Primerica Life Insurance Practice Questions (w/out multiple choice)
The type of insurance company organized to return any surplus money to its policyholders is known as what?
Mutual Company
Insurers are classified according to the legal form of their ownership. The type of insurer organized to pay dividends to its policyholders is
Mutual Company.
Which document helps to insure full and fair disclosure to the recipient of a policy?
Outline of Coverage
An insurer has filed a new rate with the Commissioner, and is waiting for a reply. The commissioner hasn't responded yet. After how many days can the insurer apply the new rate :
10 days
How many days must an existing insurer provide policy owners with a policy summary?
10 days
Under HIPAA, how many months of creditable coverage must a new employee have earned to not have a pre-existing condition exclusion in the new plan?
12 months
Under special circumstances, continuing education requirements may be extended beyond the 2 year period for a maximum period of
12 months
When a producer's residence or business address changes, the Insurance Division must be notified within
30 days.
b)Express Authority Express powers are written into the contract between the insurer and the agent.
31. The authority granted to an agent through the agent's contract is referred to as a)Absolute Authority b)Express Authority c)Apparent Authority d)Implied Authority.
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply
5 days
Once the person meets the stringent requirements for disability benefits, how long is the waiting period under Social Security before any benefits will be paid?
5 months
How many eligible employees must be included in a contributory plan?
75%
The maximum amount than can be contributed to an MSA is ____ of the high-deductible plan for individuals.
75%
If claim made on policy during grace period, an insurer is allowed to deduct overdue premium and to charge interest. What is maximum allowed interest?
8%
Regarding the primary differences between a traditional IRA and a Roth IRA, which of the following statements is not accurate?
A Roth IRA grows tax deferred.
If a policy has a 3-year pre-existing condition clause, this indicates that an insured will not be covered for all of the following EXCEPT
A congenital condition of which the client was not aware.
When Jeremiah applied for a life insurance policy, the agent informed him that a medical exam would be required. The exam may be completed by
A paramedic or examining physician at the insurer's expense.
Which of the following would automatically qualify for Medi-Cal benefits?
A person receiving Supplementary Security Income assistance
Concerning insurance, the definition of a fiduciary is
A person who is responsible for handling insurance premiums for the insurer
What are the four elements of an insurance contract?
Agreement (offer and acceptance), consideration, competent parties, and legal purpose.
2. Waiver
An insurance company receives an application with some information missing and issues the policy anyway. What is this called? (Choose from the following options) 1. Aleatory 2. Waiver 3. Estoppel 4. Subrogation
At age 30, Tom wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit Tom's needs?
Adjustable Life
What are the members of the Medical Information Bureau required to report?
Adverse medical information about individuals
When risks with higher probability of loss are seeking insurance more often than other risks, this is known as what?
Adverse selection
Which of the following describes the process of policy delivery?
After the insurer receives application, it is forwarded to the underwriting department. After the application is approved and the policy is issued the policy is then delivered by person or by mail
Which of the following describes the transfer of a legal right or interest in an insurance policy?
Assignment.. Assignment is the transfer of a legal right or interest in an insurance policy. In property and casualty insurance, assignments of policies usually are valid only with the prior written consent of the insurer.
Social security was created to protect against all the following except a.disability b.sickness in old age c.bad investment choice d.premature death
Bad investment choice
What type of benefit plan is a managed plan that is developed in conjunction with the Small Employer Carrier Advisory Committee?
Basic Health Care Plan
A dental plan that provides coverage based upon a specified maximum scheduled amount for each procedure and pays on a 'first dollar' basis with no deductible or coinsurance is a
Basic or scheduled plan.
Mr. Raines is the recipient of an Accidental Death and Dismemberment (AD&D) policy purchased by his employer. The policy pays triple indemnity in case of accidental death. If Mr. Raines died 2 months after an accident, as a result of an accident stipulated in the policy, how will the benefits paid be taxed?
Benefits received are considered income tax free.
Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policy owner?
Cash surrender
What does "liquidity" refer to in a life insurance policy?
Cash values can be borrowed at any time
Which of the following would be considered an illegal inducement to purchase insurance?
Confirming future dividends in a life insurance proposal
If a policy that is issued in Oregon covers a person who resides in another state and who has a claim outside the state of Oregon, the insurance company must:
Conform to the statutes of the state where the policyholder lives.
The type of policy that can be changed from one that does not accumulate cash value to one that does, is a:
Convertible Term Policy.
Which is true about the cash surrender nonforfeiture option?
Funds exceeding the premium paid are taxable as ordinary income.
Annually renewable term policies provide a level death benefit for a premium that
Increases annually.
Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?
Indemnity
Which type of hospital expense policy pays a fixed amount each day that the insured is in a hospital?
Indemnity
Credit Life insurance
Insures the life of a debtor
When must an IRA be completely distributed when a beneficiary is not named?
December 31 of the year that contains the fifth anniversary of the owner's death.
A 12-year-old child applies for a life insurance policy. The applicant excels in school and leads a very healthy lifestyle. What risk classification would this applicant most likely receive?
Declined
When a life insurance policy is cancelled and the insured has selected the extended term insurance option, the cash value will be used to purchase term insurance that has a face amount
Equal to the original policy for as long a period of time that the cash values will purchase.
The policy, in combination with the application, is joined together into one entity called the
Entire Contract
What life insurance policy provision states that both the policy and a copy of the application form the contract between the policyowner and the insurer?
Entire contract
What are the three types of agent authority?
Express, implied, and apparent.
Violation of unfair discrimination law may result in all of the following penalties EXCEPT
Fines of up to $1,000 for each act.
How many pints of blood will be paid for by Medicare Supplement core benefits?
First 3
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the ?
Insuring clause
Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?
Insuring clause
Which settlement option allows the usurer to retain the face amount but pay some income based on gain in the proceeds to the beneficiary at regular intervals
Interest only
The policy mown we wants to make sure that upon death the life policy will pay a portion of the polio reds annually to his spouse but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policy owner choose
Interest only option
An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments & expense factors, the cash values could change from those shown in the policy at issue time. The policy is an:
Interest-sensitive whole life policy.
If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy?
It is only taxable if the cash value exceeds the amount paid for premiums
Which of the following is NOT true regarding the accumulation period of an annuity ?
It would not occur in a deferred annuity
Insurance is a contract that protects the insured from what?
Loss
The reduction, decrease, or disappearance of value of the person or property insured in a policy is known as what?
Loss
What is the deadline for admitted insurers in California to file their annual financial reports?
March 1st.
What type of benefit helps to pay for accidental injuries that are not severe enough to qualify as disabilities?
Medical Reimbursement Benefit
50 or fewer
Medical savings accounts are only available to groups of how many employees?
The Physicians and Surgeons Equipment Floater in NOT intended for which of the following?
Medical supplies located in a hospital... This coverage form protects individuals in the medical or dental profession for loss to valuable medical and dental equipment, materials and supplies, including office equipment and furniture, and similar property of others. Coverage is not intended for hospitals, schools or other institutions.
Can a group that is formed for the sole purpose of obtaining group insurance qualify for group coverage?
No, the group must be formed for a purpose other than obtaining group insurance.
Can a group that's formed for the sole purpose of obtaining group insurance qualify for group coverage?
No. The group must be formed for a purpose other than obtaining group insurance
The cash value under a MEC accumulates
On a tax-deferred basis.
Misrepresentation
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of
Annually Renewable Term
One Year Term
50 or more
One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups of
All of the following types of distributions are considered exceptions to the early rule ans therefore are not subject to the penalty tax EXCEPT
Participants Debt
Which of the following rider would not cause the death benefit to increase
Payor Benefit Rider
Which of the following riders would NOT cause the Death Benefit to increase?
Payor Benefit Rider
Three time periods are common in medical expense policies. Which of the following is the normal chronological order of their occurrence?
Probationary period - Waiting Period - Benefit Period
Which of the following is NOT consideration on the part of an insured ?
Promise to submit timely claims
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of
Rebating.
Which non-forfeiture option provides coverage for the longest period of time
Reduced paid-up
Which nonforfeiture option provides coverage for the longest period of time?
Reduced paid-up
An insured pays 1200 annually for her life life insurance premium. The insured applies this years 300 worth of accumulation dividends to the next years premium thus reducing it to 900. What option does this describe
Reduction of premium
Which of the following is true about license reinstatement?
Reinstatement fees may be double the unpaid renewal fee
Which of the following is true about license reinstatement?
Reinstatement fees may be double the unpaid renewal fee.
What are the strategies used by underwriters to prevent adverse selection?
Restriction of coverage, refusal to accept a risk, and accepting a risk at a higher rate.
An insurance policy that only requires a payment of premium at its inception and no further premiums contributions, and in addition to providing insurance protection for the life of the insured, endows at the insured's age 100, is called
Single premium whole life
An insurance policy that only requires a payment of premium at its conception, provides insurance protection for the life of the insured, & matures at the insured's age 100 is called:
Single premium whole life.
Benefit periods for individual short-term disability policies will usually continue from
Six months to two years.
Which of the following determines the length of time that benefits will be received under the Fixed Amount settlement option?
Size of each installment
Regarding LTC policies, which of the following would NOT be included in activities of daily living?
Sleeping
Eddie submitted an application for life insurance without paying the premium. The application was approved, and now the agent is delivering the policy. What should the agent have Eddie sign?
Statement of Good Health
Which of the following is monitored by ERISA?
Stock profit-sharing plans
For an individual who is NOT covered by an employer-sponsored plan, IRA contributions are
Tax deductible
The advantage of qualified plans to employers is
Tax deductible contributions
The advantage of qualified plans to employers is
Tax deductible contributions.
What characteristic must an annuity have if it is used to accumulate funds in an IRA?
Tax-qualified
Which of the following best describes taxation during the accumulation period of an annuity ?
Taxes are deferred
A 403(b) plan, commonly referred to as a TSA, is available to used by
Teachers and not for profit organizations
Who is covered by an HO-4 policy?
Tenants The HO-4 is a tenant broad form that may not be issued to an owner-occupant.
What is the "elimination period" under a long term care policy?
The amount of time during which no benefits will be paid.
When an annuity in written, whose life expectancy is taken into account ?
The annuitant
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner.
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?
The annuitant must be a natural person.
Which of the following is NOT true about a group annuity?
The annuity must be purchased by a group, but could be owned by an individual.
In exiting a bus, Tom jumps down onto the street and breaks his ankle. Which of these is true?
The broken ankle was unintended and unforeseen.
Which of the following is not true about joint life insurance?
The death benefits can be written on a first to die or second to die basis, depending on the needs of the insureds.
Which of the following individuals could qualify for a temporary insurance license?
The designee of a producer that is called to active service with the Navy
Under an extension term nonforfeiture option, the policy cash value is converted to
The same face amount as in the whole life policy
Under a SIMPLE plan, which of the following is true regarding taxation on both contribution and earning ?
They are tax deferred til withdrawn
Which of the following is true regarding taxation of accelerated benefits under a life insurance policy?
They are tax free to terminally ill insured
Which of the following statements regarding deferred compensation funds is incorrect ?
They are usually qualified plans
Which of the following statements regarding deferred compensation funds is INCORRECT?
They are usually qualified plans.
Regarding Medicare SELECT policies, what are restricted network provisions?
They condition the payment of benefits.
An insurance company may cancel a small employer plan only if:
They discontinue all small employer plans for 5 years.
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?
Twisting
Size of each installment
Which of the following determines the length of time that benefits will be received under the Fixed Amount settlement option?
Premium are not elevated.
Which of the following do the Standard and Preferred risk categories share?
Workers compensation
Which of the following insurance coverages would be allowed with an MSA?
It is solely a federally administered
Which of the following is INCORRECT concerning Medicaid?
Providing a customer with a incomplete illustration
Which of the following would be a violation of life policy illustration regulation in Oregon?
An application on which the medical information is completed by the applicant and the agent only
Which of the following would be considered a non-medical insurance application?
Bull-sell
Which of the following would describe a legal document which would dictate who can buy a deceased partner's share of a business and for what amount?
4)Option B
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured? (Choose from the following options) 1. Corridor option 2. Variable option 3. Option A 4. Option B
Apparent
Which type of authority is based on the actions, words, or deeds, or the principal?
Which of the following describes the taxation of an annuity when money is withdrawn during the accumulation phase?
Withdrawn amounts are taxed on a last-in-first-out basis.
Which of the following is NOT a factor in determining qualifications for Social Security disability benefits?
Worker's occupation
Welfare benefits include all of the following EXCEPT
Workers compensation.
death benefits payable to a beneficiary under a life insurance policy are generally
not subject to income taxation by the federal government
During a replacement of life insurance, the replacing insurer must
obtain a list of all life insurance policies that will be replaced
A person convicted of violating Oregon Statutes may be subject to a criminal penalty of
one year in jail
Which option for universal life allows beneficiary to collect both the death benefit and the cash value upon the death of the insured
option b
Which explains policy owner's rights to change beneficiaries, choose options and receives proceeds of a policy
owner's rights
What is the name of a policy where the insurance company distributes its dividends to policy owners in the form of cash payments, reduced premiums, units of paid up insurance, a savings program or by purchasing term insurance.
participating or mutual policy
pure life
pays highest monthly benefit
Whole life insurance is also referred to as what type of insurance?
permanent insurance
A service covered by Part B, Supplemental Medical Insurance is
physician services.
reciprocal
risk sharing, mutual agreements among
For the purpose of insurance, what is risk?
Uncertainty of loss.
He waive of cost of insurance rider is found in what type of insurance
Universal life
What kind of policy allows withdrawals or partial surrenders?
Universal life
for an individual who is not covered by a employer sponsored plan, IRA contributions are
tax deductible
accumulation period of nonqualified annuity, what are the tax consequences for withdrawal
taxable interest will be withdrawn first and the 10% penalty will be imposed if under 59 1/2
Children's riders attached to whole life policies are usually issued as what type of insurance?
term
periodontics
the care and treatment of the gums
what's not true about variable universal life policy
the death benefit is fixed
randy transfers his life insurance to his son and then dies two years later, what happens
the entire face value of the policy will be included in randy's taxable estate
A 401 (k) qualified retirement plan allows employees to take a reduction in their current salaries by deferring amounts into the retirement plan.Does it also allow the company to match the employee's contribution?
yes
PO cancels life policy but transfers cash to an annuity
1035 Exchange
How many days does a licensee have to inform commissioner of change of address
30 days
Most scheduled plans provide first-dollar benefits without
Co-insurance and Deductibles.
What characteristic makes whole life permanent protection?
Coverage until death or age 100.
Issue age policy premiums increase in response to which of the following factors?
Increased benefits
What is speculative risk?
The chance of gain or loss and is not insurable
What is the premium?
The fee the policy-owner pays to the insurer
Hospice care is intended for
The terminally ill.
How are fixed annuity premiums invested?
They are deposited into the insurance company's general account.
The doctors
To insure intentional losses would be against public policy.
HICAP counselors are primarily
Trained and registered volunteers.
offer made
application submitted
Certificates of coverage are issued to
participants in a group plan
All true of key person insurance except
the plan is funded by permanent insurance only
when would a 20 pay whole life policy endow?
when the insured reaches age 100
An insurance agent is also called what?
a producer
What is the duration of the free-look period for Medicare supplement policies?
30 days
What is the amount a physician or supplier bills for a particular service or supply?
Actual charge
What limits the amount that a policy owner may borrow from a whole life insurance policy ?
Cash Value
Which of the following would qualify as a Section 1035 exchange?
Cash Value Life Insurance Policy to a Cash Value Life Insurance Policy
What two elements are necessary for a life insurance contract to have legal purpose?
Insurable interest and consent.
What method is used to determine the taxable portion of each annuity payment?
The exclusion ratio
Who guarantees a conventional fully-insured group plan?
The insurer
Insurance contracts are agreements between which 2 parties?
insurer and insured
A policyowner surrendered a non-participating whole life policy for $10,000 cash value. The policyowner had at that time paid premiums totaling $8,000. The federal income tax effect would be
$2,000 taxable, $8,000 tax free.
If Fair Credit reporting Act is violated what is the penalty?
$2,500
An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds
$ 50,000
Maximum amount of commissions from controlled business
25%
Investigative Consumer Report cannot be made unless the consumer is advised within
3 days
The minimum number of credits required for partially insured status is
6
A level annual premium for the life of the insured.
A Straight Life policy charges
As of January 1, 2009 Oregon will now perform all of the following checks on applicants for insurance licenses, EXCEPT
A credit history check.
The oldest type of insurance company structure is called:
A fraternal benefit society.
When Brad reads the first page of the cancer policy that was just delivered, what is one of the first things he should notice?
A limited policy notice
Non-particparting policy
A policy that does not pat dividends to policy owners is a
The term "illustration" in a life insurance policy refers to
A presentation of non- guaranteed elements of a policy
When an agent collects the premium, what else should be obtained?
A statement of good health
"A physical or mental impairment which substantially limits one or more major life activities; or a record of such impairment; or being considered as having such an impairment," is the definition of a disability according to
ADA
A 56-year-old annuitant decides to withdraw all the money from the annuity before he retires. Which of the following is correct?
An age-based penalty will be imposed for withdrawing the annuity
30 days
An insured pays a monthly premium of $100 for health insurance. What would be the duration of the grace period under the policy?
The policy will terminate when the loan amount with interest equals or exceeds the cash value.
An insured stops making payments on a loan taken from his cash value. What will most likely happen?
Present the insured with a Disclosure Authorization Notice
An insurer wants to obtain information from investigators regarding an insured. What must the insurer do in order to legally acquire this information?
All of the following are true of the federal tax advantages of a qualified plan, EXCEPT
At distribution, all amounts received by the employee are free of taxes.
All of the following are true of the federal tax advantages of a qualified plan EXECEPT :
At distributions. all amounts received by the employee are free of taxes.
Medicaid is sponsored by what kind of sources?
Both state and federal
What is Medi-Cal?
California's Medicaid health care program
A tax sheltered annuity is a special tax-favored retirement plan available
Certain groups of employees only, like public educators.
Which type of report includes information regarding a consumer's credit, character, reputation, and habits collected by a reporting agency from employment records, credit reports, and other public sources?
Consumer Report
Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service?
Copayment
Which of the following is NOT allowed in credit life insurance?
Creditor requiring that a debtor buys insurance from a certain insurer
Which of the following best describes what policy dividends are?
Distribution of excess funds
Which of the following terms is used to name the non taxed return of unused premiums?
Dividend
How often must a producer renew his or her insurance license?
Every 2 years
What phase begins after a new policy is delivered?
Free-Look Period
Life insurance death proceeds are
Generally not taxed as income
Life insurance death proceeds are
Generally not taxed as income.
What do individuals use to transfer their risk of loss to a larger group?
Insurance
All of the following statements about Medicare Part B are correct EXCEPT
It is a compulsory program.
Every insurer marketing Long-Term Care insurance must establish marketing procedures to ensure all of the following EXCEPT
LTC policies are marketed effectively to prospective insureds.
Which of the following statements would best describe the difference between life settlements and accelerated death benefits?
Life settlements are funded by a third party, and Accelerated Death benefits are provided by the insurer that issued the original policy.
Mary wants both protection and savings and is willing to pay premiums until retirement at age 65. The policy she will choose is
Limited pay whole life insurance.
Which of the following is excluded in a dental insurance plan?
Lost dentures
In a single employer group plan, what is the name of the policy issued to the employer?
Master contract
What is a retrospective-rating arrangement?
Method of establishing a premium on an a large group
A producer who omits a statement which may mislead or deceive the persons addressed has committed
Misrepresentation.
Which of the following in NOT true regarding policy loans ?
Money borrowed from the cash value in taxable
Which of the following is NOT true regarding policy loans ?
Money borrowed from the cash value is not taxable
What is a primary difference between an IRA and an SEP?
Much more money can be contributed to a SEP.
A policy that does not pay dividends to policy owners is a
Non-participating policy.
What describes specific information about a policy?
Policy Summary
What is another name for social security benefits?
Old Age, Survivors, and Disability Insurance
Medicare Part A services do not include which of the following?
Outpatient Hospital Treatment
Which of the following is usually true of a participating life insurance policy ?
Pays dividends to the policy owners.
Which individuals must have insurable interest in the insured?
Policyowner
Medicare Part D provides
Prescription drug benefit.
If a firm has between 2 and 50 employees that are actively engaged in business on at least 50% of its working days during the preceding calendar quarter, what is its classification?
Small Employer
Which of the following types of risk will result in the highest premium?
Substandard risk
The Health Insurance Counseling and Advocacy Program is administered by
The California Department of Aging.
Who examines the books and records of insurance companies in florida?
The Chief Financial Officer
If an applicant does not receive his or her insurance policy, who would be held responsible?
The agent
When a client replaces an existing LTC or Medicare Supplement insurance policy with another from the same company, California law requires that
The agent must advise the client about HICAP and its services.
Whose responsibility is it to determine that all the questions on an insurance application are answered?
The agents
Anna loses her left arm in an accident that is covered by her Accidental Death and Dismemberment policy. What kind of benefit will Anna most likely receive from this policy?
The capital amount in a lump sum
With regard to income taxation, how does a policy loan from a life insurance policy differ from a complete surrender?
The cash received in a complete surrender is income taxable to the extent the surrender exceeds the premiums paid.
What are a life contract's liquid resources?
The cash values you can borrow from your whole life insurance policy
Which of the following statements about group life is correct?
The cost of coverage is based on the ratio of men and women in the group.
Which statement accurately describes group disability income insurance?
The extent of benefits offered is determined by the insured's income.
A life insurance policy does not have a war clause. If the insured is killed during a time if war, what will the beneficiary receive from the policy ?
The full death benefit
All of the following conditions must be met for an association group to buy group insurance for its members EXCEPT 1) The group is contributory. 2) The group has a constitution and by-laws. 3) The group holds semiannual meetings. 4) The group has at least 50 members.
The group has at least 50 members.
A man is enrolled in Part A of Medicare and not Part B. Three months into coverage, he applies for a Medicare supplement policy. Which of the following is true?
The insurer can deny coverage.
Physical Exam and Autopsy" provision, in the case of death of the insured, allows the insurer to conduct an autopsy. The expense for this procedure is paid by
The insurer.
Which of the following will vary the length of the grace period in health insurance policies?
The mode of the premium payment
Which of the following describes cost basis in an annuity?
The money that has been taxed before being paid into an annuity
What is the advantage of reinstating a policy instead of applying for a new one ?
The original one is used for premium determination
All of the following are true of the federal tax advantages of a qualified plan, EXCEPT
The planned premium pays for mortality charges and expenses and any excess is returned to the policyowner
If an insured continually uses the automatic premium option to pay the policy premium
The policy will terminate when the cash value is reduced to nothing
Which state has jurisdiction over a group policy that covers individuals that reside in more than one state?
The state in which the policy was delivered
Which of the following is true about warranties?
They are guaranteed to be true.
What are GMWBs and GMIBs?
The two most common types of living benefit riders for annuity contracts
In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT
The type of investment.
Which is generally true regarding insureds who have earned Preferred status?
Their premiums are lower.
Which of the following is NOT true regarding Equity Indexed Annuities? 1) They earn lower interest rates than fixed annuities. 2) The insurance company keeps a percentage of the returns. 3) They have guaranteed minimum interest rates. 4) They are less risky than variable annuities.
They earn lower interest rates than fixed annuities.
Which of the following is a similarity between equity indexed annuities and fixed annuities?
They have a guaranteed minimum interest rate.
Which of the following is true for both equity indexed annuities and fixed annuities?
They have a guaranteed minimum interest rate.
Which provision states that the insurance company must pay Medical Expense claims immediately?
Time of Payment Claims
Which provision states that the insurance company must pay Medical Expense claims immediately?
Time of Payment of Claims
What is the advantage of using the Interest Adjusted Cost method for comparing the cost of life insurance policie
Time value of money is taken into consideration.
Which statement is NOT the purpose of HIPAA?
To provide specific benefits to self employed people, pregnant women and the mentally ill.
90 days of a loss.
Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within
All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT
Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident. A personal auto policy does not pay the cost of a release of a vehicle impounded by a law enforcement agency.
The insurer must be able to rely on the statements in the application, and the insured must be able to rely on the insurer to pay valid claims. In the forming of an insurance contract, this is referred to as
Utmost good faith
When a replacement auto is acquired during the policy period, what coverage will apply to it automatically under a personal auto policy?
Whatever coverage applied to the vehicle being replaced Collision and other-than-collision for a newly acquired auto begins on the date the insured becomes the owner. For coverage to apply, the company must insure it within 14 days after the insured becomes the owner if the declarations indicate that collision coverage applies to at least one auto covered under the policy. The company must insure it within 4 days after the insured becomes the owner if the declarations do not indicate that collision coverage applies.
Can an individual who belongs to a POS plan use an out-of-network physician?
Yes, and they may use any preferred physician, even if not part of the HMO
Which of the following are considered standard levels of care?
a. Skilled nursing care b. Intermediate nursing care c. Home health care **d. All of these
the two types of assignments are
absolute and collateral
receives payment
beneficiary
For individual not covered by employer sponsored plan, ira contributions
will be tax deductible
in life insurance policies, cash value increases
grow tax deferred
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse switch policies from one to another?
twisting
An insured submits proof of loss form within 10 days of loss. The insurer however does not acknowledge the form for 3 months. Which of the following violations has the insurer committed?
unfair claims settlement
Which policy component decreases in decreasing term insurance?
face amount
3. Revocable beneficiary.
#10. Bonnie wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. Bonnie should have her husband named as thea)Tertiary beneficiary.b)Irrevocable beneficiary.c)Revocable beneficiary.d)Secondary beneficiary. If her husband is named as the revocable beneficiary, Bonnie would be the policyowner and could make changes to the contract. Her husband would receive the death benefit.
b)The guardian may or may not be accountable for assets The guardian and trustee may be the same person or different people. The primary difference in function is that the trustee is accountable for assets, whereas the guardian may or may not be accountable for assets.
#14. Life insurance benefits for minors must be placed in the hands of either a guardian or a trustee. Which of the following is true? a)The trustee is not accountable for assets b)The guardian may or may not be accountable for assets c)The guardian must also be the trustee d)The guardian and trustee cannot be the same person
d)Business Entity Business entity means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity.
#15. Which of the following could be used when a corporation, association, partnership, or limited liability partnership acts as a producer? a)Natural Group b)Stock Company c)Mutual Company d)Business Entity
c)4 years Each agent and agency must keep a file of all advertising printed, published or prepared by the agency along with records of the advertising's distribution. Files must be maintained for a period of 4 years.
#18. For how many years is an insurer required to maintain a complete file of its advertisements? a)1 year b)2 years c)4 years d)5 years
d)The annuitant's life expectancy is taken into consideration for the annuity. While they don't have to be, the annuitant and annuity owner are often the same person. The annuitant is the person who receives benefits or payments from the annuity and for whom the annuity is written. Since the annuitant's life expectancy is taken into consideration, the annuitant must be a natural person
#19. Which of the following is NOT true regarding the annuitant? a)The annuitant receives the annuity benefits. b)The annuitant must be a natural person. c)The annuitant cannot be the same person as the annuity owner. d)The annuitant's life expectancy is taken into consideration for the annuity.
a)Annuitant The annuitant receives payments from an annuity and is the person whose life expectancy is considered when writing the contract. The annuitant and annuity owner are often the same person but do not have to be.
#23. When an annuity is written, whose life expectancy is taken into account?a)Annuitant b)Beneficiary c)Life expectancy is not a factor when writing an annuity d)Owner
a)Option A Under Option A, the death benefit remains level while the cash value gradually increases. The death benefit will increase at a later date in order to maintain a gap between the cash value and the death benefit before the policy matures.
#29. Which Universal Life option has a gradually increasing cash value and a level death benefit? a)Option A b)Juvenile life c)Term insurance d)Option B
b)Transfer When insurance is purchased, the insured is, in return for the payment of the premium, transferring the risk of financial loss by certain perils to the insurance company.
#32. When a homeowner purchases insurance on his home, what risk management technique is he practicing?a)Retention b)Transfer c)Avoidance d)Sharing
#39. An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority? a)Express b)Implied c)Assumed d)Apparent An agent who accepts a premium after the end of the grace period appears to the client to have the authority to prevent the policy from lapsing. In fact, the agent has no such power.
#39. An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority?a)Express b)Implied c)Assumed d)Apparent An agent who accepts a premium after the end of the grace period appears to the client to have the authority to prevent the policy from lapsing. In fact, the agent has no such power.
d)Gradually increases each year by the amount that the cash value increases. Under Option B the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases
#44. Universal Life Option B includes the annual increase in cash value; the death benefit under this option a)Decreases by the amount that the cash value increases. b)Increases for the first few years of the policy, and then levels off. c)Remains level. d)Gradually increases each year by the amount that the cash value increases
b)Fraud False advertising is the illegal practice of advertising or circulating materials that are untrue, deceptive, or misleading
#46. An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of? a)False advertising b)Fraud c)Embellishment d)Defamation
d) Apparent
#5. An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority?a)Express b)Implied c)Assumed d)Apparent An agent who accepts a premium after the end of the grace period appears to the client to have the authority to prevent the policy from lapsing. In fact, the agent has no such power.
d)$50,000 The cost of coverage paid by the employer in excess of $50,000 is taxed to the employee.
#6. An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds a)$10,000 b)$15,000 c)$25,000 d)$50,000
#6. Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?a)Limited pay whole life insurance b)10-year endowment c)Life annuity, period certain d)Increasing term insurance
#6. Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?a)Limited pay whole life insuranceb)10-year endowmentc)Life annuity, period certaind)Increasing term insurance Premium payments will cease at her age 65, but coverage will continue to her death or age 100.
d)Business Entity Business entity means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity.
#8. Which of the following could be used when a corporation, association, partnership, or limited liability partnership acts as a producer? a)Natural Group b)Stock Company c)Mutual Company d) business entity
While equity indexed annuities earn higher interest rates than fixed annuities, both types of annuities guarantee a specific minimum interest rate. c)It has a guaranteed minimum interest rate
#9. Why is an equity indexed annuity considered to be a fixed annuity? a)It has a fixed rate of return b)It is not tied to an index like the S&P 500 c)It has a guaranteed minimum interest rate d)It has modest investment potential.
a)Limited pay whole life insurance
#9. Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client? a)Limited pay whole life insurance b)10-year endowment c)Life annuity, period certain d)Increasing term insurance Premium payments will cease at her age 65, but coverage will continue to her death or age 100.
What is the maximum civil penalty for individual producers for violating the Insurance Code?
$1,000
You have a Major Medical policy that calls for a $1,000 deductible and 80/20 participation. If you incur covered medical expenses of $5,000, you would have to pay
$1,800 (deductible + 20% of the remaining bill of $4,000).
Quincy's has a $1,000 HRA account. He incurred $750 in medical expenses the first year of the plan and $1,200 in the second year. What is the maximum amount Quincy is entitled to recover for his expenses under the plan?
$1,950 Employees are allowed to roll-over unused balances at the end of the year so Quincy could apply $250 to the second year's expenses
An agent had his license suspended, but continued to transact insurance. In this situation, which of the following penalties could he face?
$10,000 fine
An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?
$10,000, no tax consequence
Jack purchased a $100,000 Joint Life policy that covered his life and the life of his wife, Jill. Eight years later, Jack died in an automobile accident. How much will Jill receive from the policy?
$100,000
When the owner of a $250,000 life insurance policy died, the beneficiary decided to leave the proceeds of the policy with the insurance company and selected the Interest Settlement Option. If at the time of withdrawal the interest paid was $11,000, the beneficiary would be required to pay income tax on
$11,000.
An insured's long-term care indemnity policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged a $100 per day. How much will the insurance company pay?
$120 a day
An insured's long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged a $100 per day. How much will the insurance company pay?
$120 a day
An insured has a standard HO-4 policy with a $30,000 limit of coverage for personal property. While he was traveling, a fire in his hotel destroys clothes and luggage with a replacement value of $10,000, and jewelry with a replacement value of $10,000. Disregarding any deductible, and assuming a depreciation of 20% has occurred in both properties, what amount is the insurer obligated to pay?
$16,000 This loss would be settled on an ACV basis: $20,000 total for the loss, minus $4,000 for depreciation. Remember, the limitation on loss of jewelry applies to the peril of theft only.
The premium for Andrea's group disability income policy is $250 per month. Her employer contributes $125 of the premium. If Andrea becomes disabled and receives $350 per week in benefits, she will pay income tax on what amount of her benefit?
$175
What is a reasonable annual deductible for individual coverage under a medical savings account?
$2,000
What is the maximum penalty for violating the Fair Credit Reporting Act?
$2,500
Pete has a major medical policy with a $500 deductible and a co-insurance clause of 80/20. If he incurs medical expenses of $4,000, the insurer would pay
$2,800.
Transportation expenses are usually covered under a personal auto policy for
$20 per day, for a maximum of $600. Other-than-collision coverage provides $20 a day for up to 30 days following the theft of the entire auto, providing the auto is not recovered within 48 hours.
M is the owner of a $225,000 life policy with a triple indemnity rider for accidental death. When M is killed in a car accident, it is determined that the accident was his fault and that he was intoxicated at the time of the accident. The triple indemnity rider in M's policy specifies that the death must not be contributed to by the insured in any manner. In this case, the beneficiary will receive
$225,000.
An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable?
$3,000
An insured decides to surrender his Whole Life insurance policy which he had purchased 30 years ago. He had paid annual premiums of $500 while the policy was in force (which added up to $15,000). When he surrendered the policy, the cash surrender value was $18,000. What part of the surrender value would be income taxable?
$3,000
If $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per year for ten years, which of the following would be taxable annually?
$3,000
An insured decides to surrender his Whole Life insurance policy which he had purchased 30 years ago. He had paid annual premiums of $500 while the policy was in force (which added up to $15,000). When he surrendered the policy, the cash surrender value was $18,000. What part of the surrender value would be income taxable?
$3,000 The difference between the premiums paid and the cash value would be taxable. In this example, he difference between the premiums paid ($15,000) and the cash value ($18,000) is $3,000.
An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable?
$3,000 The difference between the premiums paid and the cash value would be taxable. In this example, the difference between the premiums paid ($15,000) and the cash value ($18,000) is $3,000.
An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable?
$3,000 (The difference between the premiums paid and the cash value would be taxable. In this example, the difference between-the premiums paid $15,000 and the cash value $18,000-is $3,000.
The contribution limit for a HR10 or Keogh plan is 100% of the total earned income up to $_____________ per year. The contribution is tax deductible and the funds accumulate interest on a tax deferred basis until they are withdrawn.
$45,000
How much is an agents appointment fee?
$5
An insured's roof cost $4,000 when installed 5 years ago. It has been damaged by hail and must be replaced. The new roof will cost $6,000 at today's prices. If the roof has been depreciating at $200 per year and his policy is ACV, how much will it pay toward the insured's new roof?
$5,000 ACV is calculated as replacement cost less depreciation.
Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits
$50,000
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?
$50,000 The face of the term policy would be the same as the face amount provided under the whole life policy.
An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to rollover her plan to a Traditional IRA, how much will she receive, if not a direct rollover, from the plan administrator and how long does she have to complete the tax-free rollover?
$8,000, 60 days
An employee quits her job where she has a balance of $10,000 in her qualified plan. The balance was paid out directly to the employee in order for her to move the funds to a new account. If she decides to rollover her plan to a Traditional IRA, how much will she receive from the plan administrator and how long does she have to complete the tax-free rollover?
$8,000, 60 days
An employee quit her job where she has a balance 10,000 in her qualified plan. the balance was paid out directly to the employee In order for her to move the funds to a new account. I f she decides to rollover her plan to a Traditional IRA how much she will receive from the plan administrator and how long does she have to complete the tax-free rollover ?
$8000 60 days
An employee quits her job where she has a balance of $10,000 in her qualified plan. The balance was paid out directly to the employee in order for her to move the funds to a new account. If she decides to rollover her plan to a traditional IRA , How much she will receive from the plan administrator and how long does she have to complete the tax free rollover ?
$8000 in 60 days
All of the following could own group life insurance EXCEPT
**a. A group needing low cost life insurance. b. An employer group. c. An alumni group. d. A debtor group
Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy?
**a. An individual who was previously covered by group health insurance for 6 months is eligible. b. An individual who was previously covered by group health insurance is eligible. c. An individual who doesn't qualify for Medicare may be eligible. d. The gap of coverage for eligibility is a period of 63 or less days.
All of the following are characteristics of social insurance EXCEPT
**a. Benefits are provided under a contract. b. Involuntary participation in social insurance is required of all eligible taxpayers. c. Social insurance is not equitable. d. Government is the only insurance provider.
Which of the following statements regarding Business Overhead Expense policies is NOT true?
**a. Benefits are usually limited to six months. b. Premiums paid for BOE are tax-deductible. c. Any benefits received are taxable to the business. d. Leased equipment expenses are covered by the plan.
Social Security disability definition includes all of the following EXCEPT
**a. Disability expected to last for at least 6 months. b. The inability to engage in any gainful work. c. Disability resulting from a medically determinable mental impairment. d. A physical impairment expected to result in death.
In a situation when an employer purchases an individual disability income policy for a key person in the business, which of the following is NOT true?
**a. Employee can deduct the cost of premium. b. Employer pays 100% of premium. c. Benefit goes to the employee. d. 100% of benefit is taxable to the employee.
Issuance of health policies to insureds with chronic or ongoing conditions could result in all of the following EXCEPT:
**a. Lower overall costs and premiums. b. A very high claim within a short period of time. c. Adverse selection and consequently higher overall costs and premiums. d. An immediate claim.
HICAP offers services in the following areas EXCEPT
**a. Sales of LTC policies. b. Consumer counseling. c. Consumer advocacy. d. Legal assistance.
All of the following statements concerning an employer sponsored non-qualified retirement plan are true EXCEPT
**a. The employer can receive a current tax deduction for any contributions made to the plan. b. The plan is a legal method of accumulating money for retirement needs. c. The plan can discriminate as to who may participate. d. The plan is not approved for favorable tax treatment by the IRS.
All of the following must be included in annual financial reports submitted by admitted insurers to the California Department of Insurance EXCEPT
**a. The number of policies paid by list bill. b. The financial condition of the company. c. Changes that occurred in the company's financial condition. d. Company liabilities, income and expenses.
What is the shortest possible elimination period for group short-term disability benefits provided by an employer?
0 days
How much of the premium is paid by employees participating in a non-contributory plan?
0%
What percentage of individually-owned disability income is taxable?
0%
Which of the following risks are eligible for coverage under a BOP?
1 of them is Condominiums.. ISO maintains a list of those risks not eligible for consideration for a BOP. Financial institutions, auto delers, and bars and grills are specifically excluded from coverage.
A producer licensed lapsed. How soon after this lapse can his license be reinstated ?
1 year
Anna's policy includes an Additional Monthly Benefit rider. How long can she expect to receive payment from her insurer before Social Security benefits begin?
1 year
What is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly Benefit rider?
1 year
Considering Social Security restrictions, to fall under the definition of disability a disability must last at least
1 year.
The 2010 patient Protection and Affordable Care Act (PPACA) in-acted health care reform that:
1) Extended dependent coverage for adult children up to age 26 2) Elimination of pre-existing condition exclusions for children ages 19 and under
13. Which type of authority is based on the actions, words, or deeds of the principal?a)Apparent b)Express c)Lingering implied d)Implied
1. Apparent Apparent authority is the appearance of, or the assumption of, authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.
Some cost of living (COLA) riders provide cost of living increases using
1. compound interest adjustments. 2. simple interest adjustments.
Name one of the three major categories of Health and Accident Insurance.
1. medical expense insurance 2. Accidential death and dismemberment insurance 3. Disability income insurance
1. The period of time during which accumulated money is converted into income payments
1.Which of the following best describes what the "annuity period" is? (Choose from the following options) 1. The period of time during which accumulated money is converted into income payments 2. The period of time spanning from the accumulation period to the annuitization period 3. The period of time during which money is accumulated in an annuity 4. The period of time spanning from the effective date of the contract to the date of its termination
The grace period for policy premium payments cannot be less than _______ days in Oregon,
10
Teresa pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?
10 days
An annuity contract is issued to consumer over age 65. What is maximum surrender charge for withdrawal of money allowed on this annuity?
10%
Non-qualified distributions from a health savings account have a __________ penalty tax.
10%
c)Concealment In insurance, concealment is the withholding of information that will result in an imprecise underwriting decision.
10. An applicant who knowingly fails to communicate a fact that would help an underwriter make a sound decision regarding coverage is guilty of a)Fraud b)Misrepresentation c)Concealment d)Lying.
a)They earn lower interest rates than fixed annuities Equity Indexed Annuities invest on an aggressive basis in order to yield higher returns. Like a fixed annuity, Equity Indexed Annuities have guaranteed minimum interest rates. The insurance company often keeps a predetermined percentage of the return and pays the rest to the annuity owner. Equity Indexed Annuities are less risky than variable annuities and earn higher interest rates than fixed annuities.
10. Which of the following is NOT true regarding Equity Indexed Annuities? a)They earn lower interest rates than fixed annuities b)The insurance company keeps a percentage of the returns c)They have guaranteed minimum interest rates d)They are less risky than variable annuities.
1. Specified
10.All of the following are beneficiary designations EXCEPT (Choose from the following options) 1. Specified 2. Tertiary 3. Contingent 4. Primary.
For how many days of skilled nursing facility care will Medicare pay benefits?
100
In order for debtor group to qualify for group life insurance what is the minimum number of participants joining the plan each year be?
100
Single premium whole life endows for the face amount of the policy at what age?
100
The insured is the is the policy owner of a whole life policy. what age must insured attain in order to receive the policy's face amount?
100
For group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense?
100%
In a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective?
100%
Regarding Medicare Part D, beneficiaries must pay ____ of prescription drug costs when they are in the "doughnut hole," or once the initial benefit limit is reached.
100%
Sole proprietors and partners may deduct ____ of the cost of a medical expense plan provided to them and their families because they are considered self-employed individuals, not employees.
100%
Under a seven-year vesting schedule, to what percentage of the employer's contributions would the employee be entitled at the end of the seven-year period?
100%
Upon reaching the end of a vesting schedule, what percent of employer contributions to a qualified retirement plan are vested to the employee?
100%
What percentage of a company's employees must take part in a non-contributory group life plan?
100%
The proprietors of a business may deduct the cost of a medical expense plan because they are considered to be self-employed individuals instead of employees. What is the highest percentage that may be deducted?
100% of the taxpayer's annual earned income
Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT?
100% participation of members is required in noncontributory plans.
A policy owner cancels his life policy but instructs the insurance company to transfer the cash value of his policy to an annuity. This nontaxable transaction is called
1035 exchange
A policy owner cancels his life policy but instructs the insurance company to transfer the cash value of his policy to an annuity. This non taxable transaction is called
1035 exchange.
d)Increases annually.
11. Annually renewable term policies provide a level death benefit for a premium that a)Decreases annually b)Remains level c)Fluctuates d)Increases annually. Annually renewable term policies provide a level death benefit for a premium that increases each year with the age of the insured.
1. Twisting
11.Agents who induce insureds to drop a policy in favor of another policy when it might not be in the insured's best interest to do so are guilty of (Choose from the following options) 1. Twisting 2. Defamation 3. Misrepresentation 4. Rebating
When a group insurance plan is terminated, there is normally a provision for an extension of benefits to any insured or dependent who is totally disabled for a period of ____________ or until the person is no longer totally or continually disabled.
12 months
Within what time period can a producer reinstate a lapsed license without having to pass a written examination?
12 months
When someone is converting from a group plan to another group plan, he or she must have had at least how many months of creditable coverage under the old plan in order to carry over their coverage under HIPAA.
12 months of creditable coverage
In order to collect Social Security disability benefits, the claimant must be able to demonstrate that the disability will last at least
12 months.
3. It provides income the beneficiary cannot outlive
12.Which of the following is true regarding a single life settlement option? (Choose from the following options) 1. Proceeds are paid out in a lump sum 2. It provides income for a specified period of time 3. It provides income the beneficiary cannot outlive 4. Payments continue until the entire principal is exhausted.
3. Both a life insurance license and a securities license
13.What license or licenses are required to sell variable annuities? (Choose from the following options) 1. Only a securities license 2. No license is required 3. Both a life insurance license and a securities license 4. Only a life insurance license
2. Transfer
14. When a homeowner purchases insurance on his home, what risk management technique is he practicing?a)Retentionb)Transferc)Avoidanced)Sharing When insurance is purchased, the insured is, in return for the payment of the premium, transferring the risk of financial loss by certain perils to the insurance company.
4. Revocable beneficiary.
14.Bonnie wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. Bonnie should have her husband named as the (Choose from the following options) 1. Secondary beneficiary 2. Tertiary beneficiary 3. Irrevocable beneficiary. 4. Revocable beneficiary.
The minimum age for purchasing life insurance policy in Florida is
15
How many days does an insurer have to file a notice of appointment for a producer ?
15 Days
How many days does an insurer have to file a notice of appointment for a producer ?
15 days
If an insurer wishes to appoint a producer, it must file a notice of appointment within how many days of the date that the contract is executed
15 days
Within how many days of termination of employment must an employer give notice of the employee's right to convert the group policy to an individual policy?
15 days
What's the maximum amount of time a temporary license can be issued
15 months
1. A presentation of nonguaranteed elements of a policy
15.The term "illustration" in a life insurance policy refers to (Choose from the following options) 1. A presentation of nonguaranteed elements of a policy 2. A depiction of policy benefits and guarantees 3. Pictures accompanying a policy 4. Charts and graphs.
2. Require evidence of insurability.
16. If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer maya)Increase medical requirements on existing members.b)Require evidence of insurability.c)Require a higher premium.d)Prolong the open enrollment period. In group underwriting the evidence of insurability is usually not required of each participant unless he or she is enrolling for coverage outside of the normal enrollment period.
d)They are expensive to administer. The major disadvantage of trusts is that they are expensive to administer.
16. What is a major problem with naming a trust as the beneficiary of a life insurance policy? a)The insurance company will not pay the proceeds to a nonliving beneficiary. b)It is illegal to name a trust as the beneficiary. c)The insured must have the Superintendent's permission to name a trust as the beneficiary. d)They are expensive to administer
2. Option B
16.Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured? (Choose from the following options) 1. Option A 2. Option B 3. Corridor option 4. Variable option
2. Warranty
17.Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? (Choose from the following options) 1. Representation 2. Warranty 3. Concealment 4. Indemnity
The Consolicated Omnibus Budget Reconciliation Act (COBRA) stipulates that employers with 20 or more employees must offer a continuation of group health coverage for a specified period of time to qualified employees and their beneficiaries who would not otherwise be eligible for continued coverage because of a particular qualifying event involving the covered employee, including death, divorce, or termination of employment (for reasons other than misconduct). If someone is laid off from their job, that length of time would be
18 months
To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan?
18 months
4. Apply and pay a fee to a nonresident state that reciprocates.
18.In order to get a nonresident license is this state, producers must (Choose from the following options) 1. Pass the non-resident state exam and satisfy their continuing education requirements 2. Represent an agency located in this state 3. Surrender their licenses in their state of residence 4. Apply and pay a fee to a nonresident state that reciprocates.
4. The annuitant will receive the higher of either the guaranteed minimum rate or current rate.
19.In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment? (Choose from the following options) 1. The annuitant will always receive the current interest rate. 2. The annuitant will receive the lower of either the guaranteed minimum rate or current rate. 3. The annuitant will only receive the guaranteed minimum specified in the contract. 4. The annuitant will receive the higher of either the guaranteed minimum rate or current rate.
3. 12 months
19.Within what time period after completing prelicensing education must an applicant file a certificate of education completion with the Commissioner? (Choose from the following options) 1. 30 days 2. 90 days 3. 12 months 4. 2 years
The Tax Reform Act of ________ eliminated many traditional tax shelters
1984
Every small employer carrier shall, as a condition of transacting business in this state with small employers, actively offer to small employers at least how many health benefit plans?
2
How many long term care policies can be sold to an insured within a 12-month period before the number of policies is considered to be unnecessary?
2
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?
2 years
How often does the agent's insurance license expire?
2 years
4. An application on which the medical information is completed by the applicant and the agent only
2.Which of the following would be considered a nonmedical insurance application? (Choose from the following options) 1. An application that does not ask any questions about the applicant's medical history 2. An agent's report 3. An application for life insurance 4. An application on which the medical information is completed by the applicant and the agent only
What is the dollar limitation for workers compensation benefits in the state of California?
2/3 of a worker's weekly wage or a state-specified maximum payment.
Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days?
20
The law requires that employers with ____ or more employees provide for the continuation of the employer's group health benefits and group premium rates, to qualified beneficiaries.
20
4. Apparent
20.An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority? (Choose from the following options) 1. Express 2. Implied 3. Assumed 4. Apparent
First year commission on a Medicare supplement policy may not exceed
200% of the second year commission on the same policy.
3. Cash value
21.What limits the amount that a policyowner may borrow from a whole life insurance policy? (Choose from the following options) 1. Amount stated in the policy 2. Face amount 3. Cash value 4. Premiums paid
2. 30 days
22.A flexible premium universal life insurance policy must provide a grace period of (Choose from the following options) 1. 10 days. 2. 30 days. 3. 60 days. 4. 90 days.
4. Only the annuity owner
22.Which of the following can surrender a deferred annuity contract? (Choose from the following options) 1. Only the insurance company for nonpayment of premiums 2. The beneficiary after the owner's death 3. Deferred annuity cannot be surrendered. 4. Only the annuity owner
4. Agent
23.According to the Law of Agency, a principal is represented by a/an (Choose from the following options) 1. Insurer 2. Broker 3. Insured 4. Agent.
In order to maintain an insurance license an agent will need to satisfy florida's continuing education requirement of
24 hours of continuing education in every 2-year period
a)Pay dividends to the policyowner A participating insurance policy will pay dividends to the owner based upon actual mortality cost, interest earned and costs.
24. A participating insurance policy may do which of the following? a)Pay dividends to the policyowner b)Provide group coverage c)Pay dividends to the stock holder d)Require 80% participation
4. Increases annually
24.Annually renewable term policies provide a level death benefit for a premium that (Choose from the following options) 1. Decreases annually. 2. Remains level 3. Fluctuates 4. Increases annually.
c)The board of directors is chosen by a state-based election board In a stock company, the board of directors is elected by the stockholders.
25. All of the following attributes are found in stock insurance companies EXCEPT a)Earnings from operations may be kept as retained earnings b)The Stockholders may receive a dividend at the end of the year c)The board of directors is chosen by a state-based election board d)The company is owned by the stockholders. In a stock company, the board of directors is elected by the stockholders.
4. The surviving beneficiary will continue receiving this 2/3 of the benefit paid when both beneficiaries were alive.
25.An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries? (Choose from the following options)1. The beneficiary will receive 2/3 of the lump sum up front, and the remaining 1/3 will be paid over time.2. The beneficiary will receive 2/3 of the total benefit, with the final 1/3 payable when the first beneficiary dies.3. One of the beneficiaries will receive 1/3 and the other 2/3 of the proceeds when the insured dies.4. The surviving beneficiary will continue receiving this 2/3 of the benefit paid when both beneficiaries were alive.
4. An unfair trade practice.
26.If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association that would be considered (Choose from the following options) 1. A misrepresentation 2. An accurate statement 3. A legal representation of the Association 4. An unfair trade practice.
4. Pays dividends to policyowners.
26.Which of the following is usually true of a participating life insurance policy? (Choose from the following options) 1. May be converted to a term life policy. 2. Pays dividends to stockholders.3. Assesses premiums against stockholders. 4. Pays dividends to policyowners.
d)Apparent An agent who accepts a premium after the end of the grace period appears to the client to have the authority to prevent the policy from lapsing. In fact, the agent has no such power.
27. An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority?a)Express b)Implied c)Assumed d)Apparent
a)Option A Under Option A, the death benefit remains level while the cash value gradually increases. The death benefit will increase at a later date in order to maintain a gap between the cash value and the death benefit before the policy matures.
28. Which Universal Life option has a gradually increasing cash value and a level death benefit? a)Option A b)Juvenile life c)Term insurance d)Option B
3. It has a guaranteed minimum interest rate
28.Why is an equity indexed annuity considered to be a fixed annuity? (Choose from the following options) 1. It has a fixed rate of return 2. It is not tied to an index like the S&P 500 3. It has a guaranteed minimum interest rate 4. It has modest investment potential.
3. Increase medical requirements on existing members
29.If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may (Choose from the following options) 1. Require a higher premium 2. Prolong the open enrollment period 3. Increase medical requirements on existing members 4. Require evidence of insurability.
Under SIMPLE plans participating employee may defer up to a specified amount each year, and the employer then makes a matching contribution up to an amount equal to what percent the employee's annual wages ?
3
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will take place?
3
How long should a replacing insurer maintain a replacement register regarding the policy for the next regular examination by the Insurance Department?
3 years
How long must a producer keep records associated with an insurance policy?
3 years after the policy terminates
How long must an agent keep records associated with an insurance policy?
3 years after the policy terminates
An insurance company forwards fixed annuity premiums to their general account, where the money is invested conservatively. The guaranteed minimum interest is set at 3%. During an economic downswing, the investments only drew 2.5%. How much will the insurer pay?
3%
d)Warranty A warranty in insurance is a statement guaranteed to be true. When an applicant is applying for an insurance contract, the statements he or she makes are generally not warranties, but representations. Representations are statements that are true to the best of the applicant's knowledge.
3. Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?a)Concealment b)Indemnity c)Representation d)Warranty
2. Investing in the stock market.
3.All of the following actions by a person could be described as risk avoidance EXCEPT (Choose from the following options) 1. Taking a flu shot each year 2. Investing in the stock market. 3. Refusing to scuba dive 4. Never flying in an airplane.
If a new individual long-term care policyholder is not satisfied with a new policy, within how many days can the insured return the policy for a full premium refund?
30
If an insurer wants to raise its premium rates, the new rates must be submitted to the commissioner for the review and will take how many days to go into effect ??
30
An insurance company must notify the commissioner whenever it terminates an agent's appointment within how many days of termination ?
30 Days
In Oregon, how long does a producer have to notify the Director of a change in location or name?
30 days
Insurers must notify the Commissioner's office as to whether or not a life insurance policy will be marketed with illustrations. Certification of that notification must be provided annually within how many days of the anniversary of the original certification?
30 days
If a licensee has been convicted of certain crimes while licensed, he or she is required to submit a supplementary application to the Director. Within what time period must this be done?
30 days after the date of the final judgment
When a producer holding a certificate or a brokers license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within
30 days.
3. LEVEL
30.A man wants to buy a life insurance policy in which he can count on guaranteed minimum benefits. Which type should he buy? (Choose from the following options) 1. Solid 2. Fixed 3. Level 4. Variable
1. An index like Standard & Poor's 500
30.The equity in an equity index annuity is linked to (Choose from the following options) 1. An index like Standard & Poor's 500 2. The returns from the insurance company's separate account 3. The annuitant's individual stock portfolio 4. The insurance company's general account investments.
3. Apparent Authority
31.The authority granted to an agent through the agent's contract is referred to as (Choose from the following options) 1. Absolute Authority 2. Express Authority 3. Apparent Authority 4. Implied Authority.
3. Until the beneficiary's death
32.How long will the beneficiary receive payments under the single life settlement option? (Choose from the following options) 1. For a specified period of time 2. Until the insured's age 100 3. Until the beneficiary's death 4. Until the insured's death
1. It is a level term insurance
32.Which of the following best describes annually renewable term insurance? (Choose from the following options) 1. It is a level term insurance 2. It requires proof of insurability at each renewal 3. Neither the premium nor the death benefit is affected by the insured's age. 4. It provides annually increasing death benefit.
1. An index like Standard & Poor's 500
33.The equity in an equity index annuity is linked to (Choose from the following options) 1. An index like Standard & Poor's 500 2. The returns from the insurance company's separate account 3. The annuitant's individual stock portfolio 4. The insurance company's general account investments.
2. The surrender value should be equal to 100% of the premium paid, minus any prior withdrawals and surrender charges
34.A deferred annuity is surrendered prior to annuitization. Which of the following best describes the nonforfeiture value of the annuity? (Choose from the following options) 1. The surrender value will not be more than 80% of the cash value in the annuity at the time of surrender 2. The surrender value should be equal to 100% of the premium paid, minus any prior withdrawals and surrender charges 3. A deferred annuity cannot be surrendered prior to annuitization. The owner must wait until the annuitization period begins to receive any payments 4. The surrender value will be based on current interest rates.
a)Grace period Provided there is sufficient cash value in the policy, this provision triggers a loan at the end of the grace period to keep a policy in force
35. The automatic premium loan provision is activated at the end of the a)Grace period b)Time period c)Ending period d)Policy period
What is the maximum period of coverage under COBRA?
36 months
4. Until the beneficiary's death The Single Life Option can provide a single beneficiary income for the rest of his/her life. Upon the death of the beneficiary, the payments stop.
36.How long will the beneficiary receive payments under the single life settlement option? (Choose from the following options) 1. Until the insured's death 2. For a specified period of time 3. Until the insured's age 100 4. Until the beneficiary's death
2. Policyowner
37.Who controls changes in premium payments, face value, loans, and policy plans? (Choose from the following options) 1. Agent 2. Policyowner 3. Insurer 4. Beneficiary
4. Only the annuity owner If the need arises, a deferred annuity contract may be surrendered only by the annuity owner. At surrender the owner receives the value of the annuity minus a surrender charge.
38.Which of the following can surrender a deferred annuity contract? (Choose from the following options) 1. Only the insurance company for nonpayment of premiums 2. The beneficiary after the owner's death 3. Deferred annuity cannot be surrendered 4. Only the annuity owner
4. Misrepresentations Making false or misleading statements with the intent to defraud another is misrepresentation.
39.A producer who omits a statement which may mislead or deceive the persons addressed has committed (Choose from the following options) 1. Defamation 2. Twisting 3. Coercion 4. Misrepresentation.
How long should insurers keep advertisements on file?
4 years
3. A mutual insurer
4.Insurance companies may be classified according to the legal form of their ownership. The type of company organized to return any surplus money to their policyholders is (Choose from the following options) 1. A fraternal insurer 2. A stock company 3. A mutual insurer 4. A reciprocal company.
2. Non-participating policy
40.A policy that does not pay dividends to policyowners is a (Choose from the following options) 1. Mutual life policy 2. Non-participating policy 3. Participating policy 4. Whole life policy.
2. Indemnity
40.Which provision states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost? (Choose from the following options) 1. Reasonable Coverage Expectations 2. Indemnity 3. Loss-at-Cost 4. Limited Benefits Provision
A teacher may defer a portion of his earned income into a(n)
403(b) (TSA).
4. Beneficiary
41.If the annuitant dies during the accumulation period, who will receive the annuity benefits? (Choose from the following options) 1. Owner 2. Insurance company 3. Estate 4. Beneficiary
4.The type of investment. Typically, the owner of an adjustable life policy has the following privileges: increasing or decreasing the premium, changing the premium-paying period, increasing or decreasing the face amount of coverage, or changing the period of protection.
42.In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT (Choose from the following options) 1. The length of coverage 2. The premium 3. The amount of insurance 4. The type of investment.
2. Reciprocity
43.A producer in Ohio wants to become a producer in Michigan. The Department will waive certain examination requirements, provided that Ohio would waive these same requirements if a Michigan producer sought licensure in Ohio. What term is used to describe this phenomenon? (Choose from the following options) 1. Equanimity 2. Reciprocity 3. Equality 4. Fair exchange
3. Changing Michigan Insurance Code
43.Which of the following functions may a producer with a temporary insurance license NOT perform? (Choose from the following options) 1. Collect premiums 2. Countersign policies 3. Changing Michigan Insurance Code 4. Solicit applications of insurance
b)Option B
44. Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured? a)Option A b)Option B c)Corridor option d)Variable option Under Option B the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases. At any point in time, the total death benefit will always be equal to the face amount of the policy plus the current amount of cash value.
4)The illustration must stay exactly as it is. If an agent uses the illustrations of an insurer, it must first be approved, and the agent may not alter the illustrations in any way.
44.An agent wants to include an illustration written by his insurance company. Which of the following best describes the conditions under which he may use the illustration? (Choose from the following options) 1. The illustration can only be used for a month before it requires re-approval 2. Illustrations must accurately portray what would be included in a potential contract 3. All changes must be submitted to the insurer before approval 4. The illustration must stay exactly as it is.
3. Single Premium
45.Which type of life insurance policy generates immediate cash value? (Choose from the following options) 1. Decreasing Term 2. Continuous premium 3. Single Premium 4. Level Term
a) It may last for the lifetime of the annuitant or for a shorter period of time.
46. Which of the following is true regarding the annuity period? a)It may last for the lifetime of the annuitant or for a shorter period of time. b)During this period of time the annuity payments grow interest tax deferred. c)It is also referred to as the accumulation period. d)It is the period of time during which the annuitant makes premium payments into the annuity. The "annuity period" is the time during which accumulated money is converted into an income stream. It may last for the lifetime of the annuitant or for a shorter specified period of time depending on the benefit payment option selected.
3. Automatic premium loan
46.A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision? (Choose from the following options) 1. Incontestability period 2. Assignment 3. Automatic premium loan 4. Waiver of premium
1. They earn lower interest rates than fixed annuities. Equity Indexed Annuities invest on an aggressive basis in order to yield higher returns. Like a fixed annuity, Equity Indexed Annuities have guaranteed minimum interest rates. The insurance company often keeps a predetermined percentage of the return and pays the rest to the annuity owner. Equity Indexed Annuities are less risky than variable annuities and earn higher interest rates than fixed annuities
46.Which of the following is NOT true regarding Equity Indexed Annuities? (Choose from the following options) 1. They earn lower interest rates than fixed annuities 2. The insurance company keeps a percentage of the returns 3. They have guaranteed minimum interest rates 4. They are less risky than variable annuities.
c)A copy of the original application for insurance.
47. To meet the Entire Contract provision, a policy must contain a)Buyer's guide to life insurance b)Listing of the insured's former insurer(s) for incontestability provisions c)A copy of the original application for insurance d)A declarations page with a summary of insureds. An insurance contract must contain a copy of the original application.
2. The policyowner can specify the way proceeds are split in the policy
47.The owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producer say? (Choose from the following options) 1. The proceeds will be split evenly between the two beneficiaries 2. The policyowner can specify the way proceeds are split in the policy 3. The way proceeds are split between beneficiaries is decided by which type of policy is chosen 4. Life insurance policies may have only one beneficiary.
d)A new Commissioner or Director is put into office.
48. All of the following events will terminate a producer's certificate of appointment EXCEPT a)A producer's license expires and is not renewed. b)A termination issued by the appointing insurer. c)A producer's license is suspended or revoked by the Department of Insurance. d)A new Commissioner or Director is put into office. An appointment by an insurer is based upon the person maintaining a valid insurance license. Although the appointment is made by the head of the Insurance Department, that person leaving the office does not terminate existing appointments.
4. A new Commissioner or Director is put into office. An appointment by an insurer is based upon the person maintaining a valid insurance license. Although the appointment is made by the head of the Insurance Department, that person leaving the office does not terminate existing appointments.
48. All of the following events will terminate a producer's certificate of appointment EXCEPTa)A producer's license expires and is not renewed.b)A termination issued by the appointing insurer.c)A producer's license is suspended or revoked by the Department of Insurance.d)A new Commissioner or Director is put into office. An appointment by an insurer is based upon the person maintaining a valid insurance license. Although the appointment is made by the head of the Insurance Department, that person leaving the office does not terminate existing appointments.Next
2. A new Commissioner or Director is put into office.
48.All of the following events will terminate a producer's certificate of appointment EXCEPT (Choose from the following options) 1. A producer's license is suspended or revoked by the Department of Insurance 2. A new Commissioner or Director is put into office 3. A producer's license expires and is not renewed 4. A termination issued by the appointing insurer.
If a consumer requests additional information concerning an investigative consumer report, how long does insurer or reporting agency have to comply?
5 days
What is the elimination period for Social Security disability benefits?
5 months
A claimant, who is totally and permanently disabled, is eligible for Social Security Disability benefits after an elimination period of
5 months.
A replacing insurer must be able to produce copies of the Notification Regarding Replacement for at least how many years after a policy has been replaced?
5 years
When a group policy terminates, each individual insured under the policy will be entitled to have an individual policy if insured has been insured under group policy for at least how many years prior to policy termination?
5 years
When a group policy terminates, every individual insured under the policy will be entitled to have an individual policy if the insured has been insured by the group policy for at least how many years prior to policy termination?
5 years. When a group policy terminates, every individual insured under the policy at the date of such termination who has been so insured for at least 5 years prior to such termination date will be entitled to have issued to him by the insurer an individual policy of life insurance.
2. Option B
5.Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured? (Choose from the following options) 1. Option A 2. Option B 3. Corridor option 4. Variable option
The partial disability benefit is typically what percent of the regular benefit provided by the policy?
50%
What is the penalty for IRA distributions that are below the required minimum for the year
50%
What is the penalty for IRA distributions that are below the required minimum for the year?
50%
A company has a businessowners policy on a building with an agreed value of $300,000. The company carries $150,000 of insurance. If a loss occurs, how much will the insured company be paid?
50% of the actual loss If the insured carries only $150,000 of insurance, only one half (50%) of its covered losses will be paid. ($150,000/$300,000 = ½ or 50%)
An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. What kind of penalty would the IRA owner pay?
50% tax on the amount not distributed as required
How many policies are necessary to cover a cross purchase (buy/sell agreement) between 3 people?
6
A preexisting conditions provision in a small employer health benefit plan must apply only to a condition that a person sought medical advice, treatment, diagnosis, care or for which treatment was recommended during how many month period immediately preceding the enrollment date of the enrollee or late enrollee?
6 month
An applicant for a life agent's license may obtain a temporary license for a maximum period of
6 months
Benefits paid to disabled employees are exempt from the Social Security tax after what period of time?
6 months
In a small employer medical plan, a preexisting condition provision applies to conditions for which medical advice or treatment was received within what time frame before the effective date of coverage?
6 months
In order for a sickness to qualify as a pre-existing condition, how many months before the submission of an application must the condition have been treated or addressed by a medical professional?
6 months
What is the waiting period inns waiver of premium rider in life insurance policy
6 months
In a small employer medical plan, a pre-existing condition provision applies to conditions for which medical advice or treatment was received within what time frame before the effective date of coverage?
6 months A pre-existing condition provision in a small employer health benefit plan may exclude coverage for a condition for which medical advice, diagnosis, care or treatment was recommended or received 6-months before the effective date of the coverage.
What is the maximum period of coverage under Oregon state continuation rules for group health insurance?
6 months Continuation of coverage will last for a maximum of 6 months after the date that coverage would have ended if the person had not applied for continued coverage.
A pre-existing condition is a condition for which the employee has sought medical advice, diagnosis, or treatment within the previous
6 months.
A participant contributes more than the maximum amount to her Roth IRA. What kind of tax penalty will he or she have to pay?
6%
What is the penalty for excessive contributions to an IRA?
6%
How many policies are necessary to cover a cross purchase (buy/sell agreement) between 3 people?
6, Since each person would have a policy on each of the other people, among the 3 owners, the total number of policies would be six.
3. 3%
6.An insurance company forwards fixed annuity premiums to their general account, where the money is invested. The guaranteed minimum interest is set at 3%. During an economic downswing, the investments only drew 2.5%. What interest rate will the insurer pay to its policyholders? (Choose from the following options) 1. 3% regardless of what the investment draws since that's the guaranteed rate 2. 2.5% 3. 3% 4. 3% this payment. The overpayment this time will be subtracted from the next time the rate exceeds 3%.
A paid up nonforfeiture benefit will become effective as specified in the policy unless person entitled elects another available option within how many days after the due date of premium is in default?
60
Regarding the concept of creditable coverage, the number of days of coverage spent under the group plan will be used to reduce the 12-month waiting period for pre-existing conditions coverage if the employee does not have a break in coverage of __ days or more.
63
Notice of a hearing for a cease and desist order must be given at least how many days in advance?
7
Long-term care premium payments are deductible as a medical expense to the extent that when added to all other unreimbursed medical expenses, the total exceeds of the taxpayer's adjusted gross income if the taxpayer itemizes his/her deductions.
7.5%
There is an exemption from the 10% penalty on premature IRA withdrawals if they are used to pay medical expenses in excess of what percent of a person's adjusted gross income?
7.5%
4. Reduction
7.Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe? (Choose from the following options) 1. Transfer 2. Avoidance 3. Retention 4. Reduction
An employer offers a short-term disability plan to its employees. How much of a given employee's income would be covered under the plan?
70%
The Cash Surrender rider in a policy creates a cash value of around what percent of the premiums that are paid into a disability income insurance policy in excess of claims paid out?
70%
A Medicare Part D enrollee meets his deductible. Now the plan will pay for what percentage of his prescription drug costs?
75%
In life policies issued in this state, insurers are permitted to charge interest during the policy grace period for the number of days elapsing before the premium is paid. What is the maximum annual interest rate?
8%
3. It has a guaranteed minimum interest rate
8.Why is an equity indexed annuity considered to be a fixed annuity? (Choose from the following options) 1. It has a fixed rate of return. 2. It is not tied to an index like the S&P 500 3. It has a guaranteed minimum interest rate 4. It has modest investment potential.
2. Annually Renewable Term
9.All other factors being equal, the least expensive first-year premium payment is found in (Choose from the following options) 1. Level Term 2. Annually Renewable Term 3. Increasing Term 4. Decreasing Term.
An HMO is required to provide the member with inpatient hospital care inside or outside of the service area for at least how many days per year for the treatment of each injury or sickness
90 days
In most cases, an insurer must give how many days notice before they are allowed to terminate a producer's appointment?
90 days
Medicare Part A helps a person pay for inpatient hospital care for up to how many days in a participating hospital in any benefit period.
90 days
Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within
90 days of a loss.
In Pennsylvania, a "pre-existing condition" is defined as a disease or condition for which medical attention was received at least
90 days prior to the effective date of coverage.
In long term care policies, the term "chronically ill" means an individual who is unable to perform at least 2 activities of daily living - for at least
90 days.
Most policies will pay the accident death benefits as long as the death is caused by the accident and occurs within
90 days.
Which of the following is NOT true regarding annuity payments?
A "deferred annuity" is characterized by the time during which payments are made into the annuity and gain interest on a nontaxable basis
When an insurance company plans to seek and use information obtained from investigators, they must first provide the applicant with:
A Disclosure Authorization Notice
If a life insurance policy develops cash value faster than a seven-pay whole life contract, it is
A Modified Endowment Contract
If a life insurance policy develops cash value faster than a seven-pay whole life contract, it is
A Modified Endowment Contract.
A hospital indemnity policy will pay
A benefit for each day the insured is in a hospital.
What are the most common penalties for violations of insurance statutes?
A cease and desist order, a fine, and license suspension or revocation.
Which of the following would be considered an unfair claims settlement practice?
A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered
Underwriting for disability insurance is unique due to the type of risk involved. Which of the following situations illustrates this? 1) A stunt-person pays a lower premium than a data entry operator. 2) An attorney pays a higher premium and receives a poorer classification of disability. 3) A construction worker pays a low premium and receives a higher classification of disability. 4) A construction worker pays a higher premium and receives a poorer classification of disability.
A construction worker pays a higher premium and receives a poorer classification of disability.
As of January 1, 2009 Oregon will now perform all of the following checks on applicants for insurance licenses, EXCEPT:
A credit history check.
Which of the following statements is INCORRECT? 1) A deferred compensation fund is usually a qualified plan. 2) Deferred compensation funds can be established by employers. 3) Deferred compensation funding can be made with cash deposits to an annuity. 4) Deferred compensation funds generally provide additional retirement benefits.
A deferred compensation fund is usually a qualified plan.
If a company has a Simplified Employee Pension plan, what type of plan is it?
A defined contribution plan for a small business
When Barkley started work for the Ace Company, he was told he could participate in a Simplified Employee Pension Plan. This plan is
A defined contribution plan for a small business.
Lisa and Lena own a shop together. They are partners in their business of 2 years. Lisa is a designer; Lena is a seamstress. Lisa worries Lena will become disabled and be unable to sew, so she inquires about purchasing insurance to be able to buy out Lena's half of the business if she becomes disabled. What does an agent tell them about a disability buy-sell plan?
A disability buy-sell plan protects the insured in case of disability. It allows the policy-owner to buy out the partner's interest in the business, and the benefits are tax free.
All of the following could own group life insurance EXCEPT
A group needing low cost life insurance.
All of the following could own group life insurance EXCEPT
A group needing low-cost life insurance.
Which statement best defines a Multiple Employer Welfare Arrangement (MEWA)? 1) A joining together by employers to provide health benefits for employee 2) A group health plan that covers medical expenses arising from work related injuries 3) A plan that provides hospice care for terminally ill employees 4) A government health plan that provides health care for the unemployed
A joining together by employers to provide health benefits for employee
Joint Life Policy
A married couple owns a permeant policy which covers both of their lives an pays the face amount of the policy only upon the death of the first. Which policy is that?
If there is a material change in an MEC contract,
A new 7-pay test is required.
Richard is the Vice-President of a major toy company. The President of the company has offered him a special individual annuity plan that is unavailable to lower-echelon employees. This plan would involve using before-tax corporate dollars to fund, and it does not meet government approval standards. This annuity plan is
A non-qualified annuity plan.
30 days
A person buys an individual long-term care policy and is not satisfied with the provision. Within how many days will the insured be able to return the policy for a full premium refund?
An individual has been diagnosed with Alzheimer's disease. He is insured under a life insurance policy with the accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits?
A portion of the benefit up to a limit is tax free; the rest is taxable income
6 months
A pre-existing condition is a condition for which the employee has sought medical advice, diagnosis, or treatment within the previous
Which of the following is an example of a producer's fiduciary responsibilities?
A producer promptly forwarding premiums to the insurance company
Concerning insurance, the definition of a fiduciary is
A producer who handles insurer funds in a trust capacity.
This state provides for a temporary license for all of the following EXCEP
A producer's retirement.
Insurance companies may be classified according to the legal form of their ownership. The type of company organization that offers their policy holders a risk sharing mechanism is called:
A reciprocal company.
All of the following are correct about the required provisions of a health insurance policy EXCEPT
A reinstated policy provides immediate coverage for an illness.
All of the following are correct about the required provisions of a health insurance policy EXCEPT 1) Proof-of-loss forms must be sent to the insured within 15 days of notice of claim. 2) A reinstated policy provides immediate coverage for an illness. 3) A grace period of 31 days is found in an annual pay policy. 4) The entire contract clause means the signed application, policy, endorsements, and attachments constitute the entire contract.
A reinstated policy provides immediate coverage for an illness.
Which of the following would be required to be licensed as an insurance producer
A salaried employee who advertises and solicits insurance
Which of the following is true? 1. A scheduled plan is called a basic plan. 2. A basic plan is a comprehensive plan. 3. There are two varieties of dental indemnity plans. 4. None of the above
A scheduled plan is called a basic plan.
Which of the following conditions would a disability income policy most likely NOT require in order to qualify for benefits?
A specified income status prior to the disability
In the event of a loss covered by the policy, if the insurer requests a signed sworn proof of loss, the named insured is required to submit it within?
A specified time. In the event of a loss covered by the policy, the named insured is required to submit to the insurer a signed sworn proof of loss within the allotted time (usually 60 days, but may vary).
What's the difference between a fidelity bond and a surety bond?
A surety bond guarantees something will happen; a fidelity bond guarantees something will not happen. A fidelity bond is sometimes called an honesty bond and pays if someone has been dishonest. A surety bond is a guarantee someone will perform as promised and pays if they do not.
Which of the following groups would probably be covered by blanket insurance?
A university's sports team
Which of the following is NOT an allowable 1035 exchange
A whole life insurance policy is exchanged for a term insurance policy
Which of the following is NOT an allowable 1035 exchange?
A whole life insurance policy is exchanged for a term insurance policy
What company produces evaluations of insurer financial status often used by the Insurance Department?
AM Best & Company
What kind of liability would a person who owns a swimming pool have?
Absolute
The two types of assignments are
Absolute and collateral.
After an insurer's underwriter approves an application, an agent delivers the policy to the applicant, who then submits an initial premium and accepts the terms of the policy. Which of the following terms best describes what the applicant has done
Acceptance An applicant's acceptance is contingent upon receiving an approved policy and paying the initial premium.
Example of apparent authority
Accepting late premiums after grace period
Insured stopped paying premiums
According to the incontestability provision, which of the following is a reason an insurer can deny a claim on a policy that has been in force for 2 years?
If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following?
Adjust the benefit in accordance with the increased risk.
Suzie 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?
Adjust the claim benefit to reflect Suzie's true age
A woman 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?
Adjust the claim benefit to reflect the woman's true age
An insured misstated her age at the time of the life insurance application is taken. The misstatement may result in
Adjustment in the amount of death benefit.
A 63-year-old man is planning to be employed until age 68. When will he be eligible for Medicare?
Age 65, regardless of his employment status
According to the Law of Agency, a principal is represented by whom?
Agent or producer.
How is express authority conveyed onto an agent?
Agent's contract
An insured pays a small $100 premium every month, yet the insurer promises to pay a high percentage of all medical costs. What element of an insurance contract does this describe?
Aleatory
What type of insurer is formed under the laws of another country?
Alien
The duty (or duties) of a producer where replacement is involved include 1) Leaving a copy or original of all solicitation material used for presentation to the applicant. 2) Submitting to the replacing insurer a copy of all soliciting material. 3) Submitting to the replacing insurer a statement signed by the applicant as to whether or not he has existing life insurance. 4) All of the above
All of the above
What type of coverage does ERISA monitor?
All of the above
Which of the following are true? 1. The entire premium for a personally-owned medical plan is paid for by the insured. 2. Premium payments on personally-owned disability income insurance are not tax deductible by the individual. 3. The entire premium for a personally-owned long term care policy is paid for by the insured. 4. All of the above
All of the above
What is a characteristic of a 501(c)(9) trust?
All of the above are characteristics of a 501(c)(9) plan Some small employers do not have enough employees to form a group large enough to qualify for group insurance. These employers may join with other employers in the same or similar industry and form a trust to provide health coverages. They may operate as a non-profit trust under the IRS code. The plan may be "employer-pays-all" (noncontributory) or may require the employee to pay a portion of the costs (contributory).
What is a characteristic of a 501(c)(9) trust?
All of the above are characteristics of a 501(c)(9) plan.
Premiums are determined by the age, sex and occupation of each individual certificate holder.
All of the following are characteristics of group life insurance, EXCEPT
Policy loan can be made on policies that do not accumulate cash value.
All of the following are true regarding insurance policy loans EXCEPT
Coverage for cosmetic treatment.
All of the following are usually provide under an employer dental insurance plan EXCEPT
The planned premium pays for mortality charges and expenses and any excess is returned to the policyowners
All of the following character tics of a Universal Life policy EXCEPT
Dividend amounts are guaranteed in the policy.
All of the following statements concerning "dividends" are true EXCEPT
Licensed Life insurance agents are expected to be familiar with what rules and regulations?
All of the insurance laws and regulations
Which of the following provisions is mandated by HIPAA? 1) Dependent coverage up to age 19 regardless of student status. 2) All plans must cover preventive care. 3) All policies offered to small employers must be guaranteed issue. 4) All plans must offer high maximum limits.
All policies offered to small employers must be guaranteed issue
An agent is acting ethically in all of the following situations EXCEPT 1) Working within the conditions of his/her contract. 2) Representing the insurer, not the insured. 3) Always representing the insured. 4) Keeping customers' best interests in mind.
Always representing the insured.
Assuming that all of the following people are covered by a High Deductible Health Plan and are not claimed as dependents on anyone's tax returns, which would NOT be eligible for a Health Savings Account?
Amanda is 67 and is covered by a basic medical expense policy
The federal act which mandates that "all personnel actions must be unrelated to either the existence or consequence of disability to include recruitment and selection of employees, compensation of employees, training, and all terms, conditions and privileges of employment" is known as
Americans with Disabilities Act.
Which of the following would be deducted from the death benefit paid to a beneficiary, if a partial accelerated death benefit had been paid while the insured was still alive?
Amount paid with the accelerated benefit, plus the earnings lost by the insurance company in interest income from the accelerated benefit
When Marsha purchased her Disability Income policy 6 years ago, she misstated her age to the agent. She told the agent that she was 30 years old, when in fact, she was 37. If the policy contains the optional provision
Amounts payable under the policy will reflect Marsha's correct age.
When an insured purchased her disability income policy, she misstated her age to the agent. She told the agent that she was 30 years old, when in fact, she was 37. If the policy contains the optional misstatement of age provision
Amounts payable under the policy will reflect the insured's correct age.
A Universal Life Insurance policy is best described as
An Annually Renewable Term policy with a cash value account.
403(b) Plan (TSA)
An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers, for example, is a(n)
A 56-year-old annuitant decides to withdraw all the money from the annuity before he retires. Which of the following is correct?
An age-based penalty will be imposed for withdrawing the annuity.
2) Fraud.
An agent is trying to convince a potential insured to buy a policy from him, so he misrepresents the benefits of the policy. This is an example of (Choose from the following options)1. Indemnity.2. Fraud.3. Defamation.4. Concealment.
Rebating is an unfair trade practice and is regulated by law. ALl of the following would be considered to be rebating EXCEPT
An agent uses misrepresentation to convince a person to cancel an existing policy and take a new policy from him
Which of the following applicants could the insurer charge a higher rate and not be charged with unfair discrimination?
An applicant that is a female.
Permanent
An applicant wants to buy a life insurance policy that has a cash value element. Which type should she buy?
Which of the following would be considered a nonmedical insurance application?
An application on which the medical information is completed by the applicant and the agent only
Which of the following statements is true concerning a 403(b) plan (tsa) ?
An arrangement made with certain tax-exempt "502c(3)" organizations and public schools under which employees may set aside amounts of income for retirement purposes
The group has at least 50 members.
An association could buy group insurance for its member if it meets all of the following requirements EXCEPT
Which would NOT be covered by the inside the premises - robbery or safe burglary of other property coverage?
An employee is caught stealing cash from the register. Dishonest or criminal acts of any employee or representative are specifically excluded.
Under which condition would an employee's group medical benefits be exempt from income taxes?
An employee's group medical benefits are generally exempt from taxation as income.
An employer provides a group life plan for its employees; it is $50,000 of term to age 65. When one of the employees was hired 10 years ago, he misstated his age and told the employer he was 50, when in fact he was 56 years old. The insured employee died last week. His beneficiary will receive (Choose from the following options) 1. The amount of death benefit the premium would have purchased at his correct age. 2. Nothing, due to the misstatement of age. 3. $50,000. 4. Nothing, due the insured's reaching the maximum age.
An employer provides a group life plan for its employees; it is $50,000 of term to age 65. When one of the employees was hired 10 years ago, he misstated his age and told the employer he was 50, when in fact he was 56 years old. The insured employee died last week. His beneficiary will receive (Choose from the following options)1. The amount of death benefit the premium would have purchased at his correct age.2. Nothing, due to the misstatement of age.3. $50,000.4. Nothing, due the insured's reaching the maximum age.
Individuals in the business of selling construction equipment and mobile equipment should insure with Equipment dealers coverage form.
An equipment dealer's coverage form covers dealer's stock in trade consisting primarily of mobile agricultural equipment and construction equipment. It also covers property of others in the dealer's care, custody, or control. It excludes coverage for autos, motorcycles, aircraft, and watercraft.
Who can make changes to the policy once it is in effect ?
An executive officer of the insurer
While a claim is pending, an insurance company may require
An independent examination as often as reasonably required. While a claim is pending, an insurance company may require an independent exam as often as reasonably required.
Inspection reports may be obtained by an insurance company from
An independent investigating firm.
The equity in an equity index annuity is linked to
An index like Standard & Poors 500.
Who can make a fully deductible contribution to their IRA?
An individual covered by an employer-sponsored plan whose earned income is below a required limit
Decreasing term
An individual has just borrowed $10,000 from his bank on a 5-year note. The note is due in installments. What type of life insurance policy would be lest suited to this situation?
Who can make a fully deductible contribution to a traditional IRA ?
An individual not covered by an employer sponsored plan who has earned income
Who can make a fully deductible contribution to a traditional IRA?
An individual not covered by an employer-sponsored plan who has earned income
To which of the following policies would the State regulations on illustrations NOT apply?
An individual variable life policy
The insurer can require the insured to visit a different physician at the insurer's expense.
An individual who was previously covered by group health insurance for 6 months is eligible
13. Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy? 1) An individual who doesn't qualify for Medicare may be eligible. 2) An individual who was previously covered by group health insurance for 6 months is eligible. 3) The gap of coverage for eligibility is a period of 63 or less days. 4) An individual who was previously covered by group health insurance is eligible.
An individual who was previously covered by group health insurance for 6 months is eligible.
Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy?
An individual who was previously covered by group health insurance for 6 months is eligible.
Rebating
An insurance agency is running a promotion offering any purchaser of insurance two tickets to a basketball game upon payment of the annual premium. This promotion constitutes
All of the following statements concerning Waiver of Premium riders are correct EXCEPT
An insured who has recovered from a disabling injury will be required to repay the insurer for any premiums that were waived.
All of the following statements concerning Waiver of Premium riders are correct EXCEPT 1) Once activated, the Waiver of Premium will continue until the insured's recovery or the maturity of the policy, whichever occurs first. 2) Waiver of Premium riders require that disability needs to last for a certain period of time. 3) An insured who has recovered from a disabling injury will be required to repay the insurer for any premiums that were waived. 4) There is a maximum age limit for the Waiver of Premium rider to activate.
An insured who has recovered from a disabling injury will be required to repay the insurer for any premiums that were waived.
Attained age
An insured's premium increases as a result of her age. Which type of policy does she have?
Which of the following statements is true, concerning the alteration of optional policy provisions?
An insurer may change the wording of optional provisions, as long as the change does not adversely affect the policyholder.
1. Fraternal insurer
An organization that, in addition to other activities, provides a formal insurance plan to its members is classified as a (Choose from the following options) 1. Fraternal insurer 2. Mutual company 3. Stock company 4. Reciprocal association.
Under the 401K bonus or thrift plan, the employer will contribute ?
An undetermined percentage for each dollar contributed by the employee.
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
An unfair trade practice.
All other factors being equal, the least expensive first year premium payment is found in
Annual Renewable Term
Which of the following is not applied toward the deductible under a nonscheduled plan? 1) Gingivitis treatment 2) Root canal 3) Wisdom tooth extraction 4) Annual dental exam
Annual dental exam
The death protection component of Universal Life Insurance is always
Annually Renewable Term
When an annuity is annuitized, whose life expectancy is taken into account?
Annuitant
person who receives benefits or payments from the annuity, and for whom the annuity is written and whose life expectancy is taken into consideration
Annuitant
Which concept is associated with "EXCLUSION RADIO"
Annuities payment
Which concept is associated with "exclusion ratio"?
Annuities payments
Which of the following is NOT true about an insurance consultant in the State of Oregon? 1) Consultants offer advice for a fee 2)Individuals may act as consultants in both life, health, property and casualty insurance 3) A consultant must hold a valid license 4) Any attorney-at-law may be considered a consultant
Any attorney-at-law may be considered a consultant.
Davis Industrial provides its employees with a group nonoccupational disability insurance policy that provides 60% of their pre-tax wage in the event of total disability. Because Davis Industrial pays the full cost of the policy,
Any benefits received will be taxed as ordinary income.
Mike purchased a policy to provide coverage on himself, his wife Linda, and their two children, Jon and Kris. All of them would need to prove insurability EXCEPT
Any children born to them after the inception of the contract.
Deferred Compensation Funding refers to:
Any employer retirement or savings plan that is not a qualified plan.
Which of the following is NOT true of Section 1035 Policy Exchanges?
Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days
Albert and Bryan are partners in a business. They purchase a Buy-sell agreement, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
Any form of life insurance
Which of the following is NOT true about an insurance consultant in the State of Oregon?
Any insurance adjuster may be considered a consultant.
Albert and Bryan are partners in business . They purchase a BUY-SELL agreement , which states that should done of them die prematurely, the other would be financially able to buy the interest of the deceased partner . What type of life insurance policy may be used to fund this agreement ?
Any life insurance policy
Which of the following is NOT covered under accounts receivable coverage form?
Any loans required to offset uncollectible amounts Loan principal amounts are not covered under the form. However, other expenses, such as interest on necessary loans, are covered.
The Director regulates insurance rates through detailed rate reviews. The Director will prohibit insurance rates that are
Any of the above.
All of the following qualify for Medicare Part A EXCEPT
Anyone who is willing to pay a premium.
Which type of authority is bases on the actions and words of the agent ?
Apparent
An agent accepts a payment after 35 days it is due , telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority ?
Apparent Apparent
What is Apparent authority?
Appearance or the assumption of the authority grants the agent more powers to assist the client
Which of the following individuals must have insurable interest in the insured?
Applicant
An insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information?
Application
Andrea wants to apply for an individual life insurance policy. She has a nearly flawless health history and wants only limited coverage. Which type of information is the least that would probably be required?
Application for insurance
When an insured incurs medical expenses during the last 90 days of a calendar year, the Carry-Over Provision allows them to
Apply such expenses to the new year's deductible.
Representations are written or oral statements made by the applicant which
Are considered true to the best of the applicant's knowledge.
Under a Key Person disability income policy, premium payments
Are made by the business and are not tax-deductible.
SIMPLE Plans require all of the following EXCEPT
At least 1,000 employees.
The classification Small Employer means any person actively engaged in a business that on at least 50% of its working days during the preceding year employed
At least 2 and not more than 50 persons.
All individual and group health insurance policies that provide medical benefit expense insurance on any type of a cost incurred or service basis which provides coverage for the dependent family members of an insured participant are required to cover the newborn child of the insured starting when?
At moment of birth
When must an insurance company present an outline of coverage to a person?
At the time of application
When must the Medicare Supplement Buyer's Guide be presented?
At the time of application
If an insurer meets the State's financial requirements and is approved to transact business in the state,
Authorized.
A policy owner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision ?
Automatic Premium Loan
Which provision may be added to a permanent life policy, at no cost, that insures that the policy will not lapse so long as there is cash value?
Automatic Premium Loan option
Which of the following is NOT an enrollment period for Medicare Part A applicants?
Automatic enrollment
A policy fails to pay the premium due in his whole life policy after the grace period passes, but the policy remains in force. This is due to provisions
Automatic premium loan
Which of the following protects the insured from an intentional policy lapse due to a non payment of premium ?
Automatic premium loan
The risk management technique that is used to prevent a specific loss by not exposing yourself to that activity is called
Avoidance.
Which of the following provision in annuity contract allow the owner to surrender the annuity if interest rates drop to a specified level ?
Bail-out
Which of the following provisions in annuity contracts allow the owner to surrender the annuity if interest drop to a specified level ?
Bail-out
Predicted needs of the family after the insured's death.
Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value?
The accelerated benefits will provide for an early payment of death benefit when the insured
Becomes terminally ill
All of the following are requirements for retirement plans EXCEPT
Being contributory
Which of the following is not true of Disability Buy-Sell coverage?
Benefits are considered taxable income to the business.
All of the following statements about Credit Life insurance are true EXCEPT:
Benefits are paid to the borrowers beneficiary (The creditor IS the beneficiary)
Which of the following is taxable as income?
Benefits paid to the employee at retirement.
John owns a medical expense policy he purchased for his family. John's employer purchased a group Disability Income policy for John and all eligible employees. John subsequently suffered an accident on the job that left him unable to work for four months. If John receives benefits from his disability income policy, which of the following would be true?
Benefits received by John that are attributable to employer contributions are fully taxable to the employee as income.
John owns a medical expense policy that he purchased for his family. John's employer purchased a Group Disability Income policy for John and all eligible employees. John subsequently suffered an accident on the job that left him unable to work for four months. If John receives benefits from his disability income policy, which of the following would be true?
Benefits received that are attributable to employer contributions are fully taxable to the employee as income.
Which of the following is NOT true regarding an annuity certain?
Benefits stop at the annuitant's death.
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?
Benefits that are attributable to employer contributions are fully taxable to the employee as income.
All of the following are characteristics of a Major Medical Expense policy EXCEPT
Blanket coverage.
The First Street Church plans to sponsor a summer camp for the youth of their congregation. They would like to purchase insurance that would pay benefits should one of the youth get injured while participating in the camp activities. The type of policy they would likely need is a/an
Blanket.
Which of the following group plans allow benefits to be collected income tax-free by the employee, without exception? 1) Accidental Death and Dismemberment 2) Employer Group Health 3) Long-Term Care 4) Both 1 and 2
Both 1 and 2
Which entities regulates variable life policies ?
Both State government and the Insurance department
Which of the following best describes fixed period settlement option?
Both the principal and interest will be liquidated over a selected period of time.
. A policy that uses the accidental bodily injury definition will provide coverage that is _________ than a policy that uses the accidental means definition.
Broader
A policy that uses the accidental bodily injury definition will provide coverage that is __________ than a policy that uses the accidental means definition.
Broader
A business wants to make sure that if a key employee becomes disabled, the business will be protected from any resulting loss. Which kind of insurance will protect the business?
Business Disability
Brandon owns a small hardware store. He is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability
Business Overhead Expense Policy
Brendon owns a small computer store. He is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability?
Business Overhead Expense Policy
Which of the following could be used when a corporation, association, partnership, or limited liability partnership acts as a producer?
Business entity
Generic publication that explains insurance in general terms, to help with decision making
Buyer's Guide
Which of the following options best depicts how the eligibility of members for group health insurance is determined?
By conditions of employment
Which of the following options best depicts how the eligibility of members for group health insurance is determined? 1) By the physical conditions of the applicants at the time of employment 2) In such a manner as to establish individual selection as to the amounts of insurance 3) By conditions of employment 4) Eligibility is not determined, but simply accepted
By conditions of employment
After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true?
By law, the new, individual policy must provide the same benefits as the group insurance policy.
How are the variable annuities regulated?
By state and federal agencies
Which of the following is true regarding the annuity period? a)It is also referred to as the accumulation period. b)It is the period of time during which the annuitant makes premium payments into the annuity. c)It may last for the lifetime of the annuitant or for a shorter period of time. d)During this period of time the annuity payments grow interest tax deferred.
C. It may last for the lifetime of the annuitant or for a shorter period of time. The "annuity period" is the time during which accumulated money is converted into an income stream. It may last for the lifetime of the annuitant or for a shorter specified period of time depending on the benefit payment option selected.
What limits the amount that a policy owner may borrow from a whole life insurance policy ?
CASH VALUE
All of the following employees may use a 403(b) plan (TSA) for their retirement EXCEPT
CEO of private corporation.
Kevin and Nancy are married; Kevin is the primary breadwinner and has a health insurance policy that covers both him and his wife. Nancy has an illness that requires significant medical attention. Kevin and Nancy decide to legally separate, which means that Nancy will no longer be eligible for health insurance coverage under Kevin. Which of the following options would be best for Nancy at this point?
COBRA
All of the following renewability and cancellation provisions are permitted in Oregon, EXCEPT: 1) Cancellable. 2) Guaranteed renewable. 3) Optionally renewable. 4) Conditionally renewable.
Cancellable.
Which of the following categories of benefits are not covered by an LTC policy?
Care given in an acute care unit of a hospital
Carol is insured under her employer's group life insurance plan at her place of employment. All of the following statements about her coverage are true EXCEPT
Carol could choose what type of insurance her conversion policy provided (Term or Permanent).
When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply?
Case management provision
Under which non-forfeiture option does the company pay the surrender value and have no further obligations to the policy-owner?
Cash surrender
Pete, the owner of a TV sales store, is the insured under a disability buy-sell policy. Were Pete to die or become disabled, the policy would provide
Cash to Pete's business partner to accomplish a buy-out.
What limits the amount that a policyowner may borrow from a whole life insurance policy?
Cash value plus loan interest
A state-issued document empowering an insurance company to become an admitted insurer is called what?
Certificate of Authority
In order for an insurer to legally transact insurance, it must obtain which of the following?
Certificate of Authority
In order to transact insurance within a given state, an alien insurer must first obtain what?
Certificate of Authority
What document is required for an insurance company to transact insurance?
Certificate of Authority
What of the following must an alien insurer obtain in order to transact insurance within a given state?
Certificate of Authority
All of the following LTC coverages would encourage an insured to receive care at home EXCEP
Child care.
What is the term for replacing insurance policies for the purpose of making commissions?
Churning
Paul is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim?
Claim is denied if Paul's policy contains the Illegal Occupation provision
In a group prescription drug plan, the insured typically pays what amount of the drug cost?
Co-payment
A producer is proposing that his client, Richard, purchase a new life insurance policy. Which of the following is the producer NOT required to do? 1) Keep a record of the application on file for three years 2) Collect a signed statement from Ken about his existing life insurance. 3) Collect Ken's fingerprints. 4) Place Ken's premium in a trust account.
Collect Richards's fingerprints
M, who is not licensed as an insurance agent works part-time in her father's insurance agency. M may perform all of the following duties EXCEPT
Collect premium for in-force policies and explain coverages to clients that have existing policies written by her father
Lily is driving her car through a residential area. She loses control of the car, and crashes into Max's front porch. Max, who was sitting on the porch, is injured. Lily's liability insurance policy has a limit set at $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does Lily have?
Combined single Combined single is a single dollar limit of liability applying to the total of damages for bodily injury and property damage combined resulting from one accident or occurrence.
A professional who wants coverage for all liability exposures should purchase what form of liability insurance?
Commercial general and professional. Commercial general liability excludes professional liability, and professional liability does not cover premises liability.
An insured is driving north and his wife, who is also policy beneficiary , is driving south on the same highway. They have a head-on collision. The husband dies instantly , and the wife dies 15 days later. The company pays the death benefit to the state insured. This indicates that the life insurance policy had a :
Common Disaster Provision
In any case where there is a controversy or dispute between the insurance company and the insured, the soliciting agent is the agent of the
Company
The ABC Corporation has $100,000 of coverage on its building through insurance Company A, and $50,000 of identical coverage on the same building through insurance Company B. Assuming coinsurance is not an issue, when a $24,000 loss occurs, how much will each insurer pay?
Company A will pay $16,000; Company B will pay $8,000 Each policy pays its pro rata share of the loss based upon each policy's share of the total amount of coverage.
When a change needs to be made on the application for insurance, which is the best method for correcting the information?
Complete a new application or ask the applicant to initial the correction on the original application.
A health insurance plan that covers all accidents and sicknesses that are not specifically excluded from the policy is a ___ plan.
Comprehensive
Combination plans are comprised of both basic and ________ plan features.
Comprehensive
When applying for an individual life insurance policy, an applicant states that he went to the doctor for nausea, but fails to mention that he was also having severe chest pains. What is this act called?
Concealment
Under which process does the insurance company monitor an insured's hospital stay to make sure that everything is proceeding according to schedule and that the insured will be released from the hospital as planned?
Concurrent review
What process will the insurance company use to monitor the insured's hospital stay to make sure that everything is proceeding according to schedule?
Concurrent review
The contract provision which allows the insurer to not renew health coverage if certain events occur, like early retirement, is
Conditionally Renewable.
An insured's business is damaged because of a fire, and he is forced to close the business temporarily for repairs. As a result, the insured lost income. What type of loss is this?
Consequential. Consequential loss, also known as indirect loss, is a second financial loss caused by a covered direct loss.
In reference to fixed annuities, what comprises most of a life insurance company's general account?
Conservative investments like bonds
In reference to fixed annuities, what compromises most of a life insurance company generals account ?
Conservative investments like bonds
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following terms best describes what the insurer has violated?
Consideration The binding force in any contract is called "consideration". Consideration on the part of the insured is the payment of premiums and the health representations made in the application. Consideration on the part of the insurer is the promise to pay in the event of loss.
The at-fault driver in an insured's auto crash had the state required minimums for auto liability coverage, but not enough to pay for all the damage done to the insured. This driver is
Considered underinsured. An underinsured driver has at least the minimums required by law but not enough to cover the damages caused someone else. Underinsured motorist is an optional coverage that can be added to an auto policy.
Which of the following provisions must be included on the first page of a Medicare supplement policy and states the insurer's right to change premium amounts?
Continuation Provision
Which of the following situations will incur a 10% penalty for an early withdrawal from an IRA?
Contract holder is 55 1/2.
Contracts that are prepared by one party and submitted to the other party on a "take it or leave it" basis are classified as
Contracts of adhesion
Which of the following describes the tax advantage of a qualified retirement plan?
Contributions and earnings of the plan are exempt from the employee's taxable income
Which of the following describes the tax advantage of a qualified retirement plan?
Contributions and earnings of the plan are exempt from the employee�s taxable income.
Which of the following does NOT describe a defined benefit plan?
Contributions are tied to the company profits.
Which of the following is true concerning profit sharing plans that do not provide a specific formula for calculating the profits to be shared?
Contributions must be substantial and regular
In a relative value system of determining coverage for a given procedure, what term describes the total amount payable per point?
Conversion factor
Which of the following provisions give an employee's former spouse the right to exchange group insurance for an individual policy within 60 days of the separation or divorce?
Conversion provision
According to the entire contact provision what document must be made part of the insurance policy
Copy of the original application
What document must be made part of the insurance policy entire contract?
Copy of the original application
What are the conditions for the interest in a corporate-owned annuity to grow tax deferred?
Corporate-owned annuities need to be written with a measurable life as the annuitant.
The President of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?
Corporations are never legal annuitants
The President of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?
Corporations are never legal annuitants.
Which of the following is not an exclusion in a dental expense benefit plan? 1.The replacement of lost appliances 2. Oral hygiene instruction 3. Treatment for preexisting conditions 4. Cosmetic services necessary as a result of an injury
Cosmetic services necessary as a result of an injury
All of the following are advantages of an HMO or PPO for a Medicare recipient EXCEPT
Cosmetic surgery is available.
When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply?
Cost containment
A long stretch of national economic hardship causes a 7% rate of inflation. Devonne notices that the face value of her life insurance policy has been raised 7% as a result. What is the name of the provision that caused this change?
Cost of Living Rider
Which of following about Group Life is correct
Cost of coverage is based on ratio of men and women
When a policy is surrendered for its cash value
Coverage ends and the policy can not be reinstated
All of the following are usually provided under an employer group dental insurance plan EXCEPT 1) Coverage for cosmetic treatment. 2) The dental plan places limits on such procedures as braces and appliances. 3) Preventive care for up to 2 visits per year. 4) The dental plan is typically written in conjunction with group health insurance.
Coverage for cosmetic treatment.
Which of the following will NOT be an appropriate used of a deferred annuity ?
Creating an eState
Which of the following is covered under the Mail floater of a Commercial Inland Marine policy ONLY if is sent by registered mail?
Currency and unsold travelers checks Property covered only when sent by registered mail includes the following: bullion; platinum and other precious metals; currency and unsold travelers checks; or jewelry, watches, precious and semiprecious stones and similar property.
Your client owns a Market Value Adjusted Annuity. In order to pay for a series of large, unexpected medical bills, he decides to surrender his policy prematurely. Which of the following will determine the penalty that that annuity owner will have to pay?
Current interest rate at the time of surrender
The unique thing about a bailee form is that it covers
Customer's property whether or not the insured has been negligent.
And inv. applied for policy and paid premium and insurer issued conditional receipt. Five days later applicant submitted to medical exam. If policy is issued what would the policy's effective date be?
Date of medical exam
Decreasing Term
Death Benefit decreases each year
Which component must increase in the increasing term insurance?
Death benefit
Which of the following would be tax free?
Death benefit received in a lump-sum settlement
Which of the following would be tax-free?
Death benefit received in a lump-sum settlement
Which of the following is NOT typically excluded from life policies
Death due to a plane crash for a fare-paying passenger
When must an IRA be completely distributed when a beneficiary is not named?
December 31 of the year that contains the fifth anniversary of the owner's death
Which of the following is a mandatory part of an insurance policy that varies with each individual policy?
Declarations Because the declarations tell who, what, when and where, this information is different in each contract.
An individual has just been diagnosed with a quickly-spreading, fatal form of cancer; his oncologist predicts that he will live for 5 months. He applies for individual life insurance. What risk classification will he most likely receive?
Declined
What would be considered a disadvantage of owning a fixed annuity?
Decrease in purchasing power of the benefit in times of inflation
Children's riders attached to whole life policies are usually issued as what type of insurance?
Decreasing term
Which of the following types of insurance policies is most commonly used in credit life insurance?
Decreasing term Credit insurance is a special type of coverage written to insure the life of the debtor and pay off the balance of a loan in the event of the death of the debtor. It is usually written as decreasing term insurance.
Group disability income premiums are
Deductible to the employer as an ordinary business expense
Group disability income premiums are
Deductible to the employer as an ordinary business expense.
Which of the following is not covered under Part B of a Medicare policy?
Dental Care
Which of the following is NOT considered to be a basic service, under a nonscheduled plan? 1) Fillings 2) Endodontics 3) Oral surgery 4) Dentures
Dentures
Fraudulent statements made by the insured that are found in a health insurance application give the insurance company the right to:
Deny all claims related to preexisting conditions for the first two years the policy is in force.
The death benefit in a variable universal life policy
Depends on the performance of a separate account.
following are true regarding deposit premium
Deposit premium is an estimated premium paid in advance at the time the policy is issued that may be adjusted by the audit based on actual exposures.
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?
Depreciation period
Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?
Disability Buy-Sell
Which of the following scenarios will incur a 10% tax penalty on distributions?
Distributions are made on a policy before age 59 1/2
When contributions to an immediate annuity are made with before-tax dollars, which of the following is true of the distributions?
Distributions are taxable
Which of the following terms is used to name the nontaxed return of unused premiums?
Dividend
Your client wants to buy a par policy to supplement his retirement savings program. Which of the following does your client need to understand about insurance policy dividends?
Dividends are considered a refund of unused premiums.
Which of the following in true regarding dividend - related taxation :
Dividends are not Taxable
Which of the following is true regarding dividend-related taxation?
Dividends are not taxable
Which of the following is true regarding dividend-related taxation?
Dividends are not taxable.
Which of the following is true regarding dividend-related taxation?
Dividends are not taxable. Dividends are not considered to be income for tax purposes, since they are the return of unused premiums. The interest earned on the dividends, however, is subject to taxation as ordinary income.
Under the Fair Credit Reporting Act, a consumer may request the substance of the information contained in his/her report. If the consumer challenges the correctness of the information, the reporting agency must
Do nothing if the agency feels its report is accurate.
Insurers are classified according to their domicile. What are the three types of insurers?
Domestic, foreign, and alien.
Because of the history of cancer in her family, Julie purchased a policy that specifically covers the expense of treating cancer. Her policy would be classified as what type of policy?
Dread Disease Policy
A policy which covers medical costs related to a specific condition is called a
Dread Disease Policy.
2. Obtain a list of all life insurance policies that will be replaced
During replacement of life insurance, a replacing insurer must do which of the following? (Choose from the following options) 1. Send a copy of the Notice Regarding Replacement to the Department of Insurance 2. Obtain a list of all life insurance policies that will be replaced 3. Guarantee a replacement for each existing policy 4. Designate a new producer for a replaced policy
Which of the following is a TRUE statement concerning an insurer's Earned Surplus?
Earned Surplus are unassigned funds that are required to be reported on the insurer's annual statement.
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
Either the amount paid into the plan or the cash value of the plan, whichever is greater.
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount
All of the following may be excluded from coverage in a Major Medical Expense policy, EXCEPT
Emergency surgery.
Concerning group Medical and Dental insurance, which of the following statements is INCORRECT?
Employee benefits are tax deductible the year in which they were received.
Employee theft coverage may be written as
Employee theft may be written as any of the above forms.
Employers and insurance companies are given some latitude in setting minimum eligibility requirements for employee participants. These may include
Employees must be full time workers. & A probationary period.
The main purpose of ERISA is to ensure that
Employees receive the pension and other benefits promised by their employers.
According to the requirements for employee benefit plans, which of the following is NOT true?
Employer can be the beneficiary of an employee's group life insurance plan.
In which of the following will the benefit be taxable?
Employer purchases an individual disability income policy for a key person.
Amanda is scheduled for a root canal. Which type of treatment is this?
Endodontics
Which type of dental care would cover repairing a root canal?
Endodontics
In insurance, anything that modifies the original contract, either adding or removing coverage, is done through a(n)
Endorsement. Endorsements change the policy's original terms, conditions, or coverages. Endorsements can add or delete coverage, or merely correct items such as the insured's name, address, etc.
The Primary purpose of Licensing is to
Ensure high standard to the insuring publicity
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
Equal to the original policy for as long a period of time that the cash values will purchase.
An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard & Poor's 500 index. She would likely purchase an:
Equity Indexed Annuity.
14. Utilization Management consists of the evaluation and assistance with all of the following, EXCEPT: 1) The appropriateness of care. 2) The quality of care. 3) Prospective review. 4) Estimating the insured's out of pocket costs for care.
Estimating the insured's out of pocket costs for care.
What is the difference between the Medicare approved amount for a service or supply and the actual charge?
Excess charge
Which of the following statements is correct concerning taxation of long-term care insurance?
Excessive benefits may be taxable.
The section of an insurance policy that details what perils are not insured against and what persons are not insured is known as the
Exclusions. The exclusions section of an insurance policy details what perils are not insured against and what persons are not insured.
Which of the following is an example of a non-qualified retirement plan ?
Executive Bonus Plan
Which of the following is an example of a non- qualified retirement plan
Executive bonus plan
Which of the following is an example of a non-qualified retirement plan?
Executive bonus plan
Who is the owner of the policy and who pays the premium in an Executive Bonus Plan ?
Executive is the owner , and the executive pays the premium
Who is the owner of the policy and who pays the premium in an Executive Bonus Plan?
Executive is the owner and the Executive pays the premium.
Even though "sickness" is a peril covered by a health insurance policy, coverage may be limited or excluded because of all of the following EXCEPT
Exemption periods.
Insurer X charges the premium from its insured customers, passing on operating expenses for the company. The operating expenses plus the premium equals the "gross" premium. What is another name for the operating costs for Insurer X?
Expense loading
The factor added to the net premium to cover the costs of the insurer in obtaining and maintaining the business is called
Expenses.
The authority granted to an agent though the agents contract is referred to as
Express Authority
The authority granted to an agent is defined in the agent's agreement setting forth the specific powers and functions of the agent, is referred to as
Express Authority.
Which nonforfeiture option has the highest amount of insurance protection
Extended term
T/F: A signed waiver of premium is somthing that can be collected/obtained from the applicant
F: Waiver or prem is a rider that can be added to the policy, but not collected from the applicant
Which of the following must an agent receive in order to sell variable life insurance policies ?
FINRA registration
Which policy component decreases in decreasing term insurance?
Face amount.
An applicant is denied insurance because of information found on a consumer report. What act requires that the insurance company supply the applicant with the name and address of the consumer reporting company?
Fair Credit Reporting Act
Which act require that a company supply an applicant with the name & address of the consumer reporting company?
Fair Credit Reporting Act
All individual and group health insurance policies that provide medical benefit expense insurance on any type of a cost incurred or service basis which provides coverage for the dependent family members of an insured participant are required to cover an adopted child of the insured after 31 days.
False
All necessary blood is covered under Medicare Part A.
False
An insurance company or producer may claim that its policies are guaranteed by the Life and Health Insurance Guaranty Association.
False
Benefits are taxable to the plan participant when they are received during the retirement and when the retired person may be in a much lower tax bracket. Distributions prior to age 70 � impose a 10% tax penalty.
False
Emergency care will not be provided for a member if they are outside the HMO service area.
False
If an employee enrolls in a health plan during open enrollment, the preexisting condition provision does not apply.
False
If the annuity owner or the annuitant dies before the distributions begin, the entire interest must be distributed in full on or before April 1 st. of the calendar year that contains the fifth anniversary of the owner's death, unless the owner is the designated beneficiary.
False
If the insured person dies during the grace period, then the insurance company is not obligated to pay the death benefit
False
In Oregon, insurance companies that insure small employers are required to actively offer small employers at least three medical plans.
False
Risk Avoidance is a method of dealing with risk for a group or individual person, or a business with the same or similar exposure to loss.
False
Under certain conditions, Medicare Part A can help to pay for hospice care for people who are terminally ill if the care is provided by a Medicare- certified hospice. There are special benefits periods that apply to hospice care. Part A pays for two 60 day periods and one 30 day period.
False
HMOs allow participants to receive services from providers outside the plan but with higher cost sharing requirements.
False PPOs allow participants to receive services from providers outside the plan but with higher cost sharing requirements.
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?
False advertising
When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file bankruptcy. Which of the following terms best describes the advertisement?
False financial statment
Which rider when attached to permanent life insurance policy provides an amount of insurance on every family memeber
Family term rider
What is the advantage of having a qualified annuity?
Favorable tax treatment
Which of the following is not a government insurance program?
Federal Deposit Insurance Corporation ( FDIC )
Without receiving written consent from an insurance regulatory authority
Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce
When an employee is still employed upon reaching age 65, is Medicare enrollment an option?
Federal laws require that people who participate under Medicare who are also covered by an employer sponsored medical plan are subject to federal guidelines regarding the relationship between Medicare and other plans.
The type of plan that will reimburse the insured (or the provider if the insured assigns the benefits) a payment for each different type of medical service that has been provided is called what?
Fee for Service
The requirement that producers must account for all insurance funds collected, and without the expressed consent of the insurance company(ies) are not permitted to co-mingle those funds with their own funds is known as
Fiduciary responsibility.
A producer is acting in what capacity when he or she is trying to obtain creditable information about an applicant for health insurance?
Field underwriter
Insurance is used to transfer what to the insurance company?
Financial responsibility for loss.
A man wants to buy a life insurance policy in which he can count on guaranteed minimum benefits. Which type should he buy ?
Fixed
Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?
Fixed amount Under the installments for a fixed amount option, the annuitant selects the amount of each payment, and the insurer determines how long they will pay benefits. This option pays a specific amount until the funds are exhausted. There are no life contingencies.
If a beneficiary wanted a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what option would a beneficiary select?
Fixed period
All of the following are dividend options except
Fixed period installments
The annuity purchased with multiple payments, whose benefit is paid more than one year after the purchase is known as which type of annuity?
Flexible Premium Deferred Annuity
4) Reduction
Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe? (Choose from the following options) 1. Transfer 2. Avoidance 3. Retention 4. Reduction
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid
For 20 years or until death, whichever occurs first.
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid
For 20 years or until the insureds death
When an employee terminates coverage under a group insurance policy, coverage continues in force
For 31 days.
Key person life insurance does NOT reimburse a company for which of the following?
For increased pension liability resulting from a key person's death.
What is the maximum period that an insurer would pay benefits in accordance with a Waiver of Premium rider?
For the duration of the disability or the contract, depending on which ends first
An insurance company is domiciled in California and transacts insurance in Nevada. What is this insurer's classification in Nevada?
Foreign
An insurance company that is formed under the laws of another state is known as what type of insurer?
Foreign
Which of the following entities is not an insurer but organization formed to provide insurance benefits for members of an affiliated lodge or religious organization?
Fraternal Benefit Society
All of the following groups qualify for group health insurance, EXCEPT: 1) Employment related groups. 2) Fraternal benefit societies. 3) Sole proprietorships with at least one employee. 4) Multiple Employer Trusts
Fraternal benefit societies.
What type of insurer is a voluntarily formed organization that provides insurance benefits for members of an affiliated lodge or religious organization with a representative form of government?
Fraternal insurer
If taken as a lump sum, life insurance proceeds to beneficiaries are passed
Free of federal income taxation.
When does coverage begin for an adopted child?
From the moment the child is placed in the insured�s home.
In a direct rollover, how is the money transferred from one plan to the new one?
From trustee to trustee
Alden is involved in a small plane accident that renders him permanently deaf, although he does not sustain any other major injuries. Alden is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?
Full benefits
Which of the following expenses is NOT covered by a health insurance policy?
Funeral
You did not enroll in Medicare Part B when you first became eligible. Which of the following would allow you another opportunity to enroll?
General enrollment period
Which of the following policies does NOT contain an automatic reinstatement provision?
General liability written with an aggregate limit An aggregate limit is reduced by the payment of claims. It is possible for an insured to run out of coverage before the expiration of the policy. Aggregate limits are restored on the anniversary date of the policy.
George wants to transfer his personal insurance policy to his friend. Under what conditions would this be possible?
George will need the written consent of his insurer.
Under the professional liability loss settlement provision, what must an insurer do before offering to pay a claimant to settle a claim?
Get the insured's consent If a claim has been filed under a professional liability policy, an insurer MUST get the consent of the insured before offering to pay to settle a claim. If the insured's professional reputation is at risk, and the insured feels he or she is not negligent, the insured can require the insurer to defend the action in court.
Regarding long-term care coverage, as the elimination period gets shorter, the premium
Gets higher. LTC policies also define the benefit period for how long coverage applies, after the elimination period. The benefit period is usually 2 to 5 years, with a few policies offering lifetime coverage. Obviously the longer the benefit period, the higher the premium will be; and the shorter the elimination period, the higher the premium will be.
What required provision protects against unintentional lapse of the policy ?
Grace Period
What provision in a life or health insurance policy extends coverage beyond the premium due date?
Grace period
The death benefit under the Universal Life Option B
Gradually increases each year by the amount that the cash value increases
Mortality - Interest + Expense =
Gross premium
What type of policy issues certificates of insurance to insureds?
Group Insurance
As it pertains to group health insurance, COBRA stipulates that
Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.
What kind of policy does not require proof of insurability?
Group insurance
What kind of policy issues certificates of insurance to insureds?
Group insurance
In life insurance policies, cash value increases
Grow tax deferred
In life insurance policies, cash value increases
Grow tax deferred.
What option allows the insured to periodically increase benefit levels without providing evidence of insurability?
Guarantee of insurability
Increase benefit levels without providing proof of insurability
Guarantee of insurability option in long-term care policies allows the insured to
A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis?
Guaranteed
Which of the following annuity riders ensures that the owner will receive from an annuity at least the amount paid for the annuity?
Guaranteed Lifetime Withdrawal
Which of the following annuity riders ensures that the annuity value will appreciate over time?
Guaranteed Minimum Accumulation
A Universal Life insurance policy has two types of interest rate that are called
Guaranteed and Current
Insurers like to keep the same clients for as long as possible. For insurers, a high retention rate has all of the following advantages EXCEPT
Guaranteed annual returns.
Cameron is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he feels he can afford at this time, he wants to be sure that additional coverage will be available in the future. He should include in this policy a
Guaranteed insurability option
At the time Molly Francis purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called
Guaranteed insurability option.
Most LTC plans have which of the following features?
Guaranteed renewability
An individual is purchasing a permanent kife jbsustance policy with the face value of 25,000. While this is alk the jnsurance that he can afford at this thime, he wants to sure yhat additiknal coverage will be availabkr in the future . Which should be jncluded in the feature?
Guarenteed insurabke option
What insurance concept is associated with the words "Weiss" and "Fitch"?
Guides describing company financial integrity
Ted and Fred are attorneys at law and operate their practice as a partnership. They want to start a program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose
HR-10 (Keogh Plan) Plans specifically for self employee and their employees
Ted and Fred are attorneys at law and operate their practice as a partnership. They want to start a program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose
HR-10 (Keogh plan).
Concerning insurance, the definition of a fiduciary responsibility is
Handling insurer funds in a trust capacity.
First Dollar Coverage refers to a type of insurance which
Has no deductible.
To qualify as a true group, an association must
Have at least 100 members.
Conditions that increase the chance of a loss are known as what?
Hazards
Events or conditions that increase the chances of an insured loss occurring are referred to as
Hazards are conditions or situations that increase the probability of an insured loss occurring.
Events or conditions that increase the chances of an insured loss occurring are referred to as
Hazards.
A individual delays buying life insurance for himself. As time passes, which factor is likely to raise the cost of his life insurance when he finally purchases it?
He is 3 years older than he was when he first considered buying insurance.
An insured has a Modified Endowment Contract. He wants to withdraw some money in order to pay medical bills. Which of the following is true?
He will have to pay a penalty if he is younger than 59 1/2
On the way home from work, a man is involved in a car accident that damages his cervical vertebrae and surrounding nerves. He becomes quadriplegic as a result of the accident. What describes the insurance premiums that he will pay for the rest of his life if his policy contains an optional Waiver of Premium rider?
He will have to pay his regular premiums for 6 months. He will then be reimbursed for those premiums, and subsequent premiums will be waived.
HSAs are designed to
Help individuals save for qualified health expenses.
The purpose of the Life and Health Insurance Guaranty Association is to
Help protect policyowners and beneficiaries against financial loss caused by the insolvency of an insurance company.
Which of the following is true about a defined benefit plan?
High-salaried employees with only a few years until retirement would benefit the most.
Which of the following types of LTC care is not provided in an institutional setting?
Home health care
All of the following would fall under the definition of Durable Medical Equipment EXCEPT
Hospital blankets.
The primary care physician refers the member
How does a member of an HMO see a specialist?
A projection of insurance needs that is based upon the capitalization of a applicant's future earnings is:
Human life value approach- is determined by the loss of income that would result with the death of the insured, after making adjustments for expenses, inflation, etc.
A projection of insurance needs that is based upon the capitalization of an applicant's future earnings is
Human life value approach.
Which authority in NOT stated in an agent's contract but is required for the agent to conduct business ?
IMPLIED IMPLIED IMLIED IMPLIED
true of 1035 exchanges
IRS Code which permits like kind exchanges of property, typically used when exchanging a less competitive policy for a more competitive one, requires absolute assignment
Fixed period
If a beneficiary wanted a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what option would a beneficiary select?
After 1 year
If a person purchase a Flexible Premium Deferred Annuity. When is the soonest that income payouts will begin?
It has favorable tax treatment
If a retirement plan or annuity is "qualified", this means
In which of the following cases would a credit disability policy be issued?
If an individual is in debt to a specific creditor, payments will be made for him/her until the return to work.
1. The policy will terminate when the cash value is reduced to nothing.
If an insured continually uses the automatic premium loan option to pay the policy premium, (Choose from the following options) 1. The policy will terminate when the cash value is reduced to nothing 2. The face amount of the policy will be reduced by the automatic premium loan amount 3. The cash value will continue to increase 4. The insurer will increase the premium amount.
When would a misrepresentation on an insurance be considered fraud?
If it is intentional and material
When would misrepresentation be considered fraud?
If it is intentional and material
Unilateral
If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?
Which of the following is NOT correct concerning taxation of disability income benefits? 1) If the insured paid the premiums, any disability income benefits are tax-free. 2) If the benefits are for a permanent loss, they are not subject to income taxation no matter who paid the premium. 3) If the employer paid the premiums, income benefits are taxable to the insured as ordinary income. 4) If paid by the individual, the premiums are tax deductibl
If paid by the individual, the premiums are tax deductible.
When is a suicide covered by a life insurance policy?
If the policy has been in force for more than 2 years
Which of the following determines whether insurance benefits are taxed?
If the premiums were or were not taxed
An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?
If the primary beneficiary predeceases the insured.
An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?
Illegal
Ashley purchases a $90,000 annuity with a single premium and begins taking payments 2 months after that. What type of annuity does Ashley have?
Immediate
What type of annuity can be purchased with a single premium and provides benefit payments immediately?
Immediate
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?
Immediate annuity.
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?
Implied
Which authority is NOT stated in an agents contract but is required for the agent to conduct business ?
Implied
In which of the following locations would skilled care most likely be provided?
In an institutional setting
The right to determine the wording of a policy
In insurance policies where contract ambiguities are automatically ruled in the favor of the insured, what privilege does the insurer have in order to balance this?
The insured must have first been hospitalized for 3 consecutive days.
In order for an insured under Medicare Part A to receive benefits for care in a skilled nursing facially, which of the following conditions must be met?
the commissioner may waive pre licensing requirements for examinations for someone who has been licensed insurance producer
In preceding 12 months
An insured replaced an existing policy with a Medicare Supplement policy. He subsequently decided to cancel the policy, but is unsure whether or not a free look provision applies. He could find this information
In the "Notice Regarding Replacement."
It is never legal to limit coverage based on martial status.
In which of the following situations is it legal to limit coverage based on martial status?
Medicaid provides all of the following benefits EXCEPT 1) Eyeglasses. 2) Family planning services. 3) Income assistance for work-related injury. 4) Home health care services.
Income assistance for work- related injury
Medicaid provides all of the following benefits EXCEPT
Income assistance for work- related injury.
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?
Income period
The benefits received by the business in a Disability Buy-Sell policy are
Income tax free
What is the tax consequence of amounts received from a Traditional IRA after the money was left in the tax-deferred account by the beneficiary?
Income tax on distributions and no penalty
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is knows as the
Incontestability Clause
In long-term care (LTC) policies, as the benefit period lengthens, the premium
Increases.
A Return of Premium term life policy is written as what type of term coverage?
Increasing
The pro rata liability clause is designed to protect the principle of
Indemnity. If more than one policy is in force on the same property at the same time covering the same perils, this is concurrent coverage. The intent of insurance is that after a loss, the insured is restored to the condition he or she was in before the loss (indemnified). Each policy pays a percentage of a loss directly related to the amount of insurance it provides compared to the total amount of coverage.
A morale hazard may exist due to
Indifference to loss.
All of the following are differences between individual and group health insurance EXCEPT
Individual insurance does not require medical examinations, while group insurance does require medical examinations.
All of the following are differences between individual and group health insurance EXCEPT 1) In individual policies, the individual selects coverage options, while in a group plan all employees are covered for the same coverage which is chosen by the employer. 2) Individual coverage can be written on an occupational or non- occupational basis, while group plans cover only non-occupational. 3) Individual insurance does not require medical examinations, while group insurance does require medical examinations. 4) Individual policies are renewable at the option of the insured, while group usually terminates when the individual leaves the group.
Individual insurance does not require medical examinations, while group insurance does require medical examinations.
Name one of the three classes of Health Insurance Policies.
Individual or Group policies Private or Government policies Limited or Comprehensive policies
Who will be affected by the share of cost requirement for Medi-Cal?
Individuals whose income exceed the Medi-Cal limit
Ken has a life insurance policy with a face amount of $500. He pays a premium each week to the agent who sold him the policy. What kind of policy did Ken purchase?
Industrial life
When making a sales presentation for life insurance, you are required to do all of the following EXCEPT:
Inform the prospect of your role in advising and representing the client
Bob qualifies for Medicare Part A, but neglected to sign up for Medicare Part B. While retired, he develops medical challenges. Which of the following WILL NOT be covered by his Medicare benefits?
Inpatient Surgeon services
If an insured desires protection on property other than money and securities inside the premises from losses caused by breaking and entering after business hours, which of the following Crime Coverage forms should be purchased?
Inside Premises.. -Robbery or Burglary of Other Property Covers taking of property, other than money or securities, when there is visible sign of forcible entry or exit from the premises.
What type of report provides information about the applicant's hobbies, habits, and financial status?
Inspection report.
Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be?
Installments for a fixed period
What do individuals use to transfer their risk of loss to a larger group?
Insurance Insurance is the mechanism whereby an insured is protected against loss by a specified future contingency or peril in return for the present payment of premium. Because many other individuals with the same or similar risk of loss are paying premiums, funds are available to indemnify those who actually suffer that loss.
Whom does an insurance agent represent?
Insurance Company
Which of the following entities protects policyowners, isureds and beneficiares under insurance contracts when insurer fails to perform contractual obligations due to financial impairment?
Insurance Guaranty Association
The Medical Information Bureau, which is supported by insurance companies, was designed to protect
Insurance companies from adverse selection by high risk persons.
According to the incontestability provision, which of the following is a reason an insurer can deny a claim on a policy that has been in force for 2 years?
Insured stopped paying premiums
Anyone covered under an insurance policy, whether named or not, is known as the
Insureds. The insureds are anyone covered under a policy, whether named or not.
In the agent/insurer relationship, who is considered the principal?
Insurer
When agents act within the scope of their contract, their actions will be assumed to be the acts of whom?
Insurer
Which of the following best defines earned surplus?
Insurer's unassigned funds.
When acting within the scope of their contract, the actions taken by an agent/producer will be assumed to be the acts of the
Insurer.
What entities make up the Medical Information Bureau?
Insurers
Who makes up the Medical Information Bureau?
Insurers
All of the following are conditions commonly found in the insurance policy EXCEPT
Insuring agreement. The insuring agreement provides information on the policy's coverages. Conditions state the legal obligations and duties of the parties to the contract.
The type of dental plan which is incorporated into a major medical expense plan is a
Integrated dental plan.
When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income?
Interest only
State law specifically prohibits using illegal inducements in the marketing of insurance. All of the following would be considered illegal inducements EXCEPT
Inviting prospective clients to the grand opening of the company's new office.
Which of the following best describes a misrepresentation?
Issuing sales material with false statements about policy benefits Misrepresentation is issuing, publishing or circulating any illustration or sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of dividends, etc. This includes oral statements
What is NOT a benefit of a POS plan?
It allows guaranteed acceptance of all applicants
What is NOT a benefit of a POS plan?
It allows guaranteed acceptance of all applicants.
What statement best describes the Free Look provision?
It allows the insured to return the policy within 10 days and receive a full refund of premiums.
Which of the following best describes a bail-out provision ?
It allows the owner to surrender the annuity with out a charge
Which of the following is true regarding health insurance?
It could provide payments for loss of income.
What is the main purpose of the Seven-pay Test?
It determines if the insurance policy is an MEC
What is the main purpose of the seven pay test?
It determines if the insurance policy is an MEC
What is the purpose of a seven-pay Test ?
It determines if the insurance policy is an MEC (modified Endowment Contract )
What is the main purpose of the Seven-pay Test?
It determines if the insurance policy is an MEC.
Why is an equity indexed annuity considered to be a fixed annuity?
It has a guaranteed minimum interest rate.
Which of the following is true of a qualified plan? 1) It has a tax benefit for both employer and employee. 2) It does not need to have a vesting schedule. 3) It may discriminate in favor of highly paid employees. 4) It may allow unlimited contributions.
It has a tax benefit for both employer and employee.
What is the benefit of choosing extended term as a nonforfeiture option?
It has the highest amount of insurance protection
Which of the following best describes annually renewable term insurance?
It is a level term insurance.
All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT
It is a life contingency option.
Which of the following best describes the MIB?
It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. The Medical Information Bureau (MIB) is a nonprofit trade organization which receives adverse medical information from insurance companies and maintains confidential medical impairment information on individuals.
What is the main purpose of the Seven-pay Test?
It is a test to determine a life insurance policy is funded properly and therefore qualifies for the favorable tax treatment that is provided to life insurance policies.
Which of the following is NOT true regarding a Certificate of Authority? 1) It may be necessary for transacting business in a specific state. 2) It is issued to group insurance participants. 3) It is an equivalent of insurance license. 4) It is issued by the state department of insurance.
It is issued to group insurance participants.
Which of the following best describes annually renewable term insurance?
It is level term insurance
In which of the following situations is it legal to limit coverage based on marital status
It is never legal to limit coverage based on marital status
Which of the following is true regarding a term health policy?
It is nonrenewable.
If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy?
It is only taxable if the cash value exceeds the amount paid for premiums.
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?
It is reduced to the amount of what the cash value would buy as a single premium
Which of the following is true of a children's rider added to an insured's permanent life insurance policy?
It is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age.
An insurer invests the money it receives from premiums paid by its insureds. Which of the following is true regarding the interest earned on these investments?
It is used to lower premiums
An insurer invests the money it receives from premiums paid by its insureds. Which of the following is true regarding the interest earned on these investments?
It is used to lower premiums.
Which of the following is true regarding the annuity period ?
It may last for the lifetime of the annuitant
Which of the following is true regarding the annuity period?
It may last for the lifetime of the annuitant. The "annuity period" is the time during which accumulated money is converted into an income stream. It may last for the lifetime of the annuitant or for a shorter specified period of time depending on the benefit payment option selected.
Which of the following are true regarding the annuity period ?
It may last for the time of the annuitant
A Participating Life Insurance Policy may do which of the following?
It may pay dividends to the policyowner.
Which of the following statements concerning Medicare Part B is correct?
It pays for physician services, diagnostic tests, and physical therapy.
Which of the following would be a specific advantage life insurance has over other types of insurance?
It performs the function of cash accumulation.
Which of the following applies to the ten-day free look privilege?
It permits the policy owner to reject the policy with a full refund of premium.
Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option?
It provides a higher monthly benefit than a pure life annuity
Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option?
It provides a higher monthly benefit than a pure life annuity.
Which of the following is true about the premium on the children rider in a life insurance policy
It remains the same no matter how many children are added to policy
Which of the following is true about the premium on the children's rider in a life insurance policy?
It remains the same no matter how many children are added to the policy.
Which of the following statements about the reinstatement provision is true?
It requires the policyowner to pay, with interest, all overdue premiums before the policy is reinstated.
If a retirement plan or annuity is "qualified", this means
It satisfies all requirements of the Internal Revenue Service for favorable tax treatment.
Sue has an HSA and is planning to leave her current job for a new job. When she leaves her job, what will happen to her HSA?
It will continue because it is owned by Sue, not her employer
Which of the following statements is true concerning the accidental death rider
It will pay double or triple the face amount
Which of the following is NOT true regarding the accumulation period of an annuity? 1) It is also known as the pay-in period. 2) It is the period over which the annuitant makes payments into an annuity. 3) It is the period during which the annuity payments earn interest. 4) It would not occur in a deferred annuity
It would not occur in a deferred annuity.
Which of the following best describes the MIB?
It's a nonprofit organization that maintains underwriting information on applicants for life and health insurance.
Which of the following is true of a PPO? 1) Its goal is to channel patients to providers that discount services. 2) No copayment fees are involved. 3) A most common type of PPO is the staff model. 4) Claim forms are completed by members on each claim
Its goal is to channel patients to providers that discount services.
Which statement is NOT true, regarding a Straight Life policy?
Its premium steadily decreases over time, in response to its growing cash value.
$100,000
J purchase a $100,000 Joint Life policy that covered his life and the life of his wife. Eight years later, he died in an automobile accident. How much will the wife receive from the policy?
Twin Brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred starting the business . What type of insurance would be the most affordable and still provide a death benefit should one of them die.?
Join Life Policy
Norma Jean is joining a group insurance plan. In order to avoid proving insurability, what must Norma Jean do
Join during the enrollment period
Norma Jean is joining a group insurance plan. In order to avoid proving insurability, what must Norma Jean do?
Join during the enrollment period
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable & still provide a death benefit should one of them die?
Joint Life
Norm and Vera own a permanent policy which covers both of their lives and pays the face amount of the policy only upon the death of the first. Norm and Vera own a
Joint Life Policy.
A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?
Joint life
No benefits
Judy is involved in a car accident. After the accident is determined to be Judy's fault, the police give her a breathalyzer test to determine whether or not she had been drinking alcohol before the accident. Her blood alcohol level is over the legal limit. What type of health benefits will Judy's policy pay for her injuries if the policy includes the narcotics and intoxicants provision?
Paul is the policy owner of a life insurance policy which will increase significantly in face amount (death benefit) when the insured reaches an age specified in the policy. This policy is referred to as a:
Jumping Juvenile Policy
Which of the following is an IRS qualified retirement program for the self-employed?
Keogh
The _________ an insured group becomes, the more likely the reported losses will equal the statistical probability of loss for that particular class.
Larger
What law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated?
Law of large numbers
Which law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated?
Law of large numbers The law of large numbers, which states that the larger a group is, the more accurately losses reported will equal the underlying probability of loss, is the basis for statistical prediction of loss upon which rates for insurance are calculated.
Variable Life insurance is based on what kind of premium?
Level fixed
A property insurance clause that extends broader legislated or regulated coverage to current policies, so long as I does not result in a higher premium
Liberalization
Which of the following term means as a result of calculation based on the average number of months the insured is projected to live due to the medical history and mortality factors ?
Life Expectancy
The ________ option guarantees an income for two or more recipients for as long as they live.
Life Income Joint and Survivor
Which of the following is an example of a limited-pay life policy? -Level Term Life -Straight Life -Life Paid-Up at age 65 -Renewable Term to age 70
Life Paid-Up at age 65
Mortality tables are statistical tables used by life insurance companies to help predict
Life expectancy and the death rates for specific groups of individuals.
A term insurance policy that provides coverage, with level premium and level death benefit, for the number of years equal to the average life expectancy of the insured, is what kind of contract?
Life expectancy contract
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Limited pay whole life insurance
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?
Limited-pay Life
Sally has a life insurance policy that requires that she only pay premiums for a specified number of years or until death (if death occurs before the end of the specified period). What kind of policy does she have?
Limited-pay Life Insurance Policy
If an annuitant selects the straight life annuity settlement option, in order to receive all of the money out of the contract, it would be necessary to
Live at least to his life expectancy.
An insured is involved in an accident. He is informed by his insurance company that he will receive the principal amount due to his accidental death and dismemberment rider on his life insurance policy. For what losses could the insured generally receive the principal amount of the policy?
Loss of vision in both eyes
Insurance is a contract by which one seeks to protect another from
Loss. Insurance will protect a person, business or entity from loss.
Insurance is a contract by which one seeks to protect another from
Loss. Insurance will protect a person, business or entity from loss.
All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?
Lower
An applicant who receives a preferred risk classification qualifies for
Lower premiums than a person who receives a standard risk.
In franchise insurance, premiums are usually
Lower than individual policies, but higher than group policies.
If a settlement option is not chosen by the beneficiary or policy owner which option will be usedb
Lump sum
What is the other ten for the cash payment settlement option
Lump sum
All of the following statements describe a MEWA EXCEPT
MEWAs are groups of at least 3 employers.
All insurance companies admitted to sell life and/or health insurance contracts in Oregon must, as a condition to maintain their certificate of authority,
Maintain membership in the Oregon Life and Health Insurance Guaranty Association.
Which of the following best describes the concept of company solvency?
Maintaining capital or surplus in excess of the required amount
Anna has a policy with a $250 per year deductible that pays 80% of UCR up to $10,000 with a $1000 corridor deductible and then pays 100% of UCR. Which type of policy does she have?
Major Medical Insurance
Julie must have orthodontic work performed on her incisors. Which type of service would this be called, under a nonscheduled plan?
Major service
Which type of service under a nonscheduled plan typically has large deductibles and pays around 50% for the services provided?
Major service Major services under nonscheduled plans, which cover treatments such as inlays, crowns, dentures and orthodontics, either have large deductibles or the insured pays 50% of the costs.
The primary purpose of a surety bond is to
Make sure obligations are fulfilled. A surety bond guarantees the performance of the principal.
Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?
Making comparisons between different policies
Which of the following statements is INCORRECT concerning an IRA? 1) Married individuals can contribute into two separate accounts, up to a specified amount for each person. 2) Anyone with earned income can have an IRA. 3) Married individuals must contribute into one account for both spouses, up to a specified amount for each person. 4) An individual can contribute 100% of earned income up to a specified limit.
Married individuals must contribute into one account for both spouses, up to a specified amount for each person.
Mary, the primary beneficiary of her husband's life policy, found that no settlement option was stated in the policy on the date of her husband's death. Who will select the settlement option to be used?
Mary
In group insurance, what is the policy called?
Master policy
In group insurance, what is the policy called?
Master policy In group insurance the policy is called the master policy and is issued to the policyowner, which could be the employer, an association, a union, or a trust.
An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?
Material misrepresentation
An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?
Material misrepresentation A material misrepresentation will affect whether or not a policy is issued. If the insured had been truthful, it is very likely that the policy would not be issued.
Health insurance is based on
Mathematical principals & Scientific principals
The inflation protection feature in a long-term care policy
May be rejected by the policyholder.
An employer that fails to meet the continuation requirements for COBRA:
May not take a tax deduction for the premiums paid.
Which of the following programs expands individual public assistance programs for people with insufficient income and resources?
Medicaid
If a dental plan is integrated, it is combined with what type of plan?
Medical
Which of the following is not a government funded insurance program?
Medicare SELECT.
1)6 years.
Michigan insurance policies can specify a time limit during which legal action against the insurer can be taken. This time limit, however, has to be at least (Choose from the following options) 1. 6 years 2. 3 years 3. 4 years 4. 5 years.
1.It allows for up to 15 excess credit hours to be carried forward to the next reporting period.
Michigan's continuing education requirement has each of the following characteristics EXCEPT (Choose from the following options) 1. It allows for up to 15 excess credit hours to be carried forward to the next reporting period 2. At least 3 hours must cover ethics 3. It requires satisfactory completion of at least 24 hours of approved training every biennium 4. Other than the 3 hours of ethics, licensees may take courses in any line.
What is the name of a clause that is included in a policy that limits or eliminates the death benefit if the insured dies as a result of war or while serving in the military?
Military service or war
What is the name of the clause that is included in the policy that limits or eliminates the death benefit if the insured dies as a result of war or while serving in the military.
Military service or war
Which of the following best describes an unfair trade practice of in Oregon?
Misleading statements about policy terms that are only made orally and cannot be documented or proven.
If during a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant, the producer has committed?
Misrepresentation
Which of the following best describes a misrepresentation?
Misrepresenting the true nature of a policy in order to induce the policyholder to replace it
What is the term for how frequent a policy owner is required to pay the policy premium
Mode
Bill just bought a new car,which he anticipates will be paid for 4 years from now. He also wants to buy a life insurance policy, but is financially limited until the car is paid off. Which of the following types of policies would be best for Bill?
Modified life
Which of the following is NOT true regarding policy loans?
Money borrowed from the cash value is taxable
Which of the following is not true regarding policy loans ?
Money borrowed from the cash value is taxable
Which of the following is NOT true regarding policy loans?
Money borrowed from the cash value is taxable.
Alex falls from his roof and damages his spinal column enough to render him disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?
Monthly premium waiver and monthly income
Z falls from the roof of his house while fixing it and damages his spinal column enough to render him disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will Z receive?
Monthly premium waiver and monthly income
An applicant conceals relevant health information on the application. The applicant present what type of hazard?
Moral
A person who does not lock the doors to his or her house shows an indifferent attitude. This person present what type of hazard?
Morale
The likelihood of sickness is
Morbidity.
The three main differences between fixed and variable annuities include all of the following EXCEPT
Mortality
An underwriter for a life insurance company is examining an applicant's health history and demographic information. Which tool can be used to best determine the client's insurability?
Mortality Table
2. Premium receipt
Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a (Choose from the following options) 1. Warranty 2. Premium receipt 3. Statement of good health 4. Backdated receipt.
Which of the following covers a carrier for liability for loss to cargo while it is being transported in a truck?
Motor truck cargo policy - truckers form The motor trucker cargo truckers is liability insurance and the owners form is property coverage.
Life insurance illustrations
Must - Identify non guaranteed values -differentiate guaranteed & projected amount -Only be used as approved
In a long-term care policy, preexisting condition limitations
Must appear as a separate paragraph and be clearly labeled.
Medicare Part B, Supplemental Medical Insurance
Must be purchased & Is supplemented by the Federal Government out of general revenue
An insurance policy paid a nontaxable dividend to the insured one year, and nothing the next. From what type of insurer did the insured purchase the policy?
Mutual
A long-term care insurance shopper's guide must be provided in the format developed by the
NAIC
Which of the following does the term "proximate cause" refer to?
Negligence that leads to an injury Proximate cause is reasonably foreseeable act or event that results in an injury or damage. Negligence may often be the proximate cause of the damage; without it, the accident would not have happened. This is also called direct liability.
Charges for services provided through a HICAP agency are
Never made to the client.
All of the following coverages are included in the BOP standard form without requesting coverage extensions, EXCEPT
Newly acquired or constructed property.
Garrett is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits?
No benefits
Garrett is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits?
No benefits Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of use of at least two limbs, total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work. Because Garrett's blindness was only temporary and the loss of use in only 1 leg, he does not qualify for presumptive disability benefits
Julie is 37 years old and owns a policy with a Future Increase Option Rider (FIO). Julie would like to increase the benefit amount offered by her policy. What documentation will be required?
No documentation is required.
. Your client uses $50,000 in inheritance money to purchase a single premium immediate annuity. How soon can he begin receiving income payments
No later than 1 year from the time of purchase
Your client uses $50,000 in inheritance money to purchase a single premium immediate annuity. How soon can he begin receiving income payments?
No later than 1 year from the time of purchase
Producer A is prosecuted for a crime. He must notify the Director within what time frame after the initial pretrial hearing date?
No later than 30 days
An insured does not have to pay co-insurance or deductibles on a full-series mouth x-ray, but does have to pay a deductible to get his cavities filled. Which dental plan does he have?
Non-scheduled
What provisions may be included in a long-term care policy issued to an individual?
Noncancelable and guaranteed renewable
A women divorces her husband at age 35 and collects distributions on her retirement plan as a results. What penalties will she have to pay ?
None
Cinderella divorces Prince Charming at age 35 and collects distributions on their retirement plan as a result. What penalties will she have to pay?
None
Medicare Part A will cover what services in a skilled nursing facility? 1. Part time skilled nursing care 2. Occupational therapy 3. Medical social services 4. None of the above
None of the above
What term describes the benefit of life insurance policy that the policyowner does not automatically relinquish if policy lapses
Nonforfeiture Values
A prospective deferred annuity owner is concerned about what would happen if he surrendered the annuity before the annuitization period. The agent most likely explained which of the following
Nonforfeiture option guarantees that the owner will receive a surrender value of the contract.
A prospective deferred annuity owner is concerned about what would happen if he surrendered the annuity before the annuitization period. The agent most likely explained which of the following?
Nonforfeiture option guarantees that the owner will receive a surrender value of the contract.
For which of the following reasons could an insurer terminate a long-term care insurance policy?
Nonpayment of premium
Out-of-state producer wants to start selling insurance in this state. What type of license should he obtain?
Nonresident
The loss may be intentional.
Not all losses are insurable, and there are certain requirements that must be met before a risk is proper subject for insurance. These requirements include all of the following EXCEPT
When a long term care policy is replaced after it has been in effect for at least six months, the new policy may
Not exclude pre-existing conditions that would have been covered by the original contract.
While you are reviewing Patrick's employer's contributions to his Health Savings Account with him, he asks you how the contributions affect his taxes. You should advise him that HSA contributions are
Not included in the individual taxable income.
Death benefits payable to a beneficiary under a life insurance policy are generally
Not subject to income taxation by the Federal Government
Death benefits payable to a beneficiary under a life insurance policy are generally
Not subject to income taxation by the Federal Government.
. A direct rollover or trustee-to-trustee transfer from one pension trustee to another pension trustee is
Not subject to the 20% withholding tax.
A direct rollover or trustee-to-trustee transfer from one pension trustee to another pension trustee is
Not subject to the 20% withholding tax.
Premium payments for personally-owned disability income policies are
Not tax deductible.
Neville is involved in a boating accident, which injures his legs severely enough to confine him to a wheelchair. He works as a booking agent for an airline, which means that in order for Neville to work, he must sit at a desk all day. What disability benefits would Neville receive?
Nothing
An employer provides a group life plan for its employees; it is $50,000 of term to age 65. When one of the employees was hired 10 years ago, he missatated his age and told the employer he was 50, when in fact he was 56 years old. The insured employee died last week, his beneficiary will receive ?
Nothing due to the insured's reaching maximum age
Felix has a disability income policy with an annual premium of $300 and a benefit amount of $300 per month. Felix was disabled and because of the policy's elimination period, had no income at the time it was due. The policy contains the optional Unpaid Premium provision. Now that the elimination period has been satisfied, Felix's first disability payment will be
Nothing.
Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive
Nothing; the payments will cease.
Which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss?
Notice of Claim
Which of the following documents must be provided to policy owner or applicant during policy replacement?
Notice regarding replacement
Rita is a resident producer in Washington and a non-resident producer in Oregon. She got married last week and moved into a new home. What must she now do in order to comply with the state rules of Oregon?
Notify the DOI within 30 days
An agent must do all of the following actions when delivering a policy EXCEPT ?
Notify the client about commissions earned from the sale of the policy
During replacement of life insurance, a replacing insurer must do which of the following?
Obtain a list of all life insurance policies that will be replaced
In long-term care insurance, what type of care is provided with intermediate care?
Occasional nursing or rehabilitative care Intermediate care is nursing and rehabilitative care provided by medical personnel for stable conditions that require assistance on a less frequent basis than skilled care.
All of the following are types of care that is provided under LTC's home health care EXCEPT 1) Occasional visits by licensed vocational nurses. 2) Occasional visits by registered nurses. 3) Occasional visits by pediatric nurses. 4) Occasional visits by licensed practical nurses.
Occasional visits by pediatric nurses
Losses caused by continuous or repeated exposure to conditions resulting in injury persons or damage to property that is neither intended nor expected is the definition of which of the following terms?
Occurrence An occurrence includes those losses caused by continuous or repeated exposure to conditions resulting in injury persons or damage to property that is neither intended nor expected.
Disability insurance can be written as occupational or nonoccupational.
Of the following choices, which of the statements about occupational versus nonoccupational coverage is true?
An applicant is discussing his options for Medicare supplement coverage with his agent. He is eligible for the Medicare supplement plans. What is the insurance company obligated to do?
Offer the supplement policy on a guaranteed issue basis
How often may a life settlement provider contact an insured regarding the insured's health status if the insured's life expectancy is more than one year?
Once every 3 months
The dividend option in which the policy owner uses dividends to purchase a term policy for one year is referred to as the
One-year term option.
The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the
One-year term option.
Limited health insurance policies
Only cover specific accidents or diseases.
When does Medicare cover nursing home care?
Only if it is part of treatment for a covered illness or injury
Which of the following can surrender a deferred annuity contract?
Only the annuity owner
An insured had paid only part of her total number of IRA premiums before she died. What effect will this have on the insured's estate?
Only the premiums paid will be included in the estate
What type of insurance policy insures against all risks of loss that are not specifically excluded by the policy?
Open peril policy. Open peril (special) policies cover everything except what they say they don't. Named peril policies cover only perils named in them.
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?
Option A
Which option for Universal life allows the beneficiary to collect both death benefit and cash value when he dies
Option B
Max needs to have his wisdom teeth removed. Which dental treatment would cover the costs of the extraction?
Oral surgery
Which type of dental care would cover operative treatment of the mouth?
Oral surgery
Cosmo has an individual life insurance policy with a face amount of $15,000. He pays a premium each month. What kind of policy did Cosmo purchase?
Ordinary Life
A child is being fitted for braces. Which type of dental care is this?
Orthodontics
What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk?
Other insurance is a provision in an insurance policy that defines how the policy will respond if there is other valid insurance written on the same risk.
A rider attached to a life insurance policy that provides coverage in the insured family members is called the
Other insured rider
The Medical Information Bureau (MIB) helps insurers compare medical information they have collected on a potential insured with the information received from
Other insurers.
A rider attached to a life insurance policy that provides coverage on the insured's family memebers is called the
Other-insured rider
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
Other-insured rider.
The mobilehome endorsement alters the homeowners policy to cover a mobilehome and other structures on land
Owned or leased by the resident of the mobilehome. The mobilehome endorsement alters the homeowners policy to cover a mobilehome and other structures on land owned or leased by the resident of the mobilehome.
An insured has a life insurance policy from a participating company and revived quartet dividends.hey has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called
Paid up additions
An insured has a life insurance policy participating company and recovers quarterly dividends. He has instructed the company to apply policy dividends to increase the death benefit. The dividend option that the insured has chosen is called
Paid up additions
An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?
Paid up option
Which option is being utilized when the insurer accumulates dividends at the interest and then uses the accumulated dividends plus interest and the policy cash value to pay the policy up early.
Paid up option
Sam has a life insurance policy from a participating company and receives quarterly dividends. Sam has instructed the company to apply his dividends to the policy to increase the death benefit. The dividend option that Sam has chosen is called
Paid-up additions.
Who may complete a paramedical report
Paramedic or registered nurse
The part of Medicare that helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care, is known as
Part A.
D. Other insurance coverage Part II of the application contains questions regarding the applicants health history. Part I of the application incluudes questions regarding current coverage being applied for as well as any insurance coverage with the same or other insures.
Part II of the application provides questions regarding all of the following EXCEPT? A. family health history B. alcohol and tobacco consumption C. recent surgeries D. other insurance coverage
When John died, his survivors were eligible for limited benefits under his Social Security account. His insured status was
Partially insured.
Two equal partners in a business worth $150,000 are using a Cross Purchase plan to protect against each other's death. Which of the following statements would be correct?
Partner A buys a $75,000 policy on Partner B naming Partner A as beneficiary
Two equal partners in a business worth $150,000 are using a Cross Purchase plan to protect against the death of each other. Which of the following statements would be correct?
Partner A buys a policy on partner B in the amount of $75,000 naming Partner A as beneficiary.
Which of the following riders would not cause the death benefits to increase
Patrol benefit rider
An insurer has a level term life insurance policy that guaranteed renewable and also includes a re-entry provision. The re-entry provision would allow the insurer to renew the policy and
Pay a lower renewal premium by providing insurability
Which of the following is usually true of a participating life insurance policy ?
Pay dividends to policy owner
A participating insurance policy may do which of the following?
Pay dividends to the policyowner
Marsha pays her Major Medical Insurance annually on March 1, each year. Last March she forgot to mail her premium to the company. On March 19, Marsha had an accident and broke her leg. Her insurance company would
Pay the claim.
An insured purchases a policy in 2000 and dies and 2005. The insurance company discovers at the time that the insured concealed information during the application process. What can they do?
Pay the death benefit- the incontestability clause prevents an insurer from denying a claim due to statements in an application after the policy has been in force for 2 years, even on the basis of a material misstatement of facts or concealment of a material fact.
A prospective insured receives a conditional receipt and dies before the policy is issued. The company will
Pay the policy proceeds only if it would have issued the policy.
What is another term for the accumulation period of an annuity?
Pay-In Period
Which of the following is deemed to be consideration on the part of the applicant, in respect to the Consideration Clause?
Payment of premium
What is the term that most accurately describes the provision designed to relieve life insurance premium payment for minors whose parents have died or become disabled?
Payor Benefit
Who was the Oregon Medical Insurance Pool designed to protect?
People who have been denied medical coverage
What type of beneficiary designation allows the benefit to pass from a deceased primary beneficiary to the beneficiary's heirs, instead of splitting the benefit among surviving primary beneficiaries?
Per stirpes Per stirpes class designation provides distribution by family line or branch in the event a beneficiary predeceases the insured.
Which of the following factors would be an underwriting consideration for a small employer carrier? 1) Percentage of participation by the employees 2) Claims experience 3) Health status 4) Medical history
Percentage of participation by the employees
What is the term for the causes of loss insured against in an insurance policy?
Peril
An applicant wants to buy a life insurance policy that has a cash value element. Which type should she buy
Permanent
The Workers Compensation permanent disability benefit pays benefits for
Permanent total disabilities and permanent partial disabilities.
Which of the following occupations would have the lowest disability insurance premiums?
Personal Trainer
Which of the following levels of care in long-term care policies specifically includes assistance with activities of daily living?
Personal care
What are the three types of hazards?
Physical, moral, and morale.
Which of the following is not a characteristic of an HMO?
Physician provider discount contracts
Which of the following must be present in all Medicare supplement plans?
Plan A
Though the purpose of health insurance, as with all insurance, is to "indemnify" or restore the client to his/her pre-loss condition, there is a possibility that the insured will not be paid back the entire amount of the health-care expense. This occurs if the amount of the loss exceeds what?
Policy limits
If the policy-owner, the insured, and the beneficiary under life insurance policy are the different people, who has the ownership rights
Policy owner
Which of the following is NOT allowed under the no-loss/no-gain provision?
Pre-existing Condition exclusion
1. According to Oregon law, all of the following must be included in the treatment of pre-existing conditions, EXCEPT: 1) Pre-existing condition limits may be applied to some adopted children. 2) Credit must be given to anyone who changes plans within 63 days. 3) Pregnancy may be treated as a pre-existing condition. 4) Genetic information does not ever constitute evidence of a pre- existing condition.
Pre-existing condition limits may be applied to some adopted children
Jack was treated for hypertension prior to applying for a major medical policy. If Jack incurs medical expenses related to hypertension, the insurer will likely exclude coverage because the hypertension represents a/an
Pre-existing condition.
Which clause allows both the insured and dentist to know in advance which benefits will be paid?
Precertification
Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value?
Predicted needs of the family after the insured's death.
When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called
Preferred Provider Organization (PPO).
Which of the following is consideration on the part of an insured?
Premium Payment and application
All of the following are characteristics of group life insurance EXCEPT ?
Premium are determined by the age,sex and occupation of each individual holder.
All of the following are examples of risk retention EXCEPT
Premiums
All of the following are examples of risk retention EXCEPT 1) Co-payments 2) Self-insurance 3) Deductibles 4) Premiums
Premiums
All of the following are characteristics of a group life insurance EXCEPT ?
Premiums are determined by the age, sex and occupation of each individual certificate holder
Which of the following is correct concerning the taxation of a key person life insurance policy premiums and death benefit?
Premiums are not deductible as a business expense and the death benefit is not taxable to the company
Which of the following is correct concerning the taxation of a Key Person Life Insurance Policy premiums and death benefit?
Premiums are not deductible as a business expense and the death benefit is not taxable to the company.
In which of the following instances would the premium be tax deductible?
Premiums paid by an employer on a $30,000 group term life insurance plan for employees
Valuable papers and records form provides coverage for the reconstruction of all of the following types of records EXCEPT
Prepackaged software. Coverage for reconstructing prepackaged software is specifically excluded.
An underwriter may reject an application for health insurance if the rejection is based upon which of the following?
Prescription usage.
Which of the following are the main factors taken into account when calculating residual disability benefits?
Present earnings and earnings prior to disability
Which of the following is NOT among the goals of a Medicare Supplement application?
Presuming the applicant is eligible for Medicaid, based on the nature of the policy
Most disability income policies will consider the insured to be totally disabled if he/she suffers the loss of two limbs, hearing, sight, or speech. This type of disability is known as
Presumptive disability.
All of the following are considered to be supplemental benefits under an HMO plan EXCEPT
Preventive services.
A long-term care shopper's guide must be presented at what point?
Prior to the time of application
Which of the following statements is an accurate comparison between private and government insurers?
Private insurers may be authorized to transact insurance by state insurance departments.
An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called?
Profit sharing plan
Which of the following is NOT consideration on the part of an insured?
Promise to submit timely claims
The purpose of insurance regulation is to
Promote the public welfare.
A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?
Proof of insurability is not required.
Which type of dental treatment involves the replacement of natural teeth with artificial devices?
Prosthodontics
If an insurer needs to obtain information about the applicant from investigators, what is the insurer required to do?
Provide the applicant a Disclosure Authorization Notice
One of HMO's distinguishing features is that it
Provides for both medical services and the method of financing of medical services.
Which is among regulations set forth by Florida Replacement Rule?
Providing written comparison and summary statement
What type of risk is insurable?
Pure
A situation in which a person can only experience a loss and no gain presents what type of risk?
Pure risk
A situation in which a person can only lose or have no change represents
Pure risk.
A situation in which a person can only lose or have no change represents
Pure risk. Pure risk refers to situations that can only result in a loss or no change. Pure risk is the only type insurance companies are willing to accept.
If a person receives benefits for long term care from Medi-Cal, when that recipient dies, the state may
Pursue asset recovery against the estate of the recipient.
In what way can an agent demonstrate a high standard of ethics?
Putting client's best interest before their own
What is another name for substandard risk classification?
Rated
Another name for a substandard risk classification is
Rated.
An insured owns a term policy with a guaranteed renewable option. When the end of the policy draws near, the insured answers medical questions in order to prove insurability and qualifies for a discounted premium rate. Which option best describes this scenario?
Re-entry
If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?
Reasonable expectations
An agent offers his client free tickets to the Super Bowl game in exchange for the purchase of an insurance policy. The agent is guilty of
Rebating.
A producer in another state wants to become a producer in UTAH. The other states gives privileges of its producer to the prospective producer of the other state. What is this called ?
Reciprocity
Paul is a producer in Nevada and wants to become a producer in UTAH. The department will waive certain examination requirements , provided that Nevada would waive these same requirements if a UTAH producer sought licensure in Nevada. What is the term to describe this phenomenon ?
Reciprocity
Paul is a producer in Washington and wants to become a producer in Oregon. The Director will waive certain examination requirements, provided that Washington would waive these same requirements if an Oregon producer sought licensure in Washington. What term is used to describe this phenomenon?
Reciprocity
Which of the following distinguishes a Group Life Policy from an Individual Life Insurance Policy?
Reduced adverse selection
Which nonforfeiture option provides coverage for the longest period of time
Reduced paid up
An insured committed suicide 6 months after his life insurance policy was issued. The insurer will
Refund the premiums paid.
Which of the following is NOT provided by an HMO?
Reimbursement
What method do insurers use to protect themselves against catastrophic losses?
Reinsurance
When an insurance company agrees to automatically assume a portion of the risk written by another insurance company, it is known as a(n)
Reinsurance treaty.
Which of the following is not one of the three basic types of coverages that are available, based on how the face amount changes during the policy term? -Renewable -Decreasing -Level -Increasing
Renewable
Which rule would apply if an agent knew the applicant is going to cash in an old policy and use the funds to purchase new insurance?
Replacement Rule
If an employer decides to change its life insurance policy to a similar one with a different insurer, which of the following describes the extent that replacement regulations will be exercised?
Replacement regulations will not apply in this situation.
Which is an incorrect statement?
Replacing insurance policies for purpose of making commissions is legal
An insurance agent's responsibilities include all of the following EXCEPT
Represent the client.
Statements made by an applicant for a life insurance policy that are true to the best of the applicant's knowledge are referred to as
Representations. Representations are statements that the applicant believes to be true, but that are not guaranteed.
If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may
Require evidence of insurability
If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may
Require evidence of insurability.
If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may
Require evidence of insurablity
A replacing insurance company that uses a producer is required to do all of the following EXCEPT:
Require the producer to keep records at his or her place of business for 3 years and to make them available upon request.
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy
Required a premium increase each renewal.
Ed decided to purchase a $100,000 Annual Renewable Term Life Policy to provide additional protection until his children finished college. Ed discovered that his policy
Required a premium increase each renewal.
Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability?
Residual disability
Which of the following is not covered under a dental insurance plan? 1) Endodontics 2) Respite Care 3) Orthodontics 4) Restoration Care
Respite Care
Which type of care re-establishes functional use to natural teeth?
Restorative
An insurance company is trying to grow while keeping its running costs low and keeping its customer base satisfied. On which of the following tasks should it focus?
Retaining its current clients
Abigail's father dies leaving her the designated beneficiary on his life insurance policy. She is surprised to see that in addition to the face amount of the policy, she will also receive a refund of all the of the premiums he had paid. Which rider is attached to the policy?
Return of premium
Because if Finacial obligation John felt that he needed more insurance than the insurer was willing to issue johns insurance producer told him that he could maximize the death benefit without increasing the face amount of the use of an
Return of premium rider
What is the best way to handle incomplete insurance applications?
Return the application to the applicant for completion.
Which type of beneficiary is changeable at any point
Revocable
Bonnie wants to name her husband as the beneficiary of her life policy. She also wishes to retain all the rights of ownership. Bonnie should have her husband name as the
Revocable beneficary
Regarding LTC benefit periods, as the benefit period lengthens, the premium
Rises.
Insurance is the transfer of
Risk
Taking a defensive driving course or installing deadbolt locks on the doors of a home are examples of which of the following?
Risk Reduction
Gary does not want to assume the risk that his wife may not have enough money if he dies. If he purchases insurance to help assume the risk what is he doing?
Risk Transfer
What two principles are the foundation on which insurance is based and allow insurance companies to be able to operate successfully?
Risk pooling and the law of large numbers
What is the main responsibility of a company's underwriting unit?
Risk selection
insurance is the transfer of
Risk. Insurance is the transfer of financial responsibility associated with a potential of a loss (risk) to an insurance company.
An individual has been contributing to a retirement account after taxes are taken out of his paycheck. His financial advisor told him that he will be allowed to make contributions after age 70½. The account owner does not have to pay taxes on the growth of his account. What type of retirement account is it?
Roth IRA Roth IRAs have several distinguishing features. Unlike traditional IRAs, the account owner can continue beyond age 70½, and distributions do not have to begin at age 70½. The contributions are not tax-deductible.
Which of the following dental insurance categories would cover the filling of cavities?
Routine and major restorative care
Which type of Medicare policy requires insureds to use specific hospitals, except in emergency situations?
SELECT
Which of the following statement concerning Simplified Employee Pension plan (SEP) is INCORRECT ?
SEP's limits participation to members closely held corporations
Which of the following statements concerning a simplified employee pension plan (SEP) is INCORRECT ?
SEPs limit participation to members of closely held corporations
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT? 1) SEPs allow the employer to make annual tax deductible contributions up to 25% of an employee's earned income, not to exceed $46,000. 2) SEPs limit participation to members of closely held corporations. 3) SEPs have a higher tax deductible contribution limit than an IRA. 4) SEPs offer ease of plan administration with minimal reporting requirements.
SEPs limit participation to members of closely held corporations.
HICAP offers services in the following areas EXCEPT
Sales of LTC policies.
What part of the Internal Revenue Code allows an owner of a life insurance policy or annuity to exchange or replace their current contract with another contract without creating adverse tax consequences?
Section 1035 Policy Exchange
What part of the Internal Revenue Code allows an owner of a life insurance policy or annuity to exchange or replace their current contract with another without creating adverse tax consequences?
Section 1035 Policy Exchange
Equity indexed annuities
Seek higher returns.
Which type of Medicare policy requires insureds to use specific healthcare providers and hospitals, except in emergency situations?
Select
Which of the following best details the underwriting process for life insurance 1) Selection and issuance of policies 2) Selection, classification, and rating of risks 3) Selection, reporting, and rejection of risks 4) Evaluation and classification of risks
Selection, classification, and rating of risks
Who may contribute to an HR-10 plan ?
Self Employed Plumber
Keogh plans are provided specifically for
Self-employed.
Every long-term care insurer in California must submit to the Commissioner a list of all agents or other insurer representatives authorized to solicit individual consumers for the sale of long-term care insurance. These submitted agent lists must be updated at least
Semiannually
If an agent fails to obtain the applicant's signature on the insurance application, what must the insurer do?
Send the application back to the applicant for signature.
Who does HICAP serve?
Seniors receiving Social Security
Which of the below statements does NOT describe a Blue Cross and Blue Shield Plan?
Services are paid for at the time of use.
An immediate annuity purchased with the face amount at death or with the cash value at surrender can be referred as which one of the following?
Settlement option
An employee has group life insurance through her employer. After five years, she decides to leave the company and work independently. How can she obtain an individual policy?
She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.
An insurance policy is a legal contract. Each of the following elements is necessary for formation of a valid contract EXCEPT
Signatures of each party The essential elements of all contracts are agreement, consideration, competent parties, and legality. Oral contracts are legally enforceable.
Which type of life insurance policy generates immediate cash value?
Single Premium
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
To improve the availability and affordability of health benefit coverage for small employers, Oregon has established the
Small Employer Carrier Advisory Committee
A policy that covers all causes of loss except for those specifically excluded is known as
Special form. Those property policies with a title of "special" form cover loss on an open peril basis, also known as an all risk.
What is rebating?
Special offers or favors, outside of the contract
Level Term
Specific period of years with level premium
Wagering on a sporting event is known as what type of risk?
Speculative
When a life insurance policy stipulates that the beneficiary will receive payments in specified installments or for a specified number of years, what provision prevents the beneficiary from changing or borrowing from the planned installments ?
Spendthrift Provision
An applicant buy a nonqualified, but dies before the starting date. For which of the following beneficiaries would the contract's interest NOT be taxable ?
Spouse
An applicant buys a non qualified annuity, but dies before the starting date. For which of the following beneficiaries would the contract's interest NOT be taxable?
Spouse
Workers Compensation benefits are regulated by which entity?
State government
To insure coin collections, stamp collections, and other items that would be difficult to appraise after a loss, it is best to insure with
Stated amount insurance. The insured and insurer agree the policyholder has the property, what it is worth, and insure it for an agreed value.
What is material misrepresentation?
Statement by the applicant that would affect the underwriting decision, if discovered.
What is a warranty in insurance?
Statement guaranteed to be true
When an employee covered under a health reimbursement account changes employers, the HRA
Stays with the employer.
An insurer organized to return a profit to the stockholders is what type of insurer?
Stock company
Who owns stock companies?
Stockholders
Which of the following is consideration on the part of an insured?
Submitting a Statement of Good Health and premium payment The binding force in any contract is called "consideration". Consideration on the part of the insured is the payment of premiums and the health representations made in the application. Consideration on the part of the insurer is the promise to pay in the event of loss.
The policy provision found in property insurance policies that prevents the insured from collecting twice for the same loss is called
Subrogation. When insureds accept loss payment from the insurance company, they must transfer their rights to recovery to the insurer. This prevents the insured from collecting twice for the same loss, and allows the insurer to indemnify the insurance company.
The legal process that gives the insurer, after payment of a loss, the right to seek recovery from a third party that was responsible for the loss is known as
Subrogation. Subrogation is a provision found in most insurance policies that gives the insurer, after payment of a loss caused by a third party, the insured's rights to recovery against that third party. The insurer's rights are only to the extent of the loss payment.
The rider us offers used in business life insurance policies such as key employee policies when the policy owner may need to change the insured under the policy
Substitute insured rider
Which of the following statements about a suicide clause in a life insurance policy is true?
Suicide is excluded for a specific period of years and covered thereafter.
What type of annuity activity will cause immediate taxation of the interest earned?
Surrendering the annuity for cash
Which of the following is NOT an activity of daily living (ADL)?
Talking
Which of the following would help prevent a universal life policy from lapsing?
Target premium
Elise wants to know what are the tax implications of contributions to a Health Savings Account. You should advise her that the contributions are
Tax-free.
During the accumulation period in a non-qualified annuity, what are the tax consequences of a withdrawal ?
Taxable interest will be withdrawn first and the 10 % penalty will be imposed if under age 59 1/2.
During the accumulation period in a non qualified annuity, what are the tax consequences of a withdrawal?
Taxable interest will be withdrawn first and the 10% penalty will be imposed if under age 59 1/2
During the accumulation period in a non-qualified annuity, what are the tax consequences of a withdrawal ?
Taxable interest will be withdrawn first and the 10% penalty will be imposed if under age 59 1/2
If an annuitant chooses a lump-sum settlement at annuitization, which of the following taxes would be imposed in all cases?
Taxes on interest earned during the accumulation period
Which of the following when attached to a permanent life insurance policy allows the policy owner to customize the policy to provide an additional amount of temporary insurance of the insured or allows amounts of temporary insurance to cover other family members
Term rider
Which of the following when attached to a permanent life insurance policy allows the policy owner to customize the policy to provide an additional amount of temporary insurance of the insured, or allows amounts of temporary to cover other family members
Term rider
Which of the following would be a qualifying event as it relates to the Consolidated Omnibus Budget Reconciliation Act (COBRA)?
Termination of employment for "downsizing".
Producers are required to post a Personal Information Privacy Practices notice that includes all of the following EXCEPT:
That personal information that is collected by the producer may never be disclosed without authorization
I applied for life insurance policy on Jan 10. The policy was issued on January 31. J agent was on vacationing at the time the policy was issued so j did not receive the policy until February 18. J decides that he does no want the policy. When would J need to return the policy to insurer in order to receive a full refund of premium paid?
The 10th day free look period begins when the policy is delivered
Who establishes the fees that must be paid in conjunction with an application for an insurance license?
The Director
Which of the following is NOT a potential advantage of a fully-funded retirement pension plan?
The Employer manages the investments for the employees, thus picking investments best suited to the employees' risk tolerances.
What law protects consumers from the circulation of inaccurate or obsolete information?
The Fair Credit Reporting Act
A customer want to exchange an old contract for new one. What regulation should customer's insurance agent consult?
The Florida Replacement Rule
In order to become licensed to become a viatical settlement provider, an application must be made with
The Insurance Department
Which of the following would provide an underwriter with information concerning applicant's medical history?
The Medical Information Bureau
Which of the following is NOT covered under a "core" policy, Plan A in Medigap insurance?
The Medicare Part A deductible.
Which of the following is NOT covered under a "core" policy, Plan A, in Medigap insurance? 1) The first three pints of blood each year. 2) Approved hospital costs for 365 additional days after Medicare benefits end. 3) The 20% Part B coinsurance amounts for Medicare approved services. 4) The Medicare Part A deductible
The Medicare Part A deductible.
Age 65 who are retired/
The Omnibus Budget Reconciliation Act of 1990 requires that large group health plans must provide primary coverage for disabled individuals under
Your client has a Social Insurance Supplement (SIS) rider on his disability policy. After he becomes disabled, he receives payments from the company. Shortly thereafter, he also begins receiving Social Security benefit payments. Which of the following will happen?
The SIS payment will be reduced dollar-for-dollar by the Social Security benefit payment.
What is a share of cost?
The amount an individual has to pay for medical expenses before Medi-Cal will cover the rest
Which of the following is NOT true about a group annuity? 1) The annuity could be obtained through a group of people identified by their relationship to a single entity buying a contract. 2) The annuity must be purchased by a group, but could be owned by an individual. 3) Group annuity could be considered qualified. 4) The employer may be the owner of the contract
The annuity must be purchased by a group, but could be owned by an individual.
Which of the following best describes the Guaranteed Minimum Accumulation for annuities?
The annuity's original investment is secure, and will appreciate over time.
When an employer or a group provides group life insurance where the benefit is greater than $25,000, the benefit is taxable to the employee.
The answer is false. When an employer or a group provides group life insurance where the benefit is greater than $50,000, the benefit is taxable to the employee.
Under what conditions would a contract between an insurer and prospective insured be legal? 1) The applicant is a 12-year-old student. 2) The applicant is high on methamphetamines at the time of application. 3) The applicant is drunk at the time of application. 4) The applicant has been convicted of a felony.
The applicant has been convicted of a felony
Which of the following will NOT be covered under an individual health insurance policy?
The applicant�s grandchild
Which of the following is NOT the consideration in a policy ?
The application given to a prospective insured
What happens if a non-member physician is utilized under the Point-Of-Service plan?
The attending physician will be paid a fee for service, but the member patient will have to pay a higher coinsurance amount or percentage for the privilege.
Major medical policy premiums vary according to all of the following factors, EXCEPT:
The availability of health care provider contracts in the service area.
All of these events might terminate coverage when there is a change in insurance companies or loss of coverage, EXCEPT
The beginning of the last period for which the employee has made the required premium payments.
I f a life insurance policy has an irrevocable beneficiary designation ,
The beneficiary ca only be changed with written permission of the beneficiary
If a life insurance policy has an irrevocable beneficiary designation
The beneficiary can only be changed with written permission of the beneficiary
The annuity owner dies when annuity is still in accumulation stage. Which of the following is true?
The beneficiary will receive the greater of the money paid into the annuity or cash value.
The annuity owner dies while the annuity is still in the accumulation stage. What will happen?
The beneficiary will receive the greater of the money paid into the annuity or the cash value.
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
The beneficiary.
In a group life insurance policy, the employer may select all of the following EXCEPT 1) The amount of insurance. 2) The beneficiary. 3) The premium payor. 4) The type of insurance.
The beneficiary.
Which of the following is true regarding a waiver of a surrender charge on an annuity contract ?
The charge may be waived if the annuitant is confined to a long term care facility for at east 30 days.
Which of the following is true regarding a waiver of a surrender charge on an annuity contract ?
The charge may be waived if the annuitant is confined to a long term care facility for at least 30 days.
Which of the following is true regarding a waiver of a surrender charge on an annuity contract ?
The charge may be waived if the annuitant is confined to a long term facility for at least 30 days
Which of the following is a characteristic of a Reciprocal Insurance Exchange?
The chief administrator of the insurer is called an "attorney-in-fact". A "reciprocal" is an unincorporated aggregation of individuals, called subscribers, who exchange insurance risks. If the premiums charged for coverage are not sufficient to pay the losses of the group, subscribers may be assessed an additional premium. A reciprocal is administered by an attorney-in-fact who is empowered to bind each subscriber to assume a share of the losses of the group.
Which of the following describes the client which will benefit from Extension of Benefits?
The client who was disabled prior to a policy discontinuance and remains disabled.
Which of the following characteristics does not need to be met in order for a long-term care policy to be considered tax qualified?
The contract is not guaranteed renewable.
In a defined contribution plan,
The contribution is known and the benefit is unknown.
How are funds contributed to a tax-sheltered annuity treated taxation ?
The contributions are not included as income for the employee, but are taxable upon distribution
How are funds contributed to a tax-sheltered annuity treated for taxation ?
The contributions are not included as income for the employee, but are taxable upon distribution.
How are funds contributed to a tax-sheltered annuity treated for taxation?
The contributions are not included as income for the employee, but are taxable upon distribution.
How are funds contributed to a tax-sheltered annuity treated for taxation?
The contributions are not included as income for the employee, but are taxable upon distribution. Funds contributed are excluded from the employee's current taxable income, but are taxable upon withdrawal.
Jim is covered by a high deductible health plan. He makes regular contributions to this HSA. How are those contributions treated in regards to taxation?
The contributions are tax- deductible
Jim is covered by a high deductible health plan. He makes regular contributions to this HSA. How are those contributions treated in regards to taxation?
The contributions are tax-deductible
What type of information is NOT included in a certificate of insurance?
The cost the company is paying for monthly premiums
All of the following statements are true about credit life insurance EXCEPT:
The creditor is the owner and the insured.
In comparison to consumer reports which of the following describes a unique characteristic of investigative consumer report ?
The customer associates, friends and neighbors provide the reports data
The Occurrence form trigger is based on which of the following?
The date when injury or damage occurs The "Occurrence" form trigger is based on the date when injury or damage occurs, and covers claims made at any time for injuries that occur during the policy period.
Bob owns an adjustable life policy. Sometime in the future he wants to increase the death benefit. Which of the following statements is correct regarding this change?
The death benefit can be increased by providing evidence of insurability.
Which of the following individuals related to the deceased worker would be eligible for survivor benefits under the Social Security?
The disabled widow age 52
All of the following individuals would qualify to receive disability benefits EXCEPT
The disabled worker's spouse at age 60.
Which of the following describes the tax advantage of a qualified retirement plan?
The earnings in the plan accumulate tax deferred.
Sharon Mills employs 500 workers and contributes to their Health Savings Accounts. To reduce turnover, Sharon wants to tell employees that they will lose their Health Savings Accounts if they leave the company. How should you advise Sharon?
The employees own the accounts and may take them with them when they leave. Sharon will have to find another way to improve retention.
In Oregon, a small employer health benefit plan must be renewed at the option of the employer unless:
The employer elects not to renew all health benefit plans.
Which of the following statements concerning group health insurance is CORRECT?
The employer is the policyholder.
For an individual who is eligible for Medicare at age 65, and who is still employed and covered under the employer's plan, which of the following is true?
The employer plan is primary coverage, and Medicare is secondary coverage
For an individual who is eligible for Medicare at age 65, and who is still employed and covered under the employer's plan, which of the following is true?
The employer plan is primary coverage, and Medicare is secondary coverage.
Randy transfers his life insurance policy to his son Andy two years before Randy's death. Which of the following is true?
The entire face value of the policy will be included in Randy's taxable estate
Randy transfers his life insurance policy to his son Andy two years before Randy's death. Which of the following is true?
The entire face value of the policy will be included in Randy's taxable estate.
3. An index like Standard & Poor's 500.
The equity in an equity index annuity is linked to (Choose from the following options) 1. The annuitant's individual stock portfolio 2. The insurance company's general account investments 3. An index like Standard & Poor's 500 4. The returns from the insurance company's separate account.
What method is used to determined the taxable portion of each annuity payment ?
The exclusion ration
If a person accumulates more continuing education hours than is necessary to fulfill the requirements of the 2 year period which of the following will occur?
The extra hours may be continued into the next period
Negligence may be defined as
The failure to use reasonable and prudent care. Just because something bad happens does not mean there was negligence. Negligence is when the failure to use proper care results in injury or damage.
All of the following would be true about an HMO, EXCEPT 1) HMOs do not work like health insurance. 2) HMOs transfer risk to health care providers. 3) HMOs focus on preventive care. 4) The federal government requires groups with 25 or more employees to offer an HMO as an alternative plan.
The federal government requires groups with 25 or more employees to offer an HMO as an alternative plan.
Which of the following are generally NOT considered when underwriting group insurance ?
The group medical History
Which of the following are generally not considered when underwriting group insurance?
The group's medical history
Which of the following are generally NOT considered when underwriting group insurance ?
The groups medical history
Which of the following are generally not considered when underwriting insurance ?
The groups medical history
Life insurance benefits for minors must be placed in the hands of either a guardian or a trustee. Which of the following is true?
The guardian may or may not be accountable for assets
Life insurance benefits fr minors must be placed in the hands of either a guardian or trustee. Which of the following is true ?
The guardian may or may not be accountable for assets
All of the following are factors in rating workers compensation insurance
The hazard of the work, the amount of payroll, and the employer's prior loss experience are all rating factors.
Which statement regarding qualifications for Social Security disability benefits is NOT true?
The individual must be at least 65 years old.
Of the following statements, which is FALSE concerning Social Security Disability Benefits?
The individual must be unable to perform the duties of any occupation for which he/she is reasonably suited or trained.
In which of the following situations would Social Security Disability benefits NOT cease?
The individual's son gets a part-time job to help support the family
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured death he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following except
The insure reds age at death Note: The insureds age at death will not be considered, but the longer the life expectancy of the recipient. The lower the payments will be
Under the provisions of the business income coverage form, all of the following are true, EXCEPT
The insured is reimbursed for the loss from the date of loss to date of restoration or policy expiration date, whichever comes first. Business Income will pay beyond the expiration date of a policy. It will pay until the business is restored or the limits of coverage are exhausted.
Which is NOT true regarding an insured who is considered to be a standard risk?
The insured may have to pay slightly higher premiums.
An insured purchased a 10-year level term life policy that is guaranteed renewable & convertible. What happens at the end of the 10-year term?
The insured may renew the policy for another 10 years, but at a higher premium rate.
In order for an insured under Medicare Part A to receive benefits for care in a skilled nursing facility, which of the following conditions must be met?
The insured must have first been hospitalized for 3 consecutive days. Part A covers the cost of care in a skilled nursing facility as long as the patient was first hospitalized for 3 consecutive days, and the services are medically necessary and only up to amounts deeme
An insured has a Social Insurance Supplement (SIS) rider in her disability income plan. After the insured becomes disabled, she begins receiving benefit payments from her insurer. She then begins receiving Social Security benefits that are smaller than the SIS benefit payments. At that point, her insurer ends the SIS benefit payments. Which of the following best describes the situation?
The insured should contact the insurer to confirm her actual Social Security benefit amount. The SIS rider should pay the difference between the rider amount and the actual benefit.
An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true?
The insured was in compliance with the policy requirements regarding claims.
Which of the following is most likely to occur if it is determined by the audit that the deposit premium was too high?
The insured will receive a return premium. If the audit shows that the initial (deposit) premium to the insured was too high (the exposures were over-estimated), the insured will receive a return premium.
A 40-year old man buys a whole life policy and names his wife as his only beneficiary. His wife dies 10 years later. He never remarries and dies at age 61, leaving 2 grown up children. Assuming that he had never changed the beneficiary, the policy proceeds will go to
The insured's estate.
A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?
The insured's premiums will be waived until she is 21.
. If both the insured and the primary beneficiary died in the same car accident and it is impossible to determine who died first, which of the following will most likely receive the death benefit?
The insured's secondary beneficiary
Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to
The insured.
Who guarantees a conventional fully-insured group plan?
The insurer A conventional fully-insured plan is administered and guaranteed by an insurance company. In return for the premium collected from the insured by the insurer, the insurer assumes the risk of paying the cost of medical expenses that may or may not occur during the policy period
A person is enrolled in Part A of Medicare and not Part B. Three months into coverage, he applies for a Medicare supplement policy. Which of the following is true?
The insurer can deny coverage.
Which of the following is NOT a feature of a guaranteed renewable provision?
The insurer can increase the policy premium on an individual policy.
Bob applies for an insurance policy and, because of his medical history, is required to submit an attending physician's statement. He receives the evaluation, and the report is submitted. The underwriting department still has further questions but is unable to get further information from the physician. What will the insurer most likely do?
The insurer can require the insured to visit a different physician at the insurer's expense.
Which of the following statements is true regarding the cash value in a Universal life policy?
The insurer credits the cash value in the policy with a current interest rate
Which of the following statements is true regarding the cash value in a Universal life policy?
The insurer credits the cash value in the policy with a current interest rate.
Greg's long term care policy is due for renewal. During the last policy period, he was placed in hospice care and remains there today. What, if anything, may the insurer do in regard to Greg's LTC policy?
The insurer must continue the policy but may limit the extension of benefits.
An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?
The insurer will pay the full Death Benefit to the beneficiary.
The sole beneficiary of a policy dies before the insured. If the policy owner fails to change the beneficiary before the insured death the proceeds of the policy will go to
The insurers estate
An annuitant dies before the effective date of a purchased annuity. Assuming that the annuitant's wife is the beneficiary, what will occur?
The interest will continue to accumulate tax deferred.
Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT
The loss may be intentional.
Which of the following is NOT a characteristic of an insurable risk?
The loss must be catastrophic
Which of the following is NOT a characteristic of an insurance risk?
The loss must be catastrophic.
What would an Accidental Death and Dismemberment policy pay the principal amount for, other than accidental death?
The loss of 2 or more limbs
Hospital indemnity/hospital confinement indemnity policy will provide payment based on
The number of days confined in a hospital.
Which of the following entities is responsible for agent licensing and administrative supervision?
The office of Insurance Regulation
An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?
The old policy should stay in force until the new policy is issued.
In a life settlement contract whom does the life settlement broker represents ?
The owner
In a life settlement contract, whom does the life settlement broker represent?
The owner
Which of the following is true regarding a modified guaranteed annuity?
The owner is guaranteed a fixed interest rate for a specific period of time.
Which of the following is true regarding a modified guaranteed annuity?
The owner is guaranteed a fixed interest rate over a specified period of time
All of the following are true of an annuity owner except? -The owner must be the party to receive benefits. -The owner pays the premiums on the annuity. -The owner has the right to name the beneficiary. -The owner is the party who may surrender the annuity.
The owner must be the party to receive benefits.
To purchase a smaller amount of the same type the of same of insurance as the original policy.
The paid-up addition option uses the dividend
All of the following are true regarding a decreasing term policy EXCEPT ?
The payable premium amount steadly declines throughout the duration of the contract.
All of the following statements are true regarding installments for a fixed amount EXCEPT
The payments will stop when the annuitant dies.
What determines the cash value of a variable life policy?
The performance of the policy portfolio.
Which of the following best describes what the "annuity period" is?
The period of time during which accumulated money is converted into income payments
All of the following are true of a key person insurance EXCEPT
The plan is funded by permanent insurance only
All of the following are true of Key Person insurance EXCEPT
The plan is funded by permanent insurance only.
All of the following are general requirements of a qualified plan EXCEPT
The plan must provide an offset for social security benefits .
All of the following are general requirements of a qualified plan EXCEPT
The plan must provide an offset for social security benefits.
All of the following are general requirements of a qualified plan EXCEPT 1) The plan must provide an offset for social security benefits. 2) The plan must be communicated to all employees. 3) The plan must be for the exclusive benefits of the employees and their beneficiaries. 4) The plan must be permanent, written and legally binding.
The plan must provide an offset for social security benefits.
Which of the following criteria is NOT correct regarding a qualified retirement plan? 1. The plan need not be permanent 2. The plan's benefit or contribution formula cannot discriminate in favor or the so called 'prohibited group', which consists of the company's officers, stockholders, and highly paid executives. 3. The plan must be for the exclusive benefit of the employees and their beneficiaries. 4. The plan must be approved by the IRS
The plan need not be permanent
All of the following are characteristics of a Universal Life policy EXCEPT 1) The insurance company reserves the right to adjust the mortality charges and/or interest rate. 2) The policy is a cash value account at a guaranteed interest rate and endowment insurance. 3) In effect, Universal Life is a combination of term insurance and a separate savings account joined in a single contract. 4) The planned premium pays for mortality charges and expenses and any excess is returned to the policy owner.
The planned premium pays for mortality charges and expenses and any excess is returned to the policy owner.
All of the following are characteristics of a Universal Life policy EXCEPT
The planned premium pays for mortality charges and expenses and any excess is returned to the policyowner.
6. Which of the following statements regarding Key Person Disability Income policies is NOT true? 1) The policy benefits are paid to the insured. 2) The premiums are paid by the business. 3) The policy is owned by the business. 4) The business must have the consent of the insured to purchase the insurance.
The policy benefits are paid to the insured.
Which of the below statements i FALSE concerning a Modified Endowment Contract (MEC)?
The policy holder can receive distributions at any time without being penalized
Which of the below statements is FALSE concerning MEC ?
The policy holder can receive distributions at any time without being penalized
Which of the below statements is FALSE concerning a Modified Endowment Contract (MEC)?
The policy holder can receive distributions at any time without being penalized
With a Straight Life policy, what happens if the insured lives to age 100
The policy matures and the cash value is paid to the insured.
Which of the following regarding a long term care insurance policy is NOT true? 1. No long term care insurance policy that offers only nursing home benefits may be sold in Oregon. 2. All long term care insurance policies must pay benefits when the beneficiary is receiving covered services from a nursing home, assisted living facility, home care agency and an adult foster care center. 3. The policy may contain a provision establishing a new waiting period in the event that existing coverage is converted to or replaced by a new policy within the same company, unless the insured person or group policyholder voluntarily selects to increase benefits. 4. None of the above
The policy may contain a provision establishing a new waiting period in the event that existing coverage is converted to or replaced by a new policy within the same company, unless the insured person or group policyholder voluntarily selects to increase benefits.
An individual purchased a Whole Life Insurance policy and named his wife as the owner. After 20 years the policy has cash values of $12,000. Who has the right to the cash values?
The policy owner
Which of the following best defines the "owner" as it pertains to life settlement contracts ?
The policy owner of the life insurance policy
A policy with a 31-day grace period implies
The policy remains in force without penalty for 31 days even though the premium due has not been paid.
An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history 1 year later. What will probably happen?
The policy will not be affected.
If an insurer continually uses the automatic premium loan option to pay the policy premium?
The policy will terminate when the cash value is reduced to nothing.
The owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producer say?
The policyowner can specify the way proceeds are split in the policy.
A man purchases a Medicare supplement policy in March and decides to replace it with another in May. His history of coronary artery disease is considered to be a pre-existing condition. Which of the following is true?
The pre-existing condition waiting period that the man served on the old policy will be transferred to the new policy, the new one picking up where the old one left off.
Nick purchases a Medicare supplement policy in March and decides to replace it with another in May. Nick's history of coronary artery disease is considered to be a pre-existing condition. Which of the following is true?
The preexisting condition waiting period that he served on the old policy will be transferred to the new policy, the new one picking up where the old one left off.
If a policy is rated-up, which of the following is true?
The premium increases
An insured buys a 5-year level premium term policy with a face amount of 100,000. The policy also contains renewability and convertibility options . When the insured renews the policy in 5 years.
The premium will increase because the insured will be 5 years older than when the policy was originally purchased .
An insured buys a 5-year level premium term policy with a face amount of $100,000. The policy also contains renewability and convertibility options. When the insured renews the policy in five years
The premium will increase because the insured will be 5 years older than when the policy was originally purchased.
All of the following would be eligible to establish a Keogh retirement plan EXCEPT 1) A sole proprietor of film development store with no employees. 2) A hair dresser who operates her business in her home. 3) The president and employee of one's family's corporation. 4) A sole proprietor of a service station who employs four employees.
The president and employee of one's family's corporation
All of the following would be eligible to establish a Keogh retirement plan EXCEPT
The president and employee of one's family's corporation.
If a life insurer holds proceeds of any policy it issues, which of the following is true.
The proceeds may be exempt from any creditor's claims against a beneficiary other than policy owner
If a life insurer holds the proceeds of any policy it issues, which of the following is true?
The proceeds may be exempt from any creditor's claims against a beneficiary other than the policy owner.
A group of 15 skydivers meet at a seminar and begin talking about life insurance during a break. Because it is expensive to get individual life insurance, they decide to band together to form a small group so that they will be eligible. They apply for small group life insurance and are rejected. Why
The purpose of the group was to purchase life insurance.
A group of 15 skydivers meet at a seminar and begin talking about life insurance during a break. Because it is expensive to get individual life insurance, they decide to band together to form a small group so that they will be eligible. They apply for small group life insurance and are rejected. Why?
The purpose of the group was to purchase life insurance.
3. Fiduciary responsibility
The requirement that agents not commingle insurance monies with their own funds is known as (Choose from the following options) 1. Express authority 2. Accepted accounting principal 3. Fiduciary responsibility 4. Premium accountability.
Which is true about a spouse term rider
The rider is usually level term insurance
Which state has jurisdiction over a group policy that covers individuals that reside in more than one state?
The state in which the policy was delivered.
With personally owned long term care insurance, the benefits received are taxable and have to be reported as income on a tax return when they are disbursed.
The statement is false Personally owned long term care insurance policy benefits are received tax-free and do not have to be reported as income on a tax return when they are disbursed.
If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?
The surrender charge is a percentage of the cash value and decreases over time.
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when the insured was alive.
In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT 1) The length of coverage. 2) The premium payment period 3) The type of investment. 4) The amount of insurance.
The type of investment.
All of the following are characteristics of a group life insurance plan EXCEPT
There is a requirement to prove insurability on the part of the participants.
All of the following are characteristics of a group life insurance plan EXCEPT
There is a requirement to prove insurability on the part of the participants. There is no individual underwriting for group life insurance.
Annuity contracts grow tax deferred. That means that
There is no current income taxation upon the growth in the annuity.
Which of the following is true regarding METs?
They allow small employers an opportunity to band together to purchase less expensive insurance.
Which of the following statements regarding Disability Buy-Sell policies is NOT true?
They are contracts that specify how a business will pass between owners in the event one of the owners becomes disabled and can no longer work in the business.
Which of the following is NOT true regarding benefits paid to disabled employees? 1) The benefits are attributable to the employer's contribution. 2) They are exempt from the Social Security tax after 12 months. 3) They are subject to FICA withholding for Social Security. 4) Tax withholding is required for the first 6 months
They are exempt from the Social Security tax after 12 months.
All of the following statements are true regarding policy dividends EXCEPT
They are guaranteed.
What is true about nonforfeiture values?
They are required by state law to be included in the policy.
Which of the following statements is most correct concerning irrevocable beneficiaries?
They can be changed only with the written consent of that beneficiary.
Medi-Cal may be available to persons over age 65 if
They have medical or long term care claims not paid by Medicare.
Which of the following is true regarding benefits paid to disabled employees?
They may be subject to taxation if the premium was paid by the employer.
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
They obtain customer information through interviews with associates, friends and neighbors.
What do long-term care policies offer to policyholders to account for inflation?
They offer the option of purchasing coverage that raises benefit levels accordingly.
What do living benefit riders do?
They pay part of the policy death benefit to insureds in order to help them fund long-term care or nursing home care.
Which of the following statements is true concerning employer group dental plans? 1) They always contain a conversion privilege. 2) They seldom contain a conversion privilege. 3) They are only marketed as stand-alone plans. 4) They are exempt from COBRA laws
They seldom contain a conversion privilege.
What is another name for an Administrative-Services Only arrangement
Third-party administrator An Administrative-Services Only is an arrangement whereby an insurer agrees to provide certain services to a self-insured entity, such as providing printed claim forms, and the processing and auditing of claims. The insurer does not provide any insurance protection under an ASO arrangement.
Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner?
Third-party ownership
Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?
Those who have been insured under the plan for at least 5 years
How can insurers obtain information on an applicant's avocations and the way they will affect a risk?
Through the use of a questionnaire.
What is the advantage of using the Interest Adjusted Cost method for comparing the cost of life insurance policies?
Time value of money is taken into consideration.
Under what circumstances may a life insurance agent deliver a policy that is dated up to six months before the application was taken?
To allow the insured to remain in a more favorable rate class.
Which of the following statements is CORRECT about Social Security?
To be eligible, one must meet certain requirements.
Which of the following is the best reason to purchase life insurance rather than annuities?
To create and estate
What is the purpose of the buyer's guide?
To ensure that people who purchase variable life insurance and annuities understand certain basic features of these types of contracts.
What is the purpose of a disclosure statement in life insurance policies?
To explain features & benefits of a proposed policy to the consumer
Why do employer group health plans usually require a certain amount of participation by eligible employees?
To guard against adverse selection and reduce cost
Why do group health providers usually require a certain amount of participation in the plan by eligible employees?
To guard against adverse selection and reduce cost
Retention usually results from three basic goals of the insured. Which of the following is NOT one of these goals? 3. Retention usually results from three basic goals of the insured. Which of the following is NOT one of these goals? 1) To minimize the insured's level of liability in the event of loss 2) To fund for losses that cannot be insured 3) To reduce expenses and improve cash flow 4) To increase control of claim reserving and claims settlements
To minimize the insured's level of liability in the event of loss
Which of the following is NOT a goal of risk retention?
To minimize the insured's level of liability in the event of loss
All of the following are uses for an annuity except:
To pay a business when a key employee retires.
What is the porpose of a fixed period settlement option
To provide a guaranteed income for a certain amount of time.
What is the purpose of COBRA?
To provide continuation of coverage for terminated employees
What is the main purpose of Medi-Cal?
To provide coverage for medical services for individuals with limited income
What is the significance of a conditional receipt?
To provide coverage on an earlier date than the policy
9. Which of the following is NOT the purpose of HIPAA? 1) To prohibit discrimination against employees based on their health status 2) To limit exclusions for pre-existing conditions 3) To guarantee the right to buy individual policies to eligible individuals 4) To provide immediate coverage to new employees who had been previously covered for 18 months
To provide immediate coverage to new employees who had been previously covered for 18 months
Which of the following is NOT the purpose of HIPAA?
To provide immediate coverage to new employees who had been previously covered for 18 months
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
Income replacement contracts agree
To replace the insured's income up to a stated percentage if the insured suffers a loss due to a covered accident or sickness.
Anyone who is willing to pay a premium.
Trained and registered volunteers..
What type of insurance would the following acts be: -Solicitation -Preliminary insurance negotiations -Execution of insurance contracts -Transactions of matters arising out of the contracts
Transacting insurance
'Own occupation' is clearly the more liberal definition of disability and is more advantageous to the insured and has a higher premium.
True
A peril is the immediate and specific event that causes a loss.
True
A small employer is defined in Oregon as any employer that has employed an average of at least two but not more than 50 employees on business days during the preceding calendar year. The majority of the employees must be employed within Oregon and the employer must employ at least two eligible employees on the date on which the coverage becomes effective.
True
Anyone who is qualified for Medicare is also qualified to purchase a Medicare Supplement policy by paying the required premium for the level of benefits that most suits their needs. OBRA states that Medicare Supplement insurance cannot be denied on the basis of an applicant's health status, claims experience or medical condition during the first 6 months after a Medicare beneficiary turns 65 or during the first 6 months after the beneficiary enrolls in Part B.
True
As a general rule life insurance benefits are not taxable
True
Required health insurance policy provisions state that no statement or misstatement made in the application at the time it is issued will be used to deny a claim after the policy has been in force for two years.
True
Some HMOs charge the primary care physician the cost of the specialist's services when they refer one of their patients as a disincentive to provide referrals.
True
Sometimes it is possible to get a lower premium rate by backdating the insurance application.
True
The National Association of Insurance Commissioners (NAIC) Uniform Individual Accident and Sickness Provision Law was developed in 1950.
True
The primary difference between a SEP and an IRA is the much larger amount that can be contributed each year to a SEP
True
The process of determining the suitability of certain types of policies for various situations will make it easier for you to distinguish the differences between the many types of policies.
True
The purpose of the free look period is to give the insured time to review a policy and make sure it meets all of his or her needs and expectations once it has been delivered.
True
When someone becomes a member of an HMO they must choose a primary care physician.
True
It is legal in Oregon to pay, or offer to pay, anything of value specified in the insurance contract as an inducement to purchase insurance.
True But, it is illegal in Oregon to pay or offer to pay any of the following as an inducement to purchase insurance: 1. Any special favor or advantage in dividends or benefits. 2. Any stocks, bonds, securities, or accrued dividends or profits. 3. Anything of value NOT specified in the insurance contract.
Dental plan benefits are usually divided into three categories:
True, They are diagnostic/preventive services, basic services, and major services
What is Conservation effort?
Trying to discourage a policyholder to drop an existing policy
How much controlled business in a calendar year is considered to be an unlawful rebate?
Twice the amount of the premiums for other health and/or life business.
What term is used for tricking policyholders by using fraudulent comparisons of policies to persuade the insured to switch or take out another policy with another insurer?
Twisting
Discrimination
Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?
To avoid an increase in premium rate for the insured
Under what circumstances may a life insurance agent deliver a policy that is dated up to six months before the application was taken?
Fixed amount
Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?
he following are all characteristics of group life insurance, EXCEPT: 1) The group must be a natural group. 2) The group must be strong financially. 3) Underwriters prefer groups with low turnover. 4) The larger the group, the more accurately it can be underwritten.
Underwriters prefer groups with low turnover
Evaluating information that establishes adverse selection risk is the purpose of which stage of insurance?
Underwriting
What is the name of the process that insurance companies use to determine whether or not an applicant is insurable?
Underwriting
According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT
Unearned premiums are retained by the insurance company.
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
Unfair trade practice
The suitability rules are designed to protect consumers from:
Unfair trade practices and producer misconduct
Incontestability Provision
Unique to insurance contracts
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdrawals a portion of the policy's cash value. There is a limit for a withdrawal & the insurer charges a fee. What type of policy does the insured most likely have?
Universal Life
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have ?
Universal Life
What type of policy allows withdrawals or partial surrenders?
Universal Life
A life insurance policyowner has the flexibility to increase the amount of premium and then decrease it at a later date. The person is also allowed to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount. What type of policy is this?
Universal life The policyowner has the flexibility to increase the amount of premium going into the policy and to later decrease it again. In fact, the policyowner may even skip paying a premium and the policy will not lapse as long as there is sufficient cash value at the time to compensate for the nonpayment of premium.
All of the following are true regarding the convertibility option under a term life insurance policy EXCEPT 1) Upon conversion, the premium for the permanent policy will be based upon attained age. 2) Evidence of insurability is not required. 3) Most term policies contain a convertibility option. 4) Upon conversion the death benefit of the permanent policy will be reduced by 50%.
Upon conversion the death benefit of the permanent policy will be reduced by 50%.
A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as
Usual, customary and reasonable The usual, customary and reasonable approach for determining insurance benefits is based upon the fees normally charged for specific procedures in the geographic location where the services are provided.
Liability imposed on one party as a result of the actions of another person (i.e., parent/child, employer/employee) is known as
Vicarious liability. When the child makes the parent liable; the contractor makes the principal liable; the employee makes the employer liable, it is termed vicarious.
Victor purchased a noncancelable health insurance policy 1 year ago. All of these are circumstances where the insurance company could cancel or void this policy EXCEPT 1) Within two years of the application, the insurer discovers a misrepresentation. 2) Victor does not pay the premium. 3) Victor reaches the maximum age limit specified in the policy. 4) Victor does not like his policy.
Victor does not like his policy.
Vision, Inc. employs 500 people. The company offers group life insurance to its employees after 90 days of service. Who is considered the policyholder of the life insurance policies Vision, Inc. offers?
Vision, Inc.
What types of services may not be provided under LTC's Assisted Living?
Visits by a registered nurse
An insurance company receives an application with some information missing and issues the policy anyway. What is this called?
Waiver
The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called
Waiver of premium
The rider that allows the company to forgo collecting the premium if the insured is disabled is called
Waiver of premium.
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
Warranty A warranty in insurance is a statement guaranteed to be true. When an applicant is applying for an insurance contract, the statements he or she makes are generally not warranties, but representations. Representations are statements that are true to the best of the applicant's knowledge.
Adverse medical information about individual
What are the member of the Medical Information Bureau required to report?
They offer the option of purchasing coverage that raises benefit levels accordingly
What do long-term care policies offer to policyholders to account for inflation?
They offer the option of purchasing coverage that raises benefit levels accordingly.
What do long-term care policies offer to policyholders to account for inflation?
One-sided, only one party makes an enforceable promise.
What is a definition of a Unilateral Contract?
Much more money can be contributed to a SEP
What is a primary difference between an IRA and an SEP?
It has the highest amount of insurance protection
What is the benefit of choosing extended term as a nonforfeiture option?
5 months
What is the elimination period for Social Security disability benefits?
12 months
What is the maximum amount of time a health plan can exclude a pre-existing condition?
Payor Benefit
What is the term that most accurately describes the provision designed to relieve life insurance premium payment for minors whose parents have died or become disabled?
Cash refund annuity
What type of annuity promises to pay to a beneficiary, in a lump sum, the difference between the amount paid into the contract and the benefits received prior to the annuitant's death?
Provide a copy of the Important Notice Regarding Replacement of Life Insurance to the applicant.
When a replacement is involved, a replace insurance company is responsible for all of the following EXCEPT
D. Insurer While acting under the authority of the contract given by the insurer, the acts of an agent/producer are considered to be the acts of the insuer.
When agents are acting within the scope of their contract, their actions will be assumed to be acts of the A. Policy owner B. Department of Insurance C. Insured D. Insurer
In forming an insurance contract, when does an acceptance usually occur?
When an insurer approves a prepaid application
Lower.
When compared with the administrative cost found in individual coverage, the per capita administrative cost in group health insurance is
When advertisements are used, all of the following are true EXCEPT
When covering benefits payable, it is acceptable for certain illustrations to be slightly misleading.
When the insured is unable to perform his/her job duties.
When does a person qualify to receive disability-realated income?
When would a 20-pay whole life policy endow?
When insured reaches age 100
When would a misrepresentation on an insurance application be considered fraud?
When it is intentional and material.
When does the policy begin, if the initial premium is not paid?
When the agent delivers the policy -Collects the initial premium -Applicant completes an acceptable Statement of Good Health
An agent and an applicant for a life insurance policy fill out and sign the application. However the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?
When the agent delivers the policy, collects initial premium and the applicant completes and acceptable statement of good health
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
In life and health insurance, an offer is usually made
When the application is submitted.
All of the following cases show when a Small Employer Medical plan cannot legally be renewed EXCEPT
When the employer chooses to renew the plan.
In insurance, when is the offer usually made on a contract?
When the insurance application is submitted.
In forming an insurance contract, when does an acceptance usually occur?
When the insurer approves a prepaid application.
When does an insurance policy go into effect?
When the policy is delivered and the premium is paid.
When does free look period begin on a life insurance policy?
When the policy is delivered to the insured.
When is the insurability conditional receipt given?
When the premium is paid at the time of application
After a divorce, when can a surviving spouse of a certificate holder qualify for continuance of coverage under a group health policy that provides coverage for medical expenses?
When the spouse is 55 years of age or older.
When can earned surplus be returned to the policyholder?
Whenever it exists and is not needed for other expenses
Annuities payments
Which concept is associated with 'exclusion ratio"?
Both the principal and interest will be liquidated over a selected period of time.
Which of the following best describes fixed period settlement option?
Annual cost of mortality plus expenses
Which of the following best describes gross annual premium?
4. The period of time during which accumulated money is converted into income payments The "annuity period" is the time during which accumulated money is converted into an income stream.
Which of the following best describes what the "annuity period" is? (Choose from the following options) 1. The period of time spanning from the accumulation period to the annuitization period 2. The period of time during which money is accumulated in an annuity 3. The period of time spanning from the effective date of the contract to the date of its termination 4. The period of time during which accumulated money is converted into income payments
Subscribers
Which of the following entities are responsible for making premium payments?
Which of the following is INCORRECT regarding the agent's duties and responsibilities at the time of the application? 1) The agent should check to make sure that there are no unanswered questions on the application. 2) The agent should change an incorrect statement on the application by personally initialing next to the corrected statement. 3) The agent should explain the nature and type of any receipt he/she is giving to the applicant. 4) The agent should probe beyond the stated questions if he/she feels the applicant is misrepresenting or concealing information.
Which of the following is INCORRECT regarding the agent's duties and responsibilities at the time of the application?
A. The aggent should change an incorrect stament on the application by personally initialing next to the correct statement
Which of the following is INCORRECT regarding the agents duties and responsibilities at the time of the application. A. The aggent should change an incorrect statement on the application by personally initialing next to the correct statement B. the agent should explain the nature and type of any receipt he/she is giving to the applicant. C. The applicant should make sure there are no unanswered questions on the application. Any changes to information on an application must be initialed by the applicant.
To minimize the insured's level of liability in the event of loss
Which of the following is NOT a goal of risk retention?
Estimated Longevity
Which of the following is NOT a type of information that needs to be gathered in order to determine the value of someone's life when using the needs approach?
Money borrowed from the cash value is taxable.
Which of the following is NOT true regarding policy loans?
4. Telling a client that his first premium will be waived if he purchased the insurance policy today
Which of the following is an example of a producer being involved in an unfair trade practice of rebating? (Choose from the following options) 1. Inducing the insured to drop a policy in favor of another one when it's not in the insured's best interest 2. Charging a client a higher premium for the same policy as another client in the same insuring class 3. Making deceptive statements about a competitor 4. Telling a client that his first premium will be waived if he purchased the insurance policy today
Payment of premium
Which of the following is deemed to be consideration on the part of the applicant, in respect to the Consideration Clause?
d)Creditor is the policyowner.
Which of the following is true about credit life insurance? (Choose from the following options) 1. Debtor is the annuitant 2. Creditor is the insured 3. Debtor is the policy beneficiary 4. Creditor is the policyowner.
They only cover specific accidents or diseases.
Which of the following is true regarding limited health insurance policies?
2)The annuitant assumes the risks on investment.
Which of the following is true regarding variable annuities? (Choose from the following options) 1. A person selling variable annuities is required to have only a life agent's license 2. The annuitant assumes the risks on investment 3. The funds are invested in the company's general account 4. The company guarantees a minimum interest rate.
2. The annuitant assumes the risks on investment.
Which of the following is true regarding variable annuities? (Choose from the following options) 1. A person selling variable annuities is required to have only a life agent's license 2. The annuitant assumes the risks on investment 3. The funds are invested in the company's general account 4. The company guarantees a minimum interest rate.
Making derogatory oral statements about another in suer's financial condition
Which of the following nest describes an unfair trade practice of defamation?
1. An insured and his child are injured in the same accident, and the uninjured, nonworking spouse wants to collect hardship benefits from the cash value of the life policy
Which of the following situations would be addressed by The Uniform Simultaneous Death with a Common Disaster provision? (Choose from the following options) 1. An insured and his child are injured in the same accident, and the uninjured, nonworking spouse wants to collect hardship benefits from the cash value of the life policy 2. The insured and primary beneficiary are injured in the same car accident, and the beneficiary dies within 30 days of the insured 3. Two beneficiaries of a life insurance policy are both killed in the same car accident. Because there are no remaining beneficiaries, the insured must select new ones 4. Both the insured and beneficiary are severely injured and want to request advanced benefits to pay for hospitalization and subsequent medical treatment.
Buy-sell agreements are normally funded with a life insurance policy.
Which of the following statements concerning buy-sell agreements is true?
Dividend
Which of the following terms is used to name the non-taxed return of unused premium?
Decreasing term
Which of the following types of insurance policies is most commonly used in credit life insurance?
4. Implied
Which type of authority is based on the actions, words, or deeds of the principal? (Choose from the following options) 1. Apparent 2. Express 3. Lingering implied 4. Implied
In a group health policy, a probationary period is intended for people
Who joined the group after the effective date.
Tanya wants to buy a life insurance policy that has a cash value element. Which type should she buy?
Whole Life Insurance
For an individual who is NOT covered by an employer- sponsored plan IRA contrubutions
Will be tax deductible
If a life insurance policy is deemed to be modified endowment contract, the policy loans:
Will be taxed on a last-in-first -out basis
If a life insurance policy is deemed to be a Modified Endowment Contract, the policy loans
Will be taxed on a last-in-first-out basis.
Which of the following describes the taxation of an annuity when money is withdrawn during the accumulation phase?
Withdrawn amounts are taxed on a last in, first out basis
When can a Long-Term Care policy deny a claim for losses incurred because of a pre-existing condition?
Within 6 months of the effective date of coverage
How soon following the occurrence of a covered loss, or after the insurer becomes liable for periodic payments for income benefits, must an insured submit written proof of such loss to the insurance company?
Within 90 days or as soon as reasonably possible but not to exceed one year.
Which of the following is true regarding the gender of the applicants in disability income insurance?
Women, as they age, present a higher health risk and are more prone to disability.
Your client wants to buy a par policy to supplement his retirement savings program. Which of the following does your client need to understand about insurance policy dividends?
Your client wants to buy a par policy to supplement his retirement savings program. Which of the following does your client need to understand about insurance policy dividends?
What will happen to my license if I do not complete all 24 credit hours by my CE review date?
Your license will be suspended for a period of 90 days or until your 24-hour requirement is met.
To be eligible for a Health Savings Account, an individual must be covered by
a High Deductible Health Plan.
Which would not receive death benefit immediately after insured dies?
a minor son of the insured
C. a limited pay policy
a policy owner of an adjustable life policy can increase premium payments and have which of the following? A. a higher cash value interest rate B.a higher face amount without proof of insurability C.a limited pay policy D.a lower nonforfeiture option
D.non participating policy In a nonparticipating the policy pays dividends not to policy owner as with (mutual insurers) but to stockholders (stock insurers)
a policy that does not pay dividends to policy owner is a? A. participating policy B. whole life policy C. mutual life policy D. not participating policy
D. the spouse of a retiring insurance producer
a temporary producer license could be issued without examination to all the following EXCEPT? A. the spouse or legal representative of a deceased insurance producer B. the designee of a licensened insurance producer who enters active duty in the US Armed Forces C. the employee of a disabled licensed a producer D.the spouse of a retiring insurance producer
#43. 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. If the applicant has misstated his or her age or gender on the application, the insurer, in the event of a claim, is allowed under this provision to adjust the benefits to an amount that the premium at the correct age or gender would have otherwise purchased.
37. An individual applied for an insurance policy. The payment for the first premium was included with the application. Which of the following statements is correct?a)With a conditional receipt, the policy is in effect as of the date of application. b)The underwriting process is complete and coverage is issued automatically. c)The coverage would be in effect for accidental death only. d)Coverage cannot be in effect until a policy is issued and the applicant accepts the policy.
a)With a conditional receipt, the policy is in effect as of the date of application If the company acknowledges receipt of the premium with a conditional receipt, the policy is in effect on the date of the application or the date of the medical exam (whichever is later), provided that the applicant is found insurable at the rate applied for.
Which of the following are characteristics of a successful self-funded plan?
a. A group large enough to reasonably predict future loss experience b. A stop-loss contract to assume losses beyond the insured's retention c. A third party administrator who services claims **d. All of the above
Social Security disability definition includes all of the following EXCEPT
a. A physical impairment expected to result in death. **b. Disability expected to last for at least 6 months. c. The inability to engage in any gainful work. d. Disability resulting from a medically determinable mental impairment.
Which of the following statements is INCORRECT with regard to a 1035 exchange?
a. A whole life insurance policy can be exchanged for a Universal life insurance policy. b. On a trustee-to-trustee exchange where the policyowner exchanges a life insurance policy for another life insurance policy on the same life, there will be no income tax on the transaction. c. A life insurance policy can be exchanged for an annuity. **d. A whole life insurance policy can be exchanged for a term insurance policy.
All of the following individuals would qualify to receive disability benefits EXCEPT
a. An unmarried 17-year-old child of the disabled worker. **b. The disabled worker's spouse at age 60. c. The disabled worker. d. A disabled 50-year-old widow of the disabled worker.
All other factors being equal, the least expensive first-year premium payment is found in a)Annually Renewable Term. b)Increasing Term. c)Decreasing Term. d)Level Term.
a. Annually Renewable Term Annually renewable term is the purest form of term insurance. The death benefit remains level, but the premium increases each year with the insured's attained age. In decreasing policies, while the face amount decreases, the premium remains constant throughout the life of the contracts. In level term and increasing term policies, the premium also remains level for the term of the policy. Therefore, in the other types of level policies, the first-year premium would not be different from any other year.
Insurers are required to file various financial reports with appropriate government agencies. Which of the following choices is TRUE?
a. By March 1st of each year, every admitted insurer in California must file a thorough financial report outlining its financial conditions and affairs as of December 31st of the previous year. b. In addition to other taxes due, insurers file a Premium Tax Return to the State Dept. of Insurance each year for the amount of premium taxes owed. **c. Both are true. d. Neither is true.
What does the Employers Liability coverage part of a Workers Compensation insurance policy protect the employer against?
a. Common law claims by workers not covered by Workers Compensation **b. Common law claims by third parties c. Criminal Negligence charges filed by the DA d. All of the above.
Concerning AIDS and HIV risks, all of the following acts may subject an insurer to liability claims or fines EXCEPT
a. Disclosing test results to third party without applicant's consent. b. Requiring applicant to pay for HIV test in order to be underwritten. **c. Declining applicant for a positive HIV test result. d. Not providing counseling contacts and educational information about HIV and AIDS.
Which of the following is provided by an HMO?
a. Financing b. Patient care c. Life insurance **d. A & B
All of the following would be different between qualified and non-qualified retirement plans EXCEPT
a. IRS approval requirements **b. Taxation on accumulation c. Taxation of withdrawals d. Taxation of contributions
All of the following are characteristics of group life insurance, EXCEPT
a. Individuals covered under the policy receive a certificate of insurance. b. Certificate holders may convert coverage to an individual policy without evidence of insurability. **c. Premiums are determined by the age, sex and occupation of each individual certificate holder. d. Amount of coverage is determined according to nondiscriminatory rules.
The goals of HICAP are to provide
a. Information through community forums about the myths and realities of Medicare and private health insurance. b. Counseling and advocacy to assist individuals with long-term care planning and insurance policies, billing, or claims. c. Legal representation and advice when necessary and appropriate. **d. All of the above.
All of the following are disadvantages of using Traditional Net Cost method for comparing the cost of life insurance policies EXCEPT
a. It assumes the policy will be kept for the number of years used in calculation. **b. Dividends are not considered in determining the cost of the policy. c. It does not consider the time value of money. d. The dividends and cash values are projections only.
All of the following are true in regards to 24 Hour Coverage EXCEPT
a. It reduces litigation concerning cause of injury or disease. b. Gaps in coverage are reduced as employees get coverage for both occupational and nonoccupational injuries and diseases. **c. It can be distributed through a life insurance policy. d. Employees are covered around the clock.
A typical Accidental Death & Dismemberment policy covers all of the following losses EXCEPT
a. Limb. b. Life. **c. Income. d. Eyesight.
All of the following are types of care provided under LTC's home health care EXCEPT
a. Occasional visits by licensed practical nurses. b. Occasional visits by licensed vocational nurses. **c. Occasional visits by pediatric nurses. b. Occasional visits by registered nurses.
All of the following choices are legal methods for employers to finance their liability for Workers Compensation benefits in California EXCEPT
a. Private Insurance. b. State Insurance. **c. Employee Insurance. d. Self Insurance.
All of the following are basic types of Workers Compensation benefits EXCEPT
a. Rehabilitation. **b. Unemployment compensation. c. Medical expenses. d. Disability income.
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?
a. SEPs offer ease of plan administration with minimal reporting requirements. **b. SEPs limit participation to members of closely held corporations. c. SEPs allow the employer to make annual tax deductible contributions up to 25% of an employee's earned income, not to exceed $49,000. d. SEPs have a higher tax deductible contribution limit than an IRA.
All of the following statements are true EXCEPT
a. Social Insurance is prescribed by law, making individual policies unnecessary. b. Social Insurance seeks to cover the needs of those who cannot afford or cannot qualify for private insurance. c. Social Insurance, like Private Insurance, has requirements in order to qualify for benefits. **d. Social Insurance seeks to be equitable.
All of the following statements are true EXCEPT
a. Social Insurance, like Private Insurance, has requirements in order to qualify for benefits. **b. Social Insurance seeks to be equitable. c. Social Insurance is prescribed by law, making individual policies unnecessary. d. Social Insurance seeks to cover the needs of those who cannot afford or cannot qualify for private insurance.
All of the following are characteristics of social insurance EXCEPT
a. Social insurance is not equitable. b. Government is the only insurance provider. **c. Benefits are provided under a contract. d. Involuntary participation in social insurance is required of all eligible taxpayers.
The underwriting unit, when considering risk factors for individual and group disability insurance, will review the "carrier history" of the group. Which factors might the underwriters consider?
a. Stability b. Longevity c. Price Shopping **d. All the above
Which of the following is INCORRECT regarding HIPAA's creditable coverage?
a. The 12 months of creditable coverage may come from different employers as long as the total is 12 months of coverage, with no gaps over 63 days. b. There would be no pre-existing conditions limitation under a new plan as long as more than 12 months of coverage existed immediately prior to joining the new group. c. When a person leaves employment, they will be issued a certificate of creditable coverage for the number of months they were covered under the employer's group health insurance plan. **d. The 12 months of creditable coverage must all come from the same employer.
In a group life insurance policy, the employer may select all of the following EXCEPT
a. The amount of insurance. b. The premium payor. **c. The beneficiary. d. The type of insurance.
Which of the following is NOT covered under a "core" policy, Plan A in Medigap insurance?
a. The first three pints of blood each year. **b. The Medicare Part A deductible. c. Approved hospital costs for 365 additional days after Medicare benefits end. d. The 20% Part B coinsurance amounts for Medicare approved services.
Under which of the following circumstances would Workers Compensation provide coverage?
a. The injury was caused by the injured worker's intoxication. b. The injury was intentionally self-inflicted. c. The injury was caused by an altercation where the injured worker was the initial physical aggressor. **d. None of the above.
All of the following are true regarding the guaranteed insurability rider EXCEPT:
a. The insured may purchase additional coverage at the attained age. b. The insured may purchase additional insurance up to the amount specified in the base policy. c. It allows the insured to purchase additional amounts of insurance without proving insurability only at specified dates or events. **d. This rider is available to all insured.
All the factors are FALSE when used to provide data and statistics to an insurer in order to project losses and the subsequent cost of insuring risks in a group disability policy, EXCEPT
a. The number of group carriers. **b. Stability, Price, Longevity with a particular carrier. c. Experience, Expenses and Interest of a particular carrier's premiums. d. The number of eligible participants in the group.
What are the two types of policy assignment?
absolute and collateral assignment
If an annuitant dies during the ____________ period, either the cash value or the premiums that have been paid (whichever amount is greater) will be paid to a designated beneficiary. If the beneficiary is not named, the benefit will be paid to the annuitant's estate.
accumulation period
Which of the following is true regarding branch agency licensing
agent in charge must be licensed
COLI (corporate owned life insurance) covers who
all employes
The entire face amount of a policy will be included in a persons taxable estate if The entire face amount of a policy will be included in a persons taxable estate if 1. the insured person is the owner of the policy at the time of death. 2. the insured person's estate is the designated beneficary at the time of the insured person's death. 3. the insured person is the policy owner and assigns or transfers ownership of the policy, or makes a policy a gift within three years prior to his or her death, 4. all of the above
all of the above
The precertification department might recommend alternatives to inpatient hospital care and other hospital services such as 1. home health care. 2. hospice care. 3. ambulatory care. 4. all of the above.
all of the above.
C. Premiums
all of the following are examples of risk retention EXCEPT? A. co-payments B. Self-insurance C. Premiums D. deductibles
Rebating is an unfair trade practice and it's regulated by law. All of the following are rebating except
an agent uses misrepresentation to convince a person to cancel an existing policy and take a new policy from him
who can make a fully deductible contribution to a traditional IRA
an individual not covered by an employer sponsored plan who has earned income
B. if the primary beneficiary predeceases the insured
an individual purchased a life insurance policy on his life naming his wife is primary beneficiary, and their daughter as contingent beneficiary. under what circumstance could the daughter collect the death benefit. A. if the insured dies from an accident B. if the primary beneficiary predeceases the insured C. the primary and contingent beneficiaries share death benefits equally
D. 3% insurance companies promise guaranteed minimum on the fixed annuities ( 3% in this scenario) this means that if the investments draw less than 3 % the company will have to pay 3 percent anyway. if the investments earn 3 % the company will pay the excess.
an insurance company forwards fixed annuity premium to their general account, where the money is invested. The guaranteed minimum interest is 3%. During an economic downswing the investments only drew 2.5 % what interest rate will the insurance pay to the policy holders. A. 3% this payment. The overpayment this timewill be subtracted from the next time the rate exceeds 3 % B. 3% regardless of what the investment Dr since that's the guaranteed rate C. 2.5% D. 3%
oral surgery
an operation that might be required for extraction
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
an unfair trade practice
Accidental bodily injury is typically defined as
an unforeseen and unintended injury
B. represent the client an agents license authorizes the licensee to represent the insuer not the client
and insurance agents responsibilities include: all of the following EXCEPT A. perform professionally B. represent the client C. perform faithfully D. represent the insuer
A policyowner of a universal life insurance policy must receive a policy status report from the insurer at least
annually
what concept is associated with exclusion ratio
annuities payments
payout period
annuitization period
When the insured person or policy owner sells, renews or converts a term policy, the premium is figured at the insured person's age at the time. This is called the ___________age.
attained
A prospective deferred annuity owner is concerned about what would happen if he surrendered the annuity before the annuitization period. The agent most likely explained which of the following?
b) Nonforfeiture option guarantees that the owner will receive a surrender value of the contract.
15. A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy a)Decreased death benefit at each renewal b)Required a premium increase each renewal c)Built cash values d)Required proof of insurability every year
b)Required a premium increase each renewal Annually Renewable Term policies' premiums are adjusted each year to the insured's attained age; however, the policy may be guaranteed renewable. Death benefits remain level, and as with any term policy, there are no cash values.
What qualifications must an agent hold in order to sell variable life insurance policies?
both state and federal licensing-agents selling variable life products must be registered with the Financial Industry Regulatory Authority (FINRA) and must be licensed within the state to sell life insurance and variable products
How is the Insurance Guaranty association funded
by its members- authorized insurers
45. If an insurer wishes to appoint a producer, it must file a notice of appointment within how many days of the date that the contract is executed? a)45 days b)7 days c)15 days d)30 days
c)15 days The insurer has 15 days to file a notice of producer appointment.
#40. An agent is trying to convince a potential insured to buy a policy from him, so he misrepresents the benefits of the policy. This is an example of a)Concealment b)Indemnity c)Fraud d)Defamation .
c)Fraud Fraud is the intentional misrepresentation used to induce another party to make or refrain from making a contract, or to deceive or cheat a party
true about policy loans
can be repaid on death, insurer can charge interest on outstanding policy loans, a policy loan can be repaid after the policy is surrendered
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
cash option
When producers write insurance on themselves, their family, or their coworkers, it is called what?
controlled business
Applications to the insurer must include all the following except: a.license identification number of agent b.name of insurer. c.name of agent d.credit history report
credit history report
the term fixed in fixed annuity does not refer to
death benefit
The part of a property policy that shows the amount of insurance, premium, and policy term is the
declarations. Who, what, when, where, and how much insurance and premium, all are stated in the declarations.
what is the main purpose of the seven-pay test
determines if the insurance policy is an MEC
The type of policy that provides the necessary funds for the business to purchase the interest of a disabled partner is called a ______________?
disability buy-sell policy
Tim and Tom are twins. When they applied fo life insurance in company a, the insurance company found that while neither of them smoked and both had similar life style, tim was in a much stronger financial position than Tom. Because of this the company charged tim a higher rate for his insurance. This practice is
discrimination
name for nontaxed return of unused premiums
dividend
accumulation period
earn tax differed interest
federal tax advantages of a qualified plan
employer contributions made to a qualified plan are tax deductible as ordinary business expense, funds accumulate on a tax-deferred basis, contributions made to a qualified plan are not counted as income by employee for income tax purposes
Which of the following is not a responsibility of the office of insurance regulation?
enacting new insurance laws
An agent's client needs additional insurance in which the agent's own insurer cannot provide. The agent has to solicit additional coverage from another authorized insurer. This coverage is know as
excess
Failure of a licensee to maintain an appointment with an insurance company within 48 months after the date the license became effective will result in
expiration of the license
Which of the following would be an example of unfair claims settlement practice
failing to acknowledge a claim within 30 days
D. 5yrs Ech. Agent and agency must keep a file of all advertising printed published or prepared for 5yrs
for how many years is insurer required to maintain a complete file of its advertisements
Amy's insurance premium has decreased slightly, despite the fact that her level of health has remained the same. Which of the following most likely caused the premium decrease?
her insurer used interest earned on premiums to lower premium amounts
B. until the beneficiary death
how long will the beneficiary receive payments under the single life settlement option A. Until the insureds age 100 B. Until the beneficiary's death C. Until the beneficiary's death D. For a specific period of time
D. 15 days
if an insurer wishes to appoint a producer it must file a notice of appointment within how many days of the date that the contract is executed
Under what conditions will proof of insurability not required of an employee wanting to enroll in group insurance?
if employee enrolls within certain time period
A father purchases a life insurance policy on his teenage daughter and adds the payor benefits rider. In which of the following scenarios will the rider void the payment of premiums?
if the father is disabled for more than 6 months
prothodontics
includes bridges and dentures
what is the tax consequence of amounts received from a traditional IRA after the money was left in a tax deferred account by beneficiary
income tax on distributions and no penalty
A return of premium term life policy is written as what type of term coverage
increasing
Compensation to an insured that restores them to the same financial position that they enjoyed prior to the loss occurring
indemnity
Under the "____________" option, the annuitant selects the time period for the benefits, and the insurer determines how much each payment will be. This option pays for a specific period of time only, and there are no life contingencies.
installments for a fixed period
Under the __________ option, the annuitant selects the time period for the benefits; the insurer determines how much each payment will be. This option pays for a specific amount of time only, and there are no life contingencies.
installments for a fixed period annuity settlement
annuitant
insured
All the advertisements, regardless of their source of creation are the responsibility of
insurer
when the policy endows or is surrendered, any cash value that exceeds the amount the policy owner contributed with premium payments (excess of basis), it _____ taxable as ordinary income in the year it is received by the
is
Which of the following is true regarding the annuity period? -during this period of time the annuity payments grow interest tax deferred. -it is also referred to as the accumulation period. -it is the period of time during which the annuitant makes premium payments into the annuity. -it may last for the lifetime of the annuitant.
it may last for the lifetime of the annuitant.
What has the State of Oregon set up to protect people who purchase insurance from harm?
licensing procedures
life with refund
life with minimum guaranteed
what is true about whole life
lump-sum benefits are not taxable
beneficiary
may elect lump sum or periodic payments
What Act changed the name of Part C from Medicare + Choice to Medicare Advantage?
medicare modernization act of 2003
Retention
planned assumption of risk or acceptance of responsibility for the lossb by an insured through the use of deductibles, co-payments or self insurance
misstatement of age
policy adjustment allowed
which of the following is an example of an agent's fiduciary responsibilities?
promptly forwarding premiums to the insurance company
owner
purchases policy
Restored to its original status
reinstatement provision
Which method insurers use to protect themselves against catastrophic losses?
reinsurance
Disability insurance is specifically designed to do what?
replace the lost income in the event of disability
a man decides to purchase a $100,000 annually renewable term insurance life policy to provide additional protection until his children finished college, he discovered that this policy
required a premium increase at each renewal
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy
required a premium increase each renewal.
One of applicants for life insurance missed a couple of questions on the application. What should insurer do with application?
return to applicant for completion
Bonnie wants to name her husband beneficiary of life policy. She also wishes to retain all rights of ownership.Bonnie should have her husband named as
revocable beneficiary
Adverse selection is a concept best described as:
risks with higher probability of loss seeking insurance more often than other risks
Equity index annuities -are more risky that variable annuities. -are security instruments. -invest conservatively. -seek higher returns.
seek higher returns.
An immediate annuity purchased with the face amount at death or with the cash value at surrender can be referred to as which of the following
settlement option
warrenty
statement in insurance that is guaranteed to be true
representation
statements are true to the best of the applicants knowledge
What type of insurance company is a private organization that is publicly owned and incorporated under the laws of its state for the purpose of making a profit for its stockholders.?
stock insurance company
What type of risk results in highest premium
substandard risk
Which of the following will be included in policy summary? a. surrender values and premiums b.copies of illustration and application c.comparisons with similar policies d.primary and secondary beneficiary desginations
surrender values and premiums
An employer offers group coverage of 10,000 to employees. What is true about cost?
the cost of coverage is deductible expense by the employer
The right to examine provision is commonly referred to as what?
the free look period
Who does the secondary notice provision protect?
the insured over the age of 64
Under a group plan, certificates of insurance must include all the following except
the name of the writing agent
D. set premium rate the insurer sets premium rates upon underwriting consideration
the ownership provision entitles the policyowner to do all the following EXCEPT A. receive a policy loan B. assigned the policy C. designate a beneficiary D. Set premium rates
In terms of parties to a contract, which does not describe competent party
the person must have completed secondary education
Regardless of the makeup of the specific policy and how it works, the only person who has ownership rights and the powers that go with them is who
the policy owner
C. Limited pay policy
the policy owner of an adjustable life policy can increase premium payments and have which of the following? A. a higher cash value interest rate B. a higher face amount without proof of insurability C. Limited pay policy D. a lower nonforfeiture
B. avoidance
the risk management technique that is used to prevent a specific loss by not exposing yourself too that activity is called? A. sharing B. avoidance C. transfer D. reduction
endodontics
the treatment of the pulp inside the tooth
What is the minimum number of participants in group life policies in this state?
there is no minimum
What is the purpose of buyer's guide?
to allow the consumer to compare the costs of different policies
In a legal health insurance contract, both parties to the contract are required to provide consideration. The applicant's consideration is the premium and the application. What is the insurance company's consideration?
to provide a promise to pay covered claims
The taxation of insurance benefits for personally- owned policies (policies owned by individuals for personal reasons) is usually determined according to how the premiums are paid.
true If someone pays the premium with money that has already been taxed, the benefits are usually dispersed tax free, meaning they do not have to be reported as personal income on a Federal tax return. If the premium is paid with pre-tax money (money that you have not already paid taxes on) as you might for a qualified plan, or is tax deductible, then the benefits are usually dispersed as taxable income and should be reported as such on a Federal tax return.
An insured owns a life insurance policy. In order to pay some of medical bills, she withdraws a portion of policy's cash value.There is a limit for withdrawal and insurer charges a fee. What type of policy does insured most likely have?
universal life
Which of the following types of policies allow policy owner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
universal life
the waiver of cost of insurance rider is found in what type of insurance
universal life
All of the following are true regarding the convertability option under a term life insurance policy except? -upon conversion, the premium for the permanent policy will be based upon attained age. -upon conversion, the death benefit of the permanent policy will be reduced by 50%. -Evidence of insurability is not required. -Most term policies contain a convertability option.
upon conversion, the death benefit of the permanent policy will be reduced by 50%.
orthodontics
using braces and appliances for repositioning
B. ownership mutual company are owned by policyholders while stock companies are owned by stockholders
what is the major difference between a stock company and a mutual company? A. Types of ppolicies B. Ownership C. Amnt. Of death benefit D. Number of producers
cash value the amount available to the policyowner for a loan is the policies cash value. If there are any outstanding loan that amount will be reduced by the amount of the unpaid loan interest
what limits the amount of policy owner can borrow from the whole life insurance policy
If an applicant for a lief insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about
whether an insurable interest exists between the individuals
D. It is Level Term insurance
which of the following best describes annually renewable term insurance? A. it requires proof of insurability at each renewal B. Neither the premium nor the death benefit is affected by the insureds age C. It provides annually increasing death benifits D. It is level Term insurance
C. warranty a warranty for insurance is a statement guaranteed to be true. When an applicant is applying for an insurance contract the statements he or she makes are generally not warranties but representations.
which of the following is a statement that is guaranteed to be true and if untrue May breach insurance contract
which of the following is true regarding a single life settlement option? A. payments continue until the entire principal is exhausted B. proceeds are paid out in a lump sum C. it provides income for a specific Period of time D. it provides income the beneficiary cannot outlive
which of the following is true regarding a single life settlement option? A. payments continue until the entire principal is exhausted B. proceeds are paid out in a lump sum C. it provides income for Pa specific Period of time D. it provides income the beneficiary cannot outlive
C. Universal Life option A universal life aoption A (level death benefit option) policy must maintain a specified "corridor" or gap between the cash value and the death benefit, as required by the IRS. If this corridor is not maintained, the policy is no longer defined as life insurance for tax purposes, and consequently loses most of the tax advantages that have been associated with life insurance.
which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit. A. Equity Indexed Universal Life B. Variable Universal Life C. Universial life option A D. Universial Life Option B
D. The insurers guaranteed minimum rate of interest with fixed annuities the company is required to pay at least a guaranteed minimum rate of interest to the owners if the company investments perform well the company will pay a higher interest rate but since the interest rate can never fall below the guaranteed minimum that's what ultimately determines what the company will pay
which of the following ultimately determines the interest rate pay to the owner of a fixed annuity. A. investment performance of the company B. investment performance of the insured C. statewide predetermined annual interest rate D. Insurers guaranteed minimum rate of interest
A. Option B
which option for universal life allows the beneficiary to collect both the death benefit and cash value apon the death of the insured? A. option B B. Corridor option C. Variable option D. Option A
apparent athority
words and actions
Walter purchased a 15 year level term life insurance with a face amount of 100,000$. The policy contained an accidental death rider, offering a double indemnity benefit. He was severely injured in auto accident and after 10 weeks of hospitalization he dies from injuries. What amount would beneficiary receive as settlement?
$200,000
An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?
$9,800 In this scenario, the death occurred within the mandatory 30-day grace period. Past due premium would be subtracted from the face amount of the policy.
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
Cash value of the plan
Which of the following is NOT typically excluded from life policies?
Death due to plane crash for a fare-paying passenger
An applicant is denied insurance because of information found on consumer report. Which of the following requires that an insurance company supply the applicant with the name and address of the consumer reporting company?
Fair Credit Reporting Act
Upon policy delivery, the agent may be required to obtain any of the following EXCEPT
Signed waiver of premium.
An insurer is helping a married couple determine their children's needs assets and liabilities, in the event the one or both spouses die. What term means that?
Survivor Protection
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?
The date of medical exam.
Which of the following dates must be contained in a policy summary?
The date the summary was prepared.
Which of the following is incorrect concerning a noncontributory group plan
The employees receive individual policies
Who is a third party owner?
a policyowner who is not insured
All following are examples of third party ownership of life insurance policy except
an insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan
a partnership buy-sell agreement in which each partner purchases insurance on the life of each of the other partners is called
cross-purchase plan
The provision that states that both policy and copy of application form contract between policy owner and insurer is called the
entire contract
Ann is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the standard and poor's 500 index. she would purchase a
equity indexed annuity
the following are legitimate uses of insurance in business setting except
funding against general company financial loss
All of the following are general qualifications for an agent's license except: a.be a state resident b.pass a criminal background check c.have a high school diploma d.be found competent and worthy
have a high school diploma
When a reduced paid up nonforfeiture option is chosen what happens to face amount of the policy?
it is reduced to the amount of what cash value would buy as a single premium
which apply to free look privilege
it permits the insured to reject the policy with full refund
An applicant who receives preferred risk classification qualifies for
lower premiums than a person who receives a standard risk
What's not a requirement for life insurance illustrations
must be part of the contract
all of the following are characteristics of group life insurance except
premiums are determined by age, sex, and occupation of each individual certificate holder
Which of the following best details the underwriting process for life insurance?
selection, classification and rating of risks
an insurance policy that only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of the insured, matures at the insured's age 100, is called
single premium whole life
What are personal uses of life insurance
survivor protection, estate creation, and conservation, cash accumulation and liquidity
The primary beneficiary of her husband's life policy found no settlement option was stated in the policy on the date of her husband's death. who will select the settlement option in this case?
the beneficiary
What are liquid resources in a life insurance contract?
the cash value available to the insured
What is not true regarding a decreasing term policy
the payable premium amount steadily declines throughout the duration of the contract
What is true about a spouse term rider
the rider is usually level term insurance
In an adjustable life policy what cannot be changed by the owner
the type of investment
What is the purpose of a disclosure statement in life insurance policies?
to explain features and benefits of a proposed policy to the consumer
Which of the following is a statement guaranteed to be true and if untrue may breach an insurance contract?
warranty
An insured must get advance warning if the premium will be increased by more than
15%
What are the 2 offices of the Financial Services Commission?
The Office of Financial Regulation and the Office of Insurance Regulation.
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10 year term?
The insured may renew the policy for another 10 years, but at a higher premium rate
An insured is involved in car accident and disabled. If policy contains a waiver of premium rider which of the following is true regarding the policy premiums?
The insured will have to pay premium for 6 months, after which the premiums will be reimbursed and subsequent premiums will be waived.
Why should the agent personally deliver the policy when the first premium have been made?
To help insured understand all aspects of the contract
at age 30 a man wants to start an insurance program, but realizing his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs?
adjustable life
a universal life insurance policy is best described as
an annually renewable term policy with cash value account
which of the following accurately compares business and personal life insurance
both create immediate payment upon death of insured
