simulated misses #2

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? a) $100 per violation b) Revocation of license c) $2,500 d) $1,000

$2500

The own occupation definition of disability usually applies to the first ____ months after a loss?

24 months or 2 years

For how many days of skilled nursing facility care will Medicare pay benefits? a) 60 b) 90 c) 100 d) 30

100 days

According to the time limit on certain defenses provisions, the insurer cannot void the policy for any misstatments on the application (except for fraud) if the policy was in force for what time period? A.) 3 years B.) 7 years C.) 90 days D.) 1 year

3 years

If an insurer terminates a producer's appointment, the Commissioner must be notified within how many days? a) 10 b) 30 c) 60 d) 90

30

What is the maximum age for qualifying for a catastrophic plan? a) 26 b) 30 c) 45 d) 62

30

Adopting parents must inform their insurer that a child has been added to the family within a) 30 days. b) 1 year. c) 60 days. d) 31 days

31 days Adopting parents must inform their insurer that a child has been added to the family within 31 days.

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

6 months

Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within a) 30 days of a loss. b) 60 days of a loss. c) 90 days of a loss. d) 20 days of a loss.

90 days of a loss

Jason is insured under his employer's group health insurance. He splits the cost of the premiums with his employer. This is an example of a) A noncontributory plan. b) A half and half plan. c) A co-pay plan. d) A contributory plan.

A contributory plan.

Under which condition would an employee's group medical benefits be exempt from income taxes? a) When the premiums and other unreimbursed medical expenses exceed 10% of the employee's adjusted gross income b) An employee's group medical benefits are generally exempt from taxation as income. c) An employee's group medical benefits are never exempt from taxation as income. d) When the premiums and other unreimbursed medical expenses exceed 5% of the employee's adjusted gross income

An employee's group medical benefits are generally exempt from taxation as income. Group medical and dental benefits are received tax-free to employees. Also, premiums paid by the employer are deductible as business expenses.

What is the best way for an underwriter to evaluate an insured's medical history which include past diagnoses, treatments?

Attending Physicians statement

Which of the following best describes fixed-period settlement option? a) Only the principal amount will be paid out within a specified period of time. b) The death benefit must be paid out in a lump sum within a certain time period. c) Income is guaranteed for the life of the beneficiary. d) Both the principal and interest will be liquidated over a selected period of time.

Both the principal and interest will be liquidated over a selected period of time. Under the fixed-period option (also called period certain), a specified period of years is selected, and equal installments are paid to the recipient. Both the principal and interest are liquidated together over the selected period of time.

Concerning group Medical and Dental insurance, which of the following statements is INCORRECT? a) Benefits received by the employee are free from federal income tax. b) Premiums paid by the employer are deductible as a business expense. c) Employee paid premiums may be deducted if certain conditions are met. d) Employee benefits are tax deductible the year in which they were received.

Employee benefits are tax deductible the year in which they were received. For group medical and dental expense insurance any premium paid by the employer is deductible as a business expense. However, any premiums provided by the employee are only deductible if certain conditions are met. Group medical and dental expense benefits are received income tax free by the employee

All of the following are licensing requirements for a business entity, EXCEPT a) Applying for a license in the same lines of authority as held by licensed designees. b) Having all employees complete continuing education courses once every 2 years. c) Demonstrating general fitness, competence, and reliability. d) Maintaining on staff at least 1 licensed person in good standing

Having all employees complete continuing education courses once every 2 years.

Why is an equity indexed annuity considered to be a fixed annuity? a) It has modest investment potential. b) It has a fixed rate of return. c) It is not tied to an index like the S&P 500. d) It has a guaranteed minimum interest rate.

It has a guaranteed minimum interest rate.

Which of the following is NOT true regarding a Certificate of Authority? a) It is issued to group insurance participants. b) It may be necessary for transacting business in a specific state. c) It is equivalent to an insurance license. d) It is issued by the state department of insurance.

It is issued to group insurance participants.

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary? a) Joint and survivor b) Single life c) Fixed-amount d) Life income with period certain

Life income with period certain The life income with period certain option guarantees payments for the life of the recipient and also specifies a guaranteed period of continued payments. If the recipient should die during this period, the payments would continue to a designated beneficiary for the remainder of the period

All of the following are true regarding insurance policy loans EXCEPT a) Policy loans can be made on policies that do not accumulate cash value. b) The amount of the outstanding loan and interest will be deducted from the policy proceeds when the insured dies. c) The policy will terminate if the loan plus interest equals or exceeds the cash value of the policy. d) Policyowners can borrow up to the full amount of their whole life policy's cash value

Policy loans can be made on policies that do not accumulate cash value.

All of the following are penalties a producer may face for violating the insurance laws of this state EXCEPT a) Imprisonment. b) License revocation. c) Re-examination. d) A monetary fine.

Re- examination Producers who knowingly violate insurance laws of this state may be punished by fines, imprisonment, and/or license suspension and revocation.

what is recurrent disability?

Reccurrent disability is the period of time (within 3-6 months) which the recurrence of injury or sickness will be considered as a continuation of a prior disability

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

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

Which is NOT true about beneficiary designations? a) The policy does not have to have a beneficiary named in order to be valid. b) Trusts can be valid beneficiaries. c) The beneficiary must have insurable interest in the insured. d) The beneficiary may be a natural person

The beneficiary must have insurable interest in the insured A beneficiary is the person or interest to whom the policy proceeds will be paid upon the death of the insured. Beneficiaries do not have to have an insurable interest in the policyholder.

A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then a) The benefit is received tax free. b) The benefit is subject to the exclusionary rule. c) IRS has no jurisdiction. d) The benefit is received as taxable income

The benefit is received tax free. Should a key person die, the benefit is treated as a reimbursement to the business for loss of services from that key person.

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.

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

If an insurer wishes to compare information given in an insurance application with previous insurance applications by the same applicant but for different companies who can help the insurer accomplish this? A.) The national asssociation of insurance commissioners B.) The medical information Bureau C.) The state department of insurance D.) Social Security

The medical information bureau The MIB can request a report on an appllicant and receive coded information from any other applications for isurance submitted to other MIB members

All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT a) The policy is owned by the company. b) Any type of insurance policy may be used. c) The employer pays a bonus to a selected employee to fund the policy. d) It is considered a nonqualified employee benefit

The policy is owned by the company

What must happen when an individual policy or annuity has been personally delivered to the policyowner? a) The producer must go over the policy with the policyowner. b) A notary public must witness the exchange. c) The policyowner must sign a delivery receipt. d) The policyowner must pay the annual premium in full.

The policyowner must sign a delivery receipt. When an individual policy or annuity is delivered by hand to the policyowner, a delivery receipt must be signed. The receipt will be in duplicate and state the date the contract was received.

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries? a) The beneficiary will receive 2/3 of the lump sum up front, and the remaining 1/3 will be paid over time. b) The beneficiary will receive 2/3 of the total benefit, with the final 1/3 payable when the first beneficiary dies. c) One of the beneficiaries will receive 1/3 and the other 2/3 of the proceeds when the insured dies. d) The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive. When the reduced option is written as "joint and 2/3 survivor," the surviving beneficiary receives 2/3 of what was received when both beneficiaries were alive.

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit? a) Universal Life - Option A b) Universal Life - Option B c) Equity Indexed Universal Life d) Variable Universal Life

Universal Life Option A (Level Death Benefit option) policy must maintain a specified "corridor" or gap between the cash value and the death benefit, as required by the IRS. If this corridor is not maintained, the policy is no longer defined as life insurance for tax purposes, and consequently loses most of the tax advantages that have been associated with life insurance.

When would a 20-pay whole life policy endow? a) After 20 payments b) In 20 years c) When the insured reaches age 100 d) At the insured's age 65

When the insured reaches age 100 A limited-pay whole life policy, just like straight life, endows for the face amount if the insured lives to age 100. The premium is, however, completely paid off in 20 years.

All other factors being equal, the least expensive first-year premium payment is found in a) Level Term. b) Annually Renewable Term. c) Increasing Term. d) Decreasing Term.

annually renewable term Annually renewable term is the purest form of term insurance. The death benefit remains level, but the premium increases each year with the insured's attained age. In decreasing policies, while the face amount decreases, the premium remains constant throughout the life of the contracts. In level term and increasing term policies, the premium also remains level for the term of the policy. Therefore, in the other types of level policies, the first-year premium would not be different from any other year.

When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply? a) Cost reduction b) Claims reduction c) Claims discrimination d) Case management provision

case management provision Cost-saving services, also known as "case management provisions", include the following: controlled access of providers, large claim management, preventive care, hospitalization alternatives, second surgical opinions, preadmission testing, catastrophic case management, risk sharing, and providing high quality of care.

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

consideration

In long-term care (LTC) policies, as the benefit period lengthens, the premium a) Remains unchanged. b) LTC premiums are not based on benefit periods. c) Decreases. d) Increases.

increases

Which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss? a) Claims Initiation b) Consideration c) Notice of Claim d) Loss Notification

notice of claim The Notice of Claim Provision spells out the insured's duty to provide the insurer with reasonable notice in the event of a loss.

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured? a) Option A b) Option B c) Corridor option d) Variable option

option B Under Option B the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases. At any point in time, the total death benefit will always be equal to the face amount of the policy plus the current amount of cash value.

An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do? a) Pay nothing; there was a misrepresentation on the application b) Pay the full death benefit and refund excess premium c) Pay a reduced death benefit d) Pay the full death benefit

pay a reduced death benefit

Which of the following riders would NOT cause the Death Benefit to increase? a) Guaranteed Insurability Rider b) Cost of Living Rider c) Accidental Death Rider d) Payor Benefit Rider

payor benefit rider Payor Benefit Rider does not increase the Death Benefit; it only pays the premium if the payor is disabled or dies. With Guaranteed Insurability Rider, the policyowner can increase DB at specified ages or events, i.e. marriage or birth of a child; Cost of Living Rider increases DB to keep pace with inflation; in Accidental Death Rider, if the insured dies from an accident, DB is a multiple of the Face Amount.

Traditional IRA contributions are a) Never tax deductible. b) Partially tax deductible depending on the income level. c) Tax deductible. d) Deducted based on the income level.

tax deductible