Alaska Life and Health Insurance State Exam
A life insurance application may be rejected on the basis of all of these factors EXCEPT
gender
A hearing must be held before a producer's license can be suspended or revoked. Prior to the hearing, the Director is required to
give written notice to the producer
A Nonforfeiture clause gives the policyowner
guaranteed values even if the policy has lapsed
A medical care provider which typically delivers health services at its own local medical facility is known as a
health maintenance organization
A policyowner would like to change the beneficiary on an insurance policy and make the change permanent. Which type of designation would fulfill this need?
irrevocable
A policyowner's rights are limited under which beneficiary designation?
irrevocable
A foreign insurance company doing business in Alaska
is a company that was formed under the laws of another state
A catastrophic illness would be best covered by which of the following health insurance plans?
major medical
A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid
mandatory income tax withholding on the transfer amount
According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options?
monthly
A Disability Income policy that only the policyowner can terminate and which the rates will never go up is considered to be
noncancellable
A "reimbursement policy" pays what amount of covered Long-Term Care expenses?
Actual covered expenses up to the daily maximum
A Hospital/Surgical Expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013?
$1,000
A producer who intentionally violates an insurance law of Alaska may face a penalty of up to
$25,000
___ of personal life insurance premiums is usually deductible for federal income tax purposes.
0%
All of the following statements about traditional individual retirement accounts are false EXCEPT
10% penalty is applied to withdrawals before age 59 1/2
A group life insurance policy insured may assign up to ____ of the insured's coverage.
100%
A non-contributory plan requires ____ participation of all eligible employees.
100%
A 15-year mortgage is best protected by what kind of life policy?
15-year decreasing term
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?
20-Pay Life accumulates cash value faster than Straight Life
A producer must notify the Director within ____ days of a felony conviction
30
According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid?
31 days
All are true statements regarding the underwriting process, EXCEPT:
AIDS and HIV virus exams can be conducted in a discriminatory fashion
A policyowner may generate taxable income from which of the following Dividend Options?
Accumulation at interest
A pilot applies for Life insurance. The insurer approves the application with a $10 additional monthly premium modification due to the risk involved. The pilot declines the additional premium modification. The insurer will then likely issue the coverage with a(n)
Aviation exclusion
A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following?
Aviation exclusion
All of the following statements about Major Medical benefits are true, EXCEPT:
Benefits have no maximum limit
Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies?
Blanket Accident policy
A policy loan is made possible by which of these life insurance policy features?
Cash value provision
A company that owns a life insurance policy on one of its key employees may do all of the following EXCEPT
Change the policy's interest rate
A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?
Claim will be paid and coverage will remain in force
A Major Medical policy typically contains a provision that requires the insurer to pay only part of a loss, while the balance is paid by the insured. This provision is called
Coinsurance
A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed?
Company X
A 45 year-old woman won $100,000 in a scratch-off lottery ticket. She purchased an annuity that will pay her $1,500 per month beginning at age 60. Which of these annuities did this woman purchase?
Deferred fixed annuity
A CEO's personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant?
Disability Income
A characteristic of Preferred Provider Organizations (PPOs) would be:
Discounted fees for the patient
A producer does not have the authority to change a policy or waive any of its provisions. The health provision that best describes this statement is called the
Entire Contract
A producer must handle funds of a client or insurance company honestly and fairly and NOT use them for the producer's own purposes. This is called
Fiduciary responsibility
After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?
File written proof of loss
A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow?
Guaranteed Insurability Option rider
A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?
Her group health plan
A long-term care rider in a life insurance policy pays a daily benefit in the event of which of the following?
Inability of the insured to perform more than 2 Activities of Daily Living (ADL's)
A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over?
Income taxes plus a 10% penalty tax on $30,000
A sole proprietor may use this plan ONLY if the employees of this business are included.
Keogh Pension Plan
A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value?
Life settlement contract
A policyowner is allowed to pay premiums more than once a year under which provision?
Mode of Premium
A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?
Payor provision
A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the
Policy Loan provision
A policyowner is able to choose the frequency of premium payments through what policy feature?
Premium Mode
A Medical Information Report (MIB) report may disclose which of the following:
Prior use of marjuana
A primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy. Which of the following will occur when the insured dies?
Proceeds will go to the contingent beneficiary
___ is the act of offering an applicant something of value as an inducement to purchase an insurance policy
Rebating
Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?
Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company
A(n) _____ beneficiary may be changed by the policyowner WITHOUT the consent of the beneficiary.
Revocable
A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take?
Send a notice to the MIB that the applicant was declined
___is the act of replacing existing life insurance with a new life insurance policy based upon incomplete or incorrect representations.
Twisting
A Variable Annuity has which of the following characteristics?
Underlying equity investments
A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled?
Utilities and office rent
A life policy with a death benefit and cash value that can fluctuate according to the performance of its underlying investment portfolio is referred to as:
Variable Life
A life policy that contains a monthly mortality charge as well as self-directed investment choices is called a(n)
Variable Universal Life Policy
A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached?
Waiver of Premium
A $20,000 life insurance policy application is completed, however the producer does not collect the initial premium. At what point does the coverage go into effect?
When the applicant receives the policy and pays the initial premium
A Return of Premium life insurance policy is:
Whole life and Increasing term
A Cost of Living rider gives the insured
additional death benefits
A Term Life rider offers the insured
additional life coverage
A French insurance company conducting business in Alaska would be know in Alaska as a(n)
alien company
A qualified profit-sharing plan is designed to
allow employees to participate in the profits of the company
___ is the authority given to a producer to transact business on behalf of the insurer.
appointment
A(n) _____ of benefits of a health policy transfers payments to someone other than the policyowner
assignment
ABC Insurance Company would like to issue a small employer group policy in this state. Before doing so, it is REQUIRED to
be authorized to write accident and health insurance in this state
A domestic insurance company in Alaska MUST
be organized under Alaska insurance laws
A life insurance application must be signed by all of these, EXCEPT:
beneficiary
A Health Reimbursement Arrangement MUST be established:
by the employer
All individuals covered under a group contract will receive a(n)
certificate
A Whole Life insurance policyowner does NOT have the right to
change the grace period
A prospective insured completes and signs an application for health insurance but intentionally conceals information about a pre-existing heart condition. The company issues the policy. Two months later, the insured suffers a heart attack and submits a claim. While processing the claim, the company discovers the pre-existing condition. In this situation, the company will
continue coverage but exclude the heart condition
A(n) ___ term life policy is normally used when covering an insured's mortgage balance
decreasing
Additional coverage can be added to a Whole Life policy by adding a(n):
decreasing term rider
A variable insurance policy:
does not guarantee a return on its investment accounts
A(n) _____ contained in a life insurance policy states that the policy will NOT cover certain risks.
exclusion
A Universal Life policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, cost of insurance, and the
expense charges
A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered, EXCEPT for:
experimental and investigative services
A Limited-Pay Life policy has:
premium payments limited to a specified number of years
A retirement plan that sets aside part of the company's net income for distributions to qualified employees is called a:
profit-sharing plan
A major medical policy typically:
provides benefits for reasonable and necessary medical expenses, subject to policy limits
A statement made by an insured in an insurance application that must be true to the best of one's knowledge and which becomes a part of the contract is known as
representation
A(n) _____ rider may be used to include coverage for children under their parents' life insurance policy.
term
A contract owner terminates an annuity before the income payment period begins. The owner will then receive
the current contract surrender value
A noncontributory group term life plan is characterized by:
the entire cost of the plan is paid for by the employer
A life insurance Policy Summary MUST contain
the premium cost for basic coverage applied for
A level premium indicates:
the premium is fixed for the entire duration of the contract
A disability elimination period is best described as a
time deductible
A Business Disability Buyout plan policy is designed
to pay benefits to the Corporation or other shareholders
A term life insurance policy matures:
upon the insured's death during the term of the policy
A Life insurance policyowner would like to take out a policy loan against the cash value in his Whole Life policy. The interest rate applied to this loan may vary over time. This is referred to as a(n) ___ rate loan.
variable
A(n) _____ annuity pays benefits based on units rather than stated dollar amounts.
variable
A life insurance policyowner may sell their policy to a(n) ___ in order to receive a percentage of the policy's face value.
viatical settlement provider
ABC Insurance Company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has
waived one of its legal rights
A life insurance policy that provides a policyowner with cash value along with a level face amount is called:
whole life
A policy that becomes a Modified Endowment Contract (MEC):
will lose many of its tax advantages
