Ohio Pre-Licensing Insurance Quiz Questions
ABC Bank offers its credit card holders optional Credit Disability coverage. Who is the beneficiary? A. bank B. credit card holder group C. debtor D. whoever the debtor selects
A
About warranties, it is important to remember that A. all statements on an application are not warranties B. all statements the agent has said are true C. it guarantees an applicant answers to the "best of my understanding and knowledge" D. it guarantees the company will perform at the time of the claim
A
A Disability Buy-out policy is used to A. buy out the disabled person's share of the business B. fund a Buy/Sell agreement C. pay the salary of the employees when the owner is disabled D. provide income for the disabled employee
A
A Health Insurance policy providing family coverage must cover newborns A. from the moment of birth B. after a 10-day probationary period C. after 31 days D. only when the additional premium is paid
A
A Medicare Fee-For-Service has A. first-dollar coverage B. an open service area providing for coverage across several states C. a preferred provider list D. a schedule for renewability
A
A business is valued at $200,000. Partner A buys a policy covering Partner B in the amount of $100,000, and Partner B buys the same coverage for Partner A. This is referred to as a(n) A. cross purchase plan B. entity plan C. Executive bonus plan D. Viatical settlement
A
A peril is best defined as: A. anything that will cause a loss B. Anything that will increase the chance that a loss will occur C. both D. neither
A
A plan under which the surviving partners of a partnership agree to buy the interest of a deceased partner is known as a A. buy/sell agreement B. deferred compensation plan C. key employee life policy D. surviving shareholder plan
A
A presumptive disability is described as a disability A. involving loss of sight, hearing, speech, or any two limbs, which is presumed to be a permanent and total disability B. so severe that one cannot perform any substantial, gainful work and the impairment lasts for at least 12 months or until death C. that allows the insured to return to work but earning less than before the disability occurred D. which prevents a person from performing one or more important daily duties pertaining to his occupation
A
All of these actions will keep a license from being issued to an applicant EXCEPT A. Being convicted of a misdemeanor B. cheating on the exam C. earning a CLU designation D. failing to submit the proper application
A
An agent engaging in the unfair and deceptive act of providing false information as to the financial condition of an insurer and intending harm is guilty of the unfair trade practice of A. defamation B. misrepresentation C. rebating D. twisting
A
An agent uses the "needs" approach when selling life insurance to determine A. how much coverage a client needs B. the human life value C. what the commission needs to be D. what the premium needs to be
A
An applicant is interest in Whole Life Insurance because of the lifetime coverage and cash value, but cannot afford the premium at this time in his life. Which of the following policies is the best alternative for the applicant? A. Graded Premium Whole Life B. Single Premium Whole Life C. Flexible Whole Life D. Convertible Whole Life
A
An employee's evidence of participation in a Group Life plan is the A. certificate B. master contract C. policy D. proof of employment
A
An example of an occurrence commonly included in Health policies are injuries that are A. accidentally self-inflicted B. caused by an act of war C. resulting from participation in criminal activities D. treated In nursing homes operated by U.S. government
A
Coverage for a child can be continued past the age of 18 under the following condition: A. Full-time student B. Required to be financially dependent on parent C. To age 30 under most circumstances D. When child employed by provider that provides health insurance
A
During the pay-in phase for a fixed Annuity, there is no tax liability A. as long as no withdrawals are taken B. even if the owner dies C. since the growth is tax-deferred, even if a loan is taken D. since the growth is tax-deferred, even if a withdrawal is taken
A
Gabrielle, age 54, has surrendered a Modified Endowment Contract (MEC) policy. Her premiums total $22,000 and the amount received is $18,500. The taxable amount is A. $0, since there is no gain B. $3,500, which equals the amount of the loss C. $15,000 which Is the total amount minus the loss, plus 10% penalty since she is younger than 59 1/2 D. $18,500, which is the total, plus 10% penalty since she is younger than 59 1/2
A
Health policy premiums CANNOT be impacted by A. driving record of an individual B. health of an individual C. hobbies of an individual D. use of tobacco by an individual
A
If a person has both Group Insurance and Medicare, which is primary? A. Group is primary, Medicare is secondary B. Medicare can be either primary of secondary as defined in Group Insurance C. Medicare is primary, Group is secondary D. a person cannot have both Group Insurance and Medicare
A
In Life Insurance, insurable interest must exist at the time A. application is made for the insurance B. the loss (death of the insured person) occurs C. of application and at the time of loss D. of application and at the time of loss
A
It is found that the sex of the insured was incorrect, what impact will it have on the policy? A. The amount of the claim will be adjusted either up or down to cover the amount the correct premium that would have been purchased B. no adjustment is made since the clause applies only to misstatement of age C. no impact is assessed if it is proven it is the mistake of the company's D. the policy would be voided even if the Time Limits of Certain Defenses has not lapsed
A
Life Insurance is a legal contract between an insurer and a policy owner in which the policy owner transfers a risk to the insurance company. In a typical key person insurance arrangement, the employer is A. both the policy owner and the beneficiary B. the beneficiary and the trustee C. the insured and the beneficiary D. the policy owner and the insured
A
Life insurance sold to fund a small partnership buy/sell agreement is also call the A. cross purchase plan B. disability buyout C. key person D. split dollar plan
A
Medicare Part A does NOT pay for A. the first three pints of blood B. home health care C. hospice care D. inpatient hospital care
A
Medicare Supplement Core Plan A does NOT cover A. an additional 13 months of in-hospital days at 100% B. co-insurance for days 61 to 90 C. cost of the first three pints of blood D. Part B 20% co-insurance
A
Ohio Continuation of Coverage applies to companies with A. 19 or fewer employees B. at least 20 employees C. at least 25 employees D. 50 or more employees
A
Protection against unintentional lapse of a Life policy is afforded by a(n) A. Automatic Premium Loan B. dividend option C. non-forfeiture option D. policy loan
A
Samantha worked at her former bar for five years before taking employment at a different bar, where she will receive health benefits after 30 days. She has emphysema. When she leaves her old job for the new one, she receives a paper that documents "creditable coverage" from the old bar. What does that mean to Samantha for her new job? A. Her emphysema is covered once benefits commence B. her emphysema is covered 30 days after benefits commence C. her emphysema is excluded only for 6 months D. her emphysema is excluded permanently at the new employer
A
Social Security provides benefits for eligible workers who become totally disabled. Which of the following best describes Social Security's definition of disability? A. inability of the worker to perform the duties of any gainful employment where such disability is expected to last for 12 months or result in death B.inability of the worker to perform the duties of any occupation he is able to perform based on education, training, and experience C. inability of the worker to perform the duties of his own occupation if death is expected within 12 months D. inability to perform five of the seven Activities of Daily Employment as defined by the Department of Health and Human Services
A
The Accidental Death Benefit (ADB) rider requires that death must occur within A. 90 days of the accident B. 90 days of the onset of the illness C. 120 days of the accident D. 120 days of the onset of the illness
A
The FIO A. allows the insured to buy more Disability Insurance at specific intervals by showing proof of an increase in income B. increases the benefit automatically during the period the insured is receiving monthly payments based on CPI C. pays a lump sum for necessary vocational training D. states that after 90 days of disability, the premium ceases until the insured is able to return to work
A
The Living Benefit rider A. can be used to pay nursing home costs B. can be used when a person has less than 36 months to live C. has a bi-annual premium D. is an alternative to ABR
A
The definition of Any-occ states any occupation A. for which the insured is reasonably suited by education, training, or experience B. the insured was doing at the time of the claim is covered for as long as the disability lasts C. is covered D. is covered, except those included by the policy
A
The free look provision for a pre-paid dental plan is A. 72 hours B. 10 days C. 20 days D. there is no free look provision for dental plans
A
The most inexpensive type of life insurance is A. group B. term C. universal D. whole
A
The policy that provides a death benefit that declines over a definite and limited period of time is A. decreasing term B. endowment C. joint life D. joint and survivor term
A
The practice of pretexting is A. attempting to get information by pretending to be someone else B. misdemeanor C. revealing the true purpose of the interview D. signing a contract without a spouse's knowledge
A
The purpose of estate creation is to A. create a death benefit when the policy is approved B. pay the federal estate tax due at death C. pay the state estate tax due at death D. pay both the federal and state estate tax due at death
A
To become a broker of Viatical settlements, a person must A. pay a fee of $200 and a renewal fee of $100 B. pay a fee of $500 and a renewal fee of $1,000 C. pay a fee of $1,000 and a renewal fee of $500 D. take the life and health exam
A
What can be done by a policy owner to reverse a policy that has been marked as an MEC? A. nothing can be done B. the policy owner can write a letter to the company requesting a reversal C. the policy owner can write a letter to the IRS requesting a reversal D. Reversal is possible if a claim is made that the owner made an error and it is caught within the contestable period of two years
A
What is the death benefit taxation on an Annuity? A. the beneficiary pays the taxes only on the growth B. The owner/annuitant pays the taxes due C. the taxes can be deferred by transferring the policy to the brother, who is the beneficiary at the death of the annuitant D. There is no tax payable at death
A
What premium for products can be considered in the total to meet the 10% tax deductible rule? A. medical and LTC B. medical, LTC, and life C. medical, LTC, dental, and disability D. medical, LTC, dental, life, accidental death and dismemberment
A
What type of Life Insurance policy has a 28-day grace period? A. industrial B. Term C. Universal Life D. Variable Whole Life
A
When all rights and interests of an insurance policy are transferred to an assignee permanently, this is know as ______________ assignment. A. absolute B. collateral C. contingent D. third-party
A
When an agent's mailing address changes, the Superintendent of Insurance is to be notified within A. 30 days B. 60 days C. 90 days D. six months
A
When misstatement of age occurs and is discovered, the company will A. adjust the benefits as necessary to make the payment of premiums and proper face amount balance. B. assess a penalty C. backdate the policy to change the age of the insured D. require proof of insurability
A
Which rider is NOT an example of a disability rider? A. COI B. PBR C. WCI D. WP
A
Which statement regarding backdating a policy is FALSE? A. the client has coverage back to the backdated date B. the client must pay all premiums back to the backdated date C. the client will save money over a long period of time by backdating D. the maximum number of days for backdating a policy in Ohio is 90
A
William accumulated $4,200 in cash from Life Insurance dividend payments that he left with the company at interest. He asks for and receives all $4,200. The taxable amount is A. $0, as dividends are a refund of premiums B. $4,200 as long as there is a gain in the policy C. $4,200 at the capital gains, if the policy is at least 12 months old D. $4,200, if the policy is an MEC and the owner is younger than 59 1/2
A
When a person buys an insurance policy with a large deductible, part of the risk is A. avoided B. canceled C. controlled D. retained
D
A PPO does not require A. co-insurance B. a gatekeeper C. lower costs if the patient goes to a preferred provider D. network providers
B
A Tax Sheltered Annuity (TSA) CANNOT be used for A. employees of a non-profit charitable organization B. employees of a publicly held manufacturing company C. pastors of a church D. public school teachers
B
A client justifiably demands a refund of premiums. How many days does a company have to comply with the request? A. 10 B. 30 C. 40 D.. 180
B
A family deductible means A. each member of the family must meet their own deductible B. if two members of the family meet their deductible, the rest of the family deductible is waived C. the whole family has a single deductible D. the whole family is covered if involved in a common accident
B
A person does a 1035 exchange on an Annuity in order to A. increase Life Insurance coverage and defer taxation B. receive a higher interest rate and defer taxation C. receive a lower interest rate D. receiver a lower interest rate and defer taxation
B
Insurable interest does NOT exist on a A. child B. lifelong friend C. sibling D. spouse
B
A person who has had no Health coverage for 11 months is now eligible to be covered at work. What are the pre-existing condition limits for the person? A. exclusion for the next six months for any pre-existing conditions found in the prior 12 months B. exclusion for the next 12 months for any pre-existing condition found in the prior six months C. a look back over the prior 12 months for the pre-existing condition D. no restrictions on pre-existing conditions
B
A probationary period is A. the length of time the proposed insured had a health condition prior to the application for insurance B. the time frame at the beginning of some policies when there is no coverage for sickness C. the time frame at the beginning of some policies when there is no coverage of accidents D. the time frame where coverage exists for certain types of claims not associated with an injury
B
After several bills incurred during during this year for health care costs, Ethel went to her dentist to have a tooth capped. She was pleasantly surprised that there was no$250 dental plan deductible for the dental procedure. Why did she NOT have an out-of-pocket expense? A. the cost was within UCR guidelines B. Her deductible is integrated C. it must be an HIC dental plan D. she has a scheduled plan
B
An agent's obligation to act in an insurance applicant's or insured's best interest, based on the faith and trust placed in the agent by members of the insurance-buying public, is known as A. the duty owed to a principal B. a fiduciary duty C. a presumption of agency D. the warranty of the agent
B
An independent agent A. is a captive agent B. represents more than one insurance company C. represents only direct writers D. works for a solicitor
B
Dental care will pay for prosthodontics, which refers to A. braces B. bridge work C. fillings and inlays D. root canal
B
Duties of the Superintendent of Insurance do NOT include A. examining companies for solvency B. prosecuting agents in a court of law C. refusal to issue a license to an agent D. suspending licenses of an agent
B
For an individual, premiums paid for a Life Insurance policy are fully tax deductible A. if the premium for the life insurance policy is being paid as a result of a divorce settlement order by an approved State Court B. under no circumstances, because premiums paid for a life insurance policy are considered to be a personal expense and, thus, are never tax deductible C. up to a limit of $5,000 in the year paid as long as the life insurance policy is part of an IRA D. whenever the premiums paid for the life insurance are part of an IRA, regardless of how much Is paid
B
Fred dies during the grace period of his Life Insurance policy but he had not paid the required annual premium. What is the insurance company obligated to pay to his beneficiary? A. cash value of the policy, if any B. face amount of the policy less any overdue premiums C. full face amount of the policy D. refund of any premiums paid
B
How often can a revocable beneficiary be changed? A. any time the beneficiary chooses B. any time the owner chooses C. never, even with the signature of both parties D. never, without the signature of both parties
B
If the policy is changed and the change increases the risk for the company, what is required? A. the face amount may or may not be increased B. insurability must be proven C. nothing is required, as long as the change involves a change of 5% or less D. nothing since the premium must be increased to cover the increased risk
B
In a disability income policy, the waiting period refers to what time frame? A. the period between the first day of disability and the receipt of the last disability payments B. the time between the onset of the disability and the day when benefits will be paid C. the time period during which an illness is excluded from coverage D. the time period during which the insurer can contest a claim for a material misrepresentation
B
In a key employer disability agreement, in the event of the employee's total disability, A. payments made by the insurer are taxable B. payments made by the insurer to the employer are tax-free C. salary continuance to the employee is taxable unless the source is disclosed, in which case only 50% is salary continuance to the employee is tax-free D. taxed
B
In a non-contributory group plan, what is NOT an eligibility requirement for the employees? A. if not enrolled in a timely manner, must wait until open enrollment period to enroll B. must take the required plan contributions C. must serve a probationary period D. must work full-time
B
In order to help an applicant obtain a younger age and reduce the cost of the future premium year after year, an agent can backdate coverage for A. 120 days B. 90 days C. 30 days D. up to the date of the previous birthday
B
In the event an employee is totally disabled at the time of the termination of the group plan, how long must the coverage continue for the group plan? A. 61 days B. 12 months C. 18 months D. 24 months
B
In which company may policy owners receive policy dividends when there is a profit? A. assessment B. mutual C. service D. stock
B
Joe, a policy owner, wants to change his mode of premium from annual to monthly. What impact will this have on the total annual premium Joe will pay? A. his premium will decrease B. His premium will increase C. his premium will stay the same D. Nothing will change except how often he sends his money
B
Managed care plans, such as HICs and PPOs, A. are not required to cover maternity B. are required to cover maternity C. may consider maternity as a pre-existing condition D. may impose a 270-day waiting period before maternity benefits are offered
B
Medicare Part B pays for A. eye glasses B. outpatient hospital care C. routine physical exams D. skilled nursing home care
B
Medicare Part C options do NOT include A. HICs B. Long-Term Care plans C. PPOs D. Private Fee-for-Service
B
Mickey, age 32, is advised by his agent to purchase Life Insurance to cover a 20-year amortized $245,000 business improvement loan. The plan that provides adequate coverage for Mickey at the minimum premium outlay is a $245,000 A. 20-year endowment policy B. decreasing term policy for 20 years C. level term policy for 20 years D. whole life policy
B
Mrs. Jones owns an individual disability income policy. Upon total disability, the policy pays $2,000 per month after a 60-day elimination period. Mrs. Jones was disable for 135 days. How much did she collect in disability benefits? A. $4,000 B. $5,000 C. $6,000 D. $9,000
B
Regarding an Equity Index Fund, which statement is TRUE? A. The EIA is for conservative investors B. Even though the index is linked to the investment market, the client cannot lose everything when the market goes down significantly C. The participation percentage is variable depending on market performance D. The Wilshire 500 is the most commonly used index
B
Something that may increase the seriousness of a loss occurs, or that increases the likelihood that a loss will occur, is called a A. catastrophe B. hazard C. peril D. risk
B
The Automatic Premium Loan provision allows that, in the event of the premium is not being paid A. by the due date, the premium will be taken as a loan B. by the end of the grace period, the premium will be taken as a loan C. on the five-year Renewable Term policy, the loan will be taken to pay the premium D. one the five-year Renewable Term policy, by the end of the grace period, a loan will be taken to pay the premium
B
The Loss-Ratio for a large block of Credit Life policies must be at least A. 45% B. 50% C. 51% D. 65%
B
The Ohio Guaranty Fund provides some remedy when A. Director of Insurance becomes concerned B. insurance company goes bankrupt and can't pay outside claims C. insurance company is declared to be insolvent D. insurance company is losing money in its investments
B
The authority of an insurance agent that is spelled out in the written words of the agency contract between the agent and the insurer is ____________ authority? A. apparent B. express C. implied D. presumed
B
The grace period for a Health policy with monthly premiums is A. 7 days B. 10 days C. one month D. 31 days
B
The grace period for an Annuity is A. 21 days B. 30 days C. 31 days D. 63 days
B
The notice of claim for a health claim must be given to the insurance company within A. 1 day B. 20 days C. 35 days D. 90 days
B
The penalty for late enrollment for Medicare Part B is A. coverage will not start until the following year after enrollment does occur B. an increased premium for each year the person is not enrolled C. non-existent because there Is no penalty for late enrollment D. proof of insurability must be given at enrollment
B
The purpose of HIPAA is to allow a person to carry A. the benefits of the old insurance plan to a new employer B. eligibility to join a new health care plan, as long as the new employer offers Health Insurance C. the old insurance plan to the new employer D. the same premium to the new plan, even though there has been a significant change of health
B
The specific do's and don'ts are spelled out for an insurance agent in A. an agent's CLU designation B. an agent's employment contract C. legal precedents D. the state licensing application
B
The type of receipt where coverage becomes effective at the time of application once approved by the company underwriter and provided all other conditions are met is called A. binding B. conditional C. recurrent D. residual
B
These are examples of guaranteed issue situations EXCEPT A. an employee's coverage through an employer ends B. the owner of the policy fails to pay the premiums on time C. a person leaves the Medicare Advantage within one year of signing up and now wants to buy a Medicare Supplement policy D. the previous Medicare Supplement company went bankrupt
B
Under the Entity method for the buy/sell agreement, the premiums are ______________ and the death benefit is _______________. A. deductible/income tax-free B. not deductible/income tax-free C. income tax-free/not deductible D. income tax-free/deductible
B
What renewability guarantee must a Medicare Supplement policy have? A. conditionally renewable B. guaranteed renewable C. non-cancelable D. non-renewable
B
When a Medicare Supplement policy is sold, the applicant must receive A. a 40-day free look B. a Buyer's Guide from the NAIC C. confirmation that premiums will not change D. information on the managed care plan
B
When a Whole Life insurance policy matures at age 120, what are the tax implications? A. payments made by the insurer are tax deductible after 100 years B. the gains over the actual premiums paid will be taxed as ordinary income C. policy was purchased with pre-tax dollars, so the beneficiary would pay income taxes D. there are no tax implications
B
When exercising a guaranteed insurability option (GIO), A. the insured can exercise the option at any time after the age of 21 B. the maximum purchase amount per option is specified in the contract C. the new insurance is available at the original issue age rate D. purchase options are valid until the insured reaches age 65
B
When there is a budget concern, which type of policy provides the greatest amount of protection for an insured's premium dollar as well as some cash accumulation? A. Limited Pay Life B. Step-rate Whole Life C. Term Life D. Whole Life
B
Which is NOT on of the available methods for dealing with exposure to risks? A. ascertain the risk B. recoup the risk C. retain the risk D. transfer the risk
B
Which is a dividend option? A. Extended Term B. One-Year Term C. Partial Surrender D. Reduced Paid-up
B
Which party is eligible to immediately receive monthly Social Security Survivor benefits? A. 20-year-old child who is still in school B. 48-year-old widow with a 12-year-old child C. 50-year-old widow with a 16-year-old child D. 55-year-old widow with no children
B
Which settlement option assumes that the insurance proceeds are retained and are NOT liquidated? A. capital liquidation B. capital retention C. cash accumulation D. estate conservation
B
Which term means permanent termination of all authority to hold any license as an agent in the state? A. refusal to issue or renew B. revocation C. surrender for cause D. suspension
B
An accountant returns to work after a period of 18 months of disability. His hours are reduced to 35% due to doctor's orders, thus he can only see about one-third as many clients as before. This type of disability is called A. long-term B. recurrent C. residual D. short-term
C
A Jumping Juvenile policy has a(n) A. benefit of providing a relatively large policy on a newborn child B. increase in the face amount at age 21 as long as insurability can be proven C. increase in face amount at age 21 without insurability D. increasing premium when the child reaches age 21
C
A Viatical settlement is a method of getting money A. by an individual directly selling his policy to a friend B. for a terminal illness by cashing in a policy C. from a Viatical settlement company by selling an in-force policy D. that violated the insurable interest requirement
C
A benefit of replacing a Health Insurance plan could be that A. it may contain a pre-existing sickness or injury clause B. it may have more restrictive language C. the probationary period is waived D. there could be additional restrictive riders
C
A client changes her mode of premium from quarterly to semi-annually. The effect on the total annual premium is A. balanced B. increased C. reduced D. unchanged
C
A hazard is defined as A. any condition that exists prior to the effective date of a Health Insurance policy B. the cause of the loss C. a situation or condition that increases the likelihood a loss may occur D. an unintentional and unforeseen event
C
A person who gives something of value to induce a prospect from that person if guilty of unfair trade practice of A. false advertising B. misrepresentation C. rebating D. twisting
C
A policy is labeled an MEC if A. it is allowed to lapse B. not enough money (premiums) is paid into it in the first seven years] C. too much money (premiums) is paid into it in the first seven years D. too much money (premiums) is paid into it in the first ten years
C
A waiver is A. the accidental giving up of a known right B. a protection for the client C. the relinquishment of a right D. the result of an estoppel
C
An agent can provide a fee provided that the A. agent can discriminate in charging the fee in certain situations B. consumer is aware of the fee C. consumer consents to the fee D. fee is deducted from the commission earned from the sale
C
An employee is late enrolling for the Group plan. What effect, if any, does this have on the pre-existing conditions rule? A. It has no effect on the rule B. the rule changes to exclude the pre-existing condition from coverage indefinitely C. the rule changes to: look back 6 and 18 forward D. the rule stays as it was: look back 6 and 12 forward
C
An example of third-party ownership is a situation where a(n) A. employee is both the policy owner and the insured B. parent buys life insurance policy to accumulate cash C. parent is the policy owner and her newborn child is insured D. terminally ill person sells in-force policy. to get cash
C
Carl was totally disabled for a period of seven months. Three months after he returned to work, he again becomes totally disabled. His insurance company immediately resumed his disability income payments. Which of the following statements BEST explains why payments were resumed? A. Carl is covered by a policy with continuing disability benefit rider with a 6-month elimination period B. Carl is under a group of short term disability income policy with a "no gain, no loss" provision C. Carl's disability income policy contains a recurrent disability benefit D. Carl's policy had been in force for more than two years; therefore, payment could no longer be contested under the time limit of certain defense clause
C
Company advertising for Group Insurance must maintain copies of the ads they run for A. 1 year B. 2 years C. 3 years D. 4 years
C
Disability income benefits can be adjusted by which of the following? A. COBRA (Consolidated Omnibus Budget Reconciliation Act) B. FDIC (Federal Deposit Insurance Corporation) C. FIO (Future Increase Option) D. HIC (Health Insurance Corporation?
C
Genetic screening is A. allowed to be considered to either deny or approve issuing a policy if the company becomes aware of genetic information in a purely accidental manner B. permitted during underwriting for Health Insurance C. prohibited in processing an application or determining insurability for an Individual or Group Accident and Health Insurance policy D. a valid way for companies to avoid extreme claims at some point in the future
C
How often must the Ohio Superintendent of Insurance examine an insurance company that does NOT conduct business in Ohio? A. at any time B. every three years C. never D. whenever the company refuses an examination
C
Identify the TRUE statement regarding HICs. A. HICs can impose a waiting period before covering a pre-existing condition B. HICs do not deal with the financial management of a health care plan C. HICs provide emergency services D. HICs provide services to an unlimited service area
C
If a Life Insurance policy was purchased and the insured is divorced, the former spouse A. cannot be named the policy beneficiary B. cannot collect the proceeds, even if there is a court decree saying otherwise C. cannot collect the proceeds unless a new beneficiary form is filled out naming the person as a beneficiary D. remains the policy beneficiary
C
If an employer pays the premiums on a Long-Term Disability (LTD) policy, the premiums paid are A. not tax deductible for the employer B. tax deductible for the employer and the insured C. tax deductible for the employer as a business expense D. tax deductible for the insured
C
John has two insurance policies - A and B - that covers his medical care. He submits the $500 bill for medical care to both companies. Based on coordination of benefits, which BEST describes how John's claims will most likely be paid? A. neither A nor B will pay because a claimant cannot have two Medical policies at the same time B. A will pay nothing, B will pay 100% C. 50-50 D. A will pay 100%, B will pay nothing
C
Key person life insurance A. has tax-deductible premiums B. has taxable benefits C. helps pay for the cost of training a new employee D. pay benefits to the spouse of a key person
C
Lifetime Reserve Days in Medicare Part A A. are capped at 100 days B. are renewable upon request C. require a co-payment D. are restored with each new hospital stay
C
Medical Corporation of America is an HIC that buys a building in the center of its service area and operates that building with doctors and staff members who are employees of the HIC. People come to the site for medical care. This format of HIC is a(n) A. clinic B. Independent Practice Association (IPA) C. PPO D. staff model
C
Medicare Part D pays for A. dental care B. hearing aids C. prescription drugs D. routine physicals
C
Non-occupational coverage means A. an applicant who has no job at the time of the application still qualifies for the coverage B. it covers claims regardless of where the injury or sickness occurs C. it coves off-the-job claims only D. it covers on-the-job claims only
C
Renewable Term Insurance A. can be renewed indefinitely by the insured B. has a suicide waiting period that starts over at each renewal C. must be renewed at the policy owner's request regardless of insurability status of the insured D. when renewed, automatically renews the Incontestability clause
C
Rich, who is now 60, has owned an Annuity for six years. He takes a $9,000 withdrawal from the growth in the Annuity. The amount that is taxable at the capital gains rate is A. $9,000, there is no penalty since he is over 59 1/2 B. $9,000. plus any CDSC the company assesses C. $0, since it will be fully taxable at the ordinary tax rate D. dependent on whether his Annuity was part of an IRA
C
Statements provided by an applicant for insurance are considered to be A. considerations B. legal instruments C. representations D. warranties
C
The Fair Credit Reporting Act is a legislative act that A. limits the sharing of personal or privileged information, without prior authorization of the applicant, during and following the underwriting process B. protects the consumer against a company stalling or denying justified claims payments C. provides a client the right to examine information collected by the inspection company for use by the insurance company D. restricts a company or an agent from placing before the public or supervisory body information concerning insurance or the financial condition of the insurer that is untrue
C
The Federal government passed USC 1033, to do all of the following, EXCEPT A. Prohibit embezzlement, false reporting of information in company books B. Prohibit convicted individuals from engaging in the insurance business C. Allow the Federal Department of Insurance to indict individuals it thinks violated USC 1033 D. Allow the State Superintendent to refuse to issue or renew any license
C
The Law of Large Numbers A. guarantees the projections will be met B. is used only for morbidity tables C. is used to create mortality tables for Life Insurance calculations D. requires small groups In order to work
C
The Ohio Children's Health Insurance Program (OCHIP) covers A. adults and children who meet income requirements B. insured children who meet income requirements C. uninsured children under age 19 D. uninsured children over age 19 who are attending college
C
The advantage of a Single Premium Policy is it has A. cash value but it is not possible to take a loan against the cash value B. cash value that starts to increase in about three years C. immediate cash value D. to be bought on an installment program, if the company agrees
C
The approach that take into consideration the income that will be earned over the working lifetime of the insured in determining the amount of Life Insurance needed is called A. cross purchase approach B. entity approach C. human life value approach D. needs approach
C
The definition of no loss-no gain is A. any claims made on the old policy are considered pre-existing conditions on the new policy B. the complete package of coverage of the new policy must match exactly the old policy C. ongoing claims of the old policy must be assumed by the new policy D. the premiums for the new policy cannot be higher than the old policy
C
The formula to determine a Gross Annual Premium is A. Expenses minus Interest plus Mortality B. Morbidity minus Interest C. Mortality plus Expenses minus Interest D. Mortality minus Interest
C
The free look period for an LTC is A. 10 days B. 20 days C. 30 days D. 45 days
C
The insuring clause in a Life Insurance policy states A. a detailed description of the individual applicant's health status. B. the location where the application was completed and the date the coverage takes effect C. the promise that the insurance company will pay a state amount to the beneficiary upon receipt of proof of death of the insured D. specific information about the company
C
The ownership of a Variable Annuity separate account belongs to the A. annuitant B. beneficiary C. insurance company D. owner of the policy
C
The purpose of the Statement of Good Health is to A. reduce premiums during the reinstatement process B. show ongoing proof of disability C. validate no change in the applicant's health has occurred D. verify that the statements of Part 2 of the application are true
C
The reason for the death benefit corridor is A. the IRS has made the corridor optional and the insurance companies choose to use it for competitive reasons B. to give the insured less insurance once they get older C. to keep the policy in compliance with IRS rules to assure the death benefit is income tax-free D. to make the cash growth slow down as one gets older since the cost of the Term Insurance increases with age
C
The waiting period for an LTC is A. a clause to not pay for claims resulting from a pre-existing condition B. the length of time benefits will be paid C. the time before the company begins to pay benefits D. when a person first becomes eligible for Hospital Insurance
C
Under MEC laws, the penalty for a Life Insurance policy early withdrawal is A. 10% of the taxes, to be paid in the year of distribution B. payment of taxes, along with a 10% penalty, even if there is not a gain in the contract C. payment of taxes, along with a 10% penalty when there is a gain and the owner is younger than 59 1/2 D. payment of taxes, along with a 10% penalty when there is a gain and the owner is younger than 70
C
What is NOT a choice to find coverage under the Affordable Care Act? A. Coverage through a federal exchange B. Coverage through a state run exchange C. Coverage through a self insurance plan approved by the state D. Grandfathered existing health plans until October of 2016
C
What is the difference between Group Practice model and Staff model in HICs? A. the Group Practice model is similar to a health clinic B. the Group Practice model stresses preventive care C. the Staff model hires the doctors and nurses as salaried employees D. the Staff model is owned by the individual providers
C
What is the most restrictive definition for a qualifying disability? A. Any-occ B. Own-occ C. Social Security D. Workers' Compensation
C
What statement is TRUE regarding an agent sharing commissions? A. An agent may not share commissions with another agent. B. An agent may share commissions with another agent appointed by the same company. C. An agent may share commissions with another agent who is licensed for that line of insurance. D. An agent may share commissions with any licensed agent.
C
When a Medicare Supplement policy is replacing another similar policy, A. a Buyer's Guide is not necessary since a policy has already been in existence B. a complete outline of coverage is not necessary, since the two policies are similar C. the pre-existing clause is waived D. the premiums must be very close to one another
C
When applying for LTC Insurance, the. company is NOT required to disclose A. any increases for the last 10 years B. increases for policies sold in other states C. the number of policies canceled for non-payment D. rate hikes for the policy being considered
C
Which annuity pays the annuitant until they die and the annuity balance is forfeited? A. Life Annuity with Guaranteed Minimum B. Period Certain Annuity C. Pure Life Annuity D. Life Income Annuity
C
Which of the following entities is responsible for governing insurance? A. federal government B. government of each state C. government of each state, except if Congress passes a specific insurance law D. National Association of Insurance Commissions (NAIC)
C
Which of the following is NOT a personal use of Life Insurance? A. buying insurance to pay a loan at the bank if one dies too soon B. estate creation C. funding an IRA D. survivor protection
C
Which of the following is not a benefit level offered through the exchange under the Affordable Care Act? A. Bronze B. Gold C. Pewter D. Silver
C
Which of the following is not true about a Variable Annuity? A. It is not taxed as securities capital gains B. It will be taxed as ordinary income C. the investor will choose the specific investment D. the money paid into it is put in a separate account
C
Which of the following statements about insurable interest on life insurance are true? A. it may be based upon friendship B. it must be based upon economics C. it must exist at the time of the application D. a son-in-law has an insurable interest in his father-in-law
C
Which option is NOT a non-forfeiture option? A. Cash B. Extended Term C. One-Year Term D. Reduced Paid-Up
C
Which statement about the premium payment schedule for a Whole Life Insurance policy is TRUE? A. Premiums are payable for a designated period of time, after which coverage is no longer provided B. Premiums are payable throughout the insured's lifetime, and coverage continues until the age of 122 C. Premiums are payable throughout the insured's lifetime and coverage continues until the insured's death D. Premiums are payable until the insured's retirement, after which coverage is continued automatically until the insured's death
C
Which type of plan has a network of providers that the insured should normally use but allows the insured to go outside the network at a higher cost to the insured? A. HIC B. PIP C. PPO D. SHIC
C
With the bailout provision of an Annuity, the A. client can bailout at anytime and avoid both company penalties and taxation B. client is guaranteed a maximum rate of interest to be credited annually C. company waives the Contingent Deferred Sales Charge (CDSC) if interest drops below a certain percentage D. renewal interest rate is constant
C
A Life Insurance policy can be backdated up to A. 1 montu B. 31 days C. 3 months D. 90 days
D
A MET is defined as A. customer of a bank or credit card company who has borrowed money B. person who has 18 months of creditable coverage C. plan in which 75% of all eligible employees must be covered D. trust consisting of multiple small employers in the same industry
D
A cease and desist order will A. allow a hearing to be held within 45 days after being served B. provide proof that an agent Is guilty C. require the agent to stop all selling activities D. restrict the selling activity in the area being contested
D
A company located in Utah has 105 employees and buys group insurance. They have 48 employees in Ohio that will be part of the plan, 47 who live in Ohio, and one who lives just across the river in Kentucky. How is state control determined? A. Ohio controls, since that is where the majority of the employees live B. Ohio controls, since that is where the majority of the employees work C. Ohio controls the 47, Kentucky controls the 1, and Utah controls the rest D. Utah controls since that is where the master policy was sold and delivered
D
A company must allow cash loans to take place A. no sooner than year three B. no later than year five C. when the collateral is provided by the owner using a bank line of credit D. whenever the cash value has started to accumulate
D
A moral hazard A. arises from the condition, occupancy, or use of the property itself B. arises through an individual's carelessness or irresponsible action C. is not a consideration in insurable risk D. is the tendency to create a loss on purpose to collect from the insurance company
D
A policy is a legal document between the A. agent and the company B. agent and the insured C. company and the beneficiary D. company and the owner
D
A retrospective review refers to a review A. of costs during medical treatments B. that is done before the fact C. that is required to disallow unreasonable dollar levels D. to determine if the care was appropriate under the circumstances
D
According to Medicare's definition, how many days after being discharged may a hospital stay begin? A. 1 B. 5 C. 30 D. 60
D
Activities of daily living (ADLs) exclude A. bathing B. dressing C. going to the toilet D. taking medicine
D
An Annuity has a guaranteed rate of interest set in the policy, which means the guaranteed rate is A. guaranteed by the Guaranty Fund B. guaranteed for a Variable Annuity C. is the highest rate that can be paid in a calendar year D. is the lowest rate that can be paid during the life of the policy
D
An agent who circulates false or misleading information for the purpose of inducing a prospect lapse or cancel an existing policy to purchase a new one is guilty of the unfair trade practice of A. discrimination B. rebating C. misrepresentation D. twisting
D
An agent's license A. is perpetual B. is renewed at the discretion of the Superintendent of Insurance C. renews annually on the first day of January after the agent's birth month D. renews biennially on or before the last day of the agent's birth month
D
An owner/insured allowed her Whole Life policy that had be in force for 11 years to lapse. The owner did not select non-forfeiture and allowed the automatic choice to be implemented. Twenty-five months later, she decides to reinstate the policy. What action can she take? A. She has no available action - she cannot reinstate it since the two-year limit has passed B. She must fill out the paperwork, send it to the company for approval, and pay the 24 months' premium for the lapsed time frame C. She must fill out paperwork, send it to the company for approval, and pay the 25 months' premium for the lapsed time frame D. She must fill out paperwork, send it to the company for approval, and pay the 26 months' premium for the lapsed time frame
D
At the beginning of an interview when a variable annuity is discussed, the applicant must be given a(n) A. approved sales procedure passed by the SEC B. form showing the agent is properly licensed C. method to match suitability to the company D. prospectus
D
At the time of his death, a client has policies with two companies, both of which went bankrupt at the same time. With company A, he had a total of $125,000 of protection and with Company B a total of $250,000. The Ohio Guarantee Fund Payout is A. 125,000 B. 250,000 C. 300,000 D. 375,000
D
By adding the Future Increase Option (FIO), which is sometimes referred to as the Guaranteed Insurability Option or Rider (GIO or GIR), to a disability income policy the insured will automatically qualify for additional amounts of disability income without having to A. complete a new application B. demonstrate that his income has increased C. pay a higher premium rate per $10 of income benefits D. provide evidence of insurability
D
Dental policies __________ the insured for fees paid to dentists for covered dental services. A. bill B. co-pay C. do not pay D. indemnify
D
For insurance purposes, the term "dependent" does NOT include A. adopted children under the age of 19 B. children under the age of 19 C. children over the age of 19, if still in school D. ex-spouse of the employee
D
For those eligible for Medicare, qualified distributions from a HSA include A. distributions to those 55 and older B. Health Insurance premiums C. Medicare Supplement premiums D. premiums for Medicare Part D
D
Group LTD may cover the insured A. for a maximum of 13 weeks B. for a maximum of 26 weeks C. up to age 55 D. up to age 65
D
How much of the premium can an employer deduct from income tax for Group Life if the employer is the beneficiary? A. 100%, if the plan was non-contributory B. 100%, since the cost of the plan is not taxable to the employee C. 75%, if the plan was contributory - $5,000. only if age 50 or older D. 0%, since the employees are not the beneficiary
D
How often must a disability be medically verified? A. three times a year, if it is a residual policy B. every year, if it is under a group policy C. every other year, if it is permanent D. never, if it is considered to be presumptive
D
If a second surgical opinion is NOT used when required, coverage is A. canceled B. denied C. not affected D. reduced
D
In general, which class of Accident and Health Insurance is more expensive, provides less coverage, and has more stringent qualifications? A. Business B. Group C. Government health D. Individual
D
Insurance companies are required to cover mammography costs for women A. if there is a risk of breast cancer, two exams per year B. from the age of 35 to 40, one exam every other year C. over the age of 40 but under 50, one exam every third year D. over the age of 50 to age 65, one exam per year
D
James, who has been covered by $20,000 of Group Life Insurance, has just terminated his employment. How many days does James have to convert his Group coverage to Individual coverage? A. 15 B. 21 C. 28 D. 31
D
Mary has purchased an individual disability income policy with an own occupation definition of disability. On the assumption that Mary is disabled for a period of time in excess of the waiting period under the policy, she will receive monthly disability benefits if she is unable to perform A. any of the duties of her own occupation B. the duties of any occupation for which she is reasonably suited by education, training, or experience C. the duties of any gainful employee D. substantially all of the duties of her own occupation
D
New terms defined by the Affordable Cares Act include A. Exchange B. In-person Assistor C. Insurance navigator D. All of the above
D
The advantage of an Adjustable Whole Life (AWL) policy is A. all three elements of the policy can be changed annually B. the company can make changes as It sees fit on an annual basis C. it has the option of being adjusted monthly D. when compared to a Whole Life policy, it has some flexibility
D
The amount of Life Insurance a client should consider buying is determined by using the A. capital retention method B. human life capital method C. human life capital and capital retention approaches D. human life value and/or needs approach
D
The direct response method of selling Life Insurance is a method A. which no one has direct contact with the client B. used to sell Flight insurance in airports C. where the company requires the agent to deal directly with the prospect D. which uses direct mail with the materials needed to respond included in the mailing
D
The grace period for premium with quarterly premium is A. 7 days B. 10 days C. one month D. 31 days
D
The practice of TWISTING is described as a(n) A. agent placing before the public or supervisory body information concerning insurance or the financial condition of the insurer that is untrue B. attempt to obtain information by pretending to be someone else or pretending to represent a person who is in fact no represented C. conditional requirement for the client to obtain insurance from a depository institution, an affiliate of a depository institution, or from a particular insurer D. deliberate falsehood or lie made for the purpose of inducing any policy owner or prospective policy owner to purchase, amend, lapse, forfeit, change, or surrender an insurance policy
D
The purpose of COBRA A. carry the benefits of the old insurance plan after losing the job and have the former employer pay the premiums, including the extra 2% B. carry the old insurance for a period of time after losing the job and pay the same premium as before C. have the same coverage as before losing the job, but paying the full premium, plus 2%, but now sending the premium directly to the insurance company D. have the same coverage as before losing the job, but pay the full premium, plus 2%, for the former employer's administrative costs
D
The purpose of a rating service is to help a client A. know which insurance companies are bad to do business with B. know which insurance companies are good to do business with C. obtain information about insurance agents and their abilities D. obtain information about the company's financial strength
D
The rider which, when added to a disability income policy, provides benefits for a loss of income after returning to work is the A. partial disability rider B. presumptive disability rider C. recurrent disability rider D. residual disability rider
D
The unpaid premium clause allows the companies to collect premiums A. after the grace period B. at the due date C. from a claims payment if not paid by 30 days after the grace period expires D. from a claims payment if not paid by the end of the grace period
D
Under the Affordable Care Act, individuals are required to have a qualified plan in place or face a tax penalty. The requirement is called: A. A grandfathered plan B. The certificate of credible coverage C. The exchange plan D. The individual mandate
D
Under the disability income policy which includes a presumptive disability definition, all of the following will be defined as total disability EXCEPT A. loss of sight in both eyes B. total loss of hearing C. the loss of one hand and one foot D. the loss of three fingers on each hand
D
When an insurance company requires HIV testing, the A. agent or broker must give the names of people to be notified if results are positive B. agent or broker reveals the results of the test to the applicant C. applicant is not permitted to access the results of the test D. applicant must given written authorization to conduct the test
D
Which agent represents multiple insurers, owns the control of all commissions, and sells the policy that best fit's the customer's needs? A. broker B. captive agent C. exclusive agent D. independent agent
D
Which clause ensures that, during the first two years, the company may contest a Health policy for misrepresentation? A. Conformity with State Statutes provision B. Facility of Payment clause C. Free Look provision D. Time Limit on Certain Defenses clause
D
Which is NOT TRUE about suitability of annuity transactions? A. The rules apply to any recommendation to purchase an annuity B. Understanding the client's intended use of the annuity is considered suitability information C. The agent must explain the prospectus D. Before an agent can sell annuities, he must complete a one-time three hour class
D
Which is NOT an unfair claims settlement practice? A. failing to acknowledge pertinent communication within 15 days B. failing to pay the amount finally agreed upon in settlement within five days of receipt of final agreement by the insurer C. not offering fair and reasonable amounts to first-party or third-party claimants when liability has become reasonably clear D. not paying an unreported and/or unsubstantial claim
D
Which non-forfeiture option provides continuing cash value buildup? A. Cash Surrender B. Deferred Annuity C. Extended Term D. Reduced Paid-Up
D
Which of the following is a classification of risk by the underwriter? A. Preferred B. Standard C. Substandard D. All of the above
D
Which part(s) is NOT a part of the actual Life Insurance application? A. Part 1 B. Part 2 C. Parts 1 and 2 D. Part 3
D
Which statement regarding fraud is TRUE? A. Clients who commit fraud cannot be prosecuted B. A company is the only party to contract capable of committing fraud C. Fraud can be done only at the time of the claim D. Fraud does not have a statute of limitations
D
Which statement regarding speculative risk are FALSE? A. it involves a possibility of gains B. it involves an uncertainty of loss C. it is a feature of gambling D. it is a feature of insurance
D
