Oregon Life Insurance Exam Simulation: Difficult Questions
At what age may an individual make withdrawals from an HSA for nonhealth purposes without being penalized? a)55 b)59 1/2 c)62 d)65
d
Which of the following is NOT true regarding an annuity certain? a)Benefits stop at the annuitant's death. b)It will pay until a fixed amount is liquidated. c)There are no life contingencies. d)It is a short-term annuity.
a
What is the elimination period for Social Security disability benefits? a)12 months b)3 months c)5 months d)6 months
c
What is the shortest possible elimination period for group short-term disability benefits provided by an employer? a)0 days b)30 days c)60 days d)90 days
a
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will a)Automatically pay the policy proceeds. b)Pay the policy proceeds only if it would have issued the policy. c)Pay the policy proceeds up to an established limit. d)Not pay the policy proceeds under any circumstances.
b
A provision in a life or health insurance policy that may assist an insurance company in determining the cause of death of an insured is called a)Medical exam. b)Autopsy. c)Inspection. d)Attending physician's report.
b
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the a)Payor rider. b)Other-insured rider. c)Change of insured rider. d)Juvenile rider.
b
A tax-sheltered annuity is a special tax-favored retirement plan available to a)Certain groups depending on factors such as race, gender, and age. b)Certain groups of employees only. c)Anyone. d)Certain age groups only.
b
All of the following are duties and responsibilities of producers at the time of application EXCEPT a)Check to make sure that there are no unanswered questions on the application. b)Change any incorrect statement on the application by personally initialing next to the corrected statement. c)Explain the nature and type of any receipt the producer is giving to the applicant. d)Probe beyond the stated questions if the producer feels the applicant is misrepresenting or concealing information.
b
All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT a)The insurer determines the amount for each payment. b)It is a life contingency option. c)It will pay the benefit only for a designated period of time. d)The payments are not guaranteed for life.
b
An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. What kind of penalty would the IRA owner pay? a)15% for early withdrawal b)50% tax on the amount not distributed as required c)No penalties, since the owner is older than 59 ½ d)10% for early withdrawal
b
What must happen when an individual policy or annuity has been personally delivered to the policyowner? a)A notary public must witness the exchange. b)The policyowner must sign a delivery receipt. c)The policyowner must pay the annual premium in full. d)The producer must go over the policy with the policyowner.
b
When a policyowner designates a group of individuals as the beneficiary of a life insurance death benefit without specifically naming the individuals, this is called a)Stirpes designation. b)Class designation. c)Revocable designation. d)Irrevocable designation.
b
When can a Long-Term Care policy deny a claim for losses incurred because of a pre-existing condition? a)At no time b)Within 6 months of the effective date of coverage c)Within 12 months of the effective date of coverage d)At any time
b
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount? a)The same as the original policy minus the cash value b)Equal to the original policy for as long as the cash values will purchase. c)In lesser amounts for the remaining policy term of age 100. d)Equal to the cash value surrendered from the policy
b
Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost? a)Reasonable expectations b)Indemnity c)Stop-loss d)Consideration
b
Which of the following describes taxation of individual disability income insurance premiums and benefits? a)Premiums are tax deductible, and benefits are taxable. b)Premiums are not tax deductible, and benefits are not taxable. c)Premiums are not tax deductible, but benefits are taxable. d)Premiums are tax deductible, but benefits are not taxable.
b
Which of the following is NOT applied toward the deductible under a nonscheduled plan? a)Gingivitis treatment b)Annual dental exam c)Root canal d)Wisdom tooth extraction
b
Which of the following is NOT covered under Part B of a Medicare policy? a)Physician expenses b)Routine dental care c)Home health care d)Lab services
b
Which of the following is NOT covered under Plan A in Medigap insurance? a)The first three pints of blood each year b)The Medicare Part A deductible c)Approved hospital costs for 365 additional days after Medicare benefits end d)The 20% Part B coinsurance amounts for Medicare approved services
b
Which of the following is NOT true regarding a nonqualified retirement plan? a)Earnings grow tax deferred. b)It needs IRS approval. c)Contributions are not currently tax deductible. d)It can discriminate in benefits and selecting participants.
b
Which of the following is true regarding a term health policy? a)It is noncancellable. b)It is nonrenewable. c)It is conditionally renewable. d)It is guaranteed renewable.
b
Which of the following is true regarding benefits paid to disabled employees? a)Disability benefits are not taxed. b)They may be subject to taxation if the premium was paid by the employer. c)They are exempt from taxation if any portion of the premium was paid by the employee. d)Tax withholding is required if the employee paid the premium.
b
Which of the following statements concerning Medicare Part B is correct? a)It pays 100% of Medicare's standards for reasonable charges. b)It pays for physician services, diagnostic tests, and physical therapy. c)It is provided automatically to anyone who qualifies for Part A. d)It pays on a first dollar basis.
b
Which of the following would be an example of an insurer participating in an unfair competition practice of discrimination? a)Charging the insured higher premiums based on their life expectancy b)Charging the insured higher premiums based on their race c)Making malicious statements about the insured based on their race d)Charging different premium rates to the insured in different insuring classes
b
Which of the following would be exempt from the policy replacement regulations for insurers? a)Term life products b)Credit life insurance c)All annuities d)Group life policies through direct solicitation
b
Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance? a)Disclosure rule b)Replacement rule c)Reinstatement rule d)Conversion rule
b
Who guarantees a conventional fully-insured group plan? a)The employer b)The insurer c)The insured d)The annuitant
b
Why is it essential for an insurer to document all correspondence with an insured? a)Federal law b)Errors and omissions c)Statistics gathering d)State law
b
Your client is planning to retire. She has accumulated $100,000 in a retirement annuity, and now wants to select the benefit option that will pay the largest monthly amount for as long as she lives. As her agent, you should recommend a)Joint and survivor. b)Straight life. c)Life income with period certain. d)Installment refund.
b
All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT a)The payments are not guaranteed for life. b)The insurer determines the amount for each payment. c)It is a life contingency option. d)It will pay the benefit only for a designated period of time.
c
All of the following types of distributions are considered exceptions to the early distribution rule and, therefore, are not subject to the penalty tax EXCEPT a)Death of participant b)A loan from the plan. c)Participant's debt. d)Participant's disability.
c
All of the following would be eligible to establish a Keogh retirement plan EXCEPT a)A sole proprietor of film development store with no employees. b)A hair dresser who operates her business at her house. c)The president and employee of a family corporation. d)A sole proprietor of a service station who employs four employees.
c
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy? a)$20,000 b)$25,000 c)$50,000 d)The face amount will be determined by the insurer.
c
Chris, who is unlicensed, works part-time in her father's insurance agency. She may perform all of the following activities EXCEPT a)Assist her father in completing applications for insurance. b)Call prospects and collect expiration data of their existing policies for her father. c)Collect premium for in-force policies and explain coverages to clients that have existing policies written by her father. d)Make appointments with clients and prospective clients to meet with her father.
c
Circulating deceptive sales material to the public is what type of Unfair Trade Practice? a)Coercion b)Misrepresentation c)False advertising d)Defamation
c
If a company has a Simplified Employee Pension plan, what type of plan is it? a)The same as an IRA, with the same contribution limits b)An undefined contribution plan for large businesses c)A qualified plan for a small business d)The same as a 401(k) plan
c
If a dental plan is integrated, it is combined with what type of plan? a)Supplemental b)Life c)Medical d)Secondary dental
c
In Oregon, how long does a producer have to notify the Director of a change in location or name? a)7 days b)10 days c)30 days d)45 days
c
In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment? a)The annuitant will receive the lower of either the guaranteed minimum rate or current rate. b)The annuitant will only receive the guaranteed minimum specified in the contract. c)The annuitant will receive the higher of either the guaranteed minimum rate or current rate. d)The annuitant will always receive the current interest rate.
c
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? a)They provide information about a customer's character and reputation. b)The customer has no knowledge of this action. c)The customer's associates, friends, and neighbors provide the report's data. d)They provide additional information from an outside source about a particular risk.
c
Issue age policy premiums increase in response to which of the following factors? a)Inflation b)The insured's age c)Increased benefits d)Increased deductible
c
J transferred his life insurance policy to his son two years before his death. Which of the following is true? a)The unpaid premiums on the policy will be deducted from J's taxable estate. b)Because the policy has been transferred, it will not be included in J's taxable estate. c)The entire face value of the policy will be included in J's taxable estate. d)The interest portion of the policy will be included in J's taxable estate.
c
On a major medical insurance policy, the amount that an insured must pay on a claim before the insurer will pay is known as a)Inside limit b)Coinsurance. c)Deductible. d)Copayment.
c
Producer A is prosecuted for a crime. He must notify the Director within what time frame after the initial pretrial hearing date? a)Immediately b)10 days c)No later than 30 days d)3 months
c
The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the a)Accelerated endowment. b)Paid-up additions. c)One-year term option. d)Paid-up option.
c
This state provides for a temporary license for all of the following EXCEPT a)A producer's disability. b)A producer's time in the military service. c)A producer's retirement. d)The death of a producer.
c
Under which of the following employer-provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer? a)Dental Expense b)Basic Medical Expense c)Disability Income d)Major Medical
c
Under which plan does preventative dental treatment not apply toward the deductible? a)Provisional b)Limited c)Nonscheduled d)Focused
c
Long-term care policies require that in addition to the applicant at least one person must be designated in the policy. What is the role of that designated person? a)To receive policy benefits if the insured is deceased b)To pay the premiums on the policy c)To cosign the policy application d)To receive notice of policy lapse or termination
d
Long-term care insurance policies must cover which of the following? a)All mental disorders b)Treatment of alcoholism c)Injuries caused by an act of war d)Alzheimer's disease
d
One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups of a)100 or more. b)25 or more. c)Fewer than 50. d)50 or more.
d
. In a long-term care policy, pre-existing condition limitations a)Must appear as a separate paragraph and be clearly labeled. b)Apply to 12 months from the effective date of coverage. c)Never have specific exclusions. d)Are not permitted.
a
A 35-year-old spouse of the insured collects early distributions from her husband's retirement plan as a result of a divorce settlement. What penalties, if any, will she have to pay? a)No penalties b)10% penalty tax c)15% penalty tax d)Age-based penalty stipulated in the contract
a
A Health insurance policy lapses but is reinstated within an acceptable timeframe. How soon from the reinstatement date will coverage for accidents become effective? a)Immediately b)After 14 days c)After 21 days d)After 31 days
a
If a new individual long-term care policyholder is not satisfied with a new policy, within how many days can the insured return the policy for a full premium refund? a)30 b)7 c)10 d)90
a
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than a)With the policy. b)Upon issuance of the policy. c)Within 30 days after the first premium payment was collected. d)Prior to filling out an application for insurance.
a
If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy? a)It is only taxable if the cash value exceeds the amount paid for premiums .b)It is not considered to be taxable .c)It is taxable only if it exceeds the amounts paid for premiums by 50%. d)It is automatically taxable.
a
In a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective? a)100% b)75% c)50% d)25%
a
Life insurance death proceeds are a)Generally not taxed as income. b)Taxable to the extent that they exceed 7.5% of the beneficiary's adjusted gross income. c)Taxed as a capital gain. d)Taxed as ordinary income.
a
Lyle has a $10,000 term life policy. He paid his annual premium on February 1. Lyle fails to renew the policy and dies on February 28 of the following year. Accounting for the $200 of earned premium, how much will the beneficiary receive from Lyle's insurance company? a)$9,800 b)$200 c)$0 d)$10,000
a
. A rider attached to a life insurance policy that provides coverage on the insured's family members is called the a)Payor rider. b)Other-insured rider. c)Change of insured rider .d)Juvenile rider.
b
A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability? a)Medical exam and parents' medical history b)Proof of insurability is not required. c)Medical exam d)Her parents' federal income tax receipts
b
A patient is being fitted for dentures. Which type of dental treatment is this? a)Orthodontics b)Prosthodontics c)Replacement d)Restorative
b
A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision? a)Assignment b)Automatic premium loan c)Waiver of premium d)Incontestability period
b
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
All of the following are characteristics of a group life insurance plan EXCEPT a)There is a requirement to prove insurability on the part of the participants .b)The participants receive a Certificate of Insurance as their proof of insurance. c)A minimum number of participants is required in order to underwrite the plan. d)The cost of the plan is determined by the average age of the group.
a
All of the following are characteristics of a group life insurance plan EXCEPT a)There is a requirement to prove insurability on the part of the participants. b)The participants receive a Certificate of Insurance as their proof of insurance. c)A minimum number of participants is required in order to underwrite the plan. d)The cost of the plan is determined by the average age of the group.
a
All of the following are covered by Part A of Medicare EXCEPT a)Physician's and surgeon's services. b)In-patient hospital services. c)Post-hospital nursing care. d)Home health services.
a
All of the following are true regarding a decreasing term policy EXCEPT a)The payable premium amount steadily declines throughout the duration of the contract. b)The death benefit is $0 at the end of the policy term. c)The contract pays only in the event of death during the term and there is no cash value. d)The face amount steadily declines throughout the duration of the contract.
a
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
All of the following statements concerning workers compensation are correct EXCEPT a)A worker receives benefits only if the work related injury was not his/her fault b)Workers compensation laws are established by each state c)All states have workers compensation d)Benefits include medical, disability income, and rehabilitation coverage.
a
All of the following statements concerning workers compensation are correct EXCEPT a)A worker receives benefits only if the work related injury was not his/her fault. b)Workers compensation laws are established by each state. c)All states have workers compensation. d)Benefits include medical, disability income, and rehabilitation coverage.
a
An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin? a)When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health b)On the designated effective date c)On the application date d)When the agent submits the application to the company and the company issues a conditional receipt
a
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT? a)The insured may choose to convert to term or permanent individual coverage. b)The insured would not need to prove insurability for a conversion policy. c)The insured may convert coverage to an individual policy within 31 days. d)The premium for individual coverage will be based upon the insured's attained age.
a
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date? a)The date of medical exam b)The date of policy delivery c)The date of issue d)The date of application
a
An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it? a)Deferred b)Fixed c)Flexible premium d)Immediate
a
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of? a)False advertising b)Unfair claims c)Twisting d)Defamation
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? a)There is nothing wrong with this form of policy delivery. b)The insured should complain to the insurer. c)The insured should ask for a new policy to be delivered. d)The policy will not be legal until it is delivered by an agent.
a
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
An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan? a)2 years b)1 month c)She would not receive any benefits. d)3 years
a
Concerning Medicare Part B, which statement is INCORRECT? a)It is fully funded by Social Security taxes (FICA). b)It is known as medical insurance. c)It offers limited prescription drug coverage. d)It provides partial coverage for medical expenses not fully covered by Part A.
a
How many eligible employees must be included in a contributory plan? a)75% b)90% c)100% d)50%
a
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select? a)Fixed period b)Life with period certain c)Fixed amount d)Interest only
a
Regarding the return of premium option for LTC policies, what happens to the premium if the policy lapses? a)The insurer will return a percentage of the premiums paid. b)The insurer will not return any premiums in the case the policy is allowed to lapse. c)The premium will only be returned if the insured dies. d)The insurer will return all of the premiums paid.
a
State law specifically prohibits using illegal inducements in the marketing of insurance. All of the following would be considered illegal inducements EXCEPT a)Inviting prospective clients to the grand opening of the company's new office. b)Issuing or delivering insurance company stock in return for purchasing insurance. c)Promising returns and profits from the purchase of insurance. d)Offering benefit certificates or securities in return for purchasing insurance.
a
The insuring clause of a disability policy usually states all of the following EXCEPT a)The method of premium payment. b)The identities of the insurance company and the insured. c)That insurance against loss is provided. d)The types of losses covered.
a
The purpose of insurance regulation is to a)Promote the public welfare. b)Make insurance statutes uniform between states. c)Keep producers honest. d)Make insurance companies pay taxes.
a
Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive a)Nothing; the payments will cease b)Guaranteed minimum benefit. c)The amount paid into the annuity. d)The remainder of the principal.
a
Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive a)Nothing; the payments will cease. b)Guaranteed minimum benefit. c)The amount paid into the annuity. d)The remainder of the principal.
a
What is franchise insurance? a)It is health coverage for small groups whose numbers are too small to qualify for true group insurance b)It provides insurance for franchises, such as a restaurant or hotel chain c)It is group insurance d)It is blanket insurance
a
What is the elimination period for Social Security disability benefits? a)5 months b)6 months c)12 months d)3 months
a
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount? a)Equal to the original policy for as long as the cash values will purchase. b)In lesser amounts for the remaining policy term of age 100. c)Equal to the cash value surrendered from the policy d)The same as the original policy minus the cash value
a
Which of the following applicants would NOT qualify for a Keogh Plan? a)Someone who works 400 hours per year b)Someone who has been employed for more than 12 months c)Someone who is over 25 years of age d)Someone who works for a self-employed individual
a
Which of the following entities is in charge of making sure that producers follow the Insurance Code properly? a)Director b)State law enforcement c)Governor d)NAIC
a
Which of the following insurers are owned by stockholders? a)Stock b)Mutual c)Reciprocal d)Fraternal
a
Which of the following is INCORRECT concerning taxation of disability income benefits? a)If paid by the individual, the premiums are tax deductible. b)If the employer paid the premiums, income benefits are taxable to the insured as ordinary income. c)If the insured paid the premiums, any disability income benefits are tax-free. d)If the benefits are for a permanent loss, the benefits paid to the employee are not taxable.
a
Which of the following is NOT specifically prohibited by state law as an unfair trade practice? a)Reducing the premiums paid by employers for group insurance based on loss experience b)Using misleading representations to induce uncalled-for action by the insured c)Using incomplete comparisons of policies to induce uncalled-for action by the insured d)Failing to disclose that the solicitations of an insurance contract are the result of a marketing method
a
Which of the following is an eligibility requirement for all Social Security Disability Income benefits? a)Have attained fully insured status b)Be disabled for at least 1 year c)Have permanent kidney failure d)Be at least age 50
a
Which of the following is true about license reinstatement? a)Reinstatement fees may be double the unpaid renewal fee. b)A license can only be reinstated within 6 months from the renewal date. c)Lapsed licenses cannot be reinstated. d)To reinstate a license, a producer must pass a written examination.
a
Which of the following is true regarding a term health policy? a)It is nonrenewable. b)It is conditionally renewable. c)It is guaranteed renewable. d)It is noncancellable.
a
Which of the following is usually true of a participating life insurance policy? a)It pays dividends to policyowners. b)It may be converted to a term life policy. c)It pays dividends to stockholders. d)It assesses premiums against stockholders.
a
Which of the following must an insurer obtain in order to transact insurance within a given state? a)Certificate of authority b)Producer's certificate c)Business entity license d)Insurer's license
a
Which of the following statements regarding deferred compensation funds is INCORRECT? a)They are usually qualified plans. b)They can be established by employers. c)They can be made with cash deposits to an annuity. d)They generally provide additional retirement benefits.
a
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)Universal life b)Flexible life c)Variable life d)Adjustable life
a
Who chooses a primary care physician in an HMO? a)The individual member b)HMO subscribers do not have a primary care physician c)The insurer d)A referral physician
a
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? a)3 days b)5 days c)10 days d)14 days
a
An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin? a)When the agent submits the application to the company and the company issues a conditional receipt b)When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health c)On the designated effective date d)On the application date
b
An applicant buys a nonqualified annuity, but dies before the starting date. For which of the following beneficiaries would the interest accumulated in the annuity NOT be taxable? a)Annuitant b)Spouse c)Charitable organization d)Dependents
b
An individual purchased a Medicare supplement policy in March and decided to replace it 2 months later. His history of coronary artery disease is considered a pre-existing condition. Which of the following is true? a)Because this is a new policy, the pre-existing condition waiting period starts over. b)The pre-existing condition waiting period fulfilled in the old policy will be transferred to the new policy, the new one picking up where the old one left off. c)Coronary artery disease coverage will be permanently excluded from the new policy. d)In replacement, pre-existing conditions must be waived, so sickness relating to coronary artery disease will be covered upon the policy's effective date.
b
An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called a)Graded premium whole life. b)Single premium whole life. c)Modified Endowment Contract (MEC). d)Level term life.
b
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
An insured's health claim internal appeal was denied. The insurer must do all of the following EXCEPT a)Notify the insured how to obtain an outside review. b)Offer a payment plan. c)Notify the insured about the descision in writing. d)Complete the appeal in 60 days after service was received.
b
An underwriter may reject an application for health insurance if the rejection is based upon which of the following? a)Genetic characteristics (such as sickle cell) b)Prescription usage c)Sexual preference d)Blindness
b
COBRA applies to employers with at least a)50 employees. b)20 employees. c)80 employees. d)60 employees.
b
Employers can reduce health plan costs by coupling a Health Reimbursement Account (HRA) with a)Nothing; HRAs cannot be coupled with any other health plan. b)A high deductible health plan. c)A low deductible health plan. d)An IRA.
b
Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days? a)3 b)20 c)100 d)80
b
How long is an open enrollment period for Medicare supplement policies? a)90 days b)6 months c)1 year d)30 days
b
How many days from the finalization of a divorce or separation does the spouse of a group health certificate owner have to notify the insurer when requesting continuance of coverage? a)14 b)60 c)30 d)45
b
If a settlement option is not chosen by the policyowner or the beneficiary, which option will be used? a)Fixed amount b)Lump sum c)Life income d)Fixed period
b
In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe? a)Conditional b)Unilateral c)Unidirectional d)Aleatory
b
In reference to the standard Medicare Supplement benefits plans, what does the term standard mean? a)Coverage options and conditions are developed for average individuals. b)All providers will have the same coverage options and conditions for each plan. c)Coverage options and conditions comply with the law, but will vary from provider to provider. d)All plans must include basic benefits A-N.
b
Most scheduled plans provide first-dollar benefits without a)Exclusions and conditions. b)Coinsurance and deductibles. c)Premiums d)Copays.
b
Notice of a hearing for a cease and desist order must be given at least how many days in advance? a)30 b)7 c)10 d)15
b
The Medicare supplement renewal commissions paid in the third year must be as high as the commission of which year? a)1st b)2nd c)3rd d)4th
b
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
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid a)Until the policyowner's age 100, when the policy matures. b)For 20 years or until death, whichever occurs first. c)Until the policyowner reaches age 65. d)For at least 20 years.
b
Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive a)The remainder of the principal. b)Nothing; the payments will cease. c)Guaranteed minimum benefit. d)The amount paid into the annuity.
b
Under an extended term nonforfeiture option, the policy cash value is converted to a)A higher face amount than the whole life policy. b)The same face amount as in the whole life policy. c)The face amount equal to the cash value. d)A lower face amount than the whole life policy.
b
What is the benefit of experience rating? a)It allows employers with high claims experience to obtain insurance. b)It allows employers with low claims experience to get lower premiums. c)It helps employers with high claims experience to get group coverage. d)It helps employees with low claims experience to become exempt from group premiums.
b
What is the maximum amount that the Guaranty Association would have to pay on any person? a)$100,000 b)$300,000 c)$500,000 d)$1,000,000
b
A 35-year-old spouse of the insured collects early distributions from her husband's retirement plan as a result of a divorce settlement. What penalties, if any, will she have to pay? a)15% penalty tax b)Age-based penalty stipulated in the contract c)No penalties d)10% penalty tax
c
A 70-year-old individual who bought a Part B Medicare policy 2 months ago just began kidney dialysis treatments this week. The individual is now applying for a Medicare supplement policy, which would begin in 8 months. Which of the following could the insurer do to avoid paying for the dialysis? a)Deny the supplement policy b)Charge a higher premium c)Declare a pre-existing condition d)Permanently exclude coverage for dialysis
c
A Medicare SELECT policy does all of the following EXCEPT a)Provide payment for full coverage under the policy for covered services not available through network providers. b)Provide for continuation of coverage in the event that Medicare SELECT policies are discontinued due to the failure of the Medicare SELECT program. c)Prohibit payment for regularly covered services if provided by non-network providers. d)Make full and fair disclosure in writing of the provisions, restrictions, and limitations of the Medicare SELECT policy to each applicant.
c
After a brief emergency room visit, an insured discovered that his plan required a larger copayment for an out-of-network provider than for a local, in-network provider. Under the PPACA provisions, this is a)Reasonable and customary. b)Part of the plan's benefit schedule. c)Not permitted. d)Counted as part of the insured's annual deductible.
c
All of the following are ways in which a Major Medical policy premium is determined EXCEPT a)The coinsurance percentage. b)The stop-loss amount. c)The average age of the group. d)The amount of the deductible.
c
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
All of the following may be excluded from coverage in a Major Medical Expense policy, EXCEPT a)Cosmetic surgery. b)Coverage provided under workers compensation. c)Emergency surgery. d)Custodial care.
c
What determines the penalty for surrendering a market value adjusted annuity prematurely? a)There are no penalties imposed for surrendering annuities prematurely. b)The guaranteed minimum interest rate provided in the contract c)The current interest rate at the time of surrender d)The flat fee determined by an index of interest gains and the amount of time the annuity would take to mature
c
What happens when a policy is surrendered for its cash value? a)The policy can be reinstated by paying back all policy loans and premiums. b)The policy can be converted to term coverage. c)Coverage ends and the policy cannot be reinstated. d)Coverage ends but the policy can be reinstated at any time.
c
What is the advantage of reinstating a policy instead of applying for a new one? a)The face amount can be increased. b)The cash values have gained interest while the policy was lapsed. c)The original age is used for premium determination. d)Proof of insurability is not required.
c
When a producer's residential or office address changes, the Insurance Department must be notified within a)10 days b)15 days. c)30 days. d)60 days.
c
When an insured purchased her disability income policy, she misstated her age to the agent. She told the agent that she was 30 years old, when in fact, she was 37. If the policy contains the optional misstatement of age provision a)The elimination period will be extended 6 months for each year of age misstatement. b)Because the misstatement occurred more than 2 years ago, it has no effect. c)Amounts payable under the policy will reflect the insured's correct age. d)The contract will be deemed void because of the misstatement of age.
c
When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy, as well as a refund of all of the premiums paid. Which rider is attached to the policy? a)Decreasing term b)Accidental death c)Return of premium d)Cost of living
c
When is the insurability conditional receipt given? a)When an insured individual needs to obtain an insurability receipt for tax purposes b)If the application is approved before the premium is paid c)When the premium is paid at the time of application d)After the application has been approved and the premium has been paid
c
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount? a)In lesser amounts for the remaining policy term of age 100 .b)Equal to the cash value surrendered from the policy c)The same as the original policy minus the cash value d)Equal to the original policy for as long as the cash values will purchase.
c
Which of the following is NOT covered under Plan A in Medigap insurance? a)The 20% Part B coinsurance amounts for Medicare approved services b)The first three pints of blood each year c)The Medicare Part A deductible d)Approved hospital costs for 365 additional days after Medicare benefits end
c
Which of the following is available to employers of all sizes? a)LPAs b)HSAs c)HRAs d)MSAs
c
Which of the following is correct regarding the taxation of group medical expense premiums and benefits? a)Premiums are not tax deductible and benefits are not taxed. b)Premiums are tax deductible and benefits are taxed. c)Premiums are tax deductible and benefits are not taxed. d)Premiums are not tax deductible and benefits are taxed.
c
Which of the following is true regarding a market value adjusted annuity? a)There are no penalties for a premature surrender of the annuity. b)It provides a level benefit payment. c)The owner is guaranteed a fixed interest rate for a specific period of time. d)The insurer bears all the market risk of changing interest rates.
c
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit? a)Equity Indexed Universal Life b)Variable Universal Life c)Universal Life - Option A d)Universal Life - Option B
c
Which of the following statements concerning buy-sell agreements is true? a)Benefits received are considered income taxable. b)Buy-sell agreements pay in the event of a medical emergency .c)Buy-sell agreements are normally funded with a life insurance policy. d)Premiums paid are deductible as a business expense.
c
Which of the following statements concerning group health insurance is CORRECT? a)Each employee receives a policy. b)Under group insurance, the insurer may reject certain individuals from coverage. c)The employer is the policyholder. d)Only the employer receives a certificate of insurance.
c
Which of the following statements regarding Business Overhead Expense policies is NOT true? a)Any benefits received are taxable to the business. b)Leased equipment expenses are covered by the plan. c)Benefits are usually limited to six months. d)Premiums paid for BOE are tax-deductible.
c
Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early? a)Paid-up additions b)Dividend Accumulation option c)Paid-up option d)Accumulation at Interest
c
Which type of dental care services would cover the costs of the extraction of wisdom teeth? a)Endodontics b)Periodontics c)Oral surgery d)Restorative
c
Who guarantees a conventional fully-insured group plan? a)The annuitant b)The employer c)The insurer d)The insured
c
A 60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true? a)No taxes are due since the plan participant is over age 59 1/2. b)There is a 10% early withdrawal penalty. c)The amount distributed is subject to ordinary income tax. d)The amount of the distribution is reduced by the amount of a 20% withholding tax.
d
A man bought an individual health insurance policy for himself. Which of the following roles does he now legally have? a)Broker b)Subscriber only c)Insured only d)Both subscriber and insured
d
A policyowner is reading a statement on the first page of his health insurance policy, which says "this is a limited policy." What is the name of this statement? a)Policy Limitation Notice b)Statute of Limitations c)Limited Benefit Statement d)Limited Policy Notice
d
A specialized dental service that provides for treatment of missing teeth is known as a)Orthodontics. b)Endodontics. c)Periodontics. d)Prosthodontics.
d
After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive? a)Percentage of medical costs paid by the insurer b)Payments for life c)Yearly premium waiver and income d)Monthly premium waiver and monthly income
d
All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT a)Employer contributions are tax deductible as ordinary business expense. b)Funds accumulate on a tax-deferred basis. c)Employee and employer contributions are not counted as income to the employee for income tax purposes .d)At distribution, all amounts received by the employee are tax free.
d
All of the following are duties and responsibilities of producers at the time of application EXCEPT a)Explain the nature and type of any receipt the producer is giving to the applicant. b)Probe beyond the stated questions if the producer feels the applicant is misrepresenting or concealing information. c)Check to make sure that there are no unanswered questions on the application. d)Change any incorrect statement on the application by personally initialing next to the corrected statement.
d
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
All of the following statements are true regarding installments for a fixed amount EXCEPT a)Value of the account and future earnings will determine the time period for the benefits. b)This option pays a specific amount until the funds are exhausted. c)The annuitant may select how big the payments will be. d)The payments will stop when the annuitant dies.
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 individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation? a)Variable life b)Universal life c)Whole life d)Decreasing term
d
An insured has Medicare Part D coverage. Upon reaching the initial benefit limit, what percentage of the prescription drug cost is the insured responsible for paying? a)15% b)16% c)23% d)25%
d
Bethany studies in England for a semester. While she is there, she is involved in a train accident that leaves her disabled. If Bethany owns a general disability policy, what will be the extent of benefits that she receives? a)Full b)50% c)25% d)None
d
Can an individual who belongs to a POS plan use an out-of-network physician? a)No b)Yes, but they must use the POS physician first c)Yes, but they must use the HMO physician first d)Yes, and they may use any preferred physician, even if not part of the HMO
d
Death benefits payable to a beneficiary under a life insurance policy are generally a)Subject to income taxation by the Federal Government. b)Exempt from income taxation if under $10,000. c)Exempt from income taxation if over $10,000. d)Not subject to income taxation by the Federal Government.
d
During policy replacement, the replacing insurer must notify existing insurers within what time period? a)10 calendar days b)30 days c)90 days d)5 business days
d
For group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense? a)50% b)60% c)90% d)100%
d
Fred and Jody are covered under a group health insurance plan at his place of employment. When Jody gave birth to their first child, what must he do in order to have coverage for their child? a)Notify the insurer on the anniversary date of the plan b)Notify the employer within 10 days c)Notify the insurer immediately and provide proof of insurability d)Notify the insurer within 31 days in order for coverage to continue without any evidence of insurability
d
HIPAA applies to groups of a)At least 10. b)At least 100. c)More than 2, fewer than 50. d)2 or more.
d
If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may a)Require a higher premium. b)Prolong the open enrollment period. c)Increase medical requirements on existing members. d)Require evidence of insurability.
d
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
Life insurance death proceeds are a)Taxable to the extent that they exceed 7.5% of the beneficiary's adjusted gross income. b)Taxed as a capital gain. c)Taxed as ordinary income. d)Generally not taxed as income.
d
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement? a)Term insurance only b)Permanent insurance only c)Universal life insurance only d)Any form of life insurance
d
Paul is a producer in Washington and wants to become a producer in Oregon. The Director will waive certain examination requirements, provided that Washington would waive these same requirements if an Oregon producer sought licensure in Washington. What term is used to describe this phenomenon? a)Equality b)Fair exchange c)Equanimity d)Reciprocity
d
SIMPLE Plans require all of the following EXCEPT a)No other qualified plan can be used. b)No more than 100 employees. c)Employees must receive a minimum of $5,000 in annual compensation. d)At least 1,000 employees.
d
The LEAST expensive first-year premium is found in which of the following policies? a)Increasing Term b)Decreasing Term c)Level Term d)Annually Renewable Term
d
The policyowner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as a)The previous premium payments were high enough to create an excess of premium. b)The policyowner cannot skip premiums without the policy lapsing. c)The next month's premium is sufficient to cover both the current premium amount and the skipped amount. d)The policy contains sufficient cash value to cover the cost of insurance.
d
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? a)Adhesion b)Personal c)Unilateral d)Conditional
d
The responsibility of making certain that an application for insurance is filled out completely, correctly, and to the best of his or her knowledge is the responsibility of whom? a)The beneficiary of the applicant b)The insurance company c)The applicant d)The producer
d
Traditional IRA contributions are tax deductible based on which of the following? a)How long the plan has been in force b)Owner's age c)IRA limit d)Owner's income
d
Traditional IRA contributions are tax deductible based on which of the following? a)How long the plan has been in force b)Owner's age c)IRA limit d)Owner's income Traditional IRA contributions are tax deductible, but may be limited if the owner's income exceeds a certain level.
d
Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive a)Guaranteed minimum benefit. b)The amount paid into the annuity. c)The remainder of the principal. d)Nothing; the payments will cease.
d
Using a class designation for beneficiaries means a)Not naming beneficiaries. b)Naming an estate as the beneficiary. c)Naming each beneficiary by his or her name. d)Naming beneficiaries as a group.
d
What happens if a non-member physician is utilized under the Point-Of-Service plan? a)The non-member physician will be paid a fee for service. b)The non-member physician will be paid a fee for service, but the member patient will be penalized per visit on his/her monthly premium. c)The member patient will have to pay all costs out-of-pocket. d)The attending physician will be paid a fee for service, but the member patient will have to pay a higher coinsurance amount.
d
What is the advantage of reinstating a policy instead of applying for a new one? a)Proof of insurability is not required. b)The face amount can be increased. c)The cash values have gained interest while the policy was lapsed. d)The original age is used for premium determination.
d
What is the best way to change an application? a)Erase the previous answer and replace it with the new answer b)White-out the previous answer c)Draw a line through the incorrect answer and insert the correct one. d)Start over with a fresh application
d
What is the contract provision that allows the insurer to nonrenew health coverage if certain events occur? a)Optionally renewable b)Noncancellable c)Guaranteed renewable d)Conditionally renewable
d
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? a)$1,000 b)$100 per violation c)Revocation of license d)$2,500
d
What type of account will most likely be established for a minor? a)Annuity b)Credit life c)Estate planning d)Trust
d
What type of account will most likely be established for a minor?a)Annuityb)Credit lifec)Estate planningd)Trust
d
When a fixed annuity owner pays pays a monthly annuity premium to the insurance company, where is this money placed? a)Forwarded to an investor b)Each contract's separate account c)The annuity owner's account d)The insurance company's general account
d
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following? a)Legal purpose b)Contract of adhesion c)Acceptance d)Consideration
d
When employees are actively at work on the date coverage can be transferred to another insurance carrier, what happens to coinsurance and deductibles? a)They have to be reevaluated. b)Coinsurance carries over, but deductibles are generally higher. c)Deductibles carry over, but coinsurance is generally higher. d)They carry over from the old plan to the new plan.
d
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount? a)In lesser amounts for the remaining policy term of age 100. b)Equal to the cash value surrendered from the policy c)The same as the original policy minus the cash value d)Equal to the original policy for as long as the cash values will purchase.
d
Which nonforfeiture option provides coverage for the longest period of time? a)Extended term b)Paid-up option c)Accumulated at interest d)Reduced paid-up
d
Which of the following describes taxation of individual disability income insurance premiums and benefits? a)Premiums are not tax deductible, but benefits are taxable. b)Premiums are tax deductible, but benefits are not taxable. c)Premiums are tax deductible, and benefits are taxable. d)Premiums are not tax deductible, and benefits are not taxable.
d
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
Which of the following is NOT fundable by annuities? a)Cash accumulation for any reason b)A person's retirement c)Estate liquidation d)Death benefits
d
Which of the following is NOT true regarding Equity Indexed Annuities? a)The insurance company keeps a percentage of the returns. b)They have guaranteed minimum interest rates. c)They are less risky than variable annuities. d)They earn lower interest rates than fixed annuities.
d
Which of the following is another term for an authorized insurer? a)Certified b)Licensed c)Legal d)Admitted
d
Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service? a)Deductible b)Premium c)Cost share d)Copayment
d
Which of the following is true regarding inpatient hospital care for HMO members? a)Care can only be provided in the service area. b)Services for treatment of mental disorders are unlimited. c)Inpatient hospital care is not part of HMO services. d)Care can be provided outside of the service area.
d
Which of the following statements concerning buy-sell agreements is true? a)Premiums paid are deductible as a business expense. b)Benefits received are considered income taxable. c)Buy-sell agreements pay in the event of a medical emergency. d)Buy-sell agreements are normally funded with a life insurance policy.
d
Which of the following statements pertaining to Medicare Part A is correct? a)For the first 90 days of hospitalization, Medicare Part A pays 100% of all covered services, except for the initial deductible. b)Individuals with ESRD do not qualify for Part A. c)Each individual covered by Medicare Part A is allowed one 90-day benefit period per year. d)Medicare Part A is automatically provided when an individual qualifies for Social Security benefits at age 65.
d
Which of the following will NOT be an appropriate use of a deferred annuity? a)Accumulating retirement funds b)Accumulating funds in an IRA c)Funding a child's college education d)Creating an estate
d
Which of the following would provide an underwriter with information concerning an applicant's health history? a)A medical examination b)The agent's report c)The inspection report d)The Medical Information Bureau
d
