insurance certificate exam

An individual borrowed money at the bank to send his daughter to college. Instead of purchasing credit life insurance, he used an existing life insurance policy to secure the debt. This would be considered a

collateral assignment

in order for an insurance contract to be legally binding, it must have all of the following elements except a. legal purpose b. counteroffer c. agreement d. consideration

counteroffer

If an insured mistake it has age on an application for health insurance the insurance company has the right to

Adjust the benefit

if a term life policy is convertible that means that at the end of the policy term the policyowner may convert coverage to

Another term life policy

In life insurance, an insurable interest between the policy owner and the insured must exist

At the time of the application

HMOs operate on what basis? a. capitated b. stop loss c. community rating d. deductible

Community rating

all of the following are essential elements of a contract except a. consideration b. competent parties c. counter offer d. Legal purpose

Counter offer

Which health insurance provision describes the insured's right to cancel coverage? a. renewal provision b. policy duration provision c. insuring clause d. cancellation provision

cancellation provision

An insured has a disability policy. After becoming disabled, the insured must wait 90 days before qualifying for benefits. This time frame is called the

elimination period

which of the following provisions or options protects the insured from an unintentional policy lapse due to a nonpayment of premium a. automatic premium loan b. reinstatement provision c. extended term option d. reduced paid up nonforfeiture option

automatic premium loan

In which of the following types of temporary insurance protection does a death benefit not change throughout the life of the policy

level term

If an employee is injured on the job which of the following will not be a standard benefit through Worker's Compensation a. rehabilitation benefits b. caregiver benefits c. death benefits d. Medical benefits

caregiver benefits

Which of the following provisions specifies to whom claims are to be paid a. notice of claim b payment of claims c. proof of loss d. claims form

payment of claims

which of the following statements is TRUE regarding an annuitant? a. the annuitant may be a corp b. the annuitant is also beneficiary under the annuity c. the annuitant must be a natural person d. the annuitant must also be the owner of the annuity

the annuitant must be a natural person

The expense for an autopsy covered under the physical exam and autopsy provision is paid by a. the estate of the insured b. the insurer c. the beneficiary d. the limits of coverage under the health insurance policy

insurer

Which of the following statements is correct concerning the guaranteed insurability rider a. it allows coverage to be increased without a physical exam b. it may be added to the policy for free c. it may be offered to insurance of all ages d. It allows coverage to be increased after physical exam only

it allows coverage to be increased after a physical exam only

all other factors being equal, how would premium in a survivorship life policy compare to the premium in a joint life policy? a. it will be the same b. it will be half the amount c. it will be lower d. it will be higher

it will be lower

The benefit amount under a long-term care policy is usually expressed as a fixed dollar amount per

month - 30 days

Which of the following allows the dividend to be used to pay a policy premium sooner than originally planned a. paid up addition b. paid up insurance option c. acceleration of endowment d. reduction of premium

paid up insurance option

What Medicare advantage plan is offered through private insurance companies

special needs

In insurance, an offer is usually made when a) The insurer approves the application and receives the initial premium. b) The agent hands the policy to the policyholder. c) An agent explains a policy to a potential applicant. d) The completed application is submitted.

the application is submitted

Under which of the following riders will be ensure both waive policy premiums and pay monthly income to the insured if the insured is disabled

waiver of premium rider

Answers to questions in an insurance application are called representations and as such they a. are the same as warranties b. are believed to be true to the best of the applicants knowledge c. must be absolutely true d. may never void a contract

are believed to be true to the best of the applicants knowledge

how long is the grace period for an individual life insurance policy? a. 7-10 days b. 2 weeks c. 1 month d. 3 months

1 month

The maximum number of employees allowed for a simple plan is

100

How long is the elimination period in long-term care policies? a. 7 days b. 10 days c. 21 days d. 30 days

30 days

Upon termination of group life coverages how many days does an employee have to convert to an individual policy a. 90 b. 45 c. 31 d. 20

31

All of the following are characteristics of group health insurance except a. individual insuredsreceive certificates of insurance b. groups may be formed for the purpose of purchasing insurance c. A group contract is between an insurer and a group sponsor d. only one policy is issued for the entire group

Individual insurance receive certificates of insurance

What type of consideration does the proposed insured offer to an insurance company

Insurable interest plus the premium

a fixed annuity has a guaranteed interest of 4%. this means the annuitant will a. always receive the current interest rate +4% b. always receive the current interest rate adjusted for inflation c. never receive more than 4% interest d. never receive less than 4% interest

Never received less than 4% interest

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the A. Juvenile rider B. Payor rider c. other insured rider d. change of insured rider

Other insured rider

which of the following types of policies allows the policy owner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount? A. Universal life B. Variable life C. Increasing term life D. Adjustable life

Universal Life

over several years a policyowner paid $10,000 in premiums for his insurance policy. when he suffered a loss, The insurance company paid out $50,000 in benefits. What characteristics of an insurance contract does this describe

aleatory

During which of the following annuity periods does an insured make monthly contributions to the annuity for retirement purpose? a. distribution period b. pay out period c. annuity period d. accumulation period

annuity period

The insurance component of a universal life policy as what type of insurance

flexible premium adjustable life

According to the fair credit reporting act consumer reports are prohibited from reporting negative information about a customer after how many years

7 years

Which of the following is incorrect concerning taxation of disability income benefits a. if the benefits are for a permanent loss the benefits paid to the employee or not taxable b. if the insured pay the premiums any disability income benefits are tax free c. if paid by the individual the premiums are tax deductible d. if the employer paid the premiums income benefits are taxable to the insured as ordinary income

If paid by the individual, the premiums are tax deductible.

Which document is used to assess risk associated with an applicant lifestyle and character? A. Non-medical risk assessment B. Applicant lifestyle assessment C. investigative consumer report D. Character assessment

Investigative consumer report

which of the following is incorrect regarding whole life insurance? a. dividend interest is taxable b. policy loans are tax-deductible c. cash value exceeding the premiums paid is taxable d. Premiums are not tax-deductible

Policy loans are tax deductible.

When dividends are available to the owner of a participating policy, which of the following different options can be policy owner exercise a. take a loan against the dividends b. transfer the dividends to the beneficiary c. purchase reduced paid up insurance d. apply the dividends to reduce the next year's premiums

Purchase reduced paid up insurance

which of the following disability policies will cover business' rent or employee salaries following the owner's disability? A. Short term disability policy B. Business overhead expense policy C. Key person disability policy D. disability buy sell policy

Business overhead expense policy

What is the purpose of a disability income policy

To replace lost income of the insured is unable to perform the duties of his occupation

which of the following terms describes a tendency of less favorable insurance risks to seek insurance more often than standard risks

adverse selection

an underwriter must review an applicant with an extensive medical history. which document would give the underwriter a better understanding of how the insured was treated for various illnesses? a. attending physicians statement b. physicians review c. individual medical summary d comprehensive medical history

attending physicians statement

Which of the following settlement options does not guarantee that the entire principal will be paid out to the beneficiary a. lump sum payment b. fixed period installments c. fixed amount installments d. life income

life income

In order to sign up for Medicare part D prescription drug coverage the insured must be enrolled in which of the following

medicare advantage plan