Life, Health & Variable Annuity (2-15 Exam)

$0

A $75,000 death benefit is paid to Art's wife in a lump sum of $75,000. How much of this benefit is taxable? -$0 -$26,000 -$49,000 -$75,000

FALSE

A 3 year renewable policy allows a term policy owner to increase coverage for the next 3 years. TRUE or FALSE?

Provided to the policyholder for delivery to each member of the insured group (A Certificate of Coverage is provided to the policyholder for delivery to each member of the insured group. A certificate of coverage is evidence of coverage for each individual insured, but it is not the actual policy.)

A Certificate of Coverage is? A) Provided only to the policyholder B) Provided only to the insureds C) The same as the policy D) Provided to the policyholder for delivery to each member of the insured group

Guaranteed renewable (A policy issued to an individual must not contain renewal provisions other than 'guaranteed renewable' or 'noncancellable.')

A LTC policy issued to an individual must contain a provision for ___________. A) Guaranteed renewable B) Institutional care C) Non-duplication of coverage D) Preexisting conditions

Foreign

A Life Insurance company organized in IL, with it's home office in Philadelphia, is licensed to conduct business in Florida. In Florida, this company is classified as?

6 months (A Medicare supplement policy must not exclude benefits based on a preexisting condition if the individual has a continuous period of creditable coverage of at least 6 months as of the date of application for coverage.)

A Medicare supplement policy must not exclude benefits based on a preexisting condition if the insured had creditable coverage for at least _____ ____from the date of the application. A) 1 month B) 90 days C) 6 months D) 9 months

Peril

A Tornado is an example of a what type of hazard?

A Spendthrift Trust Clause

A clause that states that policy distributions payable to a beneficiary after the insured dies are not assignable or transferable and may not be attached in any way is called? -An Assignment Clause -A Spendthrift Trust Clause -A Debtors Protection Clause

60

A distribution received from an employer-sponsored retirement plan or from an IRA is eligible for a tax-free rollover if it is reinvested in an IRA within how many days after the distribution? -20 -60 -30 -45

1 (A certificate of coverage is sent to members containing the group number and the essential features of the insurance coverage, and if dependents are included in the coverage, only one certificate is issued for each family unit.)

A family of five, two parents, an 18-year old son, and 14-year old twin daughters, is insured under a group health insurer who sent them Certificate(s) of Coverage. How many certificates did they send? A) 1 B) 2 C) 3 D) 5

It shows the average number of deaths that are expected each year in any age group

A mortality table reveals which of the following? -There is no death rate for persons age 99 -It shows the average number of deaths that are expected each year in any age group -It specifies the people who will die in any given year

Medicare must not contain limitations or exclusions that are more restrictive than the Medicare Supplement policy (No policy or certificate may be advertised, solicited or issued as a Medicare supplement policy if the policy or certificate contains limitations or exclusions on coverage that are more restrictive than those of Medicare.)

Choose the statement that is LEAST correct about Medicare Supplement policies... A) The Medicare Part C - Advantage plan is a private fee-for-service plan B) Duplication of Medicare coverage in the Medicare Supplement policy is prohibited C) A person can suspend the Medicare Supplement policy up to 2 years if entitled for Medicaid D) Medicare must not contain limitations or exclusions that are more restrictive than the Medicare Supplement policy

5 (If the carrier stops selling an insurance form, the carrier must provide 90 days' notice, and if it stops selling all plans, 180 days' notice is required, and the carrier may not re-enter the Florida market for 5 years.)

If the insurer stops selling all plans in Florida, it may not re-enter the Florida market for _____ year(s). A) 1 B) 2 C) 4 D) 5

Preventative care and early intervention

HMO's are known for stressing? -Preventative care and early intervention -State-sponsored health plans -Outpatient care and services -Coverage for government employees

For 30 days every 18 months

HMO's offering group coverage must have an open enrollment at least... -Once a year -For 1 month every 3 years -For 30 days every 18 months

$11,000

Herbert and Olga, both age 48, have been married for 10 years. They have no children, and each has a well paying job. However, neither is covered by an employer retirement plan. What is the maximum amount they may set aside together in tax-deductible, traditional IRA funds in 2014? -$4,000 -$5,000 -$8,000 -$11,000

Within 3 months of a close of the fiscal year

How often must HMO's file a report of their activities to the Office of Insurance Regulation? -Every 3 years -Every 3 months -Within 3 months of a close of the fiscal year -At the end of each calendar year

$5,500

If David sets up a traditional IRA, what is the maximum contribution he can make and deduct from adjusted gross income for 2014? -$1,000 -$5,500 -$4,000 -$3,000

A paramedic or examining physician

If a medical report is required on an applicant, it is completed by? -The agent -The home office medical director -A paramedic or examining physician

The subscriber is disenrolled from Medicare

If an agent signs up a subscriber who is eligible for Medicare... -Medicare will pay what the HMO does not -The subscriber is disenrolled from Medicare -The subscriber becomes eligible for Medicaid

Increase the premium

If an error is discovered while an insured is living and the insured is older than the policy states, the insurance company can? -Reduce the premium -Increase the premium -Increase the benefits

Waiver of premium rider

If an insurance company determines that an insured is totally disabled, the policy owner is relieved of paying the policy premium as long as the disability continues. This statement describes? -Disability income rider -Waiver of premium rider -Premium suspension clause

Policy owner

If an irrevocable beneficiary dies before the policy owner, who of the following gains control of a life insurance policy with a reversionary irrevocable clause? -Insured -Policy owner -Insurer

Linda, age 28

Assume the following persons buy identical life insurance policies from the same company. Generally speaking, who will pay the lowest premium, if all have standard ratings? -Linda, age 28 -Thomas, age 28 -Louise, age 40 -Joe, age 45

$25,000 (It was not stated in the question that Darlene was named as a beneficiary from his $15,000 straight life annuity.)

Befor he died, Gary received a total of $9,200 in monthly income payments from his $15,000 straight life annuity. He also was the insured under a $25,000 life insurance policy that named his wife, Darlene, as primary beneficiary. Considering the two contracts, Darlene would receive death benefits totaling? -$15,000 -$25,000 -$30,800

Fixed-period

Beth, age 50, the beneficiary of her late husband's life insurance policy, has elected to receive the proceeds in monthly installments over the next 5 years.Due to the insurer's interest earnings, Beth notices that the amount of the payments is often more than what she was guaranteed. What kind of settlement option did Beth select? -Life-income -Fixed-amount -Cash Value -Fixed-period

15.3%

Bill is self employed. The FICA tax rate for Bill is? -6.2% -7.65% -15% -15.3%

No income tax is payable on the death proceeds

Bill names his church as the beneficiary of his $300,000 life insurance policy. When Bill dies, who is responsible for the income taxes payable on the lump-sum proceeds received by the church? -No income tax is payable on the death proceeds -His estate -His church is responsible

VOID

Bob and Tom enter into a contract in which Bob agrees to fraudulently induce sick people to sell their insurance contracts to Tom's company can best be described as?

$5,500

Bob, age 43, owns a traditional IRA and a Roth IRA. What is the maximum amount that he can contribute to both accounts in 2014 without being penalized? -$2,000 -$5,500 -$4,000 -$6,000

Transferring Risk

Buying insurance is one of the most effective ways of...

The application, in its entirety, becomes part of the entire contract (Part III of the application is the agent's confidential report and is not photocopied or communicated to client, or included in the entire contract.)

Choose the statement about applications that is NOT true... A) Any changes to the application must be initialed by the agent B) All questions must be answered C) The application, in its entirety, becomes part of the entire contract D) The agent can complete the section on medical history

Reduce the death benefits

If error is discovered after an insured dies and the insured was younger than the insurance policy stated, the insurance company will... -Reduce premiums -Reduce the death benefits -Waive the difference -Increase the death benefits

FALSE

In regards to Variable Insurance, materials used in selling variable policies must be approved only by the State Office of Insurance Regulation. TRUE or FALSE?

FALSE

In regards to a 5 year level term policy, if the insured lives beyond 5 years, the policy's cash value will be paid. TRUE or FALSE?

TRUE

In regards to a 5 year level term policy, the premiums for the renewal period will be higher than the initial period. TRUE or FALSE?

FALSE

In regards to a Family Plan policy, only children living when the policy is issued are covered. TRUE or FALSE?

TRUE

In regards to a Life Insurance Policy Application, the names of both the insured and the beneficiary are indicated on the application. TRUE or FALSE?

FALSE

In regards to a Life Insurance Policy Settlement Option, under the fixed-period option, the payment of excess interest will lengthen the payment period. TRUE or FALSE?

TRUE

In regards to a Life Insurance policy's cash value, when a whole life insurance policy is active, the owner can borrow from the cash value. TRUE or FALSE?

FALSE

In regards to reinstating a life insurance policy, a suicide exclusion period is renewed with a reinstated policy. TRUE or FALSE?

FALSE

In regards to survivor financial needs, the dependency period refers to the 20-year period immediately following the insured's death during which the widowed spouse must depend on social security. TRUE or FALSE?

TRUE

In regards to the FCRA (the Fair Credit Reporting Act), applicants must be notified within a short period of time that their credit report has been requested. TRUE or FALSE?

TRUE

In regards to the FCRA (the Fair Credit Reporting Act), it provides that consumers have the right to question reports made about them by investigative agencies. TRUE or FALSE?

TRUE

In regards to the MIB (Medical Information Bureau), the MIB provides assistance in the underwriting of life insurance. TRUE or FALSE?

FALSE

In regards to the Taxation of Insurance Proceeds, interest earned on policy dividends is exempt from income tax. TRUE or FALSE?

FALSE

In regards to the classification of applicants, a substandard applicant can never be rejected outright by the insurer. TRUE or FALSE?

FALSE

In regards to the incontestable clause, insurers can void a contract even after the specified period, provided they can prove the policy was purchased fraudulently. TRUE or FALSE?

Typing the notice on the first page of the application and the contract

In what way must the Notice to Buyer be conveyed to an HMO subscriber who is eligible for Medicare? -Printing, typing, or stamping the notice on the first page of the HMO contract -Stamping the notice on the application -Typing the notice on the first page of the application and the contract

Concealment of smoking

In which of the following situations does the incontestable clause apply? -No insurable interest -Concealment of smoking -Intent to murder

The increase in the policy's cash value

Robert and his employer agree on the purchase of a split-dollar life insurance policy and the usual split-dollar approach to premium payments. Each year the employer will contribute the premium an amount equal to? -The increase in the policy's cash value -One-half the premium -The annual dividend -Two-thirds of the premium

Llyods of London

Oldest and most famous syndicate of insurance underwriters and brokers. The underwriters (numbering about 20,000) are grouped into some 280 syndicates, each specializing in a particular type of risk. Together they provide coverage for virtually any type of peril, but their main business involves providing reinsurance to other insurance companies. This organization began in the 1689 London, in the Tavern Street coffeehouse of Edward Lloyd frequented by shipowners. What is this passage describing?

TRUE

Only pure risk is insurable. TRUE or FALSE?

Class Beneficiaries

The beneficiary on Walter's life insurance policy reads, "Children of the insured". Which of the following phrases best describes this type of beneficiary designation? -Juvenile Beneficiaries -Class Beneficiaries -Generational Beneficiaries

FALSE

Regarding Annuities, generally, annuity contracts issued today require fixed, level funding payments. TRUE or FALSE?

TRUE

Regarding Key-Person insurance, because the business has complete control over the policy, it can be considered a business asset. TRUE or FALSE?

FALSE

Regarding Key-Person insurance, premiums for a key-person life insurance policy are a tax deductible expense to the business. TRUE or FALSE?

TRUE

Regarding Social Security benefits, Mason, who is married with one son, age 16, is a fully insured retired worker receiving social security benefits. In addition, his spouse is eligible for benefits at age 62 and his son is eligible for benefits until he is 18 years old. TRUE or FALSE?

FALSE

Regarding Social Security survivor benefits, a healthy dependant child of a of a deceased worker will be entitled to an income benefit until age 18, or to 22, if the child attends college. TRUE or FALSE?

FALSE

Regarding Variable Annuities, once a variable annuity has been annuitized, the amount of monthly annuity income cannot fluctuate. TRUE or FALSE?

FALSE

Regarding a Common Disaster Provision, the provision stipulates that if the primary beneficiary outlives the insured by more than 48 hours, then the proceeds will be paid to the primary beneficiary's estate. TRUE or FALSE?

TRUE

Regarding a cost of living (COL) rider on a Life Insurance policy, an inflation index, usually the Consumer Price Index, determines the amount of inflation adjustment that is made to a policy. TRUE or FALSE?

FALSE

Regarding assignment of a life insurance policy, the policy owner must obtain approval from the insurance company before a policy can be assigned. TRUE or FALSE?

FALSE

Regarding beneficiary designations, minors cannot be named life insurance beneficiaries. TRUE or FALSE?

TRUE

Regarding equity index contracts, cash values usually grow at a minimum interest rate. TRUE or FALSE?

FALSE

Regarding facility of payment provision, they are often found in group life policies. TRUE or FALSE?

FALSE

Reinsurers usually deal with group policy owners. TRUE OR FALSE?

Policyowner

The cash values of life insurance policies belong to which of the following? -Beneficiary -Insured -Policyowner

The coverage goes into effect

The primary distinction between the insurability and approval types of conditional receipts is when? -The coverage goes into effect -The applicant pays the initial premium -The medical exam is given -The applicant proves insurable

A payor rider

The rider that provides for a waiver of premiums on a juvenile policy if the adult payor dies or becomes disabled is -An automatic premium loan rider -A payor rider -A guaranteed insurability rider -A waiver of premium rider

The amount paid to the physician for each member.

The term Capitation means?

A fixed amount per visit or per service the subscriber must pay.

The term Co-Payment means?

General benefit plan (Before a small employer carrier issues a standard health benefit plan, a basic health benefit plan, or a limited benefit policy or contract, the carrier must obtain from the prospective policyholder a signed written statement in which the prospective policyholder certifies as to eligibility for coverage under the policy chosen.)

The three health policies offered to the small employers include all of the following, except? A) Standard health benefit plan B) Limited benefit plan C) General benefit plan D) Basic health benefit plan

Annually renewable terms

The type of insurance most frequently used in group life plans is? -Annually renewable terms -Limited pay whole life -Single-premium whole life

A health maintenance contract

The written agreement between the subscriber and the HMO is called? -A health maintenance contract -A health insurance policy -A health care contract -A health maintenance agreement

Irrevocable

When a policy owner cannot exercise his rights of ownership without the policy beneficiary's consent, the beneficiary is designated.. -Primary -Irrevocable -Vested -Contractual

Exclusion ratio

"Annuity payments are taxable to the extent that they represent interest earned rather than capital returned." When an annuitized payout option is chosen, what method is used to determine the taxable portion of each payment? -Exclusion ratio -Marginal tax formula -Surtax ratio

FALSE

Limited payment life provides protection only for the years during which premiums are paid. TRUE or FALSE?

FALSE

Lloyd's of London is a service provider. TRUE or FALSE?

Is not

Assessing the prospect's financial ability to pay commissions is or is not a standard of a producer's sales pitch?

FALSE

In regards to Life Insurance benefits, benefits payable to the insured's estate are protected from the insured's creditors. TRUE or FALSE?

An entity buy-sell plan (single own, cross-purchase plan is a multiple own)

A partnership owns, pays for, and is the sole beneficiary of the life insurance policies on the lives of it's individual partners. This is knows as? -An entity buy-sell plan -A stock redemption plan -A cross-purchase plan -A keogh plan

TRUE

A per stirpes distribution means that a beneficiary's share of a policy's proceeds will be passed down to the beneficiary's living child or children if the named beneficiary predeceases the insured. TRUE or FALSE?

A joint and last survivor policy

A policy covering 2 lives that only pays a death benefit when the second insured person dies is? -A family policy -A joint life policy -A joint and last survivor policy

FALSE

A policy obtained by a person without an insurable interest can be enforced. TRUE or FALSE?

A multiple protection policy

A policy that pays double or triple the face amount if death occurs during a specified period is? -A family policy -A multiple protection policy -A Joint life policy

Assumes a portion of the risk from another insurer

A reinsurer is a company that...

Insures employees of two or more employers

A trustee group insurance policy... -Covers all full time employees of a single employer -Covers students participating in sports -Insures employees of two or more employers

TRUE

A written contract cannot be changed by oral evidence. TRUE or FALSE?

A cash refund

Albert purchased an annuity that will pay him a monthly income for the rest of his life. If Albert dies before the annuity has paid back as much as he has put into it, the insurance company has agreed to pay the difference to Albert's daughter. What annuity pay out option did Albert select? -A straight-life income -A cash refund -A fixed period

There are no restrictions on it as far as receiving favorable tax treatment

All of the following apply to a Universal Life insurance policy EXCEPT? -The coverage includes an annual renewable term policy -There are no restrictions on it as far as receiving favorable tax treatment -There can be a flexible premium and an adjustable benefit.

Conversion

All of the following are considered unfair trade practices with regard to HMO's EXCEPT? -Conversion -Defamation -Twisting -Misrepresentation

Groups established to buy insurance

All of the following are eligible groups under Florida law EXCEPT? -Groups established to buy insurance -Members of a credit union -Debtors of a single creditor -Associations of licensed professionals

Dividends

All of the following are primary premium factors EXCEPT? -Expense -Interest -Dividends -Mortality

1-Year Term Insurance option

All of the following are standard life insurance policy nonforfeiture options EXCEPT? -1-Year Term Insurance option -Cash surrender options -Reduced paid-up (permanent) insurance option -Extended Term insurance option

Edna, age 72, nurse (She is over age 70 1/2)

All of the following employed persons who have no employer-sponsored retirement plan would be eligible to set up and contribute to a traditional IRA EXCEPT? -Mirriam, age 26, secretary -Brent, age 40, medical technician -Edna, age 72, nurse -Jack, age 60, plumber

Social clubs

All of the following groups are eligible for group life insurance EXCEPT? -Social clubs -Labor units -Trustee groups

Direct Selling Systems

All of the following methods support the sale of insurance through agents and brokers EXCEPT -Independant agency systems -Career agency systems -Direct selling systems

A major stock-holder employee in a family corporation (no corporations allowed)

All of the following should be eligible to establish a Keogh retirement plan EXCEPT? -A dentist in private practice -Partners in a furniture store -A sole proprietor of a jewelry store -A major stock-holder employee in a family corporation

They are not considered securities contracts

All of the following statements about variable insurance are correct EXCEPT? -They are not considered securities contracts -They are considered insurance contracts -Sellers must hold a registered representative license from FINRA

Policy loan interest rates were set by the office of insurance regulation in 1933 and may not be changed.

All of the following statements are correct about policy loan interest rates EXCEPT? -An adjustable interest rate can be used if the insurance company follows a national corporate bond index. -Policy loan interest rates were set by the office of insurance regulation in 1933 and may not be changed. -An insurance company can charge a fixed rate of interest up to a maximum of 10%, with some restrictions.

It provides a source of income for a meaningful standard of living during retirement

All of the following statements correctly describe the purpose of Social Security EXCEPT? -It provides a source of income for a meaningful standard of living during retirement -It provides basic protection against financial problems accompanying death, disability and retirement -It augments a sound personal insurance plan -It provides retirement and survivor benefits to a worker and the worker's family

They mandate distributions no later than age 70 1/2

All of the following statements regarding Roth IRA's are true EXCEPT? -They provide for tax free accumulation of funds -They limit contributions each year -They mandate distributions no later than age 70 1/2 -They are not available to those in upper-income tax brackets

An employer must make a non elective contribution of 2% of compensation on behalf of each eligible employee.

All of the following statements regarding SIMPLE plans are correct EXCEPT? -An employer must make a non-elective contribution of 2% of compensation on behalf of each eligible employee. -Only employers with no more than 100 employees can establish SIMPLE plans -An employer may establish a SIMPLE plan if another qualified plan is not already in place.

401K

All of the following types of plans are reserved for small employers EXCEPT? -401K -SARSAP's -SIMPLE IRA's -SIMPLE 401K's

A listing of the surgical schedules in which a surgeon is paid

An HMO contract must contain all of the following EXCEPT? -A listing of the surgical schedules by which a surgeon is paid -The premium because it is subject to change -The length of the grace period -Procedures to be followed for emergencies

The amount of death proceeds would be reduced to reflect whatever benefit the premium paid would have purchased at the correct age.

An error in age is discovered after the death of an insured but before any policy death proceeds are distributed. The insured was older than previously assumed. How would an insurance company handle such a situation? -The amount of death proceeds would be reduced to reflect whatever benefit the premium paid would have purchased at the correct age. -No adjustment would be made, because the contestable period has already passed -The beneficiary would be required to pay all underpaid back premiums before the death benefit is received.

Hospitalization

An individual who buys a membership in a prepaid health clinic because the premium is less than an HMO should be aware that the clinic cannot provide? -Outpatient service -Emergency Care -Hospitalization -Ambulatory diagnostic services

Two years

An insurance company has how many years to challenge the validity of a life insurance contract?

Domestic

An insurance company organized and headquartered in Florida is what type of company?

The contract is of Adhesion

An insurance contract is prepared by one party, the insurer, rather than by negotiation between the contracting parties. Which of the following statements explains the characterisitcs of insurance contracts? -The contract is Aleatory -The contract is of Adhesion -The contract is of Acceptance

TRUE

An insurer is considered competent if it is licensed or authorized by the state. TRUE or FALSE?

Preexisting condition (Health status, claims experience, industry, occupation, or geographical locations cannot be used to avoid marketing health insurance. Preexisting conditions may qualify, and if they don't, exclusions can be applied to the policy for a period of time.)

An insurer must actively market individual health insurance in Florida for all the following reasons, EXCEPT? A) Health status B) Claims experience C) Occupation D) Preexisting condition

Moral Hazard

An owner is worried that employees will help themselves to products on the shelf without paying for them. This is an example of what type of hazard?

$75,000

Art, the owner and insured under a $75,000 life policy, is killed in an accident. He had paid total premiums of $26,000. How much of the death benefit will be included in his gross estate for estate tax purposes? -$0 -$26,000 -$49,000 -$75,000

Common Disaster Provision

Christine's policy has a clause that reads as follows: "Should the primary beneficiary and the insured die in the same accident and the primary beneficiary fails to survive the insured by 14 days, it will be assumed that the beneficiary predeceased the insured." Which of the following phrases best describes this clause? -Uniform Simultaneous Death Act -Common Disaster Provision -Secondary Beneficiary Provision

All of the above

Competent parties who can enter into contracts are... -Applicants -Trusts & Estates -Business Entities -All of the above

Major medical policy

Coordination of benefits is permitted against which of the following? A) Medicare supplement policy B) Policy with coverage limited to specified illnesses C) Major medical policy D) Excess insurance policy

TRUE

In regards to Retirement Plans in Florida, Fedral ERISA regulations override Florida law. TRUE or FALSE?

Within 14 days after delivery of the policy (Free Look)

During what period is a new life insurance policy owner entitled to review a policy and return it for a full refund? -Within 30 days of purchase -Within 14 days after delivery of the policy -After receipt, but only with the prior approval of the agent

FALSE

In regards to Term Insurance, cash values build during the specified period. TRUE or FALSE?

Her beneficiary would receive $50,000, if Elaine qualified for the policy as applied for

Elaine signs an application for a $50,000 non medical life policy, pays the first premium and received a conditional insurability receipt. If Elaine were killed in an auto accident two days later... -Her beneficiary would receive $50,000, if Elaine qualified for the policy as applied for -The company could reject the death claim, because the underwriting process was never completed -The company could reject the death claim on the basis that the death was accidental

4

Ellen works part time to supplement her family's income. Last year she earned $6,500 and worked at least part of every month. With how many quarters of coverage will she be credited? -1 -2 -3 -4

FALSE

Express Authority is determined by a principal's conduct. TRUE or FALSE?

The sales agent

Generally, the party that delivers an insurance policy to the new policy owner is? -The insurance company's home office -The sales agent -The underwriter

Health insurance that covers special groups of individuals

Group Blanket Health Insurance is defined as? A) Health insurance that covers special groups of individuals B) Group health insurance issued on an individual basis C) Health insurance that covers any group of individuals D) Health insurance that is subject to individual underwriting

Contributory

Group insurance plans that require employees to pay a portion of the premium are called? -Underwritten -Participatory -Contributory -Shared

Applicant & Insured

In Florida, properly licensed and appointed agents may act as brokers in insurance transactions , in which case they may legally represent who? -Themselves -Applicant & Insured -State office of Insurance Regulation

At moment of birth (All individual and group health policies written on an expense-incurred basis providing coverage for dependents of the insured must provide coverage for a newborn child from the moment of birth.)

In Life Insurance, a Children's Rider covers a newborn at 14 days of age. In Health Insurance, a newborn is covered? A) 48 hours after birth B) 72 hours after birth C) 3 months after birth D) At moment of birth

Term life

In a typical family policy, coverage on the children is usually provided by which of the following? -Whole life -Term life -Endowment plan -Fixed annuity

SEC (Securities & Exchange Commission)

In addition to the state, the organization that regulates variable life and variable annuities is the.. -FTC -NAIC -SEC

Insurer

In an insurance transaction, licensed agents legally represent who? -Applicant -Themselves -Insurer

TRUE

In contrast to traditional whole life insurance policies, with variable life insurance products, contract cash values are not guaranteed. TRUE or FALSE?

The PIA is a determination of the amount equal to the worker's full retirement benefit at the worker's full retirement age.

In determining Social Security retirement benefits, which of the following statements is CORRECT? -Average monthly wages (AMW) are adjusted for inflation -The primary insurance amount (PIA) determines the worker's average indexed monthly earnings (AIME) -The PIA is a determination of the amount equal to the worker's full retirement benefit at the worker's full retirement age.

Maintain a bond of not less than $10,000

In order to sell HMO contracts, and agent must do all of the following EXCEPT? -Keep and renew their appointment -Maintain a bond of not less than $10,000 -Abide by the Unfair Trade Practices Act -Obey all regulations of the Department of Financial Services

FALSE

In regards to Accelerated Death Benefits & Viatical Settlements, an insured who sells an insurance policy to a viatical company usually receives 100% of the policy's face value. TRUE or FALSE?

FALSE

In regards to Conversion Privilege of group term life insurance, an insured employee must convert to the same type of coverage as was provided under the group plan (that is, term). TRUE or FALSE?

TRUE

In regards to Deferred Compensation Plans, they permit a business to provide extra benefits to officers, executives, and other highly paid employees. TRUE or FALSE?

FALSE

In regards to IRA's, Peter inherits $15,000 in IRA benefits from his father, who died in 2008. Peter can set up a tax favored roll over IRA with the money and defer current income tax on the benefits received. TRUE or FALSE?

TRUE

In regards to Life Insurance Premiums, Harold and Billy, both age 25, each buy a whole life policy from the same company. However, Harold has a participating policy, while Billy's policy is nonparticipating. Harold will pay a higher premium. TRUE or FALSE?

TRUE

In regards to Life Insurance Premiums, premiums for group term insurance covering employees are tax deductible, assuming certain requirements are met. TRUE or FALSE?

If the policy is made payable to a named beneficiary, then the creditors can make no claims on the proceeds

In which of the following ways is a beneficiary protected from the creditors of the deceased insured? -The cash surrender of a life insurance policy can be attached by an ordinary creditor. -If the policy is made payable to a named beneficiary, then the creditors can make no claims on the proceeds -The proceeds of an insurance policy can always be claimed by the deceased insured's creditors

Law of Averages

Insurance concept founded on the ability to predict the approximate number of deaths or frequency of disabilities within a certain group during a specific time.

The age of the insured (A LTC insurance policy may not be issued if the premiums to be charged are calculated to increase based solely on the age of the insured.)

It is prohibited that premiums to be charged are calculated to increase based solely on ____________. A) The insured's health status B) The age of the insured C) The length of time insured D) The activities of daily living

As the "sponsor" of the program, her employer collects premiums from her and remits them to the insurance company

Jackie has just signed up to participate in her employer's franchise life insurance program. Which of the following statements is CORRECT? -She may not continue the policy if she terminates the employee -As the "sponsor" of the program, her employer collects premiums from her and remits them to the insurance company -The employer is given a certificate of insurance.

$12,040 ($180 x's 12 months x's 6yrs = $12,960.. $25,000 - $12,960 = $12,040 that is left on his payout to his beneficiary.)

James died after receiving $180 monthly for six years from a $25,000 installment refund annuity. His wife, Lucy, as a beneficiary, now will receive the same monthly income until her payments total? (How do we come to the answer of this equation) -$2,160 -$12,040 -$12,960 -$25,000

$255

Jan, a single, working mother, dies at age 40. Dave, her only son, would receive a one time lump-sum benefit of? -$255 -$500 -$1,000 -$2,555

A joint and full survivor annuity

Joanna and her husband, Tom, have a $40,000 annuity that pays them $200/month. Tom dies and Joanna continues receiving the $200 monthly check as long as she lives. When Joanna dies the annuity payments cease. This is an example of? -An installment refund annuity -A joint and full survivor annuity -A life annuity -A cash refund annuity

Kevin's Estate

Kevin, the insured under a $200,000 life insurance policy, and his sole beneficiary, Lynda, are killed instantly in a car accident. Under the Uniform Simultaneous Death Act, to whose estate will the policy proceeds be paid? -Lynda's Estate -Kevin's Estate -The proceeds will es cheat to the estate -Both Kevin & Lynda's estate equally

Accidents immediately, sickness after 10 days. (Upon reinstatement, accidents are covered immediately, and sickness after 10 days. This avoids the motivation to attempt reinstating a policy once an insured is already sick.)

Kirk has just reinstated an individual A&H policy that had lapsed and wants to know how soon coverage will be in effect for any accident or sickness. You, the agent, would say? A) Accidents immediately, sickness after 10 days. B) Accidents immediately, sickness after 30 days. C) Sickness immediately, accidents after 10 days. D) Sickness immediately, accidents after 30 days.

Continue to increase

Leland elects to surrender his Whole Life policy for a reduced paid-up policy. The cash value of his new policy will... -Decrease gradually -Continue to increase -Be forfeited -Remain the same as in the old policy

$1,000

Life insurance premiums are typically based on what increment of the face value? -$10 -$100 -$1,000 -$10,000

To Mary's estate

Mary names her husband, Rick, as primary beneficiary of her life insurance policy and her 2 children, Pam and Matt, as contingent beneficiaries. Rick dies in March, Pam and Matt are killed in a car accident later that month. Hearing the news, Mary has a fatal heart attack and dies. In this case, Mary's life insurance proceeds will be paid.. -To Rick's estate -To Mary's estate -Equal shares to Rick, Pam and Matt's estates

TRUE

Most state insurance laws consider statements made in an application for an insurance policy to be representations not warranties. TRUE or FALSE?

Per stirpes

Mr. Williams names his son John a beneficiary of his life insurance policy. What designation should he use if he wants to make sure that John's children would receive John's share of the life insurance policy proceeds should John predecease his father? -Per stirpes -Per Ca pita -All my Children

The Buyer's Guide

Publication that some firms (such as insurance companies) are required to give to the prospective buyers in certain jurisdictions to appraise them of all the terms and conditions involved in the purchase. What is this passage describing?

Provide payment protection

Roland is 45 years old and married. He has a son, age 19, a freshman at a local university and a daughter, age 8. Decreasing term insurance could be recommended for Roland in order to accomplish which of the following reasons? -Provide payment protection -Guarantee a college education for the son -Supplement retirement income -Provide a college education fund for the daughter

The amount of the premium is deducted from the policy proceeds paid to the beneficiary

Ron, the insured under a $100,000 life insurance policy, dies during the grace period. What happens, considering that the premium on the policy has not been paid? -The premium due, plus a 10% penalty, is charged against the policy -The amount of the premium is deducted from the policy proceeds paid to the beneficiary -The premium is cancelled, because the insured died during the grace period

The designation of the First Community Church can be contested by any of her relatives who have survived

Sandra has a life insurance policy that states her husband, Gerald, is to receive the full death benefit. If he predeceases her, their 3 children are to share the benefit equally. If her husband and 3 children predecease her, the benefit is payable to the First Community Church. All of the following statements are correct EXCEPT? -The designation of the First Community Church can be contested by any of her relatives who have survived -The First Community Church is the tertiary beneficary -Gerald is the primary beneficiary

$36,000

Sarah, age 65, the owner of a $150,000 whole life policy, decides to surrender the policy and take the $90,000 cash value in a lump sum. Over the years, she has paid a total of $54,000 in premiums. How much, if any, of the payment will be taxed? -$0 -$36,000 -$54,000 -$90,000

Keeping the premium high enough to net a profit

Savings of the HMO system are based on all of the following EXCEPT? -Keeping the premium high enough to net a profit -Volume discounts with hospitals -Encouraging members to see their doctors early

The function of Insurance

Spreads financial risk over a large group to minimize the loss to any one individual.

FALSE

The Buyer's Guide is intended to ensure that buyers obtain the lowest price for the insurance. TRUE or FALSE?

FALSE

The Federal Trade Commission (FTC) directly supervises all insurance marketing activities. TRUE OR FALSE?

Provides coverage to subscribers of HMO's that becomes insolvent

The Florida HMO Consumer Assistance plan... -Helps low income families secure HMO coverage -Provides coverage to subscribers of HMO's that becomes insolvent -Assists consumers in understating their HMO coverage

60 (The insured must wait at least 60 days following the filing of a proof of loss before pursuing any legal action(s) against the insurer.)

The Legal Actions provision preserves the insured's right to bring suit against their own insurer, but the insured must wait at least _____ days before pursuing this action after they have filed a proof of loss? A) 30 B) 45 C) 60 D) 90

Replace the existing system of health care delivery

The Legislature stated that the purpose of HMO's is to do all of the following EXCEPT? -Deliver high-quality care -Provide an alternative method of health care -Replace the existing system of health care delivery

Prior to the presentation of the application (An agent must deliver the Shopper's Guide prior to the presentation of an application or enrollment form, and in the case of direct response solicitations, the Shopper's Guide must be presented in conjunction with any application or enrollment form.)

The Long-Term Care Shopper's Guide must be delivered to the applicant at which of the following times? A) At the time the application is completed B) Prior to completing the application C) When the policy is delivered D) Prior to the presentation of the application

At the time the application is completed (The outline must be delivered to the applicant at the time application is made, however, if the policy is direct response, acknowledgment of receipt or certification of delivery of the outline of coverage must be provided to the insurer.)

The Medicare Outline of Coverage must be delivered to the applicant at which of the following times? A) At the time the application is completed B) Prior to completing the application C) When the policy is delivered D) Within 30 days after the application is completed

FALSE

The National Association of Insurance Commissioners (NAIC) is empowered to prosecute and punish criminal violators in the insurance industry. TRUE OR FALSE?

Received a valid health care provider Certificate from the Agency for Healthcare Administration of Florida

The Office of Insurance Regulation will NOT issue a Certificate of Authority to an HMO until it has? -Received a valid health care provider Certificate from the Agency for Healthcare Administration of Florida -500 perspective members -Deposited capital and surplus in the amount of $1 million -Been inspected and approved the Florida Medical Association

The time of sale or delivery

The Outline of Coverage must be provided at? A) The time of sale or delivery B) The time of application C) The request of the applicant D) Within 30 days following policy delivery

A claim will be paid if the insurer becomes insolvent

The State Guaranty Association guarantees that..

Express Authority

The authority that an insurer gives to its agents by means of the agent's contract is known as -Implied Authority -General Authority -Express Authority

FALSE

The head of a state office of insurance regulation is generally responsible for making insurance laws. TRUE or FALSE

Does not

The loss must not be due to chance. This does or does not describe an element of insurable risk?

The recording method

The method used today to change beneficiaries is known as? -The assignment method -The beneficiary alteration method -The recording method -The change of designation method

25 to 40

The most common gauranteed insurability riders allow additional life insurance to be purchased on the insured within a range of ages. The common age range in which guaranteed insurability is available is from? -25 to 40 -21 to 591/2 -16 to 65

A cross-purchase buy-sell plan

Three business partners individually agree to acquire the interest of a deceased and own life insurance on each of the other partners in the amount of his or her share of the business's buy out value. What is described here is? -An entity buy-sell plan -A cross-purchase buy-sell plan -A stock redemption buy-sell plan

TRUE

To avoid being classified as an MEC, a life insurance policy must satisfy the "7 pay test". TRUE or FALSE?

The first 14 days after the issued policy has been received by the insured

To what period would a 14-day free-look provision apply in Florida? -The first 14 days after the issued policy has been received by the insured -The first 14 days after the policy has been issued by the insurer -The first 14 days after the application has been signed by the applicant

Risk Reduction

Tom buys his wife a $50,000 diamond ring. When she is not wearing it he locks it up in his safe. This is an example of what type of risk?

Risk

Uncertainty regarding financial loss best describes this term?

Service (As service providers, they pay benefits to the provider(s) of health care services rather than to the subscribers.)

Under Health Maintenance and Preferred Provider Organizations, claim payments are made by? A) Blanket B) Cash C) Service D) Reimbursement

Interest-only

Under which option does the insurer hold the death proceeds for a specified time and, at regular intervals, pay the beneficiary interest on the proceeds? -Life-income -Interest-only -Cash Value -Fixed-period

Selection, classification, and rating of risks

Underwriting is a process of? -Evaluation and classification of risks -Selection, classification, and rating of risks -Selection and issue of policies

Life with period certain

What annuity payout option provides for lifetime payments to the annuitant but guarantees a certain minimum term of payments, whether or not the annuitant is living? -Installment refund option -Life with period certain -Joint and survivor -Straight life income

The human life value approach and the needs approach.

What are the two basic approaches that are needed in determining the proper amount of Life Insurance?

Irrevocable Beneficiary

What is the beneficiary designation that can only be changed with the beneficiary's written agreement? -Revocable Beneficiary -Wife of insured -Irrevocable Beneficiary -Per Stirpes

10 day grace period

What is the grace period for paying premiums on HMO contracts? -10 day grace period -30 day grace period -60 day grace period -There is no grace period for HMO contracts

$10,000 (In lieu of revocation of the Certificate of Authority the commission may require the publication of a corrective advertisement, impose an administrative penalty of up to $10,000, or require that the insurer provide an acceptable clarification of the advertisement to each individual applicant.)

What is the penalty if an insurer used a Medicare supplement policy advertisement that violated an unfair trade practice? A) $1,000 B) $5,000 C) $7,500 D) $10,000

3 years or as long as 7

What is the time limit on an expired policy for reinstatement?

Decreasing Term

What type of policy would be best used when the need for protection declines year after year? -Level Term -Decreasing Term -Whole Life

A 1035 exchange

When a cash value life insurance policy is converted into an annuity in a nontaxable transaction, that event is generally known as? -A rollover -A 1035 exchange -A modified endowment -A pension enhancement

Medical vs. non-medical (Home health care is medically driven, may include several different health care professionals, and the goal is to avoid unnecessary hospitalization. Home care is not medical-driven and instead focused on helping the senior with daily activity and feeling safe and independent at home.)

When it comes to choosing between home health care or home care, what is the most significant difference? A) Cost B) Availability C) Medical vs. non-medical D) Goals

Step Rate

When level premium insurance is renewed, the premium amount rises to reflect the increased mortality risk of the insured's older age. What phrase best describes this approach to increasing premiums? -Step Rate -Seniority Rate -Targeted Rate

Within 63 days after the occurrence of a qualifying event

When must a qualified beneficiary give written notice of election of continuation to the insurer? A) Within 30 days after the occurrence of a qualifying event B) Within 31 days after the occurrence of a qualifying event C) Within 60 days after the occurrence of a qualifying event D) Within 63 days after the occurrence of a qualifying event

Free Look

Which Life Insurance provision allows the policyholder to inspect and, if dissatisfied, to return the policy for a full refund? -Probationary Period -Free Look -Waiver of premium

6 months starting the beginning of the 25th month of disability for persons under age 65 (The 6-month open enrollment for a person turning 65 starts the first day of the birthday month as long as the person has purchased Medicare Part B. For a person under age 65 who has been on Social Security disability for 2 years, the 6-month enrollment begins at the beginning of the 25th month.)

Which Medicare open enrollment period is CORRECT? A) 6 months starting the beginning of the 25th month of disability for persons under age 65 B) 3 months before a person's 65th birthday C) 6 months prior to a person's 65th birthday D) 6 months starting the beginning of the 24th month of disability for persons under age 65

Standard health plan (The three basic high deductible plan options are Basic Limited Mandate Health Benefit Plan, Basic HSA Health Benefit Plan, and Basic HSA Limited Mandate Health Benefit Plan which has the highest deductible.)

Which benefit plan offers the lowest deductible? A) Basic limited mandate health plan B) Basic HSA health plan C) Standard health plan D) Limited health plan

Grace Period

Which of the following allows 30 days during which premiums may be paid to keep policies in force? -Reinstatement Clause -Waiting Period -Grace Period

Mortality

Which of the following factors is most important when computing basic premiums for life insurance? -Expense -Mortality -Reserves

Instructions regarding the rule are available from appointed life insurers.

Which of the following is CORRECT about the replacement rule? -The agent has 90 days from the effective date to deliver the Buyer's Guide. -Instructions regarding the rule are available from appointed life insurers. -Up to 30 days is allowed for a full refund

A group policy must provide conversion rights, with evidence of insurability, to an employee or member whose coverage under the group policy has been terminated

Which of the following is INCORRECT with regard to conversion of group health insurance? A) A converted policy is not required to provide benefits in excess of the insurance under the group policy from which conversion is made B) The converted policy must cover the employee or member and his/her dependents who were covered by the terminated policy C) A group policy must provide conversion rights, with evidence of insurability, to an employee or member whose coverage under the group policy has been terminated D) The converted policy may not exclude, as a preexisting condition, any condition covered by the group policy

Compensation paid to an agent will be the same regardless of health status or claims experience (Compensation paid to an agent can vary because of health status, claims experience, industry, occupation, or geographic area of the small employer if the percentage of premium does not vary due to those factors.)

Which of the following is NOT a prohibited activity for a small employer carrier or agent? A) The agent discourages a small employer to apply for coverage due to the company's health status B) Compensation paid to an agent will be the same regardless of health status or claims experience C) Small employer terminates representation with an agent because the agent placed the employer's coverage with a limited carrier due to claims experience D) An agent suggests a small employer exclude two employees from benefits because of their job

The claims experience of the small employer is excessive (A small employer carrier does not need to offer coverage to small employers who are not physically in their service area, or to employees who do not live or work in the service area, or the carrier cannot deliver proper service in the area.)

Which of the following is NOT an acceptable reason for denying coverage? A) Small employer is not physically located in the carrier's service area B) The claims experience of the small employer is excessive C) Carrier is unable to offer coverage due to obligations to existing contracts D) Employee does not work or reside in the service area

Any group eligible for group auto insurance

Which of the following is NOT an eligible group for health insurance? A) Teachers and students B) Fraternal C) Any group eligible for group auto insurance D) Blanket

An existing policy is subjected to a loan of 10% of its value

Which of the following is NOT considered to be an element of replacement? -The agent knows a new policy will take the place of an existing policy -An existing policy is subjected to a loan of 10% of its value -An existing policy is allowed to lapse

Insurers must pay benefits covered under Workers' Compensation or Veterans Administration benefits (Insurers are not required to pay benefits covered under Workers' Compensation or Veterans Administration benefits since these are usually free.)

Which of the following is NOT correct concerning required provisions? A) Newborns are covered immediately B) Insurers will not pay twice for the same claim C) Insurers must pay benefits covered under Workers' Compensation or Veterans Administration benefits D) Insurers must offer coverage for alcoholism and drug dependency

The policy owner must notify the department of cancellation

Which of the following is NOT required when a group life insurance policy is cancelled? -The policy owner must notify the department of cancellation -The insurance company must notify the group members -The policy owner must notify the group members

Personal liability insurance

Which of the following is NOT subject to minimum standards of benefits? A) Major medical expense insurance B) Disability income protection insurance C) Personal liability insurance D) Limited benefit insurance

The policy is renewable at the insured's option

Which of the following is TRUE with regard to renewability of individual health insurance? A) The policy is renewable at the insurer's option B) The policy is renewable at the insured's option C) The policy is not renewable after a claim D) The policy is renewable only for one year

Death from War

Which of the following is a common life insurance policy exclusion? -Death by commercial aviation -Death from War -Death by accidental means -All of the above

Conditional

Which of the following is a distinguishing characteristic of an insurance contract? -Consideration -Conditional -Offer & Acceptance

Pays dividends to policy owners

Which of the following is a requirement of a participating life insurance policy? -Pays dividends to stockholders -Assesses premiums against stockholders -Pays dividends to policy owners

It must have been in existence for 2 years or more

Which of the following is a requirement that a professional association must meet to obtain group insurance? -It must have at least 200 members that participate -It must have been in existence for 2 years or more -Its members must contribute premiums on a strictly volunteer basis

Initial Premium

Which of the following is an example of legal consideration? -Politeness -Legal Purpose -Initial Premium

Any group health plan or health insurance coverage that provided coverage on March 23, 2010

Which of the following is considered a grandfathered plan? A) Any group health plan or health insurance coverage that provided coverage after March 23, 2010 B) Major medical plans that provided coverage after March 23, 2010 C) Major medical plans sold on a health exchange D) Any group health plan or health insurance coverage that provided coverage on March 23, 2010

Medicare supplements must have a 10-day free-look period (The free-look period for Medicare supplements is 30 days.)

Which of the following is false with regard to Medicare supplement policies? A) Medicare supplements may not duplicate Medicare benefits B) Medicare supplements must be delivered with an outline of coverage C) Medicare supplements must have a 10-day free-look period D) A preexisting condition may apply to a condition for which medical advice was given or treatment was recommended by or received from a physician within 6 months before the effective date of coverage

Advertising may not be used by an insurer until the insurer receives approval from the office (An insurer may immediately begin using advertising upon filing, subject to subsequent disapproval by the office)

Which of the following is false with respect to advertising of health insurance? A) Advertising must be filed with the office B) Advertising may not be used by an insurer until the insurer receives approval from the office C) An insurer may start using advertising once it has been submitted to the office D) Following receipt of a disapproval, the insurer must stop using of the disapproved advertising

Autism spectrum disorder

Which of the following is required as optional coverage for individual and group health insurance? A) Diabetes treatment B) Cancer screenings C) Newborn child coverage D) Autism spectrum disorder

Amount and frequency of premium payments

Which of the following is stated in the consideration clause of a life insurance policy? -Amount and frequency of premium payments -Insured's risk classification -Benefits payable upon the insured's death

No Minimum (It can be 1 person)

Which of the following is the CORRECT number of lives required in Florida for a group life insurance company? -3 -8 -10 -No Minimum

Licensed health agent

Which of the following persons may solicit applications for HMO coverage? -Licensed health agent -Consulting actuary -Company attorney -Financial adviser

The employee's rights to funds or benefits, contributed by the employer, should the employee leave that employer.

Which of the following phrases best describes vesting? -The employee's rights to funds or benefits, contributed by the employer, should the employee leave that employer. -The time at which the worker meets the eligibility requirements for plan participation. -The age at which an employee must begin to make withdrawals from retirement plans.

There is a limit on employee deferrals.

Which of the following statements about 401k plans is CORRECT? -There is a limit on employee deferrals. -All of a company's employees must participate in the plan. -An employee's deferred contributions become nonforfeitable according to the plan's vesting schedule.

Most of the investments backing equity index contracts are similar to those of non-indexed contracts

Which of the following statements best describes equity index contracts? -Equity interest contracts are always backed by investments in stocks -Most of the investments backing equity index contracts are similar to those of non-indexed contracts -Cash values of equity indexed contracts mirror all changes in stock market values.

Policy dividends are an intentional return of a portion of the premiums paid

Which of the following statements best describes life insurance policy dividends? -Policy dividends provide policyowners with a level, known annual cash inflow -Policy dividends are an intentional return of a portion of the premiums paid -Policy dividend represent earnings to shareowners who hold stock in insurance

Earnings of the plan are taxable to the employee only when the employee receives benefits.

Which of the following statements correctly describes the tax advantage of a qualified retirement plan? -Employer contributions are not taxed when they are paid out to the employee. -Earnings of the plan are taxable to the employee only when the employee receives benefits. -Earnings of the plan are only taxable if the employee voluntarily terminates participation in the plan.

The policy owner must expect to suffer a loss when the insured dies or becomes disabled

Which of the following statements describes an insurable interest? -The beneficiary, by definition, has an insurable interest in the insured -The insured must have a personal or business relationship with the beneficiary -The policy owner must expect to suffer a loss when the insured dies or becomes disabled

The benefit amount paid per day is capped (The dread disease policy is a limited benefit policy for which benefits are paid as expense incurred, per diem, or a principle sum, and services incurred as a result of human and/or non-human organ transplant are provided.)

Which of the following statements is CORRECT about a dread disease policy? A) It is a comprehensive benefit policy B) It does not include benefits for services as a result of a lung transplant C) Benefits are not paid on an expense-incurred basis D) The benefit amount paid per day is capped

In a cash refund annuity , the annuitant's beneficiary always receives an amount equal to the beginning annuity fund plus all interest

Which of the following statements regarding annuity payout options is NOT correct? -Under a straight life annuity option, all annuity payments stop when the annuitant dies -In a cash refund annuity , the annuitant's beneficiary always receives an amount equal to the beginning annuity fund plus all interest -A period certain annuity guarantees a definite number of payments

All beneficiaries must expressly approve any assignments of life insurance policies.

Which of the following statements regarding the assignment of a life insurance policy is NOT correct? -Absolute assignment involves a complete transfer -Under a collateral assignement, policy proceeds in excess of the collateral amount pass to the insured's beneficiary -All beneficiaries must expressly approve any assignments of life insurance policies.

Level Term

Which of the following terms bests describes a life insurance policy that provides a straight $100,000 of coverage for a period of 5 years? -Level Term -Whole Term -Permanent Level

Waiver

Which of the following terms is used for the voluntary relinquishment of a known right? -Adhesion -Estoppel -Waiver

Modified Whole Life

Which of the following whole life insurance policies attempts to make insurance premiums more manageable by offering lower premiums during the first few years following issue? -Indexed whole life -Modified whole life -Intermediate premium whole life

Entire Contract Clause

Which provision of a life insurance policy states that the application is part of the contract? -Consideration Clause -Entire Contract Clause -Insuring Clause

Require an applicant for a Medicare supplement policy to prove that no other health policies exist (The agent must inquire and make every reasonable effort to identify whether a prospective applicant or enrollee for Medicare supplement insurance already has accident and sickness insurance and the types and amounts of any such insurance, but the applicant cannot be forced to prove it.)

Which statement about Medicare marketing standards is FALSE? A) Every insurer must establish an audit program to verify compliance B) It is an unfair trade practice to frighten a person into buying Medicare supplement policies C) Require an applicant for a Medicare supplement policy to prove that no other health policies exist D) It is unacceptable to mislead a person into taking out a policy with another insurer

Intermediate care (Intermediate care provides assistance with activities of daily living and some health services and nursing supervision, but not constant nursing care.)

Which type of care provides assistance with activities of daily living and some health services and nursing supervision? A) Skilled care B) Intermediate care C) Custodial care D) Personal care

TRUE

Whole life insurance is designed to mature at age 100. TRUE or FALSE?

At the inception of the policy

With life and health contracts, when must an insurable interest exist?

Per unit of benefits, group insurance is generally available at rates lower than those of individual plans.

With regard to group insurance plans, which of the following statements is CORRECT? -Employees generally pay for the entire premium -Per unit of benefits, group insurance is generally available at rates lower than those of individual plans. -Group insurance plans are a means for employers to provide a benefit for their key employees, without having to include all of their employees.

6

With three partners in a business, how many life insurance policies would be required to insure a cross-purchase buy-sell plan? -6 -3 -2 -12

63 (Written application for the converted policy must be made and the first premium must be paid to the insurer, not later than 63 days after termination of the group policy.)

Within how many days must the first premium be paid for the converted policy after the group policy was terminated? A) 26 B) 49 C) 63 D) 90

Risk Avoidance

Won't fly an airplane, never drives a car and keeps money out of the stock market is known as what type of risk ?