Test Review
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
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated.
A waiver of premium provision may be included with which kind of health insurance policy?
Disability income
If an insured continually uses the automatic premium loan option to pay the policy premium,
Executive is the owner, and the executive pays the premium.
The usage of words or symbols that are similar to what entity is prohibited in life insurance advertisements?
Federal government
Which of the following statements about the reinstatement provision is true?
It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.
Under workers compensation, which of the following benefits are NOT included?
Legal benefits
Which of the following programs expands individual public assistance programs for people with insufficient income and resources?
Medicaid
A participating insurance policy may do which of the following?
Pay dividends to the policyowner
Which nonforfeiture option provides coverage for the longest period of time?
Reduced paid-up
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.
Which of the following is NOT true regarding Equity Indexed Annuities?
They earn lower interest rates than fixed annuities.
Which of the following is true regarding Medicare supplement policies?
They must be at least guaranteed renewable.
When would a 20-pay whole life policy endow?
When the insured reaches age 100
Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to
the insured
All of the following are duties and responsibilities of producers at the time of application EXCEPT
Change any incorrect statement on the application by personally initialing next to the corrected statement.
To be eligible for tax credits under the ACA, individuals must have income that is what percent of the Federal Poverty Level?
Between 100% and 400%
Which of the following is true regarding the insurance amount in a credit life policy?
Creditor can only insure the debtor for the amount owed.
If an insured changes his payment plan from monthly to annually, what happens to the total premium?
Decreases
All of the following are true regarding insurance policy loans EXCEPT\
Policy loans can be made on policies that do not accumulate cash value.
Which of the following factors determines the amount of each installment paid in a Life Income Option arrangement?
Recipient's life expectancy and amount of principal
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?
Size of each installment
Which of the following is NOT a feature of a guaranteed renewable provision?
The insurer can increase the policy premium on an individual basis.
Which of the following is TRUE about nonforfeiture values?
They are required by state law to be included in the policy.
Which of the following would help prevent a universal life policy from lapsing?
Target Premium
Which of the following would be required to obtain a Certificate of Authority?
the HMO
Who bears all of the investment risk in a fixed annuity?
insurance company
Which of the following provisions states the insurer's right to change premium amounts?
Continuation Provision
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
An HMO subscriber no longer meets plan eligibility requirements. When can the insurer cancel coverage?
Immediately
Viator
What is the name of the insured who enters into a viatical settlement?
Company Y had 20 employees on staff last year. Which of the following terms most precisely labels the company's group insurance classification?
Small employer
An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any, would be paid by the secondary insurer?
500
Which members of a corporation or partnership are required to obtain an individual insurance agent's license in order for the association to be licensed?
At least one officer or partner and any other person acting as an agent
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an
Authorized insurer.
Which of the following would be the beneficiary in credit life insurance?
Creditor
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 insured has a life insurance policy from a participating company and receives quarterly dividends. He 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 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?
Reduction of Premium
All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT
The policy is owned by the company.
Is it illegal for an insurance company to advertise that it is the leader of the financial industry and therefore pays the most claims each year?
Yes; advertisements must not mislead the public in terms of financial standing.