insurance exam questions

M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim? A. $2,000 B. $1,760 C. $1,600 D. $400

$1,600 2,200-200 deductible x 80%

under the USA patriot act, insurers are required to report receipt of cash payments in excess of: A. $10,000 B. $7,500 C. $5,000 D. $2,500

$10,000

An insured owns an individual Disability Income policy with a 30-day Elimination Period for sickness and accidents and a monthly indemnity benefit of $500. If the insured is disabled for 3 1/2 months, what is the MAXIMUM amount he would receive for an approved claim? A. $500 B. $1,000 C. $1,250 D. $1,750

$1,250 3.5 months - 1 month elimination period = 2.5 months. 2.5 months X $500 monthly indemnity = $1,250.

Q is hospitalized for 3 days and receives a bill for $10,100. Q has a Major Medical policy with a $100 deductible and 80/20 coinsurance. How much will Q be responsible for paying on this claim? A. $2,100 B. $2,020 C. $2,000 D. $100

$2,100 (10,000 x .20 + $100 deductible = 2,100)

An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable? A. no deduction allowed B. $2,500 C. $2,000 D. $1,000

$2,500

K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? A. return of premiums paid B. cash value plus interest C. $20,000 death benefit D. face amount plus interest

$20,000 death benefit

___ of personal life insurance premiums is usually deductible for federal income tax purposes A. 100% B. 75% C. 50% D. 0%

0%

premature IRA distributions are assessed a penalty tax of: A. 0% B. 10% C. 15% D. 20%

10%

what is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan? A. 25 B. 50 C. 100 D. 250

100

a producer must notify the commissioner of insurance within ___ days of an address change A. 15 B. 30 C. 45 D. 60

30

any criminal charges taken against a producer must be reported to the commissioner of insurance by the producer within how many days of the final disposition? A. 15 B. 20 C. 25 D. 30

30

all long-term policies purchased in Mississippi MUST contain a free-look period of A. 10 days B. 15 days C. 20 days D. 30 days

30 days

N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase? A. 30 pay life B. term to age 70 C. universal life D. adjustable life

30 pay life

which of the following types of policies pays a benefit if the insured goes blind? A. universal life B. AD&D C. endowment D. adjustable life

AD&D

J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and receives a bill for $10,000, J would pay A. $1,600 B. $2,000 C. $3,600 D. $8,000

In this situation, ($2,000) + 20% of $8,000 the remaining bill ($1,600) = $3,600.

which of these arrangements allows one to bypass insurable interest laws? A. concealment B. indemnity contract C. contract of adhesion D. investor-originated life insurance

Investor-originated life insurance

a sole proprietor may use this plan ONLY if the employees of this business are included A. SEP plan B. Keogh pension plan C. Individual retirement account (IRA) D. SIMPLE plan

Keogh pension plan

under which system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured? A. HMO B. PPO C. EPO D. PLHSO

PPO

post-tax dollar contributions are found in: A. 401K investments B. traditional IRA investments C. SIMPLE investments D. Roth IRA investments

Roth IRA investments

which of the following are equity indexed annuities typically invested in? A. corporate bonds B. money market accounts C. municipal bonds D. S&P 500

S&P 500

Disability policies do NOT normally pay for disabilities arising from which of the following? A. accidents B. war C. negligence D. sickness

War

all students attending a large university could be covered by: A. a blanket policy B. a franchise policy C. a jumbo group policy D. a commercial insurance policy

a blanket policy

which of these is an element of a variable life policy? A. a fixed, level premium B. insurer assumes the investment risk C. no investment risk to the policyowner D. rate of returns are guaranteed

a fixed, level premium

A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as A. a fraternal benefit society B. a stock insurer C. a mutual insurer D. the Life and Health Insurance Guaranty Association

a fraternal benefit society

P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount? A. accelerated benefits provision B. entire contract C. accidental death and dismemberment clause D. consideration clause

accidental death and dismemberment clause

a policyowner may generate taxable income from which of the following dividend options? A. nonforfeiture B. cash C. accumulation at interest D. reduced premium

accumulation at interest

which of the following actions must be taken by an insurance company that wishes to conduct business in Mississippi? A. acquire a certificate of authority B. license 20 producers C. build a home office in this state D. obtains $1,000,000 bond

acquire a certificate of authority

Which premium schedule results in the lowest cost to the policyowner? A. semi-annual B. monthly C. quarterly D. annual

annual

what action can a policyowner take if an application for a bank loan requires collateral? A. utilize accelerated benefits provision B. borrow against policy cash value and use as a down payment C. assign policy ownership to the bank D. name bank as beneficiary

assign policy ownership to the bank

when does a guaranteed insurability rider allow the insured to buy additional coverage? A. 10 year increments B. a future dates specified in the contract with proof of insurability required C. at future dates specified in the contract with no evidence of insurability required D. at any time while policy is active

at future dates specified in the contract with no evidence of insurability required

at what point must a producer deliver a notice to applicant regarding replacement of health insurance? A. within 5 days of the sales presentation B. after policy has been in effect for 30 days C. at the time of application D. when the policy is issued

at the time of application

in order to establish a health reimbursement arrangement (HRA), it MUST: A. be offered in conjunction with other employer provided health benefits B. limit the benefits to prescription drugs only C. be established by the employer D. limit the amount of money the employee can contribute toward the account

be established by the employer

T is the policyowner for a life insurance policy with an irrevocable beneficiary designation. If T wishes to change the beneficiary, T must obtain permission from the A. payor B. agent C. beneficiary D. commissioner of insurance

beneficiary

P loses an arm in a farm accident and is paid $10,000 from his accidental death and dismemberment policy. This benefit is known as the A. dismemberment sum B. capital sum C. principal sum D. remnant sum

capital sum

the situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n): A. closed panel B. open panel C. co-op panel D. capitation panel

closed panel

which of the following reimburses its insureds for covered medical expenses? A. health maintenance organizations B. preferred provider organizations C. commercial insurers D. service providers

commercial insurers

B is a producer who primarily writes insurance business on his family. Which of the following is B engaged in? A. rebating B. controlled business C. unfair discrimination D. sliding

controlled business

what group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability? A. entire contract B. owner's rights C. nonforfeiture options D. conversion

conversion

which of the following features of a group term life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability? A. owner's right clause B. incontestable period C. insuring agreement D. conversion privilege

conversion privilege

the type of annuity that can be purchased with one monetary deposit is call a(n): A. single deposit annuity B. single premium annuity C. fixed annuity D. immediate annuity

immediate annuity

If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act? A. primary beneficiary's estate B. primary beneficiary's next of kin C. insured's estate D. insured's contingent beneficiary

insured's contingent beneficiary

in Mississippi, an element of an insurance transaction would be A. ordering an MIB report B. setting up the sales appointment C. issuing an insurance contract D. determining how much coverage is needed

issuing an insurance contract

the health insurance program which is administered by each state and funded by both the federal and state governments is called: A. Long-term care B. medicaid C. medicare supplemental program D. medicare

medicaid

a policyowner is allowed to pay premiums more than once a year under which provision? A. insuring B. consideration C. payor D. mode of premium

mode of premium

which statement is true regarding a minor beneficiary? A. normally, the death proceeds are required to be held in trust until the beneficiary reaches the age of 21 B. normally, a guardian is required to be appointed in the beneficiary clause of the contract C. the minor must pay the debts of the insured's estate before receiving any of the proceeds D. the minor is entitled to receive the death proceeds immediately

normally, a guardian is required to be appointed in the beneficiary clause of the contract

in an individual retirement account (IRA), rollover contributions are: A. subject to capital gains tax B. subject to ordinary income tax C. partially limited by dollar amount D. not limited by dollar amount

not limited by dollar amount

which of these statements concerning an individual straight life annuity is accurate? A. life expectancy of the annuitant is not a factor B. the payments are received tax-free C. only available to employees of nonprofit charitable, educational, and religious organizations D. payments are made to an annuitant for life

payments are made to an annuitant for life

which of the following provisions guarantees that premiums will be waived if a juvenile life policyowner becomes disabled? A. family maintenance clause B. payor clause C. assignment provision D. automatic premium loan provision

payor clause

What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision? A. file a lawsuit B. submit the claim in any form C. wait for the claim form to arrive D. resubmit the request for a claim form

submit the claim in any form

which of the following services is NOT included under hospitalization expense coverage? A. daily room and board B. surgical fees C. intensive care D. miscellaneous expenses

surgical fees

which statement is TRUE regarding a group accident & health policy issued to an employer? A. neither the employer or employee are policyowners B. the employer is issued a certificate of coverage and each employee receives a policy C. the employer receives the policy and each employee is issued a certificate D. both the employer and employee are policyowners

the employer receives the policy and each employee is issued a certificate

medicare is intended for all of the following groups, EXCEPT: A. those enrolled as a full-time student B. those receiving social security disability benefits for at least 24 months C. those afflicted with chronic kidney failure D. those 65 and older

those enrolled as a full-time student

how does a typical variable life policy investment account grow? A. tied to price of gold B. through mutual funds, stocks, bonds C. based on returns from insurer's general account D. tied to treasury bills

through mutual funds, stocks, bonds

P is self-employed and owns an Individual Disability Income policy. He becomes totally disabled on June 1 and receives $2,000 a month for the next 10 months. How much of this income is subject to federal income tax? A. $20,000 B. $14,000 C. $6,000 D. $0

$0

T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? A. $1,000,000 B. $500,000 C. $250,000 D. $0

$0

K pays on a $20,000 20-year endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? A. return of premiums paid B. cash value plus interest C. $20,000 death benefit D. Face amount plus interest

$20,000 death benefit

an employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a: A. $125,000 individual whole life policy B. $25,000 modified whole life policy C. $25,000 individual term life policy D. $25,000 individual whole life policy

$25,000 individual whole life policy

An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses? A. 0 B. $3,000 C. $8,000 D. $11,000

$3,000 same way to solve above

P purchases a $50,000 whole life insurance policy in 2005. One of the questions on the application asks if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary? A. premiums paid plus interest B. nothing. claim will be denied C. $50,000 minus any outstanding policy loans D. $100,000 because the cause of death was accidental

$50,000 minus any outstanding policy loans

an individual has a major medical policy with a $5,000 deductible and an 80/20 coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred? A. $2,000 B. $5,000 C. $7,000 D. $10,000

$7,000

the commission of insurance MUST give ___ days notice before holding a hearing regarding a producer's unfair practice A. 10 B. 20 C. 30 D. 40

10

all of the following statements about traditional individual retirement accounts are false EXCEPT: A. 10% penalty is applied to withdrawals after age 59 1/2 B. withdrawals are normally tax-free to the recipient C. 10% penalty is applied to withdrawals before age 59 1/2 D. contributions are not tax deductible

10% penalty is applied to withdrawals before age 59 1/2

XYZ company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is: A. 25% B. 50% C. 75% D. 100%

100%

a long-term care policy sold in Mississippi must provide benefits for a MINIMUM of A. 9 months B. 12 months C. 15 months D. 18 months

12 months

An insurer must provide an insured with claim forms within __ days after receiving notice of a loss. A. 5 B. 10 C. 15 D. 20

15

a 15-year mortgage is best protected by what kind of life policy? A. modified whole life B. 15-year level term C. 15-year decreasing term D. adjustable life

15-year decreasing term

what year was the McCarran-Ferguson act enacted? A. 1944 B. 1945 C. 1946 D. 1947

1945

which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated? A. 1970- fair credit reporting act B. 1959- intervention by (SEC) the securities and exchange commission C. 1999- Financial services modernization act D. 1945- the McCarran-Ferguson act

1970- fair credit reporting act

what is the MINIMUM number of activities of daily living (ADL) an insured must be unable to perform to qualify for long term care benefits? A. 1 B. 2 C. 3 D. 4

2

An insured must notify an insurer of a medical claim within how many days after an accident? A. 10 B. 20 C. 30 D. 40

20

insurers may request a hearing within ___ if their policy is rejected A. 20 days B. 30 days C. 60 days D. 90 days

20 days

An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction? A. 10% is withheld for income taxes B. 20% is withheld for income taxes C. 30% is withheld for income taxes D. nothing is withheld

20% is withheld for income taxes

what type of policy would offer a 40-year old the quickest accumulation of cash value? A. paid-up at 65 B. 20-pay life C. 30-pay life D. straight whole life

20-pay life

A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct? A. straight life accumulates faster than limited-pay life B. 20-pay life accumulates cash value faster than straight life C. cash value accumulation of both 20-pay life and straight life depend on the insurer's financial rating D. 20-pay life and straight life accumulate cash value at the same rate

20-pay life accumulates cash value faster than straight life

An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision? A. 7 B. 10 C. 20 D. 31

31

According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid? A. 7 days B. 10 days C. 31 days D. 60 days

31 days

V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable? A. 6 months B. 5 months C. 4 1/2 months D. 4 months

4 months

Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits? A. 3 B. 4 C. 5 D. 6

5

What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan? A. 30% B. 40% C. 50% D. 60%

50%

An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age? A. 70 1/2 B. 65 C. 55 D 59 1/2

59 1/2

Qualified Long-Term Care policies may take into consideration an applicant's pre-existing conditions for a maximum of not more than __ month(s) prior to the effective date of coverage. A. 1 B. 6 C. 12 D. 24

6

long-term care policies sold in Mississippi may exclude coverage for pre-existing conditions for A. 6 months B. 8 months C. 12 months D. 18 months

6 months

how long does an individual have to "rollover" funds from an IRA or qualified plan? A. 60 days B. 90 days C. 120 days D. no limit

60 days

The individual most likely to buy a Medicare Supplement policy would be a(n) A. unemployed 64-year old female B. 62-year old male covered by medicaid C. 68-year old male covered by medicare D. uninsured 60-year old male

68-year old male covered by medicare

C is a key employee at ABC incorporated. If a key employee life policy is purchased on her life, which of these statements would be true? A. C is the policyowner, the insured, and the beneficiary B. ABC is the policyowner, C is the insured, and ABC is the beneficiary C. C is the policyowner and the insured, and ABC is the beneficiary D. ABC is the policyowner, C is the insured, and her husband is the beneficiary

ABC is the policyowner, C is the insured, and ABC is the beneficiary

all are true statements regarding the underwriting process, EXCEPT: A. signed consent from the applicant must be provided in order to test for AIDS and HIV virus B. AIDS and HIV virus exams can be conducted in a discriminatory fashion C. the cost of any examination is paid for by the insurer D. the original application is the primary source of information used in the underwriting process

AIDS and HIV virus exams can be conducted in a discriminatory fashion

E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? A. F B. The dissolved partnership C. E's family D. E's estate

F

Taking receipt of premiums and holding them for the insurance company is an example of: A. Commingling B. Misappropriation C. Theft D. Fiduciary responsibility

Fiduciary responsibility

Medicare part B does NOT cover: A. occupational therapy B. inpatient hospital services C. physician and surgeon services D. medical equipment rental

inpatient hospital services

which type of insurance offers permanent life coverage with premiums that are payable for life? A. credit life B. renewable term life C. whole life D. endowment

whole life

a return of premium life insurance policy is: A. a nonforfeiture option B. whole life and increasing life C. interest-sensitive D. variable life

whole life and increasing life

which of the following statements describes what an accident and health policyowner may NOT do? A. file a covered claim B. assign ownership C. cancel the coverage D. adjust the premium payments

adjust the premium payments

P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to A. R's estate B. Q's estate C. P and Q's estate D. P only

P only

which of these statements is INCORRECT regarding a preferred provider organization (PPO)? A. PPO's normally have more providers to choose from as compared to an HMO B. prices are negotiated in advance for PPO providers C. in-network PPO providers offer members better coverage of incurred expenses D. PPO's are NOT a type of managed care system

PPO's are NOT a type of managed care system

what is a responsibility of the commissioner of insurance? A. establishing sales quotas B. establishing insurance statutes C. administering insurance laws D. endorsing insurers

administering insurance laws

Information obtained from a phone conversation to the proposed insured can be found in which of these reports? A. agent's report B. MIB report C. inspection report D. attending physician's report

inspection report

A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following? A. guaranteed insurability rider B. aviation exclusion C. impairment rider D. accidental death benefit rider

aviation exclusion

the automatic premium loan provision is designed to: A. provide a source of revenue to the insurance company B. avoid a policy lapse C. allow a policyowner to request a policy loan D. allow a policyowner to take out additional coverage without evidence of insurability

avoid a policy lapse

john recently purchased a long-term care policy in Mississippi. John's policy does NOT need to contain A. a minimum benefit period of 12 consecutive months B. a guarantee of issue at age 65 C. a medically necessary rehabilitation or personal care service D. a benefit provided in a setting other than an acute care unit hospital

a guarantee of issue at age 65

what is medicare? A. a disability program B. a hospital and medical expense program C. offers assistance in making health insurance premiums D. Part D provides payment for surgeon expenses

a hospital and medical expense program

which statement is TRUE regarding a variable whole life policy? A. a minimum guaranteed death benefit is provided B. it is a combination of an endowment and a increasing term policy C. its premiums and benefits are variable D. it has guaranteed dividends

a minimum guaranteed death benefit is provided

which of these is NOT a reason for a business to buy key person life insurance? A. the reduction in sales as a direct result from death of the key employee B. a void in leadership if the key person were to die C. the loss of company revenues while a replacement is being sought D. a pension deficiency if the key employee dies

a pension deficiency if the key employee dies

ABC insurance company is replacing an existing life policy from XYZ insurance company. ABC insurance company must provide which of the following documents to XYZ insurance company? A. a buyer's guide B. the sales script C. a policy summary D. the notice regarding proposed replacement of life insurance or annuity

a policy summary

a producer is attempting to replace an existing life insurance policy with a new one. What must this producer submit as part of the application? A. a signed statement by the applicant regarding the replacement B. a signed replacement statement from the insurance company being replaced C. a detailed comparison of existing coverage and the proposed coverage D. a signed replacement statement from the replacing insurance company

a signed statement by the applicant regarding the replacement

What must the policyowner provide to the insurer for validation that a loss has occurred? A. proof of coverage B. proof of claim C. proof of loss D. proof of payment

proof of loss

B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of A. additional term life coverage at any time B. additional term life coverage at specified intervals C. additional whole life coverage at any time D. additional whole life coverage at specified times

additional whole life coverage at specified times

which of the following types of care is typically not covered in a long-term care policy? A. acupuncture B. skilled care C. home health care D. custodial care

acupuncture

a cost of living rider gives the insured A. tax incentives B. monthly income C. decreasing premiums D. additional death benefits

additional death benefits

A contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of A. adherence B. assimilation C. aleatory D. adhesion

adhesion

Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features? A. aleatory B. adhesion C. unilateral D. consideration

aleatory

in Mississippi, an insurance company formed under the laws of Mexico is called a(n) A. mixed company B. alien company C. foreign company D. domestic company

alien company

common exclusions to continuation of group coverage include: A. dental care B. dental care C. other prescription drugs D. all of the above

all of the above

which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary? A. the proceeds which exceed the amount paid in premiums are taxable B. the proceeds are taxable only if the beneficiary's tax bracket has changed from the payout C. all proceeds are considered taxable income in the year they are received D. all proceeds are income tax free in the year they are received

all proceeds are income tax free in the year they are received

a qualified profit-sharing plan is designed to: A. allow key employees to participate in the profits of the company B. allow employees to participate in the profits of the company C. keep key employees from leaving the company D. allow employees to elect company officers

allow employees to participate in the profits of the company

all of these are considered a producer's breach of fiduciary duty EXCEPT A. conversion of premiums B. misappropriation of premiums C. improper withholding of premiums D. allowing premiums to be submitted electronically

allowing premiums to be submitted electronically

the amount of monthly disability benefits payable under social security is affected by which of the following factors? A. insured's tax bracket B. amount of the benefits available from other sources C. nature of the disability D. insured's education level

amount of the benefits available from other sources

who would be given an exemption from licensing requirements in Mississippi? A. an employee of a licensed producer who only answers the phone and schedules appointments B. an individual appointed by an insurance company who sells insurance C. a partnership that is compensated to negotiate an insurance contract for a third party D. a limited representative

an employee of a licensed producer who only answers the phone and schedules appointments

group life insurance policies are generally written as: A. a term rider B. annually renewable term C. increasing term D. group whole life

annually renewable term

Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company? A. variable life B. interest-sensitive life C. universal life D. annuity

annuity

when a policyowner cash surrenders a universal life insurance policy in it's early years, this may be considered a red flag for a(n): A. federal fair credit act violation B. title 18 fraud violation C. anti-money laundering violation D. unfair trade practice violation

anti-money laundering violation

to be eligible for social security disability benefits, an employee must be unable to perform: A. any occupation B. his/her current occupation C. any occupation that reflects the employee's education level D. any occupation that the employee is qualified and willing to do

any occupation

Any changes made on an insurance application requires the initials of whom? A. insured B. agent C. applicant D. beneficiary

applicant

which of the following is the MOST important factor when deciding how much disability income coverage an applicant should purchase? A. applicant's occupation B. applicant's monthly income C. applicant's health D. applicant's previous disabilities

applicant's monthly income

an incomplete life insurance application submitted to an insurer sill result in which of these actions? A. application will be returned to the writing agent B. application will be approved with restrictions C. application will be pending until a MIB report is sent to the insurer D. application will be automatically declined

application will be returned to the writing agent

Group/voluntary long-term care policy premiums are typically deducted from the employee's income and, A. are approximately the same premium as compared to individual long term care coverage B. are more expensive as compared to individual long term care coverage C. are less costly as compared to individual long term care coverage D. are substantially more costly as compared to the premiums for individual long term care coverage

are less costly as compared to individual long term care coverage

under a graded premium policy, the premiums A. are higher during the policy's early years B. are lower during the policy's early years C. are constant throughout the length of the policy D. can be adjusted by the insured

are lower during the policy's early years

in a qualified retirement plan, the yearly contributions to an employee's account: A. are not tax-deductible B. are restricted to minimum levels set by the IRS C. are restricted to maximum levels set by the IRS D. must be matched dollar-for-dollar by the the employer

are restricted to maximum levels set by the IRS

in a qualified retirement plan, the yearly contributions to an employee's account: A. are not tax-deductible B. are restricted to minimum levels set by the IRS C. are restricted to maximum levels set by the IRS D. must be matched dollar-for-dollar by the employer

are restricted to maximum levels set by the IRS

S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made? A. automatic policy loan B. assignment C. grace period D. waiver of premium

automatic policy loan

what action will an insurer take if an interest payment on a policy loan is not made on time? A. cancel the policy if not paid within the grace period B. automatically add the amount of interest due to the loan balance C. subtract from any dividends owed D. disallow any further loans

automatically add the amount of interest due to the loan balance

a health reimbursement arrangement MUST be established: A. with employee funding B. with other employer-sponsored benefit plans C. by the employer D. only during specific open enrollment periods

by the employer

a life insurance application must be signed by all of these, EXCEPT: A. the policyowner B. the agent C. the insured (if an adult) D. beneficiary

beneficiary

S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT A. type of life insurance B. S's attained age C. dividend amount used toward purchase D. beneficiary's age

beneficiary's age

what is considered to be a characteristic of an immediate annuity? A. benefit payments start within one payment period of purchase B. benefit payments start within 5 year of initial purchase C. normally tied to a specific equity or stock index D. periodical contributions begin immediately

benefit payments start within one payment period of purchase

T is receiving $3,000/month from a Disability Income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable? A. benefits are taxable to T B. benefits are tax-free to T C. benefits are partially taxable to T D. benefits are taxable to T's employer

benefits are taxable to T

all of the following statements about major medical benefits are true, EXCEPT: A. the deductible can be expressed as a fixed dollar amount B. the benefit period begins only after a specified amount of expenses have accrued C. benefits are generally expressed as a percentage of eligible expenses D. benefits have no maximum limit

benefits have no maximum limit

all of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT: A. bilateral B. unilateral C. aleatory D. adhesion

bilateral

Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business? A. company becoming insolvent B. death of the business owner C. business owner becoming disabled D. key employee becoming disabled

business owner becoming disabled

the guarantee of insurability option provides a long-term care policyowner the ability to: A. buy additional coverage at a later date B. add the insured's spouse at a later date C. pay the same premium for life D. cancel the policy at anytime

buy additional coverage at a later date

an example of life insurance policy replacement would be which of the following? A. cash surrender an existing whole life policy B. cancelling an existing life policy and purchasing a disability policy C. converting existing term life coverage to an individual whole life policy D. cash surrender an existing life policy and purchasing a new life policy

cash surrender an existing life policy and purchasing a new life policy

which statement about a whole life policy is true? A. Beneficiary may be changed only with the consent of the premium payor B. Death benefit can usually be adjusted C. Cash value may be borrowed against D. premiums are flexible

cash value may be borrowed against

a policy loan is made possible by which of these life insurance policy features? A. extended term provision B. cash value provision C. owner's rights provision D. consideration clause

cash value provision

all individuals covered under a group contract will receive a(n) A. certificate B. receipt of coverage C. master policy D. individual policy

certificate

what is issued to each employee of an employer health plan? A. provision B. receipt C. policy D. certificate

certificate

a whole life insurance policyowner does NOT have the right to A. designate a beneficiary B. take out a policy loan C. change the grace period D. assign the policy

change the grace period

which of the following BEST defines unfair discrimination? A. charging the same rates for individuals in the same risk class B. charging different rates for individuals in the same risk class C. refusing to pay a claim D. sharing commissions with another producer

charging different rates for individuals in the same risk class

whose life is covered on a life insurance policy that contains a payor benefit clause? A. parent B. beneficiary C. child D. spouse

child

S is covered by a whole life policy. Which insurance product can cover his children? A. assignment provision B. payor benefit C. accelerated benefit rider D. child term rider

child term rider

what type of employee welfare plans are not subject to ERISA regulations? A. church plans B. major medical plans C. corporate D. qualified plans

church plans

N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take? A. claim will be denied B. claim will be paid in full C. claim will be partially paid D. claim will be decided by an arbitrator

claim will be denied

a disability income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 year prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim? A. claim will be paid and coverage will remain in force B. claim will be denied and coverage will remain in force C. claim will be denied and coverage will be cancelled D. claim will be denied, the coverage cancelled, and all premiums paid will be refunded

claim will be paid and coverage will remain in force

which of these actions is taken when a policyowner uses a life insurance policy as collateral for a bank loan? A. revocable assignment B. beneficiary change C. irrevocable assignment D. collateral assignment

collateral assignment

On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take? A. collect initial premium B. collect initial premium along with a signed health statement C. explain to the applicant the policy is no longer in effect due to change in health condition D. collect initial premium and leave a binding receipt

collect initial premium along with a signed health statement

this type of deductible provision states that should more than one family member be involved in a common accident, or suffer the same illness, only one individual deductible amount shall be applied A. individual deductible B. corridor deductible C. family maximum deductible D. common accident deductible

common accident deductible

A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed? A. the employee's family B. company Y C. company X D. the employee's estate

company X

which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy? A. have the customer sign a blank application, then take the application back to his office to complete prior to sending it off to the insurance company B. complete the application over the phone with the customer, sign the application for the customer, then send the application off to the insurance company C. complete the application and review the information with the customer prior to obtaining the customers signature, then send the application off to the insurance company D. have the customer fill out the application and send it to his office for him to sign, then send it off to the insurance company

complete the application and review the information with the customer prior to obtaining the customers signature, then send the application off to the insurance company

which of the following statement BEST describes the intent of a coinsurance clause in a major medical policy? A. discourages overutilization of the insurance coverage B. minimizes the need for deductibles C. discourages adverse selection D. minimizes the waiting period

discourages overutilization of the insurance coverage

what is the requirement for maintaining an individual Mississippi producer license? A. retesting every 4 years after initial license activation B. completing 24 hours of continuing education every 2 years C. pay a fee of $500 every two years D. completing 12 hours of continuing education every year

completing 24 hours of continuing education every 2 years

T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later, provided that T is an acceptable risk. What item is given to T? A. binding receipt B. conditional receipt C. warranty receipt D. backdated receipt

conditional receipt

major medical policies typically: A. pay 100% of covered expenses B. contain a deductible and coinsurance C. require use of in-network facilities only D. do not contain a deductible and coinsurance

contain a deductible and coinsurance

the consolidated omnibus budget reconciliation act (COBRA) gives workers (and their families) whose employment has been terminated the right to: A. continue group health benefits B. take out an individual health policy C. transfer their coverage to another insurer D. convert to disability coverage

continue group health benefits

Which of the following consists of an offer, acceptance, and consideration? A. Warranty B. Estoppel C. Contract D. Representation

contract

which of these require an offer, acceptance, and consideration? A. Warranty B. Estoppel C. Contract D. Representation

contract

insurance policies are offered on a "take it or leave it" basis, which make them: A. conditional contracts B. aleatory contracts C. unilateral contracts D. contracts of adhesion

contracts of adhesion

if its employees share in the cost of insurance, what type of group life insurance plan would a corporation have? A. noneligible B. noncontributory C. eligible D. contributory

contributory

when a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply? A. extended term option B. conversion provision C. 1035 exchange D. incontestable period

conversion provision

an employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be: A. converted to an individual permanent policy at an individual rate B. converted to an individual permanent policy at a group rate C. continued at an individual rate D. continued at a group rate

converted to an individual permanent policy at an individual rate

what kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability? A. endowment policy B. limited-pay whole life C. convertible term D. decreasing term

convertible term

which of the following is NOT a situation that involves life insurance policy replacement? A. depleting cash value in an existing policy and applying for a new one B. converting a term policy to a permanent policy with the same insurer C. taking a reduced paid up option for a policy and applying for a new one D. terminating an existing policy and applying for one with better coverage

converting a term policy to a permanent policy with the same insurer

which of these actions does NOT constitute life insurance policy replacement? A. discontinue premiums on an existing policy and apply the payments to a new policy B. take reduced paid-up insurance and purchase a new policy with another insurer C. cash surrender an existing policy and purchase a new policy D. covert term coverage to a whole life policy

covert term coverage to a whole life policy

which of the following does social security NOT provide benefits for? A. survivorship B. dismemberment C. disability D. retirement

dismemberment

K has an Accidental Death and Dismemberment (AD&D) insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? A. daughter B. husband's estate C. K's estate D. trust fund

daughter

the combination of whole life and ___ term insurance is referred to as a family income policy A. decreasing B. universal C. variable D. level

decreasing

Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? A. modified whole life B. 20-pay life C. decreasing term D. endowment

decreasing term

credit life insurance is typically issued with which of the following types of coverage? A. annual renewable term B. decreasing term C. individual whole life D. group term

decreasing term

what type of life policy has a death benefit that adjusts periodically and is written for a specific period of time? A. modified whole life B. 20-year paid up policy C. endowment D. decreasing term

decreasing term

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed? A. level term policy B. whole life policy C. limited-pay policy D. decreasing term policy

decreasing term policy

additional coverage can be added to a whole life policy by adding a(n): A. payor rider B. accelerated benefit rider C. decreasing term rider D. automatic premium loan rider

decreasing term rider

a brochure that contains untrue statements which criticize the financial condition of an insurance company is an example of which of the following unfair trade practices? A. rebating B. defamation C. subrogation D. twisting

defamation

P, age 50, purchased an annuity that P will fund with $500/month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase? A. immediate B. retroactive C. deferred D. universal

deferred

medicare part A and part B do NOT pay for: A. dental work B. hospitalization C. skilled nursing care D. physical therapy

dental work

Which contract permits the remaining partners to buy-out the interest of a disabled business partner? A. group disability B. business continuation C. disability buy-sell D. key person disability

disability buy-sell

K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income? A. indemnity B. major medical C. travel D. disability income

disability income

in the event of an illness, a(n) ___ ___ policy would reimburse an insured for loss of earnings. A. earnings indemnity B. family income C. medicare supplement D. disability income

disability income

a characteristic of preferred provider organizations (PPOs) would be: A. discounted fees for the patient B. not allowed to see out-of-network physicians C. physicians are paid on a capitation basis D. a primary care physician is required

discounted fees for the patient

An employee requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee? A. distribution is subject to capital gains tax B. distribution is subject to ordinary income tax C. distribution is subject to a tax penalty D. distribution is subject to federal income tax withholding

distribution is subject to federal income tax withholding

how are Roth IRA distributions normally taxed? A. 10% penalty tax is applied B. taxed as ordinary income C. capital gains tax is applied D. distributions are received tax-free

distributions are received tax-free

a variable insurance policy: A. guarantees a minimum rate of return B. does not allow the policyowner to assume the investment risk C. does not guarantee a return on its investment accounts D. does not guarantee an assignment provision

does not guarantee a return on its investment accounts

acme insurance company conducts business in Mississippi and was incorporated in Mississippi. This company is considered to be a(n) A. alien insurer B. domestic insurer C. foreign insurer D. captive insurer

domestic insurer

what type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)? A. MEWA B. blanket insurance C. dread disease insurance D. disability insurance

dread disease insurance

M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate? A. $2,000 B. a lump sum of six times the monthly benefit C. nothing D. earned, but unpaid benefits

earned, but unpaid benefits

non-occupational disability coverage is designed for: A. 24 hour protection B. those who are exempt from workers' compensation coverage C. sole proprietors and self-employed individuals D. employees who suffer non-work related disabilities, since work-related disabilities are coved by workers' compensation

employees who suffer non-work related disabilities, since work-related disabilities are covered by workers' compensation

which of these statements is INCORRECT regarding the federal income tax treatment of life insurance? A. premiums are normally not tax deductible B. cash dividends are normally not taxed C. entire cash surrender value is taxable D. proceeds are received tax-free if there is a named beneficiary

entire cash surrender value is taxable

Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract? A. consideration B. entire contract C. free-look D. insuring

entire contract

When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the A. entire contract provision B. insuring clause C. time limit on certain defense provision D. legal contract clause

entire contract provision

when an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve? A. establishes the needs of the individual and his dependents B. takes into account the present value of future income earned by the breadwinner C. places a dollar value on the life of the individual D. establishes the investment risk level acceptable to the individual

establishes the needs of the individual and his dependents

how often must an insurance producer's license be renewed? A. every six months B. every year C. every two years D. every three years

every two years

which of the following is an important underwriting principle of group life insurance? A. physical examinations are required B. everyone must be covered in the group C. employer must pay for the entire premium D. the group must be formed for the purpose of getting affordable insurance

everyone must be covered in the group

which of these statements describe a modified endowment contract (MEC)? A. falls below the minimum amount of premium that can be paid into a policy and still have it recognize as a life insurance contract B. exceeds the maximum amount of premium that can be paid into a policy and still have it recognize as a life insurance contract C. the 7-pay test is used to determine the minimum death benefit of the policy D. the 7-pay test is used to determine the maximum death benefit of the policy

exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract

health insurance benefits NOT covered due to an act of war are: A. excluded by the insurer in the contract provisions B. assigned to a reinsurer C. given a longer probationary period D. charged a higher premium

excluded by the insurer in the contract provisions

in a life insurance policy, which feature states that the policy will not cover certain risks? A. exception B. exclusion C. ejection D. expulsion

exclusion

a universal life policy is sometimes referred to as an unbundled life policy because the owner can see the interest earned, cost of insurance, and the A. inherent risk B. commission rate C. inflation factor D. expense charges

expense charges

a comprehensive major medical health insurance policy contains an eligible expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered, EXCEPT for: A. hospital charges B. physician fees C. experimental and investigative services D. nursing services

experimental and investigative services

term insurance has which of the following characteristics? A. expires at the end of the policy period B. builds cash value C. has nonforfeiture options D. endows at the end of the policy period

expires at the end of the policy period

D owns a whole life policy that was purchased 10 years ago. If the premium payments suddenly stop and D takes no additional action, which nonforfeiture option will the insurer likely proceed with? A. extended term B. Loan provision C. reduced paid-up D. cash surrender

extended term

all of these are characteristics of an adjustable life policy, EXCEPT: A. adjustable premiums B. adjustable premium payment period C. combination of term and whole life insurance D. face amount can be adjusted using policy dividends

face amount can be adjusted using policy dividends

An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the: A. state guaranty association B. fair labor standards board C. fair credit reporting act D. national association of insurance commissioners

fair credit reporting act

From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant? A. fair credit reporting act B. medical information bureau C. part III of the application D. life insurance buyer's guide

fair credit reporting act

what is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained? A. state guaranty association B. fair labor standards board C. fair credit reporting act D. National Association of insurance commissioners

fair credit reporting act

what kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies? A. family maintenance policy B. family income policy C. survivor policy D. family survivor policy

family maintenance policy

Which of these is NOT a source of funding for social security benefits? A. self employed individuals B. employees C. federal government D. employers

federal government

N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase? A fixed period B. fixed deferred C. fixed immediate D. fixed variable

fixed deferred

the payments on Q's annuity are no less than $250 quarterly. Which of the following annuities does Q own? A. immediate fixed B. quarterly flexible C. flexible installment deferred D. adjustable deferred

flexible installment deferred

what action should a producer take if the initial premium is NOT submitted with the application? A. keep the application until premium is paid B. forward the application to the insurer after giving the applicant a binding receipt C. forward the application to the insurer without the initial premium D. forward the application to the insurer after giving the applicant a conditional receipt

forward the application to the insurer without the initial premium

S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits? A. no benefits are payable under the master contract B. full benefits are payable under the master contract C. full benefits are payable under the converted policy D. benefits less required premium are payable under the converted policy

full benefits are payable under the master contract

what is considered a valid reason for small businesses to insure the lives of its major shareholders? A. to provide an income for the surviving dependents B. reduce the company's tax liability C. to pay for final expenses D. fund a buy-sell agreement

fund a buy-sell agreement

which of these is considered a true statement regarding medicaid? A. funded by both state and federal governments B. intended to be used by individuals age 65 and older C. provides disability income benefits D. automatically covers those receiving social security disability benefits

funded by both state and federal governments

a hearing must be held before a producer's license can be suspended or revoked. Prior to the hearing, the commissioner of insurance is required to A. give oral notice to the producer B. give written notice to the producer C. give notice to the producer's insurance company D. give notice to the producer's insurance company

give written notice to the producer

which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due? A. Grace period B. consideration C. waiver of premium D. reinstatement

grace period

A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow? A. extended term rider B. cost of living adjustment rider C. guaranteed insurability option rider D. waiver of premium rider

guaranteed insurability option rider

Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this? A. guaranteed insurability rider B. additional coverage rider C. paid-up option rider D. extended insurability rider

guaranteed insurability rider

K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered: A. optionally renewable B. conditionally renewable C. guaranteed renewable D. noncancellable

guaranteed renewable

Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate for the overall risk class? A. conditionally renewable B. noncancellable C. guaranteed renewable D. optionally renewable

guaranteed renewable

a nonforfeiture clause gives the policyowner A. lifetime income B. guaranteed values even if the policy has lapsed C. unemployment benefits D. cost of living allowances

guaranteed values even if the policy has lapsed

basic medical expense insurance: A. normally has a deductible and coinsurance B. covers an illness but not an accident C. pays for lost wages while hospitalized D. has lower benefit limits than major medical insurance

has lower benefit limits than major medical insurance

Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for: A. insolvency B. health information C. financial information D. overinsurance

health information

Which type of provider is known for stressing preventative medical care and routine physical examinations? A. multiple employer welfare arrangements (MEWA) B. mejor medical provider C. health maintenance organizations (HMO's) D. preferred provider organizations (PPO's)

health maintenance organizations (HMO's)

a 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary? A. medicaid B. long-term care C. medicare D. her group health plan

her group health plan

S wants to open a tax-exempt health savings account. To qualify for this type of account, federal law dictates that S must be enrolled in a: A. low-deductible health plan B. medicare supplement C. high-deductible health plan D. flexible savings plan

high-deductible health plan

variable life products require a producer to A. guarantee not more than a 12% return per annum B. hold a life and health insurance license C. hold a life insurance license and a securities license D. be regulated solely by state law

hold a life insurance license and securities license

which of the following will a long term care plan typically provide benefits for? A. disability income B. death C. unemployment D. home health care

home health care

for which of the following expenses does a basic hospital policy pay? A. hospital room and board B. prescription medication C. surgical fees D. physician's fees

hospital room and board

in life insurance, the needs approach is used mostly to establish: A. which type of life insurance a client should apply for B. how much life insurance a client should apply for C. which company a client should use when applying for life insurance D. what the maximum amount the client can spend on life insurance

how much life insurance a client should apply for

Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted? A. 20% of the funds are subject to taxes B. 80% of the funds are invested in a separate account C. if Tom's employment is terminated, 20% of the funds would be forfeited D. if Tom's employment is terminated, 80% of the funds would be forfeited

if Tom's employment is terminated, 20% of the funds would be forfeited

which of these is NOT a reason for purchasing life insurance on the life of a minor? A. if both parents were to die, it would provide death benefits to the child B. provides funds for final expenses if the child were to die C. provides living benefits for the child's college education D. provides child with insurance now, in case the child becomes uninsurable later

if both parents were to die, it would provide death benefits to the child

In regards to representations or warranties, which of these statements is TRUE? A. Warranties are statements considered to be true to the best of the applicants belief B. If material to the risk, false representations will void a policy C. Representations are statements guaranteed to be true in every respect D. If material to the risk, false representations will NOT void a policy

if material to the risk, false representations will void a policy

which of the following statements about health reimbursement arrangements (HRA) is CORRECT? A. if the employee had a qualified medical leave from work, lost wages can be reimbursed B. if the employee paid for qualified medical expenses, the reimbursements may be tax-free C. any unused amounts are added to employee's gross income D. health insurance premiums can be reimbursed to the employee

if the employee paid for qualified medical expenses, the reimbursements may be tax-free

How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy? A. if the primary beneficiary is a minor at the time of the insured's death B. if the primary beneficiary dies before the insured C. if the insured died of accidental causes D. if the insured died of natural causes

if the primary beneficiary dies before the insured

When must insurable interest exist for a life insurance contract to be valid? A. inception of the contract B. throughout the entire length of the contract C. when the insured dies D. during the contestable period

inception of the contract

T, age 70, withdraws cash from a profit-sharing plan and purchases a straight life annuity. What will this transaction provide? A. income for a fixed period stated in the contract B. income that cannot be outlived by the owner C. inflation protection D. tax-free income

income that cannot be outlived by the owner

which of the following actions require a policyowner to provide proof of insurability in an adjustable life policy? A. increase face amount B. decrease face amount C. increase premium-paying period D. decrease premium payment

increase face amount

how does an indexed annuity differ from a fixed annuity? A. fixed annuity owners receive credited interest tied to the fluctuations of the linked index B. indexed annuity owners may receive credited interest tied to the fluctuations of the linked index C. fixed annuity owners have a separate investment account D. indexed annuity owners receive annual dividends

indexed annuity owners may receive credited interest tied to the fluctuations of the linked index

the first portion of a covered major medical insurance expense that the insured is required to pay is called the: A. corridor deductible B. initial deductible C. sop-loss deductible D. coinsurance deductible

initial deductible

K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n) A. installment refund annuity B. joint refund annuity C. straight refund annuity D. equal value annuity

installment refund annuity

a life insurance policy would be considered a wagering contract WITHOUT: A. insurable interest B. premium payment C. agent solicitation D. constructive delivery

insurable interest

when third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have: A. all statements be warranties B. insurable interest in the proposed insured C. the agent complete a third-party application D. all those involved be family-related

insurable interest in the proposed insured

who makes the legally enforceable promises in a unilateral insurance policy? A. beneficiary B. insurance company C. insured D. Applicant

insurance company

what is being delivered during a policy delivery? A. a binding receipt to the proposed insured B. insurance contract to the proposed C. application and initial premium to the insurer D. policy summary sheet and disclosure material to the proposed insured

insurance contract to the proposed

in a Key employee life insurance policy, the third-party owner can be all of the following, EXCEPT: A. applicant B. owner C. payor D. insured

insured

who has the option to renew a renewable term policy? A. agency B. agent C. insured D. beneficiary

insured

an insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the: A. medical examination is given B. producer completes the application C. insurer dates the policy D. the first premium is paid

insurer dates the policy

T was treated for an aliment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterwards. How will the insurer likely consider this condition? A. insurer will require a higher deductible for any claims resulting from this condition B. insurer is required to initially cover this pre-existing condition C. insurer will permanently exclude the condition from the policy D. insurer will likely treat as a pre-existing condition which may not be covered for one year

insurer will likely treat as a pre-existing condition which may not be covered for one year

variable annuities may invest premiums in each of the following, EXCEPT: A. common stock B. money market securities C. insurer's corporate business account D. junk bonds

insurer's corporate business account

which health policy clause specifies the amount of benefits to be paid? A. insuring B. consideration C. free-look D. payment mode

insuring

in a life insurance contract, an insurance company's promise to pay stated benefits is called the: A. insuring clause B. consideration clause C. entire contract D. owner's rights

insuring clause

which of the following health insurance policy provisions specifies the health care services a policy will provide? A. insuring clause B. usual, customary, and reasonable clause C. consideration clause D. benefit clause

insuring clause

which of the following claims are typically excluded from medical expense? A. treatment for alcohol addiction B. intentionally self-inflicted injuries C. treatment for mental illness D. injuries sustained from an automobile accident

intentionally self-inflicted injuries

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT: A. fixed period B. interest only C. fixed amount D. life income

interest only

Quarterly premium payments increase the annual cost of insurance because A. insurer risk exposure is greater B. interest to the insurer is increased while administrative costs are decreased C. mortality costs are greater D. interest to the insurer is decreased while the administrative costs are increased

interest to the insurer is decreased while the administrative costs are increased

which of these types of coverage is best described as a short term medical policy? A. interim coverage B. provisional coverage C. transitional coverage D. conversion coverage

interim coverage

J was reviewing her health insurance policy and noticed the phrase "this policy will only pay for a semi-private room". This phrase is considered to be a(n): A. hidden deductible B. internal limit C. restricted provision D. stop loss

internal limit

a life insurance arrangement which circumvents insurable interest statutes is called: A. a contract of adhesion B. an indemnity contract C. key person insurance D. investor-originated life insurance

investor-originated life insurance

a policyowner would like to change the beneficiary on a life insurance policy and make the change permanent. Which type of designation would fulfill this need? A. revocable B. contingent C. irrevocable D. primary

irrevocable

a policyowner's rights are limited under which beneficiary designation? A. revocable B. tertiary C. contingent D. irrevocable

irrevocable

a policyowner's rights are limited under which beneficiary designation? A. revocable B. tertiary C. contingent D. irrevocable

irrevocable

which type of life insurance beneficiary requires his/her consent when a change of beneficiary is attempted by the policyowner? A. irrevocable beneficiary B. tertiary beneficiary C. primary beneficiary D. revocable beneficiary

irrevocable beneficiary

the accidental death and dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured: A. dies of natural causes B. becomes critically ill C. become chronically ill D. is blinded in an accident

is blinded in an accident

the life and health insurance guaranty association A. assists in underwriting large policies B. is funded by insurance companies through assessments C. is funded by producers through their commissions D. is financed by the US treasury

is funded by insurance companies through assessments

which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a disability income policy? A. issue the policy with a diabetes exclusion B. issue the policy with an altered time of payment of claims provision C. issue the policy with a rating D. decline the applicant

issue the policy with an altered time of payment of claims provision

what type of life policy covers 2 lives and pays the face amount after the first one dies? A. group life B. joint life policy C. family income policy D. last survivor policy

joint life policy

an architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager? A. universal life insurance B. key person insurance C. graded insurance D. executive insurance

key person insurance

which of the following BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means' definition A. double indemnity B. benefits are taxable C. more restrictive D. less restrictive

less restrictive

T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect? A. $5,000 per month benefit B. $10,000 per month benefit if the cause was accidental C. more than $5,000 per month benefit if cause was work-related D. less than $5,000 per month benefit regardless of the cause

less than $5,000 per month benefit regardless of the cause

which of the following situations does a critical illness plan cover? A. asthma B. leukemia C. alcohol rehabilitation D. severe car accident

leukemia

what kind of premium does a whole life policy have? A. decreasing B. adjustable C. level D. deferred

level

D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed? A. limited-pay life B. graded premium C. level term D. endowment

level term

with whom may a producer share commissions with? A. business broker B. licensed producer C. an unlicensed employee D. the policyowner

licensed producer

which of these are NOT an example of a nonforfeiture option? A. extended term B. reduced paid-up C. cash surrender D. Life income

life income

a whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value? A. cash surrender B. life settlement contract C. buy-sell arrangement D. 1031 exchange

life settlement contract

the accelerated death benefit provision in a life insurance policy is also known as a(n): A. 1035 exchange B. inter vivos gift C. non-forfeiture option D. living benefit

living benefit

which of these is NOT relevant when determining the amount of personal life insurance needed? A. existing life insurance coverage B. local unemployment rate C. household income D. household debt

local unemployment rate

An insured's inability to perform two or more activities of daily living may trigger which type of policy rider? A. waiver of premium B. long term care C. accelerated death benefit D. accidental

long term care

Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies? A. blanket custodial B. long-term care C. critical illness D. medicare supplements

long-term care

basic hospital and surgical policy benefits are: A. lower than the actual expenses incurred B. higher than the actual expenses incurred C. normally subject to deductibles D. normally subject to coinsurance

lower than the actual expenses incurred

which of these is an element of a single premium annuity? A. deferred payment B. lump-sum payment C. fixed income D. tax-deductible

lump-sum payment

an employer that offers a qualified retirement plan to its employees is eligible to: A. avoid ERISA regulations B. make tax-deductible contributions to the plan C. make tax deductible contributions to key employees only D. make partial tax-deductible contributions to the plan

make tax-deductible contributions to the plan

defamation occurs when a producer makes a false statement intended to A. malign another insurer B. replace an existing insurance policy with another C. restrict fair trade D. misrepresent the provisions of an insurance policy

malign another insurer

which type of plan normally includes hospice benefits? A. short-term disability plans B. group life plans C. workers' compensation D. managed care plans

managed care plans

A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid: A. mandatory income tax withholding on the transfer amount B. paying transfer fees C. paying trustee fees D. ever paying income taxes on the distributions

mandatory income tax withholding on the transfer amount

Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the: A. marital deduction B. death benefits C. section 1035 exchange D. capital gains tax rate

marital deduction

which of the following are NOT managed care organizations? A. point-of-service plan (POS) B. preferred provider organization (PPO) C. medical information bureau (MIB) D. health maintenance organization (HMO)

medical information bureau (MIB)

Which type of policy is considered to be overfunded, as stated by IRS guidelines? A. modified whole life B. modified endowment contract C. variable universal life D. interest-sensitive whole life

modified endowment contract

when a life insurance policy exceeds certain IRS table values, the result would create which of the following? A. 1035 exchange B. an investment C. modified endowment contract (MEC) D. endowment

modified endowment contract (MEC)

J is issued a life insurance policy with a death benefit of $100,000. She pays $600 per year in premium for the first 5 years. The premium then increases to $900 per year in the sixth year, and remains level thereafter. The policy's death benefit also remains at $100,000. Which type of life insurance policy is this? A. endowment B. graded premium life C. straight life D. modified premium life

modified premium life

which of these life products is NOT considered interest-sensitive? A. modified whole life B. variable universal life C. interest sensitive whole life D. variable life

modified whole life

According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options? A. annually B. semiannually C. quarterly D. monthly

monthly

which of these is NOT an element of life insurance premiums? A. mortality rate B. insurer's expenses C. interest credit D. morbidity rate

morbidity rate

which of the following BEST describes how a preferred provider organization (PPO) is less restrictive than a health maintenance organization (HMO)? A. typically not subject to deductibles B. not regulated by the federal government C. more benefits available D. more physicians to choose from

more physicians to choose from

which of the following is TRUE about a qualified retirement that is "top heavy"? A. more than 30% of plan assets are in key employee accounts B. more than 40% of annual additions are for key employee accounts C. more than 50% of plan assets are in key employee accounts D. more than 60% of plan assets are in key employee accounts

more than 60% of plan assets are in key employee accounts

which of the following statements is CORRECT about accelerated death benefits? A. the full face amount is available as an accelerated benefit B. those on social security disability automatically qualify for this benefit C. this provision is usually provided with an increase in premium D. must have a terminal illness to qualify

must have a terminal illness to qualify

which of these is NOT considered to be an element of an insurance contract? A. the offer B. acceptance C. negotiating D. consideration

negotiating

which of the following characteristics is associated with a large group disability income policy? A. no waiting periods B. no medical underwriting C. no elimination periods D. no limit of benefits

no medical underwriting

What type of renewability guarantees premium rates and renewability? A. optionally renewable B. conditionally renewable C. noncancellable D. warrantied renewable

noncancellable

When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld? A. 10% B. 20% C. 30% D. none

none

J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this? A. limited coverage B. workers' compensation coverage C. occupational coverage D. nonoccupational coverage

nonoccupational coverage

which of the following BEST describes a short-term medical expense policy? A. conditionally renewable B. noncancellable C. guaranteed renewable D. nonrenewable

nonrenewable

which statement is true regarding a minor beneficiary? A. normally, the death proceeds are required to be held in trust until the beneficiary reaches the age of 21 B. normally, a guardian is required to be appointed in the beneficiary clause of the contract C. the minor must pay the debts of the insured's estate before receiving any of the proceeds D. the minor is entitled to receive the death proceeds immediately

normally, a guardian is required to be appointed in the beneficiary clause of the contract

the notice of claims requires a policyowner to: A. provide proof of loss to an insurer within a specified time B. notify an insurer of a claim within a specified time C. wait 60 days after filing a claim to initiate a lawsuit against an insurer D. notify their physician of a claim within a specified time

notify an insurer of a claim within a specified time

an accident policy will most likely pay a benefit for a (n): A. self-inflicted injury B. critical illness C. on-the-job accident D. off-the-job accident

off-the-job accident

all of these statements concerning settlement option are true, EXCEPT: A. increased proceeds can be provided through accumulation of interest B. rapid depletion of proceeds can be avoided C. proceeds can be administered by the insurance company D. Only the beneficiary may select

only the beneficiary may select

which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2? A. 10% tax penalty for early withdrawal B. capital gains tax C. ordinary income tax and a 10% tax penalty for early withdrawal D. ordinary income tax

ordinary income tax and a 10% tax penalty for early withdrawal

which of these contracts fall under replacement regulations? A. credit life B. group annuities C. ordinary life D. group life

ordinary life

long-term care policies sold in Mississippi are required to contain cost disclosure information in bold print. Where does the law require this information to be located? A. policy application B. declaration page C. outline of coverage D. sales proposal

outline of coverage

K owns a whole life policy. If K wants an increasing death benefit to protect against inflation, which dividend option should she choose? A. paid-up additional insurance B. cash option C. reduced premiums D. accumulate with interest

paid-up additional insurance

what does medicare parts A and B cover? A. part A covers hospitalization, part B covers long-term care B. part A covers doctor's services; part B covers hospitalization C. part A cover hospitalization; part B covers doctor's services D. part A covers prescription drugs; part B covers disability

part A covers hospitalization; part B covers doctor's services

whole life insurance policies are contractually guaranteed to provide each of the following, EXCEPT: A. cash value that will ultimately replace the death benefit B. nonforfeiture benefit options C. premiums that remain fixed for the life of the policy D. partial withdrawal features beyond a surrender charge period

partial withdrawal features beyond a surrender charge period

When a policy pays dividends to its policyholders, it is said to be A. profitable B. mutual C. nonparticipating D. participating

participating

all of the following statements are true regarding a policy's grace period, EXCEPT: A. past due premiums are waived B. policy loans may still be made C. full coverage continues D. grace period terms are stated in the policy

past due premiums are waived

which statement is TRUE in regards to a policy loan? A. past-due interest payments not paid after 3 month will void the policy B. past-due interest on a policy loan is added to the total debt C. insurance companies can send delinquent interest accounts to a collection agency D. insurance companies can charge an interest rate based on the policyowner's credit report

past-due interest on a policy loan is added to the total debt

the benefits under a disability buy-out policy are: A. normally paid in installments B. taxable to the beneficiary C. payable to the company or another shareholder D. normally paid after a short elimination period

payable to the company or another shareholder

the provision that defines to whom the insurer will pay benefits to is called: A. entire contract B. proof of loss C. claim forms D. payment of claims

payment of claims

which of these is considered a mandatory provision? A. payment of claims B. insurance with other insurers C. misstatement of age D. change of occupation

payment of claims

which of these is considered a mandatory provision? A. payment of claims B. insurance with other insurers C. misstatement of age D. change of occupation

payment of claims

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

payor provision

insurance policies are considered aleatory contracts because A. they are "take it or leave it" contracts B. both parties consent to the contract C. performance is conditioned upon a future occurrence D. the contract is voidable upon proof of fraud

performance is conditioned upon a future occurrence

which of the following best describes a contingent beneficiary? A. person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured B. person designated by the primary beneficiary's executor to receive policy proceeds C. person designated by the state to receive policy proceeds in the event that the primary beneficiary dies D. person designated by the insurance company to receive policy proceeds in the event that the primary beneficiary dies

person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured

which of these do NOT constitute policy delivery? A. policy mailed to applicant B. policy mailed to agent C. policy delivered to the applicant by the agent D. policy issued with a rating

policy issued with a rating

M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the A. cash value B. estate of the insured C. policy proceeds D. nonforfeiture value

policy proceeds

when an employee is terminated, which statement about a group term life conversion is true? A. employee must convert group term life coverage into an individual term life policy B. employee must provide evidence of insurability for conversion C. policy proceeds will be paid if the employee dies during the conversion period D. policy proceeds will NOT be paid if the employee dies during the conversion period

policy proceeds will be paid if the employee dies during the conversion period

which of the following information is NOT required to be included in a whole life policy? A. policy's loan interest rate B. policy's guaranteed dividend table C. policy's premium D. policy's cash value table

policy's guaranteed dividend table

Who elects the governing body of a mutual insurance company? A. chairman of the board B. bondholders C. stockholders D. policyholders

policyholders

life insurance replacement regulation is designed to protect the interests of the A. insurer B. policyowner C. commissioner D. producer

policyowner

the ___ has the right to change a life insurance policy's beneficiary A. insurer B. insured C. policyowner D. beneficiary

policyowner

the ____ is authorized to assign a life insurance policy as collateral for a loan A. beneficiary B. insured C. policyowner D. lender

policyowner

which is true concerning a variable universal life policy? A. policyowner controls where the investment will go and selects the amount of the premium payment B. policyowner has no say where the investment will go but can choose the premium mode C. the investment vehicle for this type of policy is held in the insurer's general portfolio D. the death benefit can vary but the policyowner has no say in the premium amount paid

policyowner controls where the investment will go and selects the amount of the premium payment

which of these describe a participating insurance policy? A. policyowners are entitled to receive dividends B. policyowners pay assessments for company losses C. stock companies allow their policyowners to share in any company earnings D. policyowners are not entitled to vote for members of the board or directors

policyowners are entitled to receive dividends

which long term care insurance statement is true? A. inflation protection is usually not offered B. benefits are usually payable for alcohol rehabilitation C. can only be offered to individuals under the age of 70 D. pre-existing conditions must be covered after the coverage has been in force for six months

pre-existing conditions must be covered after the coverage has been in force for six months

a policyowner is able to choose the frequency of premium payments through what policy feature? A. consideration B. payor benefit C. premium mode D. assignment provision

premium mode

a limited-pay life policy has: A. graded death benefits B. no cash value C. premium payments limited to a specific number of years D. premium payments that are paid to age 100

premium payments limited to a specific number of years

how does group insurance differ from individual insurance? A. evidence of insurability is required B. premiums are higher C. premiums are lower D. pre-existing conditions not covered

premiums are lower

which statement is correct regarding the premium payment schedule for whole life policies? A. premiums are payable throughout the insured's lifetime/coverage lasts until death of the insured B. premiums are payable for a set period/coverage expires at that point C. premiums are payable until age 65/coverage lasts a lifetime D. a single premium is paid at time of application/coverage lasts until retirement

premiums are payable throughout the insured's lifetime/coverage lasts until death of the insured

which of the following actions is NOT possible with a universal life policy? A. policy's cash value may be used to pay premiums B. premium payments may be made at unscheduled times C. premiums may be applied as a credit against income tax D. face amount may be adjusted

premiums may be applied as a credit against income tax

the coordination of benefits provision: A. allows an insured covered by two health plans to make a profit on a covered loss B. prevents an insured covered by two health plans from making a profit on a covered loss C. allows an insurer to defer paying a claim for a work-related injury until workers' compensation benefits have expired D. prevents an insured to change insurers during a claim for a covered loss

prevents an insured covered by two health plans from making a profit on a covered loss

the individual who provides general medical care for a patient as well as the referral for specialized care is known as a: A. physician's assistant B. primary care physician C. secondary care physician D. third party administrator

primary care physician

T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. When T submits a claim, his employer's plan is considered what type of carrier under the Model Group Coordination of Benefits provision? A. principal carrier B. suplus carrier C. primary carrier D. secondary carrier

primary carrier

what determines the full amount of social security retirement benefits a qualified individual is entitled to receive? A. primary insurance amount (PIA) B. total taxes paid into FICA C. number of dependents D. state of residence

primary insurance amount (PIA)

which one of these is NOT a type of agent authority? A. Express B. implied C. principal D. apparent

principal

consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine: A. driving history B. probability of making timely premium payments C. if applicant is a tobacco user D. overall health of the applicant

probability of making timely premium payments

which of the following is considered to be the time period after a health policy is issued, during which no benefits are provided for illness? A. incontestable period B. probationary period C. trial period D. subrogation period

probationary period

K is the insured and P is the sole beneficiary on an accidental death and dismemberment (AD&D) insurance policy. Both are involved in a fatal accident where K dies before P. Under the common disaster provision, which of these statements is true? A. proceeds will be paid to P's estate B. proceeds will be divided equally between K's and P's estate C. proceeds will be paid to K's estate D. the courts will decide who will receive death benefits

proceeds will be paid to P's estate

K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true? A. proceeds will be paid to P's estate B. proceeds will be divided equally between K's and P's estate C. proceeds will be payable to K's estate if P dies within a specified time D. the courts will decide who will receive death benefits

proceeds will be payable to K's estate if P dies within a specified time

a primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy. Which of the following will occur when the insured dies? A. proceeds will go to the primary beneficiary's estate B. probate will decide who receives proceeds C. proceeds will go to the contingent beneficiary D. proceeds will go to the insured's estate

proceeds will go to the contingent beneficiary

an insurance company appoints a(n) ___ to transact insurance A. employee B. producer C. administrator D. underwriter

producer

a retirement plan that sets aside part of the company's net income for distributions to qualified employees is called a: A. rollover plan B. 403(b) plan C. profit-sharing plan D. salary reduction plan

profit-sharing plan

what is the consideration given by an insurer in the consideration clause of a life policy? A. promise to never cancel coverage B. promise to pay a death benefit to a named beneficiary C. promise to not raise premiums D. promise to accept an insured's assignment of benefits

promise to pay a death benefit to a named beneficiary

The Legal Actions provision of an insurance contract is designed to do all of the following EXCEPT A. provide the insurer adequate time to research a claim B. protect the insured from having claim research delayed C. protect the producer D. give the insured guidelines for pursuing legal action against and insurer

protect the producer

what is the purpose of the life and health insurance guaranty association? A. enforces Mississippi's insurance regulations B. underwrites high-risk insurance applicants C. protects policyowners against insolvent insurance companies D. establishes underwriting guidelines for admitted insurers

protects policyowners against insolvent insurance companies

a major medical policy typically: A. provides benefits for surgical expenses only, subject to policy limits B. contains more limitations than a basic hospital, medical, or surgical policy C. contains a 60-day elimination period for losses due to accident D. provides benefits for reasonable and necessary medical expenses, subject to policy limits

provides benefits for reasonable and necessary medical expenses, subject to policy limits

a producer has returned part of his commission to the insured as an inducement to purchase the insurance. This illegal action is called A. twisting B. sliding C. rebating D. misrepresentation

rebating

X owns a disability income policy. X recently suffered a disability which was due to the same cause as a previous disability. These disabilities both occurred over a four-month span. Which of the following provisions allows X's second disability to be covered without a new elimination period? A. delayed disability B. partial disability C. recurrent disability D. residual disability

recurrent disability

the rules governing life insurance and annuity replacements were created to A. reduce the opportunity for misrepresentation B. assure that the rights of existing insurance companies are protected C. assure that replacing insurance companies receive adequate disclosure D. protect existing agents from losing commissions because of replacement

reduce the opportunity for misrepresentation and incomplete disclosure

K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation? A. free-look B. reinstatement C. grace period D. consideration

reinstatement

the provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called: A. reinstatement B. grace period C. automatic premium loan D. waiver of premium

reinstatement

which of these provisions require proof of insurability after a policy has lapsed? A. insuring B. conversion C. reinstatement D. consideration

reinstatement

T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this? A. renewable B. increasing C. level D. decreasing

renewable

J is a producer who is recommending that an insured surrender an existing life insurance policy and purchase a new one. Which provision would this producer be subject to? A. binding B. conversion C. replacement D. 1035 exchange

replacement

statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called: A. representations B. consideration C. warranties D. guarantees

representations

T is covered by an accidental death and dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T request a change of beneficiary? A. request will be accepted only if in writing by the insured B. change will be made only if premiums are paid current C. change will be made immediately D. request of the change will be refused

request of the change will be refused

D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits? A. residual benefit clause B. waiver benefit clause C. concurrent benefit clause D. guaranteed benefit clause

residual benefit clause

Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take? A. deposit the applicant's check into his account and make a personal check out to the insurance company from his personal account B. return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company C. cross off his name on the "pay to" portion of the check, write the name of the insurance company, and send the check back to the insurance company D. deposit the check in to his personal account, used the funds to purchase a cashiers check, and send the new cashiers check back to the insurance company

return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company

with optionally renewable health policies, the insurer may: A. renew the policy only if no claims have been filed the previous year B. renew the policy only with the insured's consent C. review the policy whenever they please and determine whether or not to renew it D. review the policy annually and determine whether or not to renew it

review the policy annually and determine whether or not to renew it

A(n) ___ beneficiary may be changed by the policyowner WITHOUT the consent of the beneficiary A. revocable B. irrevocable C. tertiary D. replaceable

revocable

J would like to maintain the right change beneficiaries. Which beneficiary designation should be used? A. irrevocable B. contingent C. primary D. revocable

revocable

which of these terms accurately defines an underwriter's assessment of information on a life insurance application? A. risk classification B. warranty review C. insurable interest D. inspection report

risk classification

A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a A. treaty insurer B. risk retention group C. risk assumption group D. captive insurer

risk retention group

what is the suicide provision designed to do? A. decline an applicant who is contemplating suicide B. safeguard the insurer from an applicant who is contemplating suicide C. protect the insurer from ever paying a claim that results from suicide D. allows the insurer the option to pay a death benefit in the event of suicide

safeguard the insurer from an applicant who is contemplating suicide

what does a 401(K) plan generally provide its participants? A. tax-free distributions B. salary-deferral distributions C. salary-deferral contributions D. a defined retirement benefit

salary-deferral contributions

which of these factors does NOT influence an applicant's need for life insurance? A. lifestyle of the applicant B. number of dependents C. future educational costs of the dependents D. self-maintenance expenses

self-maintenance expenses

A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take? A. send the initial premium back to the applicant B. send a notice to the applicant that the coverage was declined C. send a notice to the MIB that the applicant was declined D. send a notice to the agent that the applicant has declined

send a notice to the MIB that the applicant was declined

which of the following statements BEST describes dental care indemnity coverage? A. services are reimbursed before the insurer receives the invoice B. services are reimbursed after insurer receives the invoice C. in-network dentists must always be used D. very limited list of providers

services are reimbursed after insurer receives the invoice

P is a producer who notices 5 questions on a life application were not answered. What actions should P take? A. mail incomplete application to applicant to be completed and returned to the agent B. submit the application as-is to the insurer C. call the applicant and complete the application over the phone D. set up a meeting with the applicant to answer the remaining questions

set up a meeting with the applicant to answer the remaining questions

P is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period? A. authorize for payroll deductions B. agree to a physical examination C. sign an enrollment card D. register with her state of residency

sign an enrollment card

Which mode of payment is NOT used by health insurance policies? A. monthly premium B. annual premium C. single premium D. semi-annual premium

single premium

which of the following types of permanent life insurance policies offers the highest initial cash value? A. single premium B. limited pay C. straight whole D. interest sensitive

single premium

what is old age and survivors health insurance (OASDHI) also known as? A. medicare B. social security C. medicaid D. FICA

social security

the percentage of an individual's primary insurance amount (PIA) determines the benefits paid in which of the following programs? A. social security disability income B. medicare supplements C. medicaid D. COBRA

social security disability income

which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary? A. split-dollar plan B. employer purchase plan C. key employee plan D. deferred compensation plan

split-dollar plan

an individual disability income insurance applicant may be required to submit all of the following information, EXCEPT: A. medical history B. gross income C. occupation D. spouse's occupation

spouse's occupation

the insuring clause A. specifies the additional time given to pay past due premiums B. states the scope and limits of the coverage C. states the amount of premium to be collected D. prohibits the insured from suing the insurer for at least 60 days after filing a written proof of loss

states the scope and limits of the coverage

K is shopping for a permanent life insurance policy that will offer her the MOST protection per dollar of annual premium. Which of these policies best fits her needs? A. endowment B. straight life C. 10 year renewable term D. joint life

straight life

the annuity that represents the largest possible monthly payments to an individual annuitant is a(n): A. cash refund B. installment refund C. straight life annuity D. life annuity with period certain

straight life annuity

which of the following costs would a basic hospital/surgical policy likely cover? A. surgically removing a facial birthmark B. care given at a nursing home C. treating a wound from a soldier injured at war D. lost income caused by a hospital stay

surgically removing a facial birthmark

The premiums paid by an employer for his employee's group life insurance are usually considered to be A. tax-deductible to the employer B. partially deductible to the employee C. tax-deductible to the employee D. taxable income to the employee

tax-deductible to the employer

T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase? A. interest-sensitive whole life B. ten-year endowment C. variable universal life D. ten-year renewable term

ten-year endowment

what type of life insurance gives the greatest amount of coverage for a limited period of time? A. term life B. graded premium whole life C. whole life D. endowment policy

term life

What kind of life insurance product covers children under their parent's policy? A. family maintenance rider B. term rider C. family income rider D. payor benefit

term rider

what would the medical information bureau (MIB) identify? A. testing positive for marijuana use from a previous screening B. existing life insurance coverage with other carriers C. credit scores D. primary physician

testing positive for marijuana use from a previous screening

what does a guaranteed insurability rider provide a disability income policyowner? A. the guarantee that premiums will never increase B. the guarantee that the policy will never be cancelled C. the ability to periodically increase the amount of coverage without evidence of insurability D. the ability to periodically increase the amount of coverage only with evidence of insurability

the ability to periodically increase the amount of coverage without evidence of insurability

which of the following is TRUE if the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made? A. surrender charge is applied B. the account can be rolled into the surviving spouse's IRA C. distributions will be received tax-free if surviving spouse is over age 59 1/2 D. future distributions are payable to the owner's estate

the account can be rolled into the surviving spouse's IRA

which statement regarding a key employee life policy is NOT true? A. the application must be signed by the key employee B. its purpose is to prevent the financial loss that may ensue if a key employee dies C. the beneficiary is named by the key employee D. the company purchases, owns, pays the premiums and is the beneficiary

the beneficiary is named by the key employee

the investment gains from universal life policy usually go toward: A. the death benefit B. the dividends C. the cash value D. paying off a policy loan

the cash value

C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most? A. the cost B. the nonforfeiture options C. the contestable period D. the assignment of ownership

the cost

the most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is: A. the cost B. the health of the insured C. the amount of coverage being converted D. who will be beneficiary

the cost

K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective? A. the date the sales appointment was made B. the date the application was submitted to the insurance company C. the date of application D. the date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured

the date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured

whole life insurance is sometimes referred to as "straight life". What does the word "straight" indicate when using this phrase? A. the incontestable period B. the ability to borrow against the cash value C. the grace period D. the duration of premium payments

the duration of premium payments

what is the underlying concept regarding level premiums? A. level premiums build up cash value quicker in the early years B. the early years are charged more than what is needed C. the early years are charged less than what is needed D. level premiums can only be paid annually

the early years are charged more than what is needed

a noncontributory group term life plan is characterized by: A. the entire cost of the plan is paid for by the employer B. the entire cost of the plan is paid for by the employee C. the cost of the plan is shared by both employer and employee D. both employer and employee must provide evidence of insurability

the entire cost of the plan is paid for by the employer

the consideration clause in a life insurance policy indicated that a policyowner's consideration consists of a completed application and A. the initial premium B. agreeing to a physical examination C. delivery of policy D. disclosure of any medical conditions

the initial premium

upon policy delivery, a signed good health statement is requested from the applicant. Why would this be necessary? A. the applicant chose an annual premium mode B. the applicant is suspected of making a material misrepresentation C. the initial premium was submitted with the application D. the initial premium was NOT submitted with the application

the initial premium was NOT submitted with the application

A policy of adhesion can only be modified by whom? A. The agent B. The applicant C. The primary beneficiary D. The insurance company

the insurance company

the amount of coverage on a group credit life policy is limited to: A. half of the insured's total loan value B. the insured's total loan value C. 75% of the insured's total loan value D. $25,000

the insured's total loan value

T was insured under an individual Disability Income policy and was severely burned in a fire. As a result, T became totally disabled. The insurer began making monthly benefit payments, but later discovered that the fire was set by T in what was described as arson. What actions will the insurer take? A. the insurer will rescind the policy, deny the claim, and recover all payments made B. due to the policy not being post-claim underwritten, the insurer must continue to pay this claim C. claim will be rejected because of this criminal act, but no recovery of payments will be made D. claim will be denied but the policy will remain in force without further premium payments due to the insured's total disability

the insurer will rescind the policy, deny the claim, and recover all payments made

health policies sold in Mississippi are REQUIRED to begin medical coverage of a newborn beginning at A. 31 days after birth B. 14 days after birth C. 24 hours after birth D. the moment of birth

the moment of birth

a level premium indicates: A. the premium is fixed for a period stated in the contract, then become variable B. the premium can only be changed with the consent of the insurer C. the premium stays level until the policy's renewal date D. the premium is fixed for the entire duration of the contract

the premium is fixed for the entire duration of the contract

which of the following would be a valid reason for suspending or revoking an insurance producer's license? A. the producer has been convicted of a misdemeanor within the past ten years B. the producer unintentionally made a material misstatement on the license application C. the producer has misappropriated money held in fiduciary capacity D. the producer has filed for personal bankruptcy within the last five years

the producer has misappropriated money held in a fiduciary capacity

under a renewable term policy, A. the face amount is automatically adjusted at the time of renewal B. evidence of insurability must be provided at each renewal C. the renewal premium is calculated on the basis of the insured's attained age D. a new application must be completed at each renewal

the renewal premium is calculated on the basis of the insured's attained age

an individual who purchases a life annuity is given protection against: A. inflation B. the risk of dying prematurely C. the risk of living longer than expected D. the risk of not having enough retirement income

the risk of living longer than expected

the consideration clause of an insurance contract includes: A. the buyer's guide B. a summary of the coverage provided C. the named beneficiaries D. the schedule and amount of premium payments

the schedule and amount of premium payments

which of the following statements is true about most blue cross/blue shield organizations? A. they are the same as private insurance companies B. they are federally sponsored C. they are nonprofit organizations D. they are owned by hospitals and physicians

they are nonprofit organizations

stranger-owned life insurance (STOLI) is when a person purchases life insurance only to sell to a(n): A. underwriter B. sole proprietor with insurable interest C. third-party with no insurable interest D. relative with insurable interest

third-party with no insurable interest

the common disaster clause provides that if both the insured and the sole named beneficiary were to die in a common accident, which of the following is true? A. this clause provides the payment of proceeds to the insured's estate B. this clause provides the payment of proceeds to the beneficiary's estate C. the estate taxes in the insured's estate may be reduced D. the estate taxes in the beneficiary's estate may be reduced

this clause provides the payment of proceeds to the insured's estate

a disability elimination period is best described as a: A. time deductible B. dollar deductible C. eligibility period D. probation period

time deductible

T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called A. insuring B. time limit on certain defenses C. grace period D. free-look

time limit on certain defenses

Which Accident and Health policy provision addresses preexisting conditions? A. proof of loss B. legal action C. time limit on certain defenses D. payment of claims

time limit on certain defenses

what is the elimination period of an individual disability policy? A. time period an insured must wait before coverage begins B. time period a disabled person must wait before benefits are paid C. time period after the policy issue date in which the provisions are still contestable D. the point in time when benefits are no longer payable

time period a disabled person must wait before benefits are paid

why is an applicant's signature required on a life insurance application? A. to attest that the statements on the application are warranties B. to attest that the statements on the application are accurate to the best of the applicant's knowledge C. to give power of attorney to the producer if needed D. to attest that all statements on the application are guaranteed to be true

to attest that the statements on the application are accurate to the best of the applicant's knowledge

What type of reinsurance contract involves two companies automatically sharing their risk exposure? A. arbitrage B. facultative C. excess D. treaty

treaty

which of the following is a requirement to attain a Mississippi resident producer license? A. graduate from high school B. U.S. citizen C. trustworthiness and competence D. live in this state at least 5 years

trustworthiness and competence

J is a producer who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of? A. coercion B. sliding C. twisting D. rebating

twisting

which of the following is considered an element of a variable life policy? A. underlying equity investment B. little or no risk to insured C. guaranteed dividends D. insurer assumes all the risk

underlying equity investment

all of these are considered to be a benefit under social security, EXCEPT for: A. survivorship B. unemployment C. disability D. retirement

unemployment

in an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this? A. subrogation B. unenforceable C. adhesion D. unilateral

unilateral

life and health insurance policies are: A. multi-lateral contracts B. bilateral contracts C. unilateral contracts D. non-lateral contract

unilateral contracts

K purchased a life insurance policy in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much-higher premium is paid because of falling interest rates. This type of policy is known as a(n) ______ life policy A. whole B. universal C. graded D. increasing

universal

What type of life insurance incorporates flexible premiums and an adjustable death benefit? A. endowment policy B. modified whole life C. decreasing term. D. universal life

universal life

At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? A. before the appointment is scheduled B. Upon completion of the application C. at the policy's delivery D. when the insurer receives the MIB report

upon completion of the application

R becomes disabled and owns an individual disability income policy. When is R eligible to receive disability benefits? A. upon being laid off from employer B. upon paying a deductible C. upon being examined by a physician D. upon satisfying the elimination period requirement

upon satisfying the elimination period requirement

when is the face amount paid under a joint life and survivor policy? A. when policy reaches maturation B. upon death of the first insured C. upon death of the last insured D. when one of the insureds becomes disabled and no longer able to make premium payments

upon the death of the last insured

a term life insurance policy matures: A. upon endowment of the contract B. upon death of the insured C. when the cash value equal the death benefit D. upon the insured's death during the term of the policy

upon the insured's death during the term of the policy

which of the following BEST describes how pre-admission certification is used? A. used to assist in underwriting B. used to prevent nonessential medical costs C. used to minimize lawsuits D. used to help process claims

used to prevent nonessential medical cost

which of the following phrases refers to the fees charged by a healthcare professional? A. deductible B. coinsurance C. usual, customary, and reasonable expenses D. hospital expense

usual, customary, and reasonable expenses

A life insurance policyowner would like to take out a policy loan against the cash value in his whole life policy. The interest rate applied to this loan may vary over time. This is referred to as a(n) _____ rate loan A. fluctuating B. fixed C. variable D. increasing

variable

A(n) ___ annuity pays benefits based on units rather than stated dollar amounts A. deferred B. variable C. immediate D. unit

variable

a life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as: A. adjustable life B. graded-premium life C. variable life D. modified whole life

variable life

life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit? A. universal life B. variable life C. fixed annuity D. modified endowment contract

variable life

which of these types of insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? A. modified whole life B. variable life C. universal life D. adjustable life

variable life

a life policy that contains a monthly mortality charge as well as self-directed investment choices is called a(n) A. joint life policy B. endowment C. variable universal life policy D. universal life policy

variable universal life policy

The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the: A. grace period B. waiting period C. postponement period D. elimination period

waiting period

the part of a life insurance policy guaranteed to be true is called a(n): A. representation B. exclusion C. warranty D. waiver

warranty

which of these is considered a statement that is assured to be true in every respect? A. Estoppel B. Warranty C. Guarantee D. Representation

warranty

at what point does an informal contract become binding A. when one party makes an invitation and the other makes an offer B. when an offer is made by one party and the other party rejects the offer and makes a counteroffer C. when one party makes an offer and the other party accepts that offer D. when one party makes the required payment

when one party makes an offer and the other party accepts that offer

when does a life insurance contract become effective if the initial premium is not collected during the application process? A. after all medical and personal information has been evaluated B. when insurer receives initial premium from the producer C. when producer delivers policy and collects initial premium D. after application has been approved by the underwriters

when producer delivers policy and collects initial premium

when must insurable interest be present in order for a life insurance policy to be valid? A. when the insured dies B. within the incontestability period C. when the application is made D. before the insured dies

when the application is made

at what point does the life and health insurance guaranty association become involved with an insurer's affairs? A. when the insurer enters a lawsuit against a claimant B. when the insurer withdraws as an association member C. when the insurer becomes insolvent D. when the insurer denies a claim

when the insurer becomes insolvent

under which circumstance must the pre-existing condition clause in a long-term care policy be waived? A. when the applicant requests a waiver B. when the policy replaces existing coverage with the same insurer C. when the applicant is at least 65 D. when the policy guaranteed renewable

when the new policy replaces existing coverage with the same insurer

what does the ownership clause in a life insurance policy state? A. who the policyowner is and what rights the policyowner is entitled to B. who the beneficiary is and what rights the beneficiary is entitled to C. ownership cannot be assigned after the incontestable period D. allows the policyowner to adjust the death benefit and premium amount at anytime

who the policyowner is and what rights the policyowner is entitled to

what kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100? A. term life B. whole life C. credit life D. universal life

whole life

Q would like to purchase $100,000 of permanent protection on his wife and $50,000 of Term coverage on himself under the same policy. What kind of policy should Q purchase? A. joint policy B. joint survivor policy C. whole life policy with other insured rider D. whole life policy with a guaranteed insurability option

whole life policy with other insured rider

a policy that becomes a modified endowment contract (MEC): A. will no longer allow for policy loans B. must be placed in an irrevocable trust C. can never be reinstated after a lapse D. will lose many of its tax advantages

will lose many of its tax advantages

T is a producer who forgot to renew her license. She may reapply for a license without an examination A. within three years after no renewal B. within one year after no renewal C. within four years after no renewal D. anytime

within one year after no renewal