Section 1 of Insurance license
An unintentional violation of Kansas insurance law could lead a producer to a fine of up to _____ per violation.
$500
___ of personal life insurance premiums is usually deductible for federal income tax purposes.
0%
A producer must complete ____ hour(s) of ethics per continuing education reporting period.
1
A life insurance policyowner has ___ days to return the policy and receive a full premium refund.
10
What is the minimum Grace Period for an individual health policy that is paid monthly?
10 days
N is an 40- year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?
30 Pay Life
An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision?
31
The commissioner of Insurance is the chief officer of the Kansas Department of Insurance and is elected to a ____ year term.
4
M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?
45 days
According to the nonforfeiture law, what's the MAXIMIM number of months a cash surrender value payment may be deferred by an insurance company?
6
In order for a Medicare Supplement policy to be issued on a guaranteed basis, the policy's effective date must be within ___ months of the insured's Medicare Part B starting date.
6
Three law partners form a cross-purchase buy and sell agreement. This agreement is funded with individual life insurance. How many total life policies are needed for this agreement?
6
How many days must the insured wait to take legal action against a health insurer after submitting written proof of loss if the insurer refuses to pay?
60
The individual most likely to buy a Medicare Supplement policy would be a(n):
68-year old male covered by Medicare
A life policy loan in Kansas charge a fixed rate of interest higher than
8%
Which of these is an element of a Variable life policy?
A fixed, level premium
Which of the following is considered to be misrepresentation?
A producer guaranteeing a policy's dividends
Before a life policy is issued, which of these contract elements is necessary?
A signed application by the prospect
What kind of life insurance product covers children under their parent's policy?
A term rider
Which of the following is NOT included in an annuity contract?
AD&D rider
All are true statements regarding the underwriting process, EXCEPT:
AIDS and HIV virus exams can be conducted in a discriminatory fashion
Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?
Applicant's monthly income
In a qualified retirement plan, the yearly contributions to an employee's account:
Are restricted to maximum levels set by the IRS.
Which of the following medical expenses does Cancer insurance NOT cover?
Arthritis
When does a Guaranteed Insurability Rider allow the insured to buy additional coverage?
At future dates specified in the contract with no evidence of insurability required
When does a Probationary period provision become effective in a health insurance contract?
At the policy's inception
A pilot applies for life insurance. The insurer approves the application with a $10 additional monthly premium modification due to the risk involved. The pilot declines the additional premium modification. The insurer will then likely issue the coverage with a(n):
Aviation Exclusion
A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following?
Aviation exclusion
Group health plans typically contain a coordination of benefits (COB) provision. This provision's purpose is to:
Avoid the duplication of benefit payments
Which of the following is a requirement to attain a nonresident producer license?
Be licensed as a producer in the producer's state of domicile
Medicaid was designed to assist individuals who are:
Below a specific income limit
The difference between group insurance and blanket health policies is:
Blanket health policies do not issue certificates
Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is:
Business Overhead Expense
Which of these is NOT considered to be a cost connected with an individual's death?
Business expenses
Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks ?
Business overhead expense
A health reimbursement arrangement MUST be established:
By the employer
Whose life is covered on a life insurance policy that contains a payor benefit clause?
Child
Which rider provides coverage for a child under a parent's life insurance policy?
Child term rider
K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?
Conditional
T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?
$0
An employee with a $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a:
$25,000 individual whole life policy
J's major medical policy has a $2,000 deductible and an 80/20 coinsurance clause. If J is hospitalized and receives a bill for $10,000 J would pay:
$3,600
B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what will the policy pay B's beneficiary?
$300,000
T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?
$50,000
Which of the following activities does NOT give a producer credit for credit for continuation education?
Conducting a sales meeting
Major medical policies typically:
Contain a deductible and coinsurance
The incontestable clause allows an insurer to:
Contest a claim during the contestable period
What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?
Conversion
When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?
Conversion provision
A universal life policy is sometimes referred to as an unbundled life policy because the owner can see the interest earned, expense charges, and the
Cost of insurance
Which of the following BEST describes a Hospital Indemnity policy?
Coverage that pays a stated amount per day of a covered hospitalization.
A 45 year-old woman won $100,000 in a scratch-off lottery ticket. She purchased an annuity that will pay her $1,500 per month beginning at age 60. Which of these annuities did this woman purchase?
Deferred Fixed annuity
Common exclusions to continuation of group coverage include:
Dental care, Dental care, and other prescription drugs
Medicare Part A and Part B do NOT pay for:
Dental work
Which of the following statements BEST describes the intent of a coinsurance clause in a Major Medical policy?
Discourages overutilization of the insurance coverage
Which of the following does Social Security NOT provide benefits for?
Dismemberment
An insurance company that conducts business in Kansas and was incorporated in Kansas is called a(n) _____ insurer.
Domestic
Company Z has a cross purchase Buy-Sell agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require?
Each partner must own a policy on the other partners
What requirement must all eligible employees of a small employer meet before an insurer will cover with group medical coverage?
Employee must satisfy a specified waiting period
S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product would S be advised to purchase?
Equity index insurance
Which of the following is NOT included in the policy face?
Exclusions
A universal life policy is sometimes referred to as an unbundled life policy because the owner can see the interest earned, cost of insurance, and the:
Expense charges
Which of the following is NOT a required provision in an individual life policy?
Extended Term
The Kansas Health Insurance Exchange is what kind of Marketplace?
Federally Facilitated
What action should a producer take if the initial premium is NOT submitted with the application?
Forward the application to the insurer without the initial premium
During the course of an Insurance business transaction, who does the producer legally represent?
Insurance company
If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?
Insured's contingent beneficiary
The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n): Insuring agreement
Insuring agreement
A life insurance arrangement which circumvents insurable interest statutes is called:
Investor- Originated Life Insurance (IOLI)
A policyowner would like to change the beneficiary on a life insurance policy and make the change permanent. Which type of designation would fulfill this need?
Irrevocable
A policyowner's rights are limited under which beneficiary designation?
Irrevocable
Which statement regarding third-party ownership of a life insurance policy is true?
It is used extensively in estate-planning as well as business circumstances.
What is the requirement BEFORE an insurance company issues a small employer group policy?
It must be authorized to write accident and health insurance in Kansas
If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?
Medicare supplement
A Kansas resident insurance producer must perform which of the following actions to continue with their license?
Meet continuing requirements
When a life insurance policy exceeds certain IRS table values, the result would create which of the following?
Modified Endowment Contract (MEC)
T is covered by a group major medical policy with his employer. He leaves his employer and converts the coverage to an individual policy. All of these statements about the new policy are true EXCEPT:
New policy pays the same benefits as the group policy
What must a producer sign when an existing life insurance policy is being reissued with a reduced cash value?
Notice regarding replacement
The notice of claims provision requires a policyowner to:
Notify an insurer of a claim within a specified time
In order to determine if a Medicare Supplement insurance transaction involves the replacement of an existing policy, a question regarding replacement MUST be located:
On the application
Under a Long-Term Care policy, any that allows coverage for home health care MUST contain a minimum
One-half of one year's coverage available for nursing home benefits
The commissioner of Insurance may issue a(n) ____ to assure compliance with the law.
Order
P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to:
P only
What does Medicare Parts A and B cover?
Part A covers hospitalization: Part B covers doctor services
An insurance company has discovered, at the time of an insured's death, that the insured's age was misstated on the application. Which of the following actions would most likely be taken by the insurance company?
Pay the policy in the amount the premiums would have purchased at the insured's actual age
Which of the following actions is NOT required when a producer is replacing a Medicare Supplement policy?
Producer must notify the commissioner of the replacement
Which of the following is NOT a valid reason for the commissioner of insurance to suspend or revoke a producer's license?
Producer represents more than one insurance company
A retirement plan that sets aside part of the company's net income for distributions to qualified employees is called a:
Profit-sharing plan
What must the policyowner provide to the insurer for validation that a loss has occurred?
Proof of Loss
X owns a Disability income policy. X recently suffered a disability which was due to the same cause as a previous disability. These disabilities both occurred over a four-month span. Which of the following provisions allows x's second disability to be covered without a new elimination period?
Recurrent Disability
Which of these Nonforfeiture Options continue a build-up of cash value?
Reduced Paid-Up
Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?
Reimbursement
Which of the following statements BEST describes dental care indemnity coverage?
Services are reimbursed after insurer receives the invoice
P is a producer who notices 5 questions on a life application were not answered. What actions should P take?
Set up a meeting with the applicant to answer the remaining questions
Typically a life insurance death benefit is paid by a lump-sum payment. A(n) _________ option is a method of disturbing a life insurance policy's death benefit OTHER than by a lump sum payment.
Settlement
K has inherited a large sum of money. K purchases an annuity with this sum on July 1, and starts receiving payments August 1. These payments will continue for as long as she and her spouse lives. Which type of annuity did K purchase?
Single premium immediate joint with survivor annuity
What is Old Age and Survivors Health Insurance (OASDHI) also known as?
Social Security
An individual disability insurance applicant may be required to submit all of the following information. EXCEPT:
Spouse's occupation
Under what condition would an employee NOT be allowed to enroll in an employer-sponsored group medical plan within 31 days?
Spouse's program experience's a rate increase
Which of the following BEST describes a warranty?
Statement guaranteed to be true.
K is shopping for a permanent life insurance policy that will offer her the MOST protection per dollar of annual premium. Which of these policies best fits her needs?
Straight life
What is the basic function of an annuity?
The systematic liquidation of accumulated funds
Medicare is intended for all of the following groups, EXCEPT:
Those enrolled as a full-time student
A disability elimination period is best described as a:
Time deductible
What is the elimination period of an individual disability policy?
Time period a disabled person must wait before benefits are paid
Why would the commissioner of insurance issue a temporary license?
To allow the personal representative of a deceased producer to provide service to existing policyowners
If an insurance company engages in boycott, coercion, or intimidation that leads to the unreasonable restraint of trade it would be breaking Kansas insurance laws covering
Unfair trade practices
A business overhead expense policy would cover which of the following if a business owner becomes disabled?
Utilities and office rent
A life policy that contains a monthly mortality charge as well as self-directed investment choices is called a(n)
Variable Universal Life Policy
Term Life Policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period:
Varies according to the contract
The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the:
Waiting period
The part of a life insurance policy guaranteed to be true is called a(n):
Warranty
Which parts of a life insurance policy are guaranteed to be true?
Warranty
A $20,000 life insurance policy application is completed, however the producer does not collect the initial premium. At what point does the coverage go into effect?
When the applicant receives the policy and pays the initial premium.
When must insurable interest be present in order for a life insurance policy to be valid?
When the application is made
Under which circumstance must the pre-existing condition clause in a long-term care policy be waived?
When the new policy replaces existing coverage with the same insurer.
If an individual is covered under an Accidental Death policy and dies, an autopsy can be performed in all these situations, EXCEPT:
When the state prohibits this by law
If a 10-year term life policy contains a Renewability provision, the policy will renew.
Without evidence of insurability
Variable life products require a producer to
hold a life insurance license and a securities license
What does a certificate of authority allow?
an insurance company to conduct insurance business
Which premium schedule results in the lowest cost to the policyowner?
annual
Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures?
commercial insurer
When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called
residual disability
A(n) ______ term life policy is normally used when covering an insured's mortgage balance.
Decreasing
Additional coverage can be added to a whole life policy by adding a(n):
Decreasing term rider
Which of these is considered a true statement regarding Medicaid?
Funded by both state and federal governments
The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for:
Health Information
Information obtained from a phone conversation to the proposed insured can be found in which of these reports?
Inspection report
K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving until an amount equal to the contract value has been paid. This is called a(n):
Installment Refund Annuity
Which of the following is best described as "an insurance advertisement that tends to make a prospect want to find out more about a specific policy".
Institutional advertisement
When third -party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have:
Insurable interest in the proposed insured
What is being delivered during a policy delivery?
Insurance contract to the proposed insured
Which of these arrangements allows one to bypass insurable interest laws?
Investor-Originated Life Insurance (IOLI)
Dental care coverage is designed to cover the costs of all of the following EXCEPT:
Loss of income
The individual Health Insurance policy that offers the broadest protection is a(n) _____ ____ policy.
Major Medical
Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the:
Marital deduction
The health insurance program which is administered by each state and funded by both the federal and state governments is called:
Medicaid
A life insurance policy will frequently contain an Accelerated Benefits rider. Which of these would be an example of "qualifying event" under this rider?
Medical condition that will significantly reduce a lifespan
Which of these life products is NOT considered interest-sensitive?
Modified whole life
According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options?
Monthly
Periodic health claim payments MUST be made at least:
Monthly
Which of these is NOT an element of Life insurance premiums?
Morbidity rate
Which of the following is TRUE about a qualified retirement that is "top heavy"?
More than 60% of plan assets are in key employee accounts
If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best describes this policy is called:
Noncancellable
Which statement is true regarding a minor beneficiary?
Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
Which statement is true regarding a minor beneficiary?
Normally, a guardian is required to be appointed in the Beneficiary clause of the contract.
When an employee is terminated, which statement about a group term life conversion is true?
Policy proceeds will be paid if the employee dies during the conversion period
Under federal tax laws, what is the treatment for an employer providing $50,000 of a contributory group term life plan to all its eligible employees?
Portion of the premiums paid for by the employer may be a tax deduction
Which long term care insurance statement is true?
Pre-existing conditions must be covered after the coverage has been in force for six months
Which of these characteristics is consistent with a straight life policy?
Premiums are payable for as long as there is insurance coverage in force
What benefit does the Payor clause on a Juvenile Life policy provide?
Premiums are waived if the payor becomes disabled
Which of these options can an individual use their medical flexible spending account to pay for?
Prescription drugs
K is the insured and P is the sole beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?
Proceeds will be paid to P's estate
Premature IRA distributions are assessed a penalty tax of
10%
What is the maximum Social Security Disability benefit amount an insured can receive?
100% of the insured's primary insurance amount (PIA)
A producer must complete ___ hours of continuation education biennially.
12
Once the insurance company receives a notice of claim, they have ___ days to send the claim form.
15
How many days is a temporary producer's license valid?
180 days
An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?
20% is withheld for income taxes
The waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond.
6 months
The birth mother of an adopted child must be covered for delivery expenses if the child adopted within ____ days of birth.
90
A health care plan must contain a MINIMUM _____ coverage of inpatient care following a caesarean birth.
96 hours
A long term care insurer must provide which of the following to the department of insurance before implementing?
Any long term care insurance advertisement
N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. Which action will the insurer take?
Claim will be denied.
The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n):
Closed panel
Terry the insurance producer works for a mortgage company. he agrees to grant a loan ONLY if the applicant were to purchase insurance from him. Terry has committed the unfair practice of:
Coercion
When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?
Contributory
According to Kansas law, group life insurance conversion privileges must NOT
Require evidence of insurability
D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits?
Residual benefit clause
S buys a $10,000 whole life policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy?
Return of premium rider
M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?
Revocable
Which factors are taken into consideration when an insurance company determines the premium rate for a whole life policy on an applicant?
Risk classification
Which of the following individuals is NOT exempt from producer licensing requirements?
Semi-retired producer
T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase?
Ten-year Endowment
Q is looking to buy a life insurance policy that will provide the greatest amount of protection for a temporary time period. Which of these policies should Q purchase?
Term life
A group life insurance policy may be converted to an individual policy under which circumstance?
Termination of employment
The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is?
The cost
Which statement is TRUE regarding a group accident & health policy issued to an employer?
The employer receives the policy and each employee is issued a certificate.
A level premium indicates:
The premium is fixed for the entire duration of the contract
Life and health insurance policies are:
Unilateral contracts
The free-look provision begins
Upon receipt of the policy by the policyowner
Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?
Variable Universal life
Which of the following policies is characterized by a flexible premium and death benefit and allows the policyowner control of the investment aspect of the plan?
Variable universal life
M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the:
policy proceeds
Which is NOT a required provision in a group life policy?
Accidental Death and Dismemberment
B owns a whole life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of
Additional whole life coverage at specified times
At what point may a producer sell products for an insurance company?
After being appointed by the insurer
What determines eligibility for dependent children coverage under the Affordable Care Act?
Age
Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due?
Grace period
Which requirement must be met for an association to be eligible for a group life plan?
Group was formed for a purpose other than acquiring insurance
K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered:
Guaranteed renewable
Which of the following will a long term care plan typically provide benefits for?
Home health care
Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?
If Tom's employment is terminated, 20% of the funds would be forfeited
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?
If the primary beneficiary dies before the insured
Which of the following situations does a Critical Illness plan cover?
Leukemia
T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this ?
Life annuity with period certain
K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective?
The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured.
Whole life insurance is sometimes referred to as "straight life". What does the word "Straight" indicate when using this phrase?
The duration of premium payments
W gave W's age as 50 W purchased a life policy. At the time of W's death seven years later, the company discovered W's true age at issue had been 59. What would be normal procedure be under the misstatement of age provision in regard to the payment of the death claim.
The proceeds would be reduced based on whatever the premium would have been if purchased at age 59.
The commissioner of insurance attains office by
election to a 4-year term
