Insurance Exam Missed Questions

The most the Insurance Guaranty Association will pay for net cash surrender values is

$100,000.

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

$50,000

Your client is sole proprietor and wishes to include his family on a medical expense plan. How much of the cost of the medical expense plan can be deducted (since he is considered self-employed)?

100%

A producer has completed all of his continuing education hours, but his license has just lapsed. Within what timeframe must the producer reinstate his license if he wants to avoid taking an exam to regain his licensed status?

12 months

What is the duration of the free-look period for Medicare supplement policies?

30 days

To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?

6 credits

What is the waiting period on a Waiver of Premium rider in life insurance policies?

6 months

A Straight Life policy has what type of premium?

A level annual premium for the life of the insured

A candidate applying for which of the following licenses will NOT be required to pass a written examination?

A nonresident producer

Which is NOT a characteristic of group health insurance?

A policy is issued to each insured individual.

Which of the following best defines the Probationary Period in group health policies?

A specified period of time that a person joining a group has to wait before becoming eligible for coverage.

If a death benefit from a life insurance policy is not paid out in a timely manner, when does the interest begin to accrue?

After 30 days from the date the benefit is due

Which of the following statements is NOT true regarding health insurance policy provisions?

All additional provisions written by insurers are cataloged by their respective states.

In which Medicare supplemental policies are the core benefits found?

All plans

A business entity may be licensed as an insurance producer if

An employee who holds a producer's license is designated as a compliance officer.

A Universal Life Insurance policy is best described as a/an

Annually Renewable Term policy with a cash value account.

Which statement below is INCORRECT regarding the type of term insurance that fits best with the applicant's needs?

Applicants who may require a larger death benefit in the future should buy convertible term insurance.

All admitted insurance companies in Indiana are subject to fiscal examinations by the Commissioner

At least every 5 years.

Which of the following would be TRUE of both the fixed-period and fixed-amount settlement options?

Both guarantee that the principal and interest will be fully paid out.

In a variable life insurance policy, all of the following assets are held in the insurance company's general account EXCEPT

Cash surrender values

If a company transacts any business of insurance without a certificate of authority, what is the maximum penalty that can be charged to the director of that company?

Civil penalty of $25,000

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?

Common Disaster Clause

A Major Medical Expense policy would exclude coverage for all of the following treatments EXCEPT

Drug addiction

In a disability policy, the probationary period refers to the time

During which illness-related disabilities are excluded from coverage.

Items stipulated in the contract that the insurer will not provide coverage for are found in the

Exclusions.

An agent selling variable annuities must be registered with

FINRA.

All of the following violations may result in an agent's imprisonment EXCEPT

Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction.

Another term used to describe "no deductible" is

First-dollar basis.

J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. What settlement option did J choose?

Fixed Amount

Under which of the following conditions would life insurance proceeds be taxable by the federal government?

If there is a transfer of value.

If a loan request is for payment of due premiums on the policy, how soon must the insurer issue a loan?

Immediately

Which of the following riders would NOT increase the premium for a policyowner?

Impairment rider

A Return of Premium term life policy is written as what type of term coverage?

Increasing

What type of insurance would be used for a Return of Premium rider?

Increasing Term

Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?

Indemnity

All of the following must sign an application for health insurance EXCEPT the

Insurer

Which of the following entities can legally bind coverage?

Insurer

Which of the following entities has the authority to make changes to an insurance policy?

Insurer's executive officer

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?

Interest only option

As an insurer's field underwriter, a producer has all of the following responsibilities EXCEPT

Issuing policies on behalf of the insurer.

Which of the following statements is NOT true concerning Medicaid?

It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income.

Which statement is NOT true regarding a Straight Life policy?

Its premium steadily decreases over time, in response to its growing cash value.

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as

Legal actions.

In Indiana, controlled business is

Limited to 25% of a producer's annual commission income

In a Disability Income policy, all of the following are considered presumptive disabilities EXCEPT

Loss of two limbs.

A woman's health insurance policy dictates which doctors she is allowed to see. Her health providers share an assumed risk for their patients and encourage preventive care. What best describes the health system that the woman is using?

Managed care

Which of the following is NOT true regarding policy loans?

Money borrowed from the cash value is taxable.

The primary eligibility requirement for Medicaid benefits is based upon

Need.

Dividends received on participating life insurance policies are

Not taxable because they are a return of unused premiums.

If a health care plan has characteristics of an HMO and PPO, what type of plan is it?

POS

An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would

Pay the claim.

An insured purchased a life policy in 2010 and died in 2020. The insurance company discovers at that time that the insured had misstated information about her insurance history on the application. What will the insurer do?

Pay the death benefit

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

Payor Benefit

What is the difference between a straight life policy and a 20-pay whole life policy?

Premium payment period

Regarding the taxation of Business Overhead policies,

Premiums are deductible, and benefits are taxed.

If a life insurance company uses HIV testing as a part of its underwriting, when must an applicant be notified of the procedure?

Prior to performance of the test

Which of the following is NOT covered under Part B of a Medicare policy?

Routine dental care

Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?

Size of each installment

Which of the following would basic medical expense coverage NOT cover?

Surgeon's services

If the insurance premiums were not tax deductible, what other taxation will this affect?

Taxation of benefits

All of the following would be different between qualified and nonqualified retirement plans EXCEPT

Taxation on accumulation

Which of the following is NOT correct regarding examination of companies?

The Commissioner must examine all alien companies.

If an insurer becomes insolvent, which of the following would pay benefits to policyholders?

The Guaranty Association

Which of the following would provide an underwriter with information concerning an applicant's health history?

The Medical Information Bureau

A 60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?

The amount of the distribution is reduced by the amount of a 20% withholding tax.

An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?

The date of medical exam

Which of the following describes the tax advantage of a qualified retirement plan?

The earnings in the plan accumulate tax deferred.

What happens to the face amount of a whole life policy if the insured reaches the age of 100?

The face amount is paid to the insured.

Insured Z's health insurance policy year begins in January. His policy contains a carry-over provision. In November, he has a small claim which is less than his deductible. Which of the following is true?

The insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible.

Which of the following is NOT a feature of a noncancellable policy?

The insurer may terminate the contract only at renewal for certain conditions.

When an applicant applies for Medicare supplement insurance, whose responsibility is it to confirm whether the applicant has an accident or sickness insurance policy in force?

The insurer's

Which of the following is true about an insurance producer license?

The license remains in effect as long as the renewal fee is paid and continuing education requirements are met by the due date.

Which of the following statements is correct regarding a whole life policy?

The policyowner is entitled to policy loans.

Which of the following is TRUE regarding the premium in term policies?

The premium is level.

Under the Replacement Regulation, Rule 16.1, which of the following statements would best describe the producer's duties?

The producer must conduct a reasonable investigation to determine if a replacement will take place.

When a producer is trying to reinstate a lapsed license, what kind of fees would he be required to pay?

The producer will have to pay a penalty 3 times the unpaid renewal fees.

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

All of the following are requirements for life insurance illustrations EXCEPT

They must be part of the contract.

Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner?

Third-party ownership

All of the following are true regarding the guaranteed insurability rider EXCEPT

This rider is available to all insureds with no additional premium.

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

Unearned premiums are retained by the insurance company.

Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?

Universal life

Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending?

Unlimited

When is the earliest a policy may go into effect?

When the application is signed and a check is given to the agent

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than

With the policy.

An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any, would be paid by the secondary insurer?

$500

If a person is disabled at age 27 and meets Social Security's definition of total disability, how many work credits must he/she have earned to receive benefits?

12 credits

Every small employer carrier must actively offer to small employers at least how many health benefit plans?

2 plans

COBRA applies to employers with at least

20 employees

A person buys an individual long-term care policy and is not satisfied with the provisions. Within how many days will the insured be able to return the policy for a full premium refund?

30 days

In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?

45 days

Partial disability usually pays what percent of the total disability benefit?

50%

For how long is an insurance company allowed to defer policy loan requests?

6 months

Insurers marketing long-term care products must complete how many hours of continuing education during the first 2 years of a 4-year license renewal period?

8 hours

Most policies will pay the accidental death benefits as long as the death is caused by the accident and occurs within

90 days.

Where are premiums from fixed annuities invested?

A general account

Which of the following is NOT an example of controlled business?

A licensee writes policies solely for friends and their families.

Which of the following will be EXEMPT from continuing education requirements?

A limited lines credit producer

What is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application?

As long as the policy is in force

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?

As of the application date

What document describes an insured's medical history, including diagnoses and treatments?

Attending Physician's Statement

According to the provisions of the Patient Protection and Affordable Care Act, all of the following are required preventive care services EXCEPT

Cervical cancer exams for all women starting at age 40.

If more than one family member covered under the same major medical policy is injured in the same accident, the family only has to pay one deductible. This is due to the

Common accident provision.

The gatekeeper of an HMO helps

Control specialist costs

Which of the following would NOT be considered an unfair and deceptive practice?

Controlled business

Which of the following is NOT an exclusion in medical expense insurance policies?

Coverage for dependents

All of the following are dividend options EXCEPT

Fixed-period installments.

An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?

Full benefits

Fixed annuities provide all of the following EXCEPT

Hedge against inflation.

What is the specific requirement regarding the number of employees in a SIMPLE plan?

No more than 100 employees

In an individual long-term care insurance plan, the insured is able to deduct the premiums from taxes. What income taxation will be imposed on the benefits received?

No tax

In long-term care insurance, what type of care is provided with intermediate care?

Occasional nursing or rehabilitative care

An insured has health insurance that covers them at work and at home. This policy was written on what basis?

Occupational

An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?

Paid-up option

Which of the following conditions is NOT necessary for becoming a nonresident producer in Indiana?

Passing the proper examination

Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?

Premiums are not tax deductible as a business expense.

Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?

Principal sum

In the case of producer solicitation, at what point must a long-term care Shopper's Guide must be presented to the applicant?

Prior to the time of application

Which of the following is NOT mandatory under the Uniform Provisions Law as applied to accident and health policies?

Probationary Period

Another name for a substandard risk classification is

Rated.

Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as

Rebating.

Methods used to pay the death benefits to a beneficiary upon the insured's death are called

Settlement options.

If an Indiana family has a low level of income and cannot afford health insurance, what program could help?

The Indiana Children's Health Insurance Program

What is the purpose of a fixed-period settlement option?

To provide a guaranteed income for a certain amount of time

An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?

Universal life

Which of the following types of insurance is investment based, has a level fixed premium, and a nonguaranteed cash value?

Variable whole life

Which of the following is a key distinction between variable whole life and variable universal life products?

Variable whole life has a guaranteed death benefit.

All of the following are true regarding viatical settlement regulations in Indiana EXCEPT

Viatical contracts allow for a 10-day free-look period.

All of the following benefits are available under Social Security EXCEPT

Welfare benefits.

Within what timeframe should an applicant or a producer request a hearing before the Commissioner regarding the notice of denial or nonrenewal of a license?

Within 63 days after the notice of denial is mailed