Insurance License

If a life insurance policy has an irrevocable beneficiary designation,

The beneficiary cannot be changed.

Which is NOT true about beneficiary designations?

The beneficiary must have insurable interest in the insured.

Which of the following must be present in all Medicare supplement plans?

plan A

An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?

$100,000

An insured has a major medical policy with a $500 deductible and a coinsurance clause of 80/20. If he incurs medical expenses of $4,000, the insurer would pay

$2,800

What is the civil penalty for the first violation of the Pennsylvania Insurance Fraud Prevention Act?

$5,000

Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits?

$50,000

An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?

10 days

How long must insurers maintain the evidence from the agent that a disclosure statement about a life insurance policy was delivered to the applicant?

3 years

When a producer holding a certificate or a broker's license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within

30 days

What is the period of coverage for events such as death or divorce under COBRA?

36 months

Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within

90 days

A Straight Life policy has what type of premium?

A level annual premium for the life of the insured

Which of the following statements is INCORRECT?

A licensee may charge a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business.

Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death?

A minor son of the insured

The benefits for individual disability plans are based on

A percentage of the worker's income.

Which of the following losses will be covered by a group medical expense policy?

A pre-existing condition?

An individual was just caught acting as an exclusive general agent - even though he is not properly licensed. Assuming that this occurred in a single day, what is the maximum penalty he faces?

A third-degree misdemeanor and a $1,000 fine

Which of the following long-term care benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis?

Adult day care

All of the following would be considered rebating EXCEPT

An agent misrepresents policy benefits to convince a policyowner to replace policies.

If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's

Ancestry.

The LEAST expensive first-year premium is found in which of the following policies?

Annually Renewable Term

When an annuity is written, whose life expectancy is taken into account?

Annuitant

Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?

Apparent

A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?

Automatic premium loan

All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT

Being age 65.

Who must sign the notice regarding replacement?

Both the applicant and agent

All else being equal, which of the following will NOT be considered unfair discrimination by insurers?

Cancelling individual coverage based on the insured's marital status

Which of the following provisions requires that any policy language that is in conflict with the state statutes of the state in which the insured resides is automatically amended to conform with those of the state of residence?

Conformity with State Statutes

Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?

Disability Buy-Sell

Under a typical health insurance policy, claims that result from injuries while the insured was intoxicated or under the influence of drugs are generally

Excluded.

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.

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

Fair Credit Reporting Act

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

False Advertising

Producers are responsible to collect and disperse premiums, and return premiums or other funds. Which insurance term is associated with this?

Fiduciary capacity

Most LTC plans have which of the following features?

Guaranteed renewability

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

Illegal under any circumstances

A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?

Immediate Annuity

Which of the following factors about the insured determines the amount of disability benefit that the insured will receive?

Income

Which of the following refers to "own occupation" disability?

Insured is unable to perform duties of the occupation for which they were educated and trained.

Which of the following is NOT true regarding a Certificate of Authority?

It is issued to group insurance participants.

Which of the following is true of a children's rider added to an insured's permanent life insurance policy?

It is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age.

Which of the following is NOT true regarding the accumulation period of an annuity?

It would not occur in a deferred annuity.

If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a

Joint life annuity.

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?

Life income with period certain

In group insurance, what is the policy called?

Master policy

ll of the following statements concerning Medicaid are correct EXCEPT

Medicaid is a state funded program that provides health care to persons over age 65, only.

Which type of Medicare policy requires insureds to use specific healthcare providers and hospitals (network providers), EXCEPT in emergency situations?

Medicare select

ABC Insurance Company wishes to begin transacting business in Pennsylvania. Before it can do so, it must do which of the following?

Obtain a certificate of authority

The part of Medicare that helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care, is known as

Part A.

Peril is most easily defined as

Peril is most easily defined as

Which of the following is correct regarding the taxation of group medical expense premiums and benefits?

Premiums are tax deductible and benefits are not taxed.

If an individual is covered by a policy that includes an Accidental Death & Dismemberment rider, what term describes the maximum benefits he will receive if he loses sight in both eyes as a result of a fire?

Principal Sum

Which of the following licensees is classified as a representative of the insurance company and not allowed to represent an insured or claimant?

Producer

What form of the annuity settlement options provides payments to an annuitant for the rest of the annuitant's life and ceases at the annuitant's death?

Pure Life

Which of the following best describes a pure life annuity settlement option?

Pure life provides payments for as long as both the annuitant and the spouse are living.

All of the following are penalties a producer may face for violating the insurance laws of this state EXCEPT

Re-examination.

Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe?

Reduction

Which of the following components of dental insurance does NOT require the payment of a deductible?

Routine and preventive maintenance

Underlying assets for variable annuity contracts must be maintained in what type of account?

Separate account

If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a

Settlement option.

An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?

She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.

Which of the following is an example of a producer being involved in an unfair trade practice of rebating?

Telling a client that his first premium will be waived if he purchases the insurance policy today

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?

The beneficiary will only receive payments of the interest earned on the death benefit.

An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy?

The capital amount in a lump sum

The annuity owner dies during the accumulation period without naming a beneficiary. Annuity's cash value exceeds premiums paid. Which of the following is TRUE?

The cash value will be paid to the annuitant's estate.

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

The customer's associates, friends, and neighbors provide the report's data.

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

In a group policy, who is issued a certificate of insurance?

The individual insured

An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?

The old policy should stay in force until the new policy is issued.

All of the following are true regarding a decreasing term policy EXCEPT

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

What is the purpose of key person insurance?

To lessen the risk of financial loss because of the death of a key employee

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

To provide a guaranteed income for a certain amount of time

Which of the following is NOT the purpose of HIPAA?

To provide immediate coverage to new employees who had been previously covered for 18 months?

What is the purpose of coinsurance provisions?

To share liability among different insurance companies?

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

Universal Life

Which of the following products requires a securities license?

Variable Annuity

It is the viatical settlement broker's job to represent the

Viatical settlement provider.

In which Medicare supplemental policies are the core benefits found?

all plans

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of

concealment

Which of the following best describes an insurance company that has been formed under the laws of this state?

domestic

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?

implied

What is the other term for the cash payment settlement option?

lump sum

A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard?

morale

An applicant for health insurance has not had a medical claim in 5 years. He exercises daily and does not smoke or drink. What classification do you assume the applicant would receive from his insurer?

preferred

An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?

revocable

The National Do Not Call Registry was created to regulate

telemarketers

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 Days

One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups of

50 or more.

An insurer may provide commissions to an agent for the sale of a long-term care policy only if the first year commission is NOT greater than what percentage of the first year premium?

50%

If a telemarketer wants to make an unsolicited sales call to a potential customer, what is the earliest time the telemarketer can call the prospect's residence?

8 am

A licensed producer moving to Pennsylvania may become licensed as a resident if the producer submits a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state?

90 days

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

Consideration Clause

All of the following statements concerning Accidental Death and Dismemberment coverage are correct EXCEPT

Death benefits are paid only if death occurs within 24 hours of an accident.

According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer EXCEPT

Disputes regarding consumer report information.

All of the following statements concerning dividends are true EXCEPT

Dividend amounts are guaranteed in the policy.

Which of the following criminal activities would be sufficient violation to warrant rejection, revocation, or suspension of an insurance producer's license?

Forgery

All of the following are licensing requirements for a business entity, EXCEPT

Having all employees complete continuing education courses once every 2 years.

Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage?

Health Maintenance Organization plan

In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?

Insurer to Insured

A guaranteed renewable health insurance policy allows the

Policyholder to renew the policy to a stated age and guarantees the premium for the same period.?

All of the following are examples of risk retention EXCEPT

Premiums

Annuities can be used to fund which of the following?

Retirement Plans

When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy, as well as a refund of all of the premiums paid. Which rider is attached to the policy?

Return of premium

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

Signed waiver of premium.

Nonforfeiture values guarantee which of the following for the policyowner?

That the cash value will not be lost

All of the following entities regulate variable life policies EXCEPT

The Guaranty Association.

The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?

The annuitant must be a natural person.

In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment?

The annuitant will receive the higher of either the guaranteed minimum rate or current rate.

What happens if a non-member physician is utilized under the Point-Of-Service plan?

The attending physician will be paid a fee for service, but the member patient will have to pay a higher coinsurance amount.

If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?

The death benefit will be smaller.

Who is the beneficiary in a credit disability income policy?

The lending institution

All of the following are characteristics of a group life insurance plan EXCEPT

There is a requirement to prove insurability on the part of the participants.?

Which of the following statements regarding conditional receipts is true?

They are temporary insuring agreements.

Which of the following statements is most correct concerning the changing of an irrevocable beneficiary?

They can be changed only with the written consent of that beneficiary.

Which of the following is NOT true regarding Equity Indexed Annuities?

They earn lower interest rates than fixed annuities.

Which type of misrepresentation persuades an insured, to their detriment, to cancel, lapse, or switch policies from one to another?

Twisting

Which of the following effectuate a viatical settlement contract?

Viatical settlement providers?

Are insurance company underwriters allowed to discriminate?

Yes, but not unfairly

Which of the following is NOT an essential element of an insurance contract?

counteroffer

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of

defamation

Which of the following best defines target premium in a universal life policy?

he recommended amount to keep the policy in force throughout its lifetime

If an insured under a variable life insurance policy dies, how will the insurer respond to outstanding policy loans?

The loan amounts are deducted from the death benefit.

Variable Whole Life insurance is based on what type of premium?

Flexible?

Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?

Automatic premium loan

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

Insurer's executive officer

The type of dental plan which is incorporated into a major medical expense plan is a/an

Integrated dental plan.

Which of the following is NOT a metal level of coverage offered under the Patient Protection and Affordable Care Act?

Iron

Which of the following best describes a misrepresentation?

Issuing sales material with exaggerated statements about policy benefits

In which of the following cases would an "any occupation" disability income policy pay the benefits?

The insured is unable to perform any jobs in the field related to the insured's education and experience.

An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?

The insurer will pay the full death benefit from the group policy to the beneficiary.

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT

The interest is not taxable since it remains inside the insurance policy.

If another governmental agency takes legal action against a licensee, whose responsibility is it to report the action?

The licensee