Northwestern Mutual Life Insurance Exam
A long-term care shopper's guide must be presented at what point? a) Prior to the time of application b) At the time of application c) Between the completion of the application and the delivery of the policy d) At the time of policy delivery
A
An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is true? There is nothing wrong with this form of policy delivery. The insured should complain to the insurer. The insured should ask for a new policy to be delivered. The policy will not be legal until it is delivered by an agent.
A
An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss? a) Time of Payment of Claims b) Incontestability c) Physical Exam and Autopsy d) Legal Actions
A
An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe? Aleatory Good health Adhesion Condtional
A
Before a customer's agent delivers his policy, the insurer makes a last-minute change to the policy. The agent informs the customer of this change, and he accepts it. What must the agent do now? The agent should ask the customer to sign a statement acknowledging that he is aware of the change Nothing. After the explanation, the agent is not legally bound to do anything else The agent must notify the beneficiary of the change in the policy If the change would affect the premium, the agent must have the customer sign a statement acknowledging the change
A
Concerning insurance, the definition of a fiduciary is a) A producer who handles insurer funds in a trust capacity. b) A person who handles assets or money belonging to others. c) Any licensed producer. d) A retail clerk.
A
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? 5 days 7 days 10 days 3 days
A
In insurance, an offer is usually made when the application is submitted the insurer approves the application and receives the initial premium the agent hands the policy to the policyholder an agent explains a policy to a potential applicant
A
Producer Pete is found to be guilty of providing untrue information on his license application. The Commissioner is authorized to levy all of the following penalties, EXCEPT a) 6 months in prison. b) Probation. c) Suspension. d) Revocation.
A
The Federal Fair Credit Reporting Act Regulates consumer reports Protects customer privacy Regulates telemarketing Prevents money laundering
A
The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured's employment is called a) Nonoccupational coverage. b) Unemployment coverage. c) Occupational coverage. d) Workers compensation.
A
The insurance code defines statements made on behalf of an insurer which guarantee its policies through the Life and Health Guaranty Association as a) An unfair trade practice. b) Mandatory. c) Only required of some lines of insurance. d) Discretionary.
A
The insurance policy, together with the policy application and any added riders form what is known as Entire contract Certificate of coverage Contract of adhesion Whole life policy
A
The premium charged for exercising the Guaranteed Insurability Rider is based upon the insured's a) Attained age. b) Assumed age. c) Average age. d) Issue age.
A
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) Subrogation b) Arbitration c) Salvage d) Appraisal
A
What are the three basic coverages for medical expense insurance? a) Hospital, Surgical, Medical b) Basic, Major, Overhead c) Medical, Dental, Vision d) Reimbursement, Preventive, Service
A
What document describes an insured's medical history, including diagnoses and treatments? Attending physician's statement Physician's review Individual medical summary Comprehensive medical history
A
What is NOT a benefit of a POS plan? a) It allows guaranteed acceptance of all applicants. b) It allows the employee to use an HMO provided doctor. c) It allows the employee to use a doctor not covered under the HMO. d) With the Point-Of-Service plan the employees do not have to make a decision between the HMO or PPO plans that lock them in.
A
What is another term for the Director of the Department of Business Regulations in this state? a) Insurance Commissioner b) Insurance Administrator c) Insurance Superintendent d) Insurance Regulator
A
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? Application Policy Request Insurance Request Form Request for insurance
A
When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled? a) The insurer is considered to be notified since the notification to agent equals notification to the insurer. b) The insurer may delay the payment of this claim for up to 6 months. c) The insurer may settle this claim for less than it otherwise would have had the notification been provided in a timely manner. d) The insurer may deny the claim since it was not notified within the required 20-day time frame.
A
When a producer receives compensation from an insurer for the placement of insurance, he or she must do all of the following EXCEPT a) Inform the customer if the producer's sole compensation is commissions. b) Obtain written confirmation from the customer that the customer was notified about the commission to the producer. c) Provide the customer with a description of the method used for calculating compensation. d) Inform the customer that the producer may receive other performance based compensation.
A
When must an insurer deliver a privacy notice to consumers? a) Every 12 months b) Every 6 months c) Whenever the consumer contacts the insurer about products d) Every time a premium is collected.
A
Which of the following is NOT a feature of a guaranteed renewable provision? a) The insurer can increase the policy premium on an individual basis. b) The insured has a unilateral right to renew the policy for the life of the contract. c) Coverage is not renewable beyond the insured's age 65. d) The insured's benefits cannot be reduced.
A
Which of the following is true regarding health insurance underwriting for a person with HIV? The person may not be declined for medical coverage solely based on HIV status A person may be declined for HIV but not AIDS The person may be declined The person may only be declined if he/she has symptons
A
Which of the following will vary the length of the grace period in health insurance policies? a) The mode of the premium payment b) The length of any elimination period c) The length of time the insured has been insured d) The term of the policy
A
Which types of insurance companies marketing long-term care insurance coverage must establish procedures to assure that any comparison of policies by its agents will be fair and accurate? a) Every company is required to establish marketing procedures. b) Any company that uses any form of media to market policies that yield no less than 20% of its business. c) Mutual and stock companies. d) No companies are required to establish marketing procedures.
A
Who makes up the Medical Information Bureau insurers hospitals former insured physicians and paramedics
A
Within how many days of requesting an investigative consumer report must an insurer notify the customer in writing that the report will be obtained? 3 days 5 days 10 days 14 days
A
A producer who misappropriates funds held in a fiduciary capacity is guilty of a) Rebating. b) Theft. c) Misappropriation. d) Felony.
B
All of the following are correct about the required provisions of a health insurance policy EXCEPT a) The entire contract clause means the signed application, policy, endorsements, and attachments constitute the entire contract. b) A reinstated policy provides immediate coverage for an illness. c) Proof-of-loss forms must be sent to the insured within 15 days of notice of claim. d) A grace period of 31 days is found in an annual pay policy.
B
All of the following statements concerning Medicaid are correct EXCEPT a) Persons, at least 65 years of age, who are blind or disabled and financially unable to pay, may qualify for Medicaid Nursing Home Benefits. b) Medicaid is a state funded program that provides health care to persons over age 65, only. c) Individual states design and administer the Medicaid program under broad guidelines established by the federal government. d) Individuals claiming benefits must prove they do not have the ability or means to pay for their own medical care.
B
An agent makes a change on the application and then corrects his mistake by physically entering the necessary information. Who must then initial the change? Agent Applicant Executive officer of the company Insured
B
Applications for policies advertised by what method must include a statement announcing that the policy excludes pre-existing conditions from coverage? a) Radio commercials b) Direct response c) Any form of written advertising d) Television commercials
B
Legal services insurance is considered a) Title insurance. b) Accident and health insurance. c) Life insurance. d) Credit insurance.
B
On a health insurance application, a signature is required from all these individuals except The agent The spouse of the policyowner The proposed insured The policyowner
B
Social Security disability definition includes all of the following EXCEPT a) A physical impairment expected to result in death. b) Disability expected to last for at least 6 months. c) The inability to engage in any gainful work. d) Disability resulting from a medically determinable mental impairment.
B
The amount a self-insured company will pay out-of-pocket for health insurance coverage before a stop loss policy goes into effect is referred to as the a) Limit of liability. b) Deductible. c) Stop loss limit. d) Aggregate.
B
The classification "Small Employer" means any person actively engaged in a business that during the preceding year employed a) No more than 30 eligible employees. b) No more than 50 eligible employees. c) No more than 60 eligible employees. d) No more than 25 eligible employees.
B
The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the a) Probationary period. b) Insuring clause. c) Incontestability clause. d) Consideration clause.
B
What is the purpose of coinsurance provisions? a) To share liability among different insurance companies b) To help the insurance company to prevent overutilization of the policy c) To have the insured pay premiums to more than one company. d) To ensure payment to the doctors and hospitals
B
Which of the following is NOT an exclusion in medical expense insurance policies? a) Routine dental care b) Coverage for dependents c) Military duty d) Self-inflicted injuries
B
Which of the following is NOT true of legal services insurance? a) It provides for the mental and emotional welfare of the insured. b) It is considered to be life insurance. c) It covers the costs of legal services. d) It may be purchased on an individual or group basis.
B
Which of the following is considered a presumptive disability under a disability income policy? a) Loss of one hand or one foot b) Loss of two limbs c) Loss of one eye d) Loss of hearing in one ear
B
Which of the following is true regarding Medicare supplement policies issued in this state? a) To obtain the policy, the applicant must provide proof of insurability. b) They must be guaranteed renewable. c) They may exclude benefits based on pre-existing condition. d) The applicant's medical condition will determine the price of the policy.
B
Which of the following statements is most correct concerning the changing of an irrevocable beneficiary? a) They may be changed only on the anniversary date of the policy. b) They can be changed only with the written consent of that beneficiary. c) They may be changed at any time. d) They can never be changed.
B
Which of the following statements is true regarding coinsurance? a) The smaller the percentage that is paid by the insured, the more consistent the required premium will be. b) The larger the percentage that is paid by the insured, the lower the required premium will be. c) The larger the percentage that is paid by the insured, the higher the required premium will be. d) The smaller the percentage that is paid by the insured, the lower the required premium will be.
B
Which of the following would be required to hold a license as an insurance producer? a) A person who provides information about group insurance related to mass-marketed insurance b) An employee of an insurer who receives commissions for policies written c) A rental-car company employee d) A resident who works on advertisements for insurance policies
B
A guaranteed renewable health insurance policy allows the a) Policy to be renewed at time of expiration, but the policy can be canceled for cause during the policy term. b) Insurer to renew the policy to a specified age. c) Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class. d) Policyholder to renew the policy to a stated age and guarantees the premium for the same period.
C
All of the following long-term care coverages would allow an insured to receive care at home EXCEPT a) Respite care. b) Home health care. c) Skilled care. d) Custodial care in insured's house.
C
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? Policies must overlap to cover pre-existing conditions The old policy must be cancelled before the new one can be issued The old policy should stay in force until the new policy is issued There should be a 10-day-gap between the policies
C
An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do? Ask the applicant to sign a statement that acknowledges that the policy had been delivered Collects a late payment fee Ask her to sign a statement of good health Offer her a second policy
C
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 been done by the insurer to this point? Approved the application Issued the policy Neither Both
C
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following terms best describes what the insurer has violated? representation adhesion consideration good faith
C
COBRA applies to employers with at least a) 60 employees. b) 50 employees. c) 20 employees. d) 80 employees.
C
Disability income coverage specifies that the policy covers the insured if he is unable to perform any job for which he is qualified. In this case, total disability is defined as a) Own occupation - more restrictive than other definitions. b) Own occupation - less restrictive than other definitions. c) Any occupation - more restrictive than other definitions. d) Any occupation - less restrictive than other definitions.
C
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? a) 10 days b) 3 days c) 5 days d) 7 days
C
In Rhode Island, how many hours of CE are required every 2 years? a) 20 b) 22 c) 24 d) 15
C
In a replacement situation, all of the following must be considered except Limitations Exclusions Assets Benefits
C
It is the Commissioner's duty to revoke or suspend the license of insurers for all of the following reasons EXCEPT a) If the insurer's business practices are unsound. b) If the insurer neglects the law. c) If the insurer cancels a contract. d) If the insurer is insolvent.
C
Prior to purchasing a Medigap policy, a person must be enrolled in which of the following? a) Any private insurance policy b) Only Part A of Medicare c) Parts A and B of Medicare d) All four parts of Medicare
C
The mechanism used to pay covered claims and prevent financial losses to claimants and policyowners when an insurance company becomes insolvent is a) Reinsurance. b) A hold harmless agreement. c) The Guaranty Association. d) The Rhode Island High-Risk Insurance pool.
C
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract? Personal Unilateral Conditional Adhesion
C
What is material misrepresentation? Concealment Any misstatement by the producer A statement by the applicant that upon discovery would affect the underwriting decision of the insurance company Any misstatement made by an applicant for insurance
C
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
What phase begins after a new policy is delivered? Elimination period Grace period Free-look period Insurability period
C
When would a misrepresentation on an insurance application be considered fraud? When the application is incomplete Any misrepresentation is considered fraud If it is intentional and material Never
C
Which of the following entities can legally bind coverage? Federal Insurance Board Agent Insurer The insured
C
Which of the following is NOT the consideration in a policy? premium amount paid at the time of application promise to pay covered losses application given to a prospective insured something of value exchanged between parties
C
Which of the following is the closest term to an authorized insurer? a) Licensed b) Legal c) Admitted d) Certified
C
Who makes the rule and regulations that pertain to metabolic disease screening for a newborn? a) The Centers for Disease Control and Prevention b) The insurer c) The Department of Health d) The Commissioner
C
Whose responsibility is it to determine if all of the questions on an application have been answered. The applicant The beneficiary The agent The insurer
C
A guaranteed renewable disability insurance policy a) Is renewable at the option of the insurer to a specified age of the insured. b) Is guaranteed to have a level premium for the life of the policy. c) Cannot be cancelled by the insured before age 65. d) Is renewable at the insured's option to a specified age.
D
An employee becomes insured under a PPO plan provided by his employer. If the insured decides to go to a physician who is not a PPO provider, which of the following will happen? a) The PPO will not pay any benefits at all. b) The insured will be required to pay a higher deductible. c) The PPO will pay the same benefits as if the insured had seen a PPO physician. d) The PPO will pay reduced benefits.
D
An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied? Waiver Utmost good faith Estoppel Material misrepresentation
D
Assuming that all of the following people are covered by a High Deductible Health Plan and are not claimed as dependents on anyone's tax returns, which would NOT be eligible for a Health Savings Account? a) Andy is 55 and is covered under a dental care policy b) Jenny is 60 and also has a long-term care insurance plan c) Joe is 40 and is not covered by any other health insurance d) Amanda is 67 and is covered by a basic medical expense policy
D
If one takes Social Security retirement benefits at age 62, what needs to be done at age 65 to qualify for Medicare? a) Apply for coverage through the state b) Appear for a physical at the Social Security office c) Apply at a local Social Security office d) Nothing
D
In a Disability Income policy, all of the following are considered presumptive disabilities EXCEPT a) Loss of hearing. b) Loss of two limbs. c) Loss of speech. d) Loss of one eye.
D
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
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? They provide additional information from an outside source about a particular risk They provide information about a customer's character and reputation The customer has no knowledge of this action The customers associates, friends, and neighbors provide the report's data
D
In forming an insurance contract, when does the acceptance usually occur? When an insurer delivers the policy When an insurer receives an application When an insurer submits an application When an insurer's underwriter approves coverage
D
Insurable interest can be best described by which of the following The insured must be genuinely interested All beneficiaries need to have notification of their status It is not necessary for the insured to be aware of the insurable interest or give permission for the insurance that is to be written The applicant must experience a financial loss due to an accident or sickness that befalls the insured
D
Kevin and Nancy are married; Kevin is the primary breadwinner and has a health insurance policy that covers both him and his wife. Nancy has an illness that requires significant medical attention. Kevin and Nancy decide to legally separate, which means that Nancy will no longer be eligible for health insurance coverage under Kevin. Which of the following options would be best for Nancy at this point? a) Apply for social security benefits b) Apply for coverage under the same group policy that covers Kevin c) Convert to an individual insurance policy with 31 days so she won't have to provide evidence of insurability d) COBRA
D
Rhode Island offers producers licensed in another state the same privileges that the other state offers Rhode Island producers requesting nonresident licenses. What term is most closely associated with this? a) Bilateral licensing b) Reflective licensing c) Cross-state licensing d) Reciprocal licensing
D
The free-look provision allows for which of the following? a) Immediate coverage when the application is submitted b) A guarantee that the policy will not lapse if the premium is overdue c) A guarantee that the policy will be issued d) A right to return the policy for a full premium refund
D
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) Arbitration B) Salvage C) Appraisal D) Subrogation
D
To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested? When the applicant's credit is checked When the policy is delivered At the initial interview At the time of the application
D
What is the best way to change an application? Erase the previous answer and replace it with the new answer Write out the previous answer Draw a line through the incorrect answer and insert the correct one Start over with a fresh application
D
What is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application? a) 90 days after the effective policy date b) 6 months after the effective policy date c) 1 year after the effective policy date d) As long as the policy is in force
D
When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees a) To charge a lower premium every year the policy is renewed. b) Not to change the premium rate for any reason. c) To renew the policy indefinitely. d) To renew the policy until the insured has reached age 65.
D
Which of the following best describes the aleatory nature of an insurance contract? a) Only one of the parties being legally bound by the contract b) Ambiguities are interpreted in favor of the insured c) Policies are submitted to the insurer on a take-it-or-leave-it basis d) Exchange of unequal values
D
Which of the following includes information regarding a person's credit, character, reputation, and habits? Consumer history Insurability report Agent's report Consumer report
D
Which of the following is defined as a medically necessary program to reduce the length of a hospital stay or to delay or eliminate an otherwise medically necessary hospital admission? a) Hospice care b) Custodial care c) Skilled nursing care d) Home health care
D
Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information Unfair trade practices law The guaranty association Consumer privacy act The fair credit reporting act
D
Which of the following reports will provide the underwriter with the information about an insurance applicant's credit Inspection report Agent's report Any federal report Consumer report
D
Which of the following statements is INCORRECT? a) Misrepresenting the true nature or facts of a policy or its benefit in order to induce a policyholder to surrender one policy and replace it with another is illegal. b) It is illegal to be involved in any activity of boycott, coercion, or intimidation that is intended to restrict fair trade or to create a monopoly. c) Discrimination in rates, premiums, policy benefits, etc. for persons within the same class or with the same life expectancy is illegal. d) Replacing insurance policies for the purpose of making commissions is legal.
D
Which of the following would NOT be considered a limited coverage policy? a) Accident insurance b) Cancer insurance c) Credit insurance d) Major medical expense insurance
D
Who must pay for the cost of a medical examination required in the process of underwriting? applicant underwriters department of insurance insurer
D
an insurance contract must contain all of the following to be considered legally binding except offer and acceptance consideration competent parties beneficiary's consent
D
