Practice Exam Missed Questions

An insurance producer licensed in life and/or health must complete 12 hours of continuing education courses every 3 years. 18 months. 2 years. 1 year.

2 years

What is the maximum monetary fine for a nonwillful violation of insurance statutes regarding unfair trade practices? $500 $1,000 $5,000 $10,000

$1,000

For a retirement plan to be qualified, it must be designed for the benefit of IRS. Employees. Key employee. Employer.

Employees

Long-term care coverage may be available as any of the following options EXCEPT Endorsement to a health policy. Group long-term care. Individual long-term care. Endorsement to a life policy.

Endorsement to a health policy.

Which nonforfeiture option has the highest amount of insurance protection? Extended Term Conversion Decreasing Term Reduced Paid-up

Extended Term

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? Cash option Reduction of premium Paid-up addition Accumulation at interest

Reduction of premium

All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT The employer pays a bonus to a selected employee to fund the policy. It is considered a nonqualified employee benefit. The policy is owned by the company. Any type of insurance policy may be used.

The policy is owned by the company (Owned by employee)

An insured is covered by a partially contributory group disability income plan that pays benefits of $4,000 a month. If the insured pays 25% of the monthly premium, how much of the monthly benefit would be taxable? None $1,000 $3,000 $4,000

$3,000

What is the waiting period on a Waiver of Premium rider in life insurance policies? 30 days 3 months 5 months 6 months

6 months

Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance? Slandering Defamation Undercutting Twisting

Defamation

Which type of insurance provides funds for a business organization to purchase the business interest of a disabled partner? Disability Interest Buy-out Corporate Transfer Corporate Disability Disability Buy-Sell

Disability Buy-Sell

What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before a loss can be covered? Probationary period Contestable period Elimination period Grace period

Probationary period

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT The annual dividend is retained by the company. The interest is credited at a rate specified by the policy. The policyholder has the right to withdraw the accumulations at any time. The interest is not taxable since it remains inside the insurance policy.

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

Once the person meets the stringent requirements for disability benefits under Social Security, how long is the waiting period before any benefits will be paid? 90 days 5 months 12 months Benefits will be paid immediately.

5 months

Which of the following best describes the aleatory nature of an insurance contract? A. Policies are submitted to the insurer on a take-it-or-leave-it basis B. Exchange of unequal values C. Only one of the parties being legally bound by the contract D. Ambiguities are interpreted in favor of the insured

B. Exchange of unequal values

The purpose of managed care health insurance plans is to Provide for the continuation of coverage when an employee leaves the plan. Give the insured an unlimited choice of providers. Coordinate benefits. Control health insurance claims expenses.

Control health insurance claims expenses

If an employee terminates her employment, which of the following provisions would allow her to continue health coverage under an individual policy, if requested within 31 days? Renewability Conversion Replacement Grace period

Conversion

Which of the following statements is TRUE concerning the Accidental Death Rider? It is only available in group insurance. It will pay double or triple the face amount. It is also known as a triple indemnity rider. This rider is only available to insureds over the age of 65.

It will pay double or triple the face amount. (Dies within 90 days)

When is the earliest a policy may go into effect? When the first premium is paid and the policy has been delivered When the insurer approves the application After the underwriter reviews the policy When the application is signed and a check is given to the agent

When the application is signed and a check is given to the agent

The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT Coverage for preventive benefits. Individual tax deduction for premiums paid. Right to appeal. No lifetime dollar limits.

Individual tax deduction for premiums paid.

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

B. Rates by class

All of the following statements about Medicare supplement insurance policies are correct EXCEPT They cover the cost of extended nursing home care. They cover Medicare deductibles and copayments. They supplement Medicare benefits. They are issued by private insurers.

They cover the cost of extended nursing home care.

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 Eligibility Clause. Consideration Clause. Insuring Clause. Pre-existing Conditions Clause.

Consideration Clause

Other than for a qualified life event, when can a change be made in benefits for a Flexible Spending Account (FSA)? Within 3 months of the cause of the change No changes can be made once the policy is issued During the open enrollment period At any time as necessary

During the open enrollment period

Which statement is true about the proceeds of a life insurance policy? The lawful beneficiary receives the proceeds after all creditors of the estate have been paid. The lawful beneficiary is entitled to all policy benefits free from all claims of creditors or representatives of the insured's estate. No proceeds can be paid to the lawful beneficiary unless he/she is at least 18 years old. The beneficiary must have an insurable interest in the insured.

The lawful beneficiary is entitled to all policy benefits free from all claims of creditors or representatives of the insured's estate.

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of Misrepresentation. Rebating. Twisting. Defamation.

Twisting

What is the advantage of reinstating a policy instead of applying for a new one? The face amount can be increased The cash values have gained interest while the policy was lapsed The original age is used for premium determination Proof of insurability is not required

The original age is used for premium determination

How long does an agent have to notify the Commissioner if he or she has a change of address? 10 days 30 days 45 days 60 days

30 days

The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the Probationary period. Insuring clause. Incontestability clause. Consideration clause.

Insuring Clause

What is the purpose of settlement options? A. They provide the beneficiary with the income he/she cannot outlive. B. They determine how death proceeds will be paid. C. They are guarantees built into the policy. D. They guarantee a return of excess premiums.

B. They determine how death proceeds will be paid.

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary? Single life Fixed-amount Life income with period certain Joint and survivor

Life income with period certain

Which of the following statements is NOT correct? Medicare Part B provides physician services. Medicare Advantage must be provided through HMOs. Medicare Advantage may include prescription drug coverage at no cost Medicare Part A provides hospital care.

Medicare Advantage must be provided through HMOs.

What amount of care is provided in LTC's intermediate care? Daily care, but not nursing care Daily care by medical personnel 24-hour care Non-medical daily care

Daily care by medical personnel

Which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss? Notice of Claim Loss Notification Claims Initiation Consideration

Notice of Claim

Which of the following will NOT be considered unfair discrimination by insurers? Discriminating in benefits and coverages based on the insured's habits and lifestyle Charging applicants with similar health histories different premiums based on their ethnicity Cancelling individual coverage based on the insured's marital status Assigning different risk classifications to applicants based on gender identity

Discriminating in benefits and coverages based on the insured's habits and lifestyle

Which of the following statements is true regarding coinsurance? The smaller the percentage that is paid by the insured, the lower the required premium will be. The smaller the percentage that is paid by the insured, the more consistent the required premium will be. The larger the percentage that is paid by the insured, the lower the required premium will be. The larger the percentage that is paid by the insured, the higher the required premium will be.

The larger the percentage that is paid by the insured, the lower the required premium will be.

Methods used to pay the death benefits to a beneficiary upon the insured's death are called Settlement options. Designation options. Beneficiary provisions. Death benefit options

Settlement options

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean? The beneficiary must pay interest to the insurer. The beneficiary will receive the lump sum, plus interest. The primary beneficiary will receive the death benefit and the secondary beneficiaries will share the interest payments. The beneficiary will only receive payments of the interest earned on the death benefit.

The beneficiary will only receive payments of the interest earned on the death benefit.

Which of the following is NOT true of life settlements? The seller must be terminally ill. They could be used for a key person coverage. They could be sold for an amount greater than the current cash value. They involve insurance policies with large face amounts.

The seller must be terminally ill.

Which of the following is TRUE about nonforfeiture values? They are required by state law to be included in the policy. They are optional provisions. A table showing nonforfeiture values for the next 10 years must be included in the policy. Policyowners do not have the authority to decide how to exercise nonforfeiture values.

They are required by state law to be included in the policy.

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered Discrimination. Twisting. Controlled business. Adverse selection.

Discrimination

All of the following statements concerning an employer sponsored nonqualified retirement plan are true EXCEPT The employer can receive a current tax deduction for any contributions made to the plan. The plan is a legal method of accumulating money for retirement needs. The plan can discriminate as to who may participate. The plan is not approved for favorable tax treatment by the IRS.

The employer can receive a current tax deduction for any contributions made to the plan (There is no favorable tax treatments under the IRS rules for nonqualified retirement plans)

Which of the following statements would best describe the difference between viatical settlements and accelerated death benefits? Viaticals use mortality tables, but Accelerated Death benefits are determined by morbidity. Viaticals are funded by a third party, and Accelerated Death benefits are provided by the insurer that issued the original policy. Viaticals are provided by the insurer that issued the original policy, and Accelerated Death benefits are funded by a third party. Viaticals are determined by morbidity, but Accelerated Death benefits use mortality tables.

Viaticals are funded by a third party, and Accelerated Death benefits are provided by the insurer that issued the original policy.

A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as a) Major medical. b) AD&D. c) Medical expense. d) Critical illness.

d) Critical illness

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 Term to specified age Ordinary life policy Limited pay whole life

Level term