Life and Health Insurance Review

#137. When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled? a) The insurer is considered to be notified since the notification to agent equals notification to the insurer. b) The insurer may delay the payment of this claim for up to 6 months. c) The insurer may settle this claim for less than it otherwise would have had the notification been provided in a timely manner. d) The insurer may deny the claim since it was not notified within the required 20-day time frame.

(a) The insurer is considered to be notified since the notification to agent equals notification to the insurer

#142. The termination of marital property rights may be reversed for all of the following reasons EXCEPT a) The spouse named as beneficiary has obtained or consented to a final decree or judgment of an annulment, divorce or separation. b) The beneficiary can prove the couple were living together as husband and wife or planning to remarry. c) The spouse was named as beneficiary by class. d) The divorce or annulment decree or judgment is not recognized as valid.

(a) The spouse named as beneficiary has obtained or consented to a final decree or judgement of an annulment, divorce or separation

#6. What is the purpose of the rehabilitation benefit in disability insurance? a) To cover the expenses of retraining the insured to return to work b) To compensate the insured for the lost income c) To refund the insured's premium paid during the disability d) To help the insured recover from a disability

(a) To cover the expenses of retraining the insured to return to work

#120. All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT a) Upon conversion, the death benefit of the permanent policy will be reduced by 50%. b) Evidence of insurability is not required. c) Most term policies contain a convertibility option. d) Upon conversion, the premium for the permanent policy will be based upon attained age.

(a) Upon conversion, the death benefit of the permanent policy will be reduced by 50%

#21. All of the following are advantages of an HMO or PPO for a Medicare recipient EXCEPT a) Elective cosmetic procedures are covered. b) Prescriptions might be covered, unlike Medicare. c) Health care costs can be budgeted. d) There are no claims forms required.

(a) elective cosmetic procedures are covered

#32. When is the insurability conditional receipt given? a) When the premium is paid at the time of application b) After the application has been approved and the premium has been paid c) When an insured individual needs to obtain an insurability receipt for tax purposes. d) If the application is approved before the premium is paid

(a) when the premium is paid at the time of the application

#8. How long does a temporary producer's license last for the surviving spouse of a deceased producer? a) 150 days b) 180 days c) 1 year d) 90 days

(b) 180 days

#4. Once a viatical settlement contract has been completed, how long does the viatical settlement provider have to notify the insurance company that the life policy has been viaticated? a) 15 b) 20 c) 30 d) 10

(b) 20

#33. An insured has a $1,000 HRA account through his employer. He incurred $750 in medical expenses the first year of the plan. How much, if anything, will the insured be able to roll over toward the next year's expenses? a) $0 b) $250 c) $750 d) $1,000

(b) 250

#16. If an insurer terminates a producer's appointment, the Commissioner must be notified within how many days? a) 10 b) 30 c) 60 d) 90

(b) 30

#47. What is the civil penalty for the first violation of the Pennsylvania Insurance Fraud Prevention Act? a) $1,000 b) $5,000 c) $10,000 d) $15,000

(b) 5,000

#34. Under the Insurance Fraud Protection Act, when can a person who has been convicted of a crime involving dishonesty or a breach of trust engage in the business of insurance? a) No sooner than 7 years after the conviction b) After obtaining the consent of the Department of Insurance c) Never; a person cannot be involved in the business of insurance after a conviction d) After paying fines or serving a prison sentence

(b) After obtaining the consent of the Department of Insurance

#118. All of the following statements describe a MEWA EXCEPT a) MEWAs can be self-insured. b) MEWAs are groups of at least 3 employers. c) MEWAs can be sponsored by insurance companies. d) MEWA employers retain full responsibility for any unpaid claims.

(b) MEWAs are groups of at least 3 employers

#145. An insurance company wants to obtain the insurance history of an applicant. Which source releases coded information to insurers regarding information included on previous insurance applications? a) Federal Bureau of Investigation b) Medical Information Bureau c) Insurer's Protection Guild d) Integrated Insurer's Support

(b) Medical information Bureau

#8. Which of the following is the most common time for errors and omissions to occur on the part of an insurer? a) Application process b) Policy delivery c) Policy renewal d) Underwriting

(b) Policy Delivery

#5. The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this? a) Cash option b) Reduction of premium c) Paid-up addition d) Accumulation at interest

(b) Reduction of premium

#9. During replacement, producers must provide a list of insurance policies still in force. In addition, they must list policies sold during the past a) 6 months. b) 1 year. c) 5 years. d) 10 years.

(c) 5 years

#11. Who must pay for the cost of a medical examination required in the process of underwriting? a) Underwriters b) Department of Insurance c) Insurer d) Applicant

(c) Insurer

#123. When benefits are paid directly to the insured under a health insurance policy, the policy provides benefits on what type of basis? a) Limited b) Scheduled c) Reimbursement d) Service

(c) Reimbursement

#122. Which of the following statements is true regarding coinsurance? a) The smaller the percentage that is paid by the insured, the lower the required premium will be. b) The smaller the percentage that is paid by the insured, the more consistent the required premium will be. c) The larger the percentage that is paid by the insured, the lower the required premium will be. d) The larger the percentage that is paid by the insured, the higher the required premium will be.

(c) The larger the percentage that is paid by the insured, the lower the required premium will be

#15. In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT a) The premium. b) The amount of insurance. c) The type of investment. d) The length of coverage.

(c) The type of investment

#18. The Omnibus Budget Reconciliation Act of 1990 requires that large group health plans must provide primary coverage for disabled individuals under a) Age 59½ who are not retired. b) Age 65 who are retired. c) Age 59½ who are retired. d) Age 65 who are not retired.

(d) Age 65 who are not retired

#87. Which of the following is TRUE about a class designation? a) Beneficiaries must be part of the insured's immediate family. b) It is not allowed. c) It determines the succession of beneficiaries. d) Beneficiaries are not identified by name.

(d) Beneficiaries are not identified by name

#39. An individual is insured under his employer's group Disability Income policy. The insured suffered an accident while on vacation that left him unable to work for 4 months. If the disability income policy pays the benefit, which of the following would be true? a) The insured has to wait 2 more months to start receiving the benefits. b) For the business, payments are not considered tax deductible as an ordinary business expense. c) The insured can deduct his medical expense benefits from his income tax. d) Benefits that are attributable to employer contributions are fully taxable to the employee as income.

(d) Benefits that are attributable to employer contributions are fully taxable to the employee as income

#35. How often must the Commissioner examine rating organizations? a) Annually b) Every 2 years c) Every 3 years d) Every 5 years

(d) Every 5 years

#74. How long is the right to examine period for new individual annuities issued in this state? a) 10 days b) 20 days c) 45 days d) 90 days

(a) 10 days

#44. What document describes an insured's medical history, including diagnoses and treatments? a) Attending Physician's Statement b) Physician's Review c) Individual Medical Summary d) Comprehensive Medical History

(a) Attending Physician's statement

#72. A policy which covers medical costs related to a specific condition is called a a) Dread Disease Policy. b) Condition-Specific Policy. c) Specific Condition Policy. d) Limited Coverage Policy.

(a) Dread Disease Policy

#96. Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital? a) Medigap b) Indemnity c) Surgical d) Blanket

(b) Indemnity

#114. Which document is used to assess risk associated with an applicant's lifestyle and character? a) Applicant Lifestyle Assessment b) Investigative Consumer Report c) Character Assessment d) Non-medical Risk Assessment

(b) Investigative consumer report

#20. Under a nonscheduled plan, what portion of the balance could an insured expect to pay for basic services? a) 50% b) 80% c) 100% d) 20%

(d) 20%

#34. How long must insurers maintain the evidence from the agent that a disclosure statement about a life insurance policy was delivered to the applicant? a) 3 months b) 6 months c) 1 year d) 3 years

(d) 3 Years

#23. Within how many days must a producer respond to an inquiry from the Commissioner? a) 3 days b) 10 days c) 15 days d) 30 days

(d) 30 days

#54. A long-term care policy may NOT lapse because of unpaid premiums, unless the insurer gives at least a) 60 days' notice. b) 31 days' notice. c) 10 days' notice. d) 30 days' notice.

(d) 30 days' notice

#10. 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 a) $1,000 for each violation. b) $2,000 for each violation. c) $3,000 for each violation. d) $5,000 for each violation.

(d) 5,000 for each violation

#136. What characteristic makes whole life permanent protection? a) Living benefits b) Coverage until death or age 100 c) Guaranteed death benefit d) Guaranteed level premium

(b) Coverage until death or age 100

#68. To avoid violations of unfair claims settlement regulations, insurers are required to acknowledge the receipt of a claim within how many days? a) 10 days b) 15 days c) 30 days d) 45 days

(a) 10 days

#91. An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan? a) 2 years b) 1 month c) She would not receive any benefits. d) 3 years

(a) 2 years

#73. Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? a) 3 days b) 5 days c) 10 days d) 14 days

(a) 3 Days

#3. An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued? a) Adjust the claim benefit to reflect the insured's true age b) Deny any claims and cancel the policy c) Deny paying a claim based on misrepresentation d) Pay the full amount of a claim because the contestable period has ended

(a) Adjust the claim benefit to reflect the insured's true age

#95. A producer sold an insurance policy. Subsequently, his license was suspended. In this case, how much of the commission will the producer receive? a) All b) 1/2 c) 1/4 d) None

(a) All

#134. In which Medicare supplemental policies are the core benefits found? a) All plans b) Plans A and B only c) Plan A only d) Plans A-D only

(a) All plans

#67. An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision? a) Common Disaster b) Accidental Death c) Survivor Life d) Second-to-Die

(a) Common Disaster

#85. If an insurer appoints a producer, which authority must be notified? a) Department of Insurance b) Federal Directory of Insurers c) State Insurance Regulation Board d) Commissioner

(a) Department of insurance

#94. Which of the following authorities monitors the financial strength of insurers? a) Department of Insurance b) National Association of Insurance Commissioners c) Financial Industry Regulatory Authority d) Insurance companies

(a) Department of insurance

#50. All of the following violations may result in an agent's imprisonment EXCEPT a) Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction. b) Embezzling funds from the insurer. c) Knowingly obtaining information about a consumer under false pretenses. d) Engaging in the business of insurance after being convicted of breach of trust.

(a) Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction

#42. A Return of Premium term life policy is written as what type of term coverage? a) Increasing b) Decreasing c) Renewable d) Level

(a) Increasing

#4. Which of the following is INCORRECT concerning Medicaid? a) It is solely a federally administered program. b) It provides medical assistance to low-income people who cannot otherwise provide for themselves. c) It pays for hospital care, outpatient care, and laboratory and X-ray services. d) The federal government provides about 56 cents for every Medicaid dollar spent.

(a) It is solely a federally administered program

#116. Which of the following best describes the difference between Pure Life and Life with Guaranteed Minimum settlement options? a) Life with Guaranteed Minimum will pay the remaining principal to the beneficiary. b) In Life with Guaranteed Minimum, payments can be made in installments. c) Pure Life guarantees to pay out all the proceeds. d) Pure Life is not a life contingency option.

(a) Life with Guaranteed Minimum will pay the remaining principle to the beneficiary

#65. Which of the following statements pertaining to Medicare Part A is correct? a) Medicare Part A is automatically provided when an individual qualifies for Social Security benefits at age 65. b) For the first 90 days of hospitalization, Medicare Part A pays 100% of all covered services, except for the initial deductible. c) Individuals with ESRD do not qualify for Part A. d) Each individual covered by Medicare Part A is allowed one 90-day benefit period per year.

(a) Medicare part A is automatically provided when an individual qualifies for Social Security benefits at age 65

#12. In a long-term care policy, pre-existing condition limitations a) Must appear as a separate paragraph and be clearly labeled. b) Apply to 12 months from the effective date of coverage. c) Never have specific exclusions. d) Are not permitted.

(a) Must appear as a separate paragraph and be clearly labeled

#109. Prior to purchasing a Medigap policy, a person must be enrolled in which of the following? a) Parts A and B of Medicare b) All four parts of Medicare c) Any private insurance policy d) Only Part A of Medicare

(a) Parts A and B of medicare

#19. What is the purpose of a conditional receipt? a) It is given by the agent only to applicants who fully prepay all scheduled premiums in advance of policy issue. b) It is intended to provide coverage on a date earlier than the date of the issuance of the policy. c) It guarantees the applicant that a policy will be issued in the amount applied for in the application. d) It serves as proof that the agent has determined the applicant to be fully insurable for coverage by the insurance company.

(b) It is intended to provide coverage on a date earlier than the date of the issuance of the policy

#101. Which of the following is NOT true regarding the needs approach method of determining the value of an individual's life? a) It must be assumed that the death of the insured will occur immediately. b) Need is predicted using the number of years until the insured's retirement. c) Coverage is based on the predicted needs of that family. d) The death of an insured must be premature.

(b) Need is predicted using the number of years until the insured's retirement

#40. Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy? a) Premiums are taxable to the employee. b) Premiums are not tax deductible as a business expense. c) Premiums are tax deductible by the key employee. d) Premiums are tax deductible as a business expense.

(b) Premiums are not tax deductible as a business expense

#51. Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must a) Send an actual certified copy of the entire report to the consumer. b) Respond to the consumer's complaint. c) Defend the report if the agency feels it is accurate. d) Change the report.

(b) Respond to the consumer's complaint

#76. Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles? a) Standard risk is also known as high exposure risk. b) Standard risk is representative of the majority of people. c) Standard risk pays a higher premium than a substandard risk. d) Standard risk requires extra rating.

(b) Standard risk is representative of the majority of people

#52. Which of the following groups would most likely be covered under a blanket accident policy? a) Independent contractors who work for a general contractor b) Students at a public school c) Office workers for a retail business d) Factory workers at the automobile assembly plant

(b) Students at a public school

#25. Which of the following is true regarding health insurance underwriting for a person with HIV? a) The person may only be declined if he/she has symptoms. b) The person may not be declined for medical coverage solely based on HIV status. c) A person may be declined for HIV but not AIDS. d) The person may be declined.

(b) The person may not be declined for medical coverage solely based on HIV status

#19. If an insured continually uses the automatic premium loan option to pay the policy premium, a) The insurer will increase the premium amount. b) The policy will terminate when the cash value is reduced to nothing. c) The face amount of the policy will be reduced by the automatic premium loan amount. d) The cash value will continue to increase.

(b) The policy will terminate when the cash value is reduced to nothing

#41. A deferred annuity is surrendered prior to annuitization. Which of the following best describes the nonforfeiture value of the annuity? a) The surrender value will not be more than 80% of the cash value in the annuity at the time of surrender. b) The surrender value should be equal to 100% of the premium paid, minus any prior withdrawals and surrender charges. c) A deferred annuity cannot be surrendered prior to annuitization. The owner must wait until the annuitization period begins to receive any payments. d) The surrender value will be based on current interest rates.

(b) The surrender value should be equal to 100% of the premium paid, minus any prior withdrawals and surrender charges.

#113. What is a major problem with naming a trust as the beneficiary of a life insurance policy? a) The insured must have the Superintendent's permission to name a trust as the beneficiary. b) They are expensive to administer. c) The insurance company will not pay the proceeds to a nonliving beneficiary. d) It is illegal to name a trust as the beneficiary.

(b) They are expensive to administer

#112. How long will the beneficiary receive payments under the single life settlement option? a) Until the insured's age 100 b) Until the beneficiary's death c) Until the insured's death d) For a specified period of time

(b) Until the beneficiary's death

#90. In forming an insurance contract, when does acceptance usually occur? a) When an insured submits an application b) When an insurer's underwriter approves coverage c) When an insurer delivers the policy d) When an insurer receives an application

(b) When an insurer's underwriter approves coverage

#62. In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years? a) 1 b) 3 c) 5 d) 10

(c) 5

#73. If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? a) 10 days b) 3 days c) 5 days d) 7 days

(c) 5 days

#141. 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? a) 10 days b) 30 days c) 60 days d) 90 days

(c) 60 days

#138. Your client plans to retire at age 50. He would like to purchase an annuity that would provide income from the time he retires to the age when social security and other pension funds become available. What settlement option should he consider? a) Refund Life b) Variable annuity c) Annuity certain d) Fixed annuity

(c) Annuity certain

#49. For how long must a company maintain a complete file of all advertisements used? a) 30 days after the advertisement expires b) No more than 3 years c) At least 4 years d) 90 days after the advertisement is first used

(c) At least 4 years

#128. In order to collect Social Security disability benefits, the claimant must be able to demonstrate that the disability will last at least a) 24 months. b) Until age 65. c) For life. d) 12 months.

(d) 12 months

#140. Which of the following is INCORRECT regarding a $100,000 20-year level term policy? a) If the insured dies before the policy expired, the beneficiary will receive $100,000. b) The policy will expire at the end of the 20-year period. c) At the end of 20 years, the policy's cash value will equal $100,000. d) The policy premiums will remain level for 20 years.

(c) At the end of 20 years, the policy's cash value will equal $100,000

#74. An individual is insured under his employer's group Disability Income policy. The insured suffered an accident while on vacation that left him unable to work for 4 months. If the disability income policy pays the benefit, which of the following would be true? a) For the business, payments are not considered tax deductible as an ordinary business expense. b) The insured can deduct his medical expense benefits from his income tax. c) Benefits that are attributable to employer contributions are fully taxable to the employee as income. d) The insured has to wait 2 more months to start receiving the benefits.

(c) Benefits that are attributable to the employer contributions are fully taxable to the employee as income

#60. 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? a) Limited Coverage b) Claims Saving c) Cost-containment d) Selective Coverage

(c) Cost-containment

#64. An insured has had 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 nothing; there was a misrepresentation on the application b) Pay the full death benefit and refund excess premium c) Pay a reduced death benefit d) Pay the full death benefit

(c) Pay a reduced death benefit

#78. Which of the following must be present in all Medicare supplement plans? a) Outpatient drugs b) Plan C coinsurance c) Plan A d) Foreign travel provisions

(c) Plan A

#126. When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to a) Pay back all premiums owed plus interest. b) Receive payments for a fixed amount. c) Purchase a single premium policy for a reduced face amount. d) Purchase a term rider to attach to the policy.

(c) Purchase a single premium policy for a reduced face amount

#9. Insurers may change which of the following on a guaranteed renewable health insurance policy? a) Individual rates b) No changes are permitted. c) Rates by class d) Coverage

(c) Rates by class

#36. According to the privacy of consumer financial information regulation, if a consumer decides to opt out, this means a) The consumer has chosen not to participate in insurance contracts with the insurer. b) The consumer has declined the nonforfeiture options available in the policy. c) The consumer directs the licensee not to disclose the consumer's nonpublic personal financial information to a third party. d) The consumer gives the licensee an unconditional right to share the consumer's nonpublic financial information with a third party.

(c) The consumer directs the licensee not to disclose the consumer's nonpublic personal financial information to a third party

#29. Which statement accurately describes group disability income insurance? a) There are no participation requirements for employees. b) Short-term plans provide benefits for up to 1 year. c) The extent of benefits is determined by the insured's income. d) In long-term plans, monthly benefits are limited to 75% of the insured's income.

(c) The extent of benefits is determined by the insured's income

#17. A licensee serving in the military is unable to fulfill her continuing education requirement. What would the licensee have to do to renew the license? a) Nothing; licenses of active duty military service personnel are automatically reinstated for a full licensing term. b) The licensee must complete the continuing education requirements and pay the lapse renewal fees. Requirements cannot be waived. c) The licensee may submit a request to the department to have requirements and fees waived. The department will then determine if the request is permissible. d) Nothing; the license is automatically reinstated for an additional 6 months following return from military service.

(c) The licensee may submit a request to the department to have requirements and fees waived. The department will then determine if the request is permissible

#117. An insured stops making payments on a loan taken from his cash value policy. What will most likely happen? a) The insurer will not permit the policyowner to take out any more loans. b) The policy will be reduced to an extended term option. c) The policy will terminate when the loan amount with interest equals or exceeds the cash value. d) The insurer will increase the interest rate on the loan and charge a penalty.

(c) The policy will terminate when the loan amount with interest equals or exceeds the cash value

#13. Which provision states that the insurance company must pay Medical Expense claims immediately? a) Legal Actions b) Relation of Earnings to Insurance c) Time of Payment of Claims d) Payment of Claims

(c) Time of Payment of Claims

#14. Which of the following would be considered an unfair claims settlement practice? a) Requesting the insured swear under oath concerning the facts of the claim b) Delaying the settlement of a claim for 30 days in order for the insured to conduct an investigation c) Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered d) Requesting the insured to submit a signed proof of loss statement, after the insured has already verbally advised the insurer of the claim

(c) advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

#37. Which of the following is NOT a cost-saving service in a medical plan? a) Second surgical opinions b) Risk sharing c) Denial of coverage d) Preventive care

(c) denial of coverage

#148. 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? a) Flexible payment annuity b) Deferred interest annuity c) Immediate annuity d) Variable annuity

(c) immediate annuity

#53. How soon after the due date should the insurer pay the agent appointment fees? a) Immediately b) Within 10 days c) Within 30 days d) Within 60 days

(c) within 30 days

#52. Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain a) A statement from the insured's employer showing that the insured was unable to work. b) An estimate of the total amount of medical and hospital expense for the loss. c) A complete physician's statement. d) A statement that is sufficiently clear to identify the insured and the nature of the claim.

(d) A statement that is sufficiently clear to identify the insured and the nature of the claim

#7. Under the 401(k) bonus or thrift plan, the employer will contribute a) All of the money to the plan. b) 30% of what the employee contributes. c) 75% of what the employee contributes. d) An undetermined percentage for each dollar contributed by the employee.

(d) An undetermined percentage for each dollar contributed by the employee

#57. The death protection component of Universal Life Insurance is always a) Whole Life b) Adjustable Life c) Increasing Term d) Annually Renewable Term

(d) Annually renewable term

#111. An insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information? a) Interviews b) State records c) Medical records d) Application

(d) Application

#15. Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium? a) Extended term b) Reinstatement c) Reduced paid-up option d) Automatic premium loan

(d) Automatic premium loan

#105. Which of the following provisions in annuity contracts allow the owner to surrender the annuity if interest rates drop to a specified level? a) Surrender b) Nonforfeiture c) Annuitization d) Bail-out

(d) Bail-out

#147. An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it? a) Fixed b) Flexible premium c) Immediate d) Deferred

(d) Deferred

#86. Which of the following statements is NOT correct concerning the COBRA Act of 1985? a) It covers terminated employees and/or their dependents for up to 36 months after a qualifying event. b) It applies only to employers with 20 or more employees that maintain group health insurance plans for employees. c) COBRA stands for Consolidated Omnibus Budget Reconciliation Act. d) It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.

(d) It requires all employers, regardless of the number or age of employees, to provide extended group health coverage

#100. Who is responsible for paying producer appointment fees? a) The Commissioner's office b) The Department of Insurance c) The producer d) The appointing insurer

(d) The appointing insurer

#72. 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? a) The principal amount in a lump sum b) The capital amount in monthly installments c) The principal amount in monthly installments d) The capital amount in a lump sum

(d) The capital amount in a lump sum

#106. All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT a) Any type of insurance policy may be used. b) The employer pays a bonus to a selected employee to fund the policy. c) It is considered a nonqualified employee benefit. d) The policy is owned by the company.

(d) The policy is owned by the company

#18. Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount? a) Flexible life b) Variable life c) Adjustable life d) Universal life

(d) Universal Life

#150. When a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has a face amount a) In lesser amounts for the remaining policy term of age 100. b) Equal to the cash value surrendered from the policy. c) The same as the original policy minus the cash value. d) Equal to the original policy for as long a period of time that the cash values will purchase.

(d) equal to the original policy for as long a period of time that the cash values will purchase

#43. What do long-term care policies offer to policyholders to account for inflation? a) They do not account for inflation. b) They automatically increase premiums to account for inflation. c) They pay a dividend that increases every 7 years. d) They offer the option of purchasing coverage that raises benefit levels accordingly.

(d) they offer the option of purchasing coverage that raises benefit levels accordingly