Life Insurance Exam STUDY
Chapter Exam - Health Underwriting T is receiving $3,000/month from a disability income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable? A) Benefits are taxable to T B) Benefits are tax-free to T C) Benefits are partially taxable to T D) Benefits are taxable to T's employer
A) Benefits are taxable to T
Chapter Exam 2 - Life Provisions N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take? A) Claim will be denied B) Claim will be paid in full C) Claim will be partially paid D) Claim will be decided in an arbitrator
A) Claim will be denied
Chapter Exam - Health Provisions A Disability Income policy owner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim? A) Claim will be paid and coverage will remain in force. B) Claim will be denied and coverage will remain in force. C) Claim will be denied and coverage will be canceled. D) Claim will be denied, the coverage canceled, and all premiums will be refunded.
A) Claim will be paid and coverage will remain in force.
Chapter Exam - Health and Accident Which one of the following would be a likely candidate for disability income insurance on a key employee A) Company executive B) Hourly employee C) Common shareholder D) Secretary to the CEO
A) Company executive
Chapter Exam - Life Premiums and Benefits K has a life insurance policy where her husband is the beneficiary and her daughter is the contingent beneficiary. Under the common disaster clause if K and her husband are both killed in an automobile accident where would the death proceeds be directed? A) Daughter B) Husband's estate C) K's estate D) Trust fund
A) Daughter
Chapter Exam - Annuities T purchased a 100,000 single premium, straight life annuity 5 years ago. He has received monthly payments since inception of annuity. if t dies the insurance company A) Does not have to make any further payments B) MUST make full payments to the beneficiary C) MUST make half payments to the beneficiary D) has the option to continue making payments based on what has already been paid out.
A) Does not have to make any further payments
Chapter Exam- Disability Income 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
A) Elimination Period
Chapter Exam - Health Provisions When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the: A) Entire contract provision B) Insuring clause C) Time limit on certain defense provisions D) Legal contract clause
A) Entire contract provision
Chapter Exam 2 - Life Provisions D owns a Whole Life Policy that was purchased 10 years ago. If the premium payments suddenly stop and D takes no action, which Nonforfeiture Option will the insurer likely proceed with? A) Extend terms B) Loan provision C) Reduced Paid-up D) Cash surrender
A) Extend terms
CH. 2 E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as the primary beneficiary. E and F eventually terminate their business and four months later E dies. Although he wasn't married with three children at the time of death the primary beneficiary is still F. However insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? A) F B)The dissolved partnership C) E's family D) E' estate
A) F
Chapter Exam - Life Underwriting P has recently signed an application for insurance. The insurer must advise her in writing that an investigative consumer report may be conducted according to the A) Fair credit reporting act B) Medical Information Bureau C) Part III of the application D) Life insurance buyer's guide
A) Fair credit reporting act
Chapter Exam - Medical Expense Insurance All of these are characteristics of a Health Reimbursement Arrangement (HRA) EXCEPT: A) HRA is entirely funded by the employee B) HRA is entirely funded by the employer C) Reimbursement for medical expenses are allowed D) HRA can be offered with other health plans
A) HRA is entirely funded by the employee
Chapter Exam - Health and Accident A medical care provider which typically delivers health services at its own local medical facility is known as a A) Health Maintenance Organizations (HMO's) B) Regional Provider C) Multiple Employer Test D) Preferred Provider Organization
A) Health Maintenance Organizations (HMO's)
Chapter Exam - Health Provisions T sends proof of loss to her insurer for an acceptable medical expense claim under her individual Health Insurance policy. Upon receipt, the insurer must pay the benefits A) Immediately B) within 6 months C) At the insurer's discretion D) Within 3 months
A) Immediately
Chapter Exam 1 - Life Policies Which of the following actions require a policy owner 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
A) Increase face amount
Chapter Exam - Retirement Plans Which of these retirement plans can be started by an employee, even if another plan is in existence? A) Individual Retirement Account (IRA) B) Defined plan C) Keogh plan D) 403(B) plan
A) Individual Retirement Account (IRA)
Chapter Exam - Annuities 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 payment until an amount equal to the contract value has been paid- this is a A) Installment refund annuity B) Joint refund annuity C) Straight refund annuity D) Equal Value annuity
A) Installment refund annuity
Chapter Exam - Health Provisions The clause in an accident and health policy that defines the benefit amounts the insurer will pay is called the: A) Insuring clause B) Contestable clause C) Consideration clause D) Free look provision
A) Insuring clause
Chapter Exam - Life Premiums and Benefits Which type of life insurance beneficiary requires his/her consent when a change of beneficiary is attempted by the policy owner? A) Irrevocable beneficiary B) Tertiary beneficiary C) Primary beneficiary D) Revocable beneficiary
A) Irrevocable beneficiary
Chapter Exam - Uses of Life k is an insured under a life insurance policy owned by third party which of these statements is true? A) K has no ownership rights B) K may change the beneficiary C) K may borrow against the policy's cash value D) K may change the premium mode
A) K has no ownership rights
Chapter Exam 1 - Life Policies Which of these life products is not considered interest-sensitive A) Modified whole life B) Variable Universal life C) interest-sensitive whole life D) Variable life
A) Modified whole life
Chapter Exam 2 - Life Provisions A provision in a life insurance policy that pays the policy owner 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
A) Policy loan provision
Chapter Exam - Florida Laws and Rules All of the following activities could result in the suspension of an agent's license EXCEPT?
Acting in fiduciary responsibility
Chapter Exam - Retirement Plans An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable? A) no deduction allowed B) $2,500 C) $2,000 D) $1,000
B) $2,500
Chapter Exam 1 - Life Policies Which of the following types of Term Life policies most likely contains a Renewability feature A) Increasing term B) 10-year convertible term C) Decreasing term D) Variable term
B) 10 year convertible term
Chapter Exam - Private Insurance Plans for Seniors What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be unable to perform to qualify for Long Term Care benefits? A) 1 B) 2 C) 3 D) 4
B) 2
Chapter Exam 1 - Life Policies What type of policy would offer a 40-year old the quickest accumulation of cash value? A) Paid-up at 65 B) 20- pay life C) 30-pay life D) Straight whole life
B) 20- pay life
Chapter Exam 2 - Life Provisions A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. What statement would be correct? A) Straight life accumulates faster than Limited-pay life. B) 20-Pay Life accumulates cash value faster than Straight life. C) Cash value accumulates of both 20 Pay Life and straight life depend on the insurer's financial rating D) 20 Pay Life and Straight Life accumulate cash value at the same rate
B) 20-Pay Life accumulates cash value faster than Straight life.
Chapter Exam - Social Security One becomes eligible for social security disability benefits after having been disabled for: A) 3 months B) 5 months C) 6 months D) 12 months
B) 5 months
Chapter Exam - Uses of Life Three law partners form a Cross-Purchase Buy and Sell agreement. This agreement is funded with individual life insurance. How many total life policies are needed for this agreement? A) 12 B) 6 C) 3 D) 1
B) 6
Chapter Exam 1 - Life Policies How long do the covers normally remain on a limited pay life policy? A) Age 65 B)Age 100 C) when premium payment stops D) At the discretion of the insurer
B) Age 100
Chapter Exam - Health and Accident Under which of the following circumstances do the benefits under COBRA continuation coverage expire? A) Employee has become uninsurable B) All group health plans are terminated by the employer C) Employer moves headquarters to another state D) Employee becomes permanently disabled
B) All group health plans are terminated by the employer
Chapter Exam - Social Security The amount of monthly disability benefits payable under Social Security is affected by which of the following factors? A) Insured's tax bracket B) Amount of the benefits available from other sources C) Nature of the disability D) Insured's education level
B) Amount of the benefits available from other sources
Chapter Exam - Life Underwriting When an insurance application is taken by a producer, which of these statements is true? A) The applicant should have an attorney present during the application process B) Any changes made on the application require the applicant's initials C) Any changes made on the application can later be initialed by the producer if the applicant is unavailable D) The producer has the discretion to ask or not to ask any of the questions listed on the application
B) Any changes made on the application require the applicant's initials
Chapter Exam 2 - Life Provisions The automatic premium loan provision is designed to: A) Provide a source of revenue to the insurance company B) Avoid a policy lapse C) Allow a policy owner to request a policy loan D) Allow a policy owner to take out additional coverage without evidence of insurability
B) Avoid a policy lapse
Chapter Exam - Medical Expense Insurance B's policy provides coverage on an in-hospital basis only and contains a limited daily room and board benefit. Which of these policies does B have? A) Comprehensive Major Medical B) Basic Hospital C) Critical Illness D) Basic Surgical
B) Basic Hospital
Chapter Exam - Uses of Life P loses an arm in a farm accident and is paid $10,000 from his Accidental Death and Dismemberment policy. This benefit is known as the A) Dismemberment sum B) Capital sum C) Principal sum D) Remnant sum
B) Capital sum
Chapter Exam - Health Provisions When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates? A) Relation of earning to insurance provision B) Change of occupation provision C) Conformity of state statutes provision D) Entire contract provisions
B) Change of occupation provision
Chapter Exam - Medical Expense Insurance A major medical policy typically contains a provision that requires the insurer to pay only part of the loss, while the balance is paid by the insured. This provision is called the A) Assignments of benefits B) Coinsurance C) Indemnity D) Co-deductible
B) Coinsurance
Chapter Exam 1 - Life Policies Which provision allows the policy owner to change the policy to a permanent one without providing proof of good health A) Modification B) Conversion C)Exchange D) Adjustable
B) Conversion
Chapter Exam - Medical Expense Insurance Which of the following BEST describes a Hospital Indemnity policy? A) Coverage that reimburses an insured for surgeon expenses B) Coverage that pays a stated amount per day of a covered hospitalization. C)Coverage that replaces lost income due to hospitalization D) Coverage that pays for hospital room and board
B) Coverage that pays a stated amount per day of a covered hospitalization.
Chapter Exam - Health and Accident Which of the following does Social Security NOT provide benefits for? A) Survivorship B) Dismemberment C) Disability D) Retirement
B) Dismemberment
Chapter Exam - Group Life Which of the following is an important underwriting principle of group life insurance? A) Physical examinations are required B) Everyone must be covered in the group C) Employer must pay for the entire premium D) The group must be formed for the purpose of getting affordable insurance
B) Everyone must be covered in the group
Chapter Exam 1 - Life Policies P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase? A) Family benefit policy B) Family Maintenance policy C) Family income policy D) Family survivor policy
B) Family Maintenance policy
Chapter Exam - Group Life S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits? A) No benefits are payable under the Master contract B) Full benefits are payable under the Master contract C) Full benefits are payable under the converted policy D) Benefits less required premium are payable under the converted policy
B) Full benefits are payable under the Master contract
Chapter Exam 2 - Life Provisions A nonforfeiture clause gives the policy owner A) Lifetime income B) Guaranteed values even if the policy has lapsed C) unemployment benefits D) cost of living allowances
B) Guaranteed values even if the policy has lapsed
Chapter Exam - Health and Accident How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy? A) If the primary beneficiary is a minor at the time of the insured's death B) If the primary beneficiary dies before the insured C) If the insured died of absolute causes D) If the insured died of natural causes
B) If the primary beneficiary dies before the insured
Chapter Exam - Life Premiums and Benefits How would A contingent beneficiary receive the policy proceeds and in accidental death and dismemberment (AD&D) policy? A) If the primary beneficiary is a minor at the time of the insured's dead B) If the primary beneficiary dies before the insured C) if the insured died of accidental causes D) if the insured died of natural causes
B) If the primary beneficiary dies before the insured
Chapter Exam - Health Provisions T owns an Accident & 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? A) Allow her to take a tax deduction on unearned premiums B) Increase her policy's coverage amount. C) Decrease her policy's coverage amount D) Nothing
B) Increase her policy's coverage amount.
CH. 2 Who makes the legally enforceable promises in a unilateral insurance policy? A) Beneficiary B) Insurance company C) Insured D) Applicant
B) Insurance company
Chapter Exam 2 - Life Provisions How are policy owner dividends treated in regards to income tax? A) Dividends are not taxable B) Interest on accumulations is taxed C) taxed as ordinary income D) Taxed as capital gains
B) Interest on accumulations is taxed
Chapter Exam - Medical Expense Insurance 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 deductable B) Internal limit C) restricted provision D) stop loss
B) Internal limit
Chapter Exam- Disability Income N is covered under an individual Disability policy with a 30-day Elimination period and a monthly benefit of $500. N is totally disabled for 3 1/2 months. N's total benefit received on this claim is A) $2,000 B) $1,750 C) $1,500 D) $1,250
$1,250
What year was the mccarran-ferguson act enacted A) 1944 B) 1945 C) 1946 D) 1947
1945
Chapter Exam - Life Underwriting 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
A) $10,000
Chapter Exam - Life Underwriting The USA patriot Act was enacted in A) 2001 B) 2002 C) 2003 D) 2004
A) 2001
Chapter Exam - Health and Accident S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations? A) 36 B) 18 C) 15 D) 6
A) 36
Chapter Exam - Retirement Plans How long does an individual have to "rollover" funds from an IRA or qualified plan? A) 60 days B) 90 days C) 120 days D) No limit
A) 60 days
A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as: A) A fraternal benefit society B) A stock insurer C) A mutual insurer D) The life and health insurance guaranty association
A) A fraternal benefit society
Chapter Exam 2 - Life Provisions What does the insuring agreement in a Life Insurance contract establish? A) An insurer's basic promise B) The insurance policy's grace period C) An insurer's required reserve amount D) The obligations of the beneficiary
A) An insurer's basic promise
Chapter Exam - Life Underwriting Before a life insurance policy is issued, which of these components of the contract is required? A) Applicant's signature on application B) Beneficiary's signature C) A conditional receipt D) Attending physicians Statement (APS)
A) Applicant's signature on application
Chapter Exam - Life Underwriting What is the initial source of underwriting for an insurance policy? A) Application containing statements from the insured B) MIB report C) Credit report D) Medical exam
A) Application containing statements from the insured
Chapter Exam - Health Underwriting Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a disability income policy? A) Issue the policy with a diabetes exclusion B) Issue the policy with an altered Time of payment of Claims provision C) Issue the policy with a rating D) Decline the applicant
B) Issue the policy with an altered Time of payment of Claims provision
Chapter Exam - Uses of Life An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager? A) Universal life insurance policy B) Key-person life policy C) Graded insurance policy D) Executive insurance
B) Key person insurance
Chapter Exam - Medical Expense Insurance Which of the following situation does a critical illness plan cover? A) Asthma B) Leukemia C) Alcohol rehabilitation D) Severe car accident
B) Leukemia
Chapter Exam - Private Insurance Plans for Seniors Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies? A) Blanket custodial B) Long term care C) Critical illness D) Medicare supplements
B) Long term care
Chapter Exam - Health and Accident Which statement is true regarding a minor beneficiary? A) Normally, the death proceeds are required to be held in trust until the beneficiary reaches the age of 21 B) Normally, a guardian is required to be appointed in the Beneficiary clause of the contract C) The minor must pay the debts of the insured's estate before receiving any of the proceeds D) The minor is entitled to receive the proceeds immediately
B) Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
Chapter Exam - Health and Accident Which of the following actions is required by an insured who leaves the primary area of medical coverage and seeks medical care? A) Obtain prior approval from the NAIC for the medical service B) Obtain prior approval from the insurer for the medical service C) Take a physical examination prior to leaving the primary area D) Sign a liability waiver from the insurer prior to receiving medical care
B) Obtain prior approval from the insurer for the medical service
Chapter Exam - Health Provisions Which of the following statements about a Guaranteed renewable Health insurance policy is CORRECT? A) Premiums normally decrease at time of renewal B) Premiums normally increase at time of renewal C) Policy can renewed at any time by the company D) Policy can be cancelled at any time by the company
B) Premiums normally increase at time of renewal
Chapter Exam - Health Provisions Which of the following is considered to be the time period after a Healthy Policy issued, during which no benefits were provided for illness. A) Incontestable Period B) Probationary Period C) Trial Period D) Subrogation Period
B) Probationary Period
Chapter Exam 2 - Life Provisions Which of the following is an example of a nonforfeiture option? A) Conversion option B) Reduced paid-up option C) Inflation option D) Guaranteed insurability option
B) Reduced paid up option
Chapter Exam - Health Underwriting Which of the following best describes how pre admission certification is used A) Used to assist in underwriting B)Used to prevent nonessential medical costs C) Used to minimize hospital lawsuits D) Used tp help process claims
B)Used to prevent nonessential medical costs
CH. 2 Which of these is considered a statement that is assumed to be true in every respect? A) Estoppel B)Warranty C) Guarantee D) Representation
B)Warranty
Chapter Exam - Health and Accident A Business Overhead Expense policy A) Covers any loss of income by the business owner B) Covers business expenses such as rent and utilities C) Covers employee wages only D) Reimburses the company for any reduction in sales due to the owner's disability
B)covers business expenses such as rent and utilities
Chapter Exam - Retirement Plans 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
C) 100
Chapter Exam - Health and Accident What is the maximum Social Security Disability benefit amount an insured can receive? A) 50% of the insured's Primary Insurance Amount (PIA) B) 75% of the insured's Primary Insurance Amount (PIA) C) 100% of the insured's Primary Insurance Amount (PIA) D) 100% of the insured's Primary Insurance Amount (PIA) minus any moves received from a retirement plan
C) 100% of the insured's Primary Insurance Amount (PIA)
Chapter Exam - Social Security Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security benefits? A) 3 B) 4 C) 5 D) 6
C) 5
Chapter Exam 2 - Life Provisions An insurer may normally delay the payment of a cash value loan or surrender value for up to A) 2 months B) 4 months C) 6 months D) 8 months
C) 6 months
Chapter Exam 2 - Life Provisions P is blinded in an industrial accident. Which provision of life insurance policy will pay a stated benefit amount? A) Accelerated benefits provision B) Entire Contract C) Accidental Death and Dismemberment clause D) Consideration clause
C) Accidental Death and Dismemberment clause
Chapter Exam 2 - Life Provisions What action can a policyowner take if an application for a bank loan requires collateral? A) Utilize accelerated benefits provision B) Borrow against policy cash value and use it as a down payment C) Assign policy ownership to the bank D) Name bank as beneficiary
C) Assign policy ownership to the bank
Chapter Exam - Uses of Life Which of these is NOT considered to be a cost connected with an individual's death? A) Funeral expense B) Tax liability C) Business expenses D) Probate costs
C) Business expenses
Chapter Exam 1 - Life Policies Credit life insurance is: A) issued in any amount at the discretion of the applicant B) used in the event of loss of income C) Issued in an amount not to exceed the amount of the loan D) coverage that waives the premiums on a loan payment in the vent of total disability
C) Issued in an amount not to exceed the amount of the loan
Chapter Exam - Annuities T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this? A) Fixed Certain B) Joint and full survivor C) Life annuity with period certain D) installment refund
C) Life annuity with period certain
Chapter Exam 1 - Life Policies Life insurance that covers an insured's whole life with level premiums paid over a limited time is called: A)Adjustable Life B)Renewable Term C) Limited pay life D) Joint Life
C) Limited Pay Life
Chapter Exam - Medical Expense Insurance In Major Medical Expense policies, what is the intent of a Stop Loss provision? A) Limits an insurer's premium increases B) Limits an insurer's liability C) Limits an insured's out-of-pocket medical expenses D) Limits an insured's coverage for pre-existing conditions
C) Limits an insured's out-of-pocket medical expenses
Chapter Exam - Life Underwriting Which of these factors do NOT play a role in the underwriting of a life insurance policy? A) Avocations B) Credit status C) Marital status D) Occupation
C) Marital status
Chapter Exam - Health Underwriting Which of the following are NOT managed care organizations A) Point of service Plan (POS) B) Preferred provider organization C) Medical information Bureau (MIB) D) Health Maintenance Organization (HMO)
C) Medical information Bureau (MIB)
Chapter Exam - Private Insurance Plans for Seniors If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses. A) Long term care B) Indemnity C) Medicare supplement D) Medicaid
C) Medicare supplement
CH.2 Which of these is NOT considered to be an element of an insurance contract? A)The offer B)Acceptance C) Negotiating D) Consideration
C) Negotiating
Chapter Exam - Health Provisions What type of renewability guarantees rates and renewability? A) Optionally renewable B) Conditionally renewable C) Noncancellable D) Warranted renewable
C) Noncancellable
Chapter Exam - Retirement Plans Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2? A) 10% tax penalty for early withdrawal B) Capital gain tax C) Ordinary income tax and a 10% tax penalty for early withdrawal D) Ordinary income tax
C) Ordinary income tax and a 10% tax penalty for early withdrawal
Chapter Exam - Health and Accident What does Medicare part A and B cover? A) Part A covers hospitalization; Part B covers long term care B) Part A covers doctor's visits; Part B covers hospitalization C) Part A covers hospitalization; Part B covers doctor's services D) Part A covers prescription drugs; Part B covers disability
C) Part A covers hospitalization; Part B covers doctor's services
Chapter Exam 2 - Life Provisions Which life insurance rider typically appears on a Juvenile life insurance policy? A) Decreasing term rider B) Inflation rider C) Payor Benefit rider D) Waiver of Premium rider
C) Payor Benefit Rider
Chapter Exam - Group Life When an employee is terminated, which statement about a group term life conversion is true? A) Employee must convert group term life coverage into an individual term life policy B) Employee must provide evidence of insurability for conversion C) Policy proceeds will be paid if the employee dies during the conversion period D) Policy proceeds will NOT be paid if the employee dies during the conversion period
C) Policy proceeds will be paid if the employee dies during the conversion period
Chapter Exam - Life Premiums and Benefits A policy owner is able to choose the frequency of premium payments through what policy feature? A) Consideration B) Payor benefit C) Premium mode D) Assignment provision
C) Premium mode
Chapter Exam - Health and Accident T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. Under the Model Group Coordination of Benefits provision, when T files a claim, his employer's plan is considered the A) Principal carrier B) Surplus carrier C) Primary carrier D) Secondary carrier
C) Primary carrier
Chapter Exam- Disability Income Non-occupational disability coverage is designed for: A) 24 hour protection B) those who are exempt from workers compensation coverage C) sole proprietors and self-employed individuals D) employees who suffer non work related disabilities, since work-related disabilities are covered by Workers' Compensation
D) employees who suffer non work related disabilities, since work-related disabilities are covered by Workers' Compensation
Chapter Exam - Health Underwriting P is self-employed and owns an Individual Disability Income policy. He becomes totally disabled on June 1 and receives $2,000 a month for the next 10 months. How much of this income is subject to federal income tax? A) $20,000 B) $14,000 C) $6,000 D) $0
D) $0
Chapter Exam - Life Premiums and Benefits T and S are named Co-primary beneficiaries on a $500,000 accidental death and dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later S dies of natural causes and the father is killed in a school bus accident shortly after. How much of the death benefit with the mother receive? A) $1,000,000 B) $500,000 C) $250,000 D) $0
D) $0
Chapter Exam - Group Life An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a A) $125,000 individual whole life policy B) $25,000 modified whole life policy C) $25,000 individual term life policy D) $25,000 individual whole life policy
D) $25,000 individual whole life policy
Chapter Exam - Group Life A non-contributory plan requires ______ participation of all eligible employees A) 25% B) 50% C) 75% D) 100%
D) 100%
CH. 2 A policy of adhesion can only be modified by whom? A) The agent B) The applicant C) The primary beneficiary D) The insurance company
D) insurance company
CH. 2 A life insurance arrangement that circumvents insurable interest statutes is called A) a contract of adhesion B) an indemnity contract C)key person insurance D) investor-originated life insurance
D) investor-originated life insurance
Chapter Exam - Life Premiums and Benefits A policy owner's rights are limited under which beneficiary designation? A) revocable B) tertiary C) contingent D) irrevocable
D) irrevocable
Chapter Exam 2 - Life Provisions The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured A) dies of natural causes B) becomes critically ill C) Becomes chronically ill D) is blinded in an accident
D) is blinded in an accident
Chapter Exam - Life Underwriting What is the purpose of a policy summary? A) it details the commission earned by the agent B) It guarantees a policy will be issued C) it allows the consumer to compare the costs of different policies D) it highlights the critical parts of the policy issued
D) it highlights the critical parts of the policy issued
Chapter Exam - Health Provisions Under a guaranteed renewable health insurance policy, the insurer A) may refuse to continue upon policy renewable B) is permitted to require proof of insurability upon policy renewal C) will typically decrease the premium upon policy renewal D) may cancel the policy for nonpayment only
D) may cancel the policy for nonpayment only
Chapter Exam - Health and Accident Which of the following best describes how a Preferred Provider Organization (PPO) is less restrictive than a Health Maintenance Organization (HMO)? A) Typically no subject to deductibles B) not regulated by the federal government C) more benefits available D) more physicians to choose from
D) more physicians to choose from
Chapter Exam - Retirement Plans In an individual retirement account (IRA), rollover contributions are A) subject to capital gains tax B) subject to ordinary income tax C) partially limited by dollar amount D) not limited by dollar amount
D) not limited by dollar amount
Chapter Exam - Health Provisions With Optionally Renewable Health policies, the insurer may: A) renew the policy only if no claims have been filed the previous year B) renew the policy only with the insured's consent C) review the policy whenever they please and determine whether or not to renew it. D) review the policy annually and determine whether or not to renew it
D) review the policy annually and determine whether or not to renew it
Chapter Exam 1 - Life Policies Term Life policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period A) may be altered by the policy owner B) is controlled by the NAIC C) is the same in all contracts D) varies according to the contract
D) varies according to the contract
An insurance applicant must be informed of an investigation regarding his/her reputation and character according to the: A) State Guaranty Association B) Fair Labor Standard Board C) Fair Credit Reporting Act D)National Association of Insurance Commissioners
Fair Credit Reporting Act
Chapter Exam- Disability Income P received Disability income benefits for 3 months then returns to work. She is able to work one month before her condition returns, leaving her disabled once again. What would the insurance company most likely regard this second period of disability as? A) A presumptive disability B) An occupational disability C) A residual disability D) A recurrent disability
D) A recurrent disability
Chapter Exam - Annuities Which of the following is NOT included in an annuity contract A) Nonforfeiture benefit B) Free-look period C) Beneficiary D) AD&D riders
D) AD&D riders
Chapter Exam - Private Insurance Plans for Seniors Under a Long Term Care policy, which benefit would be typically excluded or limited? A) Intermediate nursing B) Skilled nursing C) Home health care D) Alcohol rehabilitation"
D) Alcohol rehabilitation
Chapter Exam - Health and Accident Common exclusions to the continuation of group coverage include: A) Dental Care B) Dental Care C) Other Prescription Drugs D) All of the above
D) All of the above
Chapter Exam - Life Premiums and Benefits Which premiums go to results in the lowest cost to the policy owner? A) Semi-annual B) Monthly C) Quarterly D) Annual
D) Annual
Chapter Exam - Retirement Plans Traditional individual retirement annuity (IRA) distributions must start by A) Age 59 1.2 B) Age 65 C) April 1st of the year following the year the participant attains age 59 1/2 D) April 1st of the year following the year the participant attains age 70 1/2
D) April 1st of the year following the year the participant attains age 70 1/2
Chapter Exam 1 - Life Policies A company that owns a life insurance policy on one of its key employees may do all of the following EXCEPT A) borrow against cash value B) Change beneficiary C) Cancel policy D) Change the policy's interest rate
D) Change the policy's interest rate
Chapter Exam 2 - Life Provisions Which rider provides coverage for a child under a parent's life insurance policy A) Spouse term rider B) Base insured rider C) Payor benefit rider D) Child term rider
D) Child term rider
Chapter Exam 2 - Life Provisions Which rider provides coverage for a child under a parent's life insurance policy? A) Spouse term rider B) Base insured rider C) Payor benefit rider D) Child term rider
D) Child term rider
CH. 2 Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid A) Consideration B) Unilateral C) aleatory D) conditional
D) Conditional
Chapter Exam - Group Life If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have? A) Non-eligible B) Noncontributory C) Eligible D) Contributory
D) Contributory
Chapter Exam - Group Life What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability? A) Entire Contract B) Owner's rights C) Nonforfetuire options D) Conversion
D) Conversion
Chapter Exam 1 - Life Policies 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 Age 70 D) Endowment at Age 70
D) Endowment at Age 70
CH. 2 Taking receipt of premiums and holding them for the insurance company is an example A) Commingling B) Misappropriation C) Theft D) Fiduciary Responsibility
D) Fiduciary responsibility
Chapter Exam - Health Provisions After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? A) File a lawsuit B) Contact the insurer again requesting forms C) Nothing D) File is written proof of loss
D) File is written proof of loss
Chapter Exam - Medical Expense Insurance Basic Medical Expense insurance... A) normally has a deductible and coinsurance B) covers an illness but not an accident C) pays for lost wages while hospitalized D) has lower benefit limits than Major Medical insurance
D) Has lower benefit limits than Major Medical insurance
Chapter Exam - Annuities 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
D) Immediate annuity
CH.2 If a contract of adhesion contains complicated language, to whom would the interpretation be in favor? A) Insurer B) Beneficiary C) Reinsurer D) Insured
D) Insured
Chapter Exam - Health Provisions What is the initial requirement for an insured to become eligible for benefits under under the Waiver of premium provision? A) Insured must be unemployed B) Insured must be hospitalized C) Insured must demonstrate financial need D) Insured must be under a physicians care
D) Insured must be under a physicians care
Chapter Exam - Health and Accident If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act? A) Primary beneficiary's estate B) Primary beneficiary next of kin C) Insured's estate D) Insured's contingent beneficiary
D) Insured's contingent beneficiary
Chapter Exam - Medical Expense Insurance T was treated for an ailment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterward. How will the insurer likely consider this condition? A) Insurer will require a higher deductible for any claims resulting from this condition B) Insurer is required to initially cover this pre-existing condition C) Insurer will permanently exclude the condition from the policy D) Insurer will likely treat it as a pre-existing condition which may not be covered for one year
D) Insurer will likely treat it as a pre-existing condition which may not be covered for one year
Chapter Exam - Life Premiums and Benefits Quarterly premium payments increase the annual cost of insurance because A) Insurer risk exposure is greater B) interest to the insurer is increased while administrative costs are decreased C) mortality costs are greater D) Interest to the insurer is decreased while the administrative costs are increased
D) Interest to the insurer is decreased while the administrative costs are increased
CH. 2 Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? A) Consideration B) Competent parties-offer C) Acceptance D) Legal purpose (insurable interest)
D) Legal Purpose
Chapter Exam - Health Underwriting Which type of plan includes hospice benefits? A) short term disability plans B) Group Life plans C) Workers' compensation D) Managed care plans
D) Managed care plans
Chapter Exam - Life Premiums and Benefits A policy owner is allowed to pay premiums more than once a year under which provision? A) Insuring B) Consideration C) Payor D) Mode of premium
D) Mode of premium
Chapter Exam - Life Premiums and Benefits Which of these is NOT an element of Life insurance premiums A)Mortality rate B) Insurer's expenses C) Interest credit D) Morbidity rate
D) Morbidity rate
Chapter Exam- Disability Income J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this? A) Limited coverage B) Workers compensation coverage C) Occupational coverage D) Nonoccupational coverage
D) Nonoccupational coverage
Chapter Exam - Health Provisions Which of the following BEST describes a short-term medical expense policy? A) Conditionally renewable B) Noncancellable C) Guaranteed renewable D) Nonrenewable
D) Nonrenewable
Chapter Exam - Group Life if a corporation pays the premium on a group life policy for its employees, The corporation is required to report how much additional taxable income is for each employee? A) The annual premium divided by the number of employees B) The entire premium paid in a year C) Half the premium paid in a year D) Nothing
D) Nothing
Chapter Exam - Health and Accident Which of these statements is INCORRECT regarding a Preferred Provider Organization (PPO)? A) PPO's normally have more providers to chose from as compared to an HMO B) Prices are negotiated in advance for PPO providers C) In-network PPO providers offer members better coverage of incurred expenses D) PPO's are NOT a type of managed care systems
D) PPO's are NOT a type of managed care systems
When a policy pays dividends to its policyholders It is said to be what? A) profitable B) mutual C) nonparticipating D) participating
D) Participating
Who elects governing body of a mutual insurance company? A) chairman of the board B) bondholders C) stockholders D) policyholders
D) Policyholders
Chapter Exam - Life Premiums and Benefits T is covered by accidental death and dismemberment policy that has an irrevocable beneficiary. What action with the insurance company take if T requests a change of beneficiary? A) Request will be accepted only if in writing by the insured B) Change will be made only if premiums are paid current C) Change will be made immediately D)Request of the change will be refused
D) Request of the change will be refused
Chapter Exam - Retirement Plans Post-tax dollar contributions are found in A) 401k investments B) Traditional IRA investments C) SIMPLE investments D) Roth IRA investments
D) Roth IRA investments
Chapter Exam - Life Premiums and Benefits A level premium indicates A) The premium is fixed for a period stated in the contract, then becomes variable B) The premium can only be changed with the consent of the insurer C) The premium stays level until the policy's renewal date D) The premium is fixed for the entire duration of the contract
D) The premium is fixed for the entire duration of the contract
CH. 2 The consideration clause of an insurance contract includes: A) The buyer's guide B) summary of the coverage provided C)The name beneficiaries D) The schedule and amount of premium payments
D) The schedule and amount of premium payments
Ch. 2 In an insurance contract, the insurer is the only person who makes a legally enforceable promise. What kind of contract is that? A) subrogation B) Unenforceable C) Adhesion D) Unilateral
D) Unilateral
Chapter Exam - Life Underwriting An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the A) agent B) applicant's spouse C) National Association of Insurance Commissioners (NAIC) D) applicant's physician
D) applicant's physician
Chapter Exam 1 - Life Policies Under an interest sensitive whole life policy, A) Premiums are determined by the policy owner B) no cash value ever accrues C) The policy usually renews every ten years D) cash values are determined by interest rates
D) cash values are determined by interest rates
Chapter Exam - Group Life 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? A) Portion of the premiums paid for by the employer may be a tax deduction B) Portion of the premiums paid for by the employee may be a tax deduction C) Portion of the death proceeds are taxable to the beneficiary D) Portion of the death proceeds are taxable to the estate
A) Portion of the premiums paid for by the employer may be a tax deduction
Chapter Exam - Social Security What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive A) Primary Insurance Amount (PIA) B) Total taxes paid into FICA C) Number of dependants D) State of residence
A) Primary Insurance Amount (PIA)
Chapter Exam- Disability Income R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity? A) Residual Disability. B) Recurrent Disability C) Presumptive Disability D) Occupational Disability
A) Residual Disability.
Chapter Exam - Life Premiums and Benefits A(n) ________ beneficiary may be changed by the policy owner WITHOUT the consent of the beneficiary A) Revocable B) Irrevocable C) Tertiary D) Replaceable
A) Revocable
Chapter Exam - Health and Accident The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs? A) Social Security Disability Income B) Medicare Supplements C) Medicaid D) COBRA
A) Social Security Disability Income
Chapter Exam - Health Underwriting Which of the following statements about the classification of applicants is INCORRECT? A) Substandard applicants are never declined by underwriters B) Substandard applicants are occasionally declined by underwriters C) Preferred risk applicants typically have better premium rates than standard risk applicants D) An applicant can be classified as a substandard risk because of a hazardous job
A) Substandard applicants are never declined by underwriters
Chapter Exam 1 - Life Policies Which of these is an element of variable life policy A) Underlying equity investment B) Little or no risk to insured C) Guaranteed dividends D) Insurer assumes all the risk
A) Underlying equity investment
Chapter Exam - Social Security To be eligible for Social Security Disability benefits, an employee must be unable to perform: A) any occupation B) his/her current occupation C) any occupation that reflects the employee's education level D) any occupation that the employee is qualified and willing to do
A) any occupation
Chapter Exam - Annuities what is considered to be a characteristic of an immediate annuity A) benefit payments start within one payment period of purchase B) benefit payments start within 5 years of initial purchase C) Normally ties to a specific equity or stock index D) Periodic contributions begin immediately
A) benefit payments start within one payment period of purchase
Chapter Exam - Health and Accident The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n) A) closed panel B) open panel C) co-op panel D) capitation panel
A) closed panel
Chapter Exam - Group Life 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) converted to a group rate
A) converted to an individual permanent policy at an individual rate
Chapter Exam - Health and Accident Medicare Part A and Part B do NOT pay for: A) dental work B) hospitalization C) skilled nursing care D) physical therapy
A) dental work
Chapter Exam - Life Underwriting An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n) A) extra premium B) Concealment clause C) extended contestable period D) exclusion for the medical condition
A) extra premium
Chapter Exam - Medical Expense Insurance Basic Hospital and Surgical policy benefits are: A) lower than the actual expenses incurred B) higher than the actual expenses incurred C) normally subject to deductibles D) normally subject to coinsurance
A) lower than the actual expenses incurred
Chapter Exam - Life Underwriting Why must an insurance applicant answer all questions on the application? A) statements and representations on the application are part of the consideration for issuing a policy B) The National Association of Insurance Commissioners (NAIC) requires all questions to be answered. C) The Medical Information Bureau (MIB) requires this for an insurer to be a member D) Statements and representations are considered guarantees
A) statements and representations on the application are part of the consideration for issuing a policy
Chapter Exam - Life Premiums and Benefits When can a policy owner change a revocable beneficiary? A)Anytime B) After the consent of the current beneficiary C) Never D) Only if primary beneficiary dies
A)Anytime
Chapter Exam - Health Underwriting Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take? A) Deposit the applicant's check into his account and make a personal check out to the insurance company from his personal account B) Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company C) Cross off his name on the "pay to" portion of the check, write the name of the insurance company, and send the check back to the insurance company D) Deposit the check to his personal account, use the funds to purchase the cashier's check, and send the new cashier's check back to the insurance company.
B) Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company
Chapter Exam - Health Provisions The insuring clause A) specifies the additional time given to pay past-due premiums B) States the scope and limit of the coverage C) States the amount of premium to be collected D) Prohibits the insured from suing the insurer for at least 60 days after filing a written proof of loss
B) States the scope and limit of the coverage
Chapter Exam - Health Provisions What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision? A) File a lawsuit B) Submit the claim in any form C) Wait for the claim form to arrive D) Resubmit the request for a claim form
B) Submit the claim in any form
Chapter Exam 2 - Life Provisions 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
B) Term
Chapter Exam - Health Provisions G is involved in an automobile accident as a result of driving while intoxicated and suffers from numerous injuries. According to the intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills. A) The reinsurer B) The insured C) The insurer D) The Guaranty association
B) The insured
Chapter Exam- Disability Income What is the elimination period of an individual disability policy? A) Time period an insured must wait before coverage begins B) Time period a disabled person must wait before benefits are paid. C) Time period after the policy issue date in which the provisions are still contestable D) The point in time when benefits are no longer payable
B) Time period a disabled person must wait before benefits are paid.
Chapter Exam - Life Underwriting Why is an applicant's signature required on a life insurance application? A) To attest that the statements on the application are warranties B) To attest that the statements on the application are accurate to the best of the applicant's knowledge C) To give power of attorney to the producer if needed D) To attest that all statements on the application are guaranteed to be true
B) To attest that the statements on the application are accurate to the best of the applicant's knowledge
Chapter Exam - Life Underwriting The reason for backdating policy is A) To avoid being considered a substandard risk due to a recent cancer diagnosis B) To obtain a premium rate based on an earlier age C) To decrease the face amount D) To decrease the contestable period
B) To obtain a premium rate based on an earlier age
Chapter Exam- Disability Income What is the primary factor that determines the benefits paid under a disability income policy? A) Education levels B) Wages C) Type of Occupation D) Age
B) Wages
Chapter Exam- Disability Income Disability policies do NOT normally pay for disabilities arising from which of the following? A) Accidents B) War C) Negligence D) Sickness
B) War
Chapter Exam 1 - Life Policies What kind of life policy either pay the face value upon the death of this insured or when the insured reaches age 100 A) Team life B) Whole Life C) Credit Life D) Universal Life
B) Whole Life
Chapter Exam - Retirement Plans A qualified profit-sharing plan is designed to A) allow key employees to participate in the profit of the company B) allow employees to participate in the profits of the company C) keep key employees from leaving the company D) allow employees to elect company offers
B) allow employees to participate in the profits of the company
Chapter Exam 1 - Life Policies Under a Graded Premium Whole Life policy, A) are higher during the premiums early years B) are lower during the premiums early years C) are constant throughout the length of the policy D) can be adjusted by the insured
B) are lower during the premiums early years
Chapter Exam - Health and Accident The health insurance portability and accountability act (HIPPA) gives privacy protection for A) Insolvency B) health information C) financial information D) overinsurance
B) health information
Chapter Exam - Uses of Life In life insurance, the needs approach is used mostly to establish A) which type of life insurance a client should apply for B) how much life insurance a client should apply for C) which company a client should use when applying for life insurance D) what is the maximum amount the client can spend on life insurance
B) how much life insurance a client should apply for
Chapter Exam - Medical Expense Insurance The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the: A) corridor deductible B) initial deductible C) stop-loss deductible D) coinsurance deductible
B) initial deductible
CH. 2 When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have: A) All statements be warranties B) Insurable interest in the proposed insured C) The agent complete a third party application D) All those involved be family related
B) insurable interest in the proposed insured
Chapter Exam - Medical Expense Insurance Which of the following is NOT a limited benefit plan? A) dental policies B) life insurance policy C) critical illness policy D) cancer policy
B) life insurance policy
Chapter Exam - Health Underwriting Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy? A) Have the customer sign a blank application, then take the application back to his office to complete prior to sending it off to the insurance company B) Complete the application over the phone with the customer, sign the application for the customer, then send the application off to the insurance company C) Complete the application and review the information with the customer prior to obtaining the customer's signed nature, then send the application off to the insurance company. D) Have the customer fill out the application and send it to his office for him to sign, then send it off to the insurance company
C) Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company.
Chapter Exam - Life Underwriting 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? A) Binding B) Initial Premium C) Conditional D) Contingent
C) Conditional
CH. 2 Which of the following consists of an offer, acceptance, and consideration? A)Warranty B) Estoppel C) Contract D) Representation
C) Contract
CH. 2 Which of these requires offer, acceptance, and consideration? A) warranty B) estoppel C) contract D) representation
C) Contract
Chapter Exam 1 - Life Policies What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability? A) Endowment policy B) Limited-pay whole life C) Convertible term D) Decreasing term
C) Convertible term
Chapter Exam 2 - Life Provisions 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
C) Decreasing Term
Chapter Exam - Annuities 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 15 years. Which type of annuity did P purchase? A) immediate B) retroactive C) Deferred D) Universal
C) Deferred
Chapter Exam - Life Underwriting What is the purpose of the U.S.A. Patriot Act? A) Detect and deter fraud B) Detect and deter alien insurance companies C) Detect and deter terrorism D) Detect and deter misrepresentations
C) Detect and deter terrorism
Chapter Exam - Health and Accident Which contract permits the remaining partners to buy out the interest of a disabled business partner? A) Group Disability B) Business Continuation C) Disability Buy-Sell D) Key Person Disability
C) Disability Buy-Sell
Chapter Exam- Disability Income B is a teacher who was injured in a car accident and cannot work. She is now receiving monthly benefits as a result of this accident. Which type of policy does B have? A) Major medical B) Blanket C) Disability Income. D) Indemnity
C) Disability Income.
Chapter Exam - Health Provisions " A producer does NOT have the authority to change the policy or waive any of its provisions". The health provision that best describes this statement is called the A) Grace Period B) Contestable C) Entire Contract D) Time limit on certain defenses
C) Entire Contract
Chapter Exam - Private Insurance Plans for Seniors Long term care policies will usually pay for eligible benefits using which of the following methods? A)Delayed B) Fee for service C) Expense incurred D) Respite
C) Expense incurred
Chapter Exam - Medical Expense Insurance This type of deductible provision waives the deductible for all family members after some of them have satisfied individual deductibles within the same year: A) Individual deductible B) Corridor deductible C) Family maximum deductible D) Common accident deductible
C) Family maximum deductible
Chapter Exam 2 - Life Provisions 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? A) Refund of all premiums paid, plus interest B) Refund of all premiums paid C) Full face amount minus any past-due premiums D) Full face amount
C) Full face amount minus any past due premiums
Chapter Exam - Medical Expense Insurance S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a A) Low deductible health plan B) Medicare supplement C) High-deductible health plan D) Flexible savings plan
C) High-deductible health plan
Chapter Exam - Annuities W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n) A) Flexible-Premium Deferred annuity B) Variable annuity C) Immediate annuity D) Straight Life annuity
C) Immediate annuity
Chapter Exam - Retirement Plans A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over? A) Only taxes on $30,000 B) Only taxes on $24,000 C) Income taxes plus a 10% penalty tax on $30,000 D) Income taxes plus a 10% penalty tax on $24,000
C) Income taxes plus a 10% penalty tax on $30,000
Chapter Exam - Health Provisions An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the: A) Medical examination is given B) Producer completes the application C) Insurer dates the policy D) The first premium is paid
C) Insurer dates the policy
Chapter Exam - Health and Accident A policy owner would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation would fulfill this need? A) Revocable B) Contingent C) Irrevocable D) Primary
C) Irrevocable
Chapter Exam 2 - Life Provisions Dividends paid from a life insurance policy are A) Guaranteed B) Taxable C) Issued by the insurer D) Issued by the Department of insurance
C) Issued by the insurer
Chapter Exam - Life Premiums and Benefits K is the insured and P is the sole beneficiary of a life insurance policy. Both are involved in a fatal accident where can K dies before P. Under the common disaster provision which of these statements is true? A) Proceeds will be paid to P's estate B) Proceeds will be divided equally between K's and P's estate C) Proceeds will be payable to K's estate if P dies within a specified time D) The courts will decide who will receive death benefits
C) Proceeds will be payable to K's estate if P dies within a specified time
Chapter Exam - Health Underwriting Which mode of payment is NOT used by health insurance policies? A) Monthly premium B) Annual premium C) Single premium D) Semi-annual premium
C) Single premium
Chapter Exam - Health and Accident Which statement is TRUE regarding a group accident & health policy issued to an employer? A) Neither the employer or employee are policy owners B) The employer is issued a certificate of coverage and each employee receives a policy C) The employer is the policy owner and each employee is issued a certificate D) Both the employer and employee are policy owners
C) The employer is the policy owner and each employee is issued a certificate
Chapter Exam 1 - Life Policies Which if the following policies is characterized by a flexible premium and death benefit and allows the policy owner control of the investment aspect of the plan? A) Variable Life B) Universal Life C) Variable universal life D) Adjustable life
C) Variable universal life
Chapter Exam 1 - Life Policies A variable universal policy A) guarantees a minimum rate of return B) does not allow the policy owner to assume the investment risk C) does not guarantee a return on its investment accounts D) does not guarantee an assignment provision
C) does not guarantee a return on its investment accounts
Chapter Exam - Medical Expense Insurance Deductibles are used in health policies to lower... A) the incidents of fraud B) the coinsurance amount C) overuse of medical services D) adverse selection
C) overuse of medical services
Chapter Exam - Health and Accident The benefits under a Disability Buy-Out policy are A) normally paid in installments B) taxable to the beneficiary C) payable to the company or another shareholder D) normally paid after a short elimination period
C) payable to the company or another shareholder
Chapter Exam 2 - Life Provisions M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the: A) Cash value B) estate of the insured C) policy proceeds D) nonforfeiture value
C) policy proceeds
Chapter Exam - Health Provisions The Legal Actions provision of an insurance contract is designed to do all the following, EXCEPT: A) provide the insurer adequate time to research a claim B) protect the insured from having claim research delayed C) protect the producer D) give the insured guidelines for pursuing legal action against the insurer
C) protect the producer
Chapter Exam - Annuities An immediate annuity consists of a A) variable premium B) flexible premium C) single premium D) deferred premium
C) single premium
Chapter Exam 1 - Life Policies The investment gain from a universal life policy A) the death benefit B) the dividends C) the cash value D)paying off a policy loan
C) the cash value
Chapter Exam - Annuities An individual who purchases a life annuity is given protection against A) inflation B) the risk of dying prematurely C) the risk of living longer than expected D) the risk of having enough retirement income
C) the risk of living longer than expected
Chapter Exam - Florida Laws and Rules The Bureau of Unclaimed Property is overseen by the
Chief Financial Officer
