Insuarance test

All of the following are true regarding a decreasing term policy EXCEPT a) The payable premium amount steadily declines throughout the duration of the contract. b)The death benefit is $0 at the end of the policy term. c)The contract pays only in the event of death during the term and there is no cash value. d)The face amount steadily declines throughout the duration of the contract.

A) The payable premium amount steadily declines throughout the duration of the contract.

#3. How can a new physician be added to the PPO's approved list? a) New physicians are only added once a year, and are selected by the PPO's Board of Directors. b)Agree to follow the PPO standards and charge the appropriate fees. c)Fill out the appropriate paperwork and wait the 12 month pre-certification period. d)Pay an annual fee for being on the PPO list.

B) Agree to follow the PPO standards and charge the appropriate fees.

Both Universal Life and Variable Universal Life have a a)Increasing premium. b) Flexible premium. c)Level fixed premium. d)Decreasing premium.

B) Flexible premium.

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant a)Prior to filling out an application for insurance. b) With the policy. c)Upon issuance of the policy. d)Within 30 days after the first premium payment was collected.

B) With the policy.

In reference to the standard Medicare Supplement benefits plans, what does the term standard mean? a) All plans must include basic benefits A-N. b)Coverage options and conditions are developed for average individuals. c)All providers will have the same coverage options and conditions for each plan. d)Coverage options and conditions comply with the law, but will vary from provider to provider.

C) All providers will have the same coverage options and conditions for each plan.

Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability? a) Partial disability b)Income replacement c)Residual disability d)Recurrent disability

C) Residual disability

If an insured continually uses the automatic premium loan option to pay the policy premium, a)The cash value will continue to increase. b)The insurer will increase the premium amount. c)The policy will terminate when the cash value is reduced to nothing. d)The face amount of the policy will be reduced by the automatic premium loan amount.

C) The policy will terminate when the cash value is reduced to nothing.

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? a)Indemnity b)Representation c)Warranty d)Concealment

C) Warranty

Following an injury, a policyowner covered under Medicare Parts A & B was treated by her physician on an outpatient basis. How much of her doctor's bill will she be required to pay out-of-pocket? a)80% of covered charges above the deductible b) All reasonable charges above the deductible according to Medicare standards c)A per office visit deductible d)20% of covered charges above the deductible

D) 20% of covered charges above the deductible

The insured's health policy only pays for medical costs related to accidents. Which of the following types of policies does the insured have? a)Restrictive b)Accidental Death c)Comprehensive d)Accident-only

D) Accident-only

Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled? a)Proprietary Transfer b)Absolute assignment c)Transfer of Ownership d)Disability Buy-Sell

D) Disability Buy-Sell

Which of the following information will be stated in the consideration clause of a life insurance policy? a)The parties to the contract b)The time period allowed for the payment of premium c)The conditions for insurability d)The amount of premium payment

D) The amount of premium payment

#57. What percentage of individually-owned disability income benefits is taxable? a)0% b)50% c)100% d)Amount paid by insured

a)0%

#46. Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain a)A statement that is sufficiently clear to identify the insured and the nature of the claim. b)A statement from the insured's employer showing that the insured was unable to work. c)An estimate of the total amount of medical and hospital expense for the loss. d)A complete physician's statement.

a)A statement that is sufficiently clear to identify the insured and the nature of the claim.

#68. If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following? a)Adjust the benefit in accordance with the increased risk b)Cancel the policy c)Increase the premium d)Exclude coverage for on-the-job injury

a)Adjust the benefit in accordance with the increased risk

#44. An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe? a)Aleatory b)Good health c)Adhesion d)Conditional

a)Aleatory

#59. Which of the following best describes fixed-period settlement option? a)Both the principal and interest will be liquidated over a selected period of time. b)Only the principal amount will be paid out within a specified period of time. c)The death benefit must be paid out in a lump sum within a certain time period. d)income is guaranteed for the life of the beneficiary.

a)Both the principal and interest will be liquidated over a selected period of time.

#51. The provision that states that both the printed contract and a copy of the application form the contract between the policyowner and the insurer is called the a)Entire contract. b)Certificate of insurance. c)Aleatory contract. d)Master policy.

a)Entire contract.

#55. In long-term care (LTC) policies, as the benefit period lengthens, the premium a)Increases. b)Remains unchanged. c)LTC premiums are not based on benefit periods. d)Decreases.

a)Increases.

All of the following statements concerning workers compensation are correct EXCEPT a)Benefits include medical, disability income, and rehabilitation coverage. b)A worker receives benefits only if the work related injury was not his/her fault. c)Workers compensation laws are established by each state. d)All states have workers compensation.

b)A worker receives benefits only if the work related injury was not his/her fault.

#60. An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the a)Eligibility Clause. b)Consideration Clause. c)insuring Clause. d)Pre-existing Conditions Clause.

b)Consideration Clause.

#71. Annually renewable term policies provide a level death benefit for a premium that a)Fluctuates. b)Increases annually. c)Decreases annually. d)Remains level.

b)Increases annually.

#75. A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as a)Juvenile protection provision b)Survivor protection c)Life planning d)Survivorship insurance

b)Survivor protection

#56. The annual contribution limit of a Dependent Care Flexible Spending Account is set by a)The insured. b)The IRS. c)The employer. d)The insurer.

b)The IRS.

#47. Which of the following is NOT the consideration in a policy? a)The promise to pay covered losses b)The application given to a prospective insured c)Something of value exchanged between parties d)The premium amount paid at the time of application

b)The application given to a prospective insured

Who can make a fully deductible contribution to a traditional IRA? a)Someone making contributions to an educational IRA b)A person whose contributions are funded by a return on investment c)An individual not covered by an employer-sponsored plan who has earned income d)Anybody: all IRA contributions are fully deductible regardless of income level

c)An individual not covered by an employer-sponsored plan who has earned income

#49. The death protection component of Universal Life Insurance is always a)Adjustable Life b)Increasing Term c)Annually Renewable Term d)Whole Life

c)Annually Renewable Term

A partnership buy-sell agreement in which each partner purchases insurance on the life of each of the other partners is called a a)Split-dollar plan. b)Stock redemption plan. c)Cross-purchase plan. d)Key person plan.

c)Cross-purchase plan.

#48. Which of the following explains the policyowner's right to change beneficiaries, choose options, and receive proceeds of a policy? a)The Consideration Clause b)Assignment Rights c)Owner's Rights d)The Entire Contract Provision

c)Owner's Rights

With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance? a)Providing warranties on the application b)Notice of policy cancellation c)Payment of premium d)Promise to renew the policy at the end of the policy period

c)Payment of premium

#52. Which of the following policies would be classified as a traditional level premium contract? a)Universal Life b)Variable Universal Life c)Straight Life d)Adjustable Life

c)Straight Life

Which of the following is true regarding elimination periods and the cost of coverage? a)The longer the elimination period, the higher the cost of coverage b)Elimination periods have no effect on the cost of coverage. c)The longer the elimination period, the lower the cost of coverage d)The shorter the elimination period, the lower the cost of coverage

c)The longer the elimination period, the lower the cost of coverage

#78. A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as a)Benefit schedule. b)Gatekeepers. c)Usual, customary and reasonable. d)Relative-value schedule.

c)Usual, customary and reasonable.

What is the name of the insured who enters into a viatical settlement? a)Contingent b)Viatical broker c)Viator d) Third party

c)Viator

According to the Entire Contract provision, a policy must contain a)A declarations page with a summary of insureds. b)Buyer's guide to life insurance. c)Listing of the insured's former insurer(s) for incontestability provisions. d)A copy of the original application for insurance.

d)A copy of the original application for insurance.

#63. In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is a)More limited in general. b)More limited in duration. c)Broader in duration. d)Broader in general.

d)Broader in general.

#67. When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following? a)Legal purpose b)Contract of adhesion c)Acceptance d)Consideration

d)Consideration

#69. Which nonforfeiture option has the highest amount of insurance protection? a)Conversion b)Decreasing Term c)Reduced Paid-up d)Extended Term

d)Extended Term

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

d)Grace period.

What type of insurance would be used for a Return of Premium rider? a) Level Term b)Decreasing Term c)Annually Renewable Term d)Increasing Term

d)Increasing Term

#73. According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT a)The insurer must provide the insured a written notice of the cancellation. b)Claims incurred before cancellation must be honored. c)An insurance company may cancel the policy at any time. d)Unearned premiums are retained by the insurance company. #78. A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as a) Benefit schedule. b) Gatekeepers. c) Usual, customary and reasonable. d) Relative-value schedule. The usual, customary and reasonable approach for determining insurance benefits is based upon the fees normally charged for specific procedures in the geographic location where the services are provided.

d)Unearned premiums are retained by the insurance company.

All of the following are Nonforfeiture options EXCEPT a)Cash surrender b)Extended term c)Reduced paid-up d)interest only

d)interest only