Comprehensive Life and Health IL Exam
Which of the following is responsible for paying the premiums due on a life insurance policy? A)The producer B)The policyowner C)The beneficiary D)The insured
B)The policyowner
A producer must include their name and address on which of the following? A) A policy summary B) Any policy amendment or rider C) An insurance policy's cover page D) A buyer's guide
A) A policy summary
Albert owns a printing business in which he, at times, prints counterfeit money. One day while processing counterfeit bills, his arm is severely damaged. His insurance will: A) Not cover the claim since he was involved in an illegal act at the time of injury B) Cover the claim because he was injured on equipment normally used for legal purposes C) Not cover the claim because this would be covered under Workers' Compensation D) Cover the claim for this injury, but cancel his policy
A) Not cover the claim since he was involved in an illegal act at the time of injury
For the most part, the highest authority for insurance regulation is: A) The individual States B)The Interstate Commerce Commission (ICC) C)The Federal Trade Commission (FTC) D)The National Association of Insurance Commissioners (NAIC)
A) The individual States
Eileen's health insurance had a $500 deductible and 80% / 20% coinsurance. Her first claim of the policy year amounted to $1,000, of which she paid $600. How much was her coinsurance? A)$100 B)$500 C)$600 D)$400
A)$100
In Illinois, the Continuing Education requirement is: A)24 hours every 2 years B)12 hours every year C)32 hours every 2 years D)16 hours every year
A)24 hours every 2 years
Which of the following best describes an Annual Renewable Term Policy? A)A policy with a level death benefit, but with increased premium at each renewal B)A policy with increasing cash value at each renewal C)A policy with decreasing premium at each renewal D)A policy with an increased face value at each renewal
A)A policy with a level death benefit, but with increased premium at each renewal
A short-term medical insurance plan could best be described as? A)An Interim plan B)An HMO C)A Permanent plan D)A Medicare Supplement plan
A)An Interim plan
The Attending Physician's Statement (APS) is completed by: A)An applicant's physician to provide information about the applicant's medical history B)The Medical Information Bureau C)A physician providing a required medical exam at the time of application D)The agent after the medical questions are answered by the applicant
A)An applicant's physician to provide information about the applicant's medical history
An insurable interest must exist between the _______ and the ________ at the time of application for life insurance to be valid. A)Applicant/Insured B)Owner/Beneficiary C)Applicant/Owner D)Insured/Beneficiary
A)Applicant/Insured
All of the following are examples of insurable interest between the insured and policyowner, except: A)College roommates B)Business partners C)Creditor/debtor D)Husband/wife
A)College roommates
Which of the following causes of death is covered by an Accidental Death & Dismemberment policy? A)Commercial airline crash B)Suicide C)Heart attack D)Cancer
A)Commercial airline crash
Group Accidental Death and Dismemberment premiums are _______ by the company paying the premiums as a business expense. A)Deductible B)Tax-Deferred C)Tax-Free D)Taxable
A)Deductible
When producer Pete delivers a policy, he should also do which of the following? A)Explain the policy fully B)Collect at least 3 referrals C)Demand the balance of the annual premium D)Collect any amounts due for postage and handling
A)Explain the policy fully
Which of the following is included in Part II of a Life Insurance Application? A)Family member's age and cause of death B)Marital status C)Gender D)Date of birth
A)Family member's age and cause of death
Optional Uniform Provisions are included in the contract at the _______ option. A)Insurer's B)Beneficiary's C)Insured's D)Commissioner's
A)Insurer's
If no beneficiary is living at the time of the insured's death, the benefit will automatically be paid __________. A)Into the insured's estate B) The funeral home C) To next of kin D) The deceased's spouse
A)Into the insured's estate
What is an impairment rider? A)It excludes specific conditions that normally would cause the entire policy to be declined B)It pays out an additional benefit in cases where the cause of loss is a result of an accident C)It pays out an additional benefit if the insured cannot perform 2 of the 5 specified functional activities D)It guarantees the insured's future insurability
A)It excludes specific conditions that normally would cause the entire policy to be declined
Which provision is a Mandatory Uniform Provision? A)Legal Actions B)Misstatement of Age C)Change of Occupation D)Illegal Occupation
A)Legal Actions
Tom is the beneficiary and is concerned about both running out of money during his lifetime and at the same time leaving funds behind to the insurer. Looking for some time period guarantee, Tom should consider the _________ settlement option. A)Life with Period Certain B)Life with Refund C)Joint and Survivor Life D)Life Only
A)Life with Period Certain
Which is not considered one of the basic benefits required of all HMOs? A)Long-term care B)Pre-paid routine medical exams C)Annual open enrollment for group plans D)Laboratory and x-ray services
A)Long-term care
Creating the impression that a governmental agency guarantees the terms of a policy is an example of: A)Misrepresentation B)Rebating C)Boycott D)Coercion
A)Misrepresentation
A key person is typically all of the following, except: A)Not directly involved in sales, production, or service B)Respected by customers, creditors, suppliers, or vendors C)More highly paid D)Part of the management team
A)Not directly involved in sales, production, or service
A Short-Term Disability Policy generally is for a disability lasting for: A)Not more than 2 years B)2 weeks C)2-3 years D)3-5 years
A)Not more than 2 years
If an insured pays a premium that is lower than others that are in the same class, this insured is considered to be rated as? A)Preferred B)Substandard C)Reduced D)Standard
A)Preferred
The nonforfeiture option that provides protection to age 100 is: A)Reduced Paid-Up B)Cash Surrender C)Extended Term D)Paid-up Additions
A)Reduced Paid-Up
A permanent policy is surrendered for its cash value, and that sum is greater than the amount of premiums paid in. How is the excess taxed? A)Taxed as ordinary income B)Taxed as a short term capital gain C)No tax is due D)Taxed as long term capital gain
A)Taxed as ordinary income
If a policyowner has a whole life insurance policy with a disability waiver of premium rider, when does the rider benefit start if a qualifying disability should occur? A)Typically 6 months after the disability occurs B)After the doctor certifies the disability C)Immediately D)One year after the claim forms are received by the insurer
A)Typically 6 months after the disability occurs
All of the following are examples of an absolute assignment, except: A)Using a Life Insurance policy as collateral for a loan B)A business permits the change of ownership of a company owned policy over to a retiring executive C)A donor transfers ownership of a paid-up policy to charitable organization as a donation D)A court orders the existing policyowner to change it to their ex-spouse
A)Using a Life Insurance policy as collateral for a loan
An insurer issues a policy as "other than applied for," requiring an additional premium of $100. When would an agreement come into being? A)When the applicant accepts delivery of the policy and pays the additional premium B)When the insurer puts the policy into the mail C)When the applicant agrees to the terms D)When the producer receives the policy from the home office
A)When the applicant accepts delivery of the policy and pays the additional premium
If the premium is paid at the time of application, the agent will provide the applicant with a: A) Statement of good health B) Conditional receipt C) Free look notice D) Claim form
B) Conditional receipt
What is the result of an insured not receiving a claim form within the time period allotted after submitting a notice of claim? A)The claim is automatically accepted B) The insured can submit written proof of the loss C)The insurer must add a 10% penalty to any amount eventually paid D)The claim is automatically denied
B) The insured can submit written proof of the loss
All of the following are generally the main business uses of life insurance, except: A) To cover the unexpected death of a key employee B) To provide funds for the deceased's heirs C) To provide funds for the continuation of the business D) To cover the unexpected death of a business partner
B) To provide funds for the deceased's heirs
K has a loan of $5,000 outstanding against her $25,000 traditional whole life policy. If K dies, how much will her beneficiaries receive? A)$25,000 B)$20,000 C)$30,000 D)$5,000
B)$20,000
If Jon dies with an outstanding policy loan of $10,000 on his $100,000 interest-sensitive whole life policy that has $15,000 of cash value, what will his beneficiary receive at the time of claim? A)$100,000 B)$90,000 C)$115,000 D)$105,000
B)$90,000
How many days may a producer hold a premium before depositing it into a premium fund trust account? A)5 B)15 C)1 D)10
B)15
Hicks Corp. wants to install a contributory group plan. It employs 200 people. How many employees must participate in order to install the plan? A)100 B)150 C)50 D)200
B)150
A Medicare Supplement may deny coverage for preexisting conditions for no more than how many months after the effective date of coverage? A)0 B)6 C)24 D)12
B)6
Which of the following must be supplied to an applicant whose policy is being replaced? A)The source of any statistical information about the policy B)A Buyer's Guide C)An Outline of Coverage D)A statement that no new evidence of insurability will be required
B)A Buyer's Guide
Which type of rider pays out a capital sum in case an insured loses a limb or their eyesight? A)Return of Premium B)Accidental Death and Dismemberment C)Accidental Death D)Disability Benefit
B)Accidental Death and Dismemberment
A Child Rider that is added to an insured's permanent policy includes which of the following features? A)Coverage is for the same amount as the primary insured B)All children (beyond 14 or 15 days of age) are covered, and the rider may be converted to permanent coverage at a specified age without evidence of insurability C)If the child rider death benefit is paid, it reduces the face amount of coverage D)The covered child becomes the premium payor
B)All children (beyond 14 or 15 days of age) are covered, and the rider may be converted to permanent coverage at a specified age without evidence of insurability
The Director is: A)Appointed by the President of the NAIC B)Appointed by the Governor C)Elected through public nominations D)Appointed by the State Senate
B)Appointed by the Governor
When is the earliest a beneficiary designation can be made? A)Upon policy delivery B)At the time of policy application C)Upon policy renewal D)At time of claim
B)At the time of policy application
Which of the following business disability plans can create a taxable event: A)Key person disability insurance B)Business overhead expense C)Accidental death and dismemberment D)Disability buy-sell agreement
B)Business overhead expense
Which of the following is not a prohibited provision regarding Long-Term Care? A)Providing significantly more coverage for skilled care than coverage for lower levels of care B)Condition eligibility for recuperative benefits on prior institutionalization C)Establishment of a new waiting period when replacing coverage within the same company, except for a benefit increase that the insured voluntarily selects D)Termination on the ground of the insured's age or deterioration in health
B)Condition eligibility for recuperative benefits on prior institutionalization
Once issued, the application becomes part of the ___________, when attached. A)Part 2 B)Entire contract C)Agent's Report D)Part 1
B)Entire contract
Annuities may be funded with either a lump sum or a ______ premium basis. A)Indexed B)Flexible C)Life D)Variable
B)Flexible
Regarding Medicare Part B, which of the following is not true? A)Provides coverage for outpatient services B)For citizens over the age of 65, there is no additional premium or cost C)All recipients pay a monthly premium D)It is optional coverage for those eligible for Part A
B)For citizens over the age of 65, there is no additional premium or cos
If overdue premiums are paid during the __________ period, the policy will remain in effect. A)Loan B)Grace C)Extended premium paying D)Nonforfeiture
B)Grace
When an underwriter evaluates the risks presented with a particular group life application, which of the following is considered the most important? A)The plan sponsor's credit rating B)Group size, turnover, average age and purpose of the group C)The sales volume of the employer D)The overall health of the group
B)Group size, turnover, average age and purpose of the group
Which of the following correctly describes the effect of the Common Disaster Clause? A)If the primary and contingent beneficiary die when the boat they were sailing in sinks, it is presumed that the primary beneficiary outlived the contingent beneficiary for claims paying purposes B)If an insured and primary beneficiary both are killed when the bus they are riding in goes over a cliff and if it cannot be determined who died first, the insured or primary beneficiary, the insured will be presumed to have survived the primary beneficiary so the contingent beneficiary will be able to receive the death proceeds C)If the insured and primary beneficiary are killed in an auto accident in which both were in the car at the time of the crash, an autopsy will be required in order to determine which passenger died first D)If an insured and contingent beneficiary both die in a train wreck, it is presumed that the insured died first in order to protect the primary beneficiary's right to claim the death benefit
B)If an insured and primary beneficiary both are killed when the bus they are riding in goes over a cliff and if it cannot be determined who died first, the insured or primary beneficiary, the insured will be presumed to have survived the primary beneficiary so the contingent beneficiary will be able to receive the death proceeds
A Tertiary Beneficiary is the person who receives a death benefit payment in which of the following scenarios? A)If the Primary Beneficiary dies before the insured B)If the primary and contingent beneficiary die prior to the insured C)If the Contingent Beneficiary dies before the insured D)If the insured dies before the Primary Beneficiary
B)If the primary and contingent beneficiary die prior to the insured
Optional uniform provisions found in health insurance policies are designed to protect the: A)Agency B)Insurer C)Producer D)Insured
B)Insurer
All of the following are true regarding the Life and Health Insurance Guaranty Association, except: A)It prevents financial loss to policyholders when an insurer becomes insolvent B)It covers HMOs C)Other member insurers are assessed to provide money for the claims of an insolvent insurer D)The Association is not liable for more than $300,000 in the aggregate for any one life
B)It covers HMOs
A beneficiary wants a guarantee that benefits will be paid for a period of 10 years or life whichever time period is greater. Which of the following options should the beneficiary select? A)Joint Life Income B)Life with 10-year Period Certain C)10-year Period Certain D)Fixed Amount
B)Life with 10-year Period Certain
Which statement is incorrect concerning Part B of Medicare? A)Part B has an annual deductible and requires a copayment B)Part B covers prescription drugs up to $1,500 annually C)Part B will cover vaccines and preventive screenings D)All Part B recipients pay a monthly premium
B)Part B covers prescription drugs up to $1,500 annually
The owner of a Variable Life Policy may allocate the premium into a sub-account which is owned by the insurer, this sub-account is a part of what is also known as the: A)Accumulation Account B)Separate Account C)Allocation Account D)Side Fund
B)Separate Account
An insured has paid premiums annually on her life insurance policy. She would now like to change to a monthly premium payment. What must occur to effect this change? A)The insurer and owner must agree in writing to the change and amend the original contract B)The policyowner needs to contact the insurance company and request a change in premium mode C)The policyowner and beneficiary must agree in writing to the change and amend the original contract D)The insurer and beneficiary must agree in writing to the change and amend the original contract
B)The policyowner needs to contact the insurance company and request a change in premium mode
One characteristic of life insurance is that the insurer is obligated to pay a claim in the event of the death of the insured, however, the insured is not contractually obligated to do anything other than keep the policy in force. This is a: A)Aleatory Contract B)Unilateral Contract C)Conditional Contract D)Contract of Adhesion
B)Unilateral Contract
Under the Coordination of Benefits provision, if an insured is disabled due to a work-related loss, the primary payer is A)Social Security disability B)Workers' Compensation C)Group disability D)Individual disability
B)Workers' Compensation
A medical condition that was treated prior to the effective date of a policy is a: A) Surgical Condition B) Probationary Condition C) Pre-existing Condition D) Prescribed Condition
C) Pre-existing Condition
Which of the following correctly describes the difference between a HMO and a Limited Health Service Organization (LHSO)? A)Group contracts must provide health services for at least 12 months B)The complaint process C)A LHSO provides limited health care plans D)The risk that is borne
C)A LHSO provides limited health care plans
Which of the following is NOT a disclosure requirement for accelerated benefits? A)Any benefit payment's effect on the policy's cash value, death benefit, premium, and policy loans B)Accelerated benefits may be taxable, so the insured should seek help from a personal tax advisor C)A description of the accelerated benefit's cash values D)Conditions triggering payment of the benefits
C)A description of the accelerated benefit's cash values
Rules regarding solicitation of life insurance are designed to accomplish all of the following, except: A)Improve the buyer's understanding of the basic features of a policy B)Help the buyer to determine the most appropriate type of policy to meet their needs C)Allow to producer to sell the policy that earns the highest commission D)Provide tools to evaluate the relative costs of similar life insurance policies
C)Allow to producer to sell the policy that earns the highest commission
Which of the following types of coverage must provide at least 80% of the charges for semi-private room accommodations, or $100 per day? A)Accident Only B)Major Medical C)Basic Hospital Expense D)Basic Medical-Surgical Expense
C)Basic Hospital Expense
The Outline of Coverage must be provided: A)Within 30 days following policy delivery B)At the request of the applicant C)During the initial solicitation D)At the time of policy delivery
C)During the initial solicitation
Under a Key Employee Disability Income Policy, the employer is all of the following, except: A)Premium payor B)Policyowner C)Insured D)Recipient of the proceeds
C)Insured
Which of the following is correct concerning an LTC policy? A)A new waiting period may be established when existing coverage is converted or replaced by another policy B)A policy may be canceled or nonrenewed on the basis of age C)It may define a preexisting condition as a condition for which advice or treatment was recommended or received within 6 months of the effective date of coverage D)It may provide coverage for only skilled nursing care and not any lower levels of care
C)It may define a preexisting condition as a condition for which advice or treatment was recommended or received within 6 months of the effective date of coverage
What is the name of a single policy covering two or more lives that pays benefits upon the death of the first insured? A)Accidental Death B)Joint Survivorship Life C)Joint Life D)Universal Life
C)Joint Life
Common exclusions in accident and health insurance policies include all of the following, except: A)Elective cosmetic surgery B)Commission of a felony C)Newborn infant D)Medical expenses covered under Workers' Compensation
C)Newborn infant
What factors are not used in underwriting an individual disability policy? A)Health history and foreign travel B)Smoking and hobbies C)Political affiliation and religious preference D)Age and gender
C)Political affiliation and religious preference
An insured purchased an ordinary life policy 15 years ago, and at that time listed her husband as the only beneficiary. Her husband died 2 years ago but she never changed the beneficiary. She dies, leaving one surviving adult child. Who receives the death benefit? A)The state treasury B)The probate court C)The insured's estate D)The insured's trust
C)The insured's estate
The HIV Consent Form specifies which types of individuals may receive __________. A)The underwriter's decision B)The amount and type of policy applied for C)The test results D)The name of the medical lab used and lab work
C)The test results
If the premiums are not paid on a Traditional Whole Life policy that has been in force for decades with no loan outstanding, what happens? A)The insurer mails a check to the policyowner in the amount of the policy's cash value B)The policy becomes a reduced paid-up policy C)Unless specified otherwise, the cash values buy extended term D)The policy lapses and is of no value to the policyowner
C)Unless specified otherwise, the cash values buy extended term
Contractual provisions explain all of the following, except: A)What the contract consists of B)The duties and responsibilities of the parties to the contract C)Where the premium is going to come from D)How the policy works
C)Where the premium is going to come from
What is the purpose of nonforfeiture values? A)Federal insurance law requires them B)It is a way for the insurance company to charge extra for this optional benefit C)Without them, any cash values would be retained by the insurer when the policy lapses due to non-payment of premium D)The NAIC mandates nonforfeiture values
C)Without them, any cash values would be retained by the insurer when the policy lapses due to non-payment of premium
If an insurer makes a payment for a claim but the insured is dissatisfied with it, the insured must wait _____ days after proof of loss before taking any legal action. A)45 B) 90 C) 20 D) 60
D) 60
Which of the following is correct regarding a temporary license? A) A temporary license may not be extended B) A temporary license may be issued for up to 180 days after successfully completing the licensing examination C) The duration of a temporary license may not exceed 80 days D) A temporary license may be issued to the surviving spouse of a disabled or deceased producer
D) A temporary license may be issued to the surviving spouse of a disabled or deceased producer
Even though this rider can pay out upon death, it also pays out a benefit if the insured loses a limb, eyesight, or hearing as a result of an accident. What is this rider benefit called? A) Indemnity B) Reimbursement C) Reattachment D) Dismemberment
D) Dismemberment
Which of the following is not covered with Medicare Part A? A) Post-hospital skilled nursing care B) General nursing and hospital services C) Semiprivate hospital room D) Outpatient hospital care
D) Outpatient hospital care
A surgical procedure with a high level of difficulty is assigned a value and benefits for all other procedures are paid based on a percentage of that value. These benefits are determined using a: A) Flat benefit B) Surgical schedule C) Coinsurance D) Relative value scale
D) Relative value scale
K has a $100,000 traditional whole life policy with $30,000 of cash values and a $10,000 loan outstanding. What is the maximum additional amount she could borrow from the policy at this time? A)$40,000 B)$30,000 C)$60,000 D)$20,000
D)$20,000
Which of the following is a typical benefit period for a group short-term disability benefit? A)5 years B)To age 65 C)2 years D)52 weeks
D)52 weeks
Which of the following would be considered legally competent to enter into a contract? A)A person who is under the influence of drugs or alcohol B)A person deemed to be mentally incapacitated C)A 13-year-old honor student D)A 25-year-old self-employed person
D)A 25-year-old self-employed person
Which of the following statements is false regarding examinations by the Director? A)Anyone violating a written order as a result of an examination may be fined up to $10,000 B)The examinee must pay all expenses for the examination C)The Director must disclose an examination report to the examinee before making the report public D)A person who adjusts losses is not subject to examination
D)A person who adjusts losses is not subject to examination
Part B of Medicare excludes which of the following medical expenses? A)Outpatient hospital treatment B)Home health care C)Clinical laboratory services D)A regular dental checkup
D)A regular dental checkup
The policy loan amount cannot exceed the ____________. A)The cumulative premiums paid B)The face amount of the policy C)The loan balance D)Available cash surrender value
D)Available cash surrender value
K owns a variable annuity with an assumed interest rate of 4%. If the actual performance of the separate account(s) is 5%, the effect on this month's income benefit check will be such that it: A)Becomes Lower B)All Depends on the Separate Account(s) Selected C)Remains the Same D)Becomes Higher
D)Becomes Higher
The bank may require its borrowers to have a life insurance policy to secure a loan in the event of the borrower's death. Which provision gives the bank proportional protection but not control of the policy? A)Consideration Clause B)Entire Contract Clause C)Policy Loan Provision D)Collateral Assignment
D)Collateral Assignment
A contract that is drafted by an insurer and receives no input or alteration from the insured, is considered a(n): A)Unilateral Contract B)Aleatory Contract C)Conditional Contract D)Contract of Adhesion
D)Contract of Adhesion
With respect to a producer's fiduciary capacity, which of the following is true? A)The payment of premiums to the producer by the insured is not the same as giving the money directly to the insurer B)The producer is responsible to the insured for any return of premium C)A producer is prohibited from adding a late payment charge to overdue balances on open accounts D)For knowingly misappropriating funds, the charge is a Class A misdemeanor for the first offense, and a felony for subsequent offenses, if $150 or less per offense
D)For knowingly misappropriating funds, the charge is a Class A misdemeanor for the first offense, and a felony for subsequent offenses, if $150 or less per offense
Right to Examine is the same as: A)Elimination Period B)Probationary Period C)Waiting Period D)Free Look Period
D)Free Look Period
Which rider would eliminate coverage for a preexisting condition? A)Lifetime Benefit Rider B)Return of Premium Rider C)Guaranteed Purchase Option D)Impairment Ride
D)Impairment Ride
An employer group health insurance sponsor does all of the following, except: A)Apply for coverage B)Pays the premium C)Provide underwriting information D)Issue the policy
D)Issue the policy
If after a policy has been issued and delivered, the insurer discovers unanswered questions on the application, what can the insurer legally do at this point? A)Cancel the policy B)Require the applicant/insured to answer the questions and re-underwrite the policy C)Increase the policy's premium D)Nothing, the insurer has waived its right to that information
D)Nothing, the insurer has waived its right to that information
ERISA sets minimum standards for pension plans primarily in the ______ industry. A)Public and Private B)Quasi-government C)Public D)Private
D)Private
Susan, age 65, inherits a substantial sum of money and wants to have the money distributed to her over the rest of her life starting next month. Which product offered by the life insurance industry will allow her to accomplish her objective? A)Single Premium Deferred Annuity B)Flexible Premium Deferred Annuity C)Flexible Premium Immediate Annuity D)Single Premium Immediate Annuity
D)Single Premium Immediate Annuity
Consumers must be made aware of all of the following in a replacement sale, except: A)There may be a waiting period for pre-existing conditions B)The new policy may be offered with lower benefits, limitations, or exclusions of coverage C)The new policy may have a higher premium D)The financial ratings from each rating service
D)The financial ratings from each rating service
If a policyowner of a convertible term life insurance policy exercises his/her right to convert, which of the following will happen? A)The new policy will only be issued after proof of insurability is provided B)The new life insurance policy will likely have a much lower premium C)The new policy will have much more life insurance coverage than the previous one D)The term policy will be replaced by a permanent life insurance policy
D)The term policy will be replaced by a permanent life insurance policy
If an applicant is a minor, who signs the application? A)A probate court judge B)Any adult C)The producer D)Their guardian
D)Their guardian
