Mod 04-02

Which of the following terms may be used when describing the premiums for a life insurance policy advertised in Alabama? A. Savings B. Profit C. Deposit D. None of these

D. none of these

A disability elimination period is best described as a: A. time deductible B. dollar deductible C. Eligibility period D. Probation period

A. time deductible

All of these are considered to be a benefit under Social Security, EXCEPT: A. Survivorship B. Unemployment C. Disability D. Retirement

B. Unemployment

Medicare eligibility is typically based on: A. Age B. Income C. Health D. Employment

A. Age

Which of the following statements is NOT correct? A. Agents are allowed to waive certain policy provisions B. Agents are not allowed to waive certain policy provisions

A. Agents are allowed to waive certain policy provisions

A characteristic of preferred provider organizations (PPOs) would be: A. Discounted fees for the patient B. Not allowed to see out of network physicians C. Physicians are paid on a capitation basis D. A primary care physician is required

A. Discounted fees for the patient

K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n) A. Installment Refund annuity B. Joint Refund annuity C. Straight Refund Annuity D. Equal Value annuity

A. Installment Refund annuity

What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive? A. Primary Insurance Amount (PIA) B. Total taxes paid into FICA C. Number of dependents D. State of residence

A. Primary Insurance Amount (PIA)

Kris is receiving annuity payments that has not yet paid an amount which is equal to the purchase price of the annuity. If she were to die, her beneficiary would continue receiving annuity payments until this amount has been reached. What type of annuity is this? A. Refund life annuity B. Survivorship life annuity C. Life annuity with period certain D. Straight life annuity

A. Refund life annuity

Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary? A. Split-dollar B. Employer purchase plan C. Key employee plan D. Deferred compensation plan

A. Split-dollar

Which entity is responsible for the majority of regulations imposed on the insurance industry? A. State gov B. Local gov C. Federal gov D. National Association of Insurance Commissioners (NAIC)

A. State gov

The period of time during which a surviving spouse does not qualify for Social Security survivor or retirement benefits is called: A. The Blackout Period B. The Elimination Period C. The Waiting Period D. The Restricted Period

A. The Blackout period

All of these are correct concerning group life insurance, EXCEPT: A. Whole life insurance is the form of insurance typically used in group life insurance B. Term Life insurance is the form of insurance typically used in group life insurance C. Group life insurance can cover a spouse and dependents D. Group life insurance can be converted to individual coverage upon employment termination

A. Whole life insurance is the form of insurance typically used in group life insurance

To be eligible for Social Security disability benefits, an employee must be unable to perform: A. any occupation B. His/Her occupation C. any occupation the reflects the employee's education level D. any occupation that the employee is qualified and willing to do

A. any occupation

The guarantee of insurability option provides a long term care policy owner the ability to: A. buy additional coverage at a later date B. add the insured's spouse at a later date C. Pay the same premiums for life D. Cancel the policy at anytime

A. buy additional coverage at a later date

A life insurance beneficiary has chosen a settlement option in which the principal never decreases unless the beneficiary makes a withdrawal. This settlement option is called the: A. interest only option B. lump sum option C. Fixed amount option D. life income option

A. interest only option

A disability policy in Alabama that is paid on a monthly basis is required to have a grace period of: A. 7 days B. 10 days C. 14 days D. 31 days

B. 10 days

What is a certificate of insurance? A. A certificate that contains a copy of the application and attached policy B. A certificate issued to each individual covered by the group life insurance C. A certificate issued to the employer that serves as the master policy D. A certificate that is filled out when a claim is filed

B. A certificate issued to each individual covered by the group life insurance

A "reimbursement policy" pays what amount of covered long term care expenses? A. All expenses regardless of the policy limits B. Actual covered expenses up to the daily maximum C. A daily dollar amount regardless of the actual incurred expenses D. The usual, customary, and reasonable expenses regardless of the policy limits

B. Actual covered expenses up to the daily maximum

Under a trustee group life policy, who would be eligible for a certificate of coverage? A. Corporation B. Employee C. Employer D. Labor Union

B. Employee

At certain ages or dates, an insured can increase the stated benefit (within limits) under their disability income policy, regardless of health. Which policy rider best describes this? A. Cost of living adjustment B. Future income option C. Rehabilitation Option D. Social Security adjustment

B. Future income option

Jackie has just enrolled in Medicare Part B for the first time. He cannot be refused or rated for a Medicare supplement policy as long as he applies for coverage within 6 months of enrolling in Part B what is this requirement called: A. Optional Issue B. Guaranteed Issue C. Conditional Issue D. Mirroring Medicare

B. Guaranteed issue

In life insurance, the needs approach is used mostly to establish: A. Which type of life insurance a client should apply for B. How much life insurance a client should apply for C. Which company a client should use when applying for insurance D. What the maximum amount the client can spend on life insurance

B. How much life insurance a client should apply for

Periodic benefit payments must be made no less frequently than: A. weekly B. Monthly C. Quarterly D. Annually

B. Monthly

Terry owns a 20 year life annuity certain and died before the period of 20 years has elapsed. What happens to any monies left? A. Paid to the beneficiary in a lump sum payment B. Paid to the beneficiary for the rest of the certain period C. Forfeited to the insurance company D. Paid to Terry's estate

B. Paid to the beneficiary for the rest of the certain period

An Accidental Death and Dismemberment (AD&D) policy will pay the ______ upon the accidental loss of two of the insured's primary parts. A. Capital Sum B. Principal Sum C. Primary Sum D. Accelerated Sum

B. Principal Sum

A Medical Information Report (MIB) report may disclose which of the following? A. Prior preferred rating B. Prior use of marijuana C. Prior lapsing of policy D. Prior bankruptcy judgement

B. Prior use of marijuana

Which provision allows a portion of any used medical benefit to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time? A. Reimbursement benefit B. Restoration of unused benefit C. Restoration of used benefit D. Medical offset benefit

B. Restoration of unused benefit

A contract owner terminates an annuity before the income payment period begins. The owner will then receive A. half of the current surrender value B. the current contract surrender value C. the premiums paid to date D. nothing

B. The current contract surrender value

Which of the following best describes how preadmission certification is used? A. Used to assist in underwriting B. Used to prevent nonessential medical costs C. Used to minimize hospital lawsuits D. Used to help process claims

B. Used to prevent nonessential medical costs

According to Alabama law, a minor: A. age 14 can contract for life, health, and accident insurance on their own lives B. age 18 can begin receiving life insurance benefits up to $3,000 per year C. age 15 can begin receiving life insurance death benefits up to $3,000 per year D. age 16 can contract for life insurance, but not health and accident insurance

B. age 18 can begin receiving life insurance benefits up to $3,000 per year

Under a health maintenance organization HMO service providers are paid a fixed monthly fee for each member. This concept is called: A. self-insurance B. capitation C. fee for service D. open panel

B. capitation

The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the: A. corridor deductible B. initial deductible C. stop loss deductible D. coinsurance deductible

B. initial deductible

The minimum grace period for a life insurance policy sold in Alabama is: A. 10 days B. 14 days C. 30 days D. 45 days

C. 30 days

What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan? A. 30% B. 40% C. 50% D. 60%

C. 50%

Jackie took out a Medicare supplement insurance policy and also has a preexisting condition. In this situation, a preexisting condition is defined as a condition for which medical advice was given or received within _____ of the effective date of coverage. A. 1 month B. 3 months C. 6 months D. 12 months

C. 6 months

Peggy surrenders a permanent life policy with a cash value of $15,000 and then outstanding policy loan of $5,000. If she chooses the reduced paid-up option what will be the result? A. A Paid-up term policy purchased with $10,000 B. A paid-up permanent policy purchased with $15,000 C. A Paid-up permanent policy purchased with $10,000 D. A Paid-up term policy purchased with $15,000

C. A paid-up permanent policy purchased with $10,000

Which of the following statements concerning a life insurance policy is TRUE? A. An issued policy can never be changed B. An issued policy can be changed by an authorized company officer without the policyowner knowing it C. An issued policy can never be changed by a producer D. A policy can be changed by the producer if the policyowner requests the change in writing

C. An issued policy can never be changed by a producer

how is the Alabama life and disability insurance Guaranty Association able to pay claims for insolvent insurers? A. Policy fees B. State and Local taxes C. Assessments against each other admitted insurers in Alabama D. Licensing fees charged to new producers

C. Assessments against each other admitted insurers in Alabama

Paul has a major medical policy which begins with basic first dollar coverage that pays up to its limits, then he must pay a certain dollar amount of covered expenses before the major medical portion steps in. The dollar amount Paul must pay is called the : A. carryover deductible B. Internal limit C. Corridor deductible D. Stop loss limit

C. Corridor deductible

Information obtained from a phone conversation to the proposed insured can be found in which of these reports? A. Agent's report B. MIB report C. Inspection report D. Attending physician's report

C. Inspection report

An individual unable to perform two or more activities of daily living (ADLs) will trigger coverage from a ____ policy. A. limited B. Franchise C. Long Term Care (LTC) D. Medicare

C. Long Term Care (LTC)

What does Disability Buy-Sell insurance provide? A. Periodic Payments B. Death Benefits C. Lump-sum benefit D. None of these

C. Lump-sum benefit

Replacement regulation in Alabama does NOT apply to: A. decreasing term life insurance B. adjustable life insurance C. universal life insurance D. credit life insurance

D. credit life insurance

Which of the following limits an insurance company's total exposure under a major medical policy? A. Health savings accounts (HSA) and Flexible savings accounts (FSA) B. Carryover provision and stop-loss provision C. Maximum lifetime benefit and coinsurance provision D. None of these

C. Maximum lifetime benefit and coinsurance provision

Katherine is a retiree and was recently hospitalized for 10 days. Which type of insurance policy would best cover her for excess hospital expenses? A. Major Medical B. Long Term Care C. Medicare Supplement D. Medicaid

C. Medicare Supplement

Which of these statements concerning COBRA is correct? A. Under COBRA, terminated employees must provide evidence of insurability in order to convert to individual coverage B. Under COBRA, group coverage on a terminated employee ends on the date of termination C. Under COBRA, dependents of employees covered by group plans have the same extension and conversion privileges available to them as the employee D. All of these

C. Under COBRA, dependents of employees covered by group plans have the same extension and conversion privileges available to them as the employee

What is the purpose of the U.S.A. Patriot Act? A. detect and deter fraud B. detect and deter alien insurance companies C. detect and deter terrorism D. detect and deter misrepresentations

C. detect and deter terrorism

In Alabama, an insurer who violates state laws for the payment of insurance commissions may be fined up to: A. the actual amount of the commissions paid B. twice the amount of the commissions paid C. three times the amount of the commissions paid D. four times the amount of the commissions paid

C. three times the amount of the commissions paid

An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a: A. $125,000 individual whole life policy B. $25,000 modified whole life policy C. $25,000 individual term life policy D. $25,000 individual whole life policy

D. $25,000 individual whole life policy

Required Provision 3 states that the minimum grace period for all policies (except those with monthly or weekly premium modes is: A. 7 days B. 14 days C. 21 days D. 31 days

D. 31 days

Beginning at what age can an IRA owner start making withdrawals and NOT be subjected to a tax penalty? A. 70 1/2 B. 65 C. 62 D. 59 1/2

D. 59 1/2

Which provision is NOT a requirement in a group life policy? A. Conversion B. Grace Period C. Incontestable period D. Accidental

D. Accidental

Which of these statements is true regarding the Medical Information Bureau (MIB)? A. Reports given to member companies contain information regarding the insurability of insurance applicants B. The proposed insured must give authorization before information can be given to member companies C. The MIB is a nonprofit agency which aids in underwriting insurance policies D. All the above

D. All the above

Traditional individual retirement annuity (IRA) distributions must start by: A. age 59 1/2 B. age 65 C. April 1st of the year following the year the participant attains age 59 1/2 D. April 1st of the year following the year the participant attains age 70 1/2

D. April 1st of the year following the year the participant attains age 70 1/2

A 66 year old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary? A. Medicaid B. Long Term Care C. Medicare D. Her group health plan

D. Her group health plan

Which of these will NOT result in an increase in life insurance policy dividends? A. Lower Expenses B. Higher interest earnings C. Lower Mortality D. Higher Reserves

D. Higher Reserves

Which of the following best describes a Health Maintenance Organization (HMO)? A. Operates on a fee-for-service basis B. Members select preferred providers C. Consists of small employees who have joined to provide health benefits for their employees D. Provides full medical services that stress preventative medicine

D. Provides full medical services that stress preventative medicine

Which of the following statement BEST defines usual, customary, and reasonable (UCR) charges? A. The maximum premium an insurer can charge for their health insurance based on geography B. The maximum amount an employer can contribute to a contributory health plan C. The maximum deductible an insured can be charged D. The maximum amount considered eligible for reimbursement by an insurance company under a health plan

D. The maximum amount considered eligible for reimbursement by an insurance company under a health plan

An insurance company licensed to do business in Alabama, but incorporated in another state is called: A. a nonadmitted company B. a domestic company C. an alien company D. a foreign company

D. a foreign company