Life Insurance Questions
Which of the following persons is required to hold a producer license? A. A person who negotiates insurance contracts. B. A person who creates insurance advertisements C. A person who takes messages related to claims D. A person who administers employee benefits
A. A person who negotiates insurance contracts Persons who perform clerical tasks that are not related to soliciting or negotiating insurance contacts are not required to be licensed
Which of the following documents delivered to the policy-owner includes information about premium amounts, cash values, surrender value and death benefits for specific policy years? A. A policy summary B. A notice regarding replacement C. A privacy notice D. A buyer's guide
A. A policy summary A policy summary usually includes all of the listed information, and must be delivered along with a new policy
Occasional visits by which of the following medical professionals will NOT be covered underLTC's home health care? A. Attending physician B. Registered nurses C. Licensed practical nurses D. Community-based organization professionals
A. Attending physician Home health care is care provided in one's home and could include occasional visits to the person's home by registered nurses, licensed practical nurses, licensed vocational nurses, or community- based organizations like hospice.Home health care might include physical therapy and some custodial care such as meal preparations
Which of the following would NOT be considered an exception to the National Do Not Call List? A. Calls based from outside of the United States B. Call from which the consumer has given prior written permission C. Calls which are not commercial or do not include unsolicited advertisement D. Call by or on behalf of tax exempt nonprofit Organization
A. Calls based from outside of the United States Calls from outside the United States are not exception to the National Do Not Call List
Which of the following is an eligibility requirement for all Social Security Disability Income benefits? A. Have attained fully insured status B. Be disabled for at least 1 year C. Have permanent failure D. Be at least age 50
A. Have attained fully insured benefits
A couple near retirement is planning for their golden years. They want to make sure that their retirement annuity provides monthly benefits for the rest of their lives. Should one of them die, the other would still like to continue receiving benefits. Which settlement option should they choose? A. Joint and Survivor B. Joint Life C. Life with period certain D. Straight life
A. Joint and Survivor Joint and Survivor option guarantees an income for two or more recipients that none of them can outlive.
Which of the following information regarding an insured is NOT included in an investigative Consumer Report, Which is requested by an underwriter? A. Medical history B. Applicants's character C. Personal habits D. General reputation
A. Medical history An Investigative Consumer Report is considered to be a part of an insurance application. This report is used in the underwriting process in order to assess non-medical risk factors related to moral standing and avocations. Friends and colleagues are interviewed in order to evaluate that applicant's character, reputation and habits. The applicant must be informed in writing if the insurer decides to conduct the investigation
Which of the following occupations would have the same lowest disability insurance premium? A. Personal Trainer B. Construction worker C. Stunt pilot D. Police Officer
A. Personal Trainer The more hazardous an occupation is, the higher the insurance premiums will be. Therefore, because working as a personal trainer poses the least amount of risk, the premiums for this job would be the lowest
In which of the following cases would an "Any occupation" disability income policy pay the benefits? A. The insured is unable to perform any job in the field related to the insured's education and experience B. The insured is unable to perform the duties of his or her specific occupation C. The insured changes job and is injured as a result of a more hazardous occupation D. The insured's family has unexpected expenses due to the insured disability.
A. The insured is unable to perform any job in the field related to the insured's education and experience A policy that has an :any occupation " provision will only provide benefits when the insured is unable to perform any of the duties of the occupation for which they are suited by reason of education, training, or experience.
Which of the following statements regarding conditional receipts is true? A. They are temporary insuring agreement B. They guarantee the insurer will approve the application C. They purchase temporary insurance, up to 6 months D. They become part of the policy
A. They are temporary insuring agreement With a conditional receipt, insurance coverage is effective as of the date of the receipt, so long as the application is approved.
Which of the following statements is tTRUE concerning irrevocable beneficiaries? A. They can be changes only with the written consent of that beneficiary B. They may be changed at any time C. They can never be change D. They may be changed only on the anniversary date of the policy
A. They can be changed only with the written consent of that beneficiary Once irrevocable beneficiaries are indicated for the policy their written consent is required to change the beneficiary
A Hospital Indemnity policy will pay? A. Any expenses incurred by the stay in the hospital, minus coinsurance payment and deductibles B. A benefit for each day the insured is in the hospital C. Income lost while the insured is in the hospital D. All expenses incurred by the stay in the hospital
B. A benefit for each day the insured is in the hospital Hospital Confinement indemnity polices pay specific amount that depended on the amount of time the insured is confined to the hospital
Which statement best defines a Multiple Employer Welfare Arrangement (MEWA)? A. A group health plan that covers medical expenses arising from work related injuries B. A joining together by employers to provide health benefits for employee C. A plan that provides hospice care for terminally ill employees D. A government health plan that provides health care for unemployed
B. A joining together by employers to provide health benefits for employee. A MEWA provides benefits for a number of members groups.
An individual was just caught acting as an exclusive general agent- even though he is not properly licensed. Assuming that this occurred in a single day, what is the maximum penalty he faces? A. A second degree felony and $10,000 fine B. A third degree misdemeanor and a $1,000 fine C. A second Degree misdemeanor and $1,000 fine D. A Third degree felony and a $10,000 fine
B. A third degree misdemeanor and a $1,000 fine In Pennsylvania, acting as a manager or exclusive general agent without proper licensing is punishable by third degree misdemeanor charge and fine of up to $1,000 for each day of their offense
All of the following qualify for Medicare Part A EXCEPT? A Anyone who is over 65, not covered by Social Security, and is willing to pay premiums B. Anyone who is willing to pay premium C. Anyone that qualifies through Social Security D. Anyone who is at the end stage of renal disease.
B. Anyone who is willing to pay premium For Medicare Part A, a person must be age 65 or otherwise qualify
in a replacement situation, all of the following must be considered EXCEPT A. Exclusions B. Assets C. Benefits D. Limitations
B. Assets in a replacement situations the agent must be careful to compare the benefits, limitations and exclusions found in the current and the proposed replacement policy
The state Insurance Code identifies all of the following as prohibited acts that can cause suspension, revocation or denial of an insurance producer license EXCEPT? A. Committing a felony or its equivalent B. Committing any misdemeanor C. Failing to pay state income taxes. D. Failing to pay child support obligations
B. Committing any misdemeanor Only the commission of misdemeanors that involve the misuse or theft of money or property belonging to others will affect the maintenance or obtaining of an insurance producer license
A typical Accident Death & Dismemberment policy covers all of the following losses EXCEPTS A. Life B. Income C. Eyesight D. Limb
B. Income Accident Death & Dismemberment policies cover loss of body parts or life only
Which of the following settlement options in life insurance is known as Straight life? A. Fixed Amount B. Life Income C. Single Life D. Life with period certain
B. Life Income the life income option, also known as straight life, provides the replacement with an income that he or she cant outlive. it pays the benefits while the beneficiary is alive, however the payment stops at the beneficiary's death
All of the following are beneficiary designation EXCEPT? A Primary B. Specified C. Tertiary D. Contingent
B. Specified Beneficiary designations determine the order in which benefits will be paid primary or contingent, which includes secondary and tertiary
Which of the following is NOT a characteristic of a group long term disability plan? A. The benefits can be up to 66 and 2/3% of one's monthly income B. The benefits can be up to 50% of one's yearly income C. The elimination period is the same as in the short term plan's benefits period D. The benefits period may be to age 65
B. The benefits can be up to 50% of one's yearly income The maximum benefits is based upon monthly income
When an individual purchases insurance, what risk management technique is he or she practicing? A. Sharing B. Retention C. Transfer D. Avoidance
B. Transfer Insurance is a transfer of financial loss from a covered peril from the insured to the insurance company.
Which of the following settlement option in life insurance is known as straight life? A. Fixed amount B. life Income C. Single Life D. Life with period certain
B. life Income the life income option, also known as straight life, provides the replacement with an income that he or she cant outlive. it pays the benefits while the beneficiary is alive, however the payment stops at the beneficiary's death
Employer health plan must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months? A. 12 months B. 24 months C. 30 months D. 36 months
C. 30 months The Omnibus Budget Reconciliation Act of 1990 as amended by the Balanced Budget Act of 1997 required the employer health plan to provide primary coverage for 30 months for individuals with end-stage renal (kidney) disease before Medicare become primary
in order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years? A. 1 years B. 3 years C. 5 years D. 10 years
C. 5 years If the master contract is terminated, every individual who has been on the plan for at least 5 years will be allowed to convert to individual insurance of the same coverage
A licensed producer moving to Pennsylvania may become licensed as a resident if the producer submits a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior state? A.30 Days B. 60 Days C. 90 Days D. 180 Days
C. 90 Days nonresident producer may become resident producers if they submits a completed application within 90 days of establishing residence in PA with proof of licensing from their prior home state
Under the uniform required provisions, proof of loss under a health insurance policy normally should be filled within? A. 30 days of loss B. 60 days of loss C. 90 days of loss. D. 20 days of loss
C. 90 days of loss Under the Uniform Required Provisions, proof of loss under a health insurance policy normally be filed within 90 days of loss
Which of the following best describes a misrepresentation? A. Making a maliciously critical statement that is intended to injure another person B. Discriminating among individuals of the same insuring class C. Issuing sales material with exaggerated statement about policy benefits D. Making a deceptive or untrue statement about a person engaged in the insurance business
C. Issuing sales material with exaggerated statement about policy benefits Misrepresentation is issuing, publishing or circulating any illustration or sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of dividends, etc. This includes oral This includes oral statements.
In which of the following situations is it legal to limit coverage based on marital status? A. Legal separation during the application process B. Divorce within the last six months of applying for insurance C. It is never legal to limit coverage based on marital status D. Excessive number of divorces as defined by the insurance code
C. It is never legal to limit coverage based on marital status Availability of insurance benefits or converge may not be denied based in sex, marital status. Marital status may be considered for the purpose of defining persons eligible for dependent benefits.
If a dental plan is integrated, it is combined with what type of plan? A. Supplemental B. Life C. Medical D. Secondary Dental
C. Medical Integrated plans allow for dental plans to be included in a medical plan, providing coverage for both under a single contract. Sometimes the deductibles are merged, but this does not have to be the case.
Which renewable provision allows an insurer to terminate a policy for any reason and to increase the premiums for any class of insured? A. Cancellable B. Guaranteed renewable C. Optionally renewable D. Conditional renewable
C. Optionally renewable The renewability provision in an optionally renewable policy gives the insurer the option to terminate the policy for any reason on the date specified in the contract (usually a renewal date). Furthermore, this provision allows the insurer to increase the premium for any class of optionally renewable insureds
When an employee is still employed upon reaching age 65 and eligible for Medicare, which of the following is the employee's option? A. Enroll in Medicare when eligible: Medicare Benefits will be forfeited. B. Wait until next birthday to enroll C. Remain on the group health insurance plan and defer eligibility for Medicare until retirement D. Enroll in Medicare, while the company must provide additional retirement benefits
C. Remain on the group health insurance and defer eligibility for Medicare until retirement If an employee is still employed upon reaching age 65, federal law requires keeping the employee on the group health insurance rolls and deferring their eligibility for Medicare until retirement. The employee has the right to reject the company plan and elect Medicare but the company can offer no incentives for switching to Medicare
All of the following employees may use a 403(b) plan for their retirement EXCEPT A. A part-time classroom aide B. The vice president of a charitable organizations. C. The CEO of a private corporation. D. A school bus driver
C. The CEO of a private Organization Not all public employees are eligible for 403(b) plans, or tax- sheltered annuities, only employees of public education (local, state, or federal ), as well as employees of charitable organizations
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payment will be determined by taking into account all of the following EXCEPT? A. Projected interest rates B. Face amount of the policy C. The insured's age of Death D. The beneficiary's life expectancy
C. The Insured's age of death The insured's age at death will not be considered, but the longer the life expectancy of the recipient, the lower the payment will be
Which of the following would qualify as a competent party in an insurance contract? A. The applicant is a 12 years old student B. The applicant is under the influence of a mind-impairing medication at the time of the application. C. The Applicant has a prior felony conviction D. The applicant is intoxicated at the time of application
C. The applicant has a prior felony conviction When an insurer and insured enter into a contact, both parties must be of legal age and mentally. it is legal for a person convicted of a felony to buy an insurance contract. An intoxicated person , however may not be mentally competent , a 12 year old student is considered to be underage in most states and a person under mind impairing medication most likely would be mentally competent.
What is the number of credits required for fully insured status for Social Security disability benefits? A. 4 B. 10 C. 30 D. 40
D. 40 The term "fully" refers to someone who has earned 40 quarters of coverage (10 years of work time 4 maximum annual credits"
According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan? A. 10% B. 30% C. 40% D. 60%
D. 60% Under the bronze plan, the health plan is expected to cover 60% of the cost for an average population, and the participants would cover the remaining 40%
How many eligible employees must be included in a contributory plan? A. 90% B. 100% C. 50% D. 75%
D. 75% At least 75% percent of eligible employees can be included in a contributory plan, Both the employees and the employer contribute to premium payments.
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. Accidents Only
D. Accidents Only Accidents Only policies cover medical benefits to an accident. Medical conditions related to sickness are not covered.
The Full premium was submitted with the application for the life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective? A. As the policy delivery date B. As of the first mouth after the policy issued C. As of the policy issued date D. As of the application date
D. As of the application date if the full premium was submitted with the application and the policy was issued as requested, the policy coverage effective date would generally coincide with the date of application
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an A. Local insurer B. Certified insurer C. Self insurer D. Authorized insurer
D. Authorized insurer Insurers who meet the state's financial requirements and hold a Certificate of Authority to transact business in the state are considered authorized or admitted
Which of the following options best depicts how the eligibility of members for group health insurance is determined? A. Eligibility is not determined, but simply accepted B. By the physical conditions of the applicants at the time of employment C. in such a manner as to establish individual selection as to the amount of insurance D. By conditions of employment
D. By conditions of employment The individual employment normally provides coverage to all full time employment
Which of the following authorities monitors the financial strength of insurers? A. National Association of Insurance Commissioners (NAIC) B. Financial Industry Regulatory Authority (FINRA) C. Insurance companies D. Department of Insurance
D. Department of Insurance The Commissioner and the department of Insurance are charged with monitoring the financial strength and integrity of insurers authorized to conduct business in Pennsylvania in order to determine whether the continued operation of any insurer might be financially hazardous to policyholders, creditors, or to the public in general.
A Universal Life insurance policy has two types of interest rates that are called? A. Option A and B Option B B. Fixed and Variable C. Minimum and Target D. Guaranteed and Current
D. Guaranteed and Current The insurer credits the cash value in the policy with a current (non-guaranteed) interest rates and backs the cash value with a contract (lower guaranteed) rate of interest.
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 premiums payment into the annuity D. It may last for the lifetime of the annuitant
D. It may last for the lifetime of the annuitant The "annuity period" is the time during which accumulated money is converted into income stream. it may last for the lifetime of the annuitant or for a shorter specified period of time depending on the benefits payment option selected
Which of the following is an example of limited pay life policy A. Renewable Term to 70 B. Level Term Life C. Straight Life D. Life paid up at Age 65
D. Life paid up at Age 65 Limited Pay Whole Life premiums are all paid by the time the insured reaches age 65. The policy endows when the insured turns 100. it is the premium paying period that limited, not the maturity
A medical insurance plan in which the health care provider is paid a regular fixed amount for providing care to the insured and does not receive additional amounts of compensation dependent upon the procedure performed is called? A. Indemnity plan B. Reimbursement plan C. Fee for service plan D. Prepaid plan
D. Prepaid Plan Under a prepaid plan, the health care providers are paid for services in advance, whether or not any services are provided. The amount paid to the provider is based upon the projected annual cost as determined by the provided.
All of the following are considered to be basic benefits of an HMO plan EXPECT? A. Preventive Services B. Out of area coverage C. Diagnostic laboratory services D. Prescription Drugs
D. Prescription Drugs HMO are required to provide the following benefits, Hospital inpatient services .physicians services, outpatient medical services, preventive services, emergency services, diagnostic laboratory sercices and out of area coverage
The sole beneficiary of a life insurance policy dies before the insured. if the policyowner fails to change the beneficiary before the insured's death, the proceeds of the policy will go to A. Probates B. The state C. The beneficiary's estate D. The insured's estate
D. The insured's estate In the absence of a viable beneficiary, proceeds will be paid to the estate of the insured.
The main difference between immediate and deferred annuities is? A. How the annuity is purchased. B. The number of insureds. C. The amount of each payment D. When the income payment begin
D. When the income payment begin The main difference between immediate and deferred annuities is when the income payment begin. Immediate annuities will begin payments within the first year, while deferred annuities will not begin payments until sometime after the first year