Final Exam - Hawaii Life and Health

What is the MINIMUM benefit period that must be offered by a Long Term Care policy? 1. 6 months 2. 12 months 3. 18 months 4. 24 months

12 months

A contract owner terminates an annuity before the income payment period begins. The owner will then receive 1. half of the current surrender value 2. the current contract surrender value 3. the premiums paid to date 4. nothing

2. the current contract surrender value

Which accident and health policy provision addresses preexisting conditions? 1. proof of loss 2. Legal actions 3. time limit on certain defenses 4. payment of claims

3. time limit on certain defenses

What type of life insurance incorporates flexible premiums and an adjustable death benefit? 1. Endowment policy 2. Modified whole life 3. Decreasing Term 4. Universal Life

4. Universal life

A policy of adhesion can only be modified by whom? 1. The agent 2. Applicant 3. Primary beneficiary 4. The insurance company

4. the insurance company

No temporary disability insurance benefits may be payable for ___ days after a period of disability begins.

7

What action will an insurer take if an interest payment on a policy loan is not made on time?

Automatically add the amount of interest due to the loan balance

Credit life insurance is typically issued with which of the following types of coverage? 1. Annual renewable term 2. Decreasing term 3. Individual whole life 4. Group term

Decreasing term

Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? 1. Modified whole life 2. 20 pay life 3. decreasing term 4. endownment

Decreasing term

A __________ is the signed document that starts the free look period

Delivery receipt

Which of the following nonforfeiture options offers the highest death benefit? 1. Cash surrender 2. Reduced paid up 3. Extended term 4. Dividend

Extended term

What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years? 1. Family lump sum policy 2. Family maintenance policy 3. Family survivor policy 4. family income policy

Family maintenance policy

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? 1. interest only 2. fixed period 3. fixed amount 4. life income

Life income

Which of these terms accurately defines an underwriter's assessment of information on a life insurance application? 1. risk classification 2. warranty review 3. insurable interest 4. inspection report

Risk classification underwriting is another term for risk selection

In Hawaii, an insurer licensed to conduct business in Hawaii, but domiciled In Pennsylvania, is called a(n) 1. non-admitted company 2. foreign company 3. domestic company 4. alien company

foreign company

Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life Policy? 1. increase face amount 2. decrease face amount 3. increase premium paying period 4. decrease premium payment

increase face amount

T has disability income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect? 1. 5000 per month benefit 2. 10000 per month benefit if the cause was accidental 3. more than 5000 per month benefit if cause was work related 4. less than 5000 per month benefit regardless of the cause

less than 5000 per month benefit regardless of the cause

Generally, how long is a benefit period for a Major Medical Expense plan? 1. one year 2. two year 3. three year 4. four year

one year

A(n) ______ rider may be used to include coverage for children under their parents life insurance policy. 1. payor 2. term 3. conversion 4. parent

term

How long does an individual have to "rollover" funds from an IRA or qualified plan? 1. 60 days 2. 90 days 3. 120. days 4. No limit

1. 60 days

Which of the following statements BEST describes the intent of a coinsurance clause in a Major Medical Policy? 1. Discourages overutilization of the insurance coverage 2. Minimizes the need for deductibles 3. Discourages adverse selection 4. Minimizes the waiting period

1. Discourages overutilization of the insurance coverage A purpose of the coinsurance clause in a Major Medical Policy is to discourage overutilization of the insurance coverage

Rick recently died and left behind an individual IRA account in this name. His widow was forwarded the balance of the IRA. The widow qualifies for the: 1. Marital deduction 2. Death benefits 3. Section 1035 exchange 4. Capital gains tax rate

1. Marital deduction

Which of these is considered a mandatory provision? 1. Payment of claims 2. Insurance with Other insurers 3. Misstatement of age 4. Change of occupation

1. Payment of claims

K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable? 1. Increasing 2. Decreasing 3. Adjustable 4. Level

4. Level

The Accelerated death benefit provision in a life insurance policy is also know as 1. 1035 exchange 2. inter vivos gift 3. Non-forfeiture option 4. living benefit

4. Living benefit

Which of the following is NOT a limited benefit plan? 1. dental policy 2. life insurance policy 3. Critical illness policy 4. cancer policy

2 life insurance policy

Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures? 1. Adminstrative-services-only plan 2. Commercial insurer 3. PPO 4. HMO

2. Commercial insurer

Which of the following does Social Security NOT provide benefits for? 1. Survivorship 2. Dismemberment 3. Disability 4. Retirement

2. Dismemberment

What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years? 1. Family lump sum 2. Family maintenance 3. Family Survivior 4. Family income

2. Family maintenance

T applied for a Disability income policy and has a history of back injuires. The insurer issued the policy with a statement that excludes coverage for back injuries. This statement is called a(n)? 1. back exclusion 2. impairment rider 3. rating 4. encumbrance

2. Impairment rider A statement on a policy that excludes coverage for a specific injuries or conditions is called an impairment rider.

A sole proprietor may use this plan ONLY if the employees of this business are included. 1. SEP plan 2. Keogh pension plan 3. IRA 4. SIMPLE plan

2. Keogh pension plan may be used by a sole proprietor only if the employees of the business are included

A disability income policy that only the policyowner can terminate and which the rates will never go up is considered to be 1. Optionally Renewable 2. Noncancellable 3. Cancellable 4. Guaranteed Renewable

2. Noncancellable

Which of the following is considered to be the time period after a Health policy is issued, during which no benefits are provided for illness? 1. Incontestable period 2. Probationary period 3. Trial period 4. Subrogation period

2. Probationary period

Major medical policies typically: 1. pay 100% of covered expenses 2. contain a deductible and coinsurance 3. require use of in network facilities only 4. do not contain a deductible and coinsurance

2. contain a deductible and coinsurance

The reason for a business having a business overhead expense diability plan is to cover: 1. the cost of providing group disability insurance to the employees 2. fixed business expenses 3. the owners loss of income 4. all business related expenses and salaries

2. fixed business expenses

How are policy owner dividends treated in regards to income tax? 1. dividends are not taxable 2. interest on accumulations is taxed 3. taxed as ordinary income 4. taxed as capital gains

2. interest on accumulations is taxed

The advantage of reinstating an original life policy is 1. the premiums are based on the current age of the insured. 2. the premiums are based on a younger age 3. the interest charged on policy loans will be lowered 4. a new incontestable period will begin

2. the premiums are based on a younger age

J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value? 1. life paid up at age 70 2. 20 pay life 3. increasing term to age 65 4. straight life

20 pay life shorter the pay period, the faster the cash value growth

J is a producer who recently told a claimant that his rights might be impaired if he does not complete a release form within a specified time. What could this producer be found guilty of? 1. Twisting 2. Defamation 3. Coercion 4. Rebating

Coercion

A producer must notify the Commissioner within _____ days of a felony conviction. 1. 30 2. 45 3. 60 4. 90

1. 30

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to 1. continue group health benefits 2. take out an individual health policy 3. transfer their coverage to another insurer 4. convert to disability coverage

1. continue group health benefits

A life insurance policy would be considered a wagering contract WITHOUT: 1. insurable interest 2. Premium payment 3. agent solicitation 4. Constructive delivery

1. insurable interest

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT 1. Fixed period 2. Interest only 3. fixed amount 4. life income

2. Interest only

T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this? 1. Fixed certain 2. Joint and full survivior 3. Life annuity with period certain 4. installment refund

3. life annuity with period certain

Which of these statements concerning an individual disability income policy is TRUE? 1. premium are normally tax-deductible 2. age of the insured determines the amount of the benefits 3. normally includes an Elimination period 4. benefits are normally taxable

3. normally includes an Elimination period

Under a Basic Medical Expense policy, what does the hospitalization expense portion cover? 1. Hospital room and board 2. Hospital administration expenses 3. Surgeons fees 4. Physician fees

Hospital room and board

K is an annuitant currently receiving payments. if she were to die before recieving payments equal to the correct value , a beneficiary will continue receiving payment until an amount equal to the contract value has been paid- this is a

Installment Refund annuity. An installment refund annuity promises that if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an amount equal to the contract value has been paid

Before holding a hearing regarding a producers unfair or deceptive practice, the commissioner must give how many day notice?

15 Days

Pre-hospitalization authorization is considered an example of 1. Managed care 2. PPO 3. Medicaid 4. Major medical insurance

1. managed care

A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision? 1. payor provision 2. accelerated benefits provision 3. assignment provision 4. waiver of premium provision

1. payor provision

A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the 1. policy loan provision 2. automatic premium loan provision 3. accelerated benefits provision 4. considerations clause

1. policy loan provision

ABC insurance company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has: 1. waived one of its legal rights 2. issued a voidable policy 3. committed an act of fraud 4. assigned the risk to a reinsurer

1. waived one of its legal rights

An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction? 1. 10% is withheld for income taxes 2. 20% is withheld for income taxes 3. 30% is withheld for income taxes 4. Nothing is withheld

20% is withheld for income taxes

Health insurance coverage for a handicapped child may be extended upon reaching the limiting age IF proof of incapacity is provided to the insurer within ___ days of the limiting age. 1. 15 2. 30 3. 31 4. 45

3. 31

T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay? 1. the total premiums paid minus any policy loans 2. nothing 3. 50,000 4. 100,000

3. 50,000

What action can a policyowner take is an application for a bank loan requires collateral? 1. Utilize accelerated benefits provision 2. Borrow against policy cash value and use as a down payment 3. Assign policy ownership to the bank 4. Name bank as beneficiary

3. Assign policy ownership to the bank

Which of these is NOT a duty of a producer? 1. Solicit applications for insurance 2. Collect premiums from policyowners 3. Authorize payment of certain claims 4. Render services to prospects

3. Authorize payment of certain claims

Which life insurance rider typically appears on a juvenile life insurance policy? 1. decreasing term rider 2. inflation rider 3. payor benefit rider 4. waiver of premium rider

3. Payor benefit rider

A policyowner is able to choose the frequency of premium payments through what policy feature? 1. Consideration 2. Payor benefit 3. Premium mode 4. Assignment provision

3. Premium mode

The part of a life insurance policy guaranteed to be true is called 1. representation 2. exclusion 3. warranty 4. waiver

3. Warranty

When must a producer deliver a notice regarding replacement of life insurance? 1. when the policy is issued 2. at policy delivery 3. at the time of application 4. when the sales appointment is made

3. at the time of application

Additional coverage can be added to a Whole Life policy by adding a(n) 1. payor rider 2. accelerated benefit rider 3. decreasing term rider 4. automatic premium loan rider

3. decreasing term rider

What type of policy would only provide coverage for specific types of illness (cancer, stroke) 1. MEWA 2. Blanket insurance 3. dread disease insurance 4. disability insurance

3. dread disease insurance

A producer has influenced an existing policyowner to convert an existing whole life policy to Reduced paid up insurance. The producer then sells the policyowner a new universal life policy. This transaction is called an 1. misrepresentation 2. conversion 3. Replacement 4. asset rollover

3. replacement

An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective? 1. when the policy is issued 2. the date of policy delivery 3. when the conditions of the receipt are met 4. the date the sales appoint was set

3. when the conditions of the receipt are met

When an employee is terminated, how long does this employee have to convert group life coverage to an individual place?

31 days

S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations? 1. 36 2. 18 3. 15 4. 6

36

An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision? 1. 7 2. 10 3. 20 4. 31

4. 31

Which provision is NOT a requirement in a group life policy? 1. conversion 2. Grave period 3. Incontestable period 4. Accidental

4. Accidental

Traditional individual retirement annuity (IRA) distribution must start by: 1. age 59 1/2 2. age 65 3. April 1st of the year following the year the participant attains age 59 1/2 4. April 1st of the year following the participant attains age 70 1/2

4. April 1st of the year following the participant attains age 70 1/2

Which of the following medical expenses does cancer insurance not cover? 1. Chemotherapy 2. Radiation treatment 3. Physician visit 4. Arthritis

4. Arthritis

Which of the following permits an insurance company to transact business in Hawaii? 1. Certificate of admission 2. Certificate of domestication 3. Certificate of authenticity 4. Certificate of authority

4. Certificate of authority

Which of the following BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidenal means" definition 1. Double indemnity 2. Benefits are taxable 3. More restrictive 4. Less restrictive

4. Less restrictive

What must be signed by both the producer and applicant when an existing life insurance policy is being reissued with a reduction in cash value? 1. policy guide 2. buyers summary 3. replacement receipt 4. notice regarding replacement

4. Notice regarding replacement

What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled? 1. Accidental Death and Dismemberment rider 2. Disability income rider 3. Guaranteed insurability rider 4. Waiver of premium rider

4. Waiver of premium rider

What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time? 1. modified whole life 2. 20 year paid up policy 3. endowment 4. decreasing term

4. decreasing term

All of these are characteristics of an Adjustable Life policy EXCEPT 1. adjustable premiums 2. adjustable premium payment period 3. combination of term and whole life insurance 4. face amount can be adjusted using policy dividends

4. face amount can be adjusted using policy dividends

How is the life and health insurance guaranty associated funded? 1. from producers and member companies 2. from the state government 3. federal government 4. from member companies

4. from member companies

Which of the following will a long term care plan typically provide benefits for? 1. disability income 2. death 3. unemployment 4. home health care

4. home health care

The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is: 1. Grace period 2. Physical Examination and Autopsy 3. Entire Contract 4. Time limit on certain defenses

4. time limit on certain defenses

If a 10 year term life policy contains a renewability provision, the policy will renew 1. along with a decrease in premium 2. at the option of the insurer 3. only with evidence of insurability 4. without evidence of insurability

4. without evidence of insurability

P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability? 1. P cannot borrow against the policys cash value while disabled 2. P will have to pay income taxes on the amount of premiums waived 3. P will still receive declared dividends 4. P cannot assign ownership of the policy while premiums are being waived

P will still declared dividends

A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision? 1. Payor provision 2. Accelerated benefits provision 3. assignment provision 4. Waiver of premium provision

Payor provision A payor provision provides that in the event of death or disability of the adult premium payor, the premiums on a juvenile policy will be waived until the insured child reaches a specified age or maturity date of the contract

Which of the following types of permanent life insurance policies offers the highest initial cash value? 1. Single premium 2. Limited pay 3. Straight whole 4. Interest-sensitive

Single premium Single premium whole life allows the insured to pay the entire premium in one lump sum and have coverage for his/her entire life. This type of permanent coverage has the highest initial cash value