Exam

20%

A Medicare Supplement Policy must include, as a core benefit, Medicare Part B coinsurance in the amount of _______. A 10% B 25% C 15% D 20%

Income tax** LTC benefits are usually not subject to federal income tax.

Benefits received from an individual Long-Term Care Policy are not subject to ______, regardless of the deductibility of the premiums paid for the plan. A Premiums B Sales tax C Income tax D Deductibles

Large Public Corporations

Buy-Sell agreements are used for all of the following entities, except: A Partnerships B Closely held businesses C Large Public Corporations D Sole Proprietorships Large corporations are not candidates for Buy-Sell agreements. The Buy-Sell agreement is for much smaller entities.

Actual loss experience of the group

Experience rating utilizes _______ in determining the rate the insurer will charge for group coverage in each year of coverage. A Actual loss experience of the group B The plan sponsor's credit rating C Actual loss experience of everyone in that zip code D Credit rating of all participants

Fiduciary

Legally speaking, a producer has a __________ duty when handling life insurance premiums and applications for an insurer. A Undisputed B Professional C Fiduciary D Negotiated A fiduciary duty is where one party is acting in good faith on behalf of another party and will only act in the other party's best interest.

Income tax free

Proceeds from a buy-sell agreement are received ___________. A Taxed to the extent that the amount exceeds $50,000 B Only after the deceased's estate is settled and a proper valuation of their share of the business C Income tax free D Taxable as income The premiums payable for a buy-sell agreement are not tax deductible, therefore the benefit is received income tax free.

MIB (Medical Information Bureau)

The _________ alerts insurer home office underwriters of errors, omissions, or misrepresentations made on insurance applications. A Federal Insurance Information Bureau B State Insurance Inspection Department Report C MIB D Medical Doctors Association The MIB is supported by insurance companies and it collects medical information about an applicant's health as reported by insurance companies after underwriting.

IRA**

A SEP uses employer funded _______ accounts. A Defined Benefit B Profit Sharing C 401(k) D IRA Section 501(c)(3) is the section of tax code that defines what a non-profit organization is. Section 403(b) is the section of tax code that specifies who may participate in a 403(b) retirement plan.

Use of Senior-Specific Certificates and Professional Designation in the Sales of Life Insurance and Annuities

A certificate or professional designation that was obtained from unqualified certifying or designated organization refers to which of the following? A Use of non-specific advertisements in the state of New York B Use of Non-Specific Senior Certificates and Professional Designation in the Sales of Life Insurance and Annuities C Use of all advertisement in the state of New York D Use of Senior-Specific Certificates and Professional Designation in the Sales of Life Insurance and Annuities

10** The standard Free Look, or Right to Examine provision allows the insured to return the policy for any reason within 10 days after policy delivery

A client purchases an individual disability income policy and receives the policy from the insurer 45 days after application. Upon receipt of the policy, the client typically has ______days to review and return the policy to receive a full refund for any reason. A 45 B 10 C 20 D 35 .

Contract of Adhesion** A Contract of Adhesion is submitted on a take it or leave it basis.

A contract that is drafted by an insurer and receives no input or alteration from the insured, is considered a(n): A Contract of Adhesion B Unilateral Contract C Conditional Contract D Aleatory Contract

Third-Party Ownership

A grandparent purchases a life insurance policy on a granddaughter this is an example of _________. A Key Person Insurance B Two Party Ownership C Third-Party Ownership D Wealth Transfer

The face amount of the policy

A is the insured under a $100,000 10 year term life insurance policy with her spouse named as her beneficiary. If she dies in year 9, what will her spouse receive? A A refund of all premiums paid B The face amount of the policy C Nothing since this is term insurance D The policy's cash values Since the policy was in force when Angie died, Richard will receive a claim payment equal to the face amount of the policy.

Limited Pay Whole Life-Age to age 65**

A life insurance applicant wants a combination of savings and insurance protection with guarantees. If the applicant is willing to pay premiums only until the age of 65, at which time the policy is fully paid-up, which of the following should he/she purchase? A Indeterminate Premium Whole Life B An Ordinary Straight Whole Life policy with a Level Term rider to age 65 C Limited Pay Whole Life-Age to age 65 D Adjustable Life with a large death benefit and minimal premiums A life policy payable to age 65 is a limited payment policy. If the insured does not die within the limited premium period, premiums cease because the policy is fully paid up (i.e. no more premiums are due). Death always results in the payment of the policy proceeds as long as the policy is in force. Cash values build as in any other Ordinary Whole Life policy.

Single Premium Deferred Annuity

A lump sum of money is placed into an account from which the annuitant will draw periodic benefits beginning more than a year from the date of purchase. This describes a: A Single Premium Immediate Annuity B Flexible Premium Immediate Annuity C Flexible Premium Deferred Annuity D Single Premium Deferred Annuity Regardless of how it is funded, by definition a deferred annuity does not begin its income stream for at least 13 months. Typically, the deferral period is many years, not just one.

$250,000

A married couple purchases a $250,000 Joint Life Policy. When the older of the two dies, what is the amount payable to the survivor? A $125,000 B $500,000 C Zero D $250,000 A Joint Life Policy insures two lives. It is the order of death that is significant in a Joint Life Policy. The entire death benefit is paid at the death of the first insured, regardless of age.

Purchase a Joint life policy

A married couple wants to make sure that if either of them dies, the survivor has enough funds to maintain their standard of living but want to accomplish this in the most economical way. Which of the following recommendations is best suited to accomplish their goal? A Purchase a Joint life policy B Buy two separate Limited payment life policies C Buy two separate Whole Life policies D Buy a Joint and Survivorship Life Policy Joint Life pays on the death of the first insured. It is less expensive than buying two separate policies.

501(c)(3

A non-school employer can set up a TSA plan for their employees under which of the following IRC section? A 408(a) B 401(k) C 403(b) D 501(c)(3 A non-school employer that is a non-profit organization can set up a TSA for its employees under IRC 501(c)(3).

An executive officer of the insurer**

A policy is issued with a rider. Years later the policyowner would like to drop the rider in order to save some money. Who has the authority to effect that policy change? A The insured B The producer C An executive officer of the insurer D The beneficiary Any policy changes or modifications must be in writing and signed off at the home office by an executive officer. A producer cannot change, alter, modify, or waive any policy provisions.

The owner specifies the amount of each periodic payment and the insurer pays that amount until the funds plus interest are depleted

A policyowner has chosen the Fixed Amount Settlement Option. Which of the following best describes this option? A Only the death benefit with no interest is paid B The death benefit is paid in lump sum fashion C The owner specifies the amount of each periodic payment and the insurer pays that amount until the funds plus interest are depleted D The insurer determines the number of periods that payments are made In the Fixed Amount Settlement Option, the policyowner or beneficiary states the amount to be paid periodically. This amount will include interest and is paid until the death benefit has been fully distributed. The number of periodic payments is affected by the interest rate payable.

Precertification

A procedure used by dental insurance carriers to determine the benefit to be paid is known as: A Least Coverage Provision B Precertification C Preliminary Evaluation D Pretreatment Examination

A policy summary

A producer must include their name and address on which of the following? A A buyer's guide B A policy summary C An insurance policy's cover page D Any policy amendment or rider

To pay the claim in full as long as the conditions of the receipt were fully satisfied by the insurer

A producer submits a completed application to the insurer along with the premium check after giving the applicant a conditional receipt. If the applicant completes the required medical exam, but dies prior to the insurer issuing a policy as applied for what is the insurer's responsibility? A To keep the premium and reject the claim B To pay the claim in full as long as the conditions of the receipt were fully satisfied by the insurer C To refund premiums paid less costs associated with any medical exams D To refund any and all premiums paid Since all of the conditions of the receipt were satisfied is does not matter that the insured died prior to the policy being issued. Coverage was in effect as of the time the medical exam was completed.

Long-Term Care

A product designed to provide coverage for necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital is called: A Long-Term Care B Outpatient Care C Retirement Benefits D Medicare Supplement The question is describing a Long-Term Care Policy. Medicare Supplement covers acute care expenses and related post-hospitalization skilled nursing care only.

Buying a first vacation home

A qualified plan pre-mature withdrawal tax penalty can be waived in all of the following circumstances, except: A Disability B Buying a first vacation home C Qualified educational expenses D Death First-time home buyers, meaning primary residence would be one of the exceptions but not for a vacation home.

$90,000

A small business owner used her life insurance policy as collateral for a bank loan. The face amount of the whole life policy was $100,000 and the original amount of the loan was $20,000. If the outstanding loan balance at the time the small business owner died was $10,000, how much will the policy's named beneficiary receive? A $90,000 B $70,000 C $80,000 D $100,000

Be married to a spouse that has earned income

A stay at home father wants to open up an Individual Retirement Accounts (IRA). What is required in order for him to do so? A Have the money available to afford to do so B Be married to a spouse that has earned income C Be under the age of 59 1/2

Entity

A(n) _________ plan calls for the business to purchase life insurance policies on each of the business owners. A Entity B Cross Purchase C Group D Credit Protection An entity plan calls for the business to buy life insurance policies on the business owners. A cross purchase plan calls for the partners to buy life insurance policies on one another.

The premium declines throughout the term of the policy** A decreasing term policy has a death benefit that reduces over a defined number of years, but the premium remains the same in all years.

All of the following are correct pertaining to Decreasing Term, except: A The premium stays level B Its most common use is in credit life insurance C The death benefit decreases D The premium declines throughout the term of the policy

Board

All of the following are coverages provided under a Basic Hospital Expense Policy, except: A Miscellaneous hospital expenses B Physician/Surgeon expenses C Board D Semi-private room A Basic Hospital Expense Policy does not pay for the expenses of a physician or surgeon. That would be Basic Surgical Expense

Silent partner

All of the following are eligible to participate in a HR-10 Keogh Plan, except: A Sales person B Manager C Silent partner D Secretary

Joint Survivorship

All of the following policies end when an insured dies, except: A Juvenile Life B Joint Survivorship C Variable Universal Life D Joint Life

Those who must pay less than 9.5% of their income for health insurance

All of the groups are considered to be exempt from the Affordable Care Act's requirement to purchase coverage, except: A Undocumented immigrants B Members of a religion opposed to acceptance of health care benefits C Those whose household income does not require the filing of a tax return D Those who must pay less than 9.5% of their income for health insurance Those that must pay more than 9.5%, even after subsidies, are exempt.

Business of Life Settlement

An activity involving, but not limited to, offering to enter into, soliciting, negotiating, procuring, effectuating, monitoring, or tracking life settlement contracts is referred to as? A Business of Life Settlement B Life Settlement Intermediary C Life Settlement Provider D Life Solicitor

Stranger-Originated Life Insurance

An agreement to transfer the ownership of a policy or the policy benefits to another person is an example of? A Broker-Originated Life Insurance B Other provisions C General Requirements D Stranger-Originated Life Insurance

Determine the policy's interest credit

An annuity policyowner may do all of the following, except: A Change the annuity date B Name and change the beneficiary C Select or change the settlement option prior to death D Determine the policy's interest credit The owner's rights begin at the time of purchase. An owner, who may also be the annuitant, may change the annuity date, beneficiary, and payout option.

The employee chooses which type of insurance to convert to

An employee who is covered under an employer group life insurance plan may assume all of the following are TRUE of the opportunity of conversion, except: A No proof of insurability is required B The employee chooses which type of insurance to convert to C The premiums are greater than what was being paid for the group life insurance D The policy to which the employee converts is individual permanent insurance

Adverse Selection

An employer who has an Open Enrollment Period four times during a policy period for group dental coverage might cause the insurer to have concerns about which of the following? A Premium Payments B Insurable Interest C Stability of Membership D Adverse Selection

Re-Entry** The policy will specify when the Re-Entry can take place.

An existing term life insurance policy may be exchanged for a new term life insurance policy on the ______ date. A Re-Entry B Renewal C Conversion D Expiration

6 more years of payments

An individual purchased a fixed annuity with flexible premiums. When she annuitized the policy, she chose the Life Income 10-Year Certain option. What would the beneficiary receive if the annuitant dies 4 years after the annuity payout began? A Nothing B 10 more years of payments C The undistributed balance D 6 more years of payments In any life annuitization option, distributions are made for as long as the annuitant lives. The period certain defines the minimum number of payments that will be made if the annuitant does not live as long as the guarantee period. Since the annuitant died 4 years following annuitization, 6 years of payments remain.

10%

An insurance producer may have his/her license suspended or revoked by earning commissions for business written on his/her own property and risks if the commissions received are more than what percentage of the licensee's net aggregate commissions during the preceding 12 months? A 5% B 50% C 10% D 25%

31 days

An insured covered under a group life policy will be allowed to convert to an individual policy, without evidence of insurability, within how many days of the termination or reduction of group coverage? A 31 days B 45 days C 90 days D 10 days

Whole Life** Only cash value policies can provide for missed premium payments to be paid with the policy's cash value through an automatic premium loan.

An insured forgets to pay his insurance premium. Instead of the policy lapsing, the premium is paid by the company. This would suggest that a __________ policy was purchased. A Level term B Decreasing term C Renewable term D Whole Life Only cash value policies can provide for missed premium payments to be paid with the policy's cash value through an automatic premium loan.

Up to 100 days

An insured is hospitalized for at least 3 days. How long will Medicare pay for confinement in a skilled nursing facility? A Up to 100 days B Up to 30 days C Up to 90 days D Up to 365 days Medicare Part A will provide coverage for up to 100 days of post-hospital skilled nursing care. Only the first 20 days are covered at 100% of the actual cost.

Disability

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 Rehabilitation B Disability C Transplant D Benefit Some policies require the insured to be unable to perform the duties of any occupation for which he/she is reasonably suited by education, training and experience.

15** According to the Claim Forms Provision (a Mandatory Uniform Provision), the insured should receive the necessary claim forms within 15 days after notice of claim.

An insured should receive necessary claim forms within _____ days after notice of claim. A 5 B 20 C 15 D 10

Not taxable**

An insured with an individual LTC policy is deducting the premiums he is paying for the plan on his income taxes. Once he begins to receive benefits from this plan, what will be the tax consequences on this income? A Tax-deferred B 7.5% is taxable C Fully taxed D Not taxable

She cannot change the distribution once commenced The selection of a lifetime annuity payment option is critical because once chosen it typically may not be changed. An alternative to annuitization is a 'systematic withdrawal plan' that allows the amount of withdrawal to be changed in the future. It is not a lifetime income guarantee, and the payments will end when the last dollar of cash value is taken.

At the time of her retirement at age 62, Jolene chose a Life Income Payment Option to have her annuity distributed. Five years later, when her health declines, she needs the distribution to be increased. How is this accomplished? A By adding a disability income rider B By adding an increase of benefits rider C She cannot change the distribution once commenced D By adding a Cost of Living Rider

March 1st

Authorized insurers must file an annual financial statement with the Superintendent of New York on or before which date? A April 15th B March 1st C April 1st D March 5th

The balance of the account will reduce over a period of time once payout begins Capital liquidation assumes both principal (capital) and interest are liquidated over the relevant time period to provide the required income for the dependents. This will cause the balance to decrease and benefits are paid.

Capital liquidation assumes: A The balance of the account will increase over time once payout begins B The balance of the account will reduce over a period of time once payout begins C The payout will only include interest and the balance remains the same D Only the amount invested will be liquidated

Applies to employers with 20 or more employees

Concerning COBRA, which of the following is correct? A Applies to employers with 20 or more employees B Provides 18 months of continuation of coverage for dependents of Medicare-eligible employees C Provides employees and dependents 36 months of continuation of coverage after termination of employment D Provides 36 months of continuation of coverage for disabled participants Federal law mandates that employers with 20 or more employees provide a COBRA option. Termination of employment provides only 18 months of continuation. Qualifying events for dependents only (not employees) permit continuation up to 36 months.

Eventually, no more premiums will be due on the policy

Concerning the Paid-Up Additions Dividend Option, all of the following are true, except: A Paid-up additions increase the amount of future dividends credited B These single premium additions do not change the face value of the original policy C Paid-up additions have their own increasing cash values D Eventually, no more premiums will be due on the policy The Paid-Up Additions purchased under this Option have their own values and do not change the face amount of the original policy. Each additional segment of insurance contains both a death benefit and increasing cash surrender value, and by purchasing paid-up additions, larger dividends may be paid ins the future. Paid up additions do not eliminate need to pay premiums on the original policy.

Overinsurance** Overinsurance means having more than 100% of a claim paid. This could happen if a person were covered by more than one health plan.

Coordination of Benefits is a provision designed to reduce ________ when an insured is covered under multiple health plans. A Overinsurance B Excess coverage C Extension of benefits D Continuation of coverage

Annually

Dividends if declared are paid __________. A Quarterly B Monthly C Annually D Semi-annually

Qualified plans must meet certain minimum standards

ERISA requires which of the following? A Qualified plans must meet certain minimum standards B That employers establish pension plans for their employees C That every plan has the same vesting schedule D Employers must be able to benefit equally with the employees and beneficiaries

Private

ERISA sets minimum standards for pension plans primarily in the ______ industry. A Public and Private B Public C Private D Quasi-government ERISA focuses in on the private industry pension plans.

The overall policy performance has something to do with the stock market in general

Equity Universal, Variable, and Variable Universal all have which of the following characteristics in common? A A securities license is required to sell each policy B All have a guaranteed death benefit C The overall policy performance has something to do with the stock market in general D The owner chooses the separate account(s) to invest the cash values in All of these policies do not have a guaranteed death benefit, and the Equity Universal life policy does not require a securities registration. However, all of them have a death benefit that is somehow tied to the stock market.

Varies

Expense loading ___________ from company to company. A Varies B Is higher C Is lower D Is the same Expense loading is a cost area that can vary from company to company based on its operations and efficiency. These factors are used by all insurers.

50%

Failure to take a required minimum distribution (RMD) can lead to a ________ tax penalty. A 20% B 10% C 15% D 50% A 50% tax penalty applies to any failure to take all or part of an annual Required Minimum Distributions RMD.

Wholesale

Franchise insurance is also know as _________ insurance. A True Group B Wholesale C Term Life D Whole Life Franchise insurance is also known as Wholesale insurance because of the reduced cost to the individual insured as the employer picks up the plan administration expenses.

Variable

Generally, which of the following Annuities is not designed to guarantee the principal value of the policy in stable interest rate environments? A Fixed B Variable C Indexed D Market Value Adjustment Variable annuities have no minimum guarantee of interest or gains, and may lose value in a declining market.

Deductible

Group Accidental Death and Dismemberment premiums are _______ by the company paying the premiums as a business expense. A Tax-Deferred B Deductible C Taxable D Tax-Free Group Accidental Death and Dismemberment premiums are tax deductible by the business owner. Benefits are paid income tax-free because they are not considered income.

Renewable with adjustable premiums, by classification only

Guaranteed Renewable means: A Renewable with guaranteed premium B Renewable only at the option of the insurer C Renewable with adjustable premiums, by classification only D Renewable with adjustable premiums determined by frequency of claim The Guaranteed Renewable Provision does allow the insurer to adjust premiums upon renewal, but by class only, not on an individual basis. A class of insureds is based on age or other uniform, nondiscriminatory method.

As an ordinary and necessary business expense

How are employer paid premiums on a group life insurance plan treated for tax purposes? A As a personal expense paid on behalf of the employee B A barter transaction C As an ordinary and necessary business expense D As compensation in lieu of cash Employer paid premiums on a group life insurance plan are treated as an ordinary and necessary business expense which is why it qualifies for tax deductibility.

Purchase the annuity within a Roth IRA account

How can an annuity payout an income benefit income tax free? A When the annuity was purchased as a Traditional IRA with premiums tax deductible B When the annuitant is over age 70 1/2 C Purchase the annuity within a Roth IRA account D When the annuity payout is going to the estate of the deceased The Roth IRA allows for distributions free from income tax if the Roth IRA rules are followed.

20** Written notice of claim must be given to the insurer within 20 days after the occurrence or commencement of any loss covered by the policy, or as soon as is reasonably possible. If the claim is for a loss-of-time disability and will be payable for at least 2 years, the insured must provide the insurer a notice of continued disability at least once every 6 months.

How many days does the insured have to notify the insurer, in writing, that a loss has occurred? A 20 B 180 C 31 D 15

There is no tax deferral benefit on any earnings

If a corporation owns an annuity, what is the tax ramifications? A Since the corporation is a non-natural person there is no tax penalty for early withdrawal B Any withdrawals are taxed at the favorable corporate tax rate C The premiums are tax deductible as an ordinary and necessary business expense D There is no tax deferral benefit on any earnings Any annuity policy earnings are not tax deferred rather they are taxed each and every year.

There is no tax deferral benefit on any earnings Any annuity policy earnings are not tax deferred rather they are taxed each and every year.

If a corporation owns an annuity, what is the tax ramifications? A The premiums are tax deductible as an ordinary and necessary business expense B Any withdrawals are taxed at the favorable corporate tax rate C There is no tax deferral benefit on any earnings D Since the corporation is a non-natural person there is no tax penalty for early withdrawal

Tax and 10% penalty tax on the withdrawal that represents earnings

If an annuitant withdraws funds from their annuity prior to age 59 1/2 what is the tax consequence? A Tax on the tax deferred portion of the withdrawal along with a 15% tax penalty B Tax on the entire withdrawal plus a 10% tax penalty C Tax on cost basis and 10% tax penalty on the tax deferred portion of the withdrawal D Tax and 10% penalty tax on the withdrawal that represents earnings The withdrawal that represents earnings will be taxed along with a 10% tax penalty.

10 For withdrawals of any gains from a MEC prior to age 59 1/2 there is a 10% tax penalty that applies.**

If funds are prematurely withdrawn from a Modified Endowment Contract (MEC) they are subject to a _____% penalty on any gains. A 15 B 10 C 20 D 6

Federal Estate

If life insurance proceeds are paid to the deceased's estate they may be subject to ________ taxes. A State Income B Probate C Federal Estate D Federal Income While the death benefit is income tax free, the amount in the deceased's estate may be subject to Federal Estate taxes.

45 If notice under an employer group health insurance conversion privilege is provided more than 15 days but less than 90 days after termination, the conversion privilege must be extended to 45 days.

If notice under an employer group health insurance conversion privilege is provided more than 15 days, but less than 90 days after termination, the conversion privilege must be extended to ______days. A 90 B 180 C 60 D 45

Deductibles and coinsurance

In New York, a health service corporation or medical expense indemnity corporation offering medical, major medical, or similar comprehensive insurance must provide coverage for preventive and primary care services without any: A Deductibles and coinsurance B Premium C Applications D Proof of residency

Suicide Clause - (Suicide within 2 years from the policy's date of issue.) If a person commits suicide within the first 2 years the policy is in force, the loss is excluded and the insurer's liability is limited to a refund of premium. If the insured's death is a result of suicide after the first 2 years, then the insurer pays the policy's full face amount (i.e. death benefit).

In New York, the suicide exclusion is valid for what period of time?

Dividends Dividends are never guaranteed.

In a policy summary all of the following must be shown on both a guaranteed and non-guaranteed basis, except: Premiums B Dividends C Interest rates D Cash values

Viator

In a viatical settlement transaction, the life insurance policyowner is referred to as the _________. A Provider B Viatee C Viator D Third party

For 15 years, or until the insured's death, whichever occurs first

In order for a death benefit to be paid to a beneficiary of a 15-pay Whole Life Policy, the insured must pay premiums: A Until the insured dies whenever that occurs B For 15 years or the insured's death whichever time period is greater C For 15 years, or until the insured's death, whichever occurs first D For 15 years regardless of when the insured dies A 15-pay Whole Life Policy is a limited payment policy. If the insured does not die within the limited period, premiums cease because the policy is fully paid up (i.e. no more premiums are due). Death always results in the payment of the policy proceeds as long as the policy is in force.

Purchase a decreasing benefit policy that matches the loan repayment schedule

In order to make sure that a creditor of the insured is not paid more than the outstanding loan at time of claim, the policyowner should: A Purchase a decreasing benefit policy that matches the loan repayment schedule B Indicate the percentage of the face amount the creditor will receive C Name the creditor as a primary beneficiary D Specify a dollar amount the creditor should receive at time of claim Credit insurance or decreasing term insurance is the best way to accomplish this.

Common stock of the insurer

In order to receive a stock dividend, the policyowner must own ____________. A Common stock of the insurer B Equity indexed life C Variable life D Variable universal life Stock dividends are paid to common stockholders when declared by the board of directors.

The amount of the accelerated payment, the remaining death benefit and cash values

In the event that an insured receives a periodic benefit as the result of exercising the Accelerated Death Benefit Rider, what information must the insurer provide to the insured? A The amount of taxable income that they will be reporting to the IRS B The amount of the accelerated payment, the remaining death benefit and cash values C Verification and update of the policy ownership and beneficiary designations D The life expectancy of the insured on a semi-annual basis The Accelerated Death Benefit Rider advances a terminally ill insured a portion of the death benefit, treating it as if it were a loan.

Failed to comply with an administrative or court order imposing a child support obligation

In the state of New York, the Superintendent may suspend, revoke or nonrenewal any insurance agents, broker consultants or consultants license if which of the following is determined? A Ticketed for driving 10 miles over the speeding limit B Unknowingly mailed more than 3 insurance applications directly to their assigned MGA as opposed to the carrier directly C Failed to comply with an administrative or court order imposing a child support obligation D Demonstrated competence, trustworthiness and financial responsibility in the conduct of business

C Subscribers

Individuals covered under a Blue Cross/Blue Shield HMO plan are typically referred to as: A Members B Insureds C Subscribers D Participants HMOs and PPOs typically refer to their insureds as 'subscribers'. True indemnity plans would use only the term 'insureds'.

Inspection Report An Inspection Report is a general report of the applicant's finances, character, morals, work, hobbies and other habits. It is sometimes called a Consumer Investigative Report.

Information about an applicant's work behavior or character gathered from neighbors or co-workers would be included on an? A MIB B Inspection Report C APS D Agent's Report

15

Insurance producers are required to complete how many hours of approved continuing education during each 2-year license period? A 40 B 24 C 15 D 20

180 days

Insurers can backdate life insurance policies from the date of applications, up to what period of time? A 30 days B 180 days C 60 days D 90 days No insurer will backdate the effective date of a life insurance policy for more than 6 months from the date of application if the premium is reduced below what it would have been had the effective date been the same as the application date.

Life Income

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 Joint Life B Life Income C Fixed Amount D Life Income with Refund The Life (Life Only or Straight Life) Income option provides the largest possible payment to the annuitant because the insurance company offers no residual values upon his death.

$94,500

Jeanne has a $100,000 whole life insurance policy that has $1,000 of dividend additions, a $6,000 outstanding loan that includes unpaid interest, and a monthly premium of $500. If she dies during the grace period, which of the following insurance settlements would be permitted? A $93,000 B $100,000 C $94,500 D $92,500 It is prohibited for any settlement to be less than the amount of the death benefit, plus dividends, less policy loans and loan interest outstanding, less any unpaid premium.

Proceeds are protected from creditors

Life settlement providers and brokers must disclose to the owner all of the following information with respect to life settlement contracts, except: A Possible tax consequences and the impact of benefit eligibility B Possible alternatives available to the owner C The amount of the broker's compensation D Proceeds are protected from creditors The proceeds of life settlement contracts may not be protected from creditors.

Mortality

Loading includes all of the following, except: A Producer commissions B Operating expenses C Medical exam costs D Mortality The mortality rate is used to determine net premium. Loading are additional charges to net premium to derive gross premium.

Medicaid

Long-Term Care Partnership program provisions protect policyholders who apply for _______ after exhausting their insurance coverage since certain assets are disregarded during their eligibility determination. A Medicaid B Medicare supplements C Medicare D Disability

Paid-up Additions

Lucy uses her dividends to purchase single premium additional permanent benefits at her attained age. Which Dividend Option is Lucy exercising? A Paid-up Option B One-Year Term C Reduced Paid-Up D Paid-up Additions Only Paid-up Additions, Paid-up Option and One-Year Term are dividend options. Reduced Paid-Up is a nonforfeiture option. Lucy wanted additional permanent benefits so she should choose Paid-up Additions.

Partial Case Management**

Managed Health Care attempts to contain costs by controlling the behavior of participants in all of the following ways, except: A Copayments and/or coinsurance B Partial Case Management C Controlled Provider Access D Preventive Care

Usual Customary and Reasonable

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 UCR is not scheduled, but is based on the average fee charged by all doctors in a given geographical area.

Settlement Options

Most often, life policies pay death claims in a single lump sum. The options that allow benefits to be paid other than lump sum are called _____________. A Distribution Options B Mandatory Options C Settlement Options D Statutory Options

The surrender charge

On a variable universal life policy what is the difference between the cash value and the cash surrender values? A The surrender charge B The amount of any outstanding policy loan C The investment performance D The interest earned The difference between the cash values and the cash surrender values is the surrender charge which provides an incentive for the policyowner to maintain the policy and allows for the insurer to recoup any policy issuance costs.

Earnings are tax deferred during the accumulation phase

One of the benefits of an annuity in regards to taxes is: A Earnings are tax deferred during the accumulation phase B Premiums are tax deferred C Premiums are tax deductible D Death benefits are income tax free While earnings are tax deferred during the accumulation phase, taxes do get paid eventually. The amount of tax is dependent upon not only the recipients tax bracket but also how much of the payment received represents tax deferred earnings, including death benefits.

A regular dental checkup

Part B of Medicare excludes which of the following medical expenses? A Home health care B Outpatient hospital treatment C A regular dental checkup D Clinical laboratory services Part B does not cover routine dental services.

Reserves

Policy __________ are the net premiums paid plus interest earned and reflect potential insurance contract obligations. A Liabilities B Assumptions C Dividends D Reserves A reserve is maintained by an insurer in order to meet future potential obligations and is also required by State insurance laws.

Case Management/Cost Containment Provisions

Precertification, Mandatory Second Surgical Opinion, and Concurrent Review are provisions in health insurance policies known as: A Policy Abilities Provisions B Protect Insurer Provisions C Miscellaneous Provisions D Case Management Provisions They are included as Case Management Provisions, sometimes referred to as Cost Containment Provisions.

Controlled Business

Procuring insurance on the life or property of members of any firm or association and their spouses and receiving 10% of the aggregate net commission during any 12 month period, refers to which of the following? A Rebating B Controlled Business C Twisting D Commingling

They are made

Qualified plan employer contributions are tax deductible when _________. A They are made B The employee retires C The employee makes a contribution D The employee dies Employer contributions are immediately tax deductible.

Unfair Discrimination

Refusing to insure solely because of an applicant or policyholder's past treatment for mental disability, if any, is considered: A Unfair Financial Planning Practice B Unfair Underwriting C Unfair Discrimination D Unfair Claim Settlement Practices

Total disability

Residual Disability Income pays funds to the insured, to make up for what the insured would have earned after returning to work, and while recovering from ___________. A Long-term disability B Partial disability C Short-term disability D Total disability

Representations

Statements made on the application are considered true to the best of the applicant's knowledge and belief are considered to be: A Concealments B Waivers C Representations D Warranties Representations are statements made and believed to be true to the best of a person's knowledge. Warranties are statements of absolute truth.

Life insurance purchased to benefit someone without insurable interest in the insured** Stranger-originated life insurance is the purchase of life insurance with the intention of benefitting a party that does not have insurable interest in the insured at the time the policy becomes effective.

Stranger-originated life insurance is best defined as: Life insurance purchased to benefit someone without insurable interest in the insured B Life insurance purchased by someone with insurable interest in the insured C form of credit life insurance D Another name for a life settlement agreement

PIA

The Social Security Survivor Benefit is computed using which of the following? A FUTA B FICA C PIA D ERISA The Social Security Survivor Benefit is based on the worker's Primary Insurance Amount (PIA), which is determined by cumulative earnings. 65

Create and update the insurance code (laws)

The Superintendent has the ability and duty to take all of the following actions, except: A Refer suspected criminal violations to the attorney general B Create regulations to administer the law C Investigate complaints and audit insurers D Create and update the insurance code (laws)

Geography

The Superintendent may determine the cost of insurance based on community rating for which of the following? A Health status B Gender C Geography D Occupation

The Superintendent is appointed by the Governor with the advice and consent of the Senate, and will hold office at the governor's pleasure

The Superintendent of Financial Services is the head of the insurance department. Which of the following is also correct? A The Superintendent is elected by the National Association of Insurance Commissioners with the consent of the Senate, and holds office concurrently with the Governor until a successor is appointed B The Superintendent is appointed by the Governor with the advice and consent of the Senate, and will hold office at the governor's pleasure C The Superintendent is elected by his/her deputy with the consent of the Senate, and holds office concurrently with the Governor until a successor is appointed D The Superintendent is appointed by Congress with the consent of the Senate, and holds office concurrently with the Governor until a successor is appointed

2

The Time Limit on Certain Defenses (Incontestable) period is _____ years under individual health and disability contracts. A 7 B 3 C 2 D 5

Guaranteed minimum withdrawal benefit

The _________ gives the owner of a variable annuity the ability to withdraw a maximum percentage of the annuity value until the initial investment amount has been recouped. A Group annuity B Guaranteed minimum withdrawal benefit C Retirement income annuity D Joint and survivor annuity benefit

Policyowner

The ___________ decides which dividend option is in effect and can change their election at any time. A Board of Directors B Insurer C Policyowner D Beneficiary The policyowner has all rights in the policy including the naming and changing of dividend options.

Residual

The ____________ market is a private source of coverage of last resort for individuals or businesses that have been rejected by voluntary market insurers. A Residual B Reciprocal C Self-insured D Reinsurance The residual marketplace is a source of coverage of last resort for those who have been rejected by the voluntary marketplace insurers.

Period certain

The capital liquidation approach is similar to which of the following settlement options? A Fixed amount B Life with period certain C Life only D Period certain The capital liquidation approach is similar to the period certain settlement option.

Premiums paid less dividends or withdrawals

The cost basis of a life insurance policy is __________. A Cash values plus any outstanding policy loans B Premiums paid less dividends or withdrawals C Cash values in excess of premiums paid D Dividends left on deposit at interest plus the policy's cash values

Corridor Deductible** A Corridor Deductible is used between the Basic Plan and the start of coverage under the Supplemental Major Medical policy

The deductible that applies after the Basic Plan is exhausted and the Supplemental Major Medical Coverage begins is called: A Payment Structure B Coinsurance C Stop Loss D Corridor Deductible

Fully taxable since the excess payments must represent only earnings

The exclusion ratio states that once the entire cost basis has been recovered from a non-qualified annuity income benefit payout then any further payments are __________. A Taxed at the favorable annuity continuation income rates B Fully taxable since the excess payments must represent only earnings C Still tax favored for annuitants over the age of 70 D Taxed as capital gain but only 50% of the gain is applied Once the entire cost basis is recovered than any remaining payments are fully taxable as ordinary income.

ERISA

The federal law that governs employer-sponsored employee retirement and welfare and benefit plans is: HIPAA B COBRA C ADEA D ERISA

Premiums paid with after tax dollars, Income benefit not taxable** The premiums are not tax deductible and the benefits are not subject to federal income or FICA tax.

The following statement is true concerning the income received from an individually owned disability income policy: A Premiums are tax sheltered, Income benefit not taxable B Premiums paid with after tax dollars, Income benefit not taxable C Premiums are tax sheltered, Income benefit taxable D Premiums paid with after tax dollars, Income benefit taxable

31 days

The grace period for an individual health insurance policy being paid on a quarterly basis is: A 7 days B 31 days C 45 days D 10 days 7 days for weekly; 10 days for monthly; and 31 days for all other payment modes (quarterly, semi-annual, and annual).

Medicare Select Policy

The insured may select a managed care version of a traditional Medicare Supplement Policy at a lower premium by choosing a policy that limits care to a specific list of hospitals and physicians. This would be called a: A Medicare Select Policy B Medicare Supplement Policy C Medicaid Select Policy D Medicaid Supplement Policy Medicare Select is a variation of a traditional Medicare Supplement Policy that may require you to use specific hospitals and doctors within its network to be eligible for full benefits. Non-network expenses are paid to the same extent that Medicare covers the cost. Medicare Select is not sold in all states.

Consumer Investigative Report

The insurer's underwriter may find information about an applicant's moral character, hobbies, work and general reputation from a: A Agent's Report B Attending Physician Statement C Medical Examination D Consumer Investigative Report A Consumer Investigative Report is a general report of the applicant's finances, character, morals, work, hobbies and other habits. It is sometimes called an Inspection Report.

Morbidity Table

The mathematical probability table used by insurance companies to determine loss due to sickness or injury is the: A Mortality Table B Claims Table C Morbidity Table D Rate Table The morbidity Table is used by Insurance companies to determine premiums for Accident and Health Insurance.

200% of the commission paid for policy renewals

The maximum first year commission for the sale of a Medicare Supplement policy is: A The commission paid for policy renewals B 50% of the first year premium C 200% of the commission paid for policy renewals D The amount regardless of whether the sale is replacement or not

$5,000

The maximum penalty that may be imposed by the Superintendent under the Insurance Fraud Prevention Act for a single violation is: A $500 B $5,000 C 1 year in prison D $50,000 $5,000 is the state penalty for fraud. The $50,000 is under federal statute.

1,000

The mortality rate is based on mortality tables which show life expectancy and the death rate per _______ people living in the U.S. A 100 B 10,000 C 1,000 D 100,000 Mortality tables show the death rate per 1,000, similar to how policy premiums are based on, a rate per $1,000 of coverage.

Per stirpe

The name of the beneficiary designation that will pay a deceased beneficiary's share to the heirs of that beneficiary who predeceases the insured is called: A Per class B Per stirpes C Per capita D Per individual Per stirpes is known as through the roots so the heirs of a deceased beneficiary will stand in for them and collect the deceased beneficiary's share of the proceeds. 46

Accumulation Period

The period of time over which a single sum or periodic deposits grow within an annuity is referred to as the: A Benefit Period B Accumulation Period C Savings Period D Growth Period

3 years Policyowners have 3 years to apply for reinstatement by showing evidence of insurability and paying all amounts due.

The period within which one may rightfully reinstate a lapsed life insurance policy in New York is: A 6 years B 1 year C 2 years D 3 years

Offer residents the chance to qualify for Medicaid regardless of source depletion

The purpose of the New York Long-Term Care Partnership is to: A Create a public-private partnership for profitably underwriting long-term care risks B Offer residents the chance to qualify for Medicaid regardless of source depletion C Extend Medicare benefits beyond 6 months D Enforce the terms of the Medicaid Estate Recovery Act Long-term care partnership policies are sold by private companies and meet certain standards set by the state. NY encourages individuals to fund their own long-term care service through these policies by promising early access to Medicaid if the policy benefits are exhausted. In addition, assets are preserved for their heirs.

Obtain a new term policy at a lower rate** The main purpose of a Re-Entry Term option is to allow a healthy insured to acquire a new term life insurance policy at a rate lower than what is currently being charged on the existing policy.

The purpose of the Re-Entry Term option is to: A Obtain a permanent plan of insurance that builds cash value B Extend the length of time the original policy can be in effect C Obtain a new term policy at a lower rate D Continue on with the existing policy but with a larger face

Facultative** Facultative is one of the two types of reinsurance agreements which allow the reinsurer the opportunity to reject risks presented to it or to price them higher based on the risk exposure.

The reinsurance agreement that allows the reinsurer an opportunity to reject coverage for individual risks or price them higher due to their higher risk is known as a(n) ___________ agreement. A Facultative B Residual C Treaty D Reciprocal

Treaty** Treaty is one of the two types of reinsurance agreements which automatically accepts all new risks presented by the ceding company.

The reinsurance agreement that automatically accepts all new risks presented by the company seeking or requesting reinsurance from the reinsurer is known as a ____________ agreement. A Facultative B Treaty C Residual D Reciprocal

Brokerage business

The relationship of a person who acts on behalf of a company whereby the person's actions can bind the company is known as:

Probationary period

The specified period that must elapse before new coverage is effective for nonaccidental losses is known as which of the following? A Waiting period B Probationary period C Morbidity table D Exclusion Disability policies may exclude coverage for illnesses for a short period of time (such as 7 to 10 days) after a new policy takes effect to avoid claims for preexisting conditions. Accidental injuries are never subject to a probationary period.

Decreases**

The surrender charge schedule for a variable universal life policy generally ________ over time. A Remains the same B Fluctuates C Decreases D Increases Over time the surrender charge schedule decreases to 0% generally after 10-20 years from policy issue.

Business Overhead Expense

The type of disability coverage purchased by a small business owner, to cover ongoing overhead in the event of the owner becoming disabled, would be called: A Buy-Sell Agreement B Key Employee Insurance C Business Overhead Expense D Disability Reducing Term

5 months

The waiting period from the start of a disability to be eligible to apply for Social Security disability is: A 12 months B 6 months C 3 months D 5 months The waiting period to apply for Social Security is 5 full months from the start of a qualified disability.

2 The two methods are the capital liquidation and the capital retention/conservation approaches.

There are ______ methods available to determine the income objective after the death of the client for planning purposes. A 5 B 2 C 4 D 3

Accidental Bodily Injury

Timothy owns an individual A&H policy, and in the event of an accident, he is required to prove only that the injury itself is unforeseen and unintended. Tim's policy is based on which of the following definitions of accident? A Accidental Means B Accidental Bodily Injury C Accidental Death D Accidental Dismemberment

10

To be fully insured for Social Security, generally a person must have worked and paid into the Social Security system for a minimum of ______ years. A 40 B 20 C 10 D 30

Reinsure the risk

To make insurance more affordable and protect the insurance company from paying out too much in claims, insurers will: A Reinsure the risk B Deny the risk C Retain the risk D Reserve the risk Reinsurance is what makes insurance affordable. Reinsurance companies are insurance companies that accept all or a portion of the financial risk of loss from the insurance company.

Reinsure the risk

To make insurance more affordable and protect the insurance company from paying out too much in claims, insurers will: A Deny the risk B Retain the risk C Reinsure the risk D Reserve the risk Reinsurance is what makes insurance affordable. Reinsurance companies are insurance companies that accept all or a portion of the financial risk of loss from the insurance company.

Rebating

To offer a client a return of premium, or a special favor or advantage in dividends as an inducement to making a contract, is known as: A Replacement B Controlled business C Rebating D Twisting

Remove all of the exclusion riders

To reduce its exposure to claims from a substandard disability risk, an insurer may take all of the following actions, except: A Increase the elimination period B Reduce the amount of benefit C Charge additional premium D Remove all of the exclusion riders The underwriter might utilize a Full Exclusion Rider when a certain condition is more likely to result in claims.

All of the answers listed

Under a Key Employee Disability Income Policy, the employer is the: A All of the answers listed B Premium Payor C Policyowner D Recipient of the proceeds

Nothing** The Joint Life Payment Option ceases all distributions at the first death of any of the annuitants. This would not be the case if a Life Income Joint and Survivor Option were chosen.

Under an annuity with a Joint Life Payment Option, what will the survivor receive upon the death of the first annuitant? A Nothing B The undistributed balance C The remaining period certain D The same amount they were receiving together

60 days**

Under the Legal Actions Mandatory Uniform Provision, an insured must wait at least _____ days after providing proof of loss before he or she can take legal action against the insurer. A 60 days B 45 days C 180 days D 90 days

26 weeks in any 52-week benefit period

Under the New York State Disability Benefits Law, what is the maximum number of weeks one may receive a benefit? A 26 weeks in any 26-week benefit period B 26 weeks in any 52-week benefit period C 52 weeks in any 52-week benefit period D 13 weeks in any 26-week benefit period

$50

Under the New York required benefits for those entities providing hospital, surgical or medical expense coverage, home care coverage may be subjected to an annual deductible not to exceed $______ per person and a coinsurance provision of not less than 75% of the reasonable charges. A $100 B $200 C $150 D $50 Under the New York required benefits for those entities providing hospital, surgical or medical expense coverage, home care coverage may be subjected to an annual deductible not to exceed $50 per person and a coinsurance provision of not less than 75% of the reasonable charges.

6

Under the New York required benefits for those entities providing hospital, surgical or medical expense coverage, hospice care is for persons certified as having a life expectancy of ______ months or less. A 24 B 6 C 18 D 12

10** Under the Patient Protection and Affordable Care Act, a qualified health plan is any plan which provides coverage for the 10 Essential Health Benefits and provides a minimum actuarial value of 60%.

Under the Patient Protection and Affordable Care Act, a qualified health plan is any plan which provides coverage for the _____ Essential Health Benefits. A 6 B 7 C 8 D 10

Age Under the Patient Protection and Affordable Care Act, rates are strictly based on regional costs and the age of the insured.

Under the Patient Protection and Affordable Care Act, rates are strictly based on regional costs and the ______ of the insured. A Education level B Age C Gender D Occupation

If the annuity is funding a qualified retirement plan and the IRS imposes a limit on that type of plan Aside from insurers limiting the amount of premium dollars it wishes to accept from its customers qualified retirement plans funded by annuities are limited by IRS regulations as to how much can be deposited into them.

Under what conditions would there be a limit as to how much premium can be deposited into an annuity? A If interest rates rise more than 10% B If the producer has sold more annuity premiums than their quota C Under what conditions would there be a limit as to how much premium can be deposited into an annuity? A If interest rates rise more than 10% B If the producer has sold more annuity premiums than their quota C If the annuity is funding a qualified retirement plan and the IRS imposes a limit on that type of plan D If the stock market falls by more than 25% D If the stock market falls by more than 25%

When a transfer of ownership takes place while the insured was alive

Unless an exception applies, life insurance proceeds are income taxable in which of the following circumstances? A When a policy is used for collateral for a bank loan B If a transfer of ownership occurs after the insured dies C When a transfer of ownership takes place while the insured was alive D When there is a change of beneficiary from a non-policyowner to the policyowner If a transfer of ownership takes place while the insured was alive the death benefit becomes income taxable unless an exception applies.

It goes down

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 stays the same D It goes up

The interest crediting rate

What is "fixed" in a fixed annuity? The annuitant The interest crediting rate The beneficiary The investment option in the separate account The "fixed" portion of a fixed annuity is the interest crediting rate, which may change at the discretion of the insurance company, but not less than the guaranteed minimum. A fixed annuity also promises a fixed payment to the annuitant when the contract is annuitized.

61

What is the grace period for policies with premiums that vary by amount and frequency? 31 B 30 C 61 D 10

14.5

What is the minimum age to purchase/buy life insurance in New York? A 16.5 B 14.5 C 21 D 18

At least 6 credits earned in the 13 calendar quarters prior to death, disability, or is entitled to retirement benefits

What is the minimum requirement for currently insured status under the Social Security system? A Have not had a previous Social Security claim B Earned more than minimum wage C Have 40 quarters of covered employment D At least 6 credits earned in the 13 calendar quarters prior to death, disability, or is entitled to retirement benefits A worker must be covered at least 6 quarters during the full 13-quarter period ending with the quarter in which the worker dies, becomes disabled, or is entitled to retirement benefits.

Beneficiary

What is the name of the person named in the annuity policy to POTENTIALLY receive any residual benefits? A Annuitant B Insured C Owner D Beneficiary

At policy inception there is a lack of insurable interest

What is the primary reason why States have 'outlawed' Stranger Originated Life Insurance (STOLI) transactions? A The insured may not be able to meet the premium requirements B At policy inception there is a lack of insurable interest C The transaction avoids State taxes D The 'strangers' or 'investors' are exempt from licensing If a policy is issued without proper insurable interest it becomes a wager contract which is prohibited by State insurance law.

The entire withdrawal

What portion of an employee's pension plan withdrawal is subject to tax? A The earnings on the contributions B The entire withdrawal C The employer's contribution D The employee's contribution Since the contributions were pre-tax and all earnings were tax deferred, then the entire withdrawal would be subject to taxation unless one of the exceptions apply.

Key employee

What type of disability income insurance pays a benefit to a business to help in the search, cost, and hiring of a replacement when an employee becomes disabled and is unable to work for the company? A Business overhead expense B Reducing term C Buy-sell D Key employee

Conversion Privilege

When a group member terminates employment, he or she has 31 days to purchase an individual policy without proof of insurability. This is referred to as the: A Extension of Benefits B Adverse Selection C Conversion Privilege D Coordination of Benefits It is the Conversion Privilege, which affords a group member the right to purchase individual coverage without proof of insurability. The 31-day period also applies when COBRA continuation is exhausted.

Insurable interest

When an applicant for life insurance faces potential financial loss in the event of injury or sickness of an insured, it is said the applicant has: A Incidents of ownership B Indemnity rights C Beneficiary status D Insurable interest Insurable interest in life insurance is based upon a reasonable expectation of pecuniary advantage through the continued life of another person and consequent loss by reason of that person's death or a substantial interest engendered by love and affection in the case of individuals closely related by blood or law.

Experience rating

When an insurer relies on the prior claims history of the group to be insured in determining the rate to be charged, it is called: A Claims rating B Experience rating C Community rating D Cost rating If an insurer bases premiums on the group's prior claims history, the coverage is said to be Experience Rated.

Multiple Employer Welfare Association (MEWA)

When employers who self-fund their employee benefits form a larger group in order to offer health insurance benefits to each employer's workers, it is called a (an): A Multiple Employer Welfare Association (MEWA) B Insurance Alliance C Trade Association D Premium Discount Plan A MEWA allows larger employers that self-fund employee benefits to form a group to reduce the cost of providing those benefits. A MEWA provides economy of scale, as would a Multiple Employer Trust (MET) for smaller employers.

Usual, customary, reasonable (UCR) payment

When payment under a Medical Expense policy is based on the average fee charged by all doctors in a given geographical area, and the balance of any overcharges or costs of any disallowed services are the insured's responsibility, the payment is known as: A Scheduled payment B Blanket payment C Usual, customary, reasonable (UCR) payment D Cash payment

Accidental Death Rider ** Also known as the Double Indemnity Rider, the policy pays the stated multiple of the face amount should the insured die as the result of an accident.

When the death of an insured occurs within a specified period, causing the policy to pay double or triple benefits, this policy must have which of the following riders? A Increased Death Benefit Rider B Enhanced Settlement Rider C Accelerated Benefit Rider D Accidental Death Rider Also known as the Double Indemnity Rider, the policy pays the stated multiple of the face amount should the insured die as the result of an accident.

Conditional contract

When the owner of the policy and insurer must meet certain conditions in order for the health insurance policy to be enforceable, it is referred to as a(n): A Contract of adhesion B Unilateral contract C Aleatory contract D Conditional contract

Lapsing

When there is enough cash value within a life policy to pay the premium, the Automatic Premium Loan provision prevents the policy from: A Lapsing B Renewing C Converting D Surrendering The owner always has a right to borrow from the cash value. The Automatic Premium Loan Provision APL provision gives the insurer the right to invade the policy cash value to prevent a lapse.

NAIC Model Law

Which Act was implemented in order to protect consumers from questionable Medicare Supplement Policy marketing practices? A COBRA B HIPAA C NAIC Model Law D OASDHI

Single Premium Whole Life

Which Whole Life policy is designed to provide a substantial immediate cash value? A Indeterminate B Single Premium Whole Life Policy C Adjustable D Ordinary Straight Life

Indexed

Which of the following Annuities can it be said that it has 'upside potential, but no downside risk' when it comes to the stock market overall? A Indexed B Fixed C Variable D Market Value Adjustment The upside potential is the interest credited can be higher if the index the policy is linked to goes up, but just in case the index goes down it does not affect the cash values of the policy in a negative way.

Variable

Which of the following Annuities would potentially be the most negatively impacted by the overall stock market falling in value? A Fixed B Indexed C Market adjusted annuity D Variable In order to achieve the goal of wealth accumulation and offsetting the effects of inflation most if not all of a Variable Annuity separate account investments are based off of the stock market. None of the other annuities would lose value if the stock market 'crashed'.

Plans A through N

Which of the following Medicare Supplement policies have Core Benefits? A Plans A through N B Plans C through J only C Plan A through C only D Plan A only The Core Benefits found in Plan A must be found in all plans.

Public adjuster

Which of the following acts or aids, in any manner, on behalf of an insured in negotiating a claim(s) settlement for a loss or damage to the insured's property in the state of New York? A Insurance broker B Public adjuster C Claims service representative D Independent adjuster Public Adjuster: Any person, firm, association, or corporation who acting or aiding, for money, commission, or other thing of value, acts or aids in any manner on behalf of an insured in negotiating a claim(s) settlement for loss or damage to the insured's property in this state.

Irrevocable

Which of the following beneficiary designations prevents a policyowner from assigning the policy, taking a policy loan, or surrendering the policy without the beneficiaries consent? A Named B Incontestable C Class D Irrevocable An irrevocable beneficiary has a vested interest in the policy and anything that could affect the values of the policy requires their consent.

Principal and earnings are paid out** In a capital liquidation strategy both principal and earnings are paid out over the anticipated time period in order to meet the income objective. Each payment would be the same as any investment earnings shortfall would be offset by principal liquidations.

Which of the following best describes 'Capital Liquidation' in an effort to meet an income objective? A Principal and earnings are paid out B Investment earnings are paid out C Principal is paid out but investment earnings are reinvested D Principal is paid out

Investment earnings are paid out In a capital retention/conservation strategy only the investment earnings are paid out the principal is retained or conserved for future purposes. Each payment would fluctuate as it would be based on the earnings and no principal would be used to make up for any shortfalls.

Which of the following best describes 'Capital Retention/Conservation' in an effort to meet an income objective? A Principal and investment earnings are paid out B Principal is paid out C Principal is paid out but investment earnings are reinvested D Investment earnings are paid out

The promise to pay in the event of a covered claim** Consideration is something promised, given, or done that has the effect of making an agreement a legally enforceable contract.

Which of the following best describes the consideration on the part of an insurer? A The purpose of the contract must be legal B The acceptance of the contract C The offer of the contract D The promise to pay in the event of a covered claim

Premiums are deductible, the benefits are taxable**

Which of the following best describes the general tax rules regarding employer sponsored group disability income insurance plans? A Premiums are deductible, the benefits are taxable B Premiums are not deductible, the benefits are taxable C Premiums are deductible, the benefits are not taxable D Premiums are not deductible, the benefits are not taxable While there are some exceptions to the general rule, premiums paid for employer sponsored group disability income insurance policies are deductible, the benefits are income taxable.

A condition that is terminal

Which of the following could initiate the Accelerated Benefits Provision or Rider of a life policy? A Inability to perform some activities of daily living B A condition that is terminal C A total disability not reducing life expectancy D A presumptive disability The qualifying event in the Living Needs rider is the terminal status of the insured (i.e. projected to die within 1 or 2 years).

Life insurance when the insured dies while the policy is in force

Which of the following death benefits is paid out to the beneficiary income tax free? A An annuity whose annuitant dies when used for retirement income planning B Life insurance when the insured dies while the policy is in force C An annuity whose annuitant dies during the accumulation phase D An annuity whose annuitant dies during the distribution phase ONLY LIFE INSURANCE pays out an income tax free death benefit. While an annuity does allow for a beneficiary to be named, any tax deferred earnings are subject to income tax when paid out.

Automatically amended to conform to the minimum requirements of such states

Which of the following describes how any provision of a policy which on its effective date, is in conflict with statutes of New York is amended? A Proportionately amended to conform to the mandatory maximum requirements of such state B Proportionately amended to conform to the minimum requirements of the state of residency C Automatically amended to conform to the mandatory maximum requirements of such state D Automatically amended to conform to the minimum requirements of such states Any provision of this policy which, on its effective date, is in conflict with the statutes of New York is automatically amended to conform to the minimum requirements of such statutes.

Supplementary Major Medical

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 Hospital Expense C Supplementary Major Medical D Surgical Expense

6%

Which of the following interest rates credited to an annuity will provide the larger monthly income benefit payment amount all other factors remaining the same? A 4% B 6% C 5% D 3% The higher the interest rate credited translates into the higher monthly income benefit payment.

Conditions

Which of the following is NOT considered one of the essential elements of a contract? A Conditions B Competent Parties C Legal Purpose D Offer and Acceptance The essential elements of a contract are offer and acceptance, consideration, competent parties, and legal purpose. Remember the acronym: CLOC.

Have been employed by a life insurance agent or broker for a least 1 year

Which of the following is a broker licensing requirement? A Have been employed by a life insurance agent or broker for a least 1 year B Have been licensed as a life insurance solicitor for at least 2 years C Must be at 21 or older D File an application with the NASD To obtain a Broker License, the applicant must be age 18 or over and file an application with the Superintendent. If the applicant was regularly employed by an insurance agent or broker for at least 1 year during the 3 years preceding the application for a broker license, the applicant may substitute this for the prelicensing education requirement.

Premiums are generally re-evaluated annually and may be based upon prior claims

Which of the following is correct pertaining to underwriting a group health policy? A The average age of the group is not taken into consideration B All participants are always eligible immediately C Premiums are generally re-evaluated annually and may be based upon prior claims D Group insurance cannot be based upon community experience Typically, large group policies are reevaluated annually on the basis of claims. This is known as 'experience rated,' and the prior year's claims will be a significant factor in establishing the next year's premiums, and could result in non-renewal, if permitted. Smaller groups may be 'community rated,' and evaluated in comparison to similar-sized groups. In all cases, the average age of the group is a premium consideration.

Waiver of Premium

Which of the following is not a Mandatory Uniform Provision of an Accident and Health policy? A Payment of Claims B Waiver of Premium C Proof of Loss D Time limit on Certain Defenses Waiver of Premium is a rider (or provision) in a policy. It is neither a mandatory nor optional policy provision under the Model Act.

Outpatient hospital care

Which of the following is not covered with Medicare Part A? A Outpatient hospital care B Semiprivate hospital room C Post-hospital skilled nursing care D General nursing and hospital services Outpatient care is covered under Medicare Part B.

Provides specific benefits for specific injuries from specific causes

Which of the following is the best definition of a Limited Accident Policy? A Limited in geographical scope (i.e. only in the state where written) B Only covers for a limited time after the accident C Provides specific benefits for specific injuries from specific causes D All answers are correct A Limited Accident Policy restricts benefits to those injuries and causes of loss named in the policy. For example, a person injured in a car accident, must be a passenger in/on a 'common carrier' not a private passenger vehicle.

Benefits are funded by a combination of taxes and premium dollars and coverage is elective

Which of the following is true of Medicare Part B? A It covers routine dental checkups B Benefits are funded by a combination of taxes and premium dollars and coverage is elective C Provides coverage for inpatient services D It is free for those who qualify Part B - Medical Insurance (Outpatient) is a voluntary program of government-subsidized insurance requiring participants to make premium payments.

Indeterminate Premium Life** Indeterminate Premium Whole life charges a current premium based on its current estimate of investment earnings, mortality, and expense costs. If these change then so too the premium but never beyond the maximum stated in the policy.

Which of the following life insurance policies has a current and guaranteed maximum premium stated in the policy? A Adjustable Life B Limited Premium Payment Whole Life C Indeterminate Premium Life D Ordinary Straight Whole Life

Variable Universal Life

Which of the following listed policies has the best likelihood of keeping pace with inflation? A Variable Universal Life B Straight Whole Life C Universal Life D Term Any variable policy has the best chance of keeping pace with inflation due to its ability to invest in the separate accounts of the insurer.

Certificate of Appointment

Which of the following must be filed, in a form prescribed by the Superintendent, by every insurer, fraternal benefit society, or HMO doing business in this state, when appointing agents to represent it? A Insurance Certificate of New York B Notarized Financial Statement C Certificate of Authority D Certificate of Appointment Every insurer, fraternal benefit society, or HMO doing business in this state, when appointing agents to represent it, must file a Certificate of Appointment, in a form prescribed by the Superintendent, within 15 days after the agency contract is executed or the first insurance application is submitted.

Annual apportionment by the insurer of any surplus

Which of the following must be provided on annuity or pure endowment contracts and group insurance? A Annual apportionment by the insurer of any surplus B 31 day free look C 61 day grace period D 2 year reinstatement provision Every individual annuity or pure endowment contract and every group annuity certificate issued in New York must provide annual apportionment by the insurer of any surplus, a complete premium refund if the insured surrenders the contract to the insurer within a period of not less than 10 nor more than 30 days after contract delivery and a 31-day grace period and allow for reinstatement within 3 years of policy lapse, if contract conditions have been met and the cash surrender value has not been paid.

Licensee

Which of the following notifies the Superintendent of a change of address? A Licensor B Client C Licensee D Insurer

Variable Whole Life** Variable Whole Life is a security. It is required that the producer have a securities registration in order to sell it and the policy must be sold with a prospectus detailing all fees, charges, risks, and expenses.

Which of the following policies must be sold by prospectus? A Universal Life B Variable Whole Life C Ordinary Whole Life D Equity Indexed Whole Life

Defined Benefit

Which of the following qualified plans puts the investment risk entirely on the employer sponsoring the plan? A Contribution B 401(k) C Defined Benefit D Profit Sharing In a defined benefit plan the sponsoring employer takes on the responsibility for making sure the money will be available to fund the pension retirement checks for retired employees.

Interest earned on dividends left on deposit with the insurer** While the dividend is free from income tax the interest earned on the dividend is subject to tax.

Which of the following scenarios will trigger an income tax due? A Taking out a policy loan in an amount greater than the total premiums paid in B Receiving a participating policy's cash dividend C Cancelling the policy during the free look period D Interest earned on dividends left on deposit with the insurer

Adjusting the face amount up on a Universal Life insurance policy with Option A death benefit selected

Which of the following situations will require proof of insurability? A Adjusting the face amount up on a Universal Life insurance policy with Option A death benefit selected B Universal Life insurance with Option B death benefit as the cash values grow due to additional premium payments and favorable interest rate crediting C Variable Whole Life insurance as the cash values grow due to favorable separate account investment earnings D Current Assumption Whole Life when the interest crediting is so favorable that the insurer adds a corridor of protection to keep the policy from endowing Requesting an increase in face amount ALWAYS requires proof of insurability. The other scenarios are when the death benefit is driven up based on policy performance which essentially is a payout of the cash value growth.

Consultants must have a written agreement in place in order to charge a fee

Which of the following statements regarding insurance licenses is true? A Brokers generally represent the insurer B Agents earn both consulting fees and commissions from the same sale C Public Adjusters work for the state D Consultants must have a written agreement in place in order to charge a fee

The maximum weekly benefit equals 50% one's pre-disability wages up to the state maximum

Which of the following statements regarding the New York State Disability Law is correct? A The maximum weekly benefit equals 50% one's pre-disability wages up to the state maximum B The New York State Disability Law is another name for Workers' Compensation C Persons in casual employment for fewer than 45 days per calendar year are eligible D Individuals collecting unemployment are not eligible for benefits The benefit cap for benefits equals 50% of an individual's wages for the 8 weeks prior to become disabled.

Podiatrist

Which of the following would not provide dental services for an insured? A Podiatrist B Periodontist C Endodontist D Prosthodontist

Legal Actions

Which of these is a Mandatory Uniform Provision? A Illegal Occupation B Conformity with State Statutes C Legal Actions D Misstatement of Age The only choice which is a Mandatory Uniform Provision is Legal Actions. All other responses are Optional Uniform Provisions.

Coordination of Benefits The purpose of the Coordination of Benefits provision is to prevent overinsurance. The 'COB' provision appears in both group and individual health policies.

Which provision in a health insurance plan is used to avoid overinsurance when a person is covered by more than one plan? Primary Care Coverage B Schedule of Benefits C Coordination of Benefits D

Insurance with other insurers

Which provision states that if an insured has individual policies with more than one insurer that covers the same claim, both insurers are primary and each will pay the percentage of the claim equal to their percentage of the total coverage available. A Coordination of benefits B Insurance with other insurers C Conformity with state statutes D Relation of earnings to insurance The coordination of benefits refers to group insurance policies that overlap, in which one primary and the other is secondary. In the case of individual policies, both policies are automatically liable for a portion of the claim.

Impairment Rider

Which rider would eliminate coverage for a preexisting condition? A Impairment Rider B Return of Premium Rider C None of these D Lifetime Benefit Rider

The more favorable the renewal provision to the insured, the higher the cost

Which statement concerning individual A&H policy renewal provisions is most correct from the perspective of the insured? A 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 lower the cost C The more favorable the renewal provision to the insured, the higher the cost D Renewal provisions only apply to property and casualty contracts and are not included under individual A&H policies

Increasing Term**

Which type of term protection has an increasing face value as the insured gets older? A Increasing Term B Level Term C Renewable Term D Convertible Term Increasing Term, as its name implies, increases the death benefit on an annual basis. Used primarily as a rider attached to a permanent policy, the annual premium typically stays level

State and Federal Laws

Who or what restricts the insurer's underwriting criteria for group policies? A The employees union B The Federal Insurance Office (FIO) C State and Federal Laws D The National Association of Insurance Commissioners (NAIC)

Permanent** Whole Life is designed to provide the insured protection throughout his or her life. Other types of permanent protection are Indeterminate Premium and if designed properly Adjustable Life.

Whole Life is also known as ________ protection. A Periodic B Permanent C Absolute D Temporary

Medicare Part B

With _______, the patient must pay 20% of covered charges plus the deductible. A A Medicare Supplement B Medicaid C Medicare Part B D None of the answers listed

3 out of the last 5

With a Profit Sharing Plan contributions must generally be made in at least ________ consecutive years. A 3 out of the last 5 B 2 out of the last 6 C 3 out of the last 7 D 1 out of the last 5 Generally there must be contributions made to a Profit Sharing Plan 3 out of the last 5 years.

Last-in, first out (LIFO)

Withdrawals from a non-qualified annuity prior to annuitization are taxed on a ___________ basis. A First-in, first out (FIFO) B First in, last out (FILO) C Average cost basis (ACB) D Last-in, first out (LIFO) The first dollars out of the annuity in this scenario are considered gains (LIFO).

Disability

_______ income benefits received by an employee are subject to taxation in proportion to the amount of premium that the employer paid. That income attributable to the employee's premium is not taxable. A Medical B Disability C Dental D Long-Term Care

A dividend

_________ consist(s) of the amount of premium that is returned to the policyowner if the insurer achieves lower mortality and expense costs than expected. A A policy loan B A dividend C The death benefit D The cash value

Periodic, flexible

Annuities may be funded with either a lump sum or on either a ______ or a ______ basis.

Hospital expenses

Part A of Medicare pays for: A Hospital expenses B None of the answers listed C Outpatient expenses D Dental expenses

2

The minimum number of employees to be considered a small employer for community rating is: A 5 B 2 C 25 D 50

Federal

ERISA is a ________ law. A State B Municipal C Federal D International

Must be offered in all policies

When offering Long-Term Care coverage, nonforfeiture benefits: A Are not required to be offered B Must be offered on plans providing coverage on individuals over age 65 C Must be offered on plans providing coverage on individuals up to age 50 D Must be offered in all policies

Indemnity

Which principle states that an insured may be reimbursed up to the amount of the actual loss? A Large Numbers B Indemnity C Insurable Risk D Adverse Selection The Principle of Indemnity states that the insured should not profit from an insurance transaction, but should be restored in whole or in part to their prior condition.