Practice Exam Part 3

A life insurance policy is allowed ___ days upon policy delivery to return the policy for a full premium refund. A.) 7 B.) 10 C.) 14 D.) 30

10

An insurer can exclude coverage for a preexisting condition on a Medicare Supplement policy for up to: A.) 6 months B.) 9 months C.) 12 months D.) 18 months

6 months

Which of the following is NOT considered advertising? A.) A rating from a rating service company, such as A.M. Best B.) An illustration C.) A sales presentation D.) Direct mailing from an agency

A rating from a rating service company, such as A.M. Best

Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue? A.) Accumulation at Interest Option B.) Cash Dividend Option C.) Paid-Up Additions Option D.) One-Year Term Dividend Option

Accumulation at Interest Option

Which scenario would most life insurance policies exclude coverage for? A.) A tourist traveling abroad on a major airline carrier B.) An individual who has a hobby racing cars once a month C.) An airline pilot who flies for a commercial carrier D.) A soldier on leave at home

An individual who has a hobby racing cars once a month

An insurer has a right to screen applicants for HIV in which of the following ways? A.) Blood test for HIV B.) Inquiring about risky sexual behavior C.) Inquiring about sexual orientation D.) Automatically declining an application due to sexual orientation

Blood test for HIV

Which type of clause describes the following statement: "We have issued the policy in consideration of the representations in your applications and payment of the first-term premium". A.) Premium clause B.) Consideration clause C.) Adhesion clause D.) Contestability clause

Consideration clause

All of these are typically sources of underwriting information for life or health insurance EXCEPT: A.) Consumer reports B.) Medical Information Bureau (MIB) reports C.) Disclosure authorization response D.) Attending physicians statement (APS)

Disclosure authorization response

Which of these is NOT a qualifying event for Medicare? A.) On Social Security disability for over 2 years B.) Kidney failure C.) Age 65 or older D.) Falling below the federal poverty level

Falling below the federal poverty level

How is Medicare Part B funded? A.) Employer taxes B.) Payroll taxes C.) User premiums D.) General tax revenue and user premiums

General tax revenue and user premiums

Which of these is a method of determining the level of funds required for ongoing support in the event of the breadwinner's death? A.) Financial loss value B.) Human life value C.) Assessment value D.) Replacement value

Human life value

Which approach predicts a person's earning potential and determines how much of that amount would be devoted to dependents? A.) Future value approach B.) Earnings approach C.) Needs approach D.) Human life value approach

Human life value approach

Which of the following protects a policyowner from a misrepresentation caused by an innocent mistake? A.) Reinstatement clause B.) Entire Contract clause C.) Incontestable clause D.) Nonforfeiture clause

Incontestable clause

Which type of beneficiary should be named if the insured wants to give explicit directions on how the policy proceeds should be paid? A.) Individual B.) Group C.) Class D.) Estate

Individual

Who is required to notify the agent in the event of appointment termination? A.) Insurer B.) Superintendent C.) Governor D.) Attorney General

Insurer

Which contract element is insurable interest a component of? A.) Competent parties B.) Offer and acceptance C.) Consideration D.) Legal purpose

Legal purpose

Which of these is NOT considered to be a common life insurance nonforfeiture option? A.) Cash surrender B.) Extended term insurance C.) Reduced paid-up insurance D.) Life income annuity

Life income annuity

Which of the following annuity payout options makes no additional payments regardless of when the annuitant dies? A.) Life only B.) Life with period certain C.) Cash refund D.) Installment refund

Life only

What is the contract called that is issued to an employer for a Group Medical Insurance plan? A.) Master policy B.) Certificate of coverage C). Provisional policy D). Document of coverage

Master policy

An interest-sensitive life insurance policyowner may be able to withdraw the policy's cash value interest free. The provision that allows this is called: A.) Partial Surrender B.) Subrogation C.) Automatic Premium Loan D.) Accelerated Death Benefits

Partial Surrender

Coordination of Benefits regulation applies to all of the following plans EXCEPT: A.) Group vision plan B.) Preferred Provider Organization plan C.) Self-funded group health plan D.) Group health plan

Preferred Provider Organization plan

Which of the following provides Medicare supplement policies? A.) Medicare B.) Medicaid C.) Private insurance companies D.) Associations and employers

Private insurance companies

Which of these is NOT a legal reason for an HIC to release a subscriber's confidential health information? A.) Court order B.) Lawsuit between subscriber and HIC C.) Public interest D.) Subscriber's consent

Public interest

Premiums paid that exceed 7 ½% of an insured's Adjusted Gross Income (AGI) are tax-deductible when paid for which of the following plans? A.) Accidental Death and Dismemberment B.) Personal Disability Income plan C.) Qualified Long-Term Care plan D.) Group disability income plan

Qualified Long-Term Care plan

According to the Affordable Care Act, what metal tier is required to have an actuarial value of 70% with covered individuals paying 30% through deductibles, co-pays, and other cost sharing features? A.) Bronze Plan B.) Silver Plan C.) Gold Plan D.) Platinum Plan

Silver Plan

Generally speaking, which three levels of care are Long-Term Care policies provided with? A.) Disability, acute care, and hospitalization B.) Accident, medical care, and rehabilitation C.) Psychological, acute care, and assisted living D.) Skilled nursing, intermediate, and custodial care

Skilled nursing, intermediate, and custodial care

Jonas has disability insurance through his employer. The employer pays 75% of the premium, and Jonas pays the other 25%. What is Jonas's tax liability for any benefits paid from the disability plan? A.) Taxes must be paid on all benefits received B.) No taxes are payable on any benefits received C.) Taxes must be paid on 25% of the benefits received D.) Taxes must be paid on 75% of the benefits received

Taxes must be paid on 75% of the benefits received

Which of the following decisions would a Health Savings Account (HSA) owner NOT be able to make? A.) The amount contributed by the employer B.) The amount contributed by the owner C.) The underlying account investments used D.) The medical expenses paid for by the HSA

The amount contributed by the employer

Which of the following would be a valid reason why a policy premium would be higher than the standard premium? A.) The insurer is not a member of the MIB B.) The agent quoted the wrong price C.) The insured does not have the necessary financial reserves D.) The insured does not meet established underwriting requirements

The insured does not meet established underwriting requirements

How is a health provider reimbursed if they do NOT have an agreement in place with the insurance company? A.) With a contingent fee B.) With a scheduled fee C.) With a usual, customary, and reasonable fee D.) With a reasonably appropriate fee

With a usual, customary, and reasonable fee

What type of injury would NOT be covered under a health insurance policy? A.) Accidental B.) Work-related C.) Sports-related D.) Recreational

Work-related

Major Medical expense plans provide coverage for each of the following EXCEPT: A.) Medically necessary surgery B.) Diagnostic tests C.) Blood and urine lab screens D.) Work-related injuries

Work-related injuries

Long-Term Care policies or certificates issued in Ohio are required to have: A.) a nonforfeiture value B.) conditional renewal provision C.) a disability rider D.) permanent level premiums

a nonforfeiture value

The entire contract includes the actual policy and the: A.) inspection report B.) warranty statements C.) provisions D.) application

application

Which of these factors help determine an insured's life insurance premium? A.) insured's salary B.) martial status C.) place of residence D.) avocation (hobby)

avocation (hobby)

Medicare provides coverage for each of the following EXCEPT: A.) hospital room and board B.) doctor and surgeon services C.) prescription drugs D.) custodial care

custodial care

Level premium permanent insurance accumulates a reserve that will eventually: A.) equal the face amount of the policy B.) pay a dividend to the policyowner C.) require the policyowner to make periodic withdrawals D.) become larger than the face amount

equal the face amount of the policy

A proposed insured for a health insurance policy was treated for heart disease within the past year. When applying for health insurance, the heart disease treatment: A.) does not count as a preexisting condition B.) is not required to be reported on the application C.) indicates a preexisting condition D.) is irrelevant to underwriting

indicates a preexisting condition

A non-admitted insurer: A.) may sell insurance policies in this state B.) is not afforded protection by the guaranty fund C.) only implies to foreign insurers D.) may only sell insurance policies through non-admitted agents

is not afforded protection by the guaranty fund

The reinstatement provision in a health insurance policy is: A.) mandatory B.) optional C.) voluntary D.) discretionary

mandatory

Inducement is BEST defined as: A.) making false statement intended to malign another insurer B.) making an unfair comparison of two insurance policies C.) offering to buy, sell, give, or allow a prospective insured employment, stock or special favors in exchange for an insurance transaction D.) charging a higher rate for insurance based on an insured's race, religion, or national origin

offering to buy, sell, give, or allow a prospective insured employment, stock or special favors in exchange for an insurance transaction

Medicaid is intended for: A.) people with kidney failure B.) people aged 65 and older C.) unemployed people D.) poverty stricken people

poverty stricken people

An insurance producer is often responsible for field underwriting during the application process. All of these are possible field underwriting roles EXCEPT: A.) providing disclosure information to the applicant B.) collecting initial premium C.) policy delivery D.) providing commission information to the applicant

providing commission information to the applicant

Distributions from a Health Savings Account (HSA) for qualified medical expenses are: A.) fully taxable B.) tax-free C.) partially taxable D.) tax credits

tax-free

What types of life insurance are normally used for key employee indemnification? A.) term, whole, and universal life insurance B.) increasing term insurance C.) joint, credit, and group life insurance D.) adjustable, permanent, and limited-pay life insurance

term, whole, and universal life insurance

Pre-death distributions from a modified endowment contract (MEC) receive different tax treatment than other life insurance policies because: A.) the MEC has tax deductible premiums B.) the MEC is considered an illegal product C.) the MEC tends to be an investment vehicle D.) the MEC does not accumulate cash value

the MEC tends to be an investment vehicle

Signatures for an insurance application MUST be obtained by the producer from all of the following sources EXCEPT: A.) the producer B.) the insured C.) the policyowner D.) the beneficiary

the beneficiary

An agent is legally permitted to share his/her commissions: A.) with an insurance applicant B.) with another licensed agent C.) with an unlicensed agent D.) with a proposed beneficiary

with another licensed agent

An agent's license has been suspended for non-renewal. The agent may apply for reinstatement: A.) within 3 months of the license renewal date B.) within 6 months of the license renewal date C.) within 12 months of the license renewal date D.) within 18 months of the license renewal date

within 12 months of the license renewal date

A renewable Term Life insurance policy allows the policyowner the right to renew the policy: A.) at anytime the policyowner chooses B.) as many times as the policyowner chooses C.) paying the same premium as before the renewal D.) without producing proof of insurability

without producing proof of insurability