Questions LH Luttrell5 Life

In which of the following situations is it legal to limit coverage based on marital status? a) it is never legal to limit coverage based on marital status b) excessive number of divorces, as defined by Insurance Code c) legal separation during the application process d) divorce within last 6 months of applying for insurance

A

Which of the following activities is NOT performed by an insurance producer? a) issuing the policy b) collecting premiums c) countersigning policies d) soliciting policies

A

Which of the following may obtain a producer's license, but may NOT sell, solicit, or negotiate a contract of insurance in TN? a) business entity b) nonresident producer c) applicant for an agency contract license d) applicant for a limited lines license

A

All of the following are requirements to be licensed as an insurance producer in TN EXCEPT a) has successfully passed the exams for the lines of authority b) be at least 21 years of age c) has completed a pre-licensing course of study for the lines of authority which the person has applied d) resident of state of TN

B

Which of the following best describes the unfair trade practice of defamation? a) refusing to deal with other insurers b) making derogatory oral statements about another insurer's financial condition c) assuming the name and identity of another person d) issuing false advertising material

B

A person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance is known as a) commissioner b) business entity c) insurance producer d) none of above

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) offer of employment

C

An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of a) twisting b) controlled business c) rebating d) coercion

C

How many hours of continuing education must be completed in ethics each licensing period? a) 1 b) 2 c) 3 d) 5

C

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be a) Approved. b) Authorized. c) Certified. d) Qualified.

b

Children's riders attached to whole life policies are usually issued as what type of insurance? a) Adjustable life b) Whole life c) Term d) Variable life

c

Circulating deceptive sales material to the public is what type of Unfair Trade Practice? a) coercion b) misrepresentation c) false advertising d) defamation

c

How many credit hours of excess continuing education are producers allowed to carry over to the next renewal cycle? a) None b) 3 hours c) 12 hours d) 24 hours

c

If a producer continues to violate the insurance code, a new civil penalty will be assessed every a) month b) year c) day d) week

c

In a direct rollover, how is the money transferred from one plan to the new one? a) From the participant to the new plan b) From the original plan to the original custodian c) From trustee to trustee d) From trustee to the participant

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

Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be a) Based on the issue age of the insured. b) Discounted. c) Adjusted to the insured's age at the time of renewal. d) Determined by the health of the insured.

c

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 required disclosure b) a legal representation of the Association c) an unfair trade practice d) a misrepresentation

C

An insurance producer may not act as an agent for an insurer unless he has become which of the following? a) approved b) commissioned c) licensed d) appointed

D

A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability? a) Proof of insurability is not required. b) Medical exam c) Her parents' federal income tax receipts d) Medical exam and parents' medical history

a

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

All of the following are true of key person insurance EXCEPT a) The plan is funded by permanent insurance only. b) There is no limitation on the number of key employee plans in force at any one time. c) The employer is the owner, payor and beneficiary of the policy. d) The key employee is the insured.

a

All of the following long-term care coverages would allow an insured to receive care at home EXCEPT a) Skilled care. b) Custodial care in insured's house. c) Respite care. d) Home health care

a

An applicant who receives a preferred risk classification qualifies for a) Lower premiums than a person who receives a standard risk. b) Dividends payable for lack of claims. c) Higher premiums than a person who receives a sub-standard risk. d) Higher premiums than a person who receives a standard risk.

a

An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term? a) The insured may renew the policy for another 10 years, but at a higher premium rate. b) The insured must provide evidence of insurability to renew the policy. c) The insured may only convert the policy to another term policy. d) The insured may renew the policy for another 10 years at the same premium rate

a

If an insurer is going to terminate the appointment of an insurance producer, within how many days following termination must the insurer notify the Commissioner of the termination? a) 30 days b) 45 days c) 60 days d) 15 days

a

In a replacement situation, all of the following must be considered EXCEPT a) Assets. b) Benefits. c) Limitations. d) Exclusions.

a

In any controversy between the insured or the insured's beneficiary and the insurer that arises from the application for insurance or any policy issued in connection with the application, the producer is considered to be the agent of which of the following? a) The insurer b) Himself or herself c) The insured d) The beneficiary

a

In order to enforce the Insurance Code the Commissioner has the power to conduct which of the following? a) Investigations b) Solicitations c) Business d) Civil proceedings

a

L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay? a) $900 (deductible + 20% of the bill after the deductible [20% of $2,000]) b) $500 (amount of deductible) c) $1,000 (deductible + 20% of the entire bill) d) $2,500 (the entire bill)

a

Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray? a) 50/50 b) 75/25 c) 80/20 d) 90/10

a

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled? a) Payor Benefit b) Jumping Juvenile c) Juvenile Premium Provision d) Waiver of Premium

a

Which of the following statements is NOT true concerning Medicaid? a) It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income. b) It is a state program. c) It is funded by state and federal taxes. d) It is intended to provide medical assistance for certain categories of people who are needy.

a

Which type of life insurance policy allows the policyowner to pay more or less than the planned premium? a) Universal life b) Variable life c) Decreasing term d) Straight whole life

a

While a claim is pending, an insurance company may require a) An independent examination as often as reasonably required. b) The insured to be examined only within the first 30 days. c) The insured to be examined only once annually. d) An independent examination only once every 45 days

a

f an insured is not required to pay a deductible, what kind of coverage does he/she have? a) First dollar b) Corridor c) Major medical d) Comprehensive

a

A typical Accidental Death & Dismemberment policy covers all of the following losses EXCEPT a) Life. b) Income. c) Eyesight. d) Limb.

b

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries? a) One of the beneficiaries will receive 1/3 and the other 2/3 of the proceeds when the insured dies. b) The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive. c) The beneficiary will receive 2/3 of the lump sum up front, and the remaining 1/3 will be paid over time. d) The beneficiary will receive 2/3 of the total benefit, with the final 1/3 payable when the first beneficiary dies.

b

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act? a) Legal, provided that the other insurers are paid royalties for the usage of their names b) Illegal under any circumstances c) Legal, provided that the information can be verified d) Illegal until endorsed by the Guaranty Association

b

Insured Z's health insurance policy year begins in January. His policy contains a carry-over provision. In November, he has a small claim which is less than his deductible. Which of the following is true? a) The insured must satisfy this year's deductible, but next year's deductible will begin when or if he makes a claim in the following calendar year. b) The insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible. c) The deductible will be waived. d) The insured is now eligible for an integrated deductible until the new policy year

b

The policyowner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as a) The next month's premium is sufficient to cover both the current premium amount and the skipped amount. b) The policy contains sufficient cash value to cover the cost of insurance. c) The previous premium payments were high enough to create an excess of premium. d) The policyowner cannot skip premiums without the policy lapsing.

b

The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years? a) 1 year b) 2 years c) 5 years d) 7 years

b

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

b

What is the purpose of establishing the target premium for a universal life policy? a) To cover all policy expenses b) To keep the policy in force c) To accumulate cash value faster d) To pay up the policy faster

b

Which of the following individuals must have insurable interest in the insured? a) Producer b) Policyowner c) Beneficiary d) Actuary

b

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

b

Which of the following is the closest term to an authorized insurer? a) Legal b) Admitted c) Certified d) Licensed

b

Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles? a) Standard risk is also known as high exposure risk. b) Standard risk is representative of the majority of people. c) Standard risk pays a higher premium than a substandard risk. d) Standard risk requires extra rating.

b

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

b

A disability income policy is written with a 10-month benefit period, a 30-day elimination period, and a 30-day probationary period. If the insured becomes disabled due to illness 9 days after the effective date, the policy will pay benefits for a maximum of a) 21 days. b) 6 months. c) 10 months. d) 270 days.

c

A temporary license may be issued by the Commissioner for a period not to exceed how many days? a) 90 b) 120 c) 180 d) 365

c

All of the following are true of the Key Person disability income policy EXCEPT a) It is typically written to cover key employees in the event they become disabled and are unable to work. b) The income may be used to find a replacement for the key employee. c) Benefits are considered taxable income to the business. d) Premiums are not deductible to the business.

c

An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy? a) Nothing b) $50,000 c) $100,000 d) $200,000

c

An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of? a) Twisting b) Defamation c) False advertising d) Unfair claims

c

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day a) Probationary period. b) Waiver of benefits period. c) Elimination period. d) Blackout period.

c

An insurer has made all of the decisions regarding the provisions included in the insured's policy. The insured finds an objectionable provision and wants to negotiate it with the insurer but is not allowed to do so. Her only options are to reject the policy or accept it as is. Which contract feature does this describe? a) Conditional b) Personal c) Adhesion d) Unilateral

c

As a condition for renewal of their licenses, how many hours of continuing education are required for all resident and nonresident insurance producers? a) 10 b) 20 c) 24 d) 12

c

As it pertains to group health insurance, COBRA stipulates that a) Terminated employees must be allowed to convert their group coverage to individual policies. b) Group coverage must be extended for terminated employees up to a certain period of time at the employer's expense. c) Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense. d) Retiring employees must be allowed to convert their group coverage to individual policies.

c

At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called a) Supplemental add on. b) Cost of living. c) Guaranteed insurability. d) Waiver of cost of insurance.

c

Candidate for an Accident and Health producer's license must complete how many hours of pre-licensing education? a) 10 b) 15 c) 20 d) 5

c

The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT a) Projected interest rates. b) Face amount of the policy. c) The insured's age at death. d) The beneficiary's life expectancy.

c

The regulation of the insurance industry primarily rests with a) Private insurers. b) The federal government. c) The State. d) The NAIC.

c

Under which of the following circumstances would an insurer pay accelerated benefits? a) An insured is looking for a way to put her daughter through college. b) A couple wants to build a house and would like to make a larger down payment. c) An insured is diagnosed with cancer and needs help paying for her medical treatment. d) A couple is nearing retirement and needs a steady stream of income.

c

What is a definition of a unilateral contract? a) One author: the company wrote the contract; the insured must accept it as written. b) If one party makes a condition, the other party can counteroffer. c) One-sided: only one party makes an enforceable promise d) Two or more parties go into a contract understanding there may be an unequal exchange of value

c

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident? a) Settlement Clause b) Nonforfeiture Clause c) Common Disaster Clause d) Spendthrift Clause

c

When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled? a) The insurer may settle this claim for less than it otherwise would have had the notification been provided in a timely manner. b) The insurer may deny the claim since it was not notified within the required 20-day time frame. c) The insurer is considered to be notified since the notification to agent equals notification to the insurer. d) The insurer may delay the payment of this claim for up to 6 months.

c

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

c

Which of the following determines the cash value of a variable life policy? a) The policy's guarantees. b) The premium mode c) The performance of the policy portfolio d) The company's general account

c

Which of the following riders would NOT increase the premium for a policyowner? a) Waiver of premium rider b) Multiple indemnity rider c) Impairment rider d) Payor benefit rider

c

Which of the following statements concerning buy-sell agreements is true? a) Benefits received are considered income taxable. b) Buy-sell agreements pay in the event of a medical emergency. c) Buy-sell agreements are normally funded with a life insurance policy. d) Premiums paid are deductible as a business expense.

c

Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors? a) Risk exposure b) Morbidity c) Life expectancy d) Mortality rate

c

Which statement accurately describes group disability income insurance? a) There are no participation requirements for employees. b) Short-term plans provide benefits for up to 1 year. c) The extent of benefits is determined by the insured's income. d) In long-term plans, monthly benefits are limited to 75% of the insured's income.

c

Which type of life insurance policy generates immediate cash value? a) Decreasing Term b) Continuous Premium c) Single Premium d) Level Term

c

A Return of Premium term life policy is written as what type of term coverage? a) Decreasing b) Renewable c) Level d) Increasing

d

A domestic insurer issuing variable contracts must establish one or more a) Liability accounts. b) Annuity accounts. c) General accounts. d) Separate accounts.

d

A guaranteed renewable disability insurance policy a) Is renewable at the option of the insurer to a specified age of the insured. b) Is guaranteed to have a level premium for the life of the policy. c) Cannot be cancelled by the insured before age 65. d) Is renewable at the insured's option to a specified age.

d

All of the following are true regarding the guaranteed insurability rider EXCEPT a) The insured may purchase additional coverage at the attained age. b) The insured may purchase additional insurance up to the amount specified in the base policy. c) It allows the insured to purchase additional amounts of insurance without proving insurability only at specified dates or events. d) This rider is available to all insureds with no additional premium.

d

An insurance agent proposed an individual health insurance policy that is guaranteed renewable. If the applicant accepts this policy, the insurer agrees that a) The company will change the premium rate based upon the insured's health only. b) The premium rate cannot be changed for any reason. c) The insured will always be able to pay the premiums. d) The company will continue to renew the policy until the insured has reached age 65

d

Any person acting as an insurance producer without a valid license may be fined up to a) $1,000 for all violations. b) $500 for each violation. c) $500 for all violations. d) $1,000 for each violation.

d

Before a customer's agent delivers his policy, the insurer makes a last-minute change to the policy. The agent informs the customer of this change, and he accepts it. What must the agent do now? a) Nothing. After the explanation, the agent is not legally bound to do anything else. b) The agent must notify the beneficiary of the change in policy. c) If the change would affect the premium, the agent must have the customer sign a statement acknowledging the change. d) The agent should ask the customer to sign a statement acknowledging that he is aware of the change.

d

Hospital indemnity/hospital confinement indemnity policy will provide payment based on a) The type of illness. b) The premiums paid into the policy. c) The medical expense incurred. d) The number of days confined in a hospital.

d

How do employer contributions to a Health Savings Account affect the insured's taxes? a) The employer contributions are taxed at the same rate as the Social Security tax rate. b) The employer contributions are taxed to the individual insured as earned income. c) The employer contributions are deducted from the individual insured's tax calculations. d) The employer contributions are not included in the individual insured's taxable income.

d

No examination is required of a person licensed as an insurance producer in another state who moves to Tennessee as long as application is made within how many days of establishing legal residence? a) 120 days b) 30 days c) 60 days d) 90 days

d

Social Security Supplement (SIS) or Social Security Riders would provide for the payment of income benefits in each of the situations below EXCEPT a) When used to replace or supplement benefits payable under other social insurance programs. b) When the insured is eligible for Social Security benefits but before the benefits begin. c) If the insured has been denied coverage under Social Security. d) When the amount payable under Social Security is more than the amount payable under the rider.

d

The automatic premium loan provision is activated at the end of the a) Free-look period b) Elimination period. c) Policy period. d) Grace period.

d

The expense for an autopsy covered under the physical exam and autopsy provision is paid by a) The state's autopsy fund. b) The limits of coverage under the health insurance policy. c) The estate of the insured. d) The insurer.

d

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called a) Guaranteed insurability. b) Waiver of cost of insurance. c) Payor benefit. d) Waiver of premium.

d

To appoint a producer as its agent, the appointing insurer must file a notice of appointment with the Commissioner within how many days from the date the agency contract is executed? a) 20 days b) 5 days c) 10 days d) 15 days

d

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to a) Creditors. b) Beneficiary of the death benefit. c) The spouse of the insured. d) The insured.

d

What type of policy allows the insurance company to cancel a policy at any time? a) Renewable b) Guaranteed renewable c) Noncancellable d) Cancellable

d

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will a) Negotiate a reduced settlement with the beneficiary due to the unusual circumstances involved. b) Return the premium to Y's estate, since it has no obligation to pay the death claim. c) Keep the premium and reject the risk on the basis that the applicant died before the policy could be issued. d) Issue the policy anyway and pay the face value to the beneficiary.

d

When the insured purchased his health policy he was a window washer. He has since changed occupations and now manages a library. If the insurer is notified of the insured's change of occupation, the insurer should a) Increase the benefit. b) Return any unearned premium. c) Consider decreasing the premium. d) Adjust the benefit in accordance with the decreased risk.

d

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

Which of the following is an example of an agent's fiduciary responsibilities? a) Helping clients to file claims b) Performing a review of clients' coverage c) Offering additional coverage to a client d) Forwarding premiums to the insurer

d

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

d

Which of the following is true about the requirements regarding HIV exams? a) Results may be disclosed to the agent and the underwriter. b) Prior informed oral consent is required from the applicant. c) HIV exams may not be used as a basis for underwriting. d) The applicant must give prior informed written consent.

d

Which of the following statements is NOT correct concerning the COBRA Act of 1985? a) It covers terminated employees and/or their dependents for up to 36 months after a qualifying event. b) It applies only to employers with 20 or more employees that maintain group health insurance plans for employees. c) COBRA stands for Consolidated Omnibus Budget Reconciliation Act. d) It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.

d

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

d

Which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members? a) Accidental death and dismemberment rider b) Guaranteed insurability rider c) Change of insured rider d) Term rider

d

Which one of the following is an eligibility requirement for Social Security disability income benefits? a) Experiencing at least one year of disability b) Being at least 50 years of age c) Currently employed status d) Fully insured status

d