Life Insurance Exam

A tornado that destroys property would be an example of which of the following?

A) A Peril

In the event of a divorce, which of the following would allow a divorcee to coniune to recivieng group health coverage under an insured spouse's plan for an additional 36 month?

A) Cobra

If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy?

A) it is only taxable if the cash value exceeds the amount paid for premiums

Who must pay for the cost of medical examination required in the process of underwriting?

D) Insurer

Which of the following is TRUE regarding the annuity period?

D) it may last for the lifetime of the annuitant

Which Universal Life option has a gradually increasing cash value and a level death benefit?

A) Option A

Peril is most defined as

A) The cause of loss insured against

According to the Code, how many separate requirements should an insurance policy have?

B) 6

Which of the following is NOT covered under a long-term care policy?

B) Acute care in a hospital

Which of the following would NOT be an underwriting consideration for health insurance applicant?

B) Applicants sexual orientation

In order to determine whether to test an insurance applicant for HIV or AIDS, the insurer may do which of the following?

B) Establish minimum uniform standards for testing all applicants for insurance.

You did not enroll in Medicare Part B when you first became eligible. Which of the following would allow you another opportunity to enroll?

B) Genral enrollment period

The following are factors in determining premiums charged for group disability income insurance, EXCEPT

B) The addresses of the employees

A policy with a 31 day grace period implies

B) The policy will not lapse for 31 days if the premium is not paid when due

Under the Affordable Care Act, a special enrollment period allows an individual to enroll in a qualified health plan within how many days of a qualifying event?

C) 60 days

According to the Medical Loss Ratio (MLR), what is the minimum percentage of health coverage premium that must be applied to actual medical care in an individual health plan?

C) 80 Percent

Most policies will pay the accident death benefits as long as death is cause by the accident and occurs within.

C) 90 Days

All of the following could own group life insurance EXCEPT

C) A group needing low cost life insurance

All of the following actions by person could be described as risk avoidance EXCEPT

C) Investing in the stock market

Which of the following is TRUE of a qualified plan?

C) It has a tax benefit for both employer an employee

All of the following would be qualified as dependent under a Dependent Care Flexible Spending Account, EXCEPT

C) Jeremy had to have both legs amputated, but has learned how to take care of himself and to get around in a wheelchair.

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the

C) One-year term option

During the grace period, the policyowner can

C) Pay a late premium without penalty

Which of the following answers does NOT describes the principal goal of a Preferred Provider Organization?

C) Provide medical services only from physicians in the network

According to California Insurance Code, which of the following can be classified as an insurable event?

C) Pure risks

Which of the following would basic medical expenses coverage NOT cover?

C) Surgeon's services

The advantage of qualified plans to employees is

C) Tax Deductible Contributions

Which answer is true about extension of benefits in group disability policies?

C) The benefits are extended if a disabled persons coverage terminates as a result of a discontinued group plan

A group of 15 skydivers met at a seminar an began talking about life insurance during a break....

C) The purpose of the group was to purchase life insurance

The purpose of having an elimination period in a policy is to accomplish which of the following?

C) To allow the client some flexibility in determining their own premium

Which of the following is NOT the purpose of HIPAA?

C) To provide immediate coverage to new employees who had been previously covered for 18 months

During the free-look period, the premium for a variable annuity may be invested in all of the following EXCEPT

C) Value Funds

A 40-year old man buys a whole life policy and names his wife as his only beneficiary. His wife dies 10 years later. He never remarries and dies at 61. Leaving two grown children...

C) the insured's estate

An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage?

D) $102

How long is an open enrollment period for Medicare supplement policies?

D) 6 months

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?

D) Common disaster clause

A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called

D) Cost of Living Rider

A couple recives a set amount of income from their annuity. When the wife dies, the husband no longer recives annuity payments...

D) Joint Life

After three years of making payments into a flexible premium deferred annuity, the owner decides to surrender the annuity. The insurer returns all the premium payments to the owner, except for a predetermined percentage. What is this percentage called?

D) Surrender charge

The premiums paid by the employer in a business life insurance policy are

D) Tax deductible by the employer

The annuity owner dies during the accumulation period without naming a beneficiary. Annuity's cash value exceeds premiums paid. Which of the following is TRUE?

D) The cash value will be paid to the annuitants estate

How are employer contributions to Health Reimbursement Accounts treated in regards to taxation?

D) They are tax deductibles

A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?

D) immediate annuity

Which of the following statements is TRUE concerning the Accidental Death Rider?

D) it will pay double or triple the face amount

Medicare advantage is also known as

B) Medicare Part C

According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan?

D) 60 percent

What is the minimum free-look period for newly issued life insurance policies in this state?

A) 10 days

Which of the following is a term for a person who seeks insurance from an insurer?

A) Applicant

A group policy used to provide accident and health coverage on a group of persons being transported by a common carrier, without naming the insured persons individually is called

A) Blanket Policy

If an applicant for health insurance policy is found to be a substandard risk, the insurance company is most likely to

A) Charge an Extra Premium

How many long term care policies can be sold to an insured within a 12-month period before the number of policies is considered to be unnecessary?

B) 2

An employee will be taxes on the cost of group life insurance paid by the employer if the amount of coverage exceed

D) $50,000

A policyowner cancels his life policy but instructs the insurance company to transfer the cash value of his policy to an annuity. This non-table transaction is called

D) 1035 exchange

Which of the following best describes the waiting period?

D) A period of time the insured has to wait before payments of benefits begin after a disability.

Most LTC plans have which of the following features?

D) Guaranteed Renewability

Which is true regarding HMO coverage?

It is divided into geographic territories

Which of the following terms most precisely fits the definition of "the incidence or probability of sicknesses or accidents within a given group of people?"

Mortality

What type of care is Respite care?

Relief for a major care giver

Which of the following is correct about Medicare?

The program is divided into four parts (A-D).

What is the purpose of coinsurance provisions?

To help the insurance company to prevent overutilization of the policy

The goals of HICAP are to provide

a. Information through community forums about the myths and realities of Medicare and private health insurance. b. Counseling and advocacy to assist individuals with long-term care planning and insurance policies, billing, or claims. c. Legal representation and advice when necessary and appropriate. **d. All of the above.

If a policyholder contacts an insurance company about a claim and excepts response to the inquiry, within what span of time must the agent responds?

A) 15 days

First-year commision on a Medicare supplement policy may NOT exceed

A) 200 % of the 2nd year commission on the same policy

Which of the following actions would NOT be considered a form of "adverse underwriting decisions" for a policy involving individually underwritten coverage?

An insurer giving an insured a "Preferred" rating due to health and lifestyle conditions

COBRA applies to employers with at least

B) 20 employees

A provision in a life insurance policy that provides for the early payment of some portion of the policy face amount should the insured suffer from a terminal illness or injury is called

B) Accelerated Benefit Provision

What do Modified Life and Straight Life policies have in common?

B) Accumulation of Cash Value

What is the period of coverage for events such as death or divorce under COBRA?

C) 36 months

To achieve the profitable distribution of exposures,

C) Preferred risks and poor risks are balanced, with average risks in the middle.

A Medicare SELECT policy does all of the following EXCEPT

C) Prohibit payment for regularly covered services if provided by non-network providers

Another name for a substandard risk classification is

C) Rated

Who is eligible to purchase an IRA?

D) Anyone who has earned income

A contract which one party undertakes to indemnify another against loss is called

D) Insurance

What is an advantage of the Temporary Insuring Agreement to the applicant?

D) It gives the applicant immediate coverage

To sign up for a Medicare prescription drug plan, individuals must first be enrolled in

D) Medicare part A

What term is used to describe when a medical caregiver contracts with a health organization to provide services to its members or subscribers, but retains the to treat patients who are not members or subscribers?

D) Open Panel

Which nonforfeiture option provides coverage for the longest period of time?

D) Reduced paid-up

If an insured under a variable life insurance policy dies, how will the insurer respond to outstanding policy loans?

D) The loan amounts are deducted from the death benefit

Which of the following annuity riders ensures investors will receive a set amount of income annually?

A) Guaranteed Minimum Income Benefit

What type of health insurance policy provides an employer with funds to train a replacement if a valued employee becomes disabled?

A) Key person disability

Harry has a disability that prevents him from doing certain kinds of work. Because of his qualifications, he responds to a recruitment ad and is hired for the position. What federal act allows him to apply for the job?

B) Americans with disabilities act

What do individuals use to transfer their risk of loss to a larger group?

B) Insurance

Which renewal provision(s) must be included in a long-term care policy issued to an individual?

B) Noncancellable and guaranteed renewable

Which of the following levels of care in long-term policies specifically includes assistance with activities of daily living?

B) Personal Care

Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?

B) Presumptive diability

What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before a loss can be covered?

B) Probationary Period

What describes a situation when poor risks are balanced with preferred risks, and average risks are in the middle?

B) profitable distribution of exposures

Assume that policy allows the insurer to terminate coverage for a "class" of clients under stated circumstances. Which of the following classes would it be illegal for the insurer to terminate?

C) All insureds with a sexual preference which increases the risk of HIV Infection

All of the following are dividend options EXCEPT

C) Fixed period installments

In reference to the standard Medicare Supplement benefits plans, what does the term standard mean?

D) All providers will have the same coverage options and conditions for each plan

All of the following are insurable events as defined in the insurance Code EXCEPT

D) An insured loses a large sum in a poker game

To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?

D) At the time of application

An insurance company assures its new policyholders that their premium costs will not increase for a period of at least 5 years. However due to the increasing financial strain, they plan to raise premium costs for all insureds by 10 percent over the next two years. What term best describes this act?

D) Fraud

What kind of policy does NOT typically require proof of insurability?

D) Group insurance

Health saving Accounts (HSA's) are designed to

D) Help individuals save for qualified health expenses

Medicare Savings Accounts (MSAs) are available to small business employees and self-employed individuals who have

D) High deductible health insurance

In a group health policy, a probationary period is intended for people who

D) Join the group after the effective date

Kayla's husband died in a plane crash. She needs a new source of funding that will help put her child through daycare. Which of the following would be the best source? a. estate conservation b. life insurance proceeds c. state education waiver d. viatical settlement

D) Life insurance proceeds

Harry is recovering from a long period of disability. Which rider could protect his business from loss of income due to his absence, even after he is no longer disabled?

D) Residual rider

If a life insurance policy has an irrevocable beneficiary designation,

D) The beneficiary can only be changed with written permission of the beneficiary.

Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE?

D) Withdrawals are not taxable

What are the consequences of a failure to comply with the Commissioner's Office while it is executing a seizure order?

A) It is a misdemeanor punishable by a fine of $1000, one year imprisonment or both

Which of the following is considered to be a morale hazard

C) Driving Recklessly

Twin brothers are starting a new business. They know it wall take several years to build the business to the point that they can pay off the debt incurred in starting the business...

C) Joint Life

Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal policy at any premium due date?

C) Optionally renewable

In an optionally renewable policy, the insurer has which of the following options?

C) Increase Premiums

Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service?

D) Copayment

All of the following are true about variable products EXCEPT

D) The premiums are invested in the insurer's general account