Kansas Life and Health Readiness Exam

An insured, who is 44 years old, falls while mountain climbing on vacation. He is left paralyzed. After a year, doctors feel he will never recover from his injuries. From which of the following programs will he be able to collect disability income?

Social Security

The family term rider incorporates

Spouse term and children's term.

Which of the following actions does NOT constitute false advertising?

Stating that dividends are not guaranteed

Insureds have the right to do which of the following if they have NOT received the proper claim forms within 15 days of their notice to the insurer of a covered loss under a major medical policy?

Submit the description in their own words on a plain sheet of paper.

Which of the following policies would NOT offer a policy loan option?

Term life

Who is responsible for verifying and approving the use of a life insurance advertisement?

The Commissioner

An insured needs ongoing treatment for a diabetic condition. Under PPACA, which of the following is correct?

The condition must be covered under the insured's plan.

If an applicant submits the initial premium with an application, which action constitutes acceptance?

The insurance company receives the application and initial premium.

Under the Payment of Claims provision, to whom will the insured's benefits be paid if the insured is deceased?

The insured's primary beneficiary

Which of the following statements is INCORRECT?

The insurer does not have the right to conduct an autopsy.

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

The number of days that must expire after the onset of an illness before benefits will be earned

All of the following are characteristics of group health insurance plans EXCEPT

The parties that hold a group health insurance contract are the employees and the employer.

Who is the annuity owner?

The person who purchases the annuity

Which of the following bears the investment risk in a variable life insurance policy?

The policyowner

All of the following are consideration in an insurance policy EXCEPT

The premium paid at the time of application.

A viatical settlement is arranged between a viatical company and

The terminally ill insured.

Which of the following is true regarding taxation of accelerated benefits paid under a life insurance policy?

They are received tax free.

The reduction of premium option uses the dividend to reduce

This year's premium.

What is the purpose of a disability buy-sell agreement?

To allow the business buyout in case of the owner's disability

What is the purpose of the impairment rider in a health insurance policy?

To exclude coverage for a specific impairment

A viatical settlement is a transaction outside the life insurance company where the owner sells the life insurance policy for which of the following?

A percentage of the face amount of the policy

Which of the following best describes a rebate?

A producer returning part of her commission to her client, as an inducement to buy

Regarding health insurance, all of the following are tax-deductible EXCEPT

A. Employee paid group disability income.

What is the purpose of the Agent's Report in the application process?

A. To provide additional information about the applicant to the underwriters

Which of the following terms is used to define the period of time during which an annuitant makes payments into an annuity?

Accumulation period

An individual is approaching retirement age and is concerned about having proper coverage should he have to be placed in a Long-Term Care (LTC) facility. His agent told him that LTC policies would provide necessary coverage at all of the following levels EXCEPT

Acute

How will life insurance proceeds that are paid as a lump sum received by the beneficiary?

Free of federal income taxation

The guaranteed purchase option is also referred to as the

Future increase option.

Which of the following best describes the difference between joint life and joint and survivor annuity payment options?

In joint life option, the benefits stop after the first death.

An insured's hospital policy states that it will pay him a flat fee of $75 per day for each day he is hospitalized. The policy pays benefits on what basis?

Indemnity

If a soliciting producer suspects that there could be misrepresentation on the part of the applicant for insurance, what must the producer do?

Inform the insurance company

Which of the following is the primary source of information that an insurer uses to evaluate an insured's risk for life insurance?

Insurance application

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

Insurer

The provision that sets forth the basic agreement between the insurer and the insured and states the insurer's promise to pay the death benefit upon the insured's death is called the

Insuring clause.

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

Integrated dental plan.

A fraternal benefit society

Is operated for the benefit of its members.

All of the following statements are true regarding an Ordinary (Straight) Life policy EXCEPT

It does not have a guaranteed death benefit.

What advantage does the "recurrent disability" provision provide to the insured under a disability income policy?

It eliminates the imposition of a second elimination period for the same disability.

Which of the following statements is TRUE regarding an Agent's Report during the policy application process?

It provides the agent's personal observations concerning the proposed insured.

Medicare Part B covers all of the following EXCEPT

Long-term care services.

Which of the following would NOT be considered a limited coverage policy?

Major medical expense insurance

In health insurance, the length of the grace period varies according to the

Mode of premium payment.

Under the Affordable Care Act, when would pregnancy be considered a pre-existing condition?

Never

If an insurance company issues a policy even though some questions on the application were unanswered, when can the insurer get the answers to those questions?

Never; the insurer has waived its right to those answers by issuing the policy

Cash Value guarantees in a whole life policy are called

Nonforfeiture values.

Contributions to Roth IRAs are

Not tax deductible.

Dividends received on participating life insurance policies are

Not taxable because they are a return of unused premiums.

A core Medicare supplement policy (Plan A) will cover all of the following expenses EXCEPT

Part A deductible.

Who can request changes in premium payments, face value, loans, and policy plans?

Policyowner

Policies written on a third-party ownership basis are usually written to cover which of the following?

Policyowner's minor children or business associates

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

Premium payment period

In group insurance, the primary purpose of the Coordination of Benefits provision is to

Prevent overinsurance.

On an Accidental Death and Dismemberment (AD&D) policy, the death benefit payable is known as the

Principal sum.

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

All of the following are true of annually renewable term insurance EXCEPT

Proof of insurability must be provided at each renewal.

The Guaranteed Insurability Rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT

Purchase of a new home.

An insured had a heart attack while jogging, but is expected to return to work in approximately 6 weeks. The insured's Disability Income policy will

Replace a percentage of his lost income.

In health insurance, what is coinsurance?

A percentage of the cost of service that the insured and the insurer share

When replacement is involved, how long must an insurer maintain copies of all sales proposals used in the transaction?

3 years

How soon from appointing an agent must an insurer submit a notice of appointment to the National Insurance Producer Registry (NIPR)?

30 days

When an agent changes address of their residence or office, the Insurance Department must be notified within

30 days.

What is a maximum fine for a violation of advertising and sales regulations for an individual producer in this state?

$1,000

Under the common accident provision, how many deductibles would be paid if five family members covered under the same major medical policy are injured in the same accident?

1

Notice of hearing must be sent to all interested parties within how many days of the hearing?

10 days

An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request?

3 days

A terminated employee who wants to convert her group health coverage to individual coverage without providing evidence of insurability must do this within

31 days.

Fred works for his employer full-time for ten years and then cuts his hours in half. This means that he will no longer be eligible for group health insurance coverage. He can, however, convert this coverage to an individual policy without needing to provide proof of insurability if he makes the request within

31 days.

Once a baby is born, he or she will automatically be covered under his or her parents' health insurance plan for

31 days.

Joe, age 63, was disabled and can no longer work. He meets the Social Security definition of total disability. How many work credits must Joe have accumulated to have the status of fully insured?

40

The Commissioner must conduct an examination of insurers at least once every

5 years.

An individual accident and health insurance policy with a monthly premium must have a minimum required grace period of how many days?

7 days

The policyowner has an option to pledge the life insurance policy as collateral for a bank loan. This is called

A collateral assignment.

Long-term care coverage may be sold in all of the various ways EXCEPT

As a part of a Medicare supplement policy by the use of an endorsement.

In whole life insurance, when is the policy cash value scheduled to equal the face amount?

At the insured's age 100

An underwriter is reviewing an applicant with an extensive medical history. Which of the following would give the underwriter a better understanding of how the applicant has been treated for various illnesses?

Attending Physician's Statement

Which provision may be added to a permanent life policy, at no cost, that insures that the policy will not lapse so long as there is cash value?

Automatic Premium Loan option

Which of the following is a prohibited provision in life insurance policies issued in this state?

Backdating a policy more than 6 months from the application date

What specific kind of insurance is often written in conjunction with hospital expense policies and includes surgeons' and anesthesiologists' fees?

Basic surgical expense insurance

Which of the following is NOT an indicator of a competent party?

Business profession

If an individual willfully violates provisions of the Fair Credit Reporting Act, what is the maximum civil penalty?

C. $1,000

An insured and his spouse recently had a child. Which of the following riders would allow the couple to insure the child for a limited period of time at a specified amount?

Children's term rider

A lender who conditions approval of a loan on the condition that the borrower purchase insurance from that lender may be guilty of

Coercion

An applicant gives her agent a completed application and the initial premium. What can the agent issue her that acknowledges the initial premium payment?

Conditional Receipt

An individual has a $200,000 convertible term life insurance policy. If he chooses, he can

Convert to a whole life policy for the same face amount without proof of insurability

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)?

D. 100%

During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sound worse than it is. This is an example of an unfair trade practice of

Defamation

In which of the following situations may the policyowner be allowed to sell a life insurance policy purchased 1 year ago for a viatical settlement contract?

Divorce

All of the following are features of a health insurance plan purchased on the health insurance marketplace EXCEPT

Dollar limits on essential benefits.

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

Drug addiction.

All of the following are places where care can be administered for a medical plan EXCEPT

Eye centers.

At what point would an automatic premium loan be generated?

Following the grace period

An agent tells an insured that if he replaces his current insurance policy with a newer one, his dividends will be higher and his premiums will be slightly lower. The policy, however, would not offer either one of these things. What type of misrepresentation is being committed?

Twisting

An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice known as

Twisting

An aleatory contract is based on what kind of exchange?

Unequal exchange of values

Which of the following services will NOT be provided by an HMO?

Unlimited coverage for treatment for drug rehabilitation

Considering the principles of liquidity, how would the policyowner use today's cash values in a life insurance policy?

Use it for emergency expenses

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

Variable whole life

When may HIV-related test results be provided to the MIB?

When given authorization by the patient

Under the mandatory uniform provision "Notice of Claim", written notice of a claim must be submitted to the insurer within what time parameters?

Within 20 days

If an insurer's advertising materials have been examined by the Commissioner 3 years ago, does the insurer have to maintain records any longer?

Yes, the insurer must maintain records for 1 more year.