Licence IDK

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How are the variable annuities regulated?

By state and federal agencies

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

Attending Physician's Statement

What does "level" refer to in level term insurance?

Face amount

Insurance is the transfer of

Risk.

How are state Insurance Guaranty Associations funded?

By their members - authorized insurers

Which of the following statements concerning group health insurance is CORRECT?

The employer is the policyholder.

All of the following are requirements for producer license renewal EXCEPT

Renewal examination

Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?

Those who have been insured under the plan for at least 5 years

Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option?

It does not guarantee that the entire principal amount will be paid out.

Who is responsible for paying producer appointment fees?

The appointing insurer

A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then

The benefit is received tax free.

An Adjustable Life policyowner can change which of the following policy features?

The coverage period

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

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

All of the following statements are true regarding installments for a fixed amount EXCEPT

The payments will stop when the annuitant dies.

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums.

When would a 20-pay whole life policy endow?

When the insured reaches age 100

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

$5,000

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

Increasing

What type of care is Respite care?

Relief for a major care giver

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

How soon after the due date should the insurer pay the agent appointment fees?

Within 30 days

A Universal Life insurance policy has two types of interest rates that are called

Guaranteed and Current.

After a hearing, if the Commissioner finds that a licensee is in violation of the state insurance laws, the Commissioner can do any of the following EXCEPT

Imprison the licensee.

Which of the following is TRUE regarding the accumulation period of an annuity?

It is a period during which the payments into the annuity grow tax deferred.

What is the purpose of a conditional receipt?

It is intended to provide coverage on a date prior to the policy issue.

Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?

Optionally renewable

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

Other-insured rider.

Which of the following insurance options would be considered a risk-sharing arrangement?

Reciprocal

Equity indexed annuities

Seek higher returns

Who is the beneficiary in a credit health policy?

The lending institution

What happens if a deferred annuity is surrendered before the annuitization period?

The owner will receive the surrender value of the annuity.

Which of the following determines the cash value of a variable life policy

The performance of the policy portfolio

The policyowner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as

The policy contains sufficient cash value to cover the cost of insurance

Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days?

20

A producer licensed in Pennsylvania must notify the Insurance Department of any change of address in his or her residence or business address within how many days?

30

In order for a foreign insurer to do business in this state, it must apply for and obtain

A certificate of authority

Which of the following would be required to be licensed as an insurance producer?

A salaried employee who advertises and solicits insurance

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

A man is still employed at age 65 and is now eligible for Medicare. He wants to know what health insurance coverage he is eligible to receive. Which of the following options are available to him?

Both group health and Medicare

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

Which of the following is NOT a characteristic or a service of an HMO plan?

Contracting with insurance companies

The type of policy that can be changed from one that does not accumulate cash value to the one that does is a

Convertible Term Policy

Which provision allows the policyholder a period of time, while coverage is in force, to examine a health insurance policy and determine whether or not to keep it?

Free Look Period

A couple near retirement is planning for their golden years. They want to make sure that their retirement annuity provides monthly benefits for the rest of their lives. Should one of them die, the other would still like to continue receiving benefits. Which settlement option should they choose?

Joint and Survivor

Which of the following premium modes would result in the highest annual cost for an insurance policy?

Monthly

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 insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

Mutual

A producer has become disabled. In order to keep his business going, what may his designee do?

Obtain a temporary license

The Ownership provision entitles the policyowner to do all of the following EXCEPT

Set premium rates.

When the insured initiates the cancellation of a policy, the unearned premium will be refunded on a

Short rate basis.

Which of the following is an example of a peril covered in an accident and health insurance policy?

Sickness

Which settlement option provides a single beneficiary with income for the rest of his/her life?

Single Life

All of the following statements about equity index annuities are correct EXCEPT

The annuitant receives a fixed amount of return.

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

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

Which of the following determines the cash value of a variable life policy?

The performance of the policy portfolio

Which of the following best describes what the annuity period is?

The period of time during which accumulated money is converted into income payments

A producer's license must be renewed

Biennially.

Which of the following does a producer NOT have the authority to do?

Issue policies

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

Pay the policy proceeds only if it would have issued the policy.

Which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting?

Stock

How do employer contributions to a Health Savings Account affect the insured's taxes?

The employer contributions are not included in the individual insured's taxable income.

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%

All of the following individuals may qualify for Medicare health insurance benefits EXCEPT

A retired person age 50

An insured gave birth to her first child by Caesarean section. Her health insurance covered a stay of up to 96 hours in the hospital, but her doctor allowed her and the baby to leave after only 72 hours. What other coverage must the insured's health insurance now allow her?

At least 1 home health care visit within 48 hours of discharge from the hospital

If an insurer appoints a producer, which authority must be notified?

Department of Insurance

Which of the following authorities monitors the financial strength of insurers?

Department of Insurance

Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?

Depreciation period

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

Elimination period.

Which types of insurance companies marketing long-term care insurance coverage must establish procedures to assure that any comparison of policies by its agents will be fair and accurate?

Every company is required to establish marketing procedures.

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

If the father is disabled for more than 6 months

A man purchased a $90,000 annuity with a single premium, and began receiving payments 2 months after that. What type of annuity is it?

Immediate

Which of the following best describes a bail-out provision?

It allows the owner to surrender the annuity without a charge.

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 of the following applies to the 10-day free-look privilege?

It permits the insured to reject the policy with a full refund.

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?

Making comparisons between different policies

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

Medicare SELECT

What term is used to describe when a medical caregiver contracts with a health organization to provide services to its members or subscribers, but retains the right to treat patients who are not members or subscribers?

Open panel

When an individual is covered under two health insurance policies that have duplicate benefits which could make a claim for benefits because of an injury or illness profitable, it is called

Overinsurance.

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

Producer

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

Re-examination.

If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?

Reasonable expectations

When a life insurance policy stipulates that the beneficiary will receive payments in specified installments or for a specified number of years, what provision prevents the beneficiary from changing or borrowing from the planned installments?

Spendthrift provision

All of the following are unfair claims settlement practices EXCEPT

Suggesting negotiations in settling the claim.

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as

Survivor protection

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.

The Affordable Care Act requires all U.S. citizens and legal residents to have qualifying health care coverage. This is known as

The individual mandate.

What must happen when an individual policy or annuity has been personally delivered to the policyowner?

The policyowner must sign a delivery receipt.

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

Universal Life - Option A

When is the insurability conditional receipt given?

When the premium is paid at the time of application

Under the Affordable Care Act, a special enrollment period allows an individual to enroll in a qualified health plan within how many days of a qualifying event?

60 days

Which of the following groups would probably be covered by blanket insurance?

A university's sports team

The equity in an equity index annuity is linked to

An index like Standard & Poor's 500.

The death benefit in a variable universal life policy

Depends on the performance of a separate account.

Which of the following is an example of an agent's fiduciary responsibilities?

Forwarding premiums to the insurer

Which of the following is an eligibility requirement for all Social Security Disability Income benefits?

Have attained fully insured status

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

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

The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the

Incontestability clause.

Annually renewable term policies provide a level death benefit for a premium that

Increases annually.

Which document is used to assess risk associated with an applicant's lifestyle and character?

Investigative Consumer Report

All of the following are characteristics of group life insurance EXCEPT

Premiums are determined by the age, sex and occupation of each individual certificate holder.

All of the following are characteristics of group life insurance EXCEPT (2)

Premiums are determined by the age, sex and occupation of each individual certificate holder.

All of the following are true regarding key person disability income insurance EXCEPT

Premiums are tax deductible as a business expense.

An insured committed suicide one year after his life insurance policy was issued. The insurer will

Refund the premiums paid.

When benefits are paid directly to the insured under a health insurance policy, the policy provides benefits on what type of basis?

Reimbursement

In a case where the primary beneficiary predeceases the insured, in the event of the insured's death, the death benefit proceeds will be paid to

The contingent beneficiary

A long-term care policy may NOT lapse because of unpaid premiums, unless the insurer gives at least

30 days' notice

The Omnibus Budget Reconciliation Act of 1990 requires that large group health plans must provide primary coverage for disabled individuals under

Age 65 who are not retired.

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an

Authorized insurer.

All of the following are true of the Key Person disability income policy EXCEPT

Benefits are considered taxable income to the business.

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

Consideration

Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?

Consumer report

All of the following are features and requirements of the Living Needs Rider EXCEPT

Diagnosis must indicate that death is expected within 3 years.

Which type of insurance provides funds for a business organization to purchase the business interest of a disabled partner?

Disability Buy-Sell

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?

Disclosure rule

Which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverages based on the insured's habits and lifestyle

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

False advertising

Health coverage becomes effective when the

First premium has been paid and the application has been approved

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

Income

Which of the following statements is TRUE about a policy assignment?

It transfers rights of ownership from the owner to another person

An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?

Material misrepresentation

Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner?

Payment of Claims

With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance?

Payment of premium

An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this?

Reinstatement provision

Annuities can be used to fund which of the following?

Retirement plans

A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the

Revocable beneficiary.

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

Routine dental care

Nonforfeiture values guarantee which of the following for the policyowner?

That the cash value will not be lost

In order to become licensed to become a viatical settlement provider, an application must be made with

The Insurance Department

A man works for Company A and his wife works for Company B. The spouses are covered by health plans through their respective companies that also cover the other spouse. If the husband files a claim

The insurance through his company is primary.

Which of the following is NOT a feature of a guaranteed renewable provision?

The insurer can increase the policy premium on an individual basis.

Which of the following is TRUE about nonforfeiture values?

They are required by state law to be included in the policy.

Which of the following is NOT a goal of risk retention?

To minimize the insured's level of liability in the event of loss

What kind of policy allows withdrawals or partial surrenders?

Universal life

An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this?

Unpaid premium

An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?

When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health

According to OBRA, what is the minimum number of employees required to constitute a large group?

100

An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage?

$102

Once it has been reasonably proven that a person has knowingly violated the Insurance Code regarding unfair methods of competition, the Department may impose a civil penalty of

$5,000 for each violation

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

3 days

What is the maximum age for qualifying for a catastrophic plan?

30

If a licensed person is moving to Pennsylvania, he or she may become licensed as a resident if they submit a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state?

90

Which of the following hospice expenses would NOT be covered in a cost-containment setting?

Antibiotics

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.

An insured is receiving hospice care. His insurer will pay for painkillers but not for an operation to reduce the size of a tumor. What term best fits this arrangement?

Cost-containment

A key person insurance policy can pay for which of the following?

Costs of training a replacement

What happens when a policy is surrendered for its cash value?

Coverage ends and the policy cannot be reinstated.

hat happens when a policy is surrendered for its cash value?

Coverage ends and the policy cannot be reinstated.

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

Disability Buy-Sell

Which of the following statements is correct concerning taxation of long-term care insurance?

Excessive benefits may be taxable

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.

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

Increasing Term

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

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of

Misrepresentation.

All of the following are requirements for producer license renewal EXCEPT

Renewal examination.

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?

$100,000

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

What documentation grants express authority to an agent?

Agent's contract with the principal

What does "liquidity" refer to in a life insurance policy?

Cash values can be borrowed at any time.

According to the entire contract provision, what document must be made part of the insurance policy?

Copy of the original application

Which of the following are the main factors taken into account when calculating residual disability benefits?

Present earnings and earnings prior to disability

A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

The insured's premiums will be waived until she is 21.

For the purpose of insurance, risk is defined as

The uncertainty or chance of loss

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

Separate account

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act

An insurer wishes to compare the information given in an insurance application with previous insurance applications by the same applicant but for different companies. What organization can help the insurer accomplish this?

The Medical Information Bureau

Which of the following applies to partial disability benefits?

Payment is limited to a certain period of time.

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

5 days

Benefit periods for individual short-term disability policies will usually continue from

6 months to 2 years

A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called

Cost of living rider.

All of the following are Nonforfeiture options EXCEPT

Interest only

What are the licensing requirements for someone who sells variable universal life insurance?

Life insurance and securities

When an applicant purchased a life insurance policy, the agent dated the application 4 months prior. When asked by the applicant, the agent said he was allowed to backdate policies up to 6 months if it would

Lower the insured's premium.

The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured's employment is called

Nonoccupational coverage.

Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive

Nothing; the payments will cease.

Shortly after a replacement transaction on a Medicare supplement policy, the insured decided to cancel the policy, but is unsure whether the free-look provision applies. The insured could find that information in the

Notice Regarding Replacement.

All of the following are true regarding rebates EXCEPT

Rebates are allowed if it's in the best interest of the client.

Which of the following is NOT true regarding a Variable Universal Life policy?

The death benefit is fixed.

The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT

The insured's age at death.

Which of the following statements regarding conditional receipts is true?

They are temporary insuring agreements

What do long-term care policies offer to policyholders to account for inflation?

They offer the option of purchasing coverage that raises benefit levels accordingly.

If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about

Whether an insurable interest exists between the individuals.

When can a Long-Term Care policy deny a claim for losses incurred because of a pre-existing condition?

Within 6 months of the effective date of coverage

The insurance code identifies all of these as prohibited acts that can cause suspension, revocation or denial of an insurance producer license for a licensee or applicant, with the exception of

Commission of any misdemeanor.

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

All of the following are true about variable products EXCEPT

The premiums are invested in the insurer's general account.

Which of the following occupations would have the lowest disability insurance premiums?

Personal Trainer

In a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective?

100%

The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEP

The insured's age at death.

A group of 15 skydivers met at a seminar and began talking about life insurance during a break. Because it was expensive to get individual life insurance, they decided to band together to form a small group so that they could qualify for group life insurance. After they applied for group life insurance, they were rejected. Why?

The purpose of the group was to purchase life insurance.

What is the purpose of establishing the target premium for a universal life policy?

To keep the policy in force

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce

Without receiving written consent from an insurance regulatory authority

An insured's long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged $100 per day. How much will the insurance company pay?

$120 a day

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

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of premium.

A Medicare SELECT policy does all of the following EXCEPT

Prohibit payment for regularly covered services if provided by non-network providers

In respect to the consideration clause, which of the following is consideration on the part of the insurer?

Promising to pay in accordance with the contract terms

Pertaining to insurance, what is the definition of a fiduciary responsibility?

Promptly forwarding premiums to the insurance company

An employee becomes insured under a PPO plan provided by his employer. If the insured decides to go to a physician who is not a PPO provider, which of the following will happen?

The PPO will pay reduced benefits.

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

Elijah and Mary are to receive the proceeds of a life insurance policy jointly until the first one dies. If either one should die within a specified time, the other one will receive benefits until the end of the specified time. This settlement option is known as:

Joint Life with Term Certain

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.

Which of the following is NOT the consideration in a policy?

The application given to a prospective insured


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