Insurance Exam

Agents who want to sell long-term care partnership policies must complete an initial training program of no less than __________ hours A. 8 B. 6 C. 4 D. 3

Agents who want to sell long-term care partnership policies must complete an initial program of no less than 8 hours

What is an annuitant, in regard to an annuity policy? A. the issuer of the policy B. the person who has all of the rights in the contract C. the party who receives any residual policy benefits D. the party whose life the policy's benefits are based on

The answer is D An annuitant is the individual whose life the contract is based upon

All of the following are true of the Coordination of Benefits Provision under a group plan, except: A. 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 B. secondary carriers will only pay claims that are in excess of the primary carrier's responsibility C. it is a method of determining primary and secondary coverage when an insured is covered by more than one group policy D. in a spousal situation, the insurer for the claim of an employee is primary, with the spouse's plan being secondary

The correct answer A Under the Coordination of Benefits Provisions, the insurer for the parent whose birthday is first in the calendar year is primary, not the plan for the parent who is the oldest

An insured should receive necessary claim forms within _____ days after notice of claim. A. 15 B. 20 C. 5 D. 10

The correct answer is A According to the Claims Forms Provision (a Mandatory Uniform Provision), the insured should receive the necessary claim forms within 15 days after notice of claim

Generally, an insurer may defer the granting of a policy loan for up to ______ months. A. 9 B. 6 C. 3 D. 12

The correct answer is B An insurer, by law, can defer granting a policy loan for up to 6 months

A licensed business entity acting as an insurance agency must do which of the following? A. Notify the Bureau of Insurance within 30 days if planning on conducting business under a fictitious name B. Provide a copy of its business plan and receive approval from the Commission C. Renew its license every 5 years D. Submit its application within 10 days of becoming licensed as a producer

The correct answer is A

D has an accident death and dismemberment policy with a $200,000 principal sum and a $100,000 capital sum. While mowing the lawn, D cut off a finger. How much will the policy pay? A. 0 B. $50,000 C. $100,000 D. $200,000

The correct answer is A An accidental death and dismemberment policy will not pay for fingers or toes since they are not considered to be limbs

Under Virginia laws pertaining to insurance information and privacy protection which is one of the following is not one of its stated purposes? A. enabling agents and consultants to obtain reasons for any adverse underwriting decisions B. maintaining a balance between the insurance industry's need for information and the public's need for fairness and minimal intrusion C. limiting the disclosure information D. Enabling individuals to understand what information can be, or has been, collected and provide them with access to information to verify or dispute that information

The correct answer is A Enabling applicants and policyholders to obtain reasons for any adverse underwriting decisions is one of the stated purposes of the Virginia laws pertaining to insurance information and privacy protection

Which one of the following regarding Health Maintenance Organizations (HMOs) is false? A. enrollees in HMOs must utilize the primary care physician (PCP) selected by the HMO based on where the subscriber resides at the time of application B. HMOs must offer out-of-services, both for emergencies and indemnity benefits C. HMOs may only be solicited by licensed life and health agents D. Each HMO must provide an evidence of coverage to each subscriber

The correct answer is A Enrollees in HMOs have the right to select any primary care physician (PCP) from among those contracted with the HMO's network of providers

All of the following are risks to the life settlement purchaser, except: A. the insured dies sooner than expected B. the third party runs out of funds to pay on-going premiums C. the insurer becomes insolvent D. the insurer will not honor the claim based on lack of insurable interest

The correct answer is A If the insured dies sooner than expected then the purchased will achieve a greater return than they had planned on

In a Medicare Supplement replacement sale, if the original policy has been in force for less than _____ months, the replacing insurer shall waive any time period applicable to preexisting conditions to the extent that they have already been satisfied under the original policy A. 6 B. 3 C. 9 D. 12

The correct answer is A In a Medicare Supplement replacement sale, if the original policy has been in force for less than 6 months, the replacing insurer shall waive any time periods applicable to preexisting conditions to the extent that they have already been satisfied under the original policy

A long-term care policy typically provides daily benefits? A. for 2 years, 5 years, to age 65, or lifetime B. as long as the income lasts C. up to age 65 D. for the life of the insured regardless for the stated benefit period

The correct answer is A Long-term care daily benefit are paid for a specific number of years, to a certain age, such as age 65, or for the life of the insured. The benefit period is stated in the policy

Which of the following is not covered by Medicare Part A? A. outpatient hospital treatment B. hospice care C. hospitalization D. post hospital skilled nursing facility care

The correct answer is A Part A is Hospital Insurance mainly providing coverage for inpatient services. Outpatient services are covered in Part B

Variable Whole Life has all of the following features, except: A. partial surrender are allowed B. the premium is determined by the insurer and remains fixed and level throughout the contract C. the owner may select which separate account they want their premium to be invested in D. the policy provides for both a general account and a separate account

The correct answer is A Partial surrenders are not allowed from a variable whole life policy

How much of a cash value policy loan will an insurer normally grant with a variable type policy? A. 75-90% B. 80-90% C. 100% D. 50-75%

The correct answer is A Policy loans are available from either the general account or the separate account. Typically 75-90% of the cash value can be borrowed against

After enrolling in Medicare and purchasing a supplement, Rachel withdrew $2,000 from her HSA. She used $600 to pay her Medicare Supplement premium, $200 for out of pocket medical expenses, and the remaining $1,200 on a trip to celebrate her retirement. When preparing her taxes for the year, she discovered that: A. $1,200 was subject to income tax B. $2000 was subject to income tax and a 20% penalty C. $1,200 was subject to income tax plus a 20% penalty D. The entire amount was tax free

The correct answer is A Rachel must pay income tax on the $1,200, but not the 20% penalty, because she is at least 65 years of age, as indicated by the fact that she was eligible for Medicare, a Medicare supplement and retired

Which of the following is a typical benefit period for a group short-term disability benefit? A. 52 weeks B. 2 years C. to age 65 D. 5 years

The correct answer is A Short-term disability income plans are characterized by maximum benefits for periods of rather short duration, such as 13,26, or 52 weeks

Which of the following Whole Life Insurance policies has the lowest annual premium payment per $1,000 of coverage for a 35-year-old, all other factors being equal? A. ordinary straight whole life B. 30-pay ordinary whole life C. limited pay ordinary whole to age 85 D. 20-pay ordinary whole life

The correct answer is A The longer the premium-paying period, the lower the annual premium. A $100,000 Ordinary Straight Whole Life Policy spread the payments out over a longer period of time than a limited premium payment policy

All advertisements must be approved by the ________, regardless of who writes, creates, designs, or presents them. A. insurer B. commissioner C. agency D. NAIC

The correct answer is A All advertisements must be approved by the insurer, regardless of who writes, creates, designs, or presents them

Which provisions is an Optional Uniform Provision? A. relation of earnings to insurance B. claim forms C. payment of claims D. physical examination

The correct answer is A Relation of Earnings to Insurance is an Optional Uniform Provision. The other choices are Mandatory Uniform Provisions

Which statement is incorrect regarding COBRA? A. the employee or beneficiary must respond to the notification of his/her right to continue coverage within 90 days, if he/she wants to continue the coverage B. evidence of insurability is not required to continue coverage under COBRA C. the employer may require the former employee or beneficiary to pay an amount equal to 102% of the premium D. coverage continues for 29 months for individuals receiving Social Security disability

The correct answer is A The employee or beneficiary must notify the employer within 60 days if he/she wants to continue the coverage

Agents who want to sell long-term care partnership policies must complete an initial training program of no less than ______ hours. A. 8 B. 3 C. 4 D. 6

The correct answer is A. Agents who want to sell long-term care partnership policies must complete an initial program of no less than 8 hours

Which statement is inaccurate regarding the Change of Occupation Provision? A. the insured must notify the insurer of a change of occupation, or the policy will be canceled B. if the insured changes to a more hazardous occupation, benefits will be reduced to the amount which the premiums paid would purchase at the more hazardous occupation C. if the insured works at two occupations, rate for the most hazardous occupation will be charged D. if the insured changes to a less hazardous occupation, he/she may apply for a rate reduction

The correct answer is A. Failure to notify the insurer of a change of occupation will not result in cancellation of the policy

An insured should receive necessary claim forms within _____ days after notice of claim. A. 5 B. 15 C. 20 D. 10

The correct answer is B According to the Claim Form Provision (a Mandatory Uniform Provision), the insured should receive the necessary claim forms within 15 days after notice of claim

An insurance _______ is an individual or business entity acting as an independent contactor for the client in exchange for a fee or other compensation. A. agent B. consultant C. advisor D. broker

The correct answer is B An insurance consultant is an individual or business entity acting as an independent contractor for the client in exchange for a fee or other compensation

Which of the following limitations is not included in most dental expense insurance plans? A. coinsurance B. deductibles for preventative care C. coverage only for the least expensive treatment D. deductibles for restorative care

The correct answer is B Dental expense plans typically waive deductibles for preventive care

If an insured suffers a dismemberment under the AD&D policy, which of the following will provide benefit payouts to the beneficiary? A. principal sum B. capital sum C. capital funds D. principal investments

The correct answer is B Dismemberment benefits payable under an AD&D policy are referred to as the capital sum

__________ refers to the jurisdiction where an insurer was formed or incorporated A. authorized B. domicile C. admitted D. approved

The correct answer is B Domicile refers to the jurisdiction either state or country where an insurer was formed or incorporated

The nonforfeiture option that provides the most amount of coverage is: A. automatic premium loan B. extended term C. reduced paid-up D. cash surrender value

The correct answer is B Extended term provides the most amount of coverage for the least amount of time, whereas reduced paid-up provides the least amount of coverage for the longest period of time

Insurers and agents must have _________ grounds to believe a recommendation to purchase or exchange an annuity is suitable for the consumer based on facts disclosed by the consumer that pertain to his or her financial situation and financial needs A. professional B. reasonable C. fiduciary D. defensible

The correct answer is B Insurers and agents must have reasonable grounds to believe a recommendation to purchase or exchange an annuity is suitable for the consumer based on facts disclosed by the consumer that pertain to his or her financial situation and financial needs

An insured forgets to pay his insurance premium. Instead of the policy lapsing, the premium is paid by the company. This would suggest that a __________ policy was purchased. A. decreasing term B. whole life C. level term D. renewable term

The correct answer is B Only cash value policies can provide for missed premium payments to be paid with the policy's cash value through an automatic premium loan

Which of the following is not covered with Medicare Part A? A. post-hospital skilled nursing care B. outpatient hospital care C. semiprivate hospital room D. general nursing and hospital services

The correct answer is B Outpatient care is covered under Medicare Part B

Of the following listed choices, which is true as it pertains to Medicare Part A? a. It covers all prescription drugs. b. It is prepaid through FICA taxes and is automatic when that worker qualifies for social security benefits. c. All recipients pay a monthly premium. d. Provides coverage for outpatient services.

The correct answer is B Part-A Hospital Insurance (inpatient) coverage is automatic for all eligible people and is financed by a payroll tax on employers and employees

When are dividend payments received by a policyholder fully taxable? A. when the policyowner has adjusted gross income in excess of $200,000 B. when all the premiums paid in have been fully recovered C. When the cash value of the policy first exceeds the gross premiums paid in to the policy D. when the policy's benefits have increased by more than 20%

The correct answer is B Policy dividends become taxable only after all the premiums paid in have been recovered. Subsequent dividend payments become fully taxable as income

Which of the following is NOT a dividend option? A. paid in cash B. reduced paid-up C. paid-up additions D. accumulate at interest

The correct answer is B Reduced paid-up is a nonforfeiture option. The other answer choices are dividend options

A short-term medical insurance plan could best be described as? A. an HMO B. an interim plan C. a permanent plan D. a medical supplement plan

The correct answer is B Short-term plans are interim plans designed to immediately fill coverage gaps temporarily for individuals who have lost coverage due to change in employment, need proof of insurance to participate in special activities, or need coverage while waiting to become eligible for Medicare.

The person offering him/herself or another person to be insured by the contract best defines the: A. beneficiary B. applicant C. policyowner D. insured

The correct answer is B The applicant is the party making the application, offering him/herself or another to be insured. The applicant may possibly also be the insured and/or policyowner, but not necessarily

An employer group health insurance sponsor does all of the following, except: A. pays the premium B. issue the policy C. apply for coverage D. provide underwriting information

The correct answer is B The group sponsor applies for coverage, provides information for underwriting, maintains the policy, and makes premium payments. Only insurers issue policies

A married couple is interested in a life insurance policy settlement option that will guarantee them both an income for as long as they live, an amount which reduces to 2/3 of that initial amount after one of them dies. What should they select? A. dual life income B. life income and joint survivor C. joint life income D. life income period certain

The correct answer is B The life income joint and survivor settlement option pays a periodic benefit until the lasting surviving recipient dies. However, depending upon which survivor option is chosen (eg. joint-and-full, joint and 2/3, joint and 1/2), the benefit paid following the first death could be different

Insurers include provisions in contracts to help reduce unnecessary claims and the overpayment of claims. Which of the following is not one of those provisions? A. concurrent review B. consideration clause C. mandatory second surgical option D. emergency services

The correct answer is B The other choices are Managed Care Provisions designed to contain costs. The Consideration Clause stipulates that the payment of the first premium and the statements in the application are the applicant's consideration, and the insurer's consideration is the promise to pay within the contract terms

The time limit on Certain Defenses (incontestable) period is _______ years under individual health and disability contracts A. 5 B. 2 C. 7 D. 3

The correct answer is B The time limit on certain defenses (incontestable) period is 2

All of the following are traditional whole life policy nonforfeiture values, except: A. reduced paid-up insurance B. renewable and convertible features C. cash surrender values D. extended term insurance

The correct answer is B The traditional whole life policy builds nonforfeiture values, such as cash surrender values, reduced paid-up insurance, and extended term insurance

All of the following are false statements regarding group disability plans, expect: A. there is individual medical underwriting B. the plans are typically written on a nonoccupational basis C. the plans usually cover work-related disabilities D. benefits are not available to individuals employed beyond age 65

The correct answer is B There is no individual underwriting, there will be a minimum number of participants required, and those employed beyond 65 are protected under the Age Discrimination in Employment Act. The plans are written on a nonoccupational basis

Which of the following allows reimbursement benefits to be paid directly to medical provides? A. change of insured B. assignment of benefits C. precertification D. schedule of benefits

The correct answer is B When a policy pays on a reimbursement basis, benefits are paid directly to the insured. The exception to this is if the insured assigned benefits to the provider(s), in which case they would then be paid directly to the provider.

Dividends issued by Stock insurers are paid to: A. service providers B. agencies C. stockholders D. policyholders

The correct answer is C Stockholders may receive taxable corporate dividends as a share of the stock insurer's profit

A licensed business entity acting as an insurance agency must do which of the following? A. renew its license every 5 years B. provide a copy of its business plan and receive approval from the commission C. notify the Bureau of Insurance within 30 days if planning on conducting business under a fictitious name D. submit its application within 10 days of becoming licensed as a producer

The correct answer is C

What is the minimum number of hours of continuing education courses an agent must complete in the area of ethics? A. 1 B. 4 C. 3 D. 2

The correct answer is C 3 hours of continuing education in each biennium must address the topics of ethics, which may include Virginia insurance laws and regulations

Which of the following is a true characteristic of a Variable Universal Life policy? A. the policy has a fixed premium schedule B. the insurer bears all risks in accumulating cash value C. as long as there is sufficient cash value to cover policy expenses when due, the insured is not required to pay the planned premium D. the policy requires only a life license to sell

The correct answer is C A characteristic of universal life insurance is that there is no requirement to pay any premium other than the first. As long as there is sufficient cash value to pay policy expenses (cost of insurance, riders, and other fees) when due, the policy remains in force

All of the following are correct pertaining to Decreasing Term, except: A. the death benefit increase B. the premium stays level C. the premium declines throughout the term of the policy D. its most common use is mortgage protection

The correct answer is C A decreasing term policy has a death benefit that reduces over a defined number of years, but the premium remains the same in all years

All advertisements must be approved by the ________, regardless of who writes, creates, designs, or presents them A. agency B. NAIC C. insurer D. Commissioner

The correct answer is C All advertisements must be approved by the insurer, regardless of who writes, creates, designs, or presents them

When the death of an insured occurs within a specified period, causing the policy to pay double or triple benefits, this policy must have which of the following riders? a. Increased Death Benefit Rider b. Enhanced Settlement Rider c. Accidental Death Rider d. Accelerated Benefit Rider

The correct answer is C Also known as the Double Indemnity Rider, the policy pays the stated multiple of the face amount should the insured die as the result of an accident

An insurance ________ is an individual or business entity acting as an independent contractor for the client in exchange for a fee or other compensation A. agent B. broker C. consultant D advisor

The correct answer is C An insurance consultant is an individual or business entity acting as an independent contractor for the client in exchange for a fee or other compensation

All of the following are Payment Options available upon annuitization, except: A. Life income joint and survivor B. life income with refund C. interest only D. life income period certain

The correct answer is C Annuity payment options are nearly identical to life insurance Settlement options, except for Interest Only

Basic expense policies typically cover all of the following, except: A. medical expenses B. hospital expenses C. routine vision (optometry) or dental care expenses D. miscellaneous expenses

The correct answer is C Basic expense polices (basic hospital, surgical, and medical expense) typically do not cover routine vision or dental care

Every group hospital, medical, surgical, or major medical policy in Virginia requires group policyholders to provides written notice of the continuation of coverage option to each covered person within ____ days of the date the policyholder learns eligibility was lost. A. 31 B. 28 C. 14 D. 21

The correct answer is C Every group hospital, medical, surgical, or major medical policy in Virginia requires group policyholders to provide written notice of the continuation of coverage option to each covered person within 14 days of the date of the policyholder learns eligibility was lost

_____________ is the process of selection, classification, rating, and determining if someone is insurable A. field underwriting B. the agent's report C. home office underwriting D. completing the application

The correct answer is C Home office underwriting is the process of selection, classification, and rating, determining if someone is insurable

When the exchange of value is unequal, the contract is considered: A. fraudulent B. unilateral C. aleatory C. personal

The correct answer is C In Aleatory Contracts, the parties typically exchange unequal values as is the case when comparing the premium payment to the coverage amount

Before a policy will be issued, an insurable interest must exist between the owner (applicant) and the A. producer B. insurer C. insured D. beneficiary

The correct answer is C In order for a contract to be valid, an insurable interest must exist between the owner (applicant) and insured

In order to maintain and renew an insurance license, agents and consultants must complete continuing education courses, related to their licensed class of insurance, every ____ years. A. 5 B. 4 C. 2 D. 3

The correct answer is C In order to maintain and renew an insurance license, agents and consultants must complete continuing education courses, related to their licensed class of insurance, every 2 years

Which provision is an Optional Uniform Provision A. claim forms B. payment of claims C. misstatement of age D. physical examination

The correct answer is C Misstatement of age is an Optional Uniform Provision. All of the others answers are Mandatory Uniform Provisions

Normally, when the insurer determines that the insured is an acceptable risk, the insurer will send the policy to the ____________. A. policyowner B. beneficiary C. producer D. insured

The correct answer is C Normally, the insurer will mail the issued policy to the producer for delivery so that if any outstanding premium is due, it can be collected, if a statement of good health is required, it can be obtained, and any questions the applicant has about the policy can be answered

For the most part, the highest authority for insurance regulation is A. the Interstate Commerce Commission (ICC) B. the National Association of Insurance Commissioners (NAIC) C. the individual states D. the Federal Trade Commission (FTC)

The correct answer is C States have the authority to regulate insurance without interference from federal regulation, unless federal law specifically provides otherwise

Beth owns a 20-Pay Life participating policy. She has decided that the dividends should be applied toward future premiums. Which Dividend Option did she choose? A. paid-up option B. accumulate at interest C. premium reduction D. cash

The correct answer is C The Dividend Option that allows the dividends to be applied toward the next premium due is Premium Reduction

When a policy lapses due to nonpayment of premium, which nonforfeiture option is the automatic option? A. reduced paid-up B. automatic premium loan C. extended term D. cash surrender value

The correct answer is C The automatic nonforfeiture option is extended term. Automatic premium loan is a policy provision which must be elected by the policyowner in advance for the lapsing policy

Which of the following is not a Mandatory Uniform Provision of an Accident and Health policy? A. proof of loss B. time limit on certain defenses C. wavier of premium D. payment of claims

The correct answer is C The other choices are Mandatory Uniform Provisions. Waiver of Premium is a provision that may or may not be included

The _______ has the right to change the premium mode A. revocable beneficiary B. insured C. policyowner D. irrevocable beneficiary

The correct answer is C The policyowner has the right to change the premium mode

When can a policyowner make a change in the policy's coverage or other benefits if an irrevocable beneficiary has been named? A. at any time B. after obtaining the insurer's consent C. after the irrevocable beneficiary dies D. after obtaining a court order

The correct answer is C The policyowner may not change an irrevocable beneficiary unless the beneficiary dies or provides written consent for the change. If an irrevocable beneficiary is named, the owner may not make changes to the policy that affect the coverage or benefits without consent of the beneficiary

What are the two types of life insurance assignments? A. complete and partial B. entire amount and percentage amount C. absolute and collateral D. revocable and irrevocable

The correct answer is C The two types of assignment are Collateral (temp.) and Absolute (permanent)

Which statement is incorrect concerning an Accidental Death and Dismemberment Policy? A. it usually provides that the death benefit (principal sum) will also be paid if the insured loses sight in both eyes or loses any two limbs B. a smaller amount (capital sum) may be paid for the loss of sight in one eye or the loss of one limb C. it provides a specified payment for a specified injury D. it may be written separately or added to a Health/Disability or Life Policy as a rider

The correct answer is C This describes a Limited Accident Policy, not an Accidental Death and Dismemberment Policy

Which provision states that the insurance company must pay claims immediately? A. relation of earnings to insurance B. legal actions C. time of payment of claims D. payment of claim

The correct answer is C Time of Payment of Claims (a mandatory uniform provision) stipulates that claims are to paid immediately upon written proof of loss

Once issued, the application becomes part of the ___________, when attached. A. agent's report B. part 2 C. entire contract D. part 1

The correct answer is C To be regarded a part of the contract, the application for insurance must be included with the rest of the policy. It may not be incorporated 'by reference'

Which of the following is true of traditional commercial insurers? A. they offer only group plans of insurance B. they traditionally market service type contracts that pay directly to the provider of the service C. they traditionally market reimbursement-type contracts that pay directly to the insured D. They offer only individual plans of insurance

The correct answer is C Traditional commercial insurers market reimbursement contracts that pay directly to the insured

Dividends if declared are paid __________. A. semi-annually B. quarterly C. annually D. monthly

The correct answer is C Unlike corporate stocks which pay dividends typically on a quarterly basis policy dividends if declared are paid out on an annual basis

Which statement is true regarding taxation of health insurance? A. the benefits received from a group Accidental Death and Dismemberment Policy are taxable to the recipients B. the benefits received from a personally owned Disability Income Policy are subject to federal income taxes C. the benefits received from a group Disability Income Policy paid entirely by the employer are fully taxable as income to the employee D. the benefits received from a qualified Long-term Care Policy are usually subject to federal income tax

The correct answer is C When an employer pays the full cost of disability income insurance for the employee, any benefit received is fully taxable to the employee

Own occupation is the: A. inability to perform one or more duties of one's occupation B. inability to perform all duties of any occupation for which one is qualified based upon education, training, and experience C. inability to perform all duties of one's own occupation D. presumption an individual is disabled due to the loss of sight, hearing, speak, or the loss of 2 limbs

The correct answer is C own occupation requires the insured's inability to perform the main duties of one's own occupation

Producer Andy is sent a newly issued policy by his insurer. Andy should now: A. maintain the policy securely in his office files B. notify the insured by phone that a policy has been insured C. visit the insured in person to deliver the policy D. review the policy for accuracy and return it to the insurer with his approval

The correct answer is C Producers must make sure that policies are delivered to the insureds, preferably in person

All of the following are things a producer should do when meeting with the client after the policy has been issued, except: A. review any endorsements and riders B. Explain the policy to the applicant C. Disclose the amount of commission earned on the sale D. Go over the benefits and ratings

The correct answer is C. The producer should explain the policy to be sure the policyowner/insured understands the benefits, including any ratings, endorsements, and riders

An insurer has the right to request a physical exam of an autopsy to determine its liability to pay benefits. This request may be made under which provision A. proofs of loss B. proof of disability or death C. intoxicants and narcotics D. physical exam & autopsy

The correct answer is D According to the Physical Examination and Autopsy Provision (a Mandatory Uniform Provision), the insurer, at its own expense, has the right to request a physical exam or autopsy where not prohibited by law

All individuals and group health insurance policies providing coverage for the insured's dependents must provide coverage for adopted children: A. after providing evidence of insurability B. 31 days after birth C. 31 days after being placed for adoption D. from the date of placement of adoption

The correct answer is D Adopted children are covered at the date of placement for adoption

All group life insurance policies must contain a provision that entitles a covered person to convert group coverage to an individual policy if the employment or membership terminates, without being required to provide evidence of insurability, provided an application and initial premium are submitted to the insurer within _______ days of the termination of the group coverage A. 45 B. 60 C. 90 D. 31

The correct answer is D All group life insurance policies must contain a provision that entitles a covered person to convert group coverage to an individual policy if the employment or membership terminates, without being required to provide evidence of insurability, provided an application and initial premium are submitted to the insurer within 31 days of the termination of group coverage

Field underwriting is very important: A. for individual insurance only B. due to the risk of morale hazard C. for policies that do not require home office underwriting D. due to the risk of a moral hazard

The correct answer is D An agent's personal contact and assessment of an individual or helps confirm whether the information provided on an application is accurate. The possibility that an applicant might, for his or her own benefit, provide information that does not accurately reflect the level of risk, is considered a moral hazard. A morale hazard refers to indifferent attitude towards being involved in risky behavior while coverage is in force.

Business entities must designate a licensed ______ to be responsible for the business entity's compliance with Virginia insurance laws, rules, and regulations A. attorney B. principal C. compliance officer D. producer

The correct answer is D Business entities must designate a licensed producer to be responsible for the business entity's compliance with VA insurance laws, rules, and regulations.

Generally, children receive Social Security Survivor Benefits until age ________. A. 16 B. 17 C. 15 D. 18

The correct answer is D Children generally receive benefits up to age 18. They may receive benefits up to age 19 only if they are still in school

Which one of the following regarding Health Maintenance Organizations (HMOs) is false? A. HMOs must offer out-of-area services, both for emergencies and indemnity benefits B. HMOs may only be solicited by licensed life and health agents C. Each HMO must provide an evidence of coverage to each subscriber D. Enrollees in HMOs must utilize the primary care physician (PCP) selected by the HMO based on where the subscriber resides at the time of application

The correct answer is D Enrollees in HMOs have the right to select any primary care physician (PCP) from among those contracted with the HMO's network of providers

All of the following are characteristics of Group Life Insurance, except: A. most states require a minimum number of enrollees at date of issue B. evidence of insurability is usually not required C. claims are not contestable after an employee has been covered for 2 years D. group is typically written utilizing Permanent Insurance

The correct answer is D Group Insurance is typically written on a Renewable Term basis. However, some insurers do make Permanent Insurance available

An insured has $25,000 annual renewable term life policy, orginially purchased on her birthday, April 1st of last year. She forgot to pay the $250 renewal premium, and dies in an accident on April 15th. The beneficiary will receive: A. $25,250 B. Nothing C. $24,750 D. $25,000 less the earned premium due

The correct answer is D If a death occurs during the grace period, only the earned premium may be deducted from the death benefit. The insurer cannot retain the entire annual premium, but is entitled to 15 days' premium (about $10.27 in this example). The beneficiary receives the balance of the death benefit

In general, _________ interviews are prohibited if they are conducted to obtain information in connection with an insurance transaction A. paramed B. consumer investigative C. field underwriting D. pretext

The correct answer is D In general, pretext interviews are prohibited if they are conducted to obtain information in connection with an insurance transaction

A Whole Life policyowner elects to use his dividends to pay off the sooner than originally planned. Which option allows this to occur? A. premium reduction option B. cash surrender option C. paid-up additions option D. paid-up option

The correct answer is D The Paid-Up option is designed so that at a future point the base policy is fully prepaid (i.e. no more premiums are due). In Paid-Up Additions, only the additions are paid up, not the base policy. Only a Whole Life can achieve paid-up status

Proof of loss is required within ________ days of loss A. 45 B. 180 C. 90 D. 60

The correct answer is D The Proof of Loss Provision (a Mandatory Uniform Provision) stipulates that the insured must generally provide proof of the loss within 90 days of the loss, or within the shortest time possible, but not exceeding 1 year unless the insured suffers legal incapacity

The annuity settlement option that pays out the highest monthly income for as long as the annuities lives, and leaves no residual value upon the annuitant's death, is the: A. life income joint and survivor option B. joint and life C. life income with refund option D. life income option

The correct answer is D The annuity Life Income Option (like the Life Income Settlement Option in life insurance) pays a benefit for as long as the annuitant lives, and upon death, all payment cease. It also provides the highest monthly income, all other factors being equal

Which underwriting source is primarily used when an application reveals conditions for which more medical information is required? A. agent's report B. inspection report C. Medical Information Bureau Report D. attending physician's statement

The correct answer is D The attending physician's statement would be ordered by the underwriter to secure the additional medical information

Mateo applies for an insurance policy that will have an annual premium payment of $1,000 ($510 semi-annually, $260 quarterly, and $100 monthly) if issued. Which of the following premium checks would be adequate consideration if he chose to pay monthly? A. $50 B $25 C. $75 D. $100

The correct answer is D The insured's consideration is the full modal premium he/she elects to pay for the policy if issued as applied for. Consideration also includes the application

Which of the following Whole Life insurance policies has the highest annual premium payment per $1,000 coverage for a 35-year-old, all other factors being equal? A. 30-pay ordinary whole life B. ordinary straight whole life C. limited pay ordinary whole life to age 85 D. 20-pay ordinary whole life

The correct answer is D The shorter the premium-paying period, the higher the annual premium

Which of the following is not a stated purpose of the minimum standards for individual policies? A. provide for full disclosure in the sale of individual accident and sickness policies B. eliminate provisions contained in individual accident and sickness insurance policies which may be misleading or unreasonably confusing in connection either with the purchase of coverages or with the settlement of claims C. provide reasonable standardization and simplification of terms and coverages of individual accidents and sickness insurance policies D. facilitate insurer and producer understanding and comparison

The correct answer is D To facilitate public understanding and comparison is a stated purpose of the minimum standards for individual policies

The Social Security blackout period for surviving spouses begins when the youngest child reaches age ____, and ends when the surviving spouse reaches ages ______. A. 18/65 B. 18/60 C. 16/62 D. 16/60

The correct answer is D When the youngest child reaches age 16, the widow's/widower's blackout period begins. It continues until a surviving (non-remarried) spouse reaches age 60

Which of the following allows reimbursement benefits to be paid directly to medical providers? A. schedule of benefits B. precertification C. change of insured D. assignment of benefits

The correct answer was D When a policy pays on a reimbursement basis, benefits are paid directly to the insured. The exception to this is if the insured assigned benefits to the provider(s), in which case they would then be paid directly to the provider