Missed Practice Exam Questions #4

What is the purpose of a conditional receipt?

It is intended to provide coverage on a date prior to the policy issue.

Which of the following best describes annually renewable term insurance?

It is level term insurance.

To be eligible for a Health Savings Account, an individual must be covered by a

High-deductible health plan.

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 policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

$50,000, The face of the term policy would be the same as the face amount provided under the whole life policy.

For how many days of skilled nursing facility care will Medicare pay benefits?

100

COBRA applies to employers with at least

20 employees.

All group life policies must include a grace period lasting at least

31 days.

Which of the following statements is NOT true concerning insurable interest as it applies to life insurance?

A debtor has an insurable interest in the life of a lender.

Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?

Annuity certain

n classifying a risk, the Home Office underwriting department will look at all of the following EXCEPT

Applicant's past income.

Which of the following is TRUE about a class designation

Beneficiaries are not identified by name.

Which of the following best describes fixed-period settlement option?

Both the principal and interest will be liquidated over a selected period of time.

In Kansas, which of the following provisions is legal?

Cancellation of a policy if amount of loan is more than loan value

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

Common Disaster

Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as

Contracts of adhesion.

What amount of care is provided in LTC's intermediate care?

Daily care by medical personnel

The term "fixed" in a fixed annuity refers to all of the following EXCEPT

Death benefit. Annuities do not provide a death benefit

If an insured changes the premium payment mode from monthly to annually, what happens to the total premium?

Decreases, Because the insurer would have the entire premium to invest for a full year, they would reduce the premium amount.

How often does a viatical settlement provider's license expire?

Every year

In the Executive Bonus plan, who is the owner of the policy, and who pays the premium?

Executive is the owner, and the executive pays the premium.

Which of the following statements concerning Medicare Part B is correct?

It pays for physician services, diagnostic tests, and physical therapy.

Which of the following statements is TRUE concerning the Accidental Death Rider?

It will pay double or triple the face amount.

An insured is involved in a car accident. In addition to less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will the insured receive Presumptive Disability benefits?

No benefits, Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of use of at least two limbs, total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work. Because the insured's blindness was only temporary and the loss of use in only one leg, he does not qualify for presumptive disability benefits.

All individual and group health insurance policies providing medical, surgical, or hospital expense in Kansas, must provide reimbursement or indemnity for the treatment of alcoholism, drug abuse, or nervous or mental conditions. Such coverage may be limited to

Not less than 30 days per year when the person is confined in a properly licensed facility.

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the

One-year term option.

Which of the following explains the policyowner's right to change beneficiaries, choose options, and receive proceeds of a policy?

Owner's Rights

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident, and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?

Pay a reduced death benefit

Which nonforfeiture option provides coverage for the longest period of time?

Reduced paid-up, The reduced paid-up nonforfeiture option would provide protection until the insured reaches 100, but the face amount is reduced to what the cash would buy.

In which of the following situations would Social Security Disability benefits NOT cease?

he individual's son gets a part-time job to help support the family

The Federal Fair Credit Reporting Act

Regulates consumer reports.

If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a

Settlement option.

The annual contribution limit of a Dependent Care Flexible Spending Account is set by

The IRS.

The Commissioner must find all of the following to be true of a viatical supplement provider applicant before a license will be issued EXCEPT

The applicant posts a bond with the Department of Insurance.

The examination requirement may be waived for all of the following insurance producer license applicants EXCEPT:

The applicant was previously licensed in Kansas, but allowed the license to lapse 3 years ago.

Which of the following is NOT the consideration in a policy?

The application given to a prospective insured

The primary beneficiary of her husband's life policy found that no settlement option was stated in the policy on the date of her husband's death. Who will select the settlement option in this case?

The beneficiary

What is necessary in order to be eligible to receive benefits from a long-term care policy?

The insured must be unable to perform some activities of daily living. ADLs include bathing, dressing, toileting, transferring, continence, and eating.

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT

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

The insuring clause of a disability policy usually states all of the following EXCEPT

The method of premium payment.

All of the following are true regarding a decreasing term policy EXCEPT

The payable premium amount steadily declines throughout the duration of the contract, Premiums remain level with a decreasing term policy; only the face amount decreases.

All of the following are true about variable products EXCEPT

The premiums are invested in the insurer's general account. Insurers selling variable products invest their customer's monies in a separate account, which is very similar to a mutual fund. Since there is no guaranteed rate of return, customers must bear the investment risk.

An insured has chosen the Joint and 2/3 Survivor settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

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

Waiver of Premium rider.

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage