replacement c) loss of personal income d) workers compensation
b
A medical expense policy that establishes the a mount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as... a) gatekeepers b) usual, customary, and reasonable c) relative- value schedule d) benefit schedule
b
A universal life insurance policy is best described as a/an? a) flexible premium variable life policy b) annually renewable term policy with a cash value account c) VARIABLE LIFE WITH A CASH VALUE ACCOUNT d) whole life policy with two premiums: target and minimum
b
All of the following are characteristics of group life insurance EXCEPT... a) certificate holders may convert coverage to an individual policy without evidence of insurability b) premiums are determined by the age, sex and occupation of each individual certificate holder c) amount of coverage is determined according to the nondiscriminatory rules d) individuals covered under the policy receive a certificate of insurance
b
All of the following are differences between individual and group health insurance EXCEPT... a) Individual policies are renewable at the option of the insured, while group usually terminates when the individual leaves the group b) individual insurance does not require medical examinations, while group insurance does require medical examinations c) in individual policies, the individual selects coverage options, while in a group plan all employees are covered for the same coverage which is chosen by the employer d) Individual coverage can be written on an occupational or nonoccupational basis; group plans cover only nonoccupational
b
All of the following are requirements for life insurance illustrations except. a) they must differentiate between guaranteed and projected amounts b) they must be part of the contract c) they may only be used as approved d) they must identify non-guaranteed values
b
An individual applied for insurance policy and paid the intitial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the polic is issued, what would be the policy's effective date? a) the date of the application b) the date of the medical exam c) the date of the policy delivery d) the date of the issue
b
An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive disability benefits? a) partial benefits b) full benefits c) partial benefits for 2 years d) full benefits for 2 years
b
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? a) pay the full amount of a claim because the cons-testable period has ended b) adjust the claim benefits to reflect the insured true age c) deny any claims and cancel the policy d) deny paying a claim based on misrepresentation
b
An insured pays the annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms in the contract. This is called... a) acceptance b) consideration c) conditions d) utmost good faith
b
An insured's long term care policy is scheduled to pay a fixed amount of coverage of 120 er day. The LTC facility only charged 100 per day. How much will the insurance company pay? a) 20% of the total cost b) 120 a day c) 100 a day d) 80% of the total cost
b
Equity Indexed Annuities a) invest conservatively b) seek higher returns c) are more risky than variable annuities d) are security instruments
b
In a group health policy, a probationary period is intended for people who... a) want lower premiums b) join the group after the effective date c) have a pre-existing condition at the time they join the group d) have additional coverage through a spouse
b
Social security was created to protect against all of the following EXCEPT. a) disability b) bad investment choices c) sickness in old age d) premature death
b
The provision which states that both the policy and a copy of the application form the contract between the policy-owner and the insurer is called the? a) complete contract b) entire contract c) total contract d) aleatory contract
b
When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees.... a) to renew the policy indefinitely b) to renew the policy until the insured has reached the age of 65 c) to charge a lower premium every year the policy is renewed d) not to change the premium rate for any reason
b
When is the earliest a policy may go into effect? a) after the underwriter reviews the policy b) when the application is signed and a check is given to the agent c) when the first premium is paid and the policy has been delivered d) when the insurer approves the application
b
Which of the following is true regarding health insurance underwriting for a person with HIV? a) the person may only be declined if he/she has symptoms b) the person may not be declined for medical coverage solely based on HIV status c) a person may be declined for HIV but not AIDS d) the person may be declined
b
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? a) probationary period b) free look period c) grace period d) elimination period
b
A life insurance policy has a legal purpose if both of which of the following elements exist? a) offer and counteroffer b) policy-owner and named beneficiaries c) insurable interest and consent d) underwriting and reciprocity
c
All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT ? a) most term policies contain a convertibility option b) upon conversion the premium for the permanent policy will be based upon attained age. c) upon the conversion the death benefit of the permanent policy will be reduced by 50% d) evidence of insurability is not required
c
All of the following are examples of third-party ownership-of life insurance policy EXCEPT. a) a company purchases a life insurance policy on their manager, who is an important part of operation b) when an insured purchases a new home, the insured made an absolute assignment of a life insurance policy to the mortgage company. c) an insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure a loan. d) an insured couple purchases a life insurance policy insuring the life of their grandson.
c
All of the following would be qualified as a dependent under the Dependent Care Flexible Spending Account, except? a) Matt must be constantly watched due to his violent muscle spasms which often lead to Matt injuring himself. b) Pete is severely autistic and refuses to take care of his own personal needs, which are taken care of by his father. c) Jeremy had to have both legs amputated, but has learned how to take care of himself and to get around in a wheelchair. d) Joe was paralyzed from the neck down in a car accident and is cared for by his wife.
c
An agent is in the process of replacing the insured's current health insurance policy with anew one. Which of the following would be a proper action? a) polices must overlap to cover pre-existing conditions b) the old policy must be cancelled before the new one can be issued c) the old policy should stay in force until the new policy is issued d) there should be at least a 10-day gap between the policies
c
An insured has endured multiple surgeries and hospitalizations for an illness during the summer months. Her insurer no longer bills for medical expenses. What term best describes the condition she has met? a) maximum threshold b) maximum loss c) stop-limit loss d) out-of-pocket limit
c
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 policies cash value. Which is currently 20,000. What would be the face amount of the new term policy? a) 20,000 b) 25,000 c) 50,000 d) the face amount will be determined by the insurer
c
If a changes needs to be made to the application for the insurance, the agent may do all of the following except. a) note on the application the reason for the change b) destroy the application and complete a new one c) erase the incorrect answer and record the correct answer d) draw a line through the first answer, record the correct answer and have the applicant initial the change.
c
In a replacement situation, all of the following must be considered EXCEPT? a) limitations b) exclusions c) assets d) benefits
c
In classifying a risk, the Home office underwriting department will look at all of the following except. a) applicants present physical occupation b) applicant's present occupation c) applicant's past income d) applicant's past medical history
c
The protection component of Universal Life insurance is always? a) adjustable life b) increasing term c) annually renewable term d) whole life
c
The term illustration in a life insurance policy refers to. a) pictures accompanying a policy b) charts and graphs c) a presentation of non-guaranteed elements of a policy d) a depiction of policy benefits and guarantees
c
Upon policy delivery, the producer may be required to obtain any of the following except. a) payment of the premium b) delivery receipt c) signed waiver of premium d) statement of good health
c
What is the name of the insured who enters into a viatical settlement? a) contigent b) viatical broker c) Viator d) third party
c
When an annuity is written, whose life expectancy is taken into account? a) life expectancy is not a factor when writing an annuity b) owner c) annuitant d) beneficiary
c
Which is TRUE about the cash surrender nonforfeiture option? a) the policy remains active for some time after the policyholder opts for cash surrender b) the policyholder receives the original cash value of the policy c) funds exceeding the premium paid are taxable as ordinary income d) after the cash surrender, the insured is covered for a grace period of 1 month
c
Which is not a characteristic of group health insurance? a) group coverage may be converted to individual coverage if the group contract is ended b) the actual policy is called the "master contract" c) a policy is issued to each insured individual d) dependents of insureds con be converted under group health plans.
c
Which of the following applies to the 10 day free look privilege? a) it can be waived only by the insurance company b) it is granted only at the option of the agent c) it permits the insured to return the policy for a full refund of premiums paid d) It allows the insured 10 days to pay the initial premium
c
While the claim is pending, an insurance company may require... a) the insured to be examined only once annually b) an independent examination only once every 45 days c) an independent examination as often as reasonably required d) the insured to be examined only within the first 30 days
c
A insurance contract must contain all of the following to be considered legally binding except. a) offer and acceptance b) Consideration c) competent parties d) beneficiary's consent
d
All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT? a) employer contributions are tax deductible as ordinary business expense b) funds accumulate on a tax-deferred basis c) employee and employer contributions are not counted as income to the employee for income tax purposes. d) as distribution all amounts received by the employee are tax free
d
An employee quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his. a) experience rating b) group rate c) insurer's scheduled rate d) attained age
d
As it pertains to group health insurance, COBRA stipulates that... a) retiring employees must be allowed to convert their group coverage to individual policies b) terminated employees must be allowed to convert their group coverage to individual policies c) group coverage must be extended for terminated employees up to a certain period of time at the employer's expense d) group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.
d
Which of the following LTC benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis? a) residential care b) assisted living c) home health care d) adult day care
d
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? a) jumping juvenile b) juvenile or premium provision c) waiver of premium d) payor benefit
d
Which of the following applicants would NOT qualify for a Keogh plan? a) someone who has been employed for more than 12 months b) someone who is over c) someone who works for a self employed individual d) someone who works 400 hours per year
d
Which of the following best describes annually renewable term insurance? a) it requires proof of insurability at each renewal b) neither the premium nor the death benefit is affected by the insureds age c) it provides an annually increasing death benefit d) it is level term insurance
d
Which of the following is NOT an exclusion in medical expense insurance policies? a) military duty b) self-inflicted injuries c) routine dental care d) coverage for dependents
d
Which of the following is TRUE regarding the annuity period? a) during this period of time the annuity payments grow interest tax deferred b) it is also referred to as the accumulation period c) it is the period of time during which the annuitant makes the premium payments into the annuity d) it may last for the lifetime of the annuitant
d
Which of the following is an example of liquidity in a life insurance contract? a) the death benefit paid to the beneficiary b) the flexible premium c) the money in a savings account d) the cash value available to the policy-owner
d
Which of the following is called a "second-to-die" policy? a) family income b) juvenile life c) joint life d) survivorship life
d
Which of the following is true regarding elimination periods and the cost of coverage? a) the shorter the elimination period, the lower the cost of coverage b) the longer the elimination period, the higher the cost of coverage c) elimination periods have no effect on the cost of coverage d) the longer the elimination period, the lower the cost of the coverage.
d
Which of the following policies would be classified as a traditional level premium contract? a) adjustable life b) universal life c) variable universal life d) straight life
d
Which of the following statements is correct regarding a whole life policy? a) cash values are not guaranteed b) the policy premium is based on the attained age c) the death benefit may increase or decrease during the policy period d) the policyowner is entitled to policy loans
d
Whose responsibility is it to determine if all of the questions on an application have been answered? a) the insurer b) the applicant c) the beneficiary d) the agent
d
