Life, Health & Accident - Workbook Test

18. It is unlawful for an insurance producer to give any valuable consideration or pay a referral fee to? A. A licensed producer B. A licensed insurance solicitor C. A person not duly licensed as a producer D. An unlicensed employee of a producer when the employee refers a prospective insured to a producer

D. An unlicensed employee of a producer when the employee refers a prospective insured to a producer

All of the following are true about temporary producer licenses issued by the Commissioner except A. Temporary licenses are issued for limited term B. A temporary license may be issued to another person upon the death of a licensed agent C. A temporary license may be issued to another person if a license agent is disabled D. Applicants for temporary licenses must take and pass a written exam

D. Applicants for temporary licenses must take and pass a written exam

62. If an insured's age is misstated on an application for health insurance? A. The policy is invalid B. The elimination period is extended by an amount of time equal to the discrepancy between the stated age and actual age C. The premium will be adjusted to provide the same benefits at the correct age D. Benefits will be adjusted to what the premium would have purchased at the correct age

D. Benefits will be adjusted to what the premium would have purchased at the correct age

An insurer formed under the laws of Mississippi is known as a(n) A. Mutual Insurer B. Alien Insurer C. Foreign Insurer D. Domestic Insurer

D. Domestic Insurer

42. A clause allowing the policyholder to inspect and if dissatisfied to return a policy for a full refund, is known as? A. A waiver of premium B. Facility of payments C. Probationary period D. Free look Period

D. Free look Period

20. The privilege license and filing fees required for life, accident and health insurance producers expire on A. May 31 B. December 31 C. The producer's birthday every 2 years D. The last day of the producer's birth month every 2 years

D. The last day of the producer's birth month every 2 years

70. Which health insurance policy provision provides a period during which the insurer may challenge the contract or deny a claim on the grounds of material misrepresentation in the application? A. Entire contract B. Legal action C. Reinstatement D. Time limit on certain defenses

D. Time limit on certain defenses

47. With regards to traditional whole life insurance policies; the cash accumulations will equal the amount of insurance? A. When the insured reaches age 70 B. When the insured reaches age 65 C. When the insured reaches age 55 D. When the insured reaches age 100

D. When the insured reaches age 100

29. Life insurance cash values are typically found in? A. Decreasing term contracts. B. Increasing term contracts. C. Group insurance contracts. D. Whole life contracts

D. Whole life contracts

In Mississippi, minors attain a legal right to contract for life and health insurance on their own lives upon reaching: A. 15 years of age B. 16 years of age C. 17 years of age D. 18 years of age

A. 15 years of age

15. What is the maximum percentage of commissions that a producer may earn for writing controlled business during any 24-month period? A. 105% B. 90% C. 70% D. 35%

D. 35%

Mutual Companies

-owned by their policyholders -insurers are known as Participating Insurers because policyholders PARTICIPATE in receiving dividends and electing the board of directors -dividends are paid to the policyholders & NOT subject to taxation because the dividends are considered to be a return of premium. (If dividends collect interest is taxable.)

The general penalty for violating any provision of the insurance code for which a different penalty is not specifically provided is A. A fine of up to $5,000 B. A fine of up to $2,500 C. A fine of up to $1,000 D. A fine of up to $500

A. A fine of up to $5,000

38. An assignment in which the assignee receives full control over the policy is called a(n)? A. Absolute assignment B. Collateral assignment C. Guaranteed assignment D. Revocable assignment

A. Absolute assignment

22. A person must be licensed to do all of the following except: A. Advertise without the intent to solicit on behalf of the insurance company B. Attempts to urge a person to buy from a particular company C. Exchange an insurance contract for money on behalf of an insurance company D. Negotiate the terms of an insurance contract on behalf of an insurance company

A. Advertise without the intent to solicit on behalf of the insurance company

64. Insurance that covers business expenses to continue operations when the owner is disabled is called: A. Business overhead expense B. Professional liability C. Occupational insurance D. Special risk insurance

A. Business overhead expense (BOE)

53. The purpose of COBRA requirements concerns? A. Continuation of health insurance B. Coordination of health benefits C. Medicare supplement coverage D. Nondiscrimination in group health plans

A. Continuation of health insurance

45. A beneficiary on a life insurance policy will receive what value upon the death of the insured A. Death benefit B. Surrender value C. Investment value D. Cash value

A. Death benefit

Which of the following is considered to be an insurer: A. Insurance Company B. Insurance Agent C. Insurance Policy-owner D. Beneficiary

A. Insurance Company

An incorporated insurer owned by its Policyholders is known as a: A. Mutual Insurer B. Stock Insurer C. Foreign Insurer D. Reciprocal Insurer

A. Mutual Insurer

87. When may agents change a policy or waive its provisions according to Mandatory provision 1? A. Never B. With the approval and signatures of the insured and of an executive officer of the insurance company C. With the approval and signature of the insured D. With the approval and signature of an executive officer of the insurance company

A. Never

72. A health or disability insurance policy that may not be changed in any way by the insurer and for which the insurer cannot terminate or refuse continuation of coverage as long as premiums are paid is called? A. Noncancelable B. Nonrenewable C. Conditionally renewable D. Optionally renewable

A. Noncancelable

57. As a professional surgeon, which type of disability coverage would offer the most liberal definition of benefit triggers for the policyholder if he was to break his hand? A. Own occupation B. Any occupation C. Business overhead expense D. Buy-sell agreement

A. Own occupation

48. What type of label would be used to describe a situation whereby at the disability of the policyowner the policy premiums are waived? A. Payor Benefit B. Limited payments benefit C. Nonforfeiture benefit D. Multiple protection benefit

A. Payor Benefit

26. With regards to insurance, the term consideration refers to the? A. Price of the contract (premium) B. Insurer's method of evaluating the applicant for coverage C. Screening process all agents undergo before licensing D. Side-by-side policy comparison by the applicant

A. Price of the contract (premium)

13. A restricted capacity to contract would not necessarily characterize A. Retired persons B. Insane persons C. Minors under a certain age D. Intoxicated persons

A. Retired persons

69. Disability income benefits received by insureds are treated as taxable income? A. The benefits are paid under a group plan for which premiums were paid by the employer B. All medical expenses related to the disability are covered by other insurance C. The benefits are paid under an individual policy for which the insured paid the premiums D. Compensation is being paid for a temporary disability

A. The benefits are paid under a group plan for which premiums were paid by the employer

74. If a working employee is over age 65 and is eligible for both Medicare and group health insurance, which will be the primary payor? A. The group policy B. Medicare C. They both will pay 50% D. They cannot have group insurance and Medicare simultaneously

A. The group policy

11. Under the Fair Credit Reporting Act, a Consumer has all of the following rights except: A. The right to conceal information from particular recipients. B. The right to have inaccurate information deleted from consumer reports. C. The right to know the sources of information in consumer reports. D. The right to request an investigation of incorrect information

A. The right to conceal information from particular recipients.

85. Trent Bixley is named by the insured, Nancy Bixley, as the first in line to receive the death benefit provided by Nancy's accident policy. Their daughter Elaine is named as second in line to receive the benefit. Which statement Is correct? A. Trent is the primary beneficiary and Elaine is the contingent B. Trent is the contingent beneficiary and Nancy is the primary C. Nancy is the primary beneficiary and Elaine is the contingent D. Both Trent and Elaine are primary beneficiaries

A. Trent is the primary beneficiary and Elaine is the contingent

83. Businesses use health insurance to fund all of the following, except? A. Unemployment compensation B. Business overhead expenses C. Buy-sell agreements D. Key employee

A. Unemployment compensation

41. All of the following about life insurance viatical settlements are true except: A. Viatical settlements are advanced by insurance companies B. Viatical settlements are negotiated when an insured has a serious or terminal illness C. Viatical settlements involve a transfer of all future rights to the insurance policy D. Viatical settlements make funds available to an insured before death

A. Viatical settlements are advanced by insurance companies

30. Which policy provides life insurance protection for the insured until age 100? A. Whole life contracts B. Annuity contracts C. Group contracts D. Term contracts

A. Whole life contracts.

If a person violates a cease and desist order of the Commissioner while it is in effect, the penalty may be loss of license and a fine of up to A. $500 for each violation B. $1,000 for each violation C. $2,500 for each violation D. $ 5,000 for each violation

B. $1,000 for each violation

25. Elaine owns a $100,000 whole life policy with an additional $100,000 accidental death rider attached to it. While driving to work Elaine suffers a massive heart attack and dies instantly. Her auto then runs off the road and crashes down an embankment. How much will her policy pay to the beneficiary? A. $0 B. $100,000 C. $150.000 D. $200,000

B. $100,000

76. Jim O'Hara was hospitalized for two weeks and received a bill for $2,100. He has a major medical policy with a $500 deductible. His coinsurance is 80/20. Mr. O'Hara is expected to pay a total of A. $320 B. $820 C. $500 D. $1,600

B. $820

23. Ron owns a $100,000 whole life policy. At age 47, Ron decides to cancel his policy and exercise the extended term option with the policy's cash value. He will receive a term policy with a face value of: A. $ 25,000 B. 100.000 C. 50.000 D. The face amount cannot be determined from information given

B. 100.000

17. An insurance company must appoint an agent within how many days of the date the agency contract is executed or the first insurance application is submitted A. 10 days B. 15 days C. 20 days D. 30 days

B. 15 days

81. Which of the following will have the least expensive premium? A. 180 day elimination period, 5 year benefit period B. 180 day elimination period, 1 year benefit period C. 90 day elimination period, 5 year benefit period D. 90 day elimination period, 1 year benefit period

B. 180 day elimination period, 1 year benefit period

32. Which of the following statements regarding a variable annuity is correct? A. It guarantees a continually increasing retirement income B. It provides retirement income that fluctuates with the market value of equity investments C. It provides retirement income based on fixed dollar amounts D. It may increase in value but may not decrease in value once payments have begun

B. It provides retirement income that fluctuates with the market value of equity investments

82. A disability policy has an elimination period of 30 days. Benefits paid are? A. Retroactive after 30 days B. None for 30 days C. Paid only for 30 days D. Never paid

B. None for 30 days

60. The reinstatement provision in a health insurance or disability income policy? A. Reinstates the amount of insurance after a loss B. Allows the insured to reinstate the policy after coverage lapses C. Allows the insured to change statements made in the application D. Automatically reinstates coverage after a loss

B. Allows the insured to reinstate the policy after coverage lapses

All of the following are true about inactive agents in Mississippi except: A. An inactive agent may receive renewal commissions B. An inactive agent may solicit new business C. An agent who is retired or disabled is considered inactive D. An agent who has not obtained a continuous Certificate of Authority is considered inactive

B. An inactive agent may solicit new business

39. The amount payable to the policyowner when a life insurance policy is canceled before maturity is the? A. Difference between the cash value and the face amount B. Cash surrender value C. Total premiums paid D. Paid-up value

B. Cash surrender value

37. The type of receipt most frequently given to a life insurance applicant when the initial premium and application are submitted to the insurer is called a(n)? A. Counter receipt B. Conditional receipt C. Insuring receipt D. Executed receipt

B. Conditional receipt

44. What is the most common component in all life insurance policies? A. Waiver of premium B. Death benefit C. Cost of living rider D. Living benefits

B. Death benefit

50. The two basic parts of the Medicare program are? A. Hospital service and home health B. Hospital insurance and medical insurance C. Inpatient hospital services and outpatient services D. Hospital benefits and disability benefits

B. Hospital insurance and medical insurance

67. Under the Uniform Policy Provisions Law, if a health insurance policy includes the optional provision concerning conformity with State statutes and on the effective date any contract provision is in conflict with State law, the policy: A. Is automatically void B. Is automatically amended to meet minimum requirements C. Must be returned to the insurer for reissue D. Must be amended before it is valid

B. Is automatically amended to meet minimum requirements

80. The period of time between the effective date of the policy and the date coverage begins is the A. Elimination period B. Effective period C. Probationary period D. Qualification period

C. Probationary period

73. In a disability income insurance policy, an elimination period is a? A. 30 day period following the end of a disability before benefits for a recurrent disability are payable B. Period of days following the start of disability during which benefits are not payable C. Period when benefits being paid are temporarily discontinued to encourage the insured to return to work D. Period preceding the benefit period in cases of disabilities caused by an accident rather than by illness

B. Period of days following the start of disability during which benefits are not payable

86. Primary support for Medicare Part A comes from? A. General tax revenues B. Social security payroll taxes C. Private funding D. A combination of the above

B. Social security payroll taxes

36. On which basis would a contingent, or secondary beneficiary be entitled to life insurance proceeds? A. The contingent beneficiary will share the proceeds equally with any designated primary beneficiary B. The contingent beneficiary becomes entitled to the proceeds if the primary beneficiary dies before the insured C. A contingent beneficiary is entitled to one-half the amount paid to the primary beneficiary D. A contingent beneficiary is entitled to one-quarter the amount paid to the primary beneficiary

B. The contingent beneficiary becomes entitled to the proceeds if the primary beneficiary dies before the insured

12. The principle of indemnity states that: A. Insurable risks must be based on the law of large numbers B. The insured is restored to the same condition as before the loss C. The insured must perform certain acts to receive benefits D. Only the insurer makes an enforceable promise

B. The insured is restored to the same condition as before the loss

28. The law of large numbers states that? A. The smaller the number of risks combined into one group, the less uncertainty there will be as to the amount of loss that will be incurred. B. The larger the number of risks combined into one group, the less uncertainty there will be as to the amount of loss that will be incurred. C. The smaller the number of risks combined into one group, the larger the loss will be to any one individual in that group. D. The larger the number of risks combined into one group, the smaller the loss will be to any one individual in that group

B. The larger the number of risks combined into one group, the less uncertainty there will be as to the amount of loss that will be incurred.

40. Under the Common Disaster Provision, if the insured and primary beneficiary die in the same accident and there is no evidence as to who died first? A. The court must determine who is entitled to the proceeds B. The policy is settled as though the insured survived the beneficiary C. The policy is settled as though the beneficiary survived the insured D. Proceeds are divided between the insured's estate and the beneficiary's estate

B. The policy is settled as though the insured survived the beneficiary

54. The unpaid premiums provision in health insurance or disability income policies states that A. Unpaid premiums will be automatically loaned by the company B. Unpaid premiums may be deducted from claim payments C. An unpaid premium automatically cancels the policy D. A claim that arises during the grace period is not covered.

B. Unpaid premiums may be deducted from claim payments

19. After a producer's license has expired, the producer may have the license reinstated without taking an examination if application is made within A. 3 months B. 6 months C. 12 months D. 24 months

C. 12 months

79. Which of the following will have the most expensive premium? A. 6 month elimination period, 5 year benefit period B. 6 month elimination period, 1 year benefit period C. 3 month elimination period, 5-year benefit period D. 3 month elimination period, 1 year benefit period

C. 3 month elimination period, 5-year benefit period

14. In Mississippi, a licensed producer who has a change of address may be subject to a penalty unless the producer notifies the Commissioner within? A. 90 days of the change B. 60 days of the change C. 30 days of the change D. 10 days of the change

C. 30 days of the change

51. Which of the following is the usual grace period for a semi-annual premium policy? A. 7 days B. 10 days C. 31 days D. 60 days

C. 31 days

52. For Social Security eligibility purposes, wage earners may accumulate credit for up to 4 quarters of coverage during each calendar year. At what point does a worker achieve a permanent status of being fully insured? A. 7 days B. 10 days C. 31 days D. 60 days

C. 31 days

21. In Mississippi, what is the penalty for acting as a life and health insurance agent without holding the required license? A. A fine of $ 2,000 and 6 months in jail B. Suspension of all certificates of authority and a prohibition against holding an insurance license for 2 years C. A fine of $ 200 to $ 500, or imprisonment for 1 to 2 years, or both D. Criminal prosecution for fraud

C. A fine of $ 200 to $ 500, or imprisonment for 1 to 2 years, or both

59. All of the following statements about accidental death and dismemberment coverage are true except A. It may be sold as an additional benefit to a health insurance policy B. It usually covers loss of life and Limbs C. Benefits are paid for losses resulting from accident or sickness D. Benefits are paid according to a predetermined schedule

C. Benefits are paid for losses resulting from accident or sickness

66. If a person has health insurance coverage with a change of occupation provision and that person is injured after changing to a more hazardous occupation? A. The policy becomes void B. Additional premiums must be paid to receive benefits C. Benefits payable will be reduced to the level that the premium would have provided for the new occupation D. Full benefits are payable

C. Benefits payable will be reduced to the level that the premium would have provided for the new occupation

49. Employer-paid premiums for employee group health insurance are generally? A. Tax deductible to the employer B. Nontaxable to the employees C. Both A and B D. Neither A nor B

C. Both A and B

31. Which of the following forms of life Insurance would be most appropriate for covering an outstanding mortgage indebtedness? A. Increasing term B. Modified term C. Decreasing term D. Endowment

C. Decreasing term

Making false maliciously critical or derogatory statements about an insurer with the intent of causing injury is an illegal practice known as: A. Intimidation B. unfair discrimination C. defamation D. twisting

C. Defamation

56. The deductible in a disability policy is referred to as the? A. Deductible B. Coinsurance C. Elimination period D. Copayment

C. Elimination period

75. Health insurance underwriters usually classify risks in any of the following ways except A. Standard risk B. Substandard risk C. Expected risk D. Preferred risk

C. Expected risk

35. Which of the following provisions of a life insurance contract generally helps to keep policies in force if policyowners neglect to pay their premiums A. Insuring clause B. Free-look period C. Grace period D. Incontestable clause

C. Grace period

46. A participating life insurance policyowner has just received a dividend. This dividend is therefore? A. Taxed as ordinary income B. Is only taxable in excess of 10% of adjusted gross income C. Is not taxed at all D. Is only taxed by the State in which the policyowner lives

C. Is not taxed at all

84. Dread disease, travel accident, vision care, and hospital indemnity policies are all examples of? A. LTC policies B. Group policies C. Limited policies D. Blanket policies

C. Limited policies

61. Under long-term care insurance coverage, all of the following are examples of activities of daily living (ADLs) except? A. Bathing B. Walking C. Making financial decisions D. Dressing one's self

C. Making financial decisions

16. The Commissioner of Insurance may place on probation, suspend, revoke, or refuse to issue or renew an insurance producer's license for all of the following reasons except ? A. Knowingly accepting business from an unlicensed individual B. Conviction of a felony C. Paying a commission to another duly-licensed producer D. Forging another's name on an Insurance application

C. Paying a commission to another duly-licensed producer

78. Which provision is designed to prevent malingering- remaining disabled in order to collect insurance? A. Insurance with other insurers B. Other insurance with this insurer C. Relation of earnings to insurance D. Illegal Occupation

C. Relation of earnings to insurance

33. All of the following statements pertaining to the reinstatement of a life insurance policy are correct except? A. All back premiums must be paid B. Any outstanding policy loan must be repaid C. The cash surrender value must be forfeited to the insurer. D. The insured must provide evidence of insurability

C. The cash surrender value must be forfeited to the insurer.

43. Which type of life insurance is considered to be more risky based on its investment component? A. Level term insurance B. Whole life insurance C. Variable life insurance D. Decreasing term Insurance

C. Variable life insurance

68. The waiver of premium provision in health insurance policies? A. Requires that any waived Premiums be paid when a disability ceases B. Provides for periodic payments to the insured for expenses incurred during a period of disability C. Waives premiums if the insured is totally disabled for a specified period D. None of the above

C. Waives premiums if the insured is totally disabled for a specified period

88. The Medical Information Bureau is a nonprofit organization supported by A. The federal government B. State government C. Federal and State government D. Insurance companies

D. Insurance companies

71. Which of the following statements about Medicare B is not correct? A. It covers services and supplies not covered by part A. B. It is financed by tax revenues C. It is financed by monthly premiums D. It is a compulsory program

D. It is a compulsory program

55. All of the following factors are considered by health insurance underwriters except? A. Age B. Physical condition C. Sex D. Marital status

D. Marital status

58. As a marketing tool, Ted, a health insurance agent, offered to send an applicant and his wife on a weekend vacation to a local resort to induce the applicant to purchase a policy. Is this practice permitted and, if not, what is it called? A. No; bait and switch B. No; twisting C. Yes, it is perfectly acceptable D. No; rebating

D. No; rebating

The Commissioner of Insurance in Mississippi is appointed for a term of: A. Two Years B. Four Years C. Six Years D. None of the Above

D. None of the Above (ELECTED 4 years)

24. Premiums for which of the following policies are deductible by an individual for income tax purposes: A. Universal life policy B. Whole life policy C. Term policy D. None of the above

D. None of the above

77. Which of the following is covered under the medical portion of the medicare program A. Skilled nursing B. Inpatient hospital C. Hospice care D. Physical therapy

D. Physical therapy

65. All of the following are coverages provided under health insurance policies except? A. Accidental death and dismemberment B. Medical expense coverage C. Vision D. Return of premium coverage

D. Return of premium coverage

34. Funds that are invested for insureds or annuitants who hold variable contracts must be held in an insurer's? A. Surplus account B. Capital account C. General account D. Separate account

D. Separate account

27. If an insured misstates his age on a life insurance application and dies while the policy is in effect and before the discrepancy has been discovered: A. The policy is invalid in all cases B. The policy is voidable only if the age was understated C. The premium will be adjusted to reflect the correct age D. The amount payable under the policy will be adjusted to what the premium would have purchased at the correct age.

D. The amount payable under the policy will be adjusted to what the premium would have purchased at the correct age.

63. A minimum of 75% of eligible group members must elect to be covered by a group health insurance policy whenever A. The policy includes coverage for dependents B. The policy includes both medical and disability insurance C. The premium is paid entirely by the group policyholder D. The group members contribute any portion of the premium

D. The group members contribute any portion of the premium