Comprehensive-missed questions
Generally, an individual is eligible to enroll in Medicare at age: A. 59 1/2 B. 62 C. 65 D. 67
65
What percentage of employee participation is required for a contributory employer group plan? A. 25% B. 50% C. 75% D. 100%
75% for contributory
The Double Indemnity Rider requires that the insured die within _____ days of the accident. A. 120 B. 180 C. 365 D. 90
90 days
Part A of Medicare pays for: A. None of the answers listed B. Dental expenses C. Hospital expenses D. Outpatient expenses
Hospital expenses
Jason has a Whole Life insurance policy with a face amount of $100,000, an annual premium of $1,000, and a cash value of $10,000. If he wants to borrow money from the insurer, what is the maximum he can obtain? A. $100,000 B. $10,000 C. The sum of the premiums paid up to that point in time D. $90,000
$10,000 *When using a whole life policy for collateral for a loan from the insurer, the maximum amount of that loan is the amount of cash value in the policy.
Victor's AGI is $100,000. His disability income policy premium was $3,500, his LTC premium was $4,000, and he had $5,500 in unreimbursed medical expenses. Based on this information, Victor may deduct: A. $3,000 B. $2,000 C. $5,500 D. $9,500
$2,000 *While the total amount is $13,000, part of that total refers to disability insurance premiums, which are not deductible. Minus that amount, the other expenses add up to $9,500, which exceeds 7.5% of Victor's AGI by $2,000. Therefore, Victor can deduct the excess amount.
Louise purchased a disability policy when her salary was $4,000 a month. Later, she lost that job and her salary was reduced to $2,000 a month. Three years ago, she became self-employed and now receives $3,500 a month. The maximum disability benefit she might expect will be based on which salary amount? A. $3,500 B. $4,000 C. The weighted average of her income levels over the life of the contract D. $2,000
$3,500 *Relations of Earnings to Insurance (an Optional Uniform Provision) establishes that disability benefits may not exceed the monthly earnings of an insured at the time the disability commenced, or his/her average earnings for the 2 years immediately preceding the disability, whichever is greater.
During a sale, Producer L misrepresented the conditions of an insurance policy to a potential purchaser. The Commissioner finds after a hearing that Producer L knowingly engaged in the unfair practice and orders payment of a monetary penalty of what amount? A. $5,000 B. $1,000 C. $50,000 D. $10,000
$5,000 The Commissioner may impose a penalty of up to $5,000 per violation, not to exceed $50,000 in any 6-month period, if the person knew they were engaging in an unfair practice. If Producer L was unaware of the misrepresentation, the penalty would be no more than $1,000 per violation, not to exceed $10,000 in an 6-month period.
All employer-paid premiums for amounts above $_________ of group life insurance are reported as taxable income to the employee. A. $50,000 B. $75,000 C. $25,000 D. $100,000
$50,000
The Time Limit on Certain Defenses (Incontestable) period is _____ years under individual health and disability contracts. A. 2 B. 7 C. 3 D. 5
2 years
A Medicare Supplement Policy must include, as a core benefit, Medicare Part B coinsurance in the amount of _______. A. 15% B. 10% C. 25% D. 20%
20% *All Medicare Supplement Policies must cover as a core benefit the 20% Medicare Part B coinsurance for medical insurance.
Which of the following Whole Life insurance policies has the highest annual premium payment per $1,000 of coverage for a 35-year-old, all other factors being equal? A. 20-Pay Ordinary Whole Life B. Limited Pay Ordinary Whole Life to age 85 C. Ordinary Straight Whole Life D. 30-Pay Ordinary Whole Life
20-Pay Ordinary Whole Life *The shorter the premium-paying period, the higher the annual premium.
Insurer XYZ creates a new life insurance advertisement and maintains it in its files, subject to inspection by the Kansas Department of Insurance. How long must Insurer XYZ maintain the advertisement after discontinuing its use? A. 3 years B. 5 years C. 4 years D. 3.5 years
5 years
Insurer XYZ creates a new life insurance advertisement and maintains it in its files, subject to inspection by the Kansas Department of Insurance. How long must Insurer XYZ maintain the advertisement after discontinuing its use? A. 4 years B. 3.5 years C. 3 years D. 5 years
5 years *After discontinuing their use, advertisements must be maintained in the file for 5 years.
In a Medicare Supplement replacement sale, if the original policy has been in force for less than ______ months, the replacing insurer shall waive any time periods applicable to preexisting conditions to the extent that they have already been satisfied under the original policy. A. 9 B. 6 C. 3 D. 12
6 months
What type of policy has an endowment date, a face amount, and cash value? A. A decreasing term life insurance policy B. A mortgage life insurance policy C. A permanent life insurance policy D. A traditional group life insurance policy
A permanent life insurance policy
A life insurance applicant's answers on the application indicate that they in good health. In fact, the applicant actually has a disease that they are not aware of. The statement on the application is considered: A. A representation B. Fraudulent C. A warranty D. A concealment
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.
In Kansas, an example of a domestic company would be: A. An insurer licensed in another state and incorporated in Kansas B. A risk retention group licensed and incorporated in Kansas C. A risk retention group licensed in another state and incorporated in Kansas D. An insurer licensed in Kansas and incorporated in another state
A risk retention group licensed and incorporated in Kansas
Annuity income benefit payments are based on all of the following, except: A. Settlement option selected B. Gender C. Education level D. Age
Education Level
Accident and Health Insurance provides coverage for two major categories of perils. They are: A. Automobile and home health care B. Accidental injury and sickness C. On the job and off the job D. Driving under the influence and driving while intoxicated
Accidental injury and sickness *Accidental injury and sickness are the general perils insured. Intentional losses are excluded.
When can a policyowner make a change in the policy's coverage or other benefits if an irrevocable beneficiary has been named? A. After obtaining the insurer's consent B. After obtaining a court order C. After the irrevocable beneficiary dies D. At any time
After the irrevocable beneficiary dies *The policyowner may not change an irrevocable beneficiary unless the beneficiary dies or provides written consent for the change. If an irrevocable beneficiary is named, the owner may not make changes to the policy that affect the coverage or benefits without consent of the beneficiary.
Other than the applicant, which signature is required on an application? A. Beneficiary B. Insurance commissioner C. Executive officer of the insurer D. Agent
Agent
Which of the following children would not be covered under the parent's individual or group health insurance policy in Kansas? A. An adopted newborn child from the moment of birth if the adoption petition was filed within 45 days of the child's birth B. A child placed in the enrollee's home by a child placement agency from the date of placement if the adoption petition is filed within 280 days C. A child adopted by the enrollee from the date the adoption petition was filed D. A newborn child of the enrollee from the moment of birth
An adopted newborn child from the moment of birth if the adoption petition was filed within 45 days of the child's birth *A newborn child adopted by the enrollee is covered from the moment of birth as long as the adoption petition was filed within 31 days of the birth of the child.
Which of the following is the overall least expensive premium mode? A. Monthly B. Quarterly C. Annually D. Semi-annually
Annually
Dividends issued by mutual insurance companies: A. Are non-taxable refunds (returns) of unused or surplus premiums B. Represent a share of company profits for stockholders C. Are considered guaranteed member benefits D. Are taxable distributions to policyholders
Are non-taxable refunds (returns) of unused or surplus premiums *Since the policyowners also own the company, any policy dividends are being paid back to those who paid them in the first place; therefore, they are non-taxable refunds rather than taxable income.
When is the earliest a beneficiary designation can be made? A. At the time of policy application B. Upon policy delivery C. Upon policy renewal D. At time of claim
At the time of policy application
All of the following are nonforfeiture values, except: A. Extended term B. Reduced paid-up C. Cash surrender D. Automatic premium loan
Automatic premium loan *Nonforfeiture values go into effect after a policy lapses. The automatic premium loan will keep a policy from lapsing.
With Joint Life Insurance policies, the premium is based on the: A. Average age of both insureds B. Age in a specialized table used for this type of policy C. Age of the oldest insured D. Age of the youngest insured
Average age of both insureds
Under Kansas law, which of the following rate discrimination practices is allowed? A. Based on actuarial data B. Between a blind person and a sighted person C. Based solely on geographic location D. Based solely on the insured's age in auto liability policies
Based on actuarial data *Rate differentials must be based on sound actuarial principles. Geographic location is an allowable factor when based on sound underwriting and actuarial data, but using geographic location as the sole determining factor is prohibited. In auto policies, Kansas law prohibits discrimination on the basis of age alone.
If overdue premiums are not paid by the end of the grace period, a traditional Whole Life policy will automatically: A. Be canceled with no value B. Be reduced in face amount by the amount of the overdue premium C. Be cash surrendered D. Become extended term
Become extended term *The automatic option at the end of the grace period for a traditional Whole Life policy is the extended term nonforfeiture option. This will keep the original face amount in place for a certain number of years and days as indicated on the table inside the policy.
K owns a variable annuity with an assumed interest rate of 4%. If the actual performance of the separate account(s) is 5%, the effect on this month's income benefit check will be such that it: A. All Depends on the Separate Account(s) Selected B. Remains the Same C. Becomes Higher D. Becomes Lower
Becomes Higher *If the actual return is lower than the AIR, the monthly annuity payment will be reduced. If the actual return is equal to the AIR, the monthly annuity payment will remain the same as the previous month. If the actual return is greater than the AIR, the monthly annuity payment will increase from the previous month.
How does life insurance reduce financial loss upon the insured's death? A. By eliminating the risk B. Through reinsurance risk techniques C. By transferring the risk to the insurer D. Through applicant risk retention strategies
By transferring the risk to the insurer
Which of the following personal uses of life insurance is specifically designed to provide benefits to the policyowner while the insured is still alive? A. Estate creation B. Estate conservation C. Charitable bequests D. Cash accumulation
Cash accumulation
The bank may require its borrowers to have a life insurance policy to secure a loan in the event of the borrower's death. Which provision gives the bank proportional protection but not control of the policy? A. Consideration Clause B. Collateral Assignment C. Policy Loan Provision D. Entire Contract Clause
Collateral Assignment
Which of the following is not a Mandatory Uniform Provision? A. Reinstatement B. Conformity with State Statutes C. Physical Exam and Autopsy D. Payment of Claims
Conformity with State Statutes *Conformity with State Statutes is an Optional Uniform Provision.
J completed an application for life insurance on June 1. In Kansas, what is the earliest effective date that the policy could have in order to conserve age? A. December 1 B. June 1 C. September 1 D. May 1
December 1 *A life insurance policy may be backdated for up to 6 months to conserve age.
The Minimum Benefit Standards under a qualified LTC policy include all of the following, except: A. An Outline of Coverage must be delivered to an applicant on the initial solicitation and prior to the presentation of the application form B. Every LTC policy must include basic policy requirements in the policy provisions C. Every LTC policy must be issued as noncancellable D. Every LTC policy must offer optional inflation protection to offset the increased costs of care
Every LTC policy must be issued as noncancellable *LTC policies must contain a renewal provision that is no less favorable to the insured than GUARANTEED RENEWABLE, not noncancellable. All other possible answers are Minimum Benefit Standards to be met under LTC policies.
In Kansas, Producer J is attempting to place excess lines insurance. To do so, J must have a(n) A. Excess lines license B. Surplus lines certificate C. Appointment from the Commissioner D. Designation as the insurer's excess lines representative
Excess lines license
An insured has a $175,000 permanent life insurance policy and is having difficulty keeping up with the premium payments. Which Nonforfeiture Option would allow him to forego the premiums and retain the same face amount until the cash surrender value is exhausted? A. Premium Reduction B. Reduced Paid-Up C. Extended Term D. Cash Surrender
Extended Term *Cash Surrender is a Nonforfeiture Option that terminates the policy. Extended Term continues the same coverage until the cash value from which the premium is paid is exhausted.
The nonforfeiture option that provides coverage for the shortest duration is: A. Extended Term B. Reduced Paid-Up C. Convertible Term D. Automatic Premium Loan
Extended Term *Extended Term provides the most amount of coverage for the least amount of time. Reduced Paid-Up provides the least amount of coverage for the longest period of time. Convertible Term and Automatic Premium Loan are not nonforfeiture options.
A client wants coverage for himself as well as coverage for his wife and children all under one policy at an affordable price. Which of the following would best meet the need? A. Family Income Rider B. Family Rider C. Family Maintenance Rider D. Multiple Protection Rider
Family Rider *The Family Rider covers all members of the family with Whole Life Coverage on the head (wage earner) of the family and Level Term Coverage in the form of a rider on the spouse and children.
____________ is the initial step of the total process of insuring a health risk. A. Completing medical exams B. Collecting the premium payment C. Field underwriting D. The sales presentation
Field underwriting
The _________ period keeps a policy in force for a short time after the premium due date, allowing policyowners a little extra time to pay an overdue premium without a lapse in coverage. A. Grace B. Settlement C. Nonforfeiture D. Reinstatement
Grace
The cost of any required medical exams in the underwriting process is paid by the: A. Insurer B. Applicant C. Producer D. Insured
Insurer
Which clause in a contract would state that Jim is covered by XYZ insurer for a monthly benefit of $2,000 in the event of disability? A. Consideration Clause B. Insuring Clause C. Free Look Provision D. Entire Contract
Insuring Clause
Which of the following beneficiary designations prevents a policyowner from assigning the policy, taking a policy loan, or surrendering the policy without the beneficiaries consent? A. Class B. Incontestable C. Named D. Irrevocable
Irrevocable
Which of the following is TRUE of a term rider when attached to a permanent life policy? A. It always is in the amount of the base policy B. It can provide additional temporary coverage on the insured or on other members of the family C. It only pays out a death benefit in cases of accidental death D. It allows the policy to achieve paid up status at the end of the term
It can provide additional temporary coverage on the insured or on other members of the family
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 with Period Certain B. Life Refund C. Life Only D. Joint Life
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).
Producer Q is placing an annuity with a customer in Kansas. Before recommending a specific annuity, Producer Q should take into account all of the following, except: A. Intended use of the annuity and annual income B. Liquid net worth and the customer's illness/condition C. Age and risk tolerance D. Financial status and financial objectives
Liquid net worth and the customer's illness/condition Producers should take into account the customer's financial status—including needs, experience, objectives, liquid net worth, and existing assets—as well as the customer's age and risk tolerance. The producer should also consider if the customer has an existing annuity, will incur a surrender charge, or would benefit from product enhancements. Information about the customer's illness/condition is a requirement for the witnessed, written consent document signed by the viator in a viatical settlement.
Burt named Liz as his beneficiary; however, he did not choose a Settlement Option. At the time of his death, who determines the option to be used to receive the benefits? A. Lump sum is the automatic option when no option was preselected prior to death of the insured B. Burt's estate, since no Settlement Option was chosen C. The insurer decides when the election is not made by the policyowner prior to death D. Liz the beneficiary determines which option she would like to have
Liz the beneficiary determines which option she would like to have *If the owner of the policy does not select a Settlement Option while alive, then the beneficiary may choose an option at the time of claim.
Any policy designed to provide coverage for not less than 12 consecutive months for diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital is the definition of: A. Long-Term Care B. Residential Care C. Home Convalescent Care D. Custodial Care
Long-Term Care
Which of the following is a common exclusion in a medical expense plan: A. Loss due to an accident B. Loss due to Workers' Compensation C. Minor surgical procedure D. Office visit expense
Loss due to Workers' Compensation
Medical exams are requested in all of the following situations, except: A. Low amount of premium B. Past health history C. High amounts of coverage D. Insured's advanced age
Low amount of premium *Medical examinations are usually requested by the insurer after determining if the amount of coverage, age of applicant, or his/her health history warrants the examination. Premium has nothing to do with it.
J purchased a policy that includes a carryover provision, common accident and family deductible. J owns a _______________ policy. A. Basic Hospital B. Group Disability C. Major Medical D. Basic Medical
Major Medical *The provisions listed in the question are those typically included in a Major Medical Policy.
An individual is newly eligible for Medicare and purchases a Medicare Supplement policy. The required core benefits of the policy would include all of the following, except: A. Medicare Part A eligible expenses for hospitalization, up to 365 days B. First 3 pints of blood under Medicare Part A and Part B C. Medicare Part B deductible D. Coinsurance amount of eligible expenses under Medicare Part B
Medicare Part B deductible *Medicare Supplement plans sold to newly eligible individuals no longer cover the Medicare Part B deductible. The other coverages are part of the basic core benefits for Medicare Supplement policies.
An individual is newly eligible for Medicare and purchases a Medicare Supplement policy. The required core benefits of the policy would include all of the following, except: A. Medicare Part B deductible B. Coinsurance amount of eligible expenses under Medicare Part B C. Medicare Part A eligible expenses for hospitalization, up to 365 days D. First 3 pints of blood under Medicare Part A and Part B
Medicare Part B deductible *Medicare Supplement plans sold to newly eligible individuals no longer cover the Medicare Part B deductible. The other coverages are part of the basic core benefits for Medicare Supplement policies.
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. Residual Disability B. Recurrent Disability C. Rehabilitation Disability D. Second Disability
Recurrent Disability
Which of the following requires an annual deductible and coinsurance? A. Medicaid B. Medicare Part A hospital C. Medicare Part B medical D. Long-Term Care
Medicare Part B medical *Medicare Part B requires an annual deductible and coinsurance. Part A hospital requires a deductible per benefit period and a daily copayment. Neither Medicaid nor Long-Term Care have deductibles or coinsurance features.
Fraternal insurance companies are owned by: A. Stockholders B. Policyowners C. Directors D. Members
Members
If an accelerated death benefit is in effect, how often must the insurer provide a report showing the amount paid and the amount of the remaining benefit? A. Semi-annually B. Annually C. Quarterly D. Monthly
Monthly
Which Act was implemented in order to protect consumers from questionable Medicare Supplement Policy marketing practices? A. HIPAA B. NAIC Model Law C. COBRA D. OASDHI
NAIC Model Law *NAIC Model Law requires all Medicare Supplement policies to be standardized.
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. The remaining period certain C. Nothing D. The same amount they were receiving together
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.
When underwriting group life, the underwriter treats the group as if it were: A. A substandard risk B. Two groups, with all the males in one group and all the females in the other C. One individual D. A number of separate individuals
One individual
After the blackout period has ended, the widow or widower may receive a Social Security income benefit based on the ___________. A. FICA taxes that are paid by employers B. Social Security Death Benefit C. FICA taxes that are paid by the employees D. PIA of the deceased spouse
PIA of the deceased spouse
What should a producer do if the policy applied for is issued at a higher rate than was expected? A. Deliver the policy to the applicant and have the home office reduce the commission payout to cover the higher premium B. Personally deliver the policy, explain the rating, reinforce the value of the policy, and collect the additional premium C. Have the home office re-issue the policy for a reduced amount of coverage for the original premium quoted so that it will be easier to explain at time of delivery D. Immediately return the policy to the home office because the applicant will never accept it
Personally deliver the policy, explain the rating, reinforce the value of the policy, and collect the additional premium
Monte has a health care plan that provides benefits as an HMO if he stays within the network and provides benefits like an indemnity plan if he goes outside the network. Monte is covered under a: A. Preferred Provider Organization B. Network Model HMO C. Point-of-Service Plan D. Tri-Care Plan
Point-of-Service Plan
Each insured under a blanket accident and sickness policy issued in Kansas must be furnished a memorandum providing all of the following information, except: A. Policy adjustments for each insured as a result of individual underwriting B. Eligible persons to whom benefits are payable C. Essential coverages and conditions D. Procedure to make a claim under the policy
Policy adjustments for each insured as a result of individual underwriting *Blanket insurance policies are not individually underwritten.
The nonforfeiture option that provides coverage for the longest period of time is: A. Cash surrender value B. Reduced Paid-Up C. Automatic Premium Loan D. Extended Term
Reduced Paid-Up *Extended term provides the most amount of coverage for the least amount of time, whereas reduced paid-up provides the least amount of coverage for the longest period of time.
HIPAA ensures which of the following? A. Answers on the application are guaranteed to be true B. Privacy of health information C. The insurer must provide a copy of a third-party report to the applicant D. Notice of information practices when received by a third party
Privacy of health information
Barry has just been hired by OPQ Corporation and finds that he cannot enroll for coverage under OPQ's group health insurance plan for 30 days. This 30-day period is known as a: A. Policy Period B. Elimination Period C. Deductible D. Probationary Period
Probationary Period
The purpose of the Kansas Guaranty Association Act is to guarantee that the life or health insurer will: A. Protect policyowners in the event an insurer becomes insolvent B. Issue policies that have at least $100,000 in benefits C. Pay no more than $1,000,000 for any one life D. Remain solvent
Protect policyowners in the event an insurer becomes insolvent
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. The benefit for a qualifying disabled worker is a percentage of the PIA C. The waiting period is 5 months D. 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
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.'
For which of these policies is the individual allowed to deduct the premiums they pay that exceeds 7.5% of their adjusted gross income? A. Dental B. Workers' Compensation C. Either a long-term care policy or a group health plan D. Qualified Long-Term Care
Qualified Long-Term Care *The premiums paid for individual qualified LTC policies that exceed 7.5% of adjusted gross income may be tax deductible
_____________ are allowed as a way to access annuity values without having to elect a settlement option or surrender the contract. A. Loans B. Contract waivers C. Systematic withdrawals D. Premium deferrals
Systematic withdrawals
A universal life policy has a death benefit of $125,000 and a cash accumulation value of $15,000. Generally, what will happen to the policy if there is a $5,000 partial withdrawal? A. The policy will immediately be voided by the insurer B. The death benefit or cash accumulation will be reduced by the partial withdrawal C. The policy will be used as collateral for a loan from the insurer for which interest will be charged D. The policy will become paid up
The death benefit or cash accumulation will be reduced by the partial withdrawal *A partial withdrawal also known as a partial surrender will cause the policy to have either the face amount or cash accumulation reduced by the amount of the withdrawal.
When an insurer wishes to implement changes to a group life policy, whom must it notify? A. The group sponsor B. The beneficiaries C. Each participant individually D. Management only
The group sponsor
Which of the following is not an exemption from the licensing examination requirement? A. The individual was previously licensed in Kansas and it has been less than 2 years since such license lapsed B. The individual passed the examination, but was not properly certified due to clerical error by the insurer C. The individual is applying for an insurance producer license for credit life and health D. The individual is applying for a travel insurance producer license
The individual is applying for an insurance producer license for credit life and health *An individual applying for a license to transact credit insurance is subject to the licensing examination requirement.
Which of the following scenarios will cause the value of a life insurance policy death benefit to be included in the insured's estate? A. An employer owns a policy on the life of a key employee who dies B. The policyowner at the time the insured dies is an irrevocable life insurance trust that the insured set up C. A business partner owns a life insurance policy on the other partner that died D. The insured is also the policyowner
The insured is also the policyowner *If the policyowner and the insured are the same person, the death benefit will be included in the insured's estate.
K meets with an insurance producer, completes an application, and writes a check for the initial premium. The producer submits the application and the premium to the insurer, and a policy is issued and mailed to the producer. Two weeks later, K has still not shown up to pick up the policy. Which of the following statements is correct? A. The policy is in force and coverage began when the policy arrived at the producer's office B. The policy is not in force until the insured passes a medical exam, since the policy was not immediately given to the insured C. The policy is not in force--the policy must be physically handed to K for coverage to begin D. The policy is in force and was legally delivered when the insurer sent the policy to the producer
The policy is in force and was legally delivered when the insurer sent the policy to the producer *Since the initial premium has been paid and the policy was issued as applied, legal delivery occurs when the policy is issued by the insurer. It is at this point that a legal contract exists, since the check accompanying the application is the offer, and the issued policy is the acceptance of the offer.
A mother with a teenage son purchases a life policy on his life. The policy includes an optional rider called the Payor Benefit. What will happen to the policy if the mother dies or is disabled before her son reaches age of majority? A. The policy would pay out a modest lump sum to the beneficiary B. The premiums on the son's policy would be waived until the son reaches a specified age C. The premiums would be suspended and later paid back by the son D. The amount of coverage is reduced as the policy is paid up
The premiums on the son's policy would be waived until the son reaches a specified age *The Payor Benefit Rider is used in third-party policies in which the insured and owner are not the same. The insurer continues the policy as if the owner were still making premium payments.
Which of the following best describes the consideration on the part of an insurer? A. The acceptance of the contract B. The purpose of the contract must be legal C. The promise to pay in the event of a covered claim D. The offer of the contract
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 the receipt for the initial premium of an individual life policy is written in Kansas, all of the following are correct, except: A. The receipt may void coverage if a check or draft for the premium is not honored when presented B. The receipt may void the coverage if the application contains a material misrepresentation or was fraudulently completed C. The receipt may not exclude coverage for suicide D. The receipt may limit coverage by specifying the amount and type of temporary coverage
The receipt may not exclude coverage for suicide *The receipt MAY EXCLUDE coverage for suicide.
With a Business Overhead Expense Policy, all of the following are claims that are covered, except: A. Utilities B. The salary or profit of the business owner C. Office rent D. Employee labor
The salary or profit of the business owner
What is the intent of the suicide clause? A. To distinguish between sane and insane actions B. To pay out claims only if and when suicides are committed while sane C. To be able to pay out claims to beneficiaries whenever such a tragic event occurs D. To discourage individuals from purchasing an insurance policy while contemplating suicide
To discourage individuals from purchasing an insurance policy while contemplating suicide
In Kansas, all of the following are true regarding persons required to be licensed, except: A. The term producer never includes a broker B. An individual or business entity that is a resident of another state and licensed as a producer in another state may be licensed as a nonresident producer in Kansas C. A producer is an individual or business entity required to be licensed to transact insurance D. To qualify for a nonresident license, a nonresident producer must be in good standing in their home state
The term producer never includes a broker *The term producer does include a broker, unless otherwise specified.
Why are dividends not taxable as income when paid out to a participating policyholder? A. Because they are often the sole source of a policyholders' income B. They are paid from a non-profit organization C. To create parity with nonparticipating policies under the tax code D. They represent a return of a portion of the premium paid
They represent a return of a portion of the premium paid
If a policyowner has a whole life insurance policy with a disability waiver of premium rider, when does the rider benefit start if a qualifying disability should occur? A. After the doctor certifies the disability B. Immediately C. Typically 6 months after the disability occurs D. One year after the claim forms are received by the insurer
Typically 6 months after the disability occurs *The disability waiver of premium typically has a 6 month waiting period prior to the insurer actually waiving the premiums when a qualifying disability occurs. During the 6 month time period premiums are expected to be paid in order to keep the policy in force.
An example of ___________ is charging a lower rate to one individual who lives in a certain geographic location in which others are charged the correct higher rate. A. Unfair discrimination B. Rebating C. Boycott D. Twisting
Unfair discrimination
If the premiums are not paid on a Traditional Whole Life policy that has been in force for decades with no loan outstanding, what happens? A. The insurer mails a check to the policyowner in the amount of the policy's cash value B. The policy lapses and is of no value to the policyowner C. The policy becomes a reduced paid-up policy D. Unless specified otherwise, the cash values buy extended term
Unless specified otherwise, the cash values buy extended term *Upon non-payment of premium due, the extended term option kicks in automatically and is paid for by the cash values of the policy. The policy has nonforfeiture values which are available to the policyowner.
All of the following are examples of an absolute assignment, except: A. A donor transfers ownership of a paid-up policy to charitable organization as a donation B. Using a Life Insurance policy as collateral for a loan C. A business permits the change of ownership of a company owned policy over to a retiring executive D. A court orders the existing policyowner to change it to their ex-spouse
Using a Life Insurance policy as collateral for a loan *The owner, and only the owner, possesses all of the rights in the policy, one of which is the right to assign. When a policy is used to collaterize a loan it is referred to as a temporary or collateral assignment.
