Washington Life and Health (Disability)

The Life-Disability Insurance Guaranty Association pays covered life insurance death benefit and cash value claims on one life of up to: A $500,000 B $100,000 C $300,000 D $600,000

A $500,000 The Association will pay up to $500,000 per life - up to $500,000 in life insurance, annuity or disability benefits.

A Medicare Supplement must have a free-look period of: A 30 days B 10 days C 180 days D 63 days

A 30 days 30 days is the required free-look period for Medicare Supplement policies.

A partnership has 3 partners who each have an equal ownership interest in their $3,000,000 business. How many policies would have to be purchased under a traditional cross purchase buy-sell agreement plan? A 6 B 1 C 9 D 3

A 6 There would need to be 6 policies purchased in a traditional cross purchase buy-sell agreement plan (3x2). Each partner would be acquiring a policy on the other two partners.

he widow or widower's Social Security blackout period lasts until a surviving, non-remarried spouse reaches age ________. A 60 B 65 C 62 D 50

A 60 The blackout period ends at age 60.

How much Long-Term Care training must producers have before they can solicit or sell LTC insurance? A 8 hours B 20 hours C 3 hours D 4 hours

A 8 hours After completing 20 hours of prelicensing education, passing their exam, and getting their license, agents must take 8 hours of LTC training before they sell anything LTC-related, and 4 hours of CE afterward.

The cost-sharing provisions of TRICARE Standard include: A A $12 co-pay for office visits and 25% co-pay for procedures B An $11 co-pay for office visits and $12 daily co-pay for hospital stays C A $12 co-pay for office visits and $11 daily co-pay for hospital stays D An $11 daily co-pay for hospital stays and 25% co-pay for procedures

A A $12 co-pay for office visits and 25% co-pay for procedures Both TRICARE Standard and TRICARE Prime have a $12 office visit co-pay. Prime has an $11 per day co-pay for hospital stays, and Standard has a 25% co-pay for procedures.

The entire contract typically consists of all of the following, except: A A copy of the cancelled check and receipt B A copy of the application C Any riders D The policy itself

A A copy of the cancelled check and receipt The entire contract consists of the policy, riders, amendments, and a copy of the application. Nothing can be incorporated by reference.

Which of the following is NOT an acceptable type of group life insurance plan? A A group formed to purchase life insurance B A labor union group policy covering members C A debtor group to insure repayment of the indebtedness D An employer group plan

A A group formed to purchase life insurance To be eligible for group life insurance, the group must have a purpose other than the purchase of life insurance. Typically, these will be employees, with the policyholder being the employer, a union, employee association, or association of employers or unions. Other types of groups are members of a credit union, debtors of a creditor, or associations.

Every LTC Policy that provides benefits of homecare or community-based services shall provide all of the following, except: A Acute care B Hospice services C Adult day care D Respite care

A Acute care Acute Care is an excluded coverage

Which of the following is true of Medicare Part B? A Benefits are funded by a combination of taxes and premium dollars and coverage is elective B Provides coverage for inpatient services C It is free for those who qualify D It covers routine dental checkups

A Benefits are funded by a combination of taxes and premium dollars and coverage is elective Part B - Medical Insurance (Outpatient) is a voluntary program of government-subsidized insurance requiring participants to make premium payments.

Alice is the insured, Bill is the primary beneficiary, and Claire is the contingent beneficiary. Alice dies, so who receives the policy proceeds? A Bill B Alice's estate C Claire D The treasury of the state where Alice lives

A Bill Bill is the primary beneficiary and is first in line to receive the policy proceeds if Alice should die first.

Regarding Social Security survivor benefits, when the youngest child reaches age 16, the widow's/widower's _________ period begins and continues until the surviving (non-remarried) spouse reaches age 60. A Blackout B Elimination C Probationary D Waiting

A Blackout When the youngest child reaches age 16, the widow's/widower's blackout period begins.

The type of disability coverage purchased by a small business owner, to cover ongoing overhead in the event of the owner becoming disabled, would be called: A Business Overhead Expense B Key Employee Insurance C Disability Reducing Term D Buy-Sell Agreement

A Business Overhead Expense Business Overhead Expense provides the funds to cover the overhead expenses of a business when the owner becomes disabled, such as office rent, employee labor, etc.

When disabled, which of the following would ensure payment for the wages of a business owner's employees? A Business overhead B Business expenditures C Presumptive disability D Disability buyout

A Business overhead The Business overhead expense policy will provide income to the business to cover losses such as employee's wages if the owner becomes disabled.

Conducting the business of insurance without required or proper licensure is a(n): A Class B felony B Unfair trade practice C Civil infraction D Misdemeanor

A Class B felony Conducting the business of insurance without required or proper licensure is a Class B felony.

Under what conditions, if any, may an individual that is not licensed to sell a particular line of insurance be compensated for the sale of such insurance? A If the compensation is a deferred commission and the individual had been licensed at time of sale B Only when the compensation is a fee and not a commission C There are no such circumstances D It is possible the producer has a license to sell a related line of insurance

A If the compensation is a deferred commission and the individual had been licensed at time of sale Individuals must be licensed in the appropriate line of insurance at the time of sale.

Which Payment Option pays an income for the life of the annuitant or for a specified period, whichever is longest? A Life Income with Period Cert ainB Life Income with Refund C Period Certain D Life Income

A Life Income with Period Certain The question is specifically defining Life Income with Period Certain.

Z is the beneficiary of a life insurance policy. Rather than take a lump sum, Z wanted a lifetime payout. However, Z would feel bad if after he died, residual values were retained by the insurer rather than being paid out. Z should consider which of the following settlement options? A Life Refund B Joint Life C Life with Period Certain D Life Only

A Life Refund With Life Refund, payments are made for the lifetime of the recipient. Upon death, if a recipient has not received an amount equal to the total death benefit, the balance is refunded to the beneficiary, either in a lump sum (cash refund), or in installments (installment refund).

Which of the following is the most expensive premium mode overall? A Monthly B Semi-annually C Annually D Quarterly

A Monthly The greater the frequency the higher the overall cost is.

The __________ is the person applying for insurance coverage and is responsible for completing an application. A Policyowner B Producer C Insurer D Insured

A Policyowner The policyowner is the person applying for insurance coverage and is responsible for completing an application.

Which statement is false regarding Social Security Disability benefits? A Qualification for benefits is contingent only upon the employee's having 45 work credits and being unable to perform his or her usual job B To collect disability benefits, an employee must be unable to engage in any kind of gainful work because of a medically determined physical or mental condition that has lasted, or is expected to last, at least 12 months or to result in death C The waiting period is 5 months D The benefit for a qualifying disabled worker is a percentage of the PIA

A Qualification for benefits is contingent only upon the employee's having 45 work credits and being unable to perform his or her usual job To be 'fully' insured for Social Security Disability benefits, an individual must have 40 quarters of credit and the disability must last 12 months, or be expected to result in death. In addition to satisfying the 5-month waiting period, the person must be unable to perform 'any substantial gainful activity.'

What provision states that if there is a second disability due to the same cause within a specified period, the elimination period will be waived? A Recurrent Disability B Rehabilitation Disability C Second Disability D Residual Disability

A Recurrent Disability Under the Recurrent Disability provision, if a second disability is suffered due to the same cause as the first, within a given period of time, the elimination period will be waived.

Minimizing the chance of a loss is considered which of the following ways of managing risk? A Reduction B Sharing C Avoidance D Retention Good Job!

A Reduction Minimizing the chance of a loss without eliminating the risk altogether is called reduction.

Examples of preventative care include all of the following, except: A Restricting travel to within 5 miles of home B Mammography screenings C Well child visits D Immunizations

A Restricting travel to within 5 miles of home Examples of preventive care include well child care visits, immunizations, and mammography screenings, as well as nutrition and weight loss programs.

If Charlotte wishes to cash out her annuity at age 58 after having it for over 20 years, what should she know about prior to doing it? A She will face income tax consequences and tax penalties B She will have to pay income taxes C She will have to pay tax penalties D She will pay surrender charges for failing to annuitize Good Job! Due to her age, she will face both income taxes and tax penalties.

A She will face income tax consequences and tax penalties Due to her age, she will face both income taxes and tax penalties.

Which of the following is true? A The insured and the policyowner are usually the same, but not necessarily B The insured and the policyowner are always the same C The applicant, insured, and policyowner must approve any changes to a policy in writing D Any changes to a policy must be approved by both the insured and policyowner in writing

A The insured and the policyowner are usually the same, but not necessarily The applicant, insured, and owner might all be different parties, and any changes to the policy must be approved only by the policyowner.

If an application is submitted with a question left unanswered, which of the following should occur? A The insurer would require an answer before issuing a policy B The insurer would deny the application C The insurer would waive the question D The insurer would require an answer when a claim occurred Excellent! Any unanswered questions need to be answered before the policy is issued.

A The insurer would require an answer before issuing a policy

On a variable universal life policy what is the difference between the cash value and the cash surrender values? A The surrender charge B The interest earned C The investment performance D The amount of any outstanding policy loan

A The surrender charge The difference between the cash values and the cash surrender values is the surrender charge which provides an incentive for the policyowner to maintain the policy and allows for the insurer to recoup any policy issuance costs.

What is the primary incentive for a third party to acquire a life insurance policy from a terminally ill insured? A To profit at the time of claim B To help those in desperate need C To create a secondary market for existing in-force life insurance policies D To perform an act of charity

A To profit at the time of claim The third party, the viatical settlement provider, is expecting to profit as the new policyowner at the time of claim. The insured is provided with tax-exempt discounted value during the terminal illness, relinquishing all ownership rights to the buyer.

Which one of the following do life insurance policy illustrations rules apply to? A Traditional whole life B Variable life C Individual and group annuity contracts D Credit life

A Traditional whole life Life insurance policy illustration rules apply to all life policies except variable life, individual and group annuity contracts, credit life insurance, and life policies where the illustrated death benefits would not exceed $10,000 on any individual.

The contract type in which only one party is legally bound to its contractual obligations after a premium is paid is a(n)_______ contract. A Unilateral B Conditional C Personal D Aleatory

A Unilateral In insurance, only the insurer is legally bound once the premium is paid by the insured, which is why it is a unilateral contract.

How would a term policy normally be used to pay off a mortgage upon death? A Using the death proceeds after the insured has died B Through a viatical or life settlement C By using the policy's cash values D By using the policy as collateral for a policy loan

A Using the death proceeds after the insured has died Term can be used as mortgage insurance which typically provides a decreasing term benefit.

ll of the following annuities can be sold without a securities registration/license, except: A Variable B Fixed C Guaranteed D Indexed

A Variable Only a life insurance license is required in order to sell fixed annuities in most states.

K has a $100,000 traditional whole life policy with $30,000 of cash values and a $10,000 loan outstanding. What is the maximum additional amount she could borrow from the policy at this time? A $20,000 B $30,000 C $60,000 D $40,000

A- $20,000 She can borrow up to the policy's cash value. She already has a loan of $10,000, so she could borrow another $20,000 at this time.

Jay receives an annual disability benefit of $10,000. His employer contributed 75% of the premium. How much of Jay's benefit is subject to income tax? A $7,500 B None C $10,000 D $2,500

A- $7,500 Jay is covered under a contributory plan in which the employer is contributing 75% of the premium, so 75% of the $10,000 benefit ($7,500) is subject to income tax.

A permanent life policy issued 30 years ago would endow at what age? A 100 B 65 C 121 D 95

A- 100

How many hours of approved continuing education must resident producers complete per renewal period? A 24 hours including 3 hours of ethics B 20 hours per line C 24 hours per year D 24 hours plus 3 hours of ethics

A- 24 hours including 3 hours of ethics The ethics requirement is part of overall 24 hour requirement.

Which of the following types of coverage provides custodial care outside the home for individuals not requiring confinement? A Adult Day Care B Hospice Care C Respite Care D Home Health Care

A- Adult Day Care Adult Day Care provides custodial services outside the home for individuals not requiring a 24-hour confinement in a nursing home

The pay-out period of an annuity is also referred to as the ______ period. A Annuity B Deposit C Immediate D Accumulation

A- Annuity The Annuity Period (Pay-Out/Liquidation) or annuitization period begins once the contract owner elects to convert the deferred annuity into an income benefit payment. The settlement option selected can provide a temporary or lifetime payment.

Which of following disclosure standards must be followed during the sale of a life insurance policy? A Before making any sales presentation, producers must inform prospective buyers that they are acting as life insurance producers B Producers are always required to present a Policy Summary at the time of application C A producer must identify herself as a financial planner if she sells life insurance D An insurer need only provide a Buyer's Guide or Policy Summary if a purchaser requests it

A- Before making any sales presentation, producers must inform prospective buyers that they are acting as life insurance producers Disclosure include disclosure about one's role and professional level, as well as providing a Buyer's Guide at the time of application and Policy Summary if no illustration is used.

With Long-Term Care Insurance coverage, the longer the _________is, the higher the premium is. A Benefit Period B Elimination Period C Preexisting Period D Waiting Period

A- Benefit Period A long benefit period is more costly to the insurer. Therefore, the premium is higher.

Regarding Social Security survivor benefits, when the youngest child reaches age 16, the widow's/widower's _________ period begins and continues until the surviving (non-remarried) spouse reaches age 60. A Blackout B Elimination C Waiting D Probationary

A- Blackout When the youngest child reaches age 16, the widow's/widower's blackout period begins.

A person who purchases a Medicare Supplement policy cannot enroll in Medicare Part _________. A C B A C B D D

A- C A person who purchases a Medicare Supplement policy cannot enroll in a Medicare Advantage Plan Part C.

The ____________ has the power to issue rules and regulations to help enforce insurance statutes. A Commissioner B Legislative branch C Judicial branch D Executive branch

A- Commissioner The Commissioner has the power to issue rules and regulations to help enforce insurance statutes.

As the cash value increases in a traditional whole life policy, the net amount at risk ____________, but the face amount of the policy would remain the same. A Decreases B Increases C Varies D Remains the same

A- Decreases As the cash value increases, the net amount at risk decreases, but the face amount of the policy would remain the same.

This type of policy covers the treatment and care of the insured's teeth. A Dental expense B Long-term care C Disability income D Medical expense

A- Dental expense Dental Expense is a form of Medical Expense health insurance covering the treatment and care of dental disease and injury affecting the insured's teeth.

The nonforfeiture option that provides the most AMOUNT of coverage for the least duration is: A Extended Term B Cash surrender value C Automatic Premium Loan D Reduced Paid-Up

A- Extended Term Extended term provides the most amount of coverage for the least duration, whereas reduced paid-up provides the least amount of coverage for the longest period of time.

The _________ is the time period provided after the premium due date before a policy lapses. A Grace period B Premium mode C Automatic premium loan period D Reinstatement period

A- Grace period The grace period is the time period provided after the premium due date before a policy lapses.

All else being equal, which of the following will receive the largest income benefit payment from an annuity? A Male age 80 B Female age 70 C Female age 80 D Male age 70

A- Male age 80 The older male will receive the largest income benefit as he will have the shortest remaining life expectancy.

When an individual is covered by a three-tiered, consumer driven health plan, the second source or tier of payment usually comes from a/an: A Out-of-pocket funds B Flexible Spending Account C High Deductible Health Plan D Health Savings Account

A- Out-of-pocket funds The Tier 1 source is usually a pre-tax plan, which may often cover less than the deductible of an associated High Deductible Health Plan. The participant covers such gaps with out-of-pocket funds.

All of the following, if committed so frequently as to be a general business practice, constitute unfair claims settlement practices, except: A Paying claims without investigation B Compelling an insured to sue to recover claims by offering less than the amounts recovered in such lawsuits C Failing to attempt in good faith to promptly, fairly, and equitably settle claims in which the insurer's liability has become reasonably clear D Telling claimants of a practice of appealing arbitration awards in order to compel them to accept settlements or compromises for less than such award

A- Paying claims without investigation Refusing to pay claims without investigation if committed so frequently as to be a general business practice, constitute unfair claims settlement practices.

An illustration used to sell a life policy must: A Show the policy's generic name, product name, and form number B Use an illustration that is lapse-supported C Show only the guaranteed elements D Be used during the sale of all policies

A- Show the policy's generic name, product name, and form number Illustrations are not required in all cases but they should clearly show guaranteed and non-guaranteed elements separately, never be lapsed supported, and always state the generic class or type of policy as well as brand names and specific form information

The insurance industry is primarily regulated at the _________ level. A State B Insurers C Federal D County

A- State The states have primary responsibility for regulating the insurance industry.

Which of the following is NOT a common rating classification? A Subrated B Preferred C Standard D Substandard

A- Subrated The three classifications for risks are standard, preferred and substandard

Which of the following parties does not sign an application for life insurance? A The beneficiary B The agent/producer C The applicant D The insured

A- The beneficiary The agent, the applicant/insured, and the owner, if different form the applicant/insured, must sign the application. The beneficiary does not sign the application.

Which of the following best describes the consideration on the part of an insurer? A The promise to pay in the event of a covered claim B The acceptance of the contract C The purpose of the contract must be legal D The offer of the contract

A- The promise to pay in the event of a covered claim Consideration is something promised, given, or done that has the effect of making an agreement a legally enforceable contract.

When two parties rely upon the statements and promises of the other and assume no attempt to conceal or deceive means that the contract was entered into upon the basis of: A Utmost good faith B Equal consideration C Sound business practices D Reasonable expectations

A- Utmost good faith This is one of the characteristics of an insurance contract and is the definition of utmost good faith.

Group Disability Income is usually offered only on a nonoccupational basis, which will not cover work-related disabilities, because: A Work related injuries are normally covered under Workers' Compensation B The insurer may reduce its financial obligation this way C Damages for work-related injuries are determined in court D Most individuals have their own disability income policy

A- Work related injuries are normally covered under Workers' Compensation Most group disability is written to be nonoccupational, because Workers' Compensation was developed and designed to cover work- and job-related accidents and disease.

Using a misleading policy comparison to induce an insured to convert any insurance is known as: A Twisting B False information and advertising C Misrepresentation D Defamation

A-Twisting Twisting is the correct answer because the agent is inducing the buyer to replace a policy on the basis.

Alice is the insured, Bill is the primary beneficiary, and Claire is the contingent beneficiary. Bill dies, then Claire dies, then Alice dies, so who receives the policy proceeds? A The treasury of the state where Alice lives B Alice's estate C Bill D Claire

Alice is the insured, Bill is the primary beneficiary, and Claire is the contingent beneficiary. Bill dies, then Claire dies, then Alice dies, so who receives the policy proceeds? A The treasury of the state where Alice lives B Alice's estate C Bill D Claire

Ted owns a $50,000 Whole Life Policy. At age 47, he decides to stop paying premiums on his policy when it has $15,000 of cash value and exercise the Extended Term Option. Ted's term benefit will be: A $35,000 B $50,000 C $15,000 D $65,000

B $50,000 The Extended Term Option uses the present cash value of the policy, upon its lapse, to automatically buy a single premium term policy of the same face amount for a specified number of years and days as listed in the policy's nonforfeiture table.

The free-look period for a life insurance policy is: A 30 days B 10 days C It depends on whether the purchaser received a policy summary D 15 days

B 10 days Life insurance policies include a 10-day free look.

Every licensee must promptly reply in writing to an inquiry of the Commissioner of Insurance about his/her insurance business within ______ days after the licensee receives the inquiry. A 30 B 15 C 20 D 45

B 15 Every licensee must promptly reply in writing to an inquiry of the Commissioner of Insurance about his/her insurance business within 15 days after the licensee receives the inquiry.

A life insurance policy is required to have a provision allowing the insured to borrow up to the cash value of the policy after a full _____ years' premiums have been paid. A 6 B 3 C 4 D 5

B 3 A life insurance policy is required to have a provision allowing the insured to borrow up to the cash value of the policy after a full 3 years' premiums have been paid.

Coverage for the newly born child must be no less than the coverage of the child's mother for no less than _____ week(s). Coverage for the newly born child must be no less than the coverage of the child's mother for no less than 3 weeks, even if there are separate hospital admissions. A 1 B 3 C 4 D 2

B 3 Coverage for the newly born child must be no less than the coverage of the child's mother for no less than 3 weeks, even if there are separate hospital admissions.

A nonresident producer who moves to another state or a resident producer who moves to another state must notify the Commissioner of the change of address within ______ days. A 90 B 30 C 60 D 45

B 30 A nonresident producer who moves to another state or a resident producer who moves to another state must notify the Commissioner of the change of address within 30 days.

A person may not sell, solicit, or negotiate the sale of an annuity product unless he/she has successfully completed a one-time, _____-hour training course in annuity suitability. A 8 B 4 C 12 D 6

B 4 A person may not sell, solicit, or negotiate the sale of an annuity product unless he/she has successfully completed a one-time, 4-hour training course in annuity suitability.

Generally, an insurer may defer the granting of a policy loan for up to ______ months. A 3 B 6 C 9 D 12

B 6 An insurer, by law, can defer granting a policy loan for up to 6 months.

The Insurance Commissioner may take all of the following actions, except: A Investigate potential violations any provision of insurance code B Amend the insurance code as needed C Prosecute an action in any court of competent jurisdiction D Make reasonable rules and regulations to enforce the insurance code

B Amend the insurance code as needed Changes in the Code are a change in law, and must be done by the Legislature.

Which one of the following is exempt from the requirements of the replacement regulations? A An existing life policy or annuity has been or will be converted to reduced paid-up insurance, continued as extended term insurance, or reduced in value by the use of nonforfeiture benefits B An existing life policy or annuity has been or will be go through contractual changes or conversion privileges exercised with the existing insurer C An existing life policy or annuity has been or will be terminated (e.g. lapsed, forfeited, or surrendered) D An existing life policy or annuity has been or will be pledged as collateral or borrowed against for over 25% of the loan value

B An existing life policy or annuity has been or will be go through contractual changes or conversion privileges exercised with the existing insurer Contractual changes or conversion privileges exercised with the existing insurer is not defined as a replacement transaction therefore is exempt from the requirements of the replacement regulations.

Which of the following is a Managed Care Provision used by insurers to monitor hospital stays? A Prospective Review B Concurrent Review C Precertification D Retrospective Review

B Concurrent Review Once an insured is admitted to the hospital, the insurer monitors the insured's hospital stay to make certain that everything is proceeding on schedule through the Concurrent Review Provision.

Industrial Life Insurance is also referred to as a: A Nonparticipating Policy B Debit Policy C Participating Policy D Group Policy

B Debit Policy Industrial life policies are also known as home service and debit policies where premiums are collected by a Debit Agent.

A ____________ agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature. A Sharing B Facultative C Retention D Treaty

B Facultative A facultative agreement is a reinsurance agreement that allows the reinsurance company an opportunity to reject coverage for individual risks, or price them higher due to their substandard (higher risk) nature.

LTC coverage for such things as occasional visits and care by registered, practical or vocational nurses or a hospice organization in the home would be a feature of: A Intermediate Care B Home Health Care C Custodial Care D Adult Day Care

B Home Health Care Usually, a private nurse or a state-licensed home health care agency provides Home Health Care in the home of the patient.

Which one of the following standard provisions for health insurance policies is false? A Unless the insured makes a designation of beneficiary irrevocable, he/ she retains the right to change beneficiary without consent of the beneficiary B If the age or sex were misstated, the premiums payable under the policy are adjusted so they would be what would have been paid if the age or sex had been correct C Legal action may not be taken until after 60 days after written proof of loss has been provided nor after 3 years D Upon receipt of a notice of claim, the insurer must supply the claimant forms to be used to file a proof of loss within 15 days

B If the age or sex were misstated, the premiums payable under the policy are adjusted so they would be what would have been paid if the age or sex had been correct If the age or sex were misstated, amounts payable under the policy are adjusted so they would be what would have been paid if the age or sex had been correct.

Which of the following best describes a Statement of Good Health? A It is the producer's authority to raise the rate if the insured does not appear to be in good health at the time of policy delivery B It verifies that the insured has not suffered a serious illness or injury requiring surgery or hospitalization since the application date C It is what comes along with the policy at the time of delivery confirming the underwriting class the insured falls into if the policy was issued standard or better D It is a sworn oral statement made by the insured at time of delivery which allows for coverage to come into effect

B It verifies that the insured has not suffered a serious illness or injury requiring surgery or hospitalization since the application date Generally, this is used when the policy was issued with an outstanding premium requirement to assure the issuer that the health status of the insured has not significantly changed since the time of application.

All of the following statements regarding license renewal are true, except: A After 60 days following one's license expiration date, a licensee may request reinstatement for a limited period of time B Licensees have 2 years to request a reinstatement C A producer's license is not terminated until 60 days after the license expiration date D The license fee for a producer's license is $55

B Licensees have 2 years to request a reinstatement After 12 months following the license expiration date, previously licensed individuals must go through the entire prelicensing process again.

An applicant inaccurately representing information on the application is guilty of: A Waiver and Estoppel B Misrepresentation C Concealment D Fraud

B Misrepresentation Misrepresentation is a false statement contained in the application. Fraud is an intentional deception of the truth in order to induce another to part with something of value or to surrender a legal right. Concealment is the willful holding back or secretion of material facts pertinent to the issuance of insurance or a claim. Waiver and Estoppel are terms that apply to the insurer, not the applicant.

Under an annuity with a Joint Life Payment Option, what will the survivor receive upon the death of the first annuitant? A The undistributed balance B Nothing C The remaining period certain D The same amount they were receiving together

B Nothing The Joint Life Payment Option ceases all distributions at the first death of any of the annuitants. This would not be the case if a Life Income Joint and Survivor Option were chosen.

The Commissioner of Insurance may place on probation, suspend, revoke, or refuse to issue or to renew any license for any of the following reasons, except: A Using fraud, coercion, or dishonest practices or being untrustworthy, incompetent, or financially irresponsible B Obtaining a loan from a client who is a financial institution or a relative C Having been convicted of a felony D Misappropriating or illegally withholding monies required to be held in a fiduciary capacity

B Obtaining a loan from a client who is a financial institution or a relative The Commissioner of Insurance may place on probation, suspend, revoke, or refuse to issue or to renew any license for obtaining a loan from a client who is not a financial institution or a relative.

Which of the following is not covered by Medicare Part A? A Hospitalization B Outpatient hospital treatment C Post hospital skilled nursing facility care D Hospice care Good Job! Part A is Hospital Insurance mainly providing coverage for inpatient services. Outpatient services are covered under Part B.

B Outpatient hospital treatment Part A is Hospital Insurance mainly providing coverage for inpatient services. Outpatient services are covered under Part B.

All of the following are required to get a nonresident producer license in Washington, except: A Paying the required fee B Passing the licensing exam C Holding the comparable license in the home state in good standing D Holding a resident license in a state that grants reciprocity to Washington licensees

B Passing the licensing exam An applicant for a nonresident license is not required to pass the licensing exam because he/she passed a similar exam in the resident state.

Which of the following would not provide dental services for an insured? A Prosthodontist B Podiatrist C Periodontist D Endodontist Excellent!

B Podiatrist A podiatrist is a foot doctor.

Monte has a health care plan whereby if he stays within the network, benefits are paid as an HMO. However, if he goes outside the network, benefits are paid from the medical expense portion of the plan subject to high deductibles and copayments. Monte is covered by a: A Tri-Care Plan B Point-of-Service Plan C Network Model HMO D Preferred Provider Organization

B Point-of-Service Plan The question describes the characteristics of a Point-of-Service Plan, which offers a combination of medical expense and HMO benefits.

Blue Cross and Blue Shield are considered: A Self-funded plans B Prepaid plans C Fee-for-service plans D Reimbursement plans

B Prepaid plans Blue Cross and Blue Shield are prepaid plans, with plan subscribers paying a set fee, usually monthly, for the services of doctors and hospitals at a predetermined price (negotiated fee).

In a Universal Life policy, the minimum separation between the cash value and the death benefit is called the _______. A The cash value B Risk corridor C The earned interest D The MEC limit

B Risk corridor A universal life policy must include an amount at risk. If the cash value approaches the face amount, the death benefit must increase so as to provide for this amount at risk. This minimum separation between the cash value and the death benefit is called the 'risk corridor.'

Which of the following is NOT true about social insurances? A Benefits are prescribed by law; any changes to the benefit structure and provisions are made by changes in the law B Social insurance provides equal benefits to all citizens that contribute C The government, as an insurance provider, has a clear and strong monopoly D Participation is mandatory and automatic for all eligible citizens

B Social insurance provides equal benefits to all citizens that contribute Social insurance seeks to be adequate, to meet the needs of the public. It does not provide equal benefits to all that contribute. As income is redistributed through the governmental system, insureds who put less into the system (the poor, elderly, and those with dependents) get proportionately greater benefits.

Any person, other than a licensed ___________, making an insurance contract in Washington on an unauthorized insurer's behalf is personally liable under the contract. A Broker B Surplus line broker C Producer D Insurance counselor

B Surplus line broker Any person, other than a licensed surplus line broker, making an insurance contract in Washington on an unauthorized insurer's behalf is personally liable under the contract.

All of the following factors must be taken into account in recommending the purchase or exchange of an annuity, except: A Customer's tax status B The incontestability provision C Customer's investment objectives D Other insurance or annuities owned

B The incontestability provision In recommending a purchase or exchange of an annuity, the producer must have reasonable grounds to believe that the recommendation is suitable for the customer based on facts disclosed by the customer about their investments, other insurance, financial situation, tax status, needs, and objectives. The incontestability provision eliminates insurer defenses to paying on a life insurance policy and is required to be the same for all policies; it would not affect an annuity recommendation.

All of the following are true regarding re-entry term, except: A The new policy's premiums will be based on the insured's attained age B The new policy's premium will be based on the insured's original age C The new policy's premium will be based on the premium class approved by the company D The new policy's premium will be based on the rates in effect by the insurer at the time of re-entry

B The new policy's premium will be based on the insured's original age The new policy's premium will be based on the insured's attained age, the rates in effect by the insurer at the time of re-entry, and the premium class approved by the company.

Once issued, the application becomes part of the ___________, when attached. A Part 1 B Entire contract C Part 2 D Agent's Report

B -Entire contract To be regarded a part of the contract, the application for insurance must be included with the rest of the policy. It may not be incorporated 'by reference.'

A systematic distribution of accumulated funds, either over one's life, or a specified period, is the definition of a(n): A Actuarial Option B Annuitization Option C Insurance Option D Accumulation Option

B Annuitization Option An Annuitization Option usually involves a systematic series of distributions made in substantially equal amounts to an individual over his or her life, or a specific period. Annuitization Period is the payout phase of the annuity product, while the period during which deposits are made is the Accumulation Period.

Each major line of insurance requires at least _____ credit hours of prelicensure instruction. A 12 B 20 C 16 D 18

B- 20 Each major line of insurance requires at least 20 credit hours of prelicensure instruction and the license examination must be taken within 12 months of completion.

All of the following could be approved as Long-Term Care facilities, except: A An intermediate care facility B A sanitarium for weight loss C A custodial care facility D A skilled nursing facility

B- A sanitarium for weight loss LTC approved facilities include Skilled, Intermediate and Custodial facilities. A weight loss sanitarium is not an approved LTC facility.

Which of the following organizations requires a Certificate of Authority in Washington State? A An entity acting as a surplus lines broker B An entity selling Medicare Supplements C An entity offering travel and automobile related services D An entity selling emergency expense reimbursement

B- An entity selling Medicare Supplements The entity selling Medicare Supplements is the only one that is underwriting insurance in Washington. The surplus lines broker has a license to represent, under certain conditions, companies without certificates of authority in Washington.

A producer must be __________ by an insurer in order to represent the insurer. A Licensed B Appointed C Authorized D Approved

B- Appointed A producer must be appointed by an insurer in order to represent the insurer.

Which of the following types of policies would a sports team purchase to obtain coverage for a season? A Limited Accident B Blanket C Limited Sickness D AD&D

B- Blanket Athletic teams, schools, common carriers and the like typically purchase Blanket contracts as their membership tends to fluctuate. Members are not individually underwritten and do not receive a policy or Certificate of Insurance.

Universal Life provides for an increasing death benefit only if the applicant chooses: A A return of premium rider to the plan B Death Benefit Option B C To add an increasing term rider to the policy D To include an inflation rider at the time of application

B- Death Benefit Option B Option B pays the face amount stated in the contract that is level term, plus any cash values accumulated over the years. This provides for an increasing death benefit.

Universal Life and Variable Universal Life share all of the following characteristics, except: A Policy loans, surrenders, and partial withdrawals are permitted B Flexible premiums C Adjustable death benefit options D The investment risk

B- Flexible premiums But like Variable life, a VUL has a separate account that is maintained and the investment return fluctuates based on the performance of the separate account. Since there is no guaranteed return on the separate account, the owner bears all investment risk.

Which of the following statements regarding life insurance policy exclusions is TRUE? A The war clause states coverage is provided if death is the result of war B Generally, aviation is excluded, except for fare-paying passengers on a commercial flight C The status clause states that coverage is provided to individuals with military status D Hazardous occupations are usually covered at a reduced benefit if death is the result of an insured's occupation

B- Generally, aviation is excluded, except for fare-paying passengers on a commercial flight Without an Aviation Rider on the policy, death as a result of aviation is excluded, except for a fare-paying passenger on regularly scheduled commercial flights.

Proceeds from a buy-sell agreement are received ___________. A Only after the deceased's estate is settled and a proper valuation of their share of the business B Income tax free C Taxable as income D Taxed to the extent that the amount exceeds $50,000

B- Income tax free The premiums payable for a buy-sell agreement are not tax deductible, therefore the benefit is received income tax free.

If a policy is at risk of cancellation or lapse due to nonpayment of premium, which of the following provides paid-up coverage? A Waiver of premium B Nonforfeiture C Guaranteed insurability (Future increase option) D Return of premium

B- Nonforfeiture A nonforfeiture provision/rider triggers the purchase of paid-up coverage in such circumstances. Don't confuse this with a Waiver or Premium provision/rider, which "waives" premium payments.

Which of the following Whole Life insurance policies has the lowest annual premium payment per $1,000 of coverage for a 35-year-old, all other factors being equal? A 30-Pay Ordinary Life B Ordinary Straight Whole Life C Limited Pay Ordinary Whole to age 85 D 20-Pay Ordinary Life

B- Ordinary Straight Whole Life The longer the premium-paying period, the lower the annual premium. A $100,000 Ordinary Straight Whole Life Policy spreads the payments out over a longer period of time than a limited premium payment policy.

A ________ is usually treated as an insurance company liability. A Gross premium B Reserve C Net premium D Dividend

B- Reserve A reserve is an amount representing actual or potential liabilities kept by an insurer to cover debts to policyholders. A reserve is usually treated as a liability

Which of the following statements describes the Commissioner's ability to levy penalties? A Fines must be paid within 15 days B The Commissioner may revoke a producer's license for obtaining a loan from a client who is not a financial institution or a relative C If the Commissioner suspends a producer's license, the term of the suspension must be at least one year D Licensed business entities may not be held responsible for the illegal actions of a producer

B- The Commissioner may revoke a producer's license for obtaining a loan from a client who is not a financial institution or a relative Getting a loan from an unrelated, non-bank client is a violation. Entities can be penalized for the behavior of their producers, and as for penalties, the MAXIMUM suspension period is 1 year, and fines must be paid in 30 days.

A life insurance applicant pays the initial premium at the time of application and receives a Conditional Receipt. If coverage is issued as applied for, when did coverage go into effect? A The day the check clears the bank B The date of the application or upon the completion of any required medical exam (whichever is later) C The date the policy was issued D The date the policy was delivered

B- The date of the application or upon the completion of any required medical exam (whichever is later) In the case of a Conditional Receipt, the coverage is effective as of the date of the application or upon the completion of any required medical exam, unless it is declined within a stipulated period.

Which is not correct concerning a Blue Cross and Blue Shield Plan? A In most states, they are considered not-for-profit organizations B Benefits are paid directly to the insured individual C They are fee for service plans D They offer both individual and group coverage

B-Benefits are paid directly to the insured individual As both Blue Cross and Blue Shield Plans are fee for service programs, they pay the service provider, not the covered individual (i.e. subscriber). They are typically not-for-profit and provide both group and individual coverage.

Term insurance differs from permanent insurance in that term: A Costs more than permanent insurance B Provides a variety of living benefits C Builds cash value and provides limited death benefit options only D Builds no cash value, pays a death benefit only

Builds no cash value, pays a death benefit only Term insurance provides death benefits only, at lower premiums, with no cash value accumulation or living benefits.

A $100,000 life insurance policy has an Accidental Death double indemnity rider, and an outstanding $10,000 policy loan. Following the accidental death of the insured, the beneficiary will receive: A $90,000 B $100,000 C $180,000 D $200,000

C $180,000 Outstanding policy loans are deducted from the face amount at the time of claim. The Accidental Death rider does not affect the way policy loans are treated.

A health policy may not exclude coverage for a preexisting condition for more than how many months from issuance? A 36 B 24 C 12 D 18

C 12 A health policy may not exclude coverage for a preexisting condition for more than 12 months from issuance.

How long, typically, is the reinstatement period from policy lapse? A 2 years B 1 year C 3 years D Indefinitely

C 3 years Typically, the reinstatement period is three years, but it can be up to 5 years with some policies or some insurers

In order to purchase a Medicare Supplement, an eligible individual usually must have Medicare Parts __________. A B and C B A and D C A and B D A and C

C A and B In order to purchase a Medicare Supplement, an eligible individual usually must have Medicare Parts A and B.

Which of the following statements regarding a producer's license is true? A Producers may sell insurance for up to 180 days with a temporary license B A producer may never act as an adjuster C A producer must hold a license in the line of authority he or she intends to sell D Individuals do not need a license to sell baggage insurance

C A producer must hold a license in the line of authority he or she intends to sell Producers always have to be licensed in the line they are selling, whether it is a major or limited line. Producers may act as adjusters in limited circumstances, but may not sell on the basis of having a temporary license.

If a life insurance applicant's answers on the application indicate that he/she is in good health, when in fact the applicant has a disease that he/she is not aware of, the statement on the application is considered: A A concealment B Fraudulent C A representation D A warranty

C A representation Representations are statements which are 'true and complete to the best of one's knowledge.' Warranties are statements that are guaranteed to be true. Concealment occurs when known information is not communicated.

Kirk has just reinstated an individual A&H policy that had lapsed and wants to know how soon coverage will be in effect for any accident or sickness. You, the agent, would say: A Sickness immediately, accidents after 10 days B Sickness immediately, accidents after 30 days C Accidents immediately, sickness after 10 days D Accidents immediately, sickness after 30 days

C Accidents immediately, sickness after 10 days Upon reinstatement, accidents are covered immediately, and sickness after 10 days. This prevents insureds from reinstating a policy when they are already sick.

The Insurance Commissioner may place on probation, suspend, revoke, or refuse to issue or to renew any license for any of the following reasons, except: A Intentionally misrepresenting an insurance application or an insurance contract's terms B Cheating on a licensing exam C Accounting for and appropriately handling monies required to be held in a fiduciary capacity D Providing false information in a license application

C Accounting for and appropriately handling monies required to be held in a fiduciary capacity Misappropriating or illegally withholding monies required to be held in a fiduciary capacity is reason for the Insurance Commissioner to place on probation, suspend, revoke, or refuse to issue or to renew any license.

An employer who has an Open Enrollment Period four times during a policy period for group dental coverage might cause the insurer to have concerns about which of the following? A Premium Payments B Insurable Interest C Adverse Selection D Stability of Membership

C Adverse Selection Frequent Open Enrollment periods would cause the insurer more exposure to immediate claims and concerns of increasing adverse selection.

_____________ is/are not considered material to the policy issuance. A 12 driving under the influence tickets within 6 months prior to application B Recent major inpatient hospital surgeries C Age and/or gender D Hazardous occupations and/or hobbies

C Age and/or gender Age and/or gender are not considered material to the policy issuance.

The Fair Credit Reporting Act guarantees which of the following? A An applicant has provided full, fair, and honest disclosure on the application B All applicants are treated fair and equal C Applicants' right to information held about them by any reporting agency D A good credit score

C Applicants' right to information held about them by any reporting agency The Fair Credit Reporting Act gives consumers the right to any information held about them by any reporting agency, excluding medical and investigative source information.

The duties of a producer during the process of selling and placing a life insurance policy include all of the following, except: A Giving the applicant a Notice Regarding Replacement at the time of application B Provide a signed statement as to whether a replacement is involved C Avoiding the sale of replacement policies D Leave the consumer a copy of any written sales presentation if a replacement is involved

C Avoiding the sale of replacement policies Replacements are legal as long as they are suitably made for the benefit of the consumer.

It is determined that Charles, an agent representing the Timely Payment Insurance Company, has misled the consuming public in an advertisement for one of the company's products. As a result of such action, which of the following is true? A Only Charles will be held accountable B Only the Timely Payment Insurance Company will be held accountable C Both Charles and the Timely Payment Insurance Company will be held accountable D Only Charles' immediate supervisor will be held accountable

C Both Charles and the Timely Payment Insurance Company will be held accountable In effect, if Charles misleads the public in an advertisement, so does the insurer he represents.

If a home office underwriter obtains MIB codes inconsistent with information provided on the application, what is the underwriter required to do? A Refer the case to the state Insurance Department for possible insurance fraud B Issue the policy at a higher premium due to the undisclosed higher risk C Conduct further investigation to obtain more information prior to making a decision D Automatically reject the application and order any premium paid refunded

C Conduct further investigation to obtain more information prior to making a decision When the home office underwriter receives MIB codes that are inconsistent with information provided on the application, the underwriter is required to conduct a further investigation to obtain more information prior to making an underwriting decision. Underwriting decisions cannot be based solely on MIB codes since there could be a reasonable explanation for the discrepancy.

The Insurance Commissioner of Washington is _____ to a term of office of 4 years. A Installed B Appointed C Elected D Nominated

C Elected The Insurance Commissioner of Washington is elected to a term of office of 4 years.

The Commissioner shall examine the affairs, transactions, accounts, records, documents, and assets of each authorized insurer at least once: A Annually B Every 4 years C Every 5 years D And only once when a Certificate of Authority is granted

C Every 5 years 5 years is the minimum frequency for examinations.

All of the following activities could cause an insurance purchase to be treated asa STOLI, except: A Pay for the policy they acquire from the policyowner B Change the policy ownership and beneficiary designations C Fill out the application for life insurance on behalf of the insured D Keep paying policy premiums until the insured dies, and then file a claim

C Fill out the application for life insurance on behalf of the insured After the investors have paid for the policy, they will change the ownership and beneficiary designations. The investors will also have to pay premiums to keep the policy in force. Upon death of the insured the investors will file a claim for the death benefit.

Which Settlement Option pays a specified dollar amount until benefits are exhausted? A Paid-Up Option B Life Income with Period Certain C Fixed Amount D Life Income

C Fixed Amount The Fixed Amount option pays benefits at a specified dollar amount (such as $1,000/month) until the benefits are exhausted.

The _________ gives the owner of a variable annuity the ability to withdraw a maximum percentage of the annuity value until the initial investment amount has been recouped. A Retirement income annuity B Group annuity C Guaranteed minimum withdrawal benefit D Joint and survivor annuity benefit

C Guaranteed minimum withdrawal benefit The guaranteed minimum withdrawal benefit provides variable annuity owners with a measure of protection against loss, without requiring them to annuitize.

Which of the following correctly describes the effect of the Common Disaster Clause? A If an insured and contingent beneficiary both die in a train wreck, it is presumed that the insured died first in order to protect the primary beneficiary's right to claim the death benefit B If the insured and primary beneficiary are killed in an auto accident in which both were in the car at the time of the crash, an autopsy will be required in order to determine which passenger died first C If an insured and primary beneficiary both are killed when the bus they are riding in goes over a cliff and if it cannot be determined who died first, the insured or primary beneficiary, the insured will be presumed to have survived the primary beneficiary so the contingent beneficiary will be able to receive the death proceeds D If the primary and contingent beneficiary die when the boat they were sailing in sinks, it is presumed that the primary beneficiary outlived the contingent beneficiary for claims paying purposes

C If an insured and primary beneficiary both are killed when the bus they are riding in goes over a cliff and if it cannot be determined who died first, the insured or primary beneficiary, the insured will be presumed to have survived the primary beneficiary so the contingent beneficiary will be able to receive the death proceeds The purpose of the Common Disaster Clause is to establish that, if it cannot be determined whether the insured or the primary beneficiary died first in a common disaster, the insured will be presumed to have survived the primary beneficiary and the proceeds of the policy will be paid to the contingent beneficiary, or if none is named, then to the estate of the insured.

A Tertiary Beneficiary is the person who receives a death benefit payment in which of the following scenarios? A If the insured dies before the Primary Beneficiary B If the Contingent Beneficiary dies before the insured C If the primary and contingent beneficiary die prior to the insured D If the Primary Beneficiary dies before the insured

C If the primary and contingent beneficiary die prior to the insured The Tertiary Beneficiary is the beneficiary last in order to receive a death benefit, and is sometimes the decedent's estate by default. This 'third beneficiary' is in line behind the primary and contingent beneficiaries.

Which rider would eliminate coverage for a preexisting condition? A Guaranteed Purchase Option B Lifetime Benefit Rider C Impairment Rider D Return of Premium Rider

C Impairment Rider The Impairment Rider eliminates coverage for pre-existing conditions, but at the same time may make insurance available for an otherwise uninsurable person.

What is an insurer permitted to do if and when it discovers during the underwriting process that a proposed insured has AIDS? A Insurers can discriminate between individuals of the same class in underwriting for the risk of AIDS B Insurers can share the test results with the insured's immediate family members and any health professionals listed on the application C Insurers may refuse to issue a policy to individuals based on positive HIV test results D The insurer can share information discovered during the underwriting process with the Center for Disease Control as well as state and local health authorities

C Insurers may refuse to issue a policy to individuals based on positive HIV test results Insurers are required to maintain strict confidentiality of personal information obtained through testing and to obtain informed consent before testing for HIV. Unfair discrimination is never permitted.

All of the following are TRUE about the Automatic Premium Loan (APL) Provision, except: A It must be elected by the policyowner B It becomes effective, if elected, at the end of the grace period C It is available on any type of life insurance policy D It can be cancelled at any time by the policyowner

C It is available on any type of life insurance policy The Automatic Premium Loan Provision is available on cash value policies only.

A policy that covers inpatient doctor visits and may be expanded to include payment for office visits, diagnostic x-rays, laboratory charges, ambulance and nurse's expenses when not hospitalized, and maternity benefits for an additional premium is considered which of the following? A Basic Physician's Expense Policy B Supplementary Major Medical Policy C Medical Expense Policy D Major Medical Policy

C Medical Expense Policy

Any employee-paid group life insurance premiums are __________. A Tax-deductible B Tax-exempt C Not tax-deductible D Tax-deferred

C Not tax-deductible Any employee-paid group life insurance premiums are not tax-deductible.

Bill is a retired military officer suffering from complications caused by Agent Orange exposure during his military service. He incurs $54, 510 in medical expenses during hospitalization at the local Veterans Administration Hospital. The private health insurance he now owns will likely pay: A $27,255 B $13,627.50 C Nothing D $54,510

C Nothing Private insurance does not cover treatment received in a governmental facility. This is a standard exclusion. Retired military personnel are covered under TRICARE.

If a taxable event occurs regarding the cash value of a permanent life insurance policy, in virtually every case, the taxable amount is taxed as: A Tax preference item B Short-term capital gain C Ordinary income D Long-term capital gain

C Ordinary income In just about every case, if there is a taxable event associated with a permanent life insurance policy. The IRS considers it ordinary income.

Hank, an auto mechanic, had an accident in his garage. He was unconscious for several hours and he awoke in the hospital with a broken leg and missing an arm. His disability would be: A Total, permanent B Partial, temporary C Partial, permanent D Total, temporary

C Partial, permanent The fact that the mechanic was missing an arm would be a permanent (and also a 'presumptive') disability. It is not considered a total disability initially because a person can perform many functions with only one arm. In the unlikely event the person cannot perform any work with only one arm, the disability may be rerated to total.

Whole Life is also known as ________ protection. A Periodic B Absolute C Permanent D Temporary

C Permanent Whole Life is designed to provide the insured protection throughout his or her life. Other types of permanent protection are Indeterminate Premium and if designed properly Adjustable Life.

Steve Borden, a kindergarten teacher, was in a boating accident and lost both legs. Although he will continue to teach, his disability policy pays full benefits because of this provision: A Total Disability B Partial Disability C Presumptive Disability D Residual Disability

C Presumptive Disability Presumptive Disability is where a loss is presumed to be total and permanent due to loss of sight, hearing, speech or loss of two limbs.

How is Variable Whole Life different from Variable Universal Life? A It is designed to provide a hedge against inflation B The policyowner takes on all of the investment risk C The policy has a guaranteed minimum face amount D Cash values can be invested in a separate account

C The policy has a guaranteed minimum face amount Generally speaking, Variable Whole Life has a guaranteed minimum death benefit provided that all premiums are paid in full and on time as scheduled, whereas a Variable Universal Life policy has no guaranteed death benefit.

If an annuity policyowner stops putting money into their periodic or flexible premium annuity what happens to the policy values? A They are forfeited to the insurer for breach of contract B They automatically purchase an immediate payout option C They are protected by the nonforfeiture provision D They are refunded to the policyowner in a lump sum

C They are protected by the nonforfeiture provision Just like with life insurance any policy values contained in the contract are nonforfeitable for nonpayment of premium. They can be used for surrender or buying a paid up annuity.

All of the following regarding revocable beneficiaries is true, except: A They have no vested interest in the policy B Most beneficiaries are designated as revocable C They have rights in the policy just like any other party to the contract D The policyowner can change a revocable beneficiary at any time

C They have rights in the policy just like any other party to the contract The policyowner may change a revocable beneficiary at any time. This beneficiary does not have a vested interest in the policy. Most named beneficiaries are revocable and have no rights.

For an accidental means policy to pay a claim, the injury must be an: A Unforeseeable injury only B Unintentional cause only C Unintentional in both the cause and the result of the injury D Unintentional injury only

C Unintentional in both the cause and the result of the injury For an Accidental means policy to pay both the cause and the result must be unintentional, unforeseeable and unintended.

Implied authority is: A Created when they negotiate insurance on behalf of the applicant B What the public assumes the agent has C That which is written into their contract D Created when the producer's actions exceed the authority granted to them by their contract

C Variable Universal Life

Which of the following policies offers the least guarantees? A 30 year Term Life B Straight Whole Life C Variable Universal Life D Universal Life

C Variable Universal Life Variable Universal Life has no guaranteed death benefit and no guaranteed cash values.

Which of the following is not a Mandatory Uniform Provision of an Accident and Health policy? A Proof of Loss B Time Limit on Certain Defenses C Waiver of Premium D Payment of Claims

C Waiver of Premium The other choices are Mandatory Uniform Provisions. Waiver of Premium is a provision that may or may not be included.

Which is true regarding the advertising of Accident and Sickness Insurance? A Sales talks and personal testimonials are not considered advertising B Advertisements may use words or phrases such as 'all', 'complete', 'comprehensive' C When insurers advertise that a group endorses a certain health product, the public must be made aware of any control the insurer may have regarding the group D When an agent misleads the public in an advertisement, only the agent is accountable

C When insurers advertise that a group endorses a certain health product, the public must be made aware of any control the insurer may have regarding the group Both the agent and the insurer are accountable for advertising content. Words such as all, complete, or comprehensive are not allowed. Sales talks and testimonials are considered advertising.

Frank has a life insurance policy in which he chooses to have the dividends increase the death benefit. Which Dividend Option did he select? A Fixed Amount B Paid-Up Option C Paid-Up Additions D Acceleration of Endowment

C -Paid-Up Additions Frank's objective is to use his dividends to increase the death benefit. Paid-Up Additions purchases single premium additional permanent benefits at the insured's attained age. The additional insurance is added to the face amount and it generates cash values and dividends as if the paid-up additional benefit was part of the original policy.

Jill wants to know how much to put into her annuity in order to receive the greatest benefit payment amount. Which of the following will provide her with the largest monthly income regardless of the settlement option selected? A $250,000 B $750,000 C $1,000,000 D $500,000

C- $1,000,000 All other factors being equal, the larger the premium deposit, the larger the benefit payment.

Every order by the Commissioner of Insurance suspending any license shall specify the period during which suspension will be effective but in no event exceed how many months? A 24 B 18 C 12 D 36

C- 12 Every order by the Commissioner of Insurance suspending any license shall specify the period during which suspension will be effective but in no event exceed 12 months.

Failure to take a required minimum distribution (RMD) can lead to a ________ tax penalty. A 20% B 15% C 50% D 10%

C- 50% A 50% tax penalty applies to any failure to take all or part of an annual RMD.

Which of the following is a typical benefit period for a group short-term disability benefit? A 5 years B To age 65 C 52 weeks D 2 years

C- 52 weeks Short-Term Disability Income plans are characterized by maximum benefits for periods of rather short duration, such as 13, 26, or 52 weeks.

A health policy may not establish a probationary or waiting period exceeding how many months? A 18 B 9 C 6 D 12

C- 6 A health policy may not establish a probationary or waiting period exceeding 6 months.

Which of the following is incorrect regarding the group underwriting process? A New employees usually become eligible to enroll after a waiting period B Evidence of insurability is not required since premiums are adjusted annually by evaluating the group and the claims experience C Adverse selection is not a concern for group contracts D The insurer's office location is not a cost factor

C- Adverse selection is not a concern for group contracts Adverse selection is a major underwriting concern for group contracts.

Other than the applicant, which signature is required on an application? A Insurance commissioner B Executive officer of the insurer C Agent D Beneficiary

C- Agent The applicant and the agent are required to sign and application for insurance. If the insured is not the applicant and is not a minor, a signature is also required.

Under the Health care False Claims Act, making a fraudulent claim against a health care policy is punishable: A In civil court with a civil fine B Only as an administrative matter C As a felony D As a criminal misdemeanor

C- As a felony Making a false claim is a Class C Felony punishable by 5 years in prison, a $10,000 fine or both.

If a father were to add a Child Rider to a policy to cover his children, when would coverage become effective for a newborn? A At 1 year of age B At 14 or 15 weeks of age C At 14 or 15 days of age D At birth

C- At 14 or 15 days of age Children born after the rider is issued are covered automatically after 14 or 15 days, depending on the insurer, at no additional premium.

Which provision of group health plans is used to determine primary and secondary coverage when an insured is covered by more than one insurance plan? A Extension of Benefits B Schedule of Benefits C Coordination of Benefits D Primary Care Coverage

C- Coordination of Benefits The Coordination of Benefits provision describes how primary and secondary coverage will be determined when an insured is covered by more than one group policy.

When a policy is mailed to an insured by an insurer, it is considered to be: A Purchased B Rated C Delivered D Issued

C- Delivered A policy may be delivered by registered or certified mail with a signed receipt of delivery. 'Constructive delivery' occurs when the insurer places the policy with the delivery service and no longer has physical custody of the policy.

Before taking an application for an annuity, it is important to: A Ascertain if the insurer is still issuing the product B Determine the education level of the prospect C Determine the suitability of the product to the intended purchaser D Investigate the background and work history of the applicant

C- Determine the suitability of the product to the intended purchaser While annuities provide many types of benefits, they are not suitable for everyone and in every situation.

If the beneficiary is concerned about a payout for a particular period of time, the _______ settlement option should be selected. A Joint and Survivor B Life with Period Certain C Fixed Period D Fixed Amount

C- Fixed Period Fixed Period Payments are guaranteed for a specified period of time, such as 10 or 20 years, after which time payments will cease. The proceeds and interest are used to make the payments.

Under Small Employer Medical Expense Insurance, the insurer can nonrenew the health benefit plan for all of the following, except: A Misrepresentation by the small employer on the application B Nonpayment of premium C High claim frequency D An insufficient number of individuals under the plan to meet participation requirements Good Job!

C- High claim frequency Claim frequency cannot be a basis for nonrenewal or cancellation. All of the other possible answers are a basis for nonrenewal or cancellation under Small Employer Medical Expense Insurance.

Fred owns a 40-Pay Life Policy. He designated his wife, Ethel, as primary beneficiary. Upon Fred's death, Ethel receives a set amount for life. Fred chose which Settlement Option? A Extended Term B Fixed Period C Life Income Only D Joint Life

C- Life Income Only Life Income Only guarantees payment for the lifetime of the recipient. Extended term is a nonforfeiture option.

__________ insurance policies do not pay dividends to policyowners. A Participating B Reciprocal C Nonparticipating D Risk retention

C- Nonparticipating Participating policies pay dividends, a refund of excess premiums. Mutual companies may issue participating policies. Nonparticipating policies issued by Stock companies do not pay dividends to policyholders.

All of the following actions are prohibited as they relate to the marketing and sale of Medicare Supplements, except: A Attained age rating B High-pressure tactics C Pre-existing condition exclusions D Cold-lead advertising

C- Pre-existing condition exclusions Medicare Supplements may have a 6-month pre-existing condition exclusion.

Annuities are primarily designed to accumulate funds for a(n) _________ fund. A Mortgage B College C Retirement D Emergency

C- Retirement While the accumulation of money can be for a variety of reasons, an annuity is primarily designed to accumulate funds for retirement.

Which of the following statements regarding an insurable risk is FALSE? A There must be a large number of homogeneous units B The chance of loss must be calculable C The loss must cause an economic hardship on the insurer D The insured event must be accidental

C- The loss must cause an economic hardship on the insurer The loss must cause an economic or financial hardship on the insured, not the insurer.

The insurer's consideration is __________ while the applicant's consideration is ________. A Providing claim forms / Submitting proof of death B Issuing the policy / Submitting the application C Their promise to pay the claim / The application and premium payment D Hiring and training a producer / Listening to the sales presentation

C- Their promise to pay the claim / The application and premium payment The consideration clause states what each party exchanges in the contract. The policyowner must pay something of value (premium) in exchange for the insurer's promise to pay the benefits. Policies are issued in consideration of the application and the payment of premium(s).

All of the following are elements of a contract, EXCEPT: A Offer and acceptance B Legal purpose C Authority D Consideration

Cv Authority Enforceable contracts must include: offer and acceptance, consideration (exchange of value), competent parties, and legal purpose. Authority is not considered one of the elements of a legal contract.

W has a health insurance policy with an 80/20 coinsurance, a $1,000 deductible. If in January W goes into the hospital for an overnight stay, the bill coming to $2,000, what will W pay? A $200 B $800 C $1,000 D $1,200

D $1,200 After satisfying the deductible ($1,000) the co-insurance kicks-in (20% x $1,000). The deductible plus the co-insurance is W's responsibility.

An evaluation of Simon's past earnings reveals his average earned monthly income to be about $4,000 monthly. The greatest amount of benefit that Simon will likely be able to purchase under a Disability Income Policy, in order to reduce malingering in the event of a claim, is: A $1,000 monthly B $4,000 monthly C $2,000 monthly D $2,500 monthly

D $2,500 monthly Benefits are usually determined as a percentage of the insured's current earnings, normally 60 to 70%. Simon would be unlikely to obtain 100% of his income as a disability benefit.

C has a $100,000 traditional whole life insurance policy with a $30,000 cash surrender value. What is the insurer's net amount at risk? A $100,000 B $130,000 C $30,000 D $70,000

D $70,000 The insurer's net amount at risk is the difference between the face amount and the cash surrender values. Here, it is $70,000 ($100,000 - $30,000).

The Commissioner may issue a temporary producer license for up to _____ days without an exam as necessary for servicing an insurer in certain cases. A 240 B 270 C 210 D 180

D 180 The Commissioner may issue a temporary producer license for up to 180 days without an exam as necessary for servicing an insurer in certain cases

For an insured to be deemed terminally ill under the accelerated death benefit rider, he or she must be expected to live no more than _____ months. A 6 B 12 C 18 D 24

D 24 Generally, the rider will state that terminally ill means life expectancy is less than 24 months.

An insurance producer must report to the Commissioner any administrative action taken against the producer in another jurisdiction within ___ days of the final resolution of the matter. A 31 B 20 C 14 D 30

D 30 An insurance producer, title insurance agent, or adjuster must report to the Commissioner any administrative action taken against the insurance producer, title insurance agent, or adjuster in another jurisdiction or by another governmental agency in this state within 30 days of the final resolution of the matter.

In order to be able to sell, solicit, or negotiate LTC insurance after successfully completing his/her initial LTC coverage education, at least _____ hours of continuing education must be completed every 24 months. A 3 B 6 C 2 D 4

D 4 A person may not sell, solicit, or negotiate LTC insurance unless he/she is a licensed producer and has successfully completed LTC coverage education which consists of a one-time, 8-hour course before being authorized to solicit or sell LTC insurance and in order to continue being able to do so at least 4 hours of continuing education must be completed every 24 months.

A producer must establish and maintain records and an appropriate accounting system for all premiums and return premiums he/she receives subject to inspection by the Commissioner of Insurance for _____ years immediately after the transaction's date. A 3 B 2 C 4 D 5

D 5 A producer must establish and maintain records and an appropriate accounting system for all premiums and return premiums he/she receives subject to inspection by the Commissioner of Insurance for 5 years immediately after the transaction's date.

A Small Employer is defined as any person, firm, corporation, partnership, or association that is actively engaged in business and has ______ employees or less. A 2 B 100 C 20 D 50

D 50 A Small Employer is defined as any person, firm, corporation, partnership, or association that is actively engaged in business and has 50 employees or less.

Which one of the following regarding the Life-Disability Insurance Guaranty Association and the Washington Insurance Guaranty Association is false? A The purpose of the Life-Disability Insurance Guaranty Association and the Washington Insurance Guaranty Association is to pay covered claims under certain policies when an insurer cannot pay due to the insurer's insolvency to avoid claimants' financial losses B The Life-Disability Insurance Guaranty Association and the Washington Insurance Guaranty Association assesses each member insurer an amount equal to the proportion of its net direct written premiums in the previous yeaNo person may make any statement using the Life-Disability Insurance Guaranty Association and the Washington Insurance Guaranty Association's existence to sell, solicit, or induce the purchase of any form of insurance.r to total net direct written premiums in the previous year for all member insurers C A policyowner must be given, upon request, a summary document describing the Life-Disability Insurance Guaranty Association and the Washington Insurance Guaranty Association's general purposes and current limitations D A licensee may use the Life-Disability Insurance Guaranty Association and the Washington Insurance Guaranty Association's existence to sell, solicit, or induce the purchase of any form of insurance

D A licensee may use the Life-Disability Insurance Guaranty Association and the Washington Insurance Guaranty Association's existence to sell, solicit, or induce the purchase of any form of insurance No person may make any statement using the Life-Disability Insurance Guaranty Association and the Washington Insurance Guaranty Association's existence to sell, solicit, or induce the purchase of any form of insurance.

J took out a life policy when he was 35. It had a conversion feature that he exercised at age 45. Age 45 is referred to as his ____ age. A Renewal B Issue C Effective D Attained

D Attained Attained age is the insured's age at any point in time, typically used at renewal or conversion.

If the policyowner can withdraw funds from an annuity without surrender charges in the event interest crediting rates fall by more than a specific amount, this is referred to as a(n) ____________ provision. A Refund B Cancellation C Free look D Bailout

D Bailout The bailout provision allows the policyowner an opportunity to consider other savings and investing options if the insurer's interest crediting rate falls by a certain amount as specified in the policy.

With equity-indexed life, the interest credited to the policy is: A Declared by the insurer's board of directors B Equal to the dividends paid on a stock index's underlying securities C Established by the full amount of a stock market advance, including dividends D Based on a percentage of the increase in a stipulated stock index

D Based on a percentage of the increase in a stipulated stock index When there is an increase in the specified stock market index, a given percentage of the gain is used to determine the interest credited to the policy.

Which of the following is not a Mandatory Uniform Provision? A Reinstatement B Payment of Claims C Physical Exam and Autopsy D Conformity with State Statutes

D Conformity with State Statutes Conformity with State Statutes is an Optional Uniform Provision.

When a policy is mailed to an insured by an insurer, it is considered to be: A Purchased B Rated C Issued D Delivered

D Delivered A policy may be delivered by registered or certified mail with a signed receipt of delivery. 'Constructive delivery' occurs when the insurer places the policy with the delivery service and no longer has physical custody of the policy.

Which of the following is consistent with group health underwriting? A Smokers pay a higher rate B Participants must submit to individual physical exams C Individual health histories are required D Each member of the group is covered regardless of his or her health history

D Each member of the group is covered regardless of his or her health history Group health insurance does not usually require individual underwriting, and the group is either accepted or rejected as a whole. If accepted, all of the group members are covered, regardless of their health history.

All of the following statements regarding the treatment of Chemical Dependency by health plans in Washington are correct, except: A HMOs may apply a waiting period or pre-existing condition limitation B Cost sharing amounts for chemical dependency services may not be more than for other medical and surgical services C HMOs must cover medically necessary detoxification as an emergency medical condition D HMOs often exclude chemical dependency

D HMOs often exclude chemical dependency HMOs must cover chemical dependency.

An applicant determined to have below average risk of loss would be: A Issued a standard policy B Issued a rated policy C Declined for coverage D Issued a preferred policy

D Issued a preferred policy In this case, 'below average' is a good thing. A below average risk is preferred because there is less of a chance of a claim being made.

The Commissioner may place on probation, suspend, revoke, or refuse to issue or renew a license for any one or more of the following causes, except: A Having an insurance producer license, or its equivalent, denied, suspended, or revoked in any other state, province, district, or territory B Improperly withholding, misappropriating, or converting any monies or properties received in the course of doing insurance business C Having admitted or been found to have committed any insurance, unfair trade practice, or fraud D Knowingly accepting insurance business from a licensed person

D Knowingly accepting insurance business from a licensed person The Commissioner may place on probation, suspend, revoke, or refuse to issue or renew a license for knowingly accepting insurance business from a person who is required to be licensed but is not.

Which type of Accident and Health policy would provide reimbursement for expenses involved with a broken hip? A Disability Income Policy B Hospital Indemnity C Accidental Death and Dismemberment Policy D Medical Expense Policy

D Medical Expense Policy The question asks about reimbursement for expenses, not paying benefits for death, dismemberment, or loss of income. Although the Hospital Indemnity policy would pay a benefit if the insured received treatment in a hospital, the benefit would be an indemnity payment, not a reimbursement for expenses.

The insured may select a managed care version of a traditional Medicare Supplement Policy at a lower premium by choosing a policy that limits care to a specific list of hospitals and physicians. This would be called a: A Medicaid Select Policy B Medicaid Supplement Policy C Medicare Supplement Policy D Medicare Select Policy

D Medicare Select Policy Medicare Select is a variation of a traditional Medicare Supplement Policy that may require you to use specific hospitals and doctors within its network to be eligible for full benefits. Non-network expenses are paid to the same extent that Medicare covers the cost. Medicare Select is not sold in all states.

The Insurance Commissioner may place on probation, suspend, revoke, or refuse to issue or renew a license for any one or more of the following causes, except: A Failing to comply with a court order B Providing incorrect, misleading, incomplete, or materially untrue information in the license application C Improperly using notes or any other reference material to complete an examination for an insurance license D Obtaining a loan from an insurance client that is a financial institution or who is related to the insurance producer by birth, marriage, or adoption

D Obtaining a loan from an insurance client that is a financial institution or who is related to the insurance producer by birth, marriage, or adoption Obtaining a loan from an insurance client that is not a financial institution or who is not related to the insurance producer by birth, marriage, or adoption, unless the Commissioner has permitted such arrangements, would be cause for the Insurance Commissioner to place on probation, suspend, revoke, or refuse to issue or renew a license.

Beth owns a 20-Pay Life participating policy. She has decided that the dividends should be applied toward future premiums. Which Dividend Option did she choose? A Accumulate at Interest B Paid-Up Option C Cash D Premium Reduction

D Premium Reduction The Dividend Option that allows the dividends to be applied toward the next premium due is Premium Reduction.

Which of the following statements regarding long-term care insurance is correct? A Association group plans are available to small groups of 2-50 members B Lump sum, accelerated death benefits offered by life policies are considered LTCI plans C The minimum benefit period is 24 months D Qualified LTC policies offer deductible premiums and tax-free benefits

D Qualified LTC policies offer deductible premiums and tax-free benefits A qualified LTCI policy refers to a one that allows the deduction of premiums and tax-free receipt of benefits. An LTC insurance policy (tax qualified or not) must have at least a 12 month benefit period.

An individual owns a variable annuity. Upon annuitization, the number of Annuity Units on which the benefit amount is based will __________ from month to month. A Decrease B Vary C Increase D Remain the same

D Remain the same It is important that the individual understand that upon annuitization, the number of units used to calculate the benefit amount will always be the same. It will be the unit value that fluctuates according to the performance of the separate account(s).

Sara applies for a $100,000 30 year level term life insurance policy. The producer quoted her a price of $750 annually if issued as applied for. She wants to make sure that the policy premiums are taken care of just in case she has a total disability. The policy is issued but the premium is now $825. What is the most likely reason why the overall premium increased? A Sara just increased the face amount of the policy and the premiums reflect that B Sara was most likely issued a policy type other than applied for C The policy was not issued at the underwriting class quoted D Sara now has added a waiver of premium rider, which requires an additional premium payment

D Sara now has added a waiver of premium rider, which requires an additional premium payment A waiver of premium rider has a premium associated with it. The combination of the base policy and the rider is what Sara must now pay if she wants both benefits in the policy.

Which of the following two documents always constitutes part of the entire contract? A Policy and Attending Physician's Statement B Application and Agent's Report C Policy illustration and Agent's Report D The application and policy

D The application and policy The entire contract is comprised of the policy itself, the application and any riders attached. The Agent's Report and APS are not included.

Which statement is incorrect regarding COBRA? A The employer may require the former employee or beneficiary to pay an amount equal to 102% of the premium B Coverage continues for 29 months for individuals receiving Social Security disability C Evidence of insurability is not required to continue coverage under COBRA D The employee or beneficiary must respond to the notification of his/her right to continue coverage within 90 days, if he/she wants to continue the coverage

D The employee or beneficiary must respond to the notification of his/her right to continue coverage within 90 days, if he/she wants to continue the coverage The employee or beneficiary must notify the employer within 60 days if he/she wants to continue the coverage.

For the most part, the highest authority for insurance regulation is: A The Federal Trade Commission (FTC) B The National Association of Insurance Commissioners (NAIC) C The Interstate Commerce Commission (ICC) D The individual states

D The individual states States have the authority to regulate insurance without interference from federal regulation, unless federal law specifically provides otherwise.

When an insured is discharged from the military, what happens to health insurance coverage that was in place prior to being called up for active military service? A The insured will have to go through the normal waiting period as if it were a reinstatement B The insured will be subject to service-related pre-existing condition exclusions C The insured will have to apply for new coverage, but can obtain a military discount D The insured will be permitted to resume coverage and premiums without any waiting periods

D The insured will be permitted to resume coverage and premiums without any waiting periods Under the military suspension provision, individual plans may suspend coverage (and premium) during active military service. When the insured is no longer serving, these individuals will be permitted to resume coverage and premiums without any waiting periods.

All of the following are true regarding re-entry term, except: A The new policy's premium will be based on the rates in effect by the insurer at the time of re-entry B The new policy's premium will be based on the premium class approved by the company C The new policy's premiums will be based on the insured's attained age D The new policy's premium will be based on the insured's original age

D The new policy's premium will be based on the insured's original age The new policy's premium will be based on the insured's attained age, the rates in effect by the insurer at the time of re-entry, and the premium class approved by the company.

Qualified plan employer contributions are tax deductible when _________. A The employee makes a contribution B The employee dies C The employee retires D They are made

D They are made Employer contributions are immediately tax deductible.

A partial withdrawal is permitted on which of the following policies? A Whole Life B Variable Whole Life C Current Assumption Whole Life D Universal Life

D Universal Life Policies on a universal life platform allow for partial withdrawals.

Which of the following is not a fixed type of an annuity? A Guaranteed B Fixed C Indexed D Variable

D Variable A variable annuity is not a fixed type of annuity since it is supported by the separate account and not the general account.

ncreases in insurance protection to keep a Current Assumption policy from endowing is provided:D Without evidence of insurability A With simply part 1 of the application completed B With full underwriting C With limited underwriting D Without evidence of insurability

D Without evidence of insurability It is possible that the cash value will increase too quickly and could cause the policy to mature prior to age 100. To prevent this from happening, the insurer will add a corridor of insurance protection without requiring evidence of insurability to keep the policy from endowing.

Unless the policy was issued as part of a replacement sale, a policyowner may return the policy within _____ days after receipt for a premium refund if unsatisfied for any reason. A 30 B 20 C 15 D 10

D- 10 A policyowner may return the policy within 10 days after receipt for a premium refund if unsatisfied for any reason unless it is a replacement sale in which case the insured has 20 days.

he pregnancy discrimination act applies to groups with ______ or more employees. A 50 B 20 C 10 D 15

D- 15 The pregnancy discrimination act applies to groups with 15 or more employees.

Premiums paid to reinstate a health policy cannot be applied to premiums more than days past due. A 90 B 45 C 30 D 60

D- 60 The correct answer is 60 days - 90 days refers to proof of loss. 30 days is sometimes a free-look period. 20 days refers to Notice of Claim.

A long-term care policy can exclude from coverage all of the following, except: A Hospitalization (acute care) B Intentionally self-inflicted injuries C Rest cures D Alzheimer's disease

D- Alzheimer's disease Alzheimer's disease cannot be excluded from long-term care coverage.

A generic brochure developed by the NAIC to provide consumers with descriptions of basic types of life insurance as well as the comparative costs of each is called the _______. A Sales Illustration B Consumer Information Kit C Policy Summary D Buyer's Guide

D- Buyer's Guide It is required that prospective life insurance buyers receive the NAIC Buyer's Guide to assist them in their life insurance purchase decision.

The value within a permanent life insurance policy that the policyowner can access through a policy loan or policy surrender is known as the ___________. A Endowment Value B Annuity Value C Rider Value D Cash Value

D- Cash Value The policyowner has the right to access the cash value through policy loans or policy surrender.

The holder of any license that has been revoked or suspended must surrender the license certificate to the __________ at the Commissioner of Insurance's request. A Governor B Attorney General C Insurer D Commissioner of Insurance

D- Commissioner of Insurance The holder of any license that has been revoked or suspended must surrender the license certificate to the Commissioner of Insurance at the Commissioner's request.

Which type of insurance policy combines Basic Medical Expense Coverage with Major Medical Coverage? A Hospital Expense B Surgical Expense C Supplemental Major Medical D Comprehensive Major Medical

D- Comprehensive Major Medical

Which of the following qualified plans puts the investment risk entirely on the employer sponsoring the plan? A Profit Sharing B Contribution C 401(k) D Defined Benefit

D- Defined Benefit In a defined benefit plan the sponsoring employer takes on the responsibility for making sure the money will be available to fund the pension retirement checks for retired employees.

Home Health Care benefits under a LTC Policy may be limited or excluded by: A Limiting benefits to services provided by Medicare-certified providers B Requiring the existence of an acute condition C Requiring a need for care in a nursing home D Excluding benefits for conditions caused by war or acts of war

D- Excluding benefits for conditions caused by war or acts of war

The Social Security System is funded through: A Internal Revenue Service (IRS) income taxes B The U.S. Treasury C State income taxes D Federal Insurance Contribution Act (FICA) taxes

D- Federal Insurance Contribution Act (FICA) taxes The Social Security System Funding is provided by both employee and employer through the Federal Insurance Contributions Act (FICA) tax. The employer withholds the employee's tax and pays it along with the employer's portion. Self-employed individuals pay an amount equal to the total of an employer and employee payment.

Applicants must consent to be tested and be informed that testing for ________ may determine insurability. A Nicotine B Illegal drugs C Blood alcohol D HIV

D- HIV Applicants must consent to be tested for HIV and be informed that testing for HIV may determine insurability.

A(n)____________ is the person or entity that is covered by an insurance policy. A Owner B Producer C Agency D Insured

D- Insured The insured is the person whose life is being used for insurability purposes for a life and/or health insurance policy.

The ______________ clause is the insurance company's promise to pay the policy's death benefit to the named beneficiary, after receiving due proof of death of the insured, as long as the policy is in force. A Consideration B Incontestability C Entire Contract D Insuring

D- Insuring The insuring clause is the insurance company's promise to pay the policy's death benefit to the named beneficiary, after receiving due proof of death of the insured, as long as the policy is in force.

All of the following are life insurance disability riders, except: A Disability Income Benefit B Payor Benefit C Waiver of Premium D Jumping Juvenile

D- Jumping Juvenile A payor benefit can be added to a jumping juvenile policy.

A policy that only covers cancer is considered a: A AD&D plan B Blanket Insurance plan C Hospital Income plan D Limited sickness plan

D- Limited sickness plan Critical Illness, Dread Disease, or Limited Sickness Plans provide specific benefits for a specified sickness, such as Cancer Plans and Heart Disease Plans.

A program designed to provide increased assistance to those who are unable to pay for their medical needs is known as: A State Supplemental Payment Program B Supplemental Security Income C Medicare Part A D Medicaid

D- Medicaid Medicaid (in California, Medi-Cal) is the federal and state administered program that provides increased assistance to those who are unable to pay for their own medical needs.

Which statement regarding Medicare is not true? A It is a federal health program for people 65 and older and others of any age who have received Social Security Disability Benefits for at least 2 years B Hospitals and other providers of health care that want to participate in the Medicare program must be licensed by the state C The initial enrollment period lasts 7 months and begins on the 1st day of the 3rd month before one is eligible for Medicare D Medicare is the primary payor to any employer group health plan coverage

D- Medicare is the primary payor to any employer group health plan coverage Group health plans with 20 or more employees are primary to Medicare and pay first.

Which of the following is a limited form of medical expense coverage added to a disability income policy? A Additional monthly benefit rider B Hospital confinement rider C Social insurance supplement rider D Non-disabling injury rider

D- Non-disabling injury rider A Non-Disabling Injury Rider does not pay disability income, but pays medical expenses related to an injury that does not result in total disability (emergency room, x-rays, durable medical equipment, etc.). It is a limited form of medical expense coverage added to a disability income policy.

The name of the beneficiary designation that will pay a deceased beneficiary's share to the heirs of that beneficiary who predeceases the insured is called: A Per individual B Per capita C Per class D Per stirpes

D- Per stirpes Per stirpes is known as through the roots so the heirs of a deceased beneficiary will stand in for them and collect the deceased beneficiary's share of the proceeds.

Which of the following has primary responsibility for ensuring that the application is filled out completely? A Actuary B Insurer C Home office underwriter D Producer

D- Producer It is the agent/producer's responsibility to make certain the application is filled out completely, correctly, and to the best of his/her knowledge.

A whole life policy: A Is a single premium policy that endows at a specific age specified in the contract B Requires the insured to pay premiums to age 65 and endows at age 120 C Requires the insured to pay premiums to age 90 and endows at age 100 D Requires the insured to pay premiums for life and endows at age 100

D- Requires the insured to pay premiums for life and endows at age 100 The whole life policy gets its name from the fact that the insured policyowner must pay premiums through his or her entire life and endow at age 100, whichever comes first.

If the insured outlives all of the beneficiaries named in the policy and then dies, by default who receives the death benefit? A The treasury of the state where the insured resided B A tertiary trust C The state Guaranty Association D The insured's estate

D- The insured's estate

All of the following are true regarding changes or modifications to insurance policies, except: A They must be in writing B They must be approved by the policyowner C They must be signed-off by an executive officer of the insurer D They can be taken care of by the producer

D- They can be taken care of by the producer Changes or modifications must be in writing, signed by an executive officer of the insurer, approved by the policyowner and made part of the entire contract. A producer cannot alter, change, modify or waive any policy provisions.

All of the following are true of Blue Cross and Blue Shield Associations, except: A They have traditionally offered benefits in the form of services, not indemnity or reimbursement plans B They make payments directly to the providers of services under a contractual agreement C In most states, they are considered not-for-profit organizations, and are regulated under special legislation D They specialize only in sponsoring group plans

D- They specialize only in sponsoring group plans

Harry was hospitalized and in a coma for 6 months. When does proof of loss for this claim have to be submitted? A Anytime, since he was in a coma and obviously could not submit a claim B Within 2 years, covered under the contestable period C An executor would be appointed by the courts to handle the necessary paperwork D Within 1 year, unless he suffers legal incapacity

D- Within 1 year, unless he suffers legal incapacity The Proof of Loss Provision (a Mandatory Uniform Provision) stipulates that the insured must provide proof of the loss within 90 days of the loss, or within in the shortest time possible, but not to exceed 1 year unless the insured suffers legal incapacity. Since Harry was in a coma for 6 months, it would not have been possible for him to file a claim within the 90-day time period.

C has a $100,000 traditional whole life insurance policy with a $30,000 cash surrender value. What is the insurer's net amount at risk? A $130,000 B $30,000 C $100,000 D $70,000

D-$70,000 The insurer's net amount at risk is the difference between the face amount and the cash surrender values. Here, it is $70,000 ($100,000 - $30,000).

An insurer authorized to do business within this state is considered what type of insurer? A Alien B Domestic C Foreign D Admitted

D-Admitted An insurer authorized to do business in this state is referred to as admitted, and could be either domestic, foreign, or alien domiciled.

ERISA requires that those who establish qualified plans must meet certain ___________standards. A Ethical B Voluntary C Maximum D Minimum

D-Minimum ERISA requires that those who establish qualified plans must meet certain minimum standards.

All of the following are possible business uses of Disability Income Insurance, except: A Business Overhead Expense B Key Employee Insurance C Buy-Sell D Workers' Compensation

D-Workers' Compensation Disability Income Insurance would not be used to provide benefits under Workers' Compensation.

The McCarran-Ferguson Act of 1945: A Reinforced violations of the Sherman Antitrust Act B Established the Federal Insurance Office C Established the Interstate Commerce Commission as the primary regulator of insurance D Gave states the authority to regulate insurance

Gave states the authority to regulate insurance The McCarran-Ferguson Act of 1945 gives states the authority to regulate insurance without interference from federal regulation, unless federal law specifically provides otherwise.

The insurance industry is primarily regulated at the _________ level. A Insurers B State C County D Federal

B State The states have primary responsibility for regulating the insurance industry.

Every licensee must reply within _____ days in writing to an inquiry of the Insurance Commissioner about his/her insurance business. A 45 B 15 C 20 D 30

B- 15 Every licensee must reply within 15 days in writing to an inquiry of the Insurance Commissioner about his/her insurance business.

If an individual is age 65 or over and continues to work, Medicare is usually the _________ insurer to any employer group health plan the individual participates in. A Primary B Secondary C Supplemental D Tertiary

B- Secondary If an individual is age 65 or over and continues to work, Medicare is usually the secondary insurer to any employer group health plan the individual participates in.

The insurer generally assumes the investment risk in all of the following annuities, except: A Fixed B Market Value Adjustment C Variable D Equity-Indexed

C Variable The insurer's general account assets guarantee fixed-dollar annuity contracts, and the insurer bears any investment risk.

The annuity settlement option that pays out the highest monthly income for as long as the annuitant lives, and leaves no residual value upon the annuitant's death, is the: A Life Income with Refund Option B Life Income Joint and Survivor Option C Life Income Option D Joint Life Option

C- Life Income Option The annuity Life Income Option (like the Life Income Settlement Option in life insurance) pays a benefit for as long as the annuitant lives, and upon death, all payments cease. It also provides the highest monthly income, all other factors being equal.