Certification Final
Which of the following terms and definitions do not match? A Field Underwriting - the agent's personal contact with the applicant B Medical Expense - Contract that covers the various expenses which an insured may incur due to an accident or sickness C Long-Term Care Expense - Contract that pays weekly or monthly benefits due to injury or sickness if an insured is unable to perform the duties of their job D Sickness - an illness or disease that first manifests itself, or that is first diagnosed and treated, while the policy is in force
C Long-Term Care Expense - Contract that pays weekly or monthly benefits due to injury or sickness if an insured is unable to perform the duties of their job
Which of the following requires an annual deductible and coinsurance? A Medicaid B Medicare Part B medical C Long-Term Care D Medicare Part A hospital
B Medicare Part B medical
Dominic is a physician associated with a closed panel HMO. This means that Dominic can work with: A Both that HMO's subscribers and his own private patients B Only that HMO's subscribers C Only his own private patients D Subscribers of any HMO operating in the area
B Only that HMO's subscribers
What is the name of the rider that requires that the premium payor become totally and permanently disabled before it will pay a claim? A Juvenile Waiver B Payor Benefit (Waiver of Payor's Premium) C Minor age waiver of premium D Jumping Waiver
B Payor Benefit (Waiver of Payor's Premium)
In an advertisement for a life insurance policy, which of the following terms may be used to describe the premiums? A Deposit B Premium C Premium deposit D Guaranteed Investment
B Premium
Which of the following best describes 'Capital Liquidation' in an effort to meet an income objective? A Principal is paid out B Principal and earnings are paid out C Principal is paid out but investment earnings are reinvested D Investment earnings are paid out
B Principal and earnings are paid out
What provision states that if there is a second disability due to the same cause within a specified period, the elimination period will be waived? A Rehabilitation Disability B Recurrent Disability C Second Disability D Residual Disability
B Recurrent Disability
All else being equal, which of the following will receive the largest income benefit payment from an annuity? A Female age 70 B Male age 70 C Male age 80 D Female age 80
C Male age 80 The older male will receive the largest income benefit as he will have the shortest remaining life expectancy.
An applicant determined to have below average risk of loss would be: A Declined for coverage B Issued a standard policy C Issued a preferred policy D Issued a rated policy
C Issued a preferred policy
What happens to the overall annual premium cost once a term rider expires? A It stays the same B It begins to vary C It decreases D It increases
C It decreases
All of the following are true of insurance in general, except: A It can reduce risk B It reduces uncertainty C It eliminates risk D It transfers risk
C It eliminates risk
A beneficiary wants a guarantee that benefits will be paid for a period of 10 years or life whichever time period is greater. Which of the following options should the beneficiary select? A 10-year Period Certain B Joint Life Income C Life with 10-year Period Certain D Fixed Amount
C Life with 10-year Period Certain
Coordination of Benefits is a provision designed to reduce ________ when an insured is covered under multiple health plans. A Extension of benefits B Continuation of coverage C Overinsurance D Excess coverage
C Overinsurance
In noncontributory group plans, how many eligible employees must be covered by the plan? A 75% of all employees B At least 100 employees C 100% of employees D At least 50 employees
C 100% of employees
A producer can reinstate their license once it has lapsed without retaking a prelicensing course and without taking a new license exam within: A 18 months B 15 months C 12 months D 24 months
C 12 months
Generally, Universal Life has how many death benefit options to choose from? A 4 B 1 C 2 D 3
C 2
What is a cancellable policy? A A policy that may be cancelled, but only if specific conditions stated in the policy occur during the policy period B A policy written for a short period of time and must be cancelled when the term expires C A policy the insurer may cancel at any time by returning the unearned premium D None of the answers listed
C A policy the insurer may cancel at any time by returning the unearned premium
A beneficiary that can be changed is called: A An irrevocable beneficiary B A trust C A revocable beneficiary D A tertiary
C A revocable beneficiary
To purchase the greatest amount of coverage, for the least amount of initial premium, a client would purchase which of the following? A A participating policy B An ordinary life policy C A term policy D A variable life policy
C A term policy
Misrepresentation is: A Always material to the acceptance of risk and will void the policy B Always considered fraud C A written statement or oral statement which is false D Always a written statement which is false
C A written statement or oral statement which is false
A company that is licensed to sell insurance in a particular state is: A A domiciled company B A nonadmitted company C An authorized company D A foreign company
C An authorized company
The authority created when a producer/agent exceeds the authority stipulated in his/her contract, and when the insurer does nothing to counter the public impression that such authority exists (i.e., the producer/agent accepting premiums on lapsed policies) is known as ______ authority: A Express B Implied C Apparent D Agency
C Apparent
The technical name of the person who makes a policy assignment is the: A Assignee B New owner C Assignor D Old owner
C Assignor
The policy conditions represent the obligations of: A The department of insurance B The insurance company only C Both the insured and the insurer D The insured only
C Both the insured and the insurer
The value within a permanent life insurance policy that the policyowner can access through a policy loan or policy surrender is known as the ___________. A Annuity Value B Rider Value C Cash Value D Endowment Value
C Cash Value
If questions are incomplete on an application and the insurer issues the policy, a claim is: A Covered only after the first 2 years B Not covered and the policy is canceled due to fraud C Covered since the insurer issued the contract based on an incomplete application D Not covered if discovered during the Incontestability period
C Covered since the insurer issued the contract based on an incomplete application
An individual has secured a $12,000 loan from the bank to purchase a boat, which is scheduled for repayment in monthly installments over 48 months. Which life insurance would be most efficient at protecting the lender should the borrower die prior to retiring the debt? A Whole Life B Universal Life C Decreasing Term D Level Term
C Decreasing Term
All of the following are true regarding ERISA qualified plans, except: A The plan must be IRS approved B The plan must benefit employees and beneficiaries C Employers must establish a pension plan D A vesting schedule must be established
C Employers must establish a pension plan
The premium that reflects mortality rates, assumed interest, and the policy's share of the company's operating expenses is called the: A Policy reserves B Net premium C Gross premium D Sub-standard premium
C Gross premium
Applicants must consent to be tested and be informed that testing for ________ may determine insurability. A Nicotine B Blood alcohol C HIV D Illegal drugs
C HIV
All of the following are characteristics of Ordinary Whole Life Insurance, except: A The policy pays the face value if the insured dies before age 100 B Premiums remain uniform C If insured lives to age 100, the total amount of premium paid over the lifetime of the insured is returned to the policyowner D Premiums are designed to be paid throughout the life of the insured
C If insured lives to age 100, the total amount of premium paid over the lifetime of the insured is returned to the policyowner
Joe has a policy with a face amount of $50,000 and a policy loan of $2,000. He is also a week late on his $500 premium payment. Joe decides he can no longer make monthly payments, so he chooses the extended term nonforfeiture option. What is the face value on the new policy? A $50,000 minus the $500 premium B $50,000 less the $2,000 loan balance C $50,000 less the $500 premium and the $2,000 loan balance D $50,000
D $50,000
A $100,000 policy with a waiver of premium rider and $30,000 of cash value is in force. The base policy costs $750 and the rider is $50. What is the total premium annually the policyowner must pay to keep the policy in force if the policyowner decides to cancel the rider? A $800 B $700 C $50 D $750
D $750
In a viatical settlement, a third party purchases a policy from a terminally ill insured for approximately _____ to _____% of the policy's face amount. A 50/70 B 40/60 C 30/50 D 60/80
D 60/80
Eileen's health insurance had a $500 deductible and 80% / 20% coinsurance. Her first claim of the policy year amounted to $1,000, of which she paid $600. How much was her coinsurance? A $100 B $400 C $500 D $600
A $100
Evelyn paid a $700 annual premium for a business overhead expense policy that paid a monthly benefit of up to $4,000 for a benefit period of 6 months. When Evelyn became disabled she used the entire benefit for 3 months, which covered $11,000 in employee salary and rent and utilities, which meant that the amount of the benefits which was reported as income equaled: A $12,000 B Zero C $11,000 D $1,000
A $12,000
What is the minimum grace period, provided in the Required Provision, 'Grace Period', for all policies other than monthly or weekly premium policies? A 31 days B 7 days C 10 days D 30 days
A 31 days
Generally, an individual is eligible to enroll in Medicare at age: A 65 B 59 1/2 C 62 D 67
A 65
When are LTC premiums deductible for an employer: A Any time premiums for employee policies are paid by the employer B When the plan is a tax qualified plan C When the policy is offered as a group plan D When the premiums are paid by the employee
A Any time premiums for employee policies are paid by the employer
With a modified premium whole life contract, premium payments: A Are lower in the early years of the contract B Are invested in the stock market C Are modified throughout the life of the plan and may fluctuate at the insurer's discretion D Never change for the life of the policy
A Are lower in the early years of the contract
When both parties must perform certain duties and follow certain rules of conduct to make a contract enforceable refers to a(n) __________ contract. A Conditional B Personal C Acceptable D Aleatory
A Conditional
Which of the following products replaces lost income when one is unable to work due to a condition for which therapeutic and rehabilitative care services is often necessary? A Disability Insurance B Accidental Death and Dismemberment Insurance C Long-Term Care Insurance D Medical Expense Insurance
A Disability Insurance
What provision describes the parts of the life insurance contract? A Entire Contract B Consideration C Insuring D Incontestability
A Entire Contract
An insurance company must adhere to the __________ when gathering information about an applicant from third parties. A Fair Credit Reporting Act (FCRA) B Truth in Underwriting Regulations C Medical Information Bureau Rules D Federal Trade Commission Act (FTCA)
A Fair Credit Reporting Act (FCRA)
Frank, the owner of a life insurance policy, chooses a Settlement Option whereby the proceeds of his policy will be paid out over 20 years. Frank has chosen: A Fixed Period B Fixed Amount C Life Income Joint and Survivor D Life Income Period Certain
A Fixed Period
Which of the following identifies the parties to the contract and the perils it covers and the circumstances under which the insurer will pay a life insurance policy claim? A Insuring Clause B Entire Contract Clause C Exclusions Provision D Consideration Clause
A Insuring Clause
What happens to the overall policy premium when most riders on a life insurance policy expire? A It goes down B It is refunded C It goes up D It stays the same
A It goes down
The death benefit of a variable life policy: A May go up or down but will never fall below the face amount of the policy B Is never guaranteed C Always remains level D Is totally at risk
A May go up or down but will never fall below the face amount of the policy
Which statement is incorrect regarding Group Short-Term disability? A Normally, the waiver of premium feature on these disability plans applies after a disability is prolonged for a specified period B The elimination period may be as short as zero days for an accident and 7 days for sickness C Group Short-Term disability income plans have short benefit periods with a rather short duration of coverage of 13, 26, or 52 weeks D Benefits are typically paid weekly ranging from 50% to 100% of the insured's income
A Normally, the waiver of premium feature on these disability plans applies after a disability is prolonged for a specified period
If Mr. Stanley is injured while attempting to escape from the police after committing a bank robbery, his A & H coverage will probably pay: A Nothing B Full claim, less the deductible C Amount scheduled D One half of normal benefit
A Nothing
Which of the following has primary responsibility for ensuring that the application is filled out completely? A Producer B Actuary C Insurer D Home office underwriter
A Producer
A disability that is presumed to result from the same or related cause of prior disability is called a: A Recurrent disability B Perpetuated disability C Presumed disability D Partial disability
A Recurrent disability
One of the greatest advantages of convertible and renewable term policies is that: A The insured is not required to show proof of insurability in order to renew or convert B The insured is guaranteed the right to renew or convert at any age with no increase in premium C They always renew or convert at the insured's original issue age D They provide living benefits
A The insured is not required to show proof of insurability in order to renew or convert
All of the following provisions of an adjustable life policy may be changed to meet the policyholder's needs, except: A The person named as the insured on the policy B The period of insurance protection C The amount and/or frequency of premium payments D The face amount of the policy
A The person named as the insured on the policy
Many insurers pay benefits based on the average fee charged in a geographical area. This is referred to as which of the following? A Usual Customary and Reasonable B Reimbursement C Scheduled D Cash
A Usual Customary and Reasonable
When will a primary care physician referral a HMO member to a specialist? A Usually after all other treatments have been exhausted B When the patient is facing a terminal illness C If the primary care physician is overbooked with appointments D If the primary care physician is retiring
A Usually after all other treatments have been exhausted
Generally, which of the following Annuities is not designed to guarantee the principal value of the policy in stable interest rate environments? A Variable B Fixed C Indexed D Market Value Adjustment
A Variable
Alma, age 35, earns $50,000 a year and expects to retire when she is 65. What is Alma's human life value? A $5 million B $1.5 million C $500,000 D $100,000
B $1.5 million
An individual disability policy, unless it is a single premium nonrenewable policy, must allow the person to whom the policy is issued to return the policy within _____ days of its delivery for a refund of premiums. A 20 B 10 C 25 D 15
B 10
Generally, children receive Social Security Survivor Benefits until age ________. A 16 B 18 C 17 D 15
B 18
Health policies are considered incontestable after: A 5 Years B 2 years C 3 years D 1 year
B 2 years
Policies are considered incontestable after: A 3 months B 2 years C 9 months D 6 months
B 2 years
Which of the following Whole Life insurance policies has the highest annual premium payment per $1,000 of coverage for a 35-year-old, all other factors being equal? A 30-Pay Ordinary Whole Life B 20-Pay Ordinary Whole Life C Limited Pay Ordinary Whole Life to age 85 D Ordinary Straight Whole Life
B 20-Pay Ordinary Whole Life
If the Commissioner denies a request for an extension to comply with the continuing education requirements, the licensee must complete the continuing education requirements within _______ days after being notified of the denial. A 45 B 30 C 20 D 60
B 30
Martha's Disability Income policy contains a definition of 'Presumptive Disability'. Each of the following situations would meet this definition, except: A Loss of speech B Loss of a finger C Loss of sight D Loss of hearing
B Loss of a finger
Which of the following should be put in place by two business partners who want to be assured that the business will not be lost should either one of them become disabled? A A Guaranteed Purchase Option B A Buy-Sell Agreement C A Business Overhead Expense Contract D An Errors & Omissions Policy
B A Buy-Sell Agreement
When using an illustration to sell a life policy, an agent may NOT: A Represent the policy as anything other than a life policy B All of the answers listed C Imply that nonguaranteed elements are guaranteed or misleadingly use nonguaranteed elements D Falsely represent that premium payments are not required
B All of the answers listed
Examples of third-party ownership include all of the following, except: A A life settlement B An Adjustable Life policy bought by Sam on Sam C A viatical settlement D A buy-sell agreement
B An Adjustable Life policy bought by Sam on Sam
The Attending Physician's Statement (APS) is completed by: A A physician providing a required medical exam at the time of application B An applicant's physician to provide information about the applicant's medical history C The Medical Information Bureau D The agent after the medical questions are answered by the applicant
B An applicant's physician to provide information about the applicant's medical history
When an agent misleads the public in an advertisement, ___________are held accountable. A The advertising agency B Both the insurer and agent C The agent D The insurer
B Both the insurer and agent
If an insured suffers a dismemberment under the AD&D policy, which of the following will provide benefit payouts to the beneficiary? A Principal investments B Capital sum C Capital funds D Principal sum
B Capital sum
The cash received by the policyowner when he/she terminates a policy is known as what? A Paid-Up Insurance Value B Cash Surrender Value C Accrued Premium Value D Loan Value
B Cash Surrender Value
Which of the following is a qualified retirement plan that bases an employee's retirement benefit upon length of service and highest attained salary? A SIMPLE B Defined Benefit C Profit-Sharing D Defined Contribution
B Defined Benefit
George has named each of his three sons as per capita primary beneficiaries of a $30,000 life insurance policy. If all three sons are living at the time of George's death, which statement best describes the amount each will receive? A The proceeds are paid directly to the three sons children only, in equal installments B Each son receives $10,000 C The proceeds go into George's estate D The proceeds are to be shared equally among all three sons and their children
B Each son receives $10,000
A Disability Income Policy has a period of deductibility immediately following a disability during which time benefits are not payable. This period is called a(n): A Loss of Time B Elimination Period C Loss of Income D Waiting Period
B Elimination Period
Keogh Plans are NOT available to: A Self-employed individuals who may also be covered by a qualified corporate retirement plan B Employees of large companies presently participating in a qualified retirement plan which are not self employed C Self-employed individuals with no other income source D Employees who have their own businesses on the side
B Employees of large companies presently participating in a qualified retirement plan which are not self employed
An application for group coverage is signed by the: A Employer, and each employee receiving a policy B Employer, who then receives and retains a master policy C Employer, employees, and employees spouses, with the employer receiving the master policy D Employees
B Employer, who then receives and retains a master policy
Buying life insurance so that the death benefit will be available for paying estate taxes due upon the death of the insured is known as: A Survivor protection B Estate conservation C Estate creation D Preneed planning
B Estate conservation
The nonforfeiture option that provides the most life insurance protection is the: A Paid up additions option B Extended term option C Reduced paid-up option D Cash surrender option
B Extended term option
Which of the following is included in Part II of a Life Insurance Application? A Marital status B Family member's age and cause of death C Date of birth D Gender
B Family member's age and cause of death
Which action would not render a small employer's health benefit plan nonrenewable? A Misrepresentation by the employer on the application B Frequent claims C The employer does not comply with the plan provisions D Premiums are not paid
B Frequent claims
If overdue premiums are paid during the __________ period, the policy will remain in effect. A Loan B Grace C Extended premium paying D Nonforfeiture
B Grace
Medicare benefit payments are made to the medical provider: A Only if the claim is being made under Part B B If the benefit has been assigned C Only if the claim is being made under Part A D If the provider is secondary
B If the benefit has been assigned
Which of the following types of term life insurance can be written as a rider to provide cost of living or return of premium benefits? A Level term B Increasing term C Decreasing term D Variable term
B Increasing term
Which of the following disabling acts would NOT normally be excluded form the waiver of premium rider? A Injury received in military service in time of war B Injury sustained while a paying passenger of a scheduled airline flight C Injury received during the commission of a crime D Self-inflicted injury
B Injury sustained while a paying passenger of a scheduled airline flight
In the event there is a policy issued and there are questions on the insurance application that went unanswered: A The insurer will cancel the policy B It will be assumed that the insurer waived their right to have answers to those questions C The agent will fill in the answers after the fact D A new application must be filed
B It will be assumed that the insurer waived their right to have answers to those questions
James is nearing retirement and has accumulated $175,000 in an annuity. He wants the largest possible monthly benefit for as long as he lives. Which option should he choose? A Fixed Amount B Life Income C Life Income with Refund D Joint Life
B Life Income
Which of the following definitions does not match the term? A Waiver of Premium -- In the event total disability continues beyond a specified period, the insurer will waive premiums for the duration of the disability B Return of Premium Rider -- A special provision that provides for a refund of the cash value if disability occurs after a certain period C Cost of Living -- Automatically increases monthly benefits, after the onset of disability, often in relation to increases in the Consumer Price Index D Guaranteed Purchase Option -- Guarantees that on specified dates, ages or occurrences, the insured may purchase additional monthly benefits, if income justifies it, without proof of insurability
B Return of Premium Rider -- A special provision that provides for a refund of the cash value if disability occurs after a certain period
When an insurance company cancels a policy, the unearned premium is: A Paid into the state insurance guarantee fund, and in some cases returned to the insured B Returned in full to the insured in a pro rata return C Retained in full to cover expenses D Returned in part to the insured in a short rate return
B Returned in full to the insured in a pro rata return
The owner's rights include all of the following, except: A Name and change beneficiaries B Selection of mortality table to use C Borrowing the cash values D Select dividend paying options on a participating policy
B Selection of mortality table to use
Dividends issued by Stock insurers are paid to: A Policyholders B Stockholders C Directors D Members
B Stockholders
Which statement concerning individual A&H policy renewal provisions is most correct from the perspective of the insured? A Renewal provisions only apply to property and casualty contracts and are not included under individual A&H policies B The more favorable the renewal provision to the insured, the higher the cost C The more favorable the renewal provision to the insured, the lower the cost D The renewal provision has no impact on the cost of the policy to the insured
B The more favorable the renewal provision to the insured, the higher the cost
Jerry has selected a Life Income 10 year Period Certain. What happens to the income payments if he dies in year 4 after starting to receive income benefit payments? A The payments are reduced by 40% then paid out to the surviving beneficiary for the remainder of their life B The payments continue for the balance of the Period Certain to a named beneficiary C The payments are increased by 60% and paid out for the balance of the time remaining on the guaranteed benefit D The payments end immediately with any residual values retained by the insurer
B The payments continue for the balance of the Period Certain to a named beneficiary
Which of the following is true about a policy that pays for room and board expenses on a indemnity basis? A The policy pays a stated amount per day in the hospital with no limit regardless of the number of days B The policy pays a specified, pre-established amount per day for a maximum number of days C The policy pays a percentage of the total cost per day in the hospital up to 30 days D The policy pays only a percentage of what is considered to be usual, customary, and reasonable
B The policy pays a specified, pre-established amount per day for a maximum number of days
If the initial premium is not collected when the application is submitted: A The applicants coverage will not begin until the policy is delivered, the initial premium is collected and a 10 day free look period has been exhausted B The premium must be collected at policy delivery along with a signed statement that the insured continues to be in good health C Coverage will begin as soon as the policy is issued and the first premium is waived D The application is not valid
B The premium must be collected at policy delivery along with a signed statement that the insured continues to be in good health
Which of the following statements is correct regarding a Waiver of Premium Rider on a participating whole life policy? A Cash values do not grow B The premiums are waived until either the insured recovers from the disability, the policy achieves paid-up status, or the insured dies C The death benefit is reduced by the amount of all premiums waived D Dividends cease when the rider activates
B The premiums are waived until either the insured recovers from the disability, the policy achieves paid-up status, or the insured dies
Which of the following riders require the insured being totally and permanently disabled before it becomes effective? A Spouse rider B Waiver of premium rider C Accidental death rider D Living need rider
B Waiver of premium rider
In a universal life policy, the amount of the death benefit can equal the policy's cash value: A None of the answers listed B When the insured reaches age 95 C When the insured reaches age 65 D When the insured reaches age 75
B When the insured reaches age 95
Why should a producer collect a premium at the time the application is completed? A It allows the producer to get paid faster B Without it, coverage cannot go into effect, as there would be a lack of consideration C It helps the home office with its cash flow D It allows the insurer to afford to pay for any required medical records or tests
B Without it, coverage cannot go into effect, as there would be a lack of consideration
Optional Provisions 'Changes of Occupation' and 'Misstatement of Age', permit the insurer to do which of the following? A Void the policy completely B None of the answers listed C Pay indemnities equal to benefits that would have been purchased at the premium paid had the insurer known the facts when the premium was established D Require the insured to re-apply as a new applicant to correct the applicant's information
C Pay indemnities equal to benefits that would have been purchased at the premium paid had the insurer known the facts when the premium was established
Which of the following is not an underwriting factor for health insurance: A Occupation and hobbies B Physical condition C Place of birth D Tobacco use
C Place of birth
A life Insurance policyowner receives an annual dividend. One option for this dividend is to use it to offset the annual obligation to the insurer. What is this option called? A Cash B Paid up additions C Premium Reduction D Cash Surrender
C Premium Reduction
Jim decided to participate in his employer's group dental coverage after the initial eligibility period expired. Which of the following may the insurer do? A Refuse to provide coverage until the next open enrollment date B Increase deductibles and coinsurance to minimize adverse selection C Reduce benefits for up to 1 year D Issue coverage, but require a dental exam first to verify eligibility
C Reduce benefits for up to 1 year
Lyle owns a $50,000 20-Pay Life Policy that he lets lapse at the end of the fourth year. The Nonforfeiture Option providing the longest period of coverage would be: A Paid-Up Option B Extended Term C Reduced Paid-Up D Paid-Up Additions
C Reduced Paid-Up
Which nonforfeiture option would you use to keep your policy in force, but with a smaller face amount of the same type, and would eliminate any further premium payments? A Extended term option B Cash surrender option C Reduced paid-up option D Premium reduction
C Reduced paid-up option
The Guaranteed Renewable Provision states that the policy is: A Renewable with no increase in premium B Renewable with adjustable premiums determined by frequency of claims C Renewable with premiums that may be increased for entire classes of insureds D Renewable only at the option of the insurer
C Renewable with premiums that may be increased for entire classes of insureds
Statements made by an applicant for a health insurance policy that the applicant says are true to the best of his or her knowledge are known as: A Expressions B Warranties C Representations D Considerations
C Representations
Group life insures a group of people under a _____________. A Certificate of insurance B Number of policies C Single contract D Card of insurance
C Single contract
All of the following causes of death are covered under an AD&D policy, except: A Auto accident B Murder C Stroke D Explosion
C Stroke
All of the following are traits of a Fixed Annuity, except: A The insurer's general account assets guarantee the fixed annuity contract B The insurer bears any investment risk C The actual rate of interest credited will be based on the state-published interest rate index D The purchasing power of a fixed dollar benefit amount decreases as the cost of living increases
C The actual rate of interest credited will be based on the state-published interest rate index
Which of the following is not an essential element of an insurable risk? A A large number of similar or same type units facing the same perils B The chance of loss must be calculable C The loss must be intentional D The loss must be measurable
C The loss must be intentional
If a client owns an equity-indexed product, what happens if the market falls in value by a large amount? A The policy's losses must first be made up before any future interest can be credited B The policy's values are reduced in proportion to the loss C The policy's values can never be impaired due to negative index performance D The policy's values are reduced on a dollar-for-dollar basis
C The policy's values can never be impaired due to negative index performance
When a policy is reinstated: A Accidents and sickness both have a 10 day waiting period, after which both are covered automatically B Sickness coverage begins immediately, accidents are generally covered within 20 days C There is a waiting period before sickness coverage becomes effective, but accident coverage becomes effective immediately D Accidents are not covered for one full year
C There is a waiting period before sickness coverage becomes effective, but accident coverage becomes effective immediately
Which provision states that the insurance company must pay claims immediately? A Relation of Earnings to Insurance B Payment of Claims C Time of Payment of Claims D Legal Actions
C Time of Payment of Claims
Paul is the insured and policyowner. Paul named Danny and Kayla as co-primary beneficiaries of Paul's $100,000 policy. Danny is to receive 70% and Kayla is to receive 30%, therefore Danny gets $________ and Kayla gets $______ when Paul dies. A 60,000/40,000 B 80,000/20,000 C 50,000/50,000 D 70,000/30,000
D 70,000/30,000
Which of the following statements is FALSE regarding Medigap policies? A Losses resulting form sickness may not be treated differently than losses resulting from accidents B Except for nonpayment of premium, coverage may not be terminated on a spouse solely because the insurer has reason to terminate coverage on an insured C Medigap policies may not duplicate benefits provided by Medicare D A Medigap policy provides the same coverage as a Medicare policy
D A Medigap policy provides the same coverage as a Medicare policy
If a medical exam is required as part of the underwriting process, who normally conducts the exam? A The producer B A chiropractor C The producer's manager in the agency's office D A physician or nurse
D A physician or nurse
The _________ clause states what each party exchanges in the contract. A Entire Contract B Incontestability C Insuring D Consideration
D Consideration
In which of the following circumstances would the accidental death benefit not apply? A Death caused as a direct result of an occupational accident B Death caused as the result of being a passenger on a regularly scheduled airline C Death caused by an automobile accident D Death caused by an intentional act
D Death caused by an intentional act
All of the following describe the responsibilities of an agent or producer, except: A Provide prospective purchasers with a Buyer's Guide and Policy Summary B Adhere to their State's Unfair Trade Practices rules and regulations when soliciting C When using a telephone for soliciting call after 8 a.m. and before 9 p.m. D Determine the rate the insurer will charge the applicant/insured
D Determine the rate the insurer will charge the applicant/insured
An insured may find it more difficult to qualify for benefits, but will enjoy a lower premium, when a more restrictive definition of _________ is found in a Disability Income policy. A Presumptive B Benefit C Rehabilitation D Disability
D Disability
Which Settlement Option pays a specified dollar amount until benefits are exhausted? A Paid-Up Option B Life Income C Life Income with Period Certain D Fixed Amount
D Fixed Amount
This rider allows for the insured to obtain additional insurance in between the specified ages including marriage and the birth or adoption of a child, when the need for insurance coverage may increase without having to prove insurability. It is called the ________ rider: A Additional Insurance Protection B Waiver of Insurability C Family D Guaranteed Insurability
D Guaranteed Insurability
What is the difference between a Health Reimbursement Account (HRAs) and a Health Savings Account (HSA)? A Employer contributions to health reimbursement accounts are limited B HRAs are portable C Cash disbursements from an HRA for non-medical reason are allowed but incur a tax-penalty D HRAs are owned by the employer, and are not portable when an employee leaves
D HRAs are owned by the employer, and are not portable when an employee leaves
The provision that limits the amount of time an insurer has to challenge a claim and void the contract upon proof of a material misstatement is called the ____________ clause. A Insuring B Entire Contract C Consideration D Incontestability
D Incontestability
Based upon Optional Uniform Provisions, an insurer would have the right to deny claim payment in all of the following circumstances, except: A A broken leg injury suffered as the result of ingesting an illegal drug B A claim involving an injury sustained in a bank robbery C A claim is covered by another insurer D Misstatement of age on the application
D Misstatement of age on the application
The portion of the premium that is based only on mortality rates and assumed interest is called the: A Unearned premium B Gross premium C AIR premium D Net premium
D Net premium
When group health insurance is being replaced, ongoing claims under the former policy must continue under the new policy, overriding any preexisting condition exclusion. This is a requirement under which of the following? A The Preexisting Conditions Provision B Replacement Regulations for Group Policies C The Level of Benefits Provision D No Loss - No Gain Statutes
D No Loss - No Gain Statutes
Which of the following covers the greatest percentage of the benefit cost of the plan under the Affordable Care Act? A Gold B Silver C Bronze D Platinum
D Platinum
All of the following are TRUE of Policy Loan Rate provisions, except: A The policy loan amount cannot exceed the available cash value B Policies with adjustable loan interest rates have a maximum interest rate based upon Moody's corporate bond yield average C Interest, if not paid when due, is added to the total debt D Policies with fixed interest loan rates have a maximum interest rate of 10%
D Policies with fixed interest loan rates have a maximum interest rate of 10%
Blue Cross and Blue Shield are considered: A Self-funded plans B Reimbursement plans C Fee-for-service plans D Prepaid plans
D Prepaid plans
HMOs may provide one or more of the following supplemental benefits, except: A Prescription drugs B Physical therapy C Psychological services D Private hospital rooms
D Private hospital rooms
The field underwriter is the _________ and is not a determiner of insurability. A Medical doctor B Paramedical examiner C Actuary D Producer
D Producer
Statements on an application for a life insurance policy are considered to be: A Statements of fact B Warranties C Misrepresentations D Representations
D Representations
Nursing and rehabilitative care that is required daily and can only be performed by skilled medical practitioners on a doctor's orders is: A Intermediate care B Cognitive care C Adult day care D Skilled nursing care
D Skilled nursing care
Which of the following listed policies has the least likelihood of keeping pace with inflation? A Whole Life with an increasing term rider B Variable Universal Life C Variable Whole Life D Straight Whole Life
D Straight Whole Life
Which of the following insurance policies may be written in conjunction with a Basic Medical Expense Coverage and utilizes a Corridor Deductible after the basic plan benefits have been exhausted? A Comprehensive Major Medical B Surgical Expense C Hospital Expense D Supplementary Major Medical
D Supplementary Major Medical
Which of the following fully describes the definition of fraud? A A warranteed statement on the application that was not true B The withholding of known facts that are so important that the disclosure of them would change the decision of an insurer to issue the policy C A false statement on the application D The intentional misrepresentation, deceit, or concealment of a material fact known to a person with the intent to gain from the experience
D The intentional misrepresentation, deceit, or concealment of a material fact known to a person with the intent to gain from the experience
On a variable universal life policy what is the difference between the cash value and the cash surrender values? A The amount of any outstanding policy loan B The interest earned C The investment performance D The surrender charge
D The surrender charge
Assets in a separate account are valued at: A Their market value first quoted to the applicant B Their guaranteed rate of interest C Their market value at any given time D Their market value on the date of valuation
D Their market value on the date of valuation
What is one of the main reasons for a Universal Life policy to have a surrender charge? A It encourages large additional premium deposits from policyowners B It is a way to recoup interest paid, but not earned by the policyholder C It motivates the producer to properly sell the policy D This provides a means for the insurer to recapture their upfront expenses involved in issuing the policy
D This provides a means for the insurer to recapture their upfront expenses involved in issuing the policy
To waive an insured's premium, most companies require an individual's disability to be: A A disability expected to last less than 6 months B A temporary total disability expected to last 6 months but no longer than one year C A partial disability and still able to perform some type of work D Total and permanent
D Total and permanent
An insured is hospitalized for at least 3 days. How long will Medicare pay for confinement in a skilled nursing facility? A Up to 30 days B Up to 365 days C Up to 90 days D Up to 100 days
D Up to 100 days