life & health TEST

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

At the time of application

Once an agent has met the requirements to sell long-term care insurance partnership policies, how often must the agent complete the 4 hours of ongoing training courses? a)Every 6 months b)Every 12 months c)Every 24 months d)Never

Every 24 months

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.

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

If a settlement option is not chosen by the policyowner or the beneficiary, which option will be used? a)Fixed period b)Fixed amount c)Lump sum d)Life income

Lump sum

What is the major difference between a stock company and a mutual company? a)Amount of death benefit b)Number of producers c)Types of whole life policies d)Ownership

Ownership

An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use? a)One-year term b)Reduction of premium c)Accumulation at interest d)Paid-up option

Paid-up option

Why is an equity indexed annuity considered to be a fixed annuity?a)It is not tied to an index like the S&P 500. b)It has a guaranteed minimum interest rate. c)It has modest investment potential. d)It has a fixed rate of return.

It has a guaranteed minimum interest rate.

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive? a)$0 b)$50,000 (50% of the policy value) c)$100,000 d)$300,000 (triple the amount of policy value)

$100,000

Which of the following individuals will be eligible for coverage on the Health Insurance Marketplace? a)A U.S. citizen living abroad b)A permanent resident lawfully present in the U.S. c)Someone who has Medicare coverage d)A U.S. citizen who is incarcerated

A permanent resident lawfully present in the U.S.

In which Medicare supplemental policies are the core benefits found? a)Plans A and B only b)Plan A only c)Plans A-D only d)All plans

All plans

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered a)A misrepresentation. b)A required disclosure. c)A legal representation of the Association. d)An unfair trade practice.

An unfair trade practice.

Which of the following is a feature of a variable annuity? a)Securities license is not required. b)Benefit payment amounts are not guaranteed. c)Payments into the annuity are kept in the company's general account. d)Interest rate is guaranteed.

Benefit payment amounts are not guaranteed.

Which of the following is NOT an exclusion in medical expense insurance policies? a)Self-inflicted injuries b)Routine dental care c)Coverage for dependents d)Military duty

Coverage for dependents

Insurers may change which of the following on a guaranteed renewable health insurance policy? a)No changes are permitted. b)Rates by class c)Coverage d)Individual rates

Rates by class

Which of the following special policies covers unusual risks that are NOT normally included under Accidental Death and Dismemberment coverage? a)Credit Disability b)Special Risk Policy c)Limited Risk Policy d)Specified Disease Policy

Special Risk Policy

An Adjustable Life policyowner can change which of the following policy features? a)The mortality expense b)The investment account c)The insured d)The coverage period

The coverage period

Which is true about a spouse term rider? a)Coverage is allowed for an unlimited time. b)The rider is decreasing term insurance. c)Coverage is allowed up to age 75. d)The rider is usually level term insurance.

The rider is usually level term insurance

Most policies will pay the accidental 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.

90 days.

A hospital indemnity policy will pay a)Income lost while the insured is in the hospital. b)All expenses incurred by the stay in the hospital. c)Any expenses incurred by the stay in the hospital, minus coinsurance payments and deductibles. d)A benefit for each day the insured is in a hospital.

A benefit for each day the insured is in a hospital.

If a change needs to be made to the application for insurance, the agent may do all of the following EXCEPT a)Draw a line through the first answer, record the correct answer, and have the applicant initial the change. b)Note on the application the reason for the change. c)Destroy the application and complete a new one. d)Erase the incorrect answer and record the correct answer.

Erase the incorrect answer and record the correct answer.

A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then a)IRS has no jurisdiction. b)The benefit is received as taxable income. c)The benefit is received tax free. d)The benefit is subject to the exclusionary rule.

The benefit is received tax free.

An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy? a)Within two years of the application, the insurer discovers a misrepresentation. b)The insured is in an accident and incurs a large claim. c)The insured does not pay the premium. d)The insured reaches the maximum age limit specified in the policy.

The insured is in an accident and incurs a large claim.

Who can provide skilled nursing care? a)Family Member b)Community volunteer c)Doctor d)Spouse

Doctor

Which of the following entities has the authority to make changes to an insurance policy? a)Department of Insurance b)Broker c)Producer d)Insurer's executive officer

Insurer's executive officer

he type of dental plan which is incorporated into a major medical expense plan is a/an a)Blanket dental plan. b)Integrated dental plan. c)Supplemental dental plan. d)Stand-alone dental plan.

Integrated dental plan.

What is the term for how frequently a policyowner is required to pay the policy premium? a)Mode b)Schedule c)Grace period d)Consideration

Mode

What type of care is Respite care? a)24-hour care b)Relief for a major care giver c)Daily medical care, given by medical personnel d)Institutional care

Relief for a major care giver

If a life insurance policy has an irrevocable beneficiary designation, a)The owner can always change the beneficiary at will. b)The beneficiary cannot be changed. c)The beneficiary can only be changed with written permission of the beneficiary. d)The beneficiary cannot be changed for at least 2 years.

The beneficiary can only be changed with written permission of the beneficiary

In a life settlement contract, whom does the life settlement broker represent? a)The insurer b)The beneficiary c)The life settlement intermediary d)The owner

The owner

L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay? a)$2,500 (the entire bill) b)$900 (deductible + 20% of the bill after the deductible [20% of $2,000]) c)$500 (amount of deductible) d)$1,000 (deductible + 20% of the entire bill)

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

What type of insurance would be used for a Return of Premium rider? a)Decreasing Term b)Annually Renewable Term c)Increasing Term d)Level Term

Increasing Term

When a policy is being replaced, the replacing company notifies the a)Commissioner. b)Beneficiaries. c)Replacement company. d)Policyholder.

Replacement company.

When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy as well as a refund of all of the premiums paid. Which rider is attached to the policy? a)Premature death b)Return of premium c)Cost of living d)Decreasing term

Return of premium

To sell variable life insurance policies, an agent must receive all of the following EXCEPT a)A life insurance license. b)SEC registration. c)FINRA registration. d)A securities license.

SEC registration.

What is the best way to change an application? a)White-out the previous answer b)Draw a line through the incorrect answer and insert the correct one. c)Start over with a fresh application d)Erase the previous answer and replace it with the new answer

Start over with a fresh application

An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date? a)The date of policy delivery b)The date of issue c)The date of application d)The date of medical exam

The date of medical exam

Which of the following is NOT a feature of a noncancellable policy? a)The insured has the right to renew the policy for the life of the contract. b)The insurer may terminate the contract only at renewal for certain conditions. c)The premiums cannot be increased beyond the amount stated in the policy. d)The guarantee to renew coverage usually applies until the insured reaches certain age.

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

All of the following are true of an annuity owner EXCEPT a)The owner is the party who may surrender the annuity. b)The owner must be the party to receive benefits. c)The owner pays the premiums on the annuity. d)The owner has the right to name the beneficiary.

The owner must be the party to receive benefits

Manny has been injured in an accident. Although she is still receiving benefits from her policy, she does not have to pay premiums. Her policy includes a)Benefit of Payment clause. b)Waiver of Benefit rider. c)Waiver of Premium rider. d)Return of Premium rider.

Waiver of Premium rider.

The provision that provides for the sharing of expenses between the insured and the insurance company is a)Divided cost. b)Coinsurance. c)Stop-loss. d)Deductible.

Coinsurance.

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 a)Accelerated benefits. b)Cost of living. c)Guaranteed insurability. d)Waiver of cost of insurance.

Guaranteed insurability.

If an insured's cognitive impairment results in the lapse of a long-term care policy, how long from the policy lapse may the insured request reinstatement? a)30 days b)3 months c)5 months d)6 months

5 months

Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information a)Held or transmitted in paper form. b)Held or transmitted in any form. c)Transmitted electronically only. d)Held in a computer format.

Held or transmitted in any form.

All of the following are general requirements of a qualified plan EXCEPT a)The plan must be communicated to all employees. b)The plan must be for the exclusive benefits of the employees and their beneficiaries. c)The plan must be permanent, written and legally binding. d)The plan must provide an offset for social security benefits.

The plan must provide an offset for social security benefits.

How are contributions to a tax-sheltered annuity treated with regards to taxation? a)They are taxed as income for the employee. b)They are taxed as income for the employee, but are tax free upon withdrawal. c)They are not included as income for the employee, but are taxable upon distribution. d)They are never taxed.

They are not included as income for the employee, but are taxable upon distribution.

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

The insured's contingent beneficiary

he minimum number of credits required for partially insured status for Social Security disability benefits is a)4 credits. b)6 credits. c)10 credits. d)40 credits.

6 credits.

Insurers or agents soliciting partnership policies must provide each prospective applicant with all of the following EXCEPT a)A statement that the insured does not automatically qualify for Medicaid. b)A statement that the insured does not automatically qualify for Medicare Part A c)A Partnership Program Notice. d)A Partnership Disclosure Notice.

A statement that the insured does not automatically qualify for Medicare Part A.

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.

Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.

Which of the following would be considered a violation of life insurance advertising regulations? a)Making oral sales presentations b)Calling a variable insurance policy an investment plan c)Informing the applicant that the sole subject of the sale is insurance d)Not guaranteeing dividends

Calling a variable insurance policy an investment plan

Items stipulated in the contract that the insurer will not provide coverage for are found in the a)Consideration clause. b)Exclusions clause. c)Insuring clause. d)Benefit Payment clause.

Exclusions clause.

Items stipulated in the contract that the insurer will not provide coverage for are found in the a)Consideration clause. b)Exclusions. c)Insuring clause. d)Benefit Payment clause.

Exclusions.

What is the official name for the Social Security program? a)Defined Benefit Retirement Insurance b)Qualified Pension Plan c)Old Age Survivors Disability Insurance d)Social Insurance Program

Old Age Survivors Disability Insurance

A deductible is a)An insurer's obligation to the service provider. b)A nominal fee for the use of an insurer's services. c)A specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits. d)A percentage of the medical bill the insured must pay before services will be rendered.

A specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits.

Which of the following terms will be permissible in describing a life insurance policy in company advertisements? a)Retirement plan b)Variable plan c)Risk-free plan d)Investment plan

Variable plan

Most vision expense insurance plans restrict benefits to one exam and one pair of glasses in what time period? a)6 months b)12 months c)18 months d)24 months

12 months

What is the number of credits required for fully insured status for Social Security disability benefits? a)4 b)10 c)30 d)40

40

A paid-up nonforfeiture benefit will become effective as specified in the policy, unless the person entitled elects another available option within how many days after the due date of the premium in default? a)15 b)30 c)60 d)90

60

Qualifications for soliciting, selling or negotiating a long-term care partnership policy include all of the following EXCEPT a)Completing ongoing 4-hour training every 24 months. b)Obtaining a partnership policy license from the Commissioner. c)Being appointed. d)Completing an initial 8-hour training.

Obtaining a partnership policy license from the Commissioner.

Whose responsibility is it to determine if all of the questions on an application have been answered? a)The applicant b)The beneficiary c)The agent d)The insurer

The agent

All of the following are true regarding a decreasing term policy EXCEPT a)The death benefit is $0 at the end of the policy term. b)The contract pays only in the event of death during the term and there is no cash value. c)The face amount steadily declines throughout the duration of the contract. d)The payable premium amount steadily declines throughout the duration of the contract.

The payable premium amount steadily declines throughout the duration of the contract.

If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE? a)The policy will be void. b)The insurer may deny coverage later, because of the information missing on the application. c)The policy will be interpreted as if the insurer waived its right to have an answer on the application. d)The policy will be interpreted as if the insured did not have an answer to the question.

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

Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care? a)Licensed practical nurses b)Community-based organization professionals c)Attending physician d)Registered nurses

Attending physician

Which type of life insurance policy generates immediate cash value? a)Decreasing Term b)Continuous Premium c)Single Premium d)Level Term

Single Premium

How do employer contributions to a Health Savings Account affect the insured's taxes? a)The employer contributions are taxed at the same rate as the Social Security tax rate. b)The employer contributions are taxed to the individual insured as earned income. c)The employer contributions are deducted from the individual insured's tax calculations. d)The employer contributions are not included in the individual insured's taxable income.

The employer contributions are not included in the individual insured's taxable income.

An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true? a)The insured must submit proof of loss to the Department of Insurance. b)The insured was in compliance with the policy requirements regarding claims. c)The claim most likely will not be paid since the official claims form was not submitted. d)The insurer will be fined for not providing the claims forms.

The insured was in compliance with the policy requirements regarding claims.

When an insurer combines two periods of disability into one, the insured must have suffered a a)Residual disability. b)Presumptive disability. c)Recurrent disability. d)Partial disability.

Recurrent disability.

Which nonforfeiture option provides coverage for the longest period of time? a)Paid-up option b)Accumulated at interest c)Reduced paid-up d)Extended term

Reduced paid-up

If policyowners repeatedly replace policies from the same agent, this is most likely evidence that a)The agent made a commendable effort to offer the best possible policy for his or her clients. b)The agent needs more training on the suitability of policies for clients. c)The agent knew that replacement was intended in connection with the sale and intentionally violated the replacement regulation. d)The agent is reputable and generally trusted by policyholders; the more replacements, the better.

The agent knew that replacement was intended in connection with the sale and intentionally violated the replacement regulation.

Which of the following is NOT a feature of a guaranteed renewable provision? a)The insured has a unilateral right to renew the policy for the life of the contract. b)Coverage is not renewable beyond the insured's age 65. c)The insured's benefits cannot be reduced. d)The insurer can increase the policy premium on an individual basis.

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

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? a)The insurer may delay the payment of this claim for up to 6 months. b)The insurer may settle this claim for less than it otherwise would have had the notification been provided in a timely manner. c)The insurer may deny the claim since it was not notified within the required 20-day time frame. d)The insurer is considered to be notified since the notification to agent equals notification to the insurer.

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

Which of the following documents delivered to the policyowner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years? a)A notice regarding replacement b)A privacy notice c)A buyer's guide d)A policy summary

A policy summary

Before an agent delivers a policy, the insurer makes a last-minute change to the policy. The agent informs the insured of this change, and he accepts it. In response, the agent must a)Deliver the policy without further confirmation from the insured. b)Have the insured sign a statement of acknowledgement, only if the change affects the premium amount. c)Notify the policy beneficiary of the change. d)Have the insured sign a statement acknowledging that he is aware of the change.

Have the insured sign a statement acknowledging that he is aware of the change.

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

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

An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have? a)Adjustable life b)Term life c)Limited pay d)Universal life

Universal life

Which characteristic does NOT describe managed care? a)Preventive care b)Unlimited access to providers c)High-quality care d)Shared risk

Unlimited access to providers

Which of the following is true about the premium on the children's rider in a life insurance policy? a)It decreases when the oldest child reaches the age of 21. b)It increases when a newborn baby is added to the policy. c)It decreases when an adopted child is added to the policy. d)It remains the same no matter how many children are added to the policy.

It remains the same no matter how many children are added to the policy.

A guaranteed renewable health insurance policy allows the a)Policy to be renewed at time of expiration, but the policy can be canceled for cause during the policy term. b)Insurer to renew the policy to a specified age. c)Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class. d)Policyholder to renew the policy to a stated age and guarantees the premium for the same period.

Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.