Insurance PSI Test

In non-contributory plans, which percentage of eligible members must participate

100%

When the suicide clause is inserted in a life insurance contract, death by suicide is not covered during the policy's initial:

2 year period

How long after being entitled to disability benefits will an individual be eligible to receive Medicare benefits?

2 years

Which of the following is the time limit on certain defenses after which the policy becomes incontestable?

2 years

All of the following are tax qualified retirement plans except

401K, SEP (Simplified EE Pension), and Keogh (Self-insured) EXCEPT: Section 529 Plan (college fund)

Upon the issuance of a conditional receipt for a renewal when the premium is paid AFTER the time granted by the insurer, what is the maximum amount of time for reinstatement of the policy?

45 days

Which of the following was specifically designed to address STOLI (Stranger-Owned Life Insurance) and IOLI (Investor-Originated Life Insurance) practices?

NCOIL Act (National Conference of Insurance Legislators Act)

Which of the following amends the Social Security Act to make Medicare secondary to group health plans?

TEFRA (Tax Equity and Fiscal Responsibility Act of 1982)

How do warranties differ from representations?

a warranty is guaranteed to be true, a representation is believed to be true to the best of one's knowledge.

What is it called when a life insurance policy pays a multiple of the coverage amount when certain types of accidents occur?

accident policy

For an individual long-term care policy there is an annual dollar limit for tax deductions that is based on which of the following?

age

All of the following statements define preexisting conditions except

any chronic health condition that presents symptoms and which was unknown at the time of the application

Which of the following is particularly important for an insurance producer to explain to a client upon delivery of a life ins policy?

any exclusions

Which of the following policy loans is a provision in which an amount equal to the premium due is subtracted from the cash value to pay the premium and prevent a lapse of the policy?

automatic premium loan

All of the following are disadvantages to an annually renewable term life policy except

automatically renew with EOI

Which type of receipt makes the insurer liable for the risk from the date of application, regardless of the applicant's insurability?

binding receipt

What is the major reason that insurance regulators are often critical of dread disease ins policies?

buyers often think they are getting broader coverage than they actually are

All of the following are ownership rights except

changing beneficiary, borrowing funds against cash value, and assigning all rights of policy to another person EXCEPT: switching the policy from one insured to another

All of the following are characteristics of variable whole life except

characteristics include: there is no guaranteed cash value, agent must be licensed in both insurance and securities, and the premium is level EXCEPT: there is no guaranteed minimum death benefit

All of the following are classifications of risk EXCEPT

classifications are: standard preferred and declined

What are 2 characteristics of Health Maintenance Orgs (HMOs)?

containing costs and early treatment

Which of the following is true of the limited pay whole life policy?

coverage continues after the policy is paid-up

Which of the following is the most common method to supplement Medicare coverage?

coverage offered by private insurers

In a level term policy, which ALWAYS remain constant?

death benefit

Which insurance plans are commonly offered through the worksite (employer sponsored) except?

dental, supplemental disability, and long term care are common EXCEPT: Medicare

Which of the following is TRUE for a flexible premium annuity?

designed to have a significant period of payments into the annuity plus interest growth before any money is withdrawn

What specific new procedures does the USA Patriot Act require of insurance companies?

establish an anti-money laundering program

All of the following can be used to qualify for Medicare parts A and B except

financial need

Which of the following is exempted from the incontestability provision in insurance policies?

fraudulent misstatements

Which policy provision permits the policyowner to take a specified number of days to examine the contract, and allows for cancellation and a full refund if the policyowner rejects the terms or costs?

free look (10)

Which of the following, by definition, provides benefits for expenses incurred as a result of in-hospital medical treatment and surgery as well as certain outpatient expenses such as doctor's visits, lab test, and diagnostic services?

hospitalization

How are issues of ambiguity usually resolved because insurance contracts are contracts of adhesion?

in favor of the insured bc the ins company drafts the language in the contract

A basic vision care package includes all of the following EXCEPT

includes lenses and frames, annual eye exam, contact lenses EXCEPT: safety glasses

Managed care plans increase efficiency by all of the following means EXCEPT

increasing beneficiary cost sharing, selectively contracting with health care providers, and controlling inpatient admissions and length of stay EXCEPT: transferring the management of costs to the insureds

What is granted to the insured in the consideration clause?

insurance coverage if premiums are paid

Which part of an insurance contract contains the promise to pay losses covered by the policy in exchange for the insureds premium and compliance with policy terms?

insuring clause

All life insurance and health insurance contracts contain all of the following EXCEPT

insuring clause, conditions, and policy face EXCEPT: representations

Current assumption whole life policies are sensitive to which of the following?

interest rates

In an adjustable life policy, all of the following are adjustable by the policy holder EXCEPT

invest premiums in a separate account

Which of the following is true of an equity-indexed annuity?

it has a guaranteed minimum interest rate

Why is relying solely on employer group life insurance generally considered inadequate for most individual's needs?

it is financially insufficient to cover end of life expenses

Why is the accidental death benefit referred to as double indemnity?

it provides twice the face value in the policy for death due to accident

What type of insurance should a company purchase if it wants to insure the life of its CEO?

key person

In which type of insurance is individually purchased coverage commonly more economical than group offered coverage?

long term care

Which type of rider reimburses health and social service expenses incurred in a convalescent or nursing home facility?

long term care rider

Which problem was universal life insurance designed to address?

low interest rates during periods of high inflation

STD generally only covers injuries due to which of the following?

non-occupational injuries

All of the following are characteristics of COBRA except

notification statements, continuation of coverage, and qualifying events are characteristics EXCEPT: change in medical privacy procedures

Why are insurance policies considered conditional contracts?

only valid if certain conditions are met

Which of the following provides for the continuance of life ins coverage on a juvenile in the event of the death or total disability of the individual responsible for the payment of premiums?

payor clause

Which of the following is an example of hospital indemnity plan?

pays a fixed amount per day to the INSURED for each day the insured is hospitalized

Which of the following is a characteristic of a nonqualified plan?

plan does not meet federal guidelines for tax benefits

The right to change the beneficiary or dispose of the policy or its benefits in any manner one chooses is reserved to the policyowner UNLESS which of the following is true?

policyowner has named an irrevocable beneficiary

All of the following are nonforfeiture options except

reduced paid-up insurance, extended term insurance, and cash surrender value EXCEPT: cash dividend option

replacement refers to which of the following?

replacing an existing policy with a new one

A consumer report used to determine eligibility for insurance may include all of the following except

reputation, credit info, and character EXCEPT: Medical underwriting exam

All of the following are common exclusions from loss found in disability income policies except for that incurred while ...

serving in the military, piloting a personal aircraft, and living overseas EXCEPT: committing a misdemeanor

The life ins policy will not truly be effective until all of the following occur EXCEPT

statement of good health obtained by insurer, policy is delivered to applicant, and the first premium is collected EXCEPT: the agent has explained the policy to the client

Which of the following is defined as the dollar amount beyond which the insured no longer participates in payment of medical expenses?

stop loss limit

What is it called when an ins comp tries to recover from a diff ins policy all or part of its losses resulting from a claim?

subrogation

What procedure is used by an insurer to protect itself in the event a dispute arises and the applicant and the agent do not recall the changes that were made in a completed application?

the applicant and possibly the agent initial any changes made

If a company provides group disability insurance to its EEs, which of the following may be tax deductible?

the benefit can be tax deductible if the EE has paid taxes on the premium

Group AD&D policies may be deducted by whom and under which deduction category?

the employer under business expenses

Which of the following represents an advantage of obtaining a policy loan vs. a withdrawal?

the loan is not taxed while a withdrawal is taxed for amounts above the contract cost basis

All of the following are required signatures on a life insurance app except

the minor in a juvenile policy

How are term riders used?

to purchase insurance on a family member of the originally insured

All of the following are requirements to qualify for Social Security disability benefits except when:

total and permanent disabled for at least 5 months, credited with the appropriate number of quarters of coverage, and disability expected to last for 12 months or end in death EXCEPT: unable to work in occupation in which the worker was trained or educated

In which of the following types of contracts is only one party is legally required to do something after the insured has completed the act of paying the premium?

unilateral

Which of the following lists the 3 common types of permanent individual life ins?

variable life, whole life, universal life

Which policy type is backed by equity investments and allows the policyholder to adjust the death benefit?

variable universal life

Under which situation must insurable interest exist between the applicant and insured at the time of application?

when a third-party applicant names themselves beneficiary

When can the premiums of an individually owned health insurance policy be deducted from the individual's income tax?

when the taxpayer's medical expenses exceed 7.5% of adjusted gross income during a taxable year

When would dependent children's benefits for Social Security disability payments be scaled back?

when they cause the family benefit to exceed the max benefit amount

How does a noncancelable policy differ from a guaranteed renewable policy?

with noncancelable policy, the insurer may increase the premiums only based on the terms of the policy