Insurance questions pt.2

In a replacement situation, all of the following must be considered EXCEPT A. Assets B. Benefits C. Limitations D. Exclusions

A. Assets

The owner of a small restaurant submits a claim to his insurer after a loss due to fire. The insurer's investigation finds a police report that shows that a fire may have been of suspicious origin. The insurer can do which of the following? A. Delay and acceptance or rejection decision B. Reduce the claim amount C. Disregard the claim D. Deny the claim immediately

A. Delay an acceptance or rejection decision

All of the following are dividends options EXCEPT A. Fixed-period installments B. Accumulated at interest C. Reduction of premium D. Paid-up additions

A. Fixed-period installments

A typical Accidental Death & Dismemberment policy covers all of the following losses EXCEPT A. Income B. Eyesight C. Limb D. Life

A. Income

The policy owner wants to make sure that upon his death, the life policy will pay a potion 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 policy owner choose? A. Interest only option B. Life income with period certain C. Joint and survivor D. Fixed amount option

A. Interest only option

Which of the following statements is NOT true concerning Medicaid? A. It consists of 3 parts: Part A: Hospitalization, Part B: Doctor's services; Part C: disability income. B. It is a state program C. It is funded by the state and federal taxes D. It is intended to provide medical assistance for certain categories of people who are needy.

A. It consists of 3 parts: Part A: Hospitalization, Part B: Doctor's services; Part C: disability income.

Which of the following best details the underwriting process for life insurance? A. Selection, classification, and rating of risks B. Solicitation, negotiation and sale of policies C. Issuance of policies D. Reporting and rejection of risks

A. Selection, classification, and rating of risks

Which of the following is NOT a feature of a noncancellable policy? A. The insurer may terminate the contract only at renewal for certain conditions B. The premiums cannot be increased beyond the amount stated in the policy C. The guarantee to renew coverage usually applies until the insured reaches a certain age D. The insured has the right to renew the policy for the life of the contract

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

An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss? A. Time of payment of claims B. Incontestability C. Physical exam and autopsy D. Legal actions

A. Time of payment of claims

Which of the following persons is required to hold a producer license? A. A person who administers employee benefits B. A person who negotiates insurance contracts C. A person who takes messages related to claims D. A person who creates insurance advertisements

B. A person who negotiates insurance contracts

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

B. An individual not covered by an employer-sponsored plan who has earned income

The insurers are allowed to disclose the HIV-related test results to all of the following EXCEPT A. The Texas Department of Health B. Another insurer C. The insured's doctor D. A reinsurer involved in the underwriting process

B. Another insurer

Which of the following is NOT required to be stated in the outline of coverage provided with a long-term care policy? A. Basic information about the insurance company. B. Basic information about supplementary policies. C. The policy number D. The right to return the policy for a refund

B. Basic information about supplementary policies

What does "liquidity" refer to in a life insurance policy? A. The insured receives payments each month in retirement B. Cash values can be borrowed at any time C. The death benefit replaces the assets that would have accumulated if the insured had not died D. The policy owner receives dividend checks each year

B. Cash values can be borrowed at any time

Which entity has the authority to grant a temporary life insurance agent's license? A. A licensed agent B. Commissioner of Insurance only C. Federal Board of Insurance Licensing D. Both Commissioner and the Federal Board of Insurance Licensing

B. Commissioner of insurance only

Under which of the following employer provided plans are the benefits taxable to an employee in a proportion to the amount of premium paid by the employer? A. Basic medical expense B. Disability income C. Major medical D. Dental expense

B. Disability income

How long is a newborn covered without notification to the insurer? A. A newborn is not covered without notification to the insurer. B. From the moment of birth, and the insurer must be notified within 31 days. C. From the time labor has begun, and the insurer must be notified within 31 days. D. From the moment of birth, and the insurer must be notified within 90 days.

B. From the moment of birth, and the insurer must be notified within 31 days.

A guaranteed renewable disability insurance policy A. Cannot be canceled by the insured before age 65 B. Is renewable at the insured's option to a specified age C. Is renewable at the option of the insurer to a specified age of the insured D. Is guarantee to have a level premium for the life of the policy

B. Is renewable at the insured's option to a specified age

Which of the following best describes the MIB? A. It is a rating organization for health insurance B. It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. C. It is a government agency that collects medical information on the insured from the insurance companies.

B. It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.

Which of the following settlement options in life insurance is known as straight life? A. Fixed amount B. Life income C. Single life D. Life with period certain

B. Life income

During replacement of life insurance, a replacing insurer must do which of the following? A. Send a copy of the Notice Regarding Replacement to the Department of Insurance B. Obtain a list of all life insurance policies that will be replaced C. Guarantee a replacement for each existing policy D. Designate a new procedure for a replaced policy

B. Obtain a list of all life insurance policies that will be replaced

Traditional IRA contributions are tax deductible based on which of the following? A. IRA limit B. Owner's income C. How long the plan has been in force D. Owner's age

B. Owners income

An insured has a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident, and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do? A. Pay the full death benefit and refund excess premiums B. Pay a reduced death benefit C. Pay the full death benefit D. Pay nothing; there was a misrepresentation on the application

B. Pay a reduced death benefit

For which of the following actions can an agent's license be suspended or revoked? A. Misstatements on the application B. Rebates of premiums C. Misdemeanors D. Unintentional violations of state laws

B. Rebates of premiums

When an insured combines two periods of disability into one, the insured must have suffered a A. Presumptive disability B. Recurrent disability C. Partial disability D. Residual disability

B. Recurrent disability

The interest earned on policy dividend is A. 40% taxable, similar to a capital gain B. Taxable C. Non taxable D. Tax deductible

B. Taxable

Which of the following is true regarding coinsurance? A. The smaller the percentage that is paid by the insured, the more consistent the required premium will be. B. The larger the percentage that is paid by the insured, the lower the required premium will be. C. The larger the percentage that is paid by the insured, the higher the required premium will be. D. The smaller the percentage that is paid by the insured, the lower the required premium will be.

B. The larger the percentage that is paid by the insured, the lower the required premium will be.

If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it? A. A legal (but unethical) contract B. Unilateral C. Adhesion D. Conditional

B. Unilateral

Which of the following is a risk classification used by underwriters for life insurance? A. Excellent B. Standard C. Poor D. Normal

B.Standard

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? A. $20,000 B. $25,000 C. $50,000 D. The face amount will be determined by the insurer

C. $50,000

How many hours of continuing education can be carried over from one licensing period to the next? A. 5 B. Any excess hours C. 0 D. 2

C. 0

If an insurance company offers Medicare supplement policies, it must offer which of the following plans? A. A-J B. A-N C. A D. A and B

C. A

The two types of assignments are A. Complete and partial B. Complete and proportionate C. Absolute and collateral D. Absolute and partial

C. Absolute and collateral.

The accelerated benefits provision will provide for an early payment of the death benefit when the insured A. Has earned enough credits B. Becomes disabled C. Becomes terminally ill D. Needs to borrow money

C. Becomes terminally ill

Which of the following is a feature of a variable annuity? A. Interest rate is guaranteed B. Securities license is not required C. Benefit payment amounts are not guaranteed D. Payments into the annuity are kept in the company's general account

C. Benefit payment amounts are not guaranteed

When delivering the policy, which of the following is an agent's responsibility? A. Approve or decline the risk B. Collect medical statement from physician C. Collect payment at time of delivery D. Issue the policy if the applicant is present

C. Collect payment at time of delivery

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day A. Probationary period B. Waiver of benefits period C. Elimination period D. Blackout period

C. Elimination period

Issue age policy premiums increase in response to which of the following factors? A. Inflation B. Age C. Increased benefits D. Increased deductibles

C. Increased benefits

Which of the following is an example of a limited-pay life policy? A. Level term life B. Straight life C. Life Paid-up at age 65 D. Renewable term to age 70

C. Life Paid-up at Age 65

Which of the following riders would NOT cause the death benefit to increase? A. Cost of Living Rider B. Accidental death rider C. Payor benefit rider D. Guaranteed insurability rider

C. Payor benefit rider

All of the following are mandatory life insurance policy provisions EXCEPT? A. Incontestability B. Grace period C. Policy backdating D. Misstatement of age

C. Policy backdating

A guaranteed renewable health insurance policy allows the A. Policy to be renewed at the time of expiration, but the policy can be canceled for cause during the policy term B. Insurer to renew the policy to a specified age C. Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class D. Policyholder to renew the policy to a stated age and guarantees the premium for the same period

C. Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class

Children's riders attached to whole life policies are usually issued as what type of insurance? A. Adjustable life B. Whole life C. Term D. Variable life

C. Term

Which of the following is a feature of a disability buyout plan? A. Tax deductible premiums B. Taxable benefits C. A short elimination period D. A lump-sum benefit payment option

D. A lump-sum benefit payment option

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. Insuring clause B. Pre-existing conditions clause C. Eligibility clause D. Considerations clause

D. Considerations clause

Which of the following is a specific dollar amount or a percentage of the cost of care that must be paid by the member? A. Cost share B. Prepayment C. Contractual cost D. Copayment

D. Copayment

According to the entire contract provision, what document must be made part of the insurance policy? A. Buyers guide B. Agents report C. Outline of coverage D. Copy of the original application

D. Copy of the original application

What is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan? A. A broad coverage area B. A low monthly premium C. Low cost deductibles D. Diagnostic and preventative care

D. Diagnostic and preventative care

An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of? A.Unfair claims B. Twisting C. Defamation D. False advertising

D. False advertising

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? A. Partial benefits B. Full benefits for 2 years C. No benefits D. Full benefits

D. Full benefits

Life income joint and survivor settlement option guarantees A. Payment of interest on death proceeds B. Payout of the entire death benefit C. Equal payments to all recipients D. Income for two or more recipients until they die.

D. Income for 2 or more recipients until they die.

A guaranteed renewable disability insurance policy A. is renewable at the option of the insurer to a specified age of the insured B. Is guaranteed to have a level premium for the life of the policy C. Cannot be canceled by the insured before age 65 D. Is renewable at the insured's option to a specified age

D. Is renewable at the insured's option to a specified age

Which of the following is correct about a group health insurance policy? A. it cannot exclude coverage for VA hospital treatment B. It cannot provide coverage for handicapped children C. It cannot exclude coverage from an occupational accident D. It cannot exclude newborn children from coverage

D. It cannot exclude newborn children from coverage

Which of the following statements about reinstatement provisions is true?

D. It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated

An individual covered under a group life insurance policy may convert the policy to any of the following EXCEPT A. Universal life B. Variable universal life C. Whole life D. Level term

D. Level term

Where in the long-term care policy must the insurer state the renewal provision? A. In the Provisions and Exclusions section B. In the policy appendix C. Anywhere the insurer deems appropriate D. On the first page

D. On the first page

A temporary license holder can receive a commission from a sale made to all of the following EXCEPT A. The license holders spouse's best friend. B. An accountant at a rival insurance company C. The license holders family doctor D. The license holders sister in law

D. The license holders sister in law