Incorrects
Partners in business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy be used to fund this agreement?
Any form of life insurance
How often will the Commissioner examine an insurer's books or records?
At least once every 5 years
Which of the following is NOT required to be stated in the outline of coverage provided with a long-term care policy?
Basic information about supplementary policies
If the annuitant dies during the accumulation period, who receives the benefits?
Beneficiary
An insured and his spouse recently had a child. Which of the following riders would allow the couple to insure the child for a limited period of time at a specified amount?
Children's term rider
Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as
Coercion
An applicant gives her agent a completed application and the initial premium. What can the agent issue her that acknowledges the initial premium payment?
Conditional receipt
Which is not an exclusion in a medical expense policy?
Coverage for dependents
A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as
Critical illness
The term "fixed" in a fixed annuity refers to all of the following EXCEPT
Death benefit
Which of the following is NOT a standard exclusion in life insurance policies
Disability
A Major Medical Expense policy would provide coverage for all of the following EXCEPT
Drug addiction
Other than for a qualified life event, when can a change be made in benefits for a Flexible Spending Account (FSA)?
During the open enrollment period
Regarding health insurance, all of the following are tax-deductible EXCEPT
Employee paid group disability income
When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?
Extended term
A husband and wife both incur expenses that are attributed to a single major medical insurance deductible. Which type of policy do they have?
Family
The guaranteed purchase option is also referred to as the
Future increase option
As it pertains to group health insurance, COBRA stipulates that
Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense
If a policy allows the policy owner to make periodic additions to the face amount at standard rates, without providing insurability, the policy includes a
Guaranteed insurability rider
Who would be allowed catch-up contributions?
Individuals age 50 or older
Riley reads an agreement on the first page of her policy which includes a list of losses that will be covered by her insurer. What is the name of this agreement?
Insuring clause
Which of the following statements is NOT true concerning Medicaid?
It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income.
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?
It is reduced to the amount of what the cash value would buy as a single premium.
Which of the following is TRUE regarding the annuity period?
It may last for the lifetime of an annuitant
How does insurance distribute the financial consequences of individual losses?
It transfers the risk to all persons injured
An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium?
It will increase because the insured will be 5 years older than when the policy was originally purchased.
What does an annuity protect the contract owner against?
Living longer than expected
Which of the following would not be considered a limited coverage policy?
Major medical expense insurance
All of the following are EXCLUDED from coverage in an individual health insurance policy EXCEPT
Mental illness
A married couple purchases a life insurance policy on their newborn baby. They are concerned about what would happen to the policy if either of them were unable to continue making payments due to death or disability. Which policy rider should their agent recommend?
Payor benefit
A Medicare SELECT policy does all of the following EXCEPT
Prohibit payment for regularly covered services if provided by non-network providers
Which of the following is NOT a responsibility of the replacing insurer in life insurance policy replacement?
Read the notice regarding replacement to the applicant
All of the following are true regarding rebates EXCEPT
Rebates are allowed if it is in the best interest of the client
The benefits in Medical Expense Insurance are
Received tax free by the individual
If a basic medical insurance plan's benefits are exhausted, what type of plan will then begin covering those losses?
Supplementary major medical
Which of the following is an example of a producer being involved in an unfair trade practice of rebating?
Telling a client that his first premium will be waived if he purchased the insurance policy today
All of the following entities regulate variable life policies EXCEPT
The Guaranty Association
An insured decides to surrender his Whole Life insurance policy. The cash value at surrender is higher than the premiums paid into the policy, due to interest. What part of the surrender value would become taxable?
The difference between the premiums paid and the cash value
Which of the following is true regarding conversion from a group health plan to an individual policy?
The individual must pay the premium
According to a state regulation, a notice of information practices that insurers provide to applicants and policyowners must include all of the following EXCEPT
The information gathered in the course of the investigation.
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?
The insured may renew the policy for another 10 years, but at a higher premium rate.
Which of the following is NOT a feature of a guaranteed renewable provision?
The insurer can increase the policy premium on an individual basis
Which of the following is NOT true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity
Which of the following is NOT true regarding policy loans?
Money borrowed from the cash value is taxable
Don has both a basic expense and a major medical policy. He is injured in an accident, which requires several major surgeries. This quickly exhausts Don's basic expense policy. What must Don do before his major medical policy can pick up where the basic expense policy left off?
Pay a special deductible on his major medical policy, or corridor deductible
A long-term care shopper's guide must be presented at what point?
Prior to the time of the application
Which provision states that the insurance company must pay Medical Expense claims immediately?
Time of Payment of Claims
What is the purpose of the impairment rider in a health insurance policy?
To exclude coverage for a specific impairment
Tom purchased a health insurance policy with a renewability clause that states the policy is Guaranteed Renewable. This means that as long as Tom pays the required premiums, the policy will continue until
Tom reaches 65
The paid-up option uses the dividend to
to purchase a smaller amount of the same type of policy of insurance as the original policy
When an insured terminates membership in the insured group, the insured can convert to
whole life without proof of insurability
An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage?
$102
If an agent's appointment is terminated, suspended or revoked, the agent must cease selling or soliciting on behalf of the insurer within
10 calendar days
Once the agent's appointment with the insurer has been terminated, how soon must the insurer mail a notice of termination to the agent?
15 calendar days
How long is an insurer required to maintain records in Virginia?
3 years
What is the maximum age for qualifying for a catastrophic plan?
30
An insured takes a policy loan from a whole life policy. During repayment, the interest rate changes significantly. Which scenario is most accurate?
An insurer cannot terminate coverage under an existing policy during a policy year in which the interest rate increased and subsequently caused the policy to lapse.
An agent is convicted of a felony in another jurisdiction. Within what period of time must the agent report felony charged to the Commission?
30 days
According to the general standards for healthy policy advertisements, how long are insurers required to keep records of all advertisements?
4 years
How many employees can a business have and still meet the definition of "small employer"?
50
Ray has an individual medical policy that requires coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray?
50/50
LTC would provide coverage at all of the following levels except
Acute
If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following?
Adjust the benefit in accordance with the increased risk
Which of the following would be deducted from the death benefit paid to a beneficiary, if a partial accelerated death benefit had been paid while the insured was still alive?
Amount paid with the accelerated benefit, plus the earnings lost by the insurance company in interest income from the accelerated benefit
Which of the following statements is INCORRECT concerning Modified Endowment Contracts (MECs)?
An MEC must always pass the 7-pay test
The insuring clause of a disability policy usually states all of the following EXCEPT
The method of premium payment
All of the following are true of Survivorship Life policy EXCEPT
The premium is based on the age of each insured
The responsibility of making certain that an application for insurance is filled out completely, correctly, and to the best of his or her knowledge is the responsibility of whom?
The producer
If an applicant submits the initial premium with an application, which action constitutes acceptance?
The underwriters approve the application
All of the following are true regarding the guaranteed insurability rider EXCEPT
This rider is guaranteed to the insured with no additional premium
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?
Twisting
Which of the following terms is used to described a person, other than the viator, that enters into or effectuates a viatical settlement contract?
Viatical settlement provider
In forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant
With the policy
If an insurer's health insurance advertising materials have been examined by the Commission 3 years ago, does the insurer have to maintain records any longer?
Yes, the insurer must maintain records for 1 more year.
Illustration
a representation of the non-guaranteed elements of a policy
A Whole Life policy is surrendered for a reduced-paid up policy. The cahs value in the new policy will
continue to increase
With Adjustable Life, the owner can change all of the following except
the insured
Annuity period
the time during which accumulated money is converted into an income stream. It may last for the lifetime of the annuitant or for a shorter specified period of time depending on the benefit payment option selected
