Terms for ExamFX

A temporary license in this state is valid for a maximum of

4. 180 days.

In order to maintain coverage under COBRA, how soon from termination of employment must an employee exercise extension of benefits?

4. 60 days

What is the maximum period of time for which the premium collected during policy reinstatement can be applied?

4. 60 days

Which of the following premium modes would result in the highest annual cost for an insurance policy?

4. Annual

An association could buy group insurance for its members if it meets all of the following requirements EXCEPT

4. Holds annual meetings.

Jason is insured under his employer's group health insurance. He splits the cost of the premiums with his employer. This is an example of

4. A contributory plan.

All of the following events will terminate a producer's certificate of appointment EXCEPT

4. A new Commissioner or Director is put into office.

The primary eligibility requirement for Medicaid benefits is based upon

4. Age.

Long-term care insurance policies must cover which of the following?

4. Alzheimer's disease

Which of the following is not covered under a dental insurance plan?

4. Respite Care

Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles?

4. Standard risk is representative of the majority of people.

Who can provide skilled nursing care?

Doctor

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is

1. Conditional.

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

1. Consideration

In insurance transactions, fiduciary responsibility means

1. Handling insurer funds in a trust capacity.

Which of the following best describes annually renewable term insurance?

1. It is level term insurance.

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

1. Juvenile rider.

What type of health insurance policy provides an employer with funds to train a replacement if a valued employee becomes disabled?

1. Key Person Disability

A health insurance plan which involves financing, managing, and delivery of health care services and involves a group of providers who share in the financial risk of the plan or who have an incentive to deliver cost effective service, is called

1. Managed care plan.

An insured purchased an insurance policy 5 years ago. Last year, the insured received a dividend check from the insurance company that was not taxable. This year, the insurer did not send a check. From what type of insurer did the insured purchase the policy?

1. Mutual

During the accumulation period in a nonqualified annuity, what are the tax consequences of a withdrawal?

1. Neither interest nor principal is taxed, but penalties may be imposed.

A married couple is covered under a group health insurance plan at the husband's place of employment. When the wife gave birth to their first child, what must the husband do in order to have coverage for the child?

1. Notify the insurer within 31 days in order for coverage to continue without any evidence of insurability

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

1. Option B

An insurer that does not pay a death benefit in a timely manner as required by state law, will be required to

1. Pay to the beneficiary an interest penalty from the date of the insured's death.

A woman obtains health coverage through the Marketplace on October 1. Two weeks later she finds out that she is 3 months pregnant. Which of the following is true about coverage for pregnancy?

1. Pregnancy will be covered immediately.

Which act amended the National Labor Relations Act?

1. Taft-Hartley

An Adjustable Life policyowner can change which of the following policy features?

1. The coverage period

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

1. The loss may be intentional.

Which of the following disability income policies would have the highest premium?

2. 15-day waiting period / 10-year benefit period

How can a new physician be added to the PPO's approved list?

2. Agree to follow the PPO standards and charge the appropriate fees.

When must insurable interest exist in a life insurance policy?

2. At the time of application

At what point must an Outline of Coverage be delivered?

2. At the time of application only

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

2. Blanket.

For a retirement plan to be qualified, it must be designed for the benefit of

2. Employees.

Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage?

2. Health Maintenance Organization plan

The Medical Information Bureau (MIB) was created to protect

2. Insurance companies from adverse selection by high risk persons.

In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost

2. Is not covered.

Medicare Advantage is also known as

2. Medicare Part C.

Which of the following is an example of a producer being involved in an unfair trade practice of rebating?

2. Telling a client that his first premium will be waived if he purchases the insurance policy today

An insured stops making payments on a loan taken from his cash value policy. What will most likely happen?

2. The policy will terminate when the loan amount with interest equals or exceeds the cash value.

Which of the following statements is TRUE concerning irrevocable beneficiaries?

2. They can be changed only with the written consent of that beneficiary.

When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees

2. To renew the policy until the insured has reached age 65.

An insured has been injured in an accident. Although he is still receiving benefits from his disability income policy, he does not have to pay premiums. This means that the policy includes

2. Waiver of premium feature.

What is the penalty for IRA distributions that are below the required minimum for the year?

3. 50%

The benefits for individual disability plans are based on

3. A percentage of the worker's income.

Most health insurance policies exclude all of the following EXCEPT

3. Accidental injury.

What documentation grants express authority to an agent?

3. Agent's contract with the principal

Annually renewable term policies provide a level death benefit for a premium that

3. Increases annually.

Which statement regarding insurable risks is NOT correct?

3. Insurance cannot be mandatory.

Which of the following riders would NOT cause the Death Benefit to increase?

3. Payor Benefit Rider

Which of the following individuals must have insurable interest in the insured?

3. Policyowner

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?

3. The old policy should stay in force until the new policy is issued.

In individual health insurance coverage, the insurer must cover a newborn from the moment of birth, and if additional premium payment is required, allow how many days for payment?

3. Within 31 days of birth

According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan?

4. 60%

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

4. An unfair trade practice.

All of the following are usually provided under an employer group dental insurance plan EXCEPT

4. Coverage for cosmetic treatment.

Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?

4. Fixed annuity

Who must pay for the cost of a medical examination required in the process of underwriting?

4. Insurer

Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option?

4. It does not guarantee that the entire principal amount will be paid out.

Premium payments for personally-owned disability income policies are

4. Not tax deductible.

A 55-year-old employee has worked part-time for his new employer for 3 months now, but has not been offered health insurance. What factor has limited the employee's eligibility?

4. Number of hours worked per week

An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A and Part B. What is the insurance company obligated to do?

4. Offer the supplement policy on a guaranteed issue basis

An applicant for health insurance has not had a medical claim in 5 years. He exercises daily and does not smoke or drink. What classification do you assume the applicant would receive from his insurer?

4. Preferred

Medicare Part D provides

4. Prescription drug benefit.

In the case of producer solicitation, at what point must a long-term care Shopper's Guide must be presented to the applicant?

4. Prior to the time of application

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 one year later. What will probably happen?

4. The policy will not be affected.

An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?

1. Accumulation at Interest

When the insured purchased his health policy he was a window washer. He has since changed occupations and now manages a library. If the insurer is notified of the insured's change of occupation, the insurer should

1. Adjust the benefit in accordance with the decreased risk.

All of the following qualify for Medicare Part A EXCEPT

1. Anyone who is willing to pay a premium.

Which of the following is true regarding taxation of dividends in participating policies?

1. Dividends are not taxable.

All of the following statements describe a MEWA EXCEPT

4. MEWAs are groups of at least 3 employers.

Using a class designation for beneficiaries means

4. Naming beneficiaries as a group.

An out-of-state producer wants to start selling insurance in this state. What type of license should the producer obtain?

4. Nonresident

A participating insurance policy may do which of the following?

4. Pay dividends to the policyowner

Who might receive dividends from a mutual insurer?

4. Policyholders

A situation in which a person can only lose or have no change represents

4. Pure risk.

Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as

4. Rebating.

The period of time immediately following a disability during which benefits are not payable is

4. The elimination period.

Which of the following statements regarding conditional receipts is true?

4. They are temporary insuring agreements.

The paid-up addition option uses the dividend

4. To purchase a smaller amount of the same type of insurance as the original policy.

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of

4. Defamation.

Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation?

4. Human life value approach (HLVA)

The following areas are regulated by the Insurance Department EXCEPT

3. Producer commission schedules.

Installing deadbolt locks on the doors of a home is an example of which method of handling risk?

3. Reduction

All of the following are considered unfair trade practices in the business of insurance EXCEPT

3. Sharing commissions.

Which settlement option provides a single beneficiary with income for the rest of his/her life?

3. Single Life

Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date?

2. Noncancellable

Which of the following is the most common time for errors and omissions to occur on the part of an insurer?

2. Policy delivery

Dental Expense policies generally have a deductible that would apply to all of the following EXCEPT

2. Preventive care.

An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called

2. Single premium whole life.

An employee becomes insured under a PPO plan provided by his employer. If the insured decides to go to a physician who is not a PPO provider, which of the following will happen?

2. The PPO will pay reduced benefits.

Who is the owner and who is the beneficiary on a Key Person Life Insurance policy?

2. The employer is the owner and beneficiary.

When an annuity is written, whose life expectancy is taken into account?

3. Annuitant

A producer misrepresents the details of an insured's new insurance contract that will be replacing the current contract. Which of the following is the producer violating?

3. Errors and omissions liability

An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?

3. False advertising

Which is TRUE about the cash surrender nonforfeiture option?

3. Funds exceeding the premium paid are taxable as ordinary income.

In which of the following locations would skilled care most likely be provided?

3. In an institutional setting

Which of the following refers to "own occupation" disability?

4. Insured is unable to perform duties of the occupation for which they were educated and trained.

A health insurance policy may cover all of the following risks EXCEPT

4. War-related injuries.

When may an insured deduct unreimbursed medical expenses paid under a long-term care policy?

4. When the expenses exceed a certain percentage of the insured's adjusted gross income

Insurance that would pay for hiring a replacement for an important employee who becomes disabled is called

2. Key employee disability insurance.

Which of the following information about the applicant is NOT included in the General Information section of the application for insurance?

2. Medical background

If during the underwriting process an insurer obtains personal information about an applicant from the applicant, when must the insurer provide notice of its information practices?

1. At the time of application

What type of group rating uses the actual experience of the group as a factor in developing the rates to be charged?

1. Experience rating

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

1. False advertising

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?

1. Implied

Which document is used to assess risk associated with an applicant's lifestyle and character?

1. Investigative Consumer Report

Every insurer marketing Long-Term Care insurance must establish marketing procedures to ensure all of the following EXCEPT

1. LTC policies are marketed effectively to prospective insureds.

Life insurance death proceeds are

1. Taxable to the extent that they exceed 7.5% of the beneficiary's adjusted gross income.

When a reduced paid-up nonforfeiture option is chosen, what happens to the face amount of the policy?

3. It is reduced to the amount of what the cash value would buy as a single premium.

All of the following entities regulate variable life policies EXCEPT

1. The Guaranty Association.

Which of the following is NOT covered under Plan A in Medigap insurance?

1. The Medicare Part A deductible

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?

1. The date of medical exam

Which of the following individuals could qualify for a temporary insurance license?

1. The designee of a producer that is called to active service with the Navy

When a fixed annuity owner pays a monthly annuity premium to the insurance company, where is this money placed?

1. The insurance company's general account

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

1. Waiver of premium.

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?

2. 18 months

Within how many days does a licensee have to inform the Commissioner of a change of address?

2. 30

When must an IRA be completely distributed when a beneficiary is not named?

4. December 31 of the year that contains the fifth anniversary of the owner's death.

An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds

4. $50,000

Which of the following would NOT be an underwriting consideration for a health insurance applicant?

4. Applicant's sexual orientation

What does "liquidity" refer to in a life insurance policy?

4. Cash values can be borrowed at any time.

Which of the following must the patient pay under Medicare Part B?

2. 20% of covered charges above the deductible

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?

2. Adjustable Life

An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued?

2. Adjust the claim benefit to reflect the insured's true age

Which of the following applicants could the insurer charge a higher rate of premium and not violate regulations regarding unfair discrimination?

2. An applicant who is a smoker

In the event of a divorce, which of the following would allow a divorcee to continue receiving group health coverage under an insured spouse's plan for an additional 36 months?

2. COBRA

All of the following are characteristics of a Major Medical Expense policy EXCEPT

2. Deductibles

A producer must do all of the following when delivering a new policy to the insured EXCEPT

2. Explain the rating procedures if the policy is rated differently than applied for.

What required provision protects against unintentional lapse of the policy?

2. Grace period

The mode of premium payment

2. Is defined as the frequency and the amount of the premium payment.

A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?

2. Joint and survivor

Excluding life insurance, under what condition may a policyowner transfer their personal insurance policy to another person?

2. The insured will need the written consent of the insurer.

What happens if a deferred annuity is surrendered before the annuitization period?

2. The owner will receive the surrender value of the annuity.

The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?

3. $100,000

In Michigan the state's continuing education requirement

3. Cannot be extended or waived under any circumstances.

A man is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim?

3. Claim is denied if his policy contains the Illegal Occupation provision.

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

3. Collect premium for in-force policies and explain coverages to clients that have existing policies written by her father.

The purpose of managed care health insurance plans is to

3. Control health insurance claims expenses.

What type of insurance would be used for a Return of Premium rider?

3. Level Term

B 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 B?

3. Modified Life

All of the following are examples of risk retention EXCEPT

3. Premiums.

Which of the following statements about group life is correct?

3. The cost of coverage is based on the ratio of men and women in the group.

What type of information is NOT included in a certificate of insurance?

3. The cost the company is paying for monthly premiums

Hospital indemnity/hospital confinement indemnity policy will provide payment based on

3. The number of days confined in a hospital.

On a disability income policy that contains the "own occupation" definition of total disability, the insured will be entitled to benefits if they cannot perform

3. Their regular job.

A noncontributory group disability income plan has a 30-day elimination period and offers benefits of $2,000 a month. If an employee is unable to work for 7 months due to a covered disability, the employee will receive

4. $12,000, all of which is taxable.

Which of the following is NOT true of basic medical expense plans?

4. Coverage for catastrophic medical expenses