Part 4

All of the following statements concerning workers compensation are correct EXCEPT: a) A worker receives benefits only if the work related injury was not his/her fault b) Workers compensation laws are established by each state. c) All states have workers compensation. d) Benefits include medical, disability income, and rehabilitation coverage.

a) A worker receives benefits only if the work related injury was not his/her fault

An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe? a) Conditional b) Contingent c) Aleatory d) Unilateral

a) Conditional

A deductible is: a) A nominal fee for the use of an insurer's services b) A specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits. c) A percentage of the medical bill the insured must pay before the services are rendered. d) An insurer's obligation to the service provider.

b) A specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits.

The insurance policy, together with the policy application and any added riders form what is known as: a) Contract of adhesion b) Whole life policy c) Entire contract d) Certificate of coverage

c) Entire contract

#38. All of the following are true regarding insurance policy loans EXCEPT a) The policy will terminate if the loan plus interest equals or exceeds the cash value of the policy. b) Policyowners can borrow up to the full amount of their whole life policy's cash value. c) Policy loans can be made on policies that do not accumulate cash value. d) The amount of the outstanding loan and interest will be deducted from the policy proceeds when the insured dies.

c) Policy loans can be made on policies that do not accumulate cash value. The policy loan option is only found in policies that contain cash value.

An insured misstates her age at the time the life insurance application is taken. This misstatement may result in: a) Adjustment in the amount of death benefit b) No change whatsoever c) Automatic Lapse d) Recession of the policy

a) Adjustment in the amount of death benefit

#34. All of the following are true regarding a decreasing term policy EXCEPT a) The payable premium amount steadily declines throughout the duration of the contract. b) The death benefit is $0 at the end of the policy term. c) The contract pays only in the event of death during the term and there is no cash value. d) The face amount steadily declines throughout the duration of the contract.

a) The payable premium amount steadily declines throughout the duration of the contract. Premiums remain level with a decreasing term policy; only the face amount decreases.

Which of the following is true for both equity indexed annuities and fixed annuities? a) They have a guaranteed minimum interest rate b) They are both tied to an equity index c) Both are considered to be more risky than variable annuities d) They invest on a conservative basis

a) They have a guaranteed minimum interest rate

#31. What is the purpose of key person insurance? a) To insure retirement benefits are available to all key employees b) To maintain an account that insures the owner of a company remains solvent c) To lessen the risk of financial loss because of the death of a key employee d) To provide health insurance to the families of key employees

c) To lessen the risk of financial loss because of the death of a key employee A business can suffer a financial loss because of the premature death of a key employee that has specialized knowledge, skills or business contacts. A business can lessen the risk of such loss by the use of key person insurance.

All of the following are duties and responsibilities of producers at the time of application EXCEPT: a) Explain the nature and type of any receipt the producer is giving to the applicant. b) Probe beyond the stated questions if the producer feels the applicant is misrepresenting or concealing information. c) Check to make sure that there are no unanswered questions on the application d) Change any correct statement on the application by personally initiating next to the corrected statement.

d) Change any correct statement on the application by personally initiating next to the corrected statement.