Final Exam Practice Questions
A family has a $1,000 annual family deductible with a coinsurance provision of 80/20. The family's claims for the year are $200, $300, $400, $500, $300, and $300, totaling $2,000. The insurer is responsible for paying: A. $1,600 B. $800 C. $1,200 D. $2,000
A. $1,600 *B. $800* C. $1,200 D. $2,000
How long must a health insurer maintain files containing the advertisement it has used? A. 1 year B. 3 years C. 6 months D. 5 years
A. 1 year *B. 3 years* C. 6 months D. 5 years
A small employer has how many EEs? A. 1-50 B. 2-20 C. 2-100 D. 1-99
A. 1-50 *B. 2-20* C. 2-100 D. 1-99
For an insured to be deemed terminally ill under the accelerated death benefit rider, he or she must be expected to live no more than _____ months. A. 18 B. 12 C. 6 D. 24
A. 18 B. 12 C. 6 *D. 24*
HIPAA laws apply to groups of __ or more. A. 20 B. 5 C. 2 D. 10
A. 20 B. 5 *C. 2* D. 10
When a producer receives an application for life insurance that is completed and signed, but without premium payment, when does coverage start? A. 30 days after the application is received B. At the end of the free-look period C. On the date the application is received D. On the date the policy is delivered and premium collected
A. 30 days after the application is received B. At the end of the free-look period C. On the date the application is received *D. On the date the policy is delivered and premium collected*
For an EE to be eligible to participate in an ER's group health insurance plan, he/she must be considered full time and work a minimum of ___ hours as established by the Affordable Care Act. A. 50 B. 30 C. 35 D. 40
A. 50 *B. 30* C. 35 D. 40
Every Long-Term Care policy must provide a ______-day free look period from the date the policy is delivered. A. 60 B. 10 C. 15 D. 30
A. 60 B. 10 C. 15 *D. 30*
The lowest monthly Social Security retirement benefit would occur if started at age ____. A. 65 B. 67 C. 60 D. 62
A. 65 B. 67 C. 60 *D. 62*
What type of Long-Term Care policy can be renewable and convertible, and can also be purchased at lower rates than for individual coverage? A. A Franchise Policy B. A Limited Policy C. A Policy Rider D. An Employer Group Policy
A. A Franchise Policy B. A Limited Policy C. A Policy Rider *D. An Employer Group Policy*
All of the following describe the responsibilities of an agent of producer, except: A. Adhere to their State's Unfair Trade Practices rules and regulations when soliciting B. Provide prospective purchasers with a Buyer's Guide and Policy Summary C. When using a telephone for soliciting call after 8 am and before 9pm D. Determine the rate the insurer will charge the applicant/insured
A. Adhere to their State's Unfair Trade Practices rules and regulations when soliciting B. Provide prospective purchasers with a Buyer's Guide and Policy Summary C. When using a telephone for soliciting call after 8 am and before 9pm *D. Determine the rate the insurer will charge the applicant/insured*
Regarding Medicare Part B, which of the following is not true? A. All recipients pay a monthly premium B. For citizens over the age of 65, there is no additional premium or cost C. It is optional coverage for those eligible for Part A D. Provides coverage for outpatient services
A. All recipients pay a monthly premium *B. For citizens over the age of 65, there is no additional premium or cost* C. It is optional coverage for those eligible for Part A D. Provides coverage for outpatient services
Choose the false statement about paying and sharing commissions: A. An unlicensed person cannot accept a commission for negotiating insurance B. Commissions paid to producers are negotiated with the insurers that they represent C. An insurer must pay commissions for selling insurance to only licensed persons D. Renewal commissions cannot be paid to a person who is no longer licensed on the renewal date
A. An unlicensed person cannot accept a commission for negotiating insurance B. Commissions paid to producers are negotiated with the insurers that they represent C. An insurer must pay commissions for selling insurance to only licensed persons *D. Renewal commissions cannot be paid to a person who is no longer licensed on the renewal date*
A(n) ___ is responsible for paying the policy's premium and has various rights as specified in the contract. A. Applicant B. Producer C. Agency D. Owner
A. Applicant B. Producer C. Agency *D. Owner*
Other than the applicant, which signature is required on an application? A. Beneficiary B. Executive officer of the insurer C. Insurance commissioner D. Agent
A. Beneficiary B. Executive officer of the insurer C. Insurance commissioner *D. Agent*
A resident licensee: A. Cannot hold a nonresident license at the same time B. Must hold a resident license in another state C. Must have a residence or principal place of business in this state D. Is issued a license without examination
A. Cannot hold a nonresident license at the same time B. Must hold a resident license in another state *C. Must have a residence or principal place of business in this state* D. Is issued a license without examination
If an insured suffers a dismemberment under the AD&D policy, which of the following will provide benefit payouts to the beneficiary? A. Capital funds B. Principal investments C. Capital sum D. Principal sum
A. Capital funds B. Principal investments *C. Capital sum* D. Principal sum
All of the following are traditional whole life policy nonforfeiture values, except: A. Cash surrender values B. Reduced paid-up insurance C. Extended term insurance D. Renewable and convertible features
A. Cash surrender values B. Reduced paid-up insurance C. Extended term insurance *D. Renewable and convertible features*
Which of the following provisions is NOT a standard provision? A. Insuring Clause B. Misstatement of Age C. Backdating D. Entire Contract Clause
A. Insuring Clause B. Misstatement of Age *C. Backdating* D. Entire Contract Clause
The Arizona Life and Disability Insurance Guaranty Fund does which of the following? A. Is a committee of insurers who sell insurance in AZ B. Allows producers to induce consumers into buying life insurance C. Protects policyholders if an insurer becomes insolvent or financially impaired D. Guarantees a person's ability to buy life or disability insurance
A. Is a committee of insurers who sell insurance in AZ B. Allows producers to induce consumers into buying life insurance *C. Protects policyholders if an insurer becomes insolvent or financially impaired* D. Guarantees a person's ability to buy life or disability insurance
If a health insurance policy provision contradicts or conflicts with state law, that provision: A. Is honored until it can be removed at the renewal date B. Overrules state law C. Must be amended to conform to state law D. Must be considered void and unenforceable
A. Is honored until it can be removed at the renewal date B. Overrules state law *C. Must be amended to conform to state law* D. Must be considered void and unenforceable
All of the following statements regarding an insurance application are correct, except: A. It is a formal written request by an applicant to an insurer requesting a policy B. It is not included as part of the contract C. It must be signed by at least the applicant and producer D. It is the primary source of info for underwriting purposes
A. It is a formal written request by an applicant to an insurer requesting a policy *B. It is not included as part of the contract* C. It must be signed by at least the applicant and producer D. It is the primary source of info for underwriting purposes
Until yesterday, JJ worked for his father's company and was covered by the company's large group health plan. He stopped working to go to college. He is 26 years of age and wants to keep the same coverage until he earns his degree in approx. 24 months. Which of the following statements is true? A. JJ can obtain coverage under COBRA, but it won't be the same coverage he had under his father's group plan B. As a student, JJ is still covered under his father's group plan C. JJ's only option is to buy a personal plan of coverage D. A good option for JJ is to exercise the COBRA option under his father's group plan
A. JJ can obtain coverage under COBRA, but it won't be the same coverage he had under his father's group plan B. As a student, JJ is still covered under his father's group plan C. JJ's only option is to buy a personal plan of coverage *D. A good option for JJ is to exercise the COBRA option under his father's group plan*
W and Y are annuitants of an annuity. W dies and Y receives 1/2 of the amount coming into their household when both were alive. They must have elected which of the following settlement options? A. Joint Life B. Joint and 1/2 Survivor C. Life with Period Certain D. Life with Installment Refund
A. Joint Life *B. Joint and 1/2 Survivor* C. Life with Period Certain D. Life with Installment Refund
Albert owns a life insurance policy insuring his son David. He wants a Settlement Option that, if David were to die, would provide guaranteed payments to Albert and his wife until both of them die. Albert's producer should recommend: A. Life Income Period Certain B. Life Income Joint and Survivor C. Joint Life D. Fixed Amount
A. Life Income Period Certain *B. Life Income Joint and Survivor* C. Joint Life D. Fixed Amount
If the beneficiary is concerned about a payout for a particular period of time, the ___ settlement option should be selected. A. Life with Period Certain B. Joint and Survivor C. Fixed Period D. Fixed Amount
A. Life with Period Certain B. Joint and Survivor *C. Fixed Period* D. Fixed Amount
All of the following plans allow participants to roll over or retain benefits amounts remaining at the end of the plan year, EXCEPT: A. MSAs B. FSAs C. HRAs D. HSAs
A. MSAs *B. FSAs* C. HRAs D. HSAs
Which of the following terms and definitions to not match? A. Noncancellable - Guaranteed renewable to a specified age or date with a premium that will not increase B. Optionally Renewable - Renewable only at the option of the insurer C. Cancellable - An effective period for the policy is expressed in its provisions and it cannot be renewed D. Guaranteed Renewable - Renewable without proof of insurability, but premiums may increase due to age
A. Noncancellable - Guaranteed renewable to a specified age or date with a premium that will not increase B. Optionally Renewable - Renewable only at the option of the insurer *C. Cancellable - An effective period for the policy is expressed in its provisions and it cannot be renewed* D. Guaranteed Renewable - Renewable without proof of insurability, but premiums may increase due to age
___ manufacture and sell insurance coverage in the form of policies or contracts of insurance. A. Insureds B. Insurers C. Agencies D. Producers
A. Insureds *B. Insurers* C. Agencies D. Producers
Generally, children receive Social Security Survivor Benefits until age ________. A. 18 B. 16 C. 17 D. 15
*A. 18* B. 16 C. 17 D. 15
Which of the following could initiate the Accelerated Benefits Provision of a life policy? A. A condition that is terminal B. A total disability not reducing life expectancy C. Inability to perform some activities of daily living D. A presumptive disability
*A. A condition that is terminal* B. A total disability not reducing life expectancy C. Inability to perform some activities of daily living D. A presumptive disability
The cash value of a permanent life insurance policy can be used for all of the following, except: A. Accidental death benefits B. Cash withdrawals C. Policy loans D. Nonforfeiture options
*A. Accidental death benefits* B. Cash withdrawals C. Policy loans D. Nonforfeiture options
Which of the following permanent policies could actually end up acting like term life insurance? A. Adjustable Life B. Single Premium Whole Life C. Indeterminate Premium D. Ordinary Straight Whole Life
*A. Adjustable Life* B. Single Premium Whole Life C. Indeterminate Premium D. Ordinary Straight Whole Life
An insurer which is formed under the laws of another country is a(n): A. Alien insurer B. Unauthorized insurer C. Foreign insurer D. Domestic insurer
*A. Alien insurer* B. Unauthorized insurer C. Foreign insurer D. Domestic insurer
All of the following are characteristics of Franchise Insurance, except: A. Certificates of Insurance are issued B. The ER handles most of the admin responsibilities, which makes franchise less expensive than individual insurance C. Premiums are paid by the ER or shared with the EE D. The group must be together for a reason other than purchasing cheaper insurance
*A. Certificates of Insurance are issued* B. The ER handles most of the admin responsibilities, which makes franchise less expensive than individual insurance C. Premiums are paid by the ER or shared with the EE D. The group must be together for a reason other than purchasing cheaper insurance
All of the following are sources that insurers may look at for info regarding the insurability of a prospective insured, except: A. College Degree B. MIB (Medical Info Bureau) C. Inspection Report D. APS (Attending Physician Statement)
*A. College Degree* B. MIB (Medical Info Bureau) C. Inspection Report D. APS (Attending Physician Statement)
Term life insurance will not pay out a death claim in which of the following situations? A. Death after the term expires B. Death as a result of sickness C. Death while at work D. Death as a result of accident
*A. Death after the term expires* B. Death as a result of sickness C. Death while at work D. Death as a result of accident
An insured has a $175,000 permanent life insurance policy and is having difficulty keeping up with the premium payments. Which nonforfeiture Option would allow him to forego the premiums and retain the same face amount until the cash surrender value is exhausted? A. Extended Term B. Reduced Paid-Up C. Premium Reduction D. Cash Surrender
*A. Extended Term* B. Reduced Paid-Up C. Premium Reduction D. Cash Surrender
Which of the following types of term life insurance can be written as a rider to provide cost of living or return of premium benefits? A. Increasing term B. Level term C. Variable term D. Decreasing term
*A. Increasing term* B. Level term C. Variable term D. Decreasing term
A(n) ____ is the person or entity that is covered by an insurance policy. A. Insured B. Agency C. Owner D. Producer
*A. Insured* B. Agency C. Owner D. Producer
Under a Key Employee Disability Income Policy, the employer is all of the following, except: A. Insured B. Premium payor C. Recipient of the proceeds D. Policyowner
*A. Insured* B. Premium payor C. Recipient of the proceeds D. Policyowner
Z is the beneficiary of a life insurance policy. Rather than take a lump sum, Z wanted a lifetime payout. However, Z would feel bad if after he died, residual values were retained by the insurer rather than being paid out. Z should consider which of the following settlement options? A. Life Refund B. Life with Period Certain C. Life Only D. Joint Life
*A. Life Refund* B. Life with Period Certain C. Life Only D. Joint Life
In Individual Disability Income underwriting, the single most important rating factor from an underwriting standpoint is the applicant's: A. Occupation B. Health C. Gender D. Finances
*A. Occupation* B. Health C. Gender D. Finances (In regards to DISABILITY INCOME, the applicant's occupation is the single most important, b/c it defines the primary risk)
Which statement is false regarding Social Security Disability benefits? A. Qualifications for benefits is contingent only upon the EE's having 45 work credits and being unable to perform his/her usual job B. To collect disability benefits, an EE must be unable to engage in any kind of gainful work because of a medically determined physical or mental condition that has lasted, or is expected to last, at least 12 months or to result in death C. The waiting period is 5 months D. The benefit for a qualifying disabled worker is a percentage of the PIA
*A. Qualifications for benefits is contingent only upon the EE's having 45 work credits and being unable to perform his/her usual job* B. To collect disability benefits, an EE must be unable to engage in any kind of gainful work because of a medically determined physical or mental condition that has lasted, or is expected to last, at least 12 months or to result in death C. The waiting period is 5 months D. The benefit for a qualifying disabled worker is a percentage of the PIA
Statements made on the application by the applicant that are believed to be true to the best of the applicant's knowledge are called: A. Representations B. Waivers C. Warranties D. Conditions
*A. Representations* B. Waivers C. Warranties D. Conditions
Who pays all future premiums after the Viatical Settlement? A. The Viatical Company B. The Policyowner C. The Insured's Beneficiary D. The Insured
*A. The Viatical Company* B. The Policyowner C. The Insured's Beneficiary D. The Insured
Which of the following statements is accurate concerning the changing of an irrevocable beneficiary? A. The beneficiary may be changed only with the written consent of the present beneficiary B. The benefit may be changed only on the anniversary date of the policy C. The beneficiary can never be changed D. The owner may change the irrevocable beneficiary at any time
*A. The beneficiary may be changed only with the written consent of the present beneficiary* B. The benefit may be changed only on the anniversary date of the policy C. The beneficiary can never be changed D. The owner may change the irrevocable beneficiary at any time
All of the following statements regarding the Living Needs Rider are true, except: A. The insurer charges an annual premium for this rider which creates a pool of money from which to pay out the benefit B. It allows a partial payment of the face amount before death if teh insured becomes terminally ill C. The rider is most often added without an additional premium charge D. At death, the early payment is deducted from the beneficiary's benefit
*A. The insurer charges an annual premium for this rider which creates a pool of money from which to pay out the benefit* B. It allows a partial payment of the face amount before death if teh insured becomes terminally ill C. The rider is most often added without an additional premium charge D. At death, the early payment is deducted from the beneficiary's benefit
Josh is a concert pianist and earns a very good living with his talent. He was in a car accident and broke his arm. His disability is considered: A. Total, temporary B. Temporary only C. Partial, temporary D. Total, partial
*A. Total, temporary* B. Temporary only C. Partial, temporary D. Total, partial
The reinsurance agreement that automatically accepts all new risks presented by the company seeking or requesting reinsurance from the reinsurer is known as a ____ agreement. A. Treaty B. Facultative C. Residual D. Reciprocal
*A. Treaty* B. Facultative C. Residual D. Reciprocal
F has an annuity with $50,000 of cash value. F needs life insurance but does not currently have it in his budget to pay for it. What is another option for F to consider to obtain the much needed life insurance F needs? A. Use some of the annuity funds either through systematic withdrawal or a settlement option to pay the life insurance premiums B. See if the insurer will allow for a delayed payment plan C. Much like buying a house, use the policy as collateral for a loan to acquire it D. Borrow money from F's ER and pay it back over time
*A. Use some of the annuity funds either through systematic withdrawal or a settlement option to pay the life insurance premiums* B. See if the insurer will allow for a delayed payment plan C. Much like buying a house, use the policy as collateral for a loan to acquire it D. Borrow money from F's ER and pay it back over time
Which of the following annuities typically offers no guarantees? A. Variable B. Indexed C. Bonus Interest Rate Annuities D. Fixed
*A. Variable* B. Indexed C. Bonus Interest Rate Annuities D. Fixed
In a replacement sale all of the following are producer responsibilities, except: A. Complete a notice regarding replacement with applicant and producer signatures B. Obtain information regarding the in force policies including name and policy numbers C. Provide copies of the notice regarding replacement and any sales proposals to the applicant and replacing insurer D. Reimburse the applicant for any surrender charges that may be incurred as a result of the transaction
A. Complete a notice regarding replacement with applicant and producer signatures B. Obtain information regarding the in force policies including name and policy numbers C. Provide copies of the notice regarding replacement and any sales proposals to the applicant and replacing insurer *D. Reimburse the applicant for any surrender charges that may be incurred as a result of the transaction*
Regulations governing replacement of life insurance policies would apply to which of the following policy types? A. Credit Life B. Term Life C. Group annuities D. Group Life
A. Credit Life *B. Term Life* C. Group annuities D. Group Life
All LTC policies in AZ must offer the policyholder which of the following benefit options? A. Dividends B. Inflation Protection C. Life Insurance D. Accelerated Death Benefits
A. Dividends *B. Inflation Protection* C. Life Insurance D. Accelerated Death Benefits
A group plan is designed to insure all of the following, except: A. EEs B. Creditors C. Debtors D. Members
A. EEs *B. Creditors* C. Debtors D. Members
All of the following statements about Group Life insurance are true, except: A. ER paid premiums are tax deductible B. EEs receive a tax deduction for ER paid premiums C. EE paid premiums are not tax deductible D. EEs are taxed on any premiums paid on insurance in excess of $50,000
A. ER paid premiums are tax deductible *B. EEs receive a tax deduction for ER paid premiums* C. EE paid premiums are not tax deductible D. EEs are taxed on any premiums paid on insurance in excess of $50,000
In those instances in which the death of a valued employee could cause financial hardship for a company, the company might acquire additional funds through which type of coverage? A. ER-EE Cross purchase B. Key person C. Preferred Insured D. Business Reimbursement
A. ER-EE Cross purchase *B. Key person* C. Preferred Insured D. Business Reimbursement
Which of the following identifies the parties to the contract and the perils it covers and the circumstances under which the insurer will pay a life insurance policy claim? A. Entire Contract Clause B. Consideration Clause C. Insuring Clause D. Exclusions Provision
A. Entire Contract Clause B. Consideration Clause *C. Insuring Clause* D. Exclusions Provision
In order to sell variable contracts in AZ, the person must have all of the following qualifications, except: A. FINRA (Financial Industry Regulatory Authority) registration B. Variable contract license C. CLU, ChFC, or CFP D. Life producer license
A. FINRA (Financial Industry Regulatory Authority) registration B. Variable contract license *C. CLU, ChFC, or CFP* D. Life producer license
Ashley wanted to establish her company benefit plan so that it could cover her individual health insurance premiums and out-of-pocket expenses without group insurance or loss of unused benefits. After some research, she established a: A. FSAs B. MSAs C. HRAs D. HSAs
A. FSAs B. MSAs *C. HRAs* D. HSAs
Which of the following riders can be used to cover the life of an additional insured who is an unrelated business partner? A. Family rider B. Nonfamily rider C. Child rider D. Spouse rider
A. Family rider *B. Nonfamily rider* C. Child rider D. Spouse rider
Universal Life and Variable Universal Life share all of the following characteristics, except: A. Flexible premiums B. Policy loans, surrenders, and partial withdrawals are permitted C. The investment risk D. Adjustable death benefit options
A. Flexible premiums B. Policy loans, surrenders, and partial withdrawals are permitted *C. The investment risk* D. Adjustable death benefit options
All of the following are ways in which an EE will lose their ER sponsored group health insurance, except: A. Group contract is terminated B. Becoming too old while still on the job C. Employment is terminated D. No longer meeting eligibility requirements
A. Group contract is terminated *B. Becoming too old while still on the job* C. Employment is terminated D. No longer meeting eligibility requirements
A replacing insurer must assume liability for paying ongoing existing claims under which law? A. HIPAA B. COBRA C. No-Loss, No-Gain D. ERISA
A. HIPAA B. COBRA *C. No-Loss, No-Gain* D. ERISA
Which statement is incorrect regarding HMOs? A. HMOs are sponsored by medical schools, hospitals, employers, labor unions, consumer groups, commercial insurers, gov'ts and hospital-medical service plans B. HMOs must provide basic health care services including hospitalization, lab services, optical services, physical therapy, dental care, and preventative services C. The copayment discourages unnecessary use of medical resources D. Members are required to pay a small copayment for basic health care services
A. HMOs are sponsored by medical schools, hospitals, employers, labor unions, consumer groups, commercial insurers, gov'ts and hospital-medical service plans *B. HMOs must provide basic health care services including hospitalization, lab services, optical services, physical therapy, dental care, and preventative services* C. The copayment discourages unnecessary use of medical resources D. Members are required to pay a small copayment for basic health care services
All of the following are true of the Coordination of Benefits Provision under a group plan, except: A. In a spousal situation, the insurer for the claim of an EE is primary, with the spouse's plan being secondary B. It is a method of determining primary and secondary coverage when an insured is covered by more than one group policy C. In the event children are covered under two group plans, the insurer for the parent who is the oldest is primary, and the other parent's plan is secondary D. Secondary carriers will only pay claims that are in excess of the primary carrier's responsibility
A. In a spousal situation, the insurer for the claim of an EE is primary, with the spouse's plan being secondary B. It is a method of determining primary and secondary coverage when an insured is covered by more than one group policy *C. In the event children are covered under two group plans, the insurer for the parent who is the oldest is primary, and the other parent's plan is secondary* D. Secondary carriers will only pay claims that are in excess of the primary carrier's responsibility
PPO plans pay providers based on a: A. Prepaid basis determined by a primary care physician B. Flat benefit determined by geographical region C. Discounted fee for service negotiated in advance D. Reimbursement basis
A. Prepaid basis determined by a primary care physician B. Flat benefit determined by geographical region *C. Discounted fee for service negotiated in advance* D. Reimbursement basis
Right to Examine is the same as: A. Probationary Period B. Elimination Period C. Waiting Period D. Free Look Period
A. Probationary Period B. Elimination Period C. Waiting Period *D. Free Look Period*
Basing insurability on a genetic condition is an example of what Unfair Trade Practice? A. Rebating B. Defamation C. Misrepresentation D. Unfair Discrimination
A. Rebating B. Defamation C. Misrepresentation *D. Unfair Discrimination*
What type of disability income insurance pays a benefit to a business to help in the search, cost, and hiring of a replacement when an EE becomes disabled and is unable to work for the company? A. Reducing Term B. Business overhead expense C. Buy-self D. Key Employee
A. Reducing Term B. Business overhead expense C. Buy-self *D. Key Employee*
What is the correct risk management term for minimizing the chance of a loss? A. Risk sharing B. Risk avoidance C. Risk reduction D. Risk retention
A. Risk sharing B. Risk avoidance *C. Risk reduction* D. Risk retention
Primarily, the _________ is the person who will receive any residual policy benefits after the annuitant has died. A. Spouse B. Beneficiary C. Owner D. Insurer
A. Spouse *B. Beneficiary* C. Owner D. Insurer
If life insurance proceeds are paid to the deceased's estate they may be subject to ___ taxes. A. State Income B. Federal Estate C. Probate D. Federal Income
A. State Income *B. Federal Estate* C. Probate D. Federal Income
Which of the following is a type of rating that does not involve an extra premium being assessed? A. Sub-standard B. Rated up age C. The flat rate D. The lien plan
A. Sub-standard B. Rated up age C. The flat rate *D. The lien plan*
Which of the following establishes a cost basis in an annuity? A. Tax deferred gains B. Pre-tax contributions C. After-tax contributions D. Tax deferred interest
A. Tax deferred gains B. Pre-tax contributions *C. After-tax contributions* D. Tax deferred interest
Which of these is a qualified plan designed specifically for unincorporated self-employed individuals? A. Tax-Deferred Annuity B. IRA C. 403(b) Plan D. Keogh Plan
A. Tax-Deferred Annuity B. IRA C. 403(b) Plan *D. Keogh Plan*
Reasonable expenses and charges for the cost of the Director's examination will be paid by: A. The AZ State Treasury B. The examiner's revolving fund C. The examiner D. The examinee
A. The AZ State Treasury *B. The examiner's revolving fund* C. The examiner D. The examinee
The net amount at risk to the insurance company at the endowment date is: A. The cash values B. The total of the premiums paid to date C. The face amount D. Zero
A. The cash values B. The total of the premiums paid to date C. The face amount *D. Zero*
Arthur has been licensed and appointed as a life insurance agent with the XYZ insurance company for a little over a year. Which of the following disclosure statements would be appropriate when talking with prospective clients? A. The financial counseling I offer focuses on the comprehensive insurance needs analysis I provide as part of my services B. Dividends are an estimate of future performance, and the exact amount cannot be guaranteed C. I am a licensed insurance producer, appointed as an agent of the XYZ Insurance Company, which is located at 123 Main St., Your Town, USA D. This premium combines all cost factors, including the base policy, policy and riders, and other optional benefits in a unified annual price
A. The financial counseling I offer focuses on the comprehensive insurance needs analysis I provide as part of my services B. Dividends are an estimate of future performance, and the exact amount cannot be guaranteed *C. I am a licensed insurance producer, appointed as an agent of the XYZ Insurance Company, which is located at 123 Main St., Your Town, USA* D. This premium combines all cost factors, including the base policy, policy and riders, and other optional benefits in a unified annual price
All of the following are traits of a Fixed Annuity, except: A. The insurer bears any investment risk B. The insurer's general account assets guarantee fixed annuity contract C. The actual rate of interest credited will be based on the state-published interest rate index D. The purchasing power of a fixed dollar benefit amount decreases as the cost of living increases
A. The insurer bears any investment risk B. The insurer's general account assets guarantee fixed annuity contract *C. The actual rate of interest credited will be based on the state-published interest rate index* D. The purchasing power of a fixed dollar benefit amount decreases as the cost of living increases
What is the purpose of the facility of payment clause? A. The insurer can determine if they would like to send the beneficiary a check, a checkbook, or wire the proceeds into their bank account B. The clause allows the beneficiary to determine how and when the proceeds will be paid out C. It allows the insurer to determine if the beneficiary should receive a lump sum or monthly installments D. It allows the insurer to pay out the death benefit to a person deemed entitled when there is no designated beneficiary
A. The insurer can determine if they would like to send the beneficiary a check, a checkbook, or wire the proceeds into their bank account B. The clause allows the beneficiary to determine how and when the proceeds will be paid out C. It allows the insurer to determine if the beneficiary should receive a lump sum or monthly installments *D. It allows the insurer to pay out the death benefit to a person deemed entitled when there is no designated beneficiary*
Three years ago, Charles purchased a health policy from the QRS Company; he has purchased two additional contracts from the same insurer since. Each contract contains the Other Insurance With This Insurer Provision. What happens if Charles has a claim? A. The insurer will cancel all contracts because of intent to defraud B. Only one policy will pay, the premiums for the other contracts will be returned C. Each contract will pay indirect proportion to the loss D. Benefits are paid in full by all contracts
A. The insurer will cancel all contracts because of intent to defraud *B. Only one policy will pay, the premiums for the other contracts will be returned* C. Each contract will pay indirect proportion to the loss D. Benefits are paid in full by all contracts
Under the Modified Endowment Contract rules the 7-Pay Test is defined as: A. The least amount of premium required to be paid in the first 7 years to maintain the policy to age 70 B. Any life insurance policy that endows in 7 years C. The cash value at the end of year 7 exceeds the total premiums paid D. The comparison of premiums paid during the first 7 years with the net level premiums that would have been paid on a 7 year pay whole life of the same death benefit
A. The least amount of premium required to be paid in the first 7 years to maintain the policy to age 70 B. Any life insurance policy that endows in 7 years C. The cash value at the end of year 7 exceeds the total premiums paid *D. The comparison of premiums paid during the first 7 years with the net level premiums that would have been paid on a 7 year pay whole life of the same death benefit*
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 have much more life insurance coverage than the previous one B. The new policy will only be issued after proof of insurability is provided C. The term policy will be replaced by a permanent life insurance policy D. The new life insurance policy will likely have a much lower premium
A. The new policy will have much more life insurance coverage than the previous one B. The new policy will only be issued after proof of insurability is provided *C. The term policy will be replaced by a permanent life insurance policy* D. The new life insurance policy will likely have a much lower premium
An applicant for accident and health insurance works two jobs. Which of the applicant's jobs will be used to underwrite the policy? A. The one with the most hours per week B. The most hazardous of the two C. The least hazardous of the two D. The job in which the applicant has the most experience
A. The one with the most hours per week *B. The most hazardous of the two* C. The least hazardous of the two D. The job in which the applicant has the most experience
With a Current Assumption Whole life policy, what can happen if the cash values increase too quickly? A. The policy will lapse B. The insurer will be forced to pay out the excess to the policyowner C. The policy could mature sooner than expected D. The face amount of the policy will decrease
A. The policy will lapse B. The insurer will be forced to pay out the excess to the policyowner *C. The policy could mature sooner than expected* D. The face amount of the policy will decrease
All of the following statements are true regarding Long-Term Care policies, except: A. They must provide a free look period of at least 30 days B. They must have a renewal provision shown on the first page of the policy C. They must require prior confinement in a hospital as a condition for payment D. They may exclude coverage for illegal drug use
A. They must provide a free look period of at least 30 days B. They must have a renewal provision shown on the first page of the policy *C. They must require prior confinement in a hospital as a condition for payment* D. They may exclude coverage for illegal drug use
A producer submits a completed application to the insurer along with the premium check after giving the applicant a conditional receipt. If the applicant completes the required medical exam, but dies prior to the insurer issuing a policy as applied for, what is the insurer's responsibility? A. To keep the premium and reject the claim B. To refund premiums paid less costs associated with any medical exams C. To refund any and all premiums paid D. To pay the claim in full as long as the conditions of the receipt were fully satisfied by the insurer
A. To keep the premium and reject the claim B. To refund premiums paid less costs associated with any medical exams C. To refund any and all premiums paid *D. To pay the claim in full as long as the conditions of the receipt were fully satisfied by the insurer*
if no money is involved when the ownership of a policy changes, this is referred to specifically as a(n) ___: A. Transfer for value B. Life settlement C. Viatical Settlement D. Absolute assignment
A. Transfer for value B. Life settlement C. Viatical Settlement *D. Absolute assignment*
If money is paid to change the ownership on a policy covering an insured who is not terminally ill, this is referred to as a(n) ___. A. Transfer for value B. Viatical settlement C. Life settlement D. Absolute assignment
A. Transfer for value B. Viatical settlement *C. Life settlement* D. Absolute assignment
For an accidental means policy to pay a claim, the injury must be an: A. Unintentional injury only B. Unintentional in both the cause and the result of the injury C. Unforeseeable injury only D. Unintentional cause only
A. Unintentional injury only *B. Unintentional in both the cause and the result of the injury* C. Unforeseeable injury only D. Unintentional cause only
Y just received an inheritance and instead of spending the money right now, decides to put it away for the future. What annuity premium funding would be best in this situation? A. Variable B. Flexible C. Periodic D. Single
A. Variable B. Flexible C. Periodic *D. Single*
Which of the following uses convertible term to help lower premiums initially and then allows you the right to purchase permanent insurance? A. Variable life B. Modified whole life C. Graded premium whole life D. Universal life
A. Variable life *B. Modified whole life* C. Graded premium whole life D. Universal life
Which of the following life insurance policies does not develop a cash value? A. Variable whole life B. 5 year term C. whole life D. universal life
A. Variable whole life *B. 5 year term* C. whole life D. universal life
Statements made on the application are considered true to the best of the applicant's knowledge and belief are considered to be: A. Waivers B. Warranties C. Representations D. Concealments
A. Waivers B. Warranties *C. Representations* D. Concealments
When may an insurance company discriminate based on blindness? A. When cancelling insurance B. Never C. At the time of the application D. When charging premium rates
A. When cancelling insurance *B. Never* C. At the time of the application D. When charging premium rates
H as an annuity funded with after-tax contributions. So far, H has placed $10,000 into the policy and it is now worth $25,000. If H cashes out the annuity, what is H's cost basis? A. Zero B. $10,000 C. $25,000 D. $15,000
A. Zero *B. $10,000* C. $25,000 D. $15,000
Many insurers pay benefits based on the average fee charged in a geographical area. This is referred to as which of the following? a. Reimbursement. b. Cash c. Scheduled d. Usual Customary and Reasonable.
a. Reimbursement. b. Cash c. Scheduled *d. Usual Customary and Reasonable*
How is the funding for Social Security provided? a. Through FICA taxes that are paid by employees. b. Through FICA taxes that are paid by employers. c. Through FICA taxes that are paid by both employers and employees. d. Through PIA
a. Through FICA taxes that are paid by employees. b. Through FICA taxes that are paid by employers. *c. Through FICA taxes that are paid by both employers and employees.* d. Through PIA