Life & Health
Which of the following is NOT allowed in regards to a Medigap (Medicare Supplement) policy? - Holding an open enrollment period - Issuing an additional Medigap policy to ensure no out-of-pocket exposure for the insured - Issuing a Medigap policy to someone under age 65 - Offering a free-look period of 30 days
Issuing an additional Medigap policy to ensure no out-of-pocket exposure for the insured
Which statement regarding third-party ownership of a life insurance policy is true?
It is used extensively in estate-planning as well as business circumstances
Which of the following actions may NOT be taken by an insurance company to insure a substandard applicant for disability income coverage? - Increase the premium - Do not cover the substandard condition - Limit the type of coverage - Lengthen the contestability period
Lengthen the contestability period
Which of the following is not a limited benefit plan? Which of the following is not a limited benefit plan? - Dental policy - Life insurance policy - Critical illness policy - Cancer policy
Life insurance policy
Pre-hospitalization authorization is considered an example of: - Managed care - PPO care - Medicaid - Major Medical insurance
Managed care
A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid
Mandatory income tax withholding on the transfer amount
The health insurance program which is administered by each state and funded by both the federal and state governments is called: 1) Long-term care 2) Medicaid 3) Medicare Supplemental Program 4) Medicare
Medicaid
All of these insurance products require an agent to have proper FINRA securities registration in order to sell them, EXPECT for: - Variable life - Modified whole life - Universal variable life - Variable annuity
Modified Whole Life
An accident policy will most likely pay a benefit for a(n) - Off-the-job accident - On-the-job accident
Off-the-job accident
All of these statements concerning Settlement Options are true, EXCEPT: - Increased proceeds can be provided through accumulation of interest - Rapid depletion of proceeds can be avoided - Proceeds can be administered by the insurance company - Only the beneficiary may select
Only the beneficiary may select
The free-look provision begins: - upon the date of the sales presentation - upon receipt of the policy by the producer - upon receipt of the policy by the policyowner - upon the completion of the application
Upon receipt of the policy by the policyowner
A(n) ____ annuity pays benefits based on units rather than stated dollar amount - Deferred - Variable - Immediate - Unit
Variable
Which type of life policy contains a monthly mortality charge as well as self-directed investment choices? - Joint life policy - Endowment - Variable universal life - Universal life policy
Variable Universal Life
A policyowner is able to choose the frequency of premium payment through what policy feature? - Consideration - Payor benefit - Premium mode - Assignment provision
Premium mode
How does group insurance differ from individual insurance? - Premiums are lower - Premiums are higher - Premiums are level - Premiums increase after 5 years
Premiums are lower
What is considered to be a characteristic of a conditionally renewable health policy - Premiums may increase at time of renewal - Premiums may increase at any time - Policy may be renewed at the discretion of the insured - Policy may be amended by insurer at any time
Premiums may increase at time of renewal
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? - Universal life - Variable life - Fixed annuity - Modified endowment contract
Variable life
ABC Insurance Company failed to accept a valid Proof of Loss statement. This is considered to be a(n) - Coercion - Warranty - Unfair claims practice - Misrepresentation
Unfair claims practice
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) __________ policy. Whole Universal Graded Increasing
Universal
The payments on Q's annuity are no less than $250 quarterly. Which of the following annuities does Q own? - Immediate fixed - Quarterly flexible - Flexible installment deferred - Adjustable deferred
Flexible Installment Deferred
What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years? - Family lump sum policy - Family maintenance policy - Family survivor policy - Family income policy
Family maintenance policy
Which of these is NOT a source of funding for social security benefits? - Self employed individuals - Employees - Federal government - Employers
Federal government
An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction? - 10% is withheld for income taxes - 20% is withheld for income taxes - 20% is income tax deferred - 10% is income tax deferred
20% is withheld for income taxes
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? - 20,000 - 14,000 - 6,000 - 0
$0(Disability income benefits that derive from an individual policy which was paid entirely by the policyowner is not subject to federal income tax.)
A Hospital/Surgical Expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013? - 500 - 1000 - 1500 - 2000
$1,000
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? - no deduction allowed - $6,000 - $5,000 - $4,000
$6,000
C was injured while deep sea diving and requires a hospital stay. C has a Major Medical policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000? - 0 - 400 - 720 - 1000
$720
All of these are considered sources of underwriting information about an applicant EXCEPT? - Inspection Report - Credit Report - Rating Services - Medical information bureau
- Rating Services.(All of these are valid sources to obtain underwriting information about an applicant EXCEPT for a rating service (A.M. Best, Standard & Poor's).
In Missouri, an A&H policy that is paid on a monthly basis requires a grace period of at LEAST - seven - ten - fifteen - thirty one
10 days
Insurers may request a hearing within _____ if their policy is rejected - 20 - 30 - 60 - 90
20 days
Missouri requires that an insurance producer must complete ____ hours of continuing education on the subject of law and ethics every reporting period - 0 - 1 - 2 - 3
3 hours
A producer must report any personal felony charges within ___ days of pre-trial hearing. - 10 - 15 - 20 - 30
30 days
When an employee is terminated, how long does this employee have to convert group life coverage to an individual plan? - 30 - 31 - 60 - 90
31 days
One becomes eligible for Social Security disability benefits after having been disabled for -3 months -5 months -6 months -12 months
5 months
An insurer may exclude pre-existing conditions coverage on a Medicare Supplement policy for up to . - 3 - 6 - 9 - 12
6 months
How long does an individual have to "rollover" funds from an IRA or qualified plan? -30 -31 -60 -90
60 days
A contract where one party either accepts or rejects the terms of a contract written by another party is Called a contract of..
Adhesion
Which type of contract liquidates an estate through recurrent payments? - Universal life insurance - Whole life insurance - Annuity - 401k
Annuity
An incomplete life insurance application submitted to an insurer will result in which of these actions?
Application will be returned to the writing agent
What action can a policyowner take if an application for a bank loan requires collateral? - Utilize accelerated benefits provision - Borrow against policy cash value and use as a down payment - Assign policy ownership to the bank - Name bank as beneficiary
Assign policy ownership to the bank
Which of the following is a requirement to attain a nonresident producer license? - Be at least 21 years of age - Be bonded in the producer's state of domicile - Be licensed as a producer in the producer's state of domicile - Pass a special examination for resident producers
Be licensed as an producer in the producer's state of domicile
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 - Dismemberment sum - Capital sum - Premium sum - Remnant sum
Capital Sum
A policy loan is made possible by which of these life insurance policy features? - extended term provision - cash value provision - owner's rights provision - consideration clause
Cash value provision
Which of the following organizations reimburses its insureds for covered medical expenses? - Health maintenance organizations - Preferred provider organizations - Commercial insurers - Service providers
Commercial insurer
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 - Initial deductible - Time deductible - Dollar deductible - Common accident deductible
Common accident deductible
K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used? - Binding receipt - Conditional receipt - Backdated receipt - Warranty receipt
Conditional receipt
The Consolidated Omnibus Budget Reconciliation Act (COBRA) Gives workers and their families whose employment has been terminated the right to - continue group health benefits - take out an individual health policy - transfer their coverage to another insurer - convert to disability coverage
Continue group health benefits
Insurance policies are offered on a "take it or leave it" basis which makes them?
Contracts of adhesion
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? - Owner's rights clause - Incontestable period - Insuring agreement - Conversion privilege
Conversion privilege
Which of the following best describes a hospital indemnity policy? - Coverage that reimburses an insured for surgeon expenses - Coverage that pays a stated amount per day of a covered hospitalization - Coverage that replaces lost income due to hospitalization - Coverage that pays for hospital room and board
Coverage that pays a stated amount per day of a covered hospitalization
How are surrender charges deducted in a life policy with a rear-end loaded provision? - deducted from the death benfit - deducted when the policy is discontinued - deducted from policy's cash value - deducted when assigned to another policyowner
Deducted when the policy is discontinued
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 - Fixed Deferred - Immediate - Adjustable
Deferred
K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income? - Medicare - Business Overhead Expense - Disability Income - Worker's Compensation
Disability Income
Which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual Accident and Health insurance? - Disability income policy premiums are NOT tax-deductible - Disability income policy premiums are tax-deductible - Major medical policy benefits are normally not taxed - Disability income policy premiums are normally not taxed
Disability income policy premiums are tax-deductible
Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy? - Discourages overutilization of the insurance coverage - Minimizes the need for deductibles - Discourages adverse selection - Minimizes the waiting period
Discourages overutilization of the insurance coverage(Correct.) A purpose of the Coinsurance clause in a Major Medical Policy is to discourage overutilization of the insurance coverage.
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? - 2000 - A lump sum of six times the monthly benefit - Nothing - Earned, but unpaid benefits
Earned, but unpaid benefits
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? - Endowment at age 70 - Paid up life - Modified endowment - Fixed annuity
Endowment at age 70
A producer does not have the authority to change a policy or waive any of its provisions. The health provision that best describes this statement is called the - grace period - incontestable - entire contract - time limit on certain defenses
Entire Contract
Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE? - Coverage can be added at specific events such as marriage or having a child - Evidence of insurability is not required when the option is exercised - Evidence of insurability is required when the option is exercised - Coverage can be added at specific ages
Evidence of insurability is required when the option is exercised
The section of an insurance contract which limit coverage are called: - Exclusions - Warranty - Exception - Misrepresentations
Exclusions
Long Term Care policies will usually pay for eligible benefits using which of the following methods? - Delayed - Fees for service - Expense incurred - Respite
Expense incurred
X is insured with a disability income policy that provides coverage until age 65. This policy allows the insurer to change the premium rate for the overall risk class assigned. Which of these renewability features does this policy contain? - Guaranteed assignable - Guaranteed renewable - Optionally cancellable - Noncancelable
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? - Term renewable - Optionally renewable - Conditionally renewable - Guaranteed renewable
Guaranteed Renewable.(The renewal provision in a guaranteed renewable policy specifies that the policy must be renewed (as long as premiums are paid) until the insured reaches a specified age. These usually have increasing premiums.)
In Missouri, a health insurance policy that is not exempt from state-mandated benefits must cover childhood immunizations and shall not charge any deductible or copayments. The EXCEPTION to this would be - Providers who offer high-deductible plans only - PPO's that offer nationwide plans - Providers that charge separate amounts based on Medicare allowable reimbursement - HMO's that exclude coverage to subscribers who obtain services by a non-participating provider
HMO's that exclude coverage to subscribers who obtain services by a non-participating provider
Which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT? - If the employee had a qualified medical leave from work, lost wages can be reimbursed - If the employee paid for qualified medical expenses, the reimbursements may be tax-free - Any unused amounts are added to employee's gross income - Health insurance premiums can be reimbursed to the employee
If the employee paid for qualified medical expenses, the reimbursements may be tax-free
A long-term care rider in a life insurance policy pays a daily benefit in the event of which of the following? - critical illness - terminal illness - inability of the insured to perform more than 2 activities of daily living (ADL's) - inability to maintain insurance premiums due to unemployment
Inability of the insured to perform more than 2 activities of daily living
Which entity issues medicare supplement insurance? - Insurance companies - Medicaid - Medicare - NAIC
Insurance companies
Who may assign benefits from a group life insurance policy? - Producer - Insured - Insurance company - Beneficiary
Insured
All of these statements about the Waiver of Premium provision are correct EXCEPT - A waiting period must pass before becoming eligible for benefits - A waiver of premium is available on both permanent and term insurance policies - Insured must be eligible for Social Security disability for claim to be accepted - Insured must be totally disabled to qualify
Insured must be eligible for Social Security disability for claim to be accepted
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: - Medical examination is given - Producer completes the application - Insurer dates the policy - The first premium is paid
Insurer dates the policy. An insurance company can usually contest the information contained in an accident and health application for two years from the date the insurance company dates the policy.
The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n): - entire contract provision - consideration clause - insuring agreement - assignment agreement
Insuring agreement
Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2? - Ordinary income tax and a 5% tax penalty for early withdrawal - Ordinary income tax and a 10% tax penalty for early withdrawal - Ordinary income tax and a 20% tax penalty for early withdrawal - Ordinary income tax and a 50% tax penalty for early withdrawal
Ordinary income tax and a 10% tax penalty for early withdrawal
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? - HMO - PPO - EPO - PLHSO
PPO
Which statement is TRUE in regards to a policy loan? - past-due interest payments not paid after 3 months will void the policy - past-due interest on a policy load is added to the total debt - insurance companies can send delinquent interest accounts to a collection agency - insurance companies can charge an interest rate based on the policyowner's credit report
Past-due interest on a policy load is added to the total debt
The provision that defines to whom the insurer will pay benefits to is called - Consideration - Entire contract - Accelerated benefits - Payment of claims
Payment of claims
Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled? - Ownership clause - Residual premium provision - Accelerated benefits provision - Payor clause
Payor clause
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? - Payor provision - Accelerated benefits provision - Assignment provision - Waiver of premium provision
Payor provision. A payor provision provides that in the event of death or disability of the adult premium payor, the premiums on a juvenile policy will be waived until the insured child reaches a specified age or the maturity date of the contract.
what is the purpose of the time of payment of claims provision - Requires the insured wait 60 days after submitting proof of loss before filing a lawsuit - Prevents delayed claim payments made by the insurer - Requires a probation period for each claim filed by the insured - Protects the insurer from frivolous lawsuits
Prevents delayed claim payments made by the insurer
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? - Proceeds will be paid to P's estate - Proceeds will be divided equally between K's and P's estate - Proceeds will be payable to K's estate if P dies within a specified time - The courts will decide who will receive death benefits
Proceeds will be payable to K's estate if P dies within a specified time
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? - This clause provides the payment of proceeds to the insured's estate - This clause provides the payment of proceeds to the beneficiary's estate - The estate taxes in the insured's estate may be reduced - The estate taxes in the beneficiary's estate may be reduced
Provides the payment of proceeds to the insured's estate
Which of these Nonforfeiture Options continue a build-up of cash value? - waiver of premium - extended term - reduced paid-up - cash surrender
Reduced Paid-Up
Which of the following is an example of a nonforfeiture option? - Conversion option - Reduced Paid-Up option - Inflation option - Guaranteed insurability option
Reduced Paid-Up option
With Optionally Renewable Health policies, the insurer may?
Review the policy annually and determine whether or not to renew it.
Which of the following are equity indexed annuities typically invested in - Corporate monds - Money market accounts - Municipal bonds - S&P500
S&P500
Typically a life insurance death benefit is paid by a lump-sum payment. A(n) __________ option is a method of distributing a Life Insurance policy's death benefit OTHER than by a lump sum payment. - settlement - dividend - conversion - aleatory
Settlement
The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs? - Social Security Disability Income - Medicare supplements - Medicade - COBRA
Social Security Disability Income
Which of these life insurance riders allows the applicant to have excess coverage? - automatic premium loan rider - waiver of premium rider - guarantee insurability rider - term rider
Term rider
A contract owner terminates an annuity before the income payment period begins. The owner will then receive - Half of the current surrender value - The current contract surrender value - The premiums paid to date - Nothing
The current contract surrender value
The amount of coverage on a group credit life policy is limited to: - Half of the insured's total loan value - The insured's total loan value - 75% of the insured's total loan value - $25,000
The insured's total loan value
The Consideration clause of an insurance contract includes? The Consideration clause of an insurance contract includes? - Summary of benefits - Offer and acceptance - Entire contract - The schedule and amount of premium payments
The schedule and amount of premium payments. (The Consideration clause of a Life or Health policy includes the schedule and amount of premium payments.)
What is the basic function of an annuity? - systematic liquidation of accumulated funds - guarantee of a specific sum of money to a designated beneficiary upon the death of the insured - protection against loss of income due to partial or total disability - accumulation of funds to pay for life insurance premiums during retirement years
The systematic liquidation of accumulated funds
A disability elimination period is best described as a - time deductible - dollar deductible - eligibility period - probation period
Time deductible
What is the elimination period of an individual disability policy? - Time period an insured must wait before coverage beings - Time period a disabled person must wait before benefits are paid - Time period after the policy issue date in which the provisions are still contestable - The point in time when benefits are no longer payable
Time period a disabled person must wait before benefits are paid
Which of these types of life insurance allows the policy owner to have level premiums and to also choose from a selection of investment options - Modified whole life - Variable life - Universal life - Adjustable life
Variable life
A Return of Premium life insurance policy is: - Whole life and Decreasing term - Universal life - Whole life and Increasing term - Variable life
Whole life and Increasing term
Health insurance policies in Missouri are REQUIRED to contain coverage for human leukocyte antigen testing for bone marrow transplant - When genetic testing suggests the insured has a likelihood of cancer - At the discretion of the insurer - Only when requested by the insured - With each issued health policy
With each issued health policy
If a 10-year term life policy contains a renewable provision, the policy will renew - along with a decrease in premium - at the option of the insurer - only with evidence of insurability - without evidence of insurability
Without evidence of insurability
B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of: - additional Term Life coverage at any time - additional Term Life coverage at specified intervals - additional Whole Life coverage at any time - additional Whole Life coverage at specified times
additional Whole Life coverage at specified times
Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks? - Key Employer Disability - Disability Income - Business Overhead Expense - Worker's Compensation
business overhead expense
Basic hospital and surgical policy benefits are: - lower than the actual expenses incurred - higher than the actual expenses incurred - normally subject to deductibles - normally subject to coinsurance
lower than the actual expenses incurred
