Most Recent Simulated Exam

The most the Insurance Guarantee Association will pay for net cash surrender values is

$300,000

The most the Insurance Guaranty Association will pay for net cash surrender values is

$300,000

Which of the following is a feature of a variable annuity? a. interest rate is guaranteed b. securities license is not required c. benefit payment amounts are not gauaranteed d. payments into the annuity are kept in the company's general account

(c) benefit payment amounts are not guaranteed (d )insurers separate account

Agents selling life variable insurance products must

- be registered with FINRA - be licensed by the state to sell life insurance - have received a securities license

characteristics of group life to individual coverage conversion

- individual does NOT have to prove insurability at a standard rate -group life policy can covert to any form of insurance issued by the insurer except for term -employee usually has 31 days to convert after termination

3 options in life insurance

1) dividend (need for premium is lower) - paid up additions 2) nonforfeiture (policy lapses) - extended term 3) settlement (policy maturity) - cash

HIPPA applies to groups of a. more than 2 fewer than 50 b. 2 or more c. at least 10 d. at least 100

2 or more

If an individual or group health policy provides coverage for dependent children and the insured has a newly born child notification of the birth and any subsequent premium must be made within

31 days

For how long can an insurance company be allowed to defer policy loan requests?

6 months

What provision in an insurance policy extends coverage beyond the premium due date? a) Free look b) Automatic premium loan c) Waiver of premium d) Grace period

Grace period

The Medical Information Bureau was created to protect

Insurance companies from adverse selection by high risk persons

What is the benefit experience rating?

It allows employers with low claims experience to get lower premiums.

Which of the following is NOT true regarding the NEEDs approach method of determining the value of an individuals life a. It must be assumed that the death of the insured will occur immediately b. need is predicted using the number of years until the insured's retirement c. coverage is based on the predicted needs of the family d. the death of insured must be premature

Need is predicted using the number of years until the insured's retirement

A husband and wife are covered under a group health insurance plan at his place of employment. When she gave birth to their first child, what must he do in order to have coverage for their child?

Notify the insurer within 31 days in order for coverage to continue without any evidence of insurability

Which type of dental care would cover the cost of fillings? a. oral surgery b. restorative c. endodontics d. orthodontics

Restorative

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

Which settlement option provides a single beneficiary with income for the rest of his/her life

Single Life

Which is NOT true about beneficiary designations? a.the beneficiary must have insurable interest in the insured b. the beneficiary may be. a natural person c. the policy does not have to have the beneficiary named in order to be valid d. trusts can be valid beneficiaries

The beneficiary must have insurable interest in the insured.

what constitutes the entire contract?

The insurance policy with a copy of the application, and any riders and amendments

If a business owner becomes totally disabled, a business overhead expense policy will pay all of the following except a. loss of owner's income b. rent c. utilities d. employee payroll

a. loss of owner's income

Assuming that all of the following people are covered by high deductible health plan and are not claimed as dependents on anyones tax returns, which could not be eligible for a health savings account? a. joe is 40 and is not covered by any other health insurance b. amanda is 67 and is covered by a basic medical expense policy c. andy is 55 and is covered under a dental care policy d. jenny is 60 and has a long term care insurance plan

amanda is 67 and is covered by a basic medical expense policy ( to be eligible for a health savings account one must not be covered by health insurance except specific injury etal. must not be

In disability income insurance, if an insured is considered disabled if they are suited for by prior education training or experience, they fall under which definition of total disability?

any occupation

The full premium was submitted with the application with the application for life insurance and the policy was issued two weeks later as requested. When does the policy coverage become effective

as of application date

Which of the following protects the insured from unintentional policy lapse due to a nonpayment of premium? a) extended term b) reinstatement c) reduced paid up option d) automatic premium loan

automatic premium loan

All of the following are a requirement for a nonresident license EXCEPT a) holding an active license in the same line of authority in the home state b) passing the state licensing examination c) submitting a proper application and paying the fees d) submitting a licensing application from the home state

b) passing the state licensing examination

Which of the following is true about a class designation? a) it is not allowed b) it determines the succession of beneficiaries c)beneficiaries are not identified by name d)beneficiaries must be a part of the insured's immediate family

c) beneficiaries are not identified by name

***What are the 3 nonforfeiture options in life insurance policies?

cash surrender value, extended term, and reduced paid up insurance

What size companies are eligible for health reimbursement accounts (HRAs)?

companies of all sizes

Which of the following would NOT be an appropriate use of a deferred annuity? a. accumulating funds in an IRA b. funding a child's college education c. creating an estate d. accumulating retirement funds

creating an estate

In the executive owner plan who is the owner of the policy and who pays the premium?

executive is the owner, executive pays the premium

Nonforfeiture Options

extended term is the automatic nonforfeiture option

All of the following business uses of life insurance except a. funding against financial loss caused by death of key employee b. funding business continuation agreements c. funding against company's general financial loss d. compensating executives

funding against company's general loss

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy? a. dividend options b. guaranteed renewable options c. nonforfeiture options d. guaranteed insurability option

guaranteed insurability option

Which rider allows an insured to purchase additional coverage without evidence of insurability?

guaranteed insurability rider

Variable whole life insurance is based on what type of premium? a)graded b) level fixed c) increasing d)flexible

level fixed

A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?

level term

which of the following is correct concerning taxation of premiums in a key person life insurance policy a. premiums are not tax deductible as a business expense b. premiums are tax deductible by the key employee c. premiums are tax deductible as a business expense d. premiums are taxable to the employee

premiums are not tax deductible as a business expense

****Insurers may change which of the following on a renewable health insurance policy a. no changes are permitted b. rates by class c. coverage d. individual rates

rates by class

straight life

recipient receives income they cannot outlive

In the event of an insurer's insolvency, the SC Life and Health Guarantee Association will a. Fine producers of the insolvent insurer b. Conduct the business of the insolvent insurer from the Director's office in the Department of Insurance c. Reinsure policies of the insolvent insurer through other companies d. Refuse to pay outstanding claims agains the insolvent insurer

reinsure policies of the insolvent insurer through other companies

the insuring clause of a disability policy states all of the following except a. the insurance against loss is provided b. the types of loss covered c. the method of premium payment d. the identities of the insurance company and the insured

the method of premium payment