Missed Exam Questions

________________________________________ #47. If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following? a) Adjust the benefit in accordance with the increased risk b) Cancel the policy c) Increase the premium d) Exclude coverage for on-the-job injury

A; A part of the premium rating concerns the hazard of occupation.

________________________________________ #43. An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would a) Pay the claim. b) Hold the claim as pending until the end of the grace period. c) Deny the claim. d) Pay half of her claim because the insured had an outstanding premium.

A; Because the accident occurred during the grace period, the insurance company will pay the claim.

________________________________________ #36. A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid? a) The benefits will be coordinated. b) Neither plan would pay. c) Each plan will pay in equal shares. d) The insured will have to select a plan from which to collect benefits.

A; Benefits will be coordinated when individuals are covered under two or more health plans.

________________________________________ #2. Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner? a) Third-party ownership b) An irrevocable beneficiary c) A buy-sell agreement d) Family term rider

A; Contracts that are owned by someone other than the insured are known as third-party ownership. Most policies involving third-party ownership are written in business situations or for minors in which the parent owns the policy.

________________________________________ #65. What is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan? a) Diagnostic and preventive care b) A broad coverage area c) A low monthly premium d) Low cost deductibles

A; Dental expense insurance is a form of medical expense health insurance that covers the treatment, care and prevention of dental disease and injury to the insured's teeth. An important feature of a dental insurance plan which is typically not found in a medical expense insurance plan is the inclusion of diagnostic and preventive care (teeth cleaning, fluoride treatment, etc.).

________________________________________ #31. A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums? a) The insured's premiums will be waived until she is 21. b) The premiums will become tax deductible until the insured's 18th birthday. c) Since it is the policyowner, and not the insured, who has become disabled, the life insurance policy will not be affected. d) The insured will have to pay premiums for 6 months. If at the end of this period the father is still disabled, the insured will be refunded the premiums.

A; If the payor (usually a parent or guardian) becomes disabled for at least 6 months or dies, the insurer will waive the premiums until the minor reaches a certain age, such as 21.

________________________________________ #2. Which of the following hospice expenses would NOT be covered in a cost-containment setting? a) Antibiotics b) Tylenol c) Morphine d) Special hospital bed

A; In a cost-containment setting, daily needs and pain relief are provided for hospice patients, but curative measures are not.

________________________________________ #129. How long must insurance companies, that issue health insurance benefit contracts in Kansas, keep records of the advertising used in marketing these products? a) 4 years, or until the next examination by the Commissioner. b) 5 years, or until the next examination by the Commissioner. c) One year d) 3 years, or until the next examination by the Commissioner.

A; Insurance companies that issue health insurance benefit contracts in Kansas, must keep records of the advertising used in marketing these products for 4 years, or until the next examination by the Commissioner.

________________________________________ #105. In a life settlement contract, whom does the life settlement broker represent? a) The owner b) The insurer c) The beneficiary d) The life settlement intermediary

A; Life Settlement Broker is a person who, for compensation, solicits, negotiates, or offers to negotiate a life settlement contract. Life settlement brokers represent only the policyowners.

________________________________________ #136. How many consecutive months of coverage (other than in an acute care unit of a hospital) does LTC insurance cover? a) 12 b) 24 c) 36 d) 6

A; Long-term care policies, which can be marketed in the form of individual policies, group policies, or as riders to life insurance policies, provide coverage for individuals who are no longer able to live an independent lifestyle and require living assistance at home or in a nursing home facility. They must provide coverage for at least 12 consecutive months in a setting other than an acute care unit of a hospital.

________________________________________ #143. All individual and group health insurance policies providing medical, surgical, or hospital expense in Kansas, must provide reimbursement or indemnity for the treatment of alcoholism, drug abuse, or nervous or mental conditions. Such coverage may be limited to a) Not less than 30 days per year when the person is confined in a properly licensed facility. b) 180 days per year when the person is confined in a properly licensed facility. c) Treatment and limits of any other covered disease. d) Unlimited, if treatment is provided in a licensed facility.

A; Minimum standards for coverage for the treatment of alcoholism, drug abuse, and mental conditions are established by the Insurance Code.

________________________________________ #58. All of the following statements about Medicare Part B are correct EXCEPT a) It is a compulsory program. b) It covers services and supplies not covered by Part A. c) It is financed by monthly premium d) It is financed by tax revenues.

A; Part B is elective. Individuals become eligible for Part B at the same time they become eligible for Part A, however Part B requires that a monthly premium be paid.

of all covered services, except for the initial deductible. d) Individuals entitled to Social Security disability are not eligible for coverage under Medicare Part A.

A; Persons under the age of 65, but entitled to Social Security disability benefits for 24 months, may qualify for Medicare, in addition to citizens or legal residents of the US age 65 and over who qualify for Social Security or railroad retirement benefits. Individuals with ESRD or ALS are automatically eligible for coverage under Medicare Part A.

________________________________________ #69. An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term? a) The insured may renew the policy for another 10 years, but at a higher premium rate. b) The insured must provide evidence of insurability to renew the policy. c) The insured may only convert the policy to another term policy. d) The insured may renew the policy for another 10 years at the same premium rate.

A; Policies that are guaranteed renewable and convertible may be renewed, without evidence of insurability, for another like term, or may be converted to permanent insurance, without evidence of insurability.

________________________________________ #5. Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client? a) Limited pay whole life b) Interest-sensitive whole life c) Life annuity with period certain d) Increasing term

A; Premium payments will cease at her age 65, but coverage will continue to her death or age 100.

________________________________________ #96. An insured is involved in a car accident. In addition to less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will the insured receive Presumptive Disability benefits? a) No benefits b) Full benefits c) Partial benefits d) Full benefits until the blindness lifts

A; Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of use of at least two limbs, total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work. Because the insured's blindness was only temporary and the loss of use in only one leg, he does not qualify for presumptive disability benefits.

________________________________________ #6. In which of the following locations would skilled care most likely be provided? a) In an institutional setting b) At the patient's home c) In an outpatient setting d) At a physician's office

A; Skilled nursing care is performed under the direction of a physician, usually in an institutional setting.

________________________________________ #114. The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT a) Individual tax deduction for premiums paid. b) Right to appeal. c) No lifetime dollar limits. d) Coverage for preventive benefits.

A; The Act does not offer tax deductions for health insurance premiums. The Act does offer a tax credit, which is different from a tax deduction. All the other provisions are included in the Act.

________________________________________ #34. Who makes up the Medical Information Bureau? a) Insurers b) Hospitals c) Former insured d) Physicians and paramedics

A; The Medical Information Bureau is made up of insurers so the companies can compare the information they have collected on a potential insured with information other insurers may have discovered.

________________________________________ #59. An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action? a) The old policy should stay in force until the new policy is issued. b) There should be at least a 10-day gap between the policies. c) Policies must overlap to cover pre-existing conditions. d) The old policy must be cancelled before the new one can be issued.

A; The agent must make sure that the current policy is not cancelled before the new policy is issued.

________________________________________ #54. Regarding the taxation of Business Overhead policies, a) Premiums are deductible, and benefits are taxed. b) Premiums are not deductible, and benefits are taxed. c) Premiums are not deductible, but benefits are deductible. d) Premiums are not deductible, but expenses paid are deductible.

A; The premiums paid for BOE insurance are tax deductible to the business as a business expense. However, the benefits received are taxable to the business as received.

________________________________________ #28. Which of the following is NOT an enrollment period for Medicare Part A applicants? a) Automatic enrollment b) Initial enrollment c) Special enrollment d) General enrollment

A; There are 3 types of enrollment periods for Medicare Part A: initial enrollment period, general enrollment period and special enrollment period.

________________________________________ #151. Which statement is true about the proceeds of a life insurance policy? a) The lawful beneficiary is entitled to all policy benefits free from all claims of creditors or representatives of the insured's estate. b) No proceeds can be paid to the lawful beneficiary unless he/she is at least 18 years old. c) The beneficiary must have an insurable interest in the insured. d) The lawful beneficiary receives the proceeds after all creditors of the estate have been paid.

A; There is no requirement that the beneficiary show insurable interest with respect to a life insurance policy. Death benefits are paid to the beneficiary and are not subject to the creditors of the insured's estate, unless there was an assignment of benefits prior to the insured's death.

________________________________________ #25. Employer contributions made to a qualified plan a) Are taxed annually as salary. b) Are subject to vesting requirements. c) May discriminate in favor of highly paid employees. d) Are after-tax contributions.

B; Qualified plans must have a vesting requirement.

________________________________________ #139. How long is the required free-look period for replacement policies? a) 10 days b) 20 days c) 30 days d) 45 days

B; Replacement policies must include a 20-day free-look provision that gives the applicant the right to an unconditional refund of all premiums paid within 20 days after the policy delivery if not satisfied for any reason.

________________________________________ #27. Which one of the following is an eligibility requirement for Social Security disability income benefits? a) Currently employed status b) Fully insured status c) Experiencing at least one year of disability d) Being at least 50 years of age

B; Social Security Disability benefits are available only if the worker is fully insured. Benefits are provided only after a 5-month waiting period.

________________________________________ #153. What is the maximum monetary fine for a nonwillful violation of insurance statutes regarding unfair trade practices? a) $500 b) $1,000 c) $5,000 d) $10,000

B; The Commissioner will issue a cease and desist order and impose a monetary penalty of no more than $1,000 for each nonwillful violation, up to the maximum aggregate penalty of $10,000.

________________________________________ #119. Which of the following is the fine for failing to complete CE requirements? a) $50 b) $100 c) $500 d) $1,000

B; The agent will be fined $100 for each license suspended because of not meeting CE requirements.

________________________________________ #43. An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy? a) 7 days b) 10 days c) 31 days d) 60 days

B; The grace period is 7 days if the premium is paid weekly, 10 days if paid monthly, and 31 days for all other modes.

________________________________________ #22. Which of the following is true about the premium on the children's rider in a life insurance policy? a) It decreases when an adopted child is added to the policy. b) It remains the same no matter how many children are added to the policy. c) It decreases when the oldest child reaches the age of 21. d) It increases when a newborn baby is added to the policy.

B; The premium does not change on the inclusion of additional children; it is based on an average number of children.

________________________________________ #5. The minimum number of credits required for partially insured status for Social Security disability benefits is a) 4 credits. b) 6 credits. c) 10 credits. d) 40 credits.

B; To be considered partially insured, an individual must have earned 6 credits during the last 13-quarter period.

________________________________________ #37. An IRA purchased by a small employer to cover employees is known as a a) Defined contribution plan. b) 403(b) plan. c) Simplified Employee Pension plan. d) 401(k) plan.

C; A Simplified Employee Pension (SEP) is an employer sponsored IRA. Contributions to the plan are not included in the employee's taxable income for the year, to the extent that they do not exceed the maximums allowed. Distributions from a SEP are taxable as ordinary income when received at retirement.

________________________________________ #58. Which of the following products requires a securities license? a) Equity Indexed annuity b) Deferred annuity c) Variable annuity d) Fixed annuity

C; A variable annuity is considered to be a security and is regulated by the Securities Exchange Commission (SEC) in addition to state insurance regulations. For that reason, a person must hold a securities license in addition to a life agent's license in order to sell variable annuities.

________________________________________ #66. The transfer of an insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses? a) Salvage b) Appraisal c) Subrogation d) Arbitration

C; After the insured accept payment from the insurer, they have been indemnified. Insurance policies require the insured to transfer any right to recovery to the insurer so that they may seek recovery up to the amount they paid as loss.

________________________________________ #83. An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true? a) The group plan will pay a portion of the employee's expenses. b) The group plan will pay depending on the employee's recovery. c) The group plan will not pay because the employee was injured at work. d) The group plan will pay.

C; Because the employee's injuries were work related, the group health policy would not respond. The insured would have to rely on worker's compensation for coverage.

________________________________________ #134. Which of the following determines continuing education biennium due date? a) Agent's last name b) Agent's license number c) Agent's year of birth d) Agent's licensing year

C; Biennial due date means the date of birth of any licensed insurance agent who is required to complete CE credits. Agents born in odd-numbered years will complete their CE requirements every odd-numbered year; agents born in even-numbered years will complete their CE credits every biennium in even-numbered years.

________________________________________ #127. During a hearing, the Commissioner is allowed to do all of the following EXCEPT a) Require to produce evidence of records. b) Collect fines for violations. c) Subpoena witnesses. d) Cross-examine witnesses.

C; During a hearing, the Commissioner can subpoena witnesses, administer oaths, examine and cross-examine witnesses, receive oral and documentary evidence, and require the production of books, records or other documents relevant to the inquiry.

________________________________________ #47. What is the period of coverage for events such as death or divorce under COBRA? a) 31 days b) 12 months c) 36 months d) 60 days

C; The maximum period of coverage under COBRA is 36 months, in the event of the covered employee's death or divorce.

________________________________________ #99. In a group health policy, a probationary period is intended for people who a) Have additional coverage through a spouse. b) Want lower premiums. c) Join the group after the effective date. d) Have a pre-existing condition at the time they join the group.

C; The probationary period is the waiting period new employees must satisfy before becoming eligible for benefits.

________________________________________ #18. Traditional IRA contributions are tax deductible based on which of the following? a) Owner's age b) IRA limit c) Owner's income d) How long the plan has been in force

C; Traditional IRA contributions are tax deductible, but may be limited if the owner's income exceeds a certain level.

________________________________________ #41. All of the following entities regulate variable life policies EXCEPT a) The SEC. b) The Insurance Department. c) The Guaranty Association. d) Federal government.

C; Variable life insurance is regulated by both the state and federal government, as well as the Insurance Department, and the SEC.

________________________________________ #148. To legally transact insurance in this state, an insurer must obtain which of the following? a) Certificate of Insurance b) Certificate of Authority c) Power of Attorney d) Business entity license

B; A Certificate of Authority is required in order to transact insurance.

________________________________________ #33. Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability? a) Income replacement b) Residual disability c) Recurrent disability d) Partial disability

B; A residual disability will pay an amount to make up the difference between what the insured would have earned before the loss.

________________________________________ #79. An absolute assignment is a a) Change of insurer. b) Transfer of all ownership rights in a policy. c) Transfer of some ownership rights in a policy. d) Change of beneficiary.

B; Absolute Assignment involves transferring all rights of ownership to another person or entity. This is a permanent and total transfer of all the policy rights. The new policyowner does not need to have an insurable interest in the insured.

________________________________________ #147. What is the current requirement for continuing education hours in ethics in each license renewal period for individual producers? a) 2 hours b) 3 hours c) 4 hours d) 5 hours

B; All producers are required to take at least 3 credit hours in ethics courses as part of their continuing education requirement.

________________________________________ #13. In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost a) Counts toward coinsurance. b) Is not covered. c) Must be covered by the insurer. d) Counts toward deductible.

B; An insurance company will pay the usual, reasonable, or customary amount for a given procedure based upon the average charge for that procedure.

________________________________________ #39. According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer EXCEPT a) Failure to pay off a loan. b) Disputes regarding consumer report information. c) Tax delinquencies. d) Late payments.

B; As defined by the Act, negative information includes information regarding a customer's delinquencies, late payments, insolvency or any other form of default. Customer disputes are not considered negative information, and, in fact, must be included in consumer reports.

________________________________________ #70. An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an a) Adjustable Life. b) Interest-sensitive Whole Life. c) Credit Life. d) Annual Renewable Term.

B; Because the cash values are generated by investments, interest rates will affect the amount of the cash value.

________________________________________ #19. If the annuitant dies during the accumulation period, who will receive the annuity benefits? a) The annuitant's estate b) The beneficiary c) The annuity owner d) The insurance company

B; If the annuitant dies during the accumulation period, the beneficiary receives benefits from the annuity: either the amount paid into the plan or the cash value - whichever is greater.

________________________________________ #70. Which of the following entities has the authority to make changes to an insurance policy? a) Producer b) Insurer's executive officer c) Department of Insurance d) Broker

B; Only an executive officer of the company, not an agent, has authority to make any changes to the policy. The insurer must have the insured's written agreement to the change.

________________________________________ #20. Which of the following entities can legally bind coverage? a) Agent b) Insurer c) The insured d) Federal Insurance Board

B; Only insurers, not agents, can bind coverage.

________________________________________ #75. Concerning Medicare Part B, which statement is INCORRECT? a) It provides partial coverage for medical expenses not fully covered by Part A. b) It is fully funded by Social Security taxes (FICA). c) It is known as medical insurance. d) It offers limited prescription drug coverage.

B; Part B is funded by monthly premiums and from the general revenues of the federal government.

________________________________________ #56. 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? a) Grace period b) Probationary period c) Contestable period d) Elimination period

B; Probationary period is the period of time after a policy is in effect before claims arising out of an illness are covered. This is to prevent adverse selection, persons waiting until they have been exposed to a cause of loss before purchasing coverage.

________________________________________ #82. Fixed annuities provide all of the following EXCEPT a) Minimum guaranteed rate of interest. b) Future income payments. c) Hedge against inflation. d) Equal monthly payments for life.

C; Fixed annuities invest premium payments into a general account - a safe and conservative investment portfolio. They also provide a specified dollar amount for each annuity payment regardless of the purchasing power of the money. Variable annuities premiums are invested in securities, hopefully maintaining a constant purchasing power, and therefore providing protection against inflation.

________________________________________ #120. If an employer decides to change its life insurance policy to a similar one with a different insurer, which of the following describes the extent that replacement regulations will be exercised? a) The type of life insurance policy obtained will determine which replacement regulations will be required. b) The number of employees covered by the policy will determine which replacement regulations will be required. c) Replacement regulations will not apply in this situation. d) Special corporate replacement regulations will apply.

C; If a new life insurance policy is provided under a group life insurance policy covering employees or members of an association, replacement regulations do not apply.

________________________________________ #38. In a direct transfer, how is money transferred from one retirement plan to a traditional IRA? a) From the participant to the new plan b) From the original plan to the original custodian c) From trustee to trustee d) From trustee to the participant

C; In a direct transfer, the distribution is made directly from the trustee of the first plan to the trustee or administrator/custodian of the new IRA plan.

________________________________________ #46. How does a member of an HMO see a specialist? a) HMOs do not cover specialists. b) The member is allowed to choose his or her own specialist. c) The primary care physician refers the member. d) The insurer chooses the specialist.

C; In order for the member to get to see a specialist, the primary care physician must refer the member. If the member feels that the specialist should be treating him or her but is unable to get the referral from the primary care physician, the member might consider changing primary care physicians. In some HMOs there is a financial cost to the primary care physician for referring a patient to a more expensive specialist.

________________________________________ #53. Which of the following is NOT true regarding policy loans? a) An insurer can charge interest on outstanding policy loans. b) A policy loan may be repaid after the policy is surrendered. c) Money borrowed from the cash value is taxable. d) Policy loans can be repaid at death.

C; Money borrowed from the cash value is not taxable. Policy loans can be repaid at any time, including surrender and death. An insurer can charge interest on outstanding policy loans.

________________________________________ #46. In disability income insurance, the time between the onset of an injury or sickness and when benefits begin is known as the a) Enrollment period. b) Probationary period. c) Elimination period. d) Qualification period.

C; On disability income insurance, the time between the onset of an injury or sickness and the time benefits begin is known as the waiting or elimination period.

________________________________________ #106. Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to a) Beneficiary of the death benefit. b) The spouse of the insured. c) The insured. d) Creditors.

C; Payments for loss of life benefits are to be made to the designated beneficiary. If no beneficiary has been named, payment proceeds are to be paid to the deceased insured's estate. Claims other than death benefits are to be paid to the insured or the insured's estate, unless otherwise assigned by the insured.

________________________________________ #71. All of the following are covered by Part A of Medicare EXCEPT a) Post-hospital nursing care. b) Home health services. c) Physician's and surgeon's services. d) In-patient hospital services.

C; Physician's and surgeon's services are covered under Part B.

________________________________________ #28. All of the following apply to short-term disability plans EXCEPT a) Individual plans can provide benefit periods of up to 2 years. b) A benefit period of 26 weeks is most common for group plans. c) Both group and individual plans are renewable. d) Group plans can provide benefit periods of up to 52 weeks.

C; Short-term disability plans are not renewable.

________________________________________ #55. Another name for a substandard risk classification is a) Declined. b) Elevated. c) Rated. d) Controlled.

C; Substandard risk classification is also referred to as "rated" since these policies could be issued with the premium rated-up, resulting in a higher premium.

________________________________________ #126. Which of the following entities ultimately decides if an advertisement is complete and truthful? a) The Federal Advertisement Review Board b) The Kansas Guaranty Association c) The Commissioner d) The Consumer Protection Agency

C; The Commissioner has the power to determine whether an advertisement is clear, truthful, and complete.

________________________________________ #50. An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? a) Representation b) Adhesion c) Consideration d) Good faith

C; The binding force in any contract is consideration. Consideration on the part of the insured is the payment of premiums and the health representations made in the application. Consideration on the part of the insurer is the promise to pay in the event of loss.

________________________________________ #61. An insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy, stock performance declined, and the cash value fell to $10,000. If the insured dies, how much will be paid out? a) $10,000 b) $40,000 c) $50,000 d) $60,000

C; The cash value of a variable life insurance policy is not guaranteed. However, even if investments devalue significantly, they cannot be lower than the initial guaranteed benefit amount.

________________________________________ #118. Life insurance policies that have cash value must provide for a maximum policy loan interest rate of no more than a) 12 per annum. b) 9 per annum. c) 8 per annum. d) 6 1/2 per annum.

C; The following policy loan provisions apply to any policy that has a cash value element: a provisions allowing a maximum interest rate not to exceed 8 per year, or a provision allowing an adjustable maximum interest rate established periodically.

________________________________________ #45. An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point? a) Approved the application b) Issued the policy c) Neither approved the application nor issued the policy d) Both approved the application and issued the policy

C; When the agent receives the application and issues a conditional receipt, the insurer has not yet approved the application and issued the policy.

________________________________________ #83. An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point? a) Approved the application b) Issued the policy c) Neither approved the application nor issued the policy d) Both approved the application and issued the policy

C; When the agent receives the application and issues a conditional receipt, the insurer has not yet approved the application and issued the policy.

________________________________________ #9. Which of the following is true about the requirements regarding HIV exams? a) Results may be disclosed to the agent and the underwriter. b) Prior informed oral consent is required from the applicant. c) HIV exams may not be used as a basis for underwriting. d) The applicant must give prior informed written consent.

D; A separate written consent form must be obtained prior to an HIV exam. HIV exam results may be disclosed to underwriters, but not agents.

________________________________________ #145. Which of the following is NOT true regarding a temporary license in this state? a) Each individual can only hold one temporary license. b) It can be issued for up to 180 days to a spouse of the deceased agent. c) It does not require a written examination. d) Temporary licensees can write new business while the license is active

D; A temporary licensee cannot write new business.

________________________________________ #10. A Universal Life Insurance policy is best described as a/an a) Variable Life with a cash value account. b) Whole Life policy with two premiums: target and minimum. c) Flexible Premium Variable Life policy. d) Annually Renewable Term policy with a cash value account.

D; A universal policy has two components: an insurance component and a cash account. The insurance component (or the death protection) of a universal life policy is always annual renewable term insurance.

________________________________________ #81. Which of the following is NOT a factor in determining qualifications for Social Security disability benefits? a) Worker's PIA b) Worker's age c) Number of work credits earned d) Worker's occupation

D; A worker's specific occupation is not a factor in determining benefits, so long as the worker has earned the required amount of work credits.

________________________________________ #7. What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided? a) Policy Request b) Insurance Request Form c) Request for Insurance d) Application

D; An individual can submit an application to an insurer, which requests that the insurer review the information and issue an insurance contract.

________________________________________ #22. All of the following are true about group disability income insurance EXCEPT a) Benefits are usually short term. b) The waiting period starts at the onset of the injury or sickness. c) The longer the waiting period, the lower the premium. d) Coverage applies both on and off the job.

D; Employees who are injured on the job are covered by Workers Compensation insurance. Group disability income insurance is designed to cover employees only while they are off the job, so the coverage is considered to be nonoccupational in nature.

________________________________________ #26. Which of the following is NOT a feature of a guaranteed renewable provision? a) The insured has a unilateral right to renew the policy for the life of the contract. b) Coverage is not renewable beyond the insured's age 65. c) The insured's benefits cannot be reduced. d) The insurer can increase the policy premium on an individual basis.

D; Guaranteed renewable provision has all the same features that the noncancellable provision does, with the exception that the insurer can increase the policy premium on the policy anniversary date. However, the premiums can only be increased on a class basis, not on an individual policy.

________________________________________ #34. Which of the following is NOT a feature of a guaranteed renewable provision? a) The insured has a unilateral right to renew the policy for the life of the contract. b) Coverage is not renewable beyond the insured's age 65. c) The insured's benefits cannot be reduced. d) The insurer can increase the policy premium on an individual basis.

D; Guaranteed renewable provision has all the same features that the noncancellable provision does, with the exception that the insurer can increase the policy premium on the policy anniversary date. However, the premiums can only be increased on a class basis, not on an individual policy.

________________________________________ #39. Employers can reduce health plan costs by coupling a Health Reimbursement Account (HRA) with a) A low deductible health plan. b) An IRA. c) Nothing; HRAs cannot be coupled with any other health plan. d) A high deductible health plan.

D; HRAs permit an employer to reduce health plan costs by coupling the HRA with a high-deductible (and usually lower-cost) health plan. ________________________________________ #41. Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits? a) $50,000 b) $62,500 c) $75,000 d) Nothing &A; The life policy would pay the face amount, but because of the settlement option selected on the annuity, payments would cease upon the annuitant's death. Straight life annuity payments stop at death of the annuitant regardless of the principal left in the account.

________________________________________ #44. Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be a) Determined by the health of the insured. b) Based on the issue age of the insured. c) Discounted. d) Adjusted to the insured's age at the time of renewal.

D; If a level term product is renewed at the end of the term period the premium will be based upon the attained age of the insured.

________________________________________ #23. In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid? a) 10 days b) 25 days c) 30 days d) 45 days

D; If a policy premium is not paid by the end of the grace period, and the policy lapses, an insured may pay the outstanding premium and have the policy reinstated. If the insurer does not refuse reinstatement within 45 days from the date the conditional receipt was issued, the policy will be automatically reinstated.

________________________________________ #78. The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the a) Reinstatement clause. b) Insuring clause. c) Misstatement of Age clause. d) Incontestability clause.

D; If an insurer wishes to contest any statements on an application, they must do so within the first two years.

________________________________________ #35. An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true? a) The claim most likely will not be paid since the official claims form was not submitted. b) The insurer will be fined for not providing the claims forms. c) The insured must submit proof of loss to the Department of Insurance. d) The insured was in compliance with the policy requirements regarding claims.

D; If claims forms are not furnished to the insured, the claimant is deemed to have complied with the requirements of the policy if he or she submits written proof of the occurrence, nature of the loss, and extent of loss to the insurer.

________________________________________ #44. The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective? a) As of the policy delivery date b) As of the first of the month after the policy issue c) As of the policy issue date d) As of the application date

D; If the full premium was submitted with the application and the policy was issued as requested, the policy coverage effective date would generally coincide with the date of application.

________________________________________ #3. In reference to the standard Medicare Supplement benefits plans, what does the term standard mean? a) Coverage options and conditions comply with the law, but will vary from provider to provider. b) All plans must include basic benefits A-N. c) Coverage options and conditions are developed for average individuals. d) All providers will have the same coverage options and conditions for each plan.

D; In reference to the standard Medicare Supplement benefits plans, the term "standard" implies that all providers will have the same coverage options and conditions for each plan.

________________________________________ #122. On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of a) Concealment. b) Unfair claim practice. c) Rebating. d) Misrepresentation.

D; Issuing or circulating any sales material that is false or misleading would be considered misrepresentation and is illegal.

________________________________________ #98. Which of the following is an example of liquidity in a life insurance contract? a) The death benefit paid to the beneficiary b) The flexible premium c) The money in a savings account d) The cash value available to the policyowner

D; Liquidity in life insurance refers to availability of cash to the insured. Some life insurance policies offer cash values that can be borrowed at any time and used for immediate needs.

________________________________________ #41. What is the waiting period on a Waiver of Premium rider in life insurance policies? a) 30 days b) 3 months c) 5 months d) 6 months

D; Most insurers impose a 6-month waiting period from the time of disability until the first premium is waived.

________________________________________ #24. What happens when a policy is surrendered for its cash value? a) Coverage ends but the policy can be reinstated at any time. b) The policy can be reinstated by paying back all policy loans and premiums. c) The policy can be converted to term coverage. d) Coverage ends and the policy cannot be reinstated.

D; Once the cash surrender value option is selected, the coverage is terminated and the policy cannot be reinstated.

________________________________________ #115. Under the Affordable Care Act, what percentage of preventive care must be covered without cost sharing? a) 25 b) 50 c) 80 d) 100

D; The Act requires that 100 of preventive care be covered without cost sharing.

________________________________________ #29. Which nonforfeiture option has the highest amount of insurance protection? a) Conversion b) Decreasing Term c) Reduced Paid-up d) Extended Term

D; The Extended Term nonforfeiture option has the same face amount as the original policy, but for a shorter period of time.

________________________________________ #125. An insurer is on the verge of bankruptcy and can no longer pay the claims to its insureds. Which of the following will make sure that the insureds receive their money? a) NAIC b) Federal Insurer's Reserve c) Commissioner's Fund d) The Kansas Life and Health Insurance Guaranty Association

D; The Kansas Life and Health Insurance Guaranty Association protects policyowners, insureds, and beneficiaries from financial losses caused by insurers who become insolvent or otherwise unable to perform their contractual obligations.

________________________________________ #100. The period of time immediately following a disability during which benefits are not payable is a) The probationary period. b) The grace period. c) The blackout period. d) The elimination period.

D; The elimination period is a waiting period, expressed in days, not dollars, imposed on the insured from the onset of disability until benefit payments commence.

________________________________________ #128. If an employee has been continuously insured under a group health policy for at least 3 months prior to termination, the employee will be entitled to how many months of continued coverage (maximum)? a) 3 months b) 6 months c) 12 months d) 18 months.

D; The employee will be entitled to coverage continued under the group policy for 18 months after termination.

________________________________________ #45. 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? a) $25 b) $25.50 c) $100 d) $102

D; The employer is permitted to collect a premium from the terminated employee at a rate of no more than 102% of the individual's group premium rate (in this scenario, 102% of $100 total premium is $102). The 2% charge is to cover the employer's administrative costs.

________________________________________ #32. In a group health policy, a probationary period is intended for people who a) Have a pre-existing condition at the time they join the group. b) Have additional coverage through a spouse. c) Want lower premiums. d) Join the group after the effective date.

D; The probationary period is the waiting period new employees must satisfy before becoming eligible for benefits.

________________________________________ #37. In order to maintain coverage under COBRA, how soon from termination of employment must an employee exercise extension of benefits? a) 7 days b) 10 days c) 30 days d) 60 days

D; Under COBRA, terminated employees must exercise extension of benefits within 60 days of separation from employment.

________________________________________ #9. Under which provision can a physician submit claim information prior to providing treatment? a) Concurrent Review b) Anticipatory Treatment c) Suspended Treatment d) Prospective Review

D; Under the prospective review or precertification provision, the physician can submit claim information prior to providing treatment to know in advance if the procedure is covered under the insured's plan and at what rate it will be paid.

#1. Which of the following is NOT true regarding the annuitant? a) The annuitant's life expectancy is taken into consideration for the annuity. b) The annuitant receives the annuity benefits. c) The annuitant must be a natural person. d) The annuitant cannot be the same person as the annuity owner.

D; While they don't have to be, the annuitant and annuity owner are often the same person. The annuitant is the person who receives benefits or payments from the annuity and for whom the annuity is written. Since the annuitant's life expectancy is taken into consideration, the annuitant must be a natural person.

________________________________________ #28. Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount? a) Flexible life b) Variable life c) Adjustable life d) Universal life

D; With universal life policies, the policyowner has the flexibility to increase the amount of premium going into the policy and to later decrease it again. In fact, the policyowner may even skip paying a premium, and the policy will not lapse as long as there is sufficient cash value at the time to compensate for the nonpayment of premium.