Insurance Test
Which statement is true regarding a variable whole life policy?
A minimum guaranteed death benefit is provided
Traditional individual retirement annuity (IRA) distributions must start by
April 1st of the year following the year participant attains age 70 ½
What action can a policyowner take if an application for a bank loan requires collateral?
Assign policy ownership to the bank
Which of the following is a requirement to attain a nonresident producer license?
Be licensed as a producer in the producers state of domicile
In life insurance the needs approach is used mostly to establish?
How much life insurance should the client apply for
What is the purpose of the U.S.A. patriot act?
detect and deter terrorism
Which of these are not an example of a nonforfeiture option?
life income
Life insurance that covers an insured's whole life with level premiums paid over a limited time is called?
limited pay life
The provision that defines whom the insurer will pay benefits to is called:
payment of claims
A _____ is an individual who is appointed by an insurance company to transact insurance.
producer
No one may be denied coverage by an insurance company due to:
race
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?
sign an enrollment card
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
variable life
What is the primary factor that determines the benefit paids under a disability income policy?
wages
Which parts of a life insurance policy are guaranteed to be true?
warranty
A life insurance policy that provides a policy owner with cash value along with a level face amount is called?
whole life
B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what will the policy pay B's Beneficiary?
$300,000
What is the maximum for willfully violating the unfair trade ;practice laws of iowa?
$5,000
What percent of personal life insurance premiums is usually deductible for federal income tax?
0%
According to Iowa law, a group life insurance policy requires a minimum of how many insureds?
10
What is the maximum social security disability benefit amount an insured can receive?
100% of the insureds primary insurance amount (PIA)
If an insurer receives a cash payment in excess of __ , it must report this act as stated by the USA patriot act.
10000
What is the minimum benefit period that must be offered by a long term care policy?
12 months
Within __ days after policy delivery, a medicare supplement policy can be returned for a 100% premium refund
30
A producer must notify the insurance division within __ days of a felony conviction
30 days
The maximum time period that a preexisting conditions can be excluded in long term care policies is
6 months
The waiting period for a pre-existing condition under a medicare supplement policy may not go beyond?
6 months
How many days must the insured wait to take legal action against a health insurer after submitting written proof of loss if the insurer refuses to pay?
60
The individual most likely to buy a medicare supplement policy would be a(n):
68 year old male covered by medicare
P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount?
AD&D accidental Death and dismemberment clause
The option that provides an additional death benefit benefit for a limited amount of time at the lowest possible cost is called?
Accidental Death and Dismemberment AD&D
In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments
After an insured has become totally disabled as defined in the policy
Under a long term care policy, which benefit would be typically excluded or limited?
Alcohol Rehab
Which of the following statements best describes what the legal actions provision of an accident and health policy requires?
An insured must wait at least 60 days after proof of loss has been submitted before a lawsuit can be filed
An example of false advertising would be?
An insurer exaggerating its dividends in a magazine advertisement
Before a life insurance policy is issued, which of these components of the contract is required?
Applicant's signature on application
Which of the following is the most important factor when deciding how much disability income coverage an applicant should purchase
Applicants monthly income
Medicare part C is:
Available to those who are enrolled in medicare Part A and Part B
Which of the following is a requirement to attain a nonresident producer license?
Be licensed as an producer in the producers state of domicile
T is receiving 3000/month from a disability income policy in which t's employed had paid the premiums. How are the 3000 benefits payments taxable
Benefits are taxable to T
The difference between group insurance and blanket health policies is;
Blanket health policies do not issue certificates
Which type of policy would pay an employees salary if the employer was injured in a bicycle accident and was out of work for six weeks?
Business Overhead expense
According to the affordable care act, which of the following coverages is not required
Coverage for cosmetic surgery
Which of the following statements best describes the intent of a coinsurance clause in a major medical policy?
Discourages overutilization of the insurance coverage
The federal income tax treatment of employer-provided group medical expense insurance can be accurately described as:
Employee's premiums paid by the employer is tax deductible to the employer as a business expenditure
Replacement can be defined as?
Exchanging an existing policy for a new policy
Health insurance benefits not covered due to an act of war are?
Excluded by the insurer under the contracts provisions
All of these are characteristics of an Adjustable Life policy, EXCEPT?
Face amount can be adjusted using policy Dividends
An insured is past due on his life insurance premium, but is still within the grace period. What will the beneficiary receive if the insured dies during this grace period?
Full face amount minus any past due premiums
With accidental death and dismemberment policies, what is the purpose of the grace period
Gives the policyowner additional time to pay overdue premiums
Which of the following is a requirement to be eligible for a group life policy in Iowa?
Group must be formed for a purpose other than obtaining insurance
Which of the following actions require a policy owner to provide proof of insurability in an adjustable life policy?
Increase face amount
T owns an Accident and health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the change of occupation provision, which of the following actions may her insurance company take?
Increase her policies coverage amount
When third party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have?
Insurable interest in the proposed insured
What is being delivered during a policy delivery
Insurance contract to the proposed insured
The accidental death and dismemberment provision in a life policy would pay additional benefits if the insured:
Is blinded in an accident
A license may be denied, suspended, or revoked if the license:
Is found guilty of misrepresentation in obtaining the license
Which of the following statements about long term care insurance is correct?
It must provide coverage for at least 12 consecutive months.
Which of these would be considered a limited pay life policy?
Life paid up at age 70
Under iowa law, which of the following provisions is not required in a medicare supplement policy?
Limitation on pre-existing conditions on up to 12 months
Which of the following is NOT a situation that involves life insurance policy replacement?
Maintaining an existing policy and applying for a new one.
Defamation occurs when a producer makes a false statement intended to
Malign another insurer
Which requirement must be met by a group that seeks group health coverage for its members
Must have been formed for a purpose other than obtaining insurance
Which type of insurance company allows their policy owners to elect a governing body?
Mutual
Which of these statements concerning an individual disability income policy is true:
Normally includes an elimination period
An example of unfair discrimination would be?
Offering different terms of coverage for different policyowners having the same risk classification
Deductibles are used in health policies to lower
Overuse of medical services
P and Q are married and have three children. P is the primary beneficiary on Q's accidental death and dismemberment 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:
P only
Under what 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.
PPO
A young married teacher has two children and owns a whole life policy. IF the teacher wants an increasing death benefit to protect against inflation, the teacher should select which of the following dividend options?
Paid-up additional insurance
The benefits under a disability buy-out policy are:
Payable to the company or another shareholder
Which of the following provisions guarantees that premiums will be waived if a juvenile life policyowner becomes disabled?
Payor clause
Which of the following describes a contingent beneficiary?
Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured.
Under Federal Tax laws, what is the tax treatment for an employer providing 50,000 of a contributory group term life plan to all its eligible employees?
Portion of the premiums paid for by the employer may be a tax deduction
What is considered to be a characteristic of a conditionally renewable health insurance policy?
Premiums may increase at time of renewal
What is the purpose of the time payment of claims provision?
Prevents delayed claim payments made by the insurer
The individual who provides general medical care for a patient as well as the referral for specialized care is known as a
Primary care physician
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?
Proceeds will go to the contingent beneficiary
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?
Reinstatement
According to Iowa law, group life insurance conversion privileges must not
Require evidence of insurability
An example of rebating would be
Returning a portion of a premium as inducement to purchase insurance
M purchased an accidental death and dismemberment policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?
Revocable
A prepaid application for individual disability income insurance was recently submitted to an insurer. When the insurer received the medical information bureau 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?
Send a notice to the MIB that the applicant was denied
Upon delivery of a rated life insurance policy, the producer must obtain each of the following except:
Signed Hippa disclosure
An immediate annuity consists of a:
Single Premium
The percentage of an individual primary insurance amount determines the benefits paid in which of the following programs?
Social security disability income
The premiums pad by an employer for his employee's group life insurance are usually considered to be:
Tax-deductible to the employer
On delivery of a policy, a signed statement of good health is typically requested if:
The application was submitted without the initial premium
The amount of coverage on a group credit life policy is limited to:
The insured's total loan value
Life insurance replacement regulation protects the interest of?
The policyowner
W gave W's age as 50 when W purchased a life policy. At the time of W's death seven years later, the company discovered W's true age at issue had been 59. What would the normal procedure be under the misstatement of age provision in regard to the payment of the death claim?
The proceeds would be reduced based on whatever the premium would have been if purchased at age 59
Essential Benefits without annual and lifetime limits are required on any health policy purchased
Through the federal Marketplace
A disability elimination period is best described as a:
Time deductible
T files on his Accident and health policy after being treated for an illness, the insurance company believes that T misrepresented his actua health on the initial insurance application and is, therefore disputing the claims validity. The provision that limits the time period during which the company may dispute a claims validity is called?
Time limit on certain defenses
According to the time limit of certain defenses provision in an individual health insurance policy, non fraudulent misstatements first become incontestable.
Two years from the date of the policy was issued
Which of the following phrases refers to the fees charged by a healthcare professional?
Usual customary, and reasonable expenses
A life insurance policy may sell their own policy to a(n) __ in order to receive a percentage of the policies face value:
Viatical settlement provider
An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium, when will the policy become effective?
When the conditions on the receipt are met
What does the ownership clause in a life insurance policy state?
Who the policyowner is and what rights the policyowner is entitled to
A producers license may be suspended or revoked if the license?
Write primarily controlled business
Which product would ebay serve a retired individual looking to invest a lump-sum of money through an insurance company?
annuity
When can a policy owner change a revocable beneficiary?
anytime
____ is the authority given to a producer to transact business on behalf of the insurer
appointment
A policy loan is made possible by which of these life insurance policy features?
cash value provision
Whose life is covered on a life insurance policy that contains a payor benefit clause.
child
Which rider provides coverage for a child under a parents life insurance policy?
child term rider
An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. Afew weeks later E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet?
consideration clause
Which provision allows policyowner to change a term life policy to a permanent one without providing proof of good health?
conversion
How often must the commissioner examine each domestic insurance company?
every 5 years
Which of the following is not included in the policy face?
exclusions
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?
f
An insurer receives proof of loss for an acceptable medical expense claim under an individual health insurance policy. Under the time of payment of claims provision, the insurer must pay the benefits:
immediately
The clause identifying which losses resulting from an accident of sickness are insured by the policy is called the :
insuring clause
All of these settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death except:
interest only
Which unfair trade practice involves a producer telling a prospective client that a policies dividends are guaranteed?
misrepresentation
According to the time payment of claims provision, the insurer must pay disability income benefits no less frequently than which option?
monthly
A medicare supplement policy can be cancelled by the insurer for:
nonpayment
Which of the following best describes a short-term medical expense policy?
nonrenewable
When a medicare supplement policy is delivered, disclosure standards require that a of coverage be provided to the insured:
outline
An individual Disability income insurance applicant may be required to submit all of the following information except:
spouses income
Obtaining information from the applicant to determine whether an insurance or annuity product is appropriate is called?
suitability
L aged 50 and L's spouse 48 have one natural child and one adopted child. They purchase a Family Policy that covers L's spouse to age 64. A death benefit will not be paid in which of the following circumstances.
L's spouse dies at age 66
Basic Hospital and surgical policy benefits are:
Lower than the actual expenses incurred
Which of these is an element of a single premium annuity?
Lump- Sum Payment
All these statements about equity indexed life insurance are correct, except:
The premiums can be lowered or raised, based on investment performance.
Which Accident and Health policy provision addresses preexisting conditions?
Time limit on Certain Defenses
Why is an applicant's signature required on a life insurance application?
To attest that the statements on the application are accurate to the best of the applicant's knowledge
The provision in a group health policy that allows the insurer to postpone coverage for a covered illness 30 days afte the policy's effective date is referred to as the:
Waiting period
M's insurance company denied a reinstatement application for her lapsed health insurance polic. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?
45 days
Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled being able to apply for Social Security disability Benefits?
5
Which of the following are not managed care organizations?
Medical Information Bureau (MIB)
The legal actions provision of an insurance contract is designed to do all of the following Except:
Protect the producer
An example of life insurance policy replacement would be?
Cash surrender an existing whole life policy and purchasing a new whole life policy
What does the Iowa Life and Health Insurance Guaranty Association provide?
Claim payments of admitted, insolvent insurance companies
When does a life insurance contract become effective if the initial premium is not collected during the application process?
When producer delivers policy and collects initial premium
An individual life insurance policy issued in iowa must have a free look period of atleast -- days.
10
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?
31
C was injured while deep sea diving and requires a hospital stay. C has a major Medical policy with 80/20 coinsurance clause and a $400 deductible. What is the maximum C will pay if the covered medical expenses are $2,000.
720
A disability income policyowner recently submitted a claim or a chronic neck problem that has now resulted in total disability. The original neck injury occured before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?
Claim will be denied, the coverage cancelled, and all the premiums paid will be refunded
S the producer has deposited premiums collected from clients into his personal bank account. This illegal act is called
Commingling
Which of these is a requirement for obtaining a resident insurance producer license in this state?
Complete a pre licensing examination
Which of these statements is not true regarding health coverage for a newborn?
Coverage is limited to only congenital defects
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?
Deferred
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?
Fair Credit Reporting act
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?
Guaranteed renewable
A long term care rider in a life insurance policy pays a daily benefit in the event of which of the following?
Inability of the insured to perform more than 2 activities of daily living.
When must insurable interest exist for a life insurance contract to be valid?\
Inception of the contract
The annuity that represents the largest possible monthly payment to an individual annuitant is a(n):
Straight life annuity
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?
Unilateral
What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?
conversion
