Insurance License 215
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%
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 premium and benefits are variable D) it has guaranteed dividends
A minimum guaranteed Death Benefit is provided
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
Two partners own equal shares in a business worth a total of $1,000,000. If they both commit to the purchase a life insurance policy that will fund a Buy-Sell Agreement, which of the following is true? A)Each partner owns a $1,000,000 policy on their own life B) Each partner owns a $1,000,000 policy on their partners life C) Each partner owns a $500,000 policy on their own life D) Each partner owns a $500,000 policy on their partners life
Each partner owns a $500,000 policy on their partners life
The type of annuity that can be purchased with one monetary deposit is called a(n): A) Single Deposit Annuity B) Single Premium Annuity C) Fixed Annuity D) Immediate Annuity
Immediate Annuity
Which provision allows a reimbursement of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time? A)Reimbursement benefit B)Restoration of unused benefit C) Restoration of used benefit D)Medical offset benefit
Restoration of used benefit
What is Old Age and Survivors Health Insurance (OASDHI) also known as? A) medicare B) Social Security C) Medicaid D) FICA
Social Security
A(n) _______ rider may be used to include coverage for children under their parents life insurance policy: A)Payor B)Term C)Conversion D)Parent
Term
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
Life insurance companies are required to establish and maintain an anti-money laundering compliance program according to which federal regulation? A)Federal Reserve Act B)USA Patriot Act C)Fair Credit Reporting Act D)Dodd-Frank Act
USA Patriot Act
S age 40 is looking to buy a life insurance policy that will allow for increases or decreases in coverage as his needs change. The policy best suited for S is : A)Straight life B)Universal Life C)an Endowment D)Modified Whole Life
Universal Life
A life insurance policy that provides a policyowner with cash value along with a level face amount is: A)Whole life B)Level Term C)Credit Life D)Ordinary Life
Whole life
A return of premium life insurance policy is: A) a Nonforfeiture option B) Whole life and Increasing term C) interest sensitive D)Variable life
Whole life and increasing term
A life insurance contract would be considered a wagering contract WITHOUT: A)insurable interest B)premium payment C)agent solicitation D)constructive delivery
insurable interest
Which department oversees 'Market Conduct Examinations' in Florida? A)department of markets B)office of financial regulations C)department of revenue D)office of insurance regulation
office of insurance regulation
G purchased a Family Income policy at age 40, The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income? A)5 years B)10 years C)20 years D)15 years
10 years
P loses his arm in a farm accident and is paid $10,000 from his Accidental Death & Dismemberment policy. This benefit is known as: A)Dismemberment Sum B)Capital Sum C)Principal Sum D)Remnant Sum
Capital Sum
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
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
M becomes disabled and is unable to work for 6 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 6 times the monthly benefit C)Nothing D)Earned, but unpaid benefits
Earned, but unpaid benefits
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 Rider D)Waiver of Premium Rider
Guaranteed insurability rider
a provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the: A)Policy loan provision B)Automatic premium loan provision C)Accelerated benefits provision D)Consideration Clause
Policy loan provision
Which of the following life insurance policies combine term insurance with an investment element? A)Increasing Term Life B)Decreasing Term Life C)Universal Life D)Graded Life
Universal Life
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
under a guarantee renewable health insurance policy, the insurer: A) may refuse to continue coverage upon policy renewal B)is permitted to require proof of insurability upon policy renewal C)will typically decrease the policy premium upon renewal D)may cancel the policy for nonpayment only
may cancel the policy for nonpayment only
What type of renewability guarantees premium rates and renewability? A) Optionally renewable B) Conditionally renewable C) Noncancelable D) Warrantied Renewable
Noncancelable
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
All of these are considered to be a benefit under Social Security, EXCEPT for: A)survivorship B)unemployment C)disability D)retirement
unemployment
The provision in a Group Health Policy that allows the insurer to postpone coverage for a covered illness 30 days after the policies effective date is referred to as the : A) grace period B) waiting period C) postponement period D) elimination period
waiting period
What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled? A)accidental death and dismemberment rider B)disability income rider C)guaranteed insurability rider D)waiver of premium rider
waiver of premium rider
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 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
Qualified Long-term care policies may take into consideration an applicants 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
The waiting period for a pre-existing condition under a medicare supplement policy may NOT go beyond A) 1 month B) 3 months C) 6 months D) 12 months
6 months
A "reimbursement policy" pays what amount of covered Long-Term Care expense? A) All expenses regardless of the policy limits B) Actual covered expenses up to the daily amount C) A daily dollar amount regardless of the actual incurred expense D) The usual, customary, and reasonable expenses regardless of policy limits
Actual covered expenses up to the daily maximum
All of the following are Nonforfeiture options EXCEPT: A) Cash Surrender Option B) Extended Term Option C) Reduced Paid-Up Option D) Automatic Premium Loan Option
Automatic Premium Loan Option
S is the policy owner for a Major Medical Policy. The premiums are paid monthly and due on the 1st of each month. S fails to make September's payment and is hospitalized October 15th. When S files the claim for this hospitalization the insurer will likely, A) pay half the claim B) pay the full claim C) pay the claim minus September & October's premium payment D) deny the claim
Deny the claim
In a disability income policy, which of these clauses acts as a deductible? A)Elimination Period B)Waiver Period C)Deductible Period D)Probationary Period
Elimination Period
P owns a $25,000 life policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does P own? A)Straight life B)Modified life C)Whole life paid up at 70 D)Endowment at age 70
Endowment at age 70
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 be recognized as a life insurance policy B) Exceeds the maximum amount of premium that can be paid into a life policy and still be recognized as a life insurance policy 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 life policy and still be recognized as a life insurance policy
Information obtained from a phone conversation to the proposed insured can be found in which report? A)Agent's report B)MIB report C)Inspection Report D)Attending Physician Report
Inspection Report
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
K is looking to purchase renewable term insurance. Which of these types of term insurance may be renewable? A)Increasing B)Decreasing C)Adjustable D)Level
Level
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? A) Interest only B) Fixed period C) Fixed Amount D) Life Income
Life Income
Which of the following types of health coverage frequently uses a deductible? A) Major Medical Policy B) Basic Surgical Policy C)Basic Hospital Policy D)Workers Compensation
Major Medical Policy
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 C)This provision is usually provided with an increased premium D)Must have a terminal illness to qualify
Must have a terminal illness to qualify
The percentage of an individuals 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
The Common disaster clause provides that if both the insured and 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 beneficiaries estate C)The estate taxes in the insured's estate may be reduced D)The estate taxes in the beneficiaries estate may be reduced
This clause provides the payment of proceeds to the insured's estate
under a graded premium policy, the premiums: A)are higher during the policy's early years B)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 policies 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 employer
are restricted to maximum levels set by the IRS
A(n) _______ of benefits of a Health Policy transfers payments to someone other than the policy owner. A) assignment B) transfer C) allocation D) design
assignment
Which of the following reimburses its insured for covered medical expenses? A) Health maintenance organizations B) preferred provider organizations C) commercial insurers D) service providers
commercial insurers
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
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
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
How are surrender charges deducted in a life policy with a rear-end loaded provision? A)Deducted from the death benefit B) deducted when the policy is discontinued C) deducted from the policy's cash value D) deducted when assigned to another policy owner
deducted when the policy is discontinued
Which of the following statements does NOT accurately describe the tax treatments of premiums and benefits of individual Accident and Health insurance? A)Disability income policy premiums are NOT tax-deductible B)Disability income policy premiums are tax-deductible C)Major Medical policy benefits are normally not taxed D)Disability income policy benefits are normally not taxed
disability income policy premiums are tax-deductible
Which of the following Nonforfeiture options offers the highest death benefit? A) cash surrender B) reduced paid-up C) extended term D) Dividend
extended term
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)interest to insurer is decreased while administrative costs are increased D)mortality costs are greater
interest to insurer is decreased while administrative costs are increased
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
P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA laws, which of the following statements is TRUE? A)she DOES need to provide evidence of insurability B)she does NOT need to provide evidence of insurability C)she will have up to 6 months to convert to an individual policy D)she will be paying exactly the same premium for the individual plan as the group plan
she DOES need to provide evidence of insurability
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 fees
surgical fees
A(n) _____ ______ life policy combines investment choices with a form of term coverage: A)Straight whole life B)Variable Universal C)Variable Term D)Adjustable universal
variable universal
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
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
Insurers/agents must, in Florida, offer and issue all small employer health plans on a _________ basis: A)fair B)nonrenewal C)discounted D)guaranteed-issue
guaranteed issue
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
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 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 is
how much insurance a client should apply for
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
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 of these needs is satisfied by adjustable life insurance? A)insureds need for level premiums B)insureds need for flexible premiums C)insureds need for nonforfeiture options D)insureds need for level death benefits
insureds need for flexible premiums
Which of the following health insurance policy provisions specifies the health care services a policy will provide? A) insuring clause B) usual, customary, reasonable clause C) consideration clause D) benefit clause
insuring clause
How are policyowner dividends treated in regards to income tax? A)dividends are not taxable B)interest on accumulation is taxed C)taxed as ordinary income D)taxed as capital gains
interest on accumulation is taxed
B receives yearly dividends and interest from a participating life insurance policy. Which of these should B include as gross income for federal income tax purposes? A)interest and dividends B)interest only C)dividends only D)neither interest or dividends
interest only
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? A)beneficiary B)insured C)policyowner D)insurer
policyowner
The department of financial services serves as the receiver of any insurer placed into: A)bankruptcy B)foreclosure C)receivership D)indebtedness
receivership
Which of these Nonforfeiture Options continue a build-up of cash value? A)waiver of premium B)extended term C)reduced paid-up D)cash surrender
reduced paid-up
Which of theses factors does NOT influence an applicants need for life insurance? A) Lifestyle of the applicant B)Number of dependents C)Future educational costs of dependents D) self-maintenance expenses
self-maintenance expenses
The investment gains from a 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
What is the underlying concept of level premiums? A)level premiums build 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
What advantage does the renewability feature give to a term policy? A)the insured may extend the coverage period at no additional cost B)the insured may apply for this policy with little or no underwriting C)the insured may borrow against the cash value D)the insured may extend the coverage period
the insured may extend the coverage period
All of these statements about Equity Index Life Insurance are correct, EXCEPT: A)cash value has a minimum rate of accumulation B)if the gain on the index goes beyond the policy's minimum rate of return, the cash value will mirror that of the index C)the premiums can be lowered, or raised based on the investment performance D)Tied to an equity index such as the S&P 500
the premiums can be lowered, or raised based on the investment performance