work exam 6
a
Annually renewable term policies provide a level death benefit for a premium that a. Increases annually. b. Decreases annually.
a
What is a primary difference between an IRA and an SEP? a. Much more money can be contributed to a SEP. b. Only $3,000 maximum per year can be contributed to a SEP.
b
What is the benefit of experience rating? a. Experience rating helps employees with low claims experience become exempt from group premiums. b. Experience rating helps employers with low claims experience because they get lower premiums.
a
Which of the following best describes fixed period settlement option? a. Both the principal and interest will be liquidated over a selected period of time. b. income is guaranteed for the life of the beneficiary
b
A man wants to buy a life insurance policy in which he can count on guaranteed minimum benefits. Which type should he buy? a. Level b. Fixed
b
At what age may an individual make withdrawals from an HSA for nonhealth purposes without being penalized? a. 59½ b. 65
a
Concerning insurance, the definition of a fiduciary responsibility is a. Handling insurer funds in a trust capacity. b. Handling assets or money belonging to others.
a
HIPAA applies to groups of a. 2 or more b. at least 100
b
How are funds contributed to a tax-sheltered annuity treated for taxation? a. The contributions are taxed as income for the employee, but are tax free upon withdrawal. b. The contributions are not included as income for the employee, but are taxable upon distribution.
a
How long must an insurer retain an advertisement for its long-term care policies? a. 3 years b. 5 years
b
If a consumer requests additional information concerning an Investigative Consumer Report, how long does the insurer or reporting agency have to comply? a. 3 days b. 5 days
b
If an insurance company offers Medicare supplement policies, it must offer which of the following plans? a. A-J b. A
a
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 a. Incontestability clause. b. Reinstatement clause.
b
What characteristic must an annuity have if it is used to accumulate funds in an IRA? a. Tax-deductible b. Tax- qualified
b
A provision in a life insurance policy that provides for the early payment of some portion of the policy face amount should the insured suffer from a terminal illness or injury is called a. Automatic premium loan provision b. Accelerated Benefit provision
a
If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a a. Joint life annuity. b. Joint and survivor annuity.
b
In a case where the primary beneficiary predeceases the insured, in the event of the insured's death, the death benefit proceeds will be paid to a. Tertiary beneficiary. b. Contingent beneficiary.
b
Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early? a. Accumulation at Interest b. Paid-up option
b
A 30-year-old insured has suffered from asthma ever since he was a child. He is applying for individual insurance. What kind of coverage will this individual most likely receive for asthma-related loss, during the initial months of his policy? a. 50% b. 0%
b
All of the following are true regarding insurance policy loans EXCEPT a. The policy will terminate if the loan plus interest equals or exceeds the cash value of the policy. b. Policy loan can be made on policies that do not accumulate cash value.
a
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? a. Reduction of Premium b. Cash option
a
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? a. It is used to lower premiums. b. It is used to fund executive bonuses
b
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 a. Return of premium rider. b. Waiver of premium feature
a
Which of the following producers will be required to complete continuing education hours to renew his license? a. A producer licensed 4 years ago who holds only one line of authority b. A nonresident producer who only completed continuing education in his own state
b
Which of the following statements is NOT true, regarding health insurance policy provisions? a. All individual policies contain Universal Mandatory Provisions b. All additional provisions written by insurers are cataloged by their respective states.
a
All of the following cases show when a Small Employer Medical plan cannot be renewable EXCEPT a. When the employer chooses to renew the plan. b. When the Commissioner/Director finds that the continuation of the coverage would not be in the best interests of the policyholders or certificate holders or may impair the carrier's ability to meet its contractual obligations.
a
An insured has a Level Term Life Insurance policy that is guaranteed renewable and also includes a reentry provision. The reentry provision would allow the insured to renew the policy and a. Pay a lower renewal premium by proving insurability. b. Change the type of insurance by proving insurability.
a
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do? a. Pay a reduced death benefit b. Pay the full death benefit
a
An insured is scheduled to have two cavities filled. He knows in advance what benefits will be paid for the procedure. Which clause is responsible for the advanced notification? a. Prior authorization b. Scheduled Benefits
a
Which of the following would be a typical maximum benefit offered by major medical plans? a. $1 million b. $50,000
a
All other factors being equal, the least expensive first-year premium payment is found in a. Annually Renewable Term. b. Increasing Term.
a
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? a. The capital amount in a lump sum b. The principal amount in a lump sum
a
What is the term for how frequently a policyowner is required to pay the policy premium? a. Mode b. consideration
b
What kind of LTC benefit would provide coverage for care for functionally impaired adults on a less than 24-hour basis? a. Residential Care b. adult day care
b
Which of the following does NOT have to be disclosed in a long-term care (LTC) policy? a. Any riders or endorsements b. The aggregate amount of premiums due
a
Which of the following entities must approve all Medicare supplement advertisements? a. Insurance Commissioner or Director b. NAIC
b
Which of the following is guaranteed to the policyowner through nonforfeiture values? a. A beneficiary has the right to choose a settlement option. b. The cash value in a policy belongs to the insured even if the policy lapses or is surrendered.
b
Which of the following is true of a children's rider added to an insured's permanent life insurance policy? a. Each child covered must show evidence of insurability. b. It is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age.
b
Which of the following is true regarding the annuity period? a. It is the period of time during which the annuitant makes premium payments into the annuity. b. It may last for the lifetime of the annuitant or for a shorter period of time.
b
Which of the following premium modes would result in the highest annual cost for a Life Insurance Policy? a. Annual b. Monthly
