SC Life, and Insurance Exam
which of the following authorities may grant a domestic company in this state a certificate of authority?
Director of Insurance
Which of the following best describes what the annuity period is? 1. The period of time from the effective date of the contract to the date of its termination 2. The period of time during which accumulated money is converted into income payments 3. The period of time from the accumulation period to the annuitization period 4. The period of time during which money is accumulated in an annuity
2. The period of time during which accumulated money is converted into income payments
Which of the following is an eligibility requirement for all social security disability Income benefits? 1. Have attained fully insured status 2. Be disabled for at least 1 year 3. Have permanent kidney failure 4. Be at least age 50
3. Have permanent kidney failure
What type of health insurance policy provides an employer with funds to train a replacement if a valued employee becomes disabled? 1. Disability Buy-Sell 2. Business Overhead 3. Key person disability 4. Group Disability
3. Key person Disability
Which of the following is NOT a typical type of Long-term car coverage? a) Home health car b) Child day care c) Skilled nursing care d) Residential care
b) Child day care
What type of insurer uses a formal sharing agreement? a) Fraternal Benefit Societies b) Reciprocal insurers c) Stock insurers d) Mutual insurers
b) Reciprocal insurers
Premium paid by an employer for a group health insurance are a) May be different amount for group heath insurance are b) Tax deductible to employer c) Tax deductible to employee d) Included in the employee's taxable income
b) Tax deductible to employer
If an annuity has a guaranteed minimum interest rate, this means a) There is no interest rate b) The interest rate will never drop below the guaranteed minimum. c) The interest rate will never rise above the guaranteed minimum. d) The interest rate will not fluctuate.
b) The interest rate will never drop below the guaranteed minimum.
core benefits are included in all Medicare supplemental policies, what percentage of part B coinsurance is required? a) 35% b) 10% c) 15% d) 20%
d) 20%
A producer must report to the Director any conviction of the producer taken in any jurisdiction within how many days? a) 10 days b) 15 days c) 20 days d) 30 days
d) 30 days
Which of the following is NOT normally an excluded cause of disability in an individual disability income policy? a) Injury resulting from illegal activity b) Suicide c) War d) Complications from pregnancy
d) Complications from pregnancy
According to the life insurance replacement regulations, which of the following would be an example of policy replacement? a) a lapsed policy is reinstated within a specific time frame. b) A policy is reissued with a reduction in cash value c) A term policy expires, and the insured buys another term life policy . d) Term insurance is changed to a Whole Life policy.
b) A policy is reissued with a reduction in cash value
An employee is insured by a group major medical plan that is provided through her employer. The employee contributes 75% of the premium and the employee contributes the remaining 25%. If the insured received a benefit from this policy in the amount of $1,000, how much of this benefit would be taxed as income? a) $1,000 b) $750 c) $250 d) $0
$0
Which of the following is NOT fundable by annuities? 1. Death benefit 2. Cash accumulation for any reason 3. A person's retirement 4. Estate Liquidation
1. Death benefits
In terms of parties to a contract, Which of the following does NOT describe a competent party? 1. the person must not be under the influence of drugs or alcohol. 2. The person must be of legal age. 3. The person must be mentally competent to understand the contract. 4. The person must have at least completed secondary education.
1. The person must not be under the influence of drugs or alcohol
Which of the following authorities my grant a domestic company in this state a Certificate of Authority? a) Guaranty Association b) Director c) Governor d) NAIC
B) Director The Director in Insurance has the power the grant a certificate of Authority or license o domestic insurance companies that wish to do business in the state.
An elimination (waiting) period may NOT have to be satisfied for a disability in which of the following? A) An Insured is disabled from a work related accident B) An Insured contracts an incurable disease C) An insured suffers a relapse of a prior disability within 6 months of the initial covered disability D) an Insured suffered the disability from the results of active duty with the US Armed Forces
C) An insured suffers a relapse of a prior disability within 6 months of the initial covered disability.
Because of the imposed blackout period. the surviving spouse will not receive social security benefits until a) He or she becomes fully insured. b) The age of 59 1/2. c) He or she qualifies for retirement benefits. d) The age of 65.
He or she qualifies for retirement benefits.
Which of the following is NOT a crucial factor in health insurance underwriting? a) Occupation b) Income c) Physical condition d) Morale hazards
b) Income
Agent may be found guilty of defamation if they make false statements that are intended to a) Maliciously criticize another insurance company. b) Deceive a policyholder. c) Misinform prospective clients about policy coverage. d) Misrepresent the benefits payable under policies.
a) Maliciously criticize another insurance company
In health insurance, the length of the grace period varies according to the a) Mode of the premium payment. b) Length of the waiting period. c) Length of the benefit period. d) Age of the insured.
a) Mode of premium payment
Which of the following does NOT need to be included on the first page of a Medicare supplement policy? a) Premium b) renewal provision c) Continuation provision d) The company's right to change premiums based on the policyholder's age
a) Premium rates
Insureds have the right to do which of the following if they have NOT received the proper claim forms within 15 days of their notice to the insurer of covered loss under a major medical policy? a) Subject the description in their own words on a plain sheet of paper. b) Be reimbursed any copayment or deducible or deductible on the claim. c) Demand full payment immediately for the claim. d) Speak with claims adjuster or another representative from the insurance company.
a) Submit the description in their own words on a plain sheet of paper
Considering the principles of liquidity, ho would the policyowner use today's cash values in a life insurance policy? a) Use it for emergency expenses. b) Secure a car loan next year. c) Make a down payment on a home in 5 years. d) Fund a retirement.
a) Use it for emergency expenses.
Which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insured's death was caused by an accident an defined is the policy? a) A covered Peril Rider b) An Accidental Death Rider c) A Double Indemnity Rider d) A Guaranteed Insurability Rider
b) A Accidental Death rider
According to the life insurance replacement regulations, which of the following would be an example of policy replacement? a) A lapsed policy is reinstated within a specific time frame. b) A policy is reissued with a reduction in cash value. c) A term policy expires, and the insures buys another term life policy. d) Term insurance is changed to a Whole Life policy.
b) A policy reissued with a reduction in cash value.
What is the maximum loan amount a policy owner may withdrawal from a variable universal life insurance policy? a) A amount equal to the first year of premium payments b) An amount not exceeding the cash value c) a amount up to the face amount of the policy d) Nothing loans are not allowed under variable universal life
b) An amount not exceeding the cash value
Which of the following are considered activities of daily living in most long-term care policies? a) hearing and seeing b) Eating and dressing c) Bathing and sleeping b) walking and running
b) Eating and dressing
Medicare Part B covers all of the following EXCEPT a) Long-term care services. b) Doctor's services. c) Home health visit's. d) outpatient hospital services.
a) Long-term care services
which of the following best defines the unfair trade practice of rebating? a) Making false statements that are maliciously critical and intended to injury another person in the business of insurance. b) Offering an inducement of something of value not specified in the policy c) Making statements that misrepresent an insurance policy in order to induce an insured to replace the policy d) Charging premium amounts in excess of the amount stated in the policy
b) Offering an inducement of something of value not specified in the policy
What happens to the face amount of a whole life policy if the insured reaches the age of 100? a) It is paid to the insured's estate and the policy is terminated. b) It is paid to the beneficiary in full. c) The cash value and the face amount are paid to the insured. d) The face amount is paid to the insured.
d) The face amount is paid to the insured
In group health insurance, what is experience rating? a) The Larger the group, the more experienced the agent assigned to the policy. b) when a larger group gets higher premium due to its relatively higher health costs. c) when a larger group gets lower rates because its median age is fairly low. d) When an Insurer uses the experience of the group as a whole to determine the premiums.
d) When an insurer uses the experience of the group as a whole to determine the premiums
An employee that become ineligible for group coverage because of termination of employment or charge in status, must exercise extension of benefits under COBRA. a) Within 30 days. b) Before termination is complete. c) Within 10 days. d) within 60 days.
d) Within 60 days
S is a sole business proprietor who owns a medical expense plan. What percentage of the cost of the plan may he deduct? 1. 25% 2. 50% 3. 75% 4.100%
4. 100%
Partners in a business want to make sure that if one of them were to pass away, their surviving family will receive a fair value for their portion in the business. What life insurance arrangement would be most suited for transitioning the business? a) Deferred Compensation Plan b) Executive Bonus Plan c) Split Dollar Plan d) Buy-Sell Agreement
d) Buy-sell Agreement
Before being issued a license, applicants must submit which of the following to the Director as part of a background check? 1. A credit report 2. A complete set of fingerprints 3. Record of prelicensing education 4. A complete set of financial records
2. A complete set of fingerprints
When an employee is still employed upon reaching age 65 and eligible for Medicare, which of the following is the employee's option? 1. Wait until the next birthday to enroll 2. Remain on the group health insurance plan and defer eligibility for Medicare until retirement 3. Enroll in Medicare, while the company must provide additional retirement benefits 4. Enroll in Medicare when eligible, otherwise, Medicare benefits will be forfeited.
2. Remain on the group health insurance plan and defer eligibility for Medicare until retirement
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report. 1. Must be advised that a copy of the report is available to anyone who requests it. 2. May sue the reporting agency in order to get inaccurate data corrected. 3. Must be informed of the source of the report. 4. Are entitled to obtain a copy of the report from the party who ordered it.
3. Must be informed of the source of the report.
The LEAST expensive first-year premium is found in which of the following policies? 1. Increasing Term 2. Decreasing Term 3. Level Term 4. Annually renewable Term
4. Annually renewable Term
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? 1. Joint and survivor 2. Single life 3. Fixed-amount 4. Life income with period certain
4. Life income with period certain
In which Medicare supplemental policies are the core benefits found? 1. Plans A-D only 2. All plans 3. Plans A and B only 4. Plan A only
4. Plan A only
The Ownership provision entitles the policyowner to do all of the following EXCEPT 1. Set premium rates. 2. Receive a policy loan. 3. Assign the policy. 4. Designate a beneficiary.
4. Set premium rates
While completing a life insurance application the applicant realizes that she should have answered an earlier question differently. what should the agent do to make the necessary change? a) Nothing only a company officer can make any change. b) Cross out the incorrect information, write in the correct answer, and have the applicant initial the change. c) White-out the information, make the change, and have the applicant initial that change. d) Cross out the incorrect information and provide explanation to the insurance company.
b) Cross out the incorrect information, write in the correct answer, and have the applicant initial the change
Which of the following losses would likely be covered under the Accidental Death Rider? a) Death resulting From a long-term disability. b) Death caused by a head-on collision c) Suicide. d) mountain-climbing accident.
b) Death caused by a head-on collision
J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose? a) Joint and survivor b) Fixed Amount c) Fixed Period d) Interest Only
b) Fixed Amount
An insurer driver is involved in an accident in which he is disabled and his passenger and other driver are injured. Which of the following will be covered by his disability income policy? a) The passenger's b) His lost income c) The other driver's injuries d) His medical expenses
b) His lost income
All of the following are true regarding key person disability income insurance EXCEPT a) The employee is the insured. b) Premiums are tax deductible as a business expense. c) The employer receives the benefits if the key person is disabled. d) The employer pays the premiums.
b) Premiums are tax deductible as a business expense.
What is the only difference between blanket insurance and group health Insurance? a) membership is not allowed to change in blanket insurance except on a yearly basis b) The Insured members are not named c) Group health insurance is provided on an employee-only basis d) Blanket insurance is not provided to schools
b) The Insured members are not named.
Which of the following is a permissible reason for an insurance company to contest payment of a claim based on statements in the applications? a) The application contains a correction. b) The application contains material misstatements. c) The insured died too soon after applying for the policy. d) The insurer has already paid out the expected amount of benefits for the year.
b) The application contains material misstatements
If an insured dies, and it is discovered that the insured misstated his/her age or gender, the the insurance company will a) Deny all claims because of the misrepresentation. b) Adjust the back premiums for the proper age or gender. c) Adjust the death benefit to what the premium would have purchased at the actual age or gender. d) Pay the face amount specified at the time of policy issue.
c) Adjust the death benefit to what the premium would have purchased at he actual age or gender
what is it called when a doctor accepts the medicare approved amount? a) Verification b) Acceptance c) Assignment d) Consent
c) Assignment
A medicare supplement plan must have at least which of the following renewal provisions? a) Nonrenewable b) Noncancellable c) Guaranteed renewable d) Conditionally renewable
c) Guaranteed renewable
An Insurance agent visits a potential client and explain various types of policies. The customer displays a lack of interest , so the guarantees higher dividends than he knows would be possible . What describes what the agent has done? a) Twisting b) Defamation c) Misrepresentation d) Rebating
c) Misrepresentation
Which of the following statements is true regarding advertising that the insurance Guaranty Association would ensure payment of benefits in the event of insurer insolvency? a) Insurers may choose whether to mention the Association in advertisements , but if they choose to do so, they must first pay a fee to the Department of Insurance. b) if insureds join the Association, they will be protected financialy if their insurers become insolvent. c) All advertisements of an insurer must mention coverage by the Association. d) It is an unfair trade practice to mention the association in advertisements.
d) It is an unfair trade practice to mention the Association in advertisements.
Under the Affordable Care Act , when would pregnancy be considered a pre-existing condition? a) Only if specifically excluded by the insurer b) If it begins before the coverage takes effect c) Always d) Never
d) Never
An employer is no longer able to afford the group health insurance plan and the plan terminates, However one of the employee's continues to receive coverage under the plan. Which of the following explains the reason for the continued coverage? a) The employee is an executive covered under the plan. b) The employee's health savings account pays for the coverage. c) A nonforfeiture value is in place. d) The employee is totally disabled.
d) The employee is totally disabled