Missed Questions on Practice exams - Health/Life Insurance
How long is an open enrollment period for Medicare Supplement policies?
6 months
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2500
An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the a) Consideration clause b) insuring clause c) pre-existing conditions clause d) eligibility clause
A)
If consumer requests additional info 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)
Which of the following is the term used when a person in a fiduciary position has used assets in manner for which they were not intended such as the wrongful taking or use of money belonging to another? a) misappropriation of funds b) fraud c) rebating d) Fiduciary Capacity
A)
Which provision allows a person to return a Medicare Supplement policy within 30 days for a full premium refund? a) right to examine b) Guaranteed renewability c) grace period d) refund of premium
A)
Equity Indexed Annuities a) seek higher returns b) are more risky than variable annuities c) are security instruments d) invest conservatively
A) Equity Indexed Annuity (like a fixed annuity) has a guaranteed minimum interest rate. The current interest rate that is actually credited is often tied to a familiar index like the Standard and Poor's 500
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid a) for 20 years or until death, whichever is first b) until the Policyowner reached 65 c) for 20 years d) until the Policyowner's age 100, when the policy matures
A) If insured dies before planned premiums are paid (20 years worth), the beneficiary will receive the face amount as a death benefit
What documentation grants express authority to an agent? a) agents contract with the principle b) agent's insurance license c) fiduciary contract d) state provisions
A) The principal grants authority to an agent through the agent's contract
which of the following statements is NOT true concerning insurable interest as it applies to life insurance? a) a debtor has an insurable interest in the life of a lender b) business partners have insurable interest in each other c) a husband or wife has insurable interest in their spouse d) an individual has an insurable interest in his/her own life
A) a lender has an insurable interest in the life of a debtor, but only to the extent of the debt - debtor does not have an insurable interest in the life of the lender
Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance? a) Replacement rule b) Reinstatement rule c) Conversion rule d) Disclosure rule
A) anytime a new policy is issued that replaces or modifies existing insurance, a replacement form must be submitted to the ceding company
What document describes an insured's medical history, including diagnoses and treatments? a) Attending Physicians Statement b) Physician's Review c) Individual Medical Summary d) Comprehensive Medical History
A) best way for underwriter to evaluate insured's medical history
Guarantee of insurability option in long-term care policies allows the insured to a) secure the policy's nonforfeiture values regardless of insured's age or health status b) increase benefit levels without providing proof of insurability c) add dependents to the plan without providing proof of insurability d) replace the existing LTC policy based on the original underwriting
B
If a licensed person is moving to PA, he/she may become a licensed as a resident if they submit a completed application within how many days of establishing residence with proof of licensing from their prior home state? a) 60 b) 90 c) 180 d) 30
B
Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean? a) the primary beneficiary will receive death benefit and the secondary beneficiaries will share the interest payments b) the beneficiary will only receive payments of the interest earned on the death benefit c) beneficiary must pay interest to the insurer d) beneficiary will receive a lump sum, plus interest
B
Which of the following would provide an underwriter with info concerning an applicants health history? a) the inspection report b) the Medical Information Bureau c) a medical exam d) the agent's report
B) agents report and inspection report provide personal info -med exams provide Info on current health
In which Medicare Supplemental policies are the core benefits found? a) plans A-D only b) All plans c) plans A and B only d) Plan A only
B) core benefits are plan A, must be included in all other types
Which of the following hospice expenses would NOT be covered in a cost-containment setting? a) special hospital bed b) antibiotics c) Tylenol d) morphine
B) daily needs and pain relief are provided, curative measures are not
A producer licensed in PA must notify the Insurance department of any changes of address in his/her residence or business within how many days? a) 15 b) 20 c) 30 d) 10
C
According to OBRA, what is the minimum number of employees required to constitute a large group? a) 20 b) 50 c) 100 d) 15
C
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT a) stocks, securities , or bonds b) an offer to share in commissions generated by the sale c) dividends from a mutual insurer d) an offer of employment
C
Regarding Medicare SELECT policies, what are restricted network provisions? a) they determine premium rates b) they help avoid adverse selection c) they condition the payment of benefits d) they determine who can be insured
C) A medicare SELECT policy is a Medicare Supplement policy that contains restricted network provisions - provisions that condition the payment of benefits, in whole or in part, on the use of network providers
According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer EXCEPT a) late payments b) failure to pay off a loan c) disputes regarding consumer report information d) tax delinquencies
C) Customer disputes are not considered negative info, and in fact, must be included in consumer reports
Bob purchased a policy to provide coverage on himself, his wife Linda, and their two children, John and Kristen. All of them would need to prove insurability EXCEPT a) Linda b) John and Kristen c) Any children born to them after the inception of the contract d) Bob
C) New born children need not prove insurability
A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid? a) neither plan would pay b) each plan will pay in equal shares c) the insured will have to select a plan from which to collect benefits d) the benefits will be coordinated
D
According to the Time Limit on Certain Defenses provision, the insurer can't void the policy for any misstatements on the application (except for fraud) if the policy was in force for what time period? a) 7 years b) 90 days c) 1 year d) 3 years
D
Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce a) under any circumstance b) unless they have served an appropriate prison sentence c) without receiving written consent from a federal judge d) without receiving written consent from an insurance regulatory authority
D
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
D) though it is illegal to advertise, the statement is still true and would not be considered a misrepresentation
Variable Life Policies
Vary in value, as the name suggests, because the value is based on the stocks that support the policy - if a policyholder wants a more stable, reliable value, he/she should invest in a fixed policy
Medicaid
a 'needs' tested program administered by the states to provide assistance to persons who are not able to provide for themselves
Creditor group (creditor life) health insurance
a specialized use of group life and group health insurance that protects the lending institution from loosing money as the result of a borrower's death or disability -generally, the borrower is the premium payer, but the lending institution is the beneficaiary
According to OBRA, what is the minimum number of employees required to constitute a large group?
a) 100
Cost of Living Rider
adjusts the face amount of a policy to maintain the relationship of the face amount and increases in the cost of living - may be attached to a life insurance policy that will adjust the face amount based upon a specific index (such as the Consumer Price Index)
Guaranteed Insurability Rider
allows the insured to increase the amount of insurance without proving evidence of insurability
Cost of Living Rider
allows the policyholder to purchase one-year term insurance equal to the percentage change in the consumer price index with no evidence of insurability
Straight whole life policies
have a level guaranteed face amount and a level premium for the life of the insured
Consumer Reports
include written and/or oral info regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources
Interest-only Option
insurance company retains the policy proceeds and pays interest on the proceeds to the recipient (beneficiary) at regular intervals
The Insuring Clause
lists the insured, the insurance company, what kind of loses are covered, and for how much the losses would be compensated
Business Overhead Expense (BOE) insurance
sold to small business owners for the purpose of reimbursing the policyholder for business overhead expenses during a period of total disability
The Consideration Clause
specifies that both parties to the contract must give some valuable consideration -payment of the premium is the consideration given by the applicant
Indemnity
stipulates that the insured can only collect for the amount of the loss even if the policy is written with greater benefit limits
Additional Monthly Benefit Rider
stipulates that the insurer will pay benefits comparable to what Social Security would pay. -After a year, the insurer ends the benefit and assumes that Social Security will begin benefit payment
Licensees must make a report of any action taken against them in another jurisdiction or by another governmental agency in PA within how many days of the final disposition of the matter?
30
When a producer holding a certificate or a broker's license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within
30 days
When a producer holding a certificate or a broker's license has a change in his/her residence or business address, they most notify Department of Insurance and any company within
30 days
An adopting parent must inform their insurer that a child has been added to the family within
31 day s
Adoptive parents must inform their insurer that a child has been added to the family within
31 days
A prospective insured receives a conditional receipt but dies before the policy is issued . The insurer will a) pay the policy proceeds only if it would have issued the policy b) pay the policy proceeds up to an established amount c) not pay the proceeds d) automatically pay the policy proceeds
A
After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit Rider. Which of the following benefits will he receive? a) monthly premium waiver and monthly income b) percentage of medical costs paid by the insurer c) payments for life d) yearly premium waiver and income
A
The insuring clause of a disability policy usually states all of the following EXCEPT a) the method of premium payment b) the identities of the insurance company and the insured c) that insurance against loss is provided d) the types of losses covered
A
Which is true about a qualified plan? a) has a tax benefit for both employer and employee b) does not need to have a vesting schedule c) may discriminate in favor of highly paid employees d) may allow unlimited contributions
A
Which of the following is an example of a limited-pay life policy? a) Life Paid-up at Age 65 b) Renewable Term to Age 70 c) Level Term Life d) Straight Life
A
According to the Time Limit on Certain Defenses provision, the insurer can't void the policy for any misstatements on the application (except for fraud) if the policy was in force for what time period?
3 years
According to the provisions of the Patient Protection and Affordable Care Act, all of the following are required preventive care services EXCEPT a) cervical cancer exams for all women starting at age 40 b) diet counseling for adults c) well-woman visits and counseling d) screenings for autism and behavioral disorders in children
A) cervical cancer exams as preventive service will only be made available for women at higher risk
What is the shortest possible elimination period for group short-term disability benefits provided by an employer? a) 0 day s b) 30 days c) 60 days d) 90 days
A) elimination can be nonexistent and the benefits can last as long as two years - benefit typically spans 70-80% of the insured's income
All of the following are features and requirements of the Living Needs Rider EXCEPT a) diagnosis must indicate that death is expected within 3 years b) it is usually available at no additional charge c) the remainder of the policy proceeds is payable to the beneficiary at the insured's death d) it provides funds for medical and nursing home expenses to a terminally ill insured
A) if insured is diagnosed with a terminal illness that will result in death within TWO years
which of the following best describes annually renewable term insurance ? a) it is level term insurance b) it requires proof of insurability at each renewal c) neither the premium nor death benefit is affected by insured's age d) it provides an annually increasing death benefit
A) offers the most insurance at the lowest cost
Insurance producers that do not have company appointments are considered a/an a) representative of the consumer b) managing general agent c) agent d) producer
A) such producers must have written agreement with consumer before acting
Which of the following is NOT a characteristic of a group long-term disability plan? a) the benefit can be up to 50% of one's yearly income b) the elimination period is the same as in the short-term plan's benefit period c) the benefit period may be to age 65 d) the benefit can be up to 66 2/3% of ones monthly income
A) the max benefit is based upon monthly income
When the insured initiates the cancellation of a policy, the unearned premium will be refunded on a a) per occurence basis b) short rate basis c) extended term basis d) pro rata basis
B
Which of the following reports will provide the underwriter with the info about an insurance applicant's credit? a) any federal report b) consumer report c) inspection report d) agents report
B
With regards to premium rates, which of the following statements is NOT true? a) if a premium rate is disapproved, the Commissioner must hold a hearing if requested by the insurer b) The Commissioner sets all insurance premium rates used in PA c) PA is a "prior approval" state in that premiums rates must be filed with the Insurance Department and approved by the Commissioner d) After a premium rate is filed, the insurer must wait 30 days or until approval is received from the Commissioner before using the new rate
B) All premium rates must be filed with the Commissioner -the insurer must wait 30 days before using the filed rate, or until the approval is received -if after 30 days, the filing has not been disapproved, the insurer may use the filed rate
What is the purpose of a conditional receipt? a) it is given only to applicants who fully prepay the premium b) it is intended to provide coverage on a date prior to the policy issue c) it guarantees that a policy will be issued in the amount applied for d) it serves as proof that the applicant has been determined insurable
B) Coverage commences on the date of the application or the date of a medical exam, whichever is later, on the condition that the applicant is determined to be insurable at the rate applied for
All of the following would be considered an insurance transaction EXCEPT a) negotiating coverage b) obtaining an insurance license c) soliciting a policy d) advising a policyholder regarding a claim
B) Insurance transaction - the carrying on of business in insurance, which could include the solicitation of a policy, advising, negotiation, or inducement related to coverage or claims - obtaining an insurance license is a prerequisite to transacting insurance
An insured is involved in a care accident. In addition to general , 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 he receive Presumptive Disability benefits? a) full benefits until the blindness lifts b) no benefits c) full benefits d) partial benefits
B) Presumptive disability plans offer full benefits for specified conditions. -loss of use of at least two lies, total/permanent blindness, loss of speeach/hearing
An insured is receiving hospice care. His insurer will pay for painkillers but not for an operation to reduce the size of the tumor. What term best fits this? a) claims saving b) cost-containment c) selective coverage d) limited coverage
B) daily needs and pain relief are provided, but curative measures are not
Which benefits would a disability plan most likely pay? a) medical expenses associated with a disability b) income lost by the insured's inability to work c) rehabilitation costs d) copayments
B) designed to help insured recover income lost as a result of the disability -amount of benefits that an insured receives is determined by insured's earned income and is usually limited to a certain percentage of that amount
Which of the following policies would be classified as a traditional level premium contract? a) variable universal life b) straight life c) adjustable life d) universal life
B) have a level guaranteed face amount and a level premium for the life of the insured
Which of the following types of LTC is NOT provided in the institutional setting? a) intermediate care b) home health care c) custodial care d) skilled nursing care
B) home health care is given in the home
Insurers may change which of the following on a guaranteed renewable health insurance policy? a) no changes permitted b) rates by class c) coverage d) individual rates
B) insurer may increase premiums on a class basis only and not on an individual policy
If an insurer becomes insolvent, which of the following would pay benefits to policyholders? a) a federal reserve fund b) The Guaranty Association c) the NAIC fund d) The State
B) is in existence to protect policy owners and beneficiaries against losses caused by the insolvency of an insurance company
Which of the following is NOT a characteristic of a group long-term disability plan? a) benefit can be up to 66 and 2/3% of ones monthly income b) benefit can be up to 50% of ones yearly income c) elimination period is the same as in the short-term plan's benefit period d) benefit period may be to age 65
B) max benefit is based upon monthly income
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following is true? a) the contract can be issued without an annuitant b) the annuitant must be a natural person c) a corporation can be an annuitant as long as it is also the owner d) a corporation can be an annuitant as long as the beneficiary is a natural person
B) owners of annuities can be individuals or entities like corporation and trusts, but the annuitant must be a natural person, whose life expectancy is taken into consideration for the annuity
Which type of care re-establishes functional use to natural teeth? a) repair b) restorative c) fillings d) functionality
B) such as fillings and crowns
All of the following would be different between qualified and non qualified retirement plans EXCEPT a) IRS approval requirements b) Taxation on accumulation c) Taxation on withdrawals d) Taxation of contributions
B) taxation on accumulation is deferred in both types of plans
A Policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision? a) assignment b) automatic premium loan c) waiver of premium d) incontestability period
B) this provision is not required, but is commonly added to contracts with a cash value at no additional charge - this special type of loan prevents the unintentional lapse of a policy due to a nonpayment of the premium
How are the variable annuities regulated? a) by the department of insurance b) by state and federal agencies c) by the national association of securities dealers d) by the commissioner of insurance
B) variable annuities are considered securities and are regulated by various state and federal agencies, including the SEC, the FINRA, and the state department of insurance
A producers licensed must be renewed..
Bienually
All of the following statements are true of a Combination Dental Plan EXCEPT a) it covers diagnostic and preventative care on the usual , customary, and reasonable basis b) it uses a fee schedule for other dental services c) it is also known as the Superimposed Plan d) it is basically a combo of a scheduled and nonscheduled dental plan
C
An applicant is denied insurance because of info found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name/address of the consumer reporting company? a) conditional receipt b) disclosure rule c) Fair Credit Reporting act d) Consumer Privacy Act
C
How soon after the due date should the insurer pay the agent appointment fees? a) immediately b) within 10 days c) within 30 days d) within 60 days
C
In long-term care (LTC) policies, as the benefit period lengthens, the premium a) LTC premiums are not based on benefit periods b) Decreases c) Increases d) Remains unchanged
C
L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2500 loss. What is the minimum amount L will have to pay? a) $1000 (deductible plus 20% of entire bill) b) $2500 (entire bill) c) $900 (deductible, plus 20% of bill after deductible [20% of $2000] d) $500 (amount of deductible)
C
The Policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change? a) death benefit can be increased only when the policy has developed a cash value b) death benefit can be increased only by exchanging the existing policy for a new one c) the death benefit can be increased by providing evidence of insurability d) the death benefit can't be increased
C
The Policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should Policyowner choose? a) joint and survivor b) fixed amount option c) interest only option d) life income with period certain
C
Traditional IRA contributions are a) never tax deductible b) partially tax deductible depending on the income level c) tax deductible d) deducted based on the income level
C
Which of the following is NOT covered under Plan A in Medigap insurance? a) the 20% part B coinsurance for medicare approved services b) the first three pints of blood each year c) The Medicare Part A deductible d) approved hospital costs for 365 additional days after Medicare benefits end
C
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? a) indemnity b) representation c) warranty d) concealment
C
Which of the following statements regarding the Business Overhead Expense policies is NOT true? a) any benefits received are taxable to the business b) leased equipment expenses are covered c) benefits are usually limited to 6 months d) premiums paid for BOE are tax-deductible
C
Who is the beneficiary in a credit health policy? a) estate of the borrower b) Federal Government c) the lending institution d) the insurer
C
All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT a) the payments are not guaranteed for life b) the insurer determines the amount for each payment c) it is a life contingency option d) it will pay the benefit only for a designated period of time
C)
What happens if a deferred annuity is surrendered before the annuitization period? a) insurer can only apply the surrender value toward another annuity b) deferred annuities can't be surrendered prior to the annuitization period c) owner will receive the surrender value of the annuity d) owner will only receive a refund of the premium
C)
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? a) $100 per violation b) revocation of license c) $2500 d) $1000
C)
Which of the following is NOT a goal of risk retention? a) to increase control of claim reserving and claims settlements b) to fund losses that cannot be insured c) to minimize the insured's level of liability in the event of loss d) to reduce expenses and improve cash flow
C)
What is the civil penalty for violating a cease and desist order of the Commissioner? a) $1000 b) $5000 c)10000 d) 50000
C) a penalty of up to $10000 may be leveled for each violation of the Commissioner's cease and desist order
All of the following statements concerning Accidental Death and Dismemberment coverage are correct EXCEPT a) dismemberment benefits are paid for certain disabilities that are presumed to be total and permanent b) accidental death and dismemberment insurance is considered to be limited coverage c) death benefits are paid only if death occurs within 24 hours of an accident d) accidental death benefits are paid only if death results form accidental bodily injury as defined in the policy
C) death benefit will be paid if the accidental death occurs within 90 days of the accident
An individual has just borrowed $10000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited? a) universal life b) whole life c) decreasing term d) variable life
C) decreasing term policy's face amount decreases as the amount of debt is reduced
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) reimbursement plan b) fee-for-service plan c) prepaid plan d) indemnity plan
C) health care providers are paid for the services in advance, whether or not any are provided -amount paid to provider is based upon the projected annual cost as determined by the provider
Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to a) 3 years b) 5 years c) 10 years d) 12 years
C) if activity jeoprardized the security of the accompanied insurer, the punishment can be up to 15 years
Shortly after a replacement transaction on a Medicare Supplement policy, the insured decided to cancel the policy, but is unsure whether the free-look provision applies. The insured could find that info in the a) buyers guide b) certificate of coverage c) notice regarding replacement d) policy application
C) notice must inform the applicant of the 30-day free look provision of the replacing policy
The insurance code identifies all of these as prohibited acts that can cause suspension, revocation, or denial of an insurance producer license for a licensee or applicant, with the exception of a) failing to pay child support obligations b) commission of a felony or its equivalent c) commission of any misdemeanor d) failing to pay state income taxes
C) 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
The premium of a survivorship life policy compared with that of a joint life policy would be a) as high b) half the amount c) lower d) higher
C) since the death benefit is not paid until the last death, the joint life expectancy in a sense is extended, resulting in lower premiums
A producer sold an insurance policy. Subsequently, his license was suspended. In this case, how much of the commission will the producer receive? a) 1/4 b) none c) all d) 1/2
C) was licensed at the time of sale
If a licensed person is moving to PA, he/she may become licensed as a resident if they submit a completed application within how many days of establishing residence in PA with proof of licensing from their prior home state? a) 180 b) 30 c) 60 d) 90
D
If a vatical settlement provider transfers ownership of an insurance policy, how long does the insurer have to inform the insured of the change? a) 30 days b) 60 days c) 90 days d) 20 days
D
The Policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this? a) paid-up addition b) accumulation at interest c) cash option d) reduction of premium
D
The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is true? a) owner's estate will receive the money paid into the annuity b) insurance company will retain the cash value and pay back the premiums to the owners estate c) money will continue to grow tax-deferred until the liquidation period, and then will be paid to the beneficiary d) beneficiary will receive the greater of the money paid into the annuity or the cash value
D
Under a Key Person disability income policy, premium payments a) are made by the employee and are not tax-deductible b) are made by the employee and are tax-free c) are made by the business and are tax-deductible d) are made by the business and are not tax-deductible
D
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy? a) it is increased when extra premiums are paid b) it decreases over the term of the policy c) it remains the same as the original policy, regardless of any differences in value d) it is reduced to the amount of what the cash value would buy as a single premium
D
When is the insurability conditional receipt given? a) after the application has been approved and the premium has been paid b) when an insured individual needs to obtain an insurability receipt for tax purposes c) if the application is approved before the premium is paid d) when the premium is paid at the time of application
D
Which of the following is true regarding a waiver of a surrender charge on an annuity contract? a) charge can only be waived if the annuitant needs the funds for medical expenses b) surrender charge will be applied to all premature surrenders c) surrender charge waiver only applied to all premature surrenders d) the charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days
D
Which of the following will NOT be an appropriate use of a deferred annuity? a) accumulating retirement funds b) accumulating funds in an IRA c) funding a child's college education d) creating an estate
D
To sign up for a Medicare prescription drug plan, individuals must first be enrolled in a) Medicare Part B and C b) Medicare Part A and C c) Medicare Part D d) Medicare Part A
D)
Which of the following is NOT true regarding Equity Indexed Annuities? a) the insurance company keeps a percentage of the returns b) they have guaranteed minimum interest rates c) they are less risky than variable annuities d) they earn lower interest rates than fixed annuities
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) 6 month waiting period from the time of disability until the first premium is waived
Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage? a) group dental insurance plan b) medical-surgical expense plan c) basic medical expense plan d) health maintenance organization plan
D) HMOs provide a package of comprehensive health care services that include routine physicals, immunizations, well baby care, family planning, etc. , as well as the treatment of sickness and injury
If a life insurance policy increases significantly in face amount(death benefit) when the insured reaches a specified age, what type of policy is this? a) limited pay whole life b) modified life insurance c) single premium d) jumping juvenile
D) JJ provide a low face amount in the early years and then increase, usually by 5x the amount, when the insured reaches an age specified in the policy (usually age 21)
Who is repsponsible for paying producer appointment fees? a) The Commissioner's office b) The Department of Insurance c) The Producer d) The appointing insurer
D) a fee of $15 will be billed to the insurer annually for each producer appointed during the previous year
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
D) available for a limited amount of time, usually expiring at age 65. -jsut like any other insured rider, is usually level term insurance
At the time of initial licensing, what fee must a vatical settlement provider pay? a) $50 b) $100 c) $200 d) $300
D) must pay fee of $300 at time of initial and renewal applications for vatical settlement providers
Under a Key Person Disability income policy, premium payments a) are made by the employee and are not tax-deductible b) are made by the employee and are tax-free c) are made by the business and are tax-deductible d) are made by the business and are not tax-deductible
D) premiums are nondeductible to the business, however, benefits are received tax-free by the business
Installing deadbolt locks on the doors of a home is an example of which method of handling risk? a) avoidance b) transfer c) self-insurance d) reduction
D) steps taken to prevent losses from occurring are called risk reduction
Fair Credit Reporting Act (FCRA)
a federal law that helps to ensure the accuracy, fairness, and privacy of the info in consumer credit bureau files -regulates the way credit reporting agencies can collect, access, use, and share the data they collect in your consumer reports
Medicaid
a program operated by the state, with some federal funding, to provide medical care for those in need
Incontestability Clause
a provision stating that the insurer cannot dispute the validity of a policy after a specified period - prevents an insurance company from denying payment of a death claim after a specified period of time
Reciprocity
occurs when the state in which the person resides accords the same privilege to residents of PA
Restorative Care
re-establishes functional use to natural tech, such as the application of fillings and crowns
Participating
refers to any insurance policy that distributes its dividends by cash payments, reduced premiums, units of paid-up life insurance, a savings program, or by the purchase of term insurance
Liquidity
refers to availability of cash to the insured through cash valued
Reduced paid-up Policy
the original policy's cash value is used as single premium to pay for a permanent policy with a reduced face amount from the original, hence the name. The new policy accumulates in cash value until its maturity or the insured's death
Viator
the person who sells the insurance policy to the provider
Annuitization Period
the time during which accumulated money is converted into an income streak -aka annuity, liquidation, or pay-out period
Insuring Clause
usually on the first page of the policy, is the general statement that defines the insurance agreement and identifies the insured and the insurance company and states what kind of loss (peril) is covered
Disability Income Benefit Rider
waives the policy premiums, just like the Waiver of Premiumium rider. - it also allows the insured to receive a weekly or monthly income during the disability period
Concealment
when a person withholds a material fact that is crucial to making a decision
