Exam FX Test Bank
Which of the following applies to partial disability benefits? a)Benefits are reduced once an insured is no longer under a doctor's care .b)Payment is limited to a certain period of time. c)An insured is entitled to a principal sum benefit for the partial loss of a limb. d)Payment is based on termination of employment.
.b)Payment is limited to a certain period of time.
How soon from the reinstatement of a health insurance policy would a loss be covered? a)10 days b)30 days c)60 days d)7 days
a)10 days
COBRA applies to employers with at least a)20 employees. b)80 employees. c)60 employees. d)50 employees.
a)20 employees.
What document describes an insured's medical history, including diagnoses and treatments?a)Attending Physician's Statement b)Physician's Review c)Individual Medical Summary d)Comprehensive Medical History
a)Attending Physician's Statement
The type of policy that can be changed from one that does not accumulate cash value to the one that does is a a)Convertible Term Policy. b)Renewable Term Policy. c)Decreasing Term Policy. d)Whole Life Policy.
a)Convertible Term Policy.
If an insured changes his payment plan from monthly to annually, what happens to the total premium? a)Decreases b)Stays the same c)Doubles d)Increases
a)Decreases
An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day a)Elimination period. b)Blackout period. c)Probationary period. d)Waiver of benefits period.
a)Elimination period.
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a a)Guaranteed insurability rider. b)Paid-up additions option. c)Cost of living provision. d)Nonforfeiture option.
a)Guaranteed insurability rider.
An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called a)Paid-up additions. b)One-year term purchase .c)Accumulation at interest. d)Reduction of premiums.
a)Paid-up additions.
An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy? a)The insured is in an accident and incurs a large claim. b)The insured does not pay the premium. c)The insured reaches the maximum age limit specified in the policy. d)Within two years of the application, the insurer discovers a misrepresentation.
a)The insured is in an accident and incurs a large claim.
Which of the following disability income policies would have the highest premium? a)15-day waiting period / 5-year benefit period b)15-day waiting period / 10-year benefit period c)30-day waiting period / 10-year benefit period d)30-day waiting period / 5-year benefit period
b)15-day waiting period / 10-year benefit period
The provision that provides for the sharing of expenses between the insured and the insurance company is a)Divided cost. b)Coinsurance. c)Stop-loss. d)Deductible.
b)Coinsurance.
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income? a)Liquidation period b)Depreciation period c)Annuitization period d)Pay-out period
b)Depreciation period
What required provision protects against unintentional lapse of the policy? a)Reinstatement b)Grace period c)Assignment d)Payment of premiums
b)Grace period
In life insurance policies, cash value increases a)Are only taxed when the owner reaches age 65. b)Grow tax deferred. c)Are income taxable immediately. d)Are taxed annually.
b)Grow tax deferred.
What type of insurance would be used for a Return of Premium rider? a)Annually Renewable Term b)Increasing Term c)Level Term d)Decreasing Term
b)Increasing Term
What are the two components of a universal policy? a)Separate account and policy loans b)Insurance and cash account c)Insurance and investments d)Mortality cost and interest
b)Insurance and cash account
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die? a)Ordinary Life b)Joint Life c)Decreasing Term d)Whole Life
b)Joint Life
The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as a)Proof of loss. b)Legal actions. c)Time limit on certain defenses. d)Payment of claims.
b)Legal actions.
he policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change? a)The death benefit can be increased only by exchanging the existing policy for a new one. b)The death benefit can be increased by providing evidence of insurability. c)The death benefit cannot be increased .d)The death benefit can be increased only when the policy has developed a cash value.
b)The death benefit can be increased by providing evidence of insurability.
An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy? a)Within two years of the application, the insurer discovers a misrepresentation. b)The insured is in an accident and incurs a large claim. c)The insured does not pay the premium. d)The insured reaches the maximum age limit specified in the policy.
b)The insured is in an accident and incurs a large claim.
Which of the following is true regarding elimination periods and the cost of coverage? a)Elimination periods have no effect on the cost of coverage. b)The longer the elimination period, the lower the cost of coverage c)The shorter the elimination period, the lower the cost of coverage d)The longer the elimination period, the higher the cost of coverage
b)The longer the elimination period, the lower the cost of coverage
How are contributions to a tax-sheltered annuity treated with regards to taxation? a)They are taxed as income for the employee, but are tax free upon withdrawal. b)They are not included as income for the employee, but are taxable upon distribution. c)They are never taxed. d)They are taxed as income for the employee.
b)They are not included as income for the employee, but are taxable upon distribution.
Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT? a)Coverage cannot be converted when an individual leaves the group. b)Premiums are determined by age, occupation, and individual underwriting. c)100% participation of members is required in noncontributory plans. d)Each member covered receives a policy.
c)100% participation of members is required in noncontributory plans.
An insurance agent has received a request for a hearing from the Commissioner. Within how many days must the hearing be held? a)10 days b)15 days c)30 days d)45 days
c)30 days
For how long is an insurance company allowed to defer policy loan requests? a)30 days b)60 days c)6 months d)1 year
c)6 months
When an insured purchased her disability income policy, she misstated her age to the agent. She told the agent that she was 30 years old, when in fact, she was 37. If the policy contains the optional misstatement of age provision a)The elimination period will be extended 6 months for each year of age misstatement. b)Because the misstatement occurred more than 2 years ago, it has no effect. c)Amounts payable under the policy will reflect the insured's correct age. d)The contract will be deemed void because of the misstatement of age.
c)Amounts payable under the policy will reflect the insured's correct age.
Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled? a)Absolute assignment b)Transfer of Ownership c)Disability Buy-Sell d)Proprietary Transfer
c)Disability Buy-Sell
How often must the Commissioner of Insurance examine health maintenance organizations (HMOs) authorized to do business in this state? a)Annually b)Every 2 years c)Every 3 years d)Every 5 years
c)Every 3 years
In which of the following locations would skilled care most likely be provided? a)In an outpatient setting b)At a physician's office c)In an institutional setting d)At the patient's home
c)In an institutional setting
Life income joint and survivor settlement option guarantees a)Payout of the entire death benefit. b)Equal payments to all recipients. c)Income for 2 or more recipients until they die. d)Payment of interest on death proceeds.
c)Income for 2 or more recipients until they die.
Regarding the taxation of Business Overhead policies, a)Premiums are not deductible, but benefits are deductible. b)Premiums are not deductible, but expenses paid are deductible. c)Premiums are deductible, and benefits are taxed. d)Premiums are not deductible, and benefits are taxed.
c)Premiums are deductible, and benefits are taxed.
A Medicare SELECT policy does all of the following EXCEPT a)Provide payment for full coverage under the policy for covered services not available through network providers. b)Provide for continuation of coverage in the event that Medicare SELECT policies are discontinued due to the failure of the Medicare SELECT program. c)Prohibit payment for regularly covered services if provided by non-network providers. d)Make full and fair disclosure in writing of the provisions, restrictions, and limitations of the Medicare SELECT policy to each applicant.
c)Prohibit payment for regularly covered services if provided by non-network providers.
Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as a)False advertising. b)Coercion. c)Rebating. d)Twisting.
c)Rebating.
The insured is also the policyowner of a whole life policy. What age must the insured attain in order to receive the policy's face amount? a)65 b)70 1/2 c)90 d)100
d)100
What percentage of a company's employees must take part in a noncontributory group life plan? a)0% b)25% c)75% d)100%
d)100%
If a person is disabled at age 27 and meets Social Security's definition of total disability, how many work credits must he/she have earned to receive benefits? a)20 credits b)6 credits c)40 credits d)12 credits
d)12 credits
What is the maximum period of time a temporary license can be in force? a)6 months b)3 months c)1 year d)15 months
d)15 months
Group accident and sickness policies in Georgia have a grace period of a)10 days. b)15 days. c)30 days. d)31 days.
d)31 days.
An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe? a)Good health b)Adhesion c)Conditional d)Aleatory
d)Aleatory
Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?a)Surgical b)Blanket c)Medigap d)Indemnity
d)Indemnity
The mode of premium payment a)Is the factor that determines the amount of dividends in a policy. b)Is the method used to compute the cash surrender value of the policy. c)Does not affect the amount of premium paid. d)Is defined as the frequency and the amount of the premium payment.
d)Is defined as the frequency and the amount of the premium payment.
A guaranteed renewable disability insurance policy a)Is renewable at the option of the insurer to a specified age of the insured. b)Is guaranteed to have a level premium for the life of the policy. c)Cannot be cancelled by the insured before age 65. d)Is renewable at the insured's option to a specified age.
d)Is renewable at the insured's option to a specified age.
Which of the following statements concerning Medicare Part B is correct? a)It is provided automatically to anyone who qualifies for Part A. b)It pays on a first dollar basis. c)It pays 100% of Medicare's standards for reasonable charges. d)It pays for physician services, diagnostic tests, and physical therapy.
d)It pays for physician services, diagnostic tests, and physical therapy.
Which of the following statements about the reinstatement provision is true? a)It permits reinstatement within 10 years after a policy has lapsed. b)It provides for reinstatement of a policy regardless of the insured's health. c)It guarantees the reinstatement of a policy that has been surrendered for cash. d)It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.
d)It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.
A guaranteed renewable health insurance policy allows the a)Policyholder to renew the policy to a stated age and guarantees the premium for the same period. b)Policy to be renewed at time of expiration, but the policy can be canceled for cause during the policy term. c)Insurer to renew the policy to a specified age. d)Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.
d)Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.
An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true? a)The claim most likely will not be paid since the official claims form was not submitted. b)The insurer will be fined for not providing the claims forms. c)The insured must submit proof of loss to the Department of Insurance. d)The insured was in compliance with the policy requirements regarding claims.
d)The insured was in compliance with the policy requirements regarding claims.
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT a)The annual dividend is retained by the company. b)The interest is credited at a rate specified by the policy. c)The policyholder has the right to withdraw the accumulations at any time. d)The interest is not taxable since it remains inside the insurance policy.
d)The interest is not taxable since it remains inside the insurance policy.
In a life settlement contract, whom does the life settlement broker represent? a)The insurer b)The beneficiary c)The life settlement intermediary d)The owner
d)The owner
Which of the following is a key distinction between variable whole life and variable universal life products? a)Variable universal life is regulated solely through FINRA. b)Variable whole life allows policy loans from the cash value. c)Variable universal life has a fixed premium. d)Variable whole life has a guaranteed death benefit.
d)Variable whole life has a guaranteed death benefit.
Which of the following long-term care benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis?a)Residential care b)Assisted living c)Home health care d)Adult day care
d)Adult day care
Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?a)Automatic premium loan b)Extended term c)Reinstatement d)Reduced paid-up option
a)Automatic premium loan
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client? a)Limited pay whole life b)Interest-sensitive whole life c)Life annuity with period certain d)Increasing term
a)Limited pay whole life
Who is a third-party owner? a)An insurer who issues a policy for two people b)An employee in a group policy c)An irrevocable beneficiary d)A policyowner who is not the insured
d)A policyowner who is not the insured
Which of the following statements is NOT true concerning insurable interest as it applies to life insurance? a)A debtor has an insurable interest in the life of a lender. b)Business partners have an insurable interest in each other. c)A married person has an insurable interest in their spouse. d)An individual has an insurable interest in their own life.
a)A debtor has an insurable interest in the life of a lender.
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective? a)As of the application date b)As of the policy delivery date c)As of the first of the month after the policy issue d)As of the policy issue date
a)As of the application date
An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would a)Hold the claim as pending until the end of the grace period. b)Deny the claim. c)Pay half of her claim because the insured had an outstanding premium. d)Pay the claim.
d)Pay the claim.
Underwriting a group health insurance plan that is paid for by the employer requires all of the following EXCEPT a)Individual members of the group may select the level of benefits for their own coverage. b)The plan is based on other than individual selection. c)All eligible employees must be covered. d)Coverage for plan participants is uniform.
a)Individual members of the group may select the level of benefits for their own coverage.
What is the purpose of a conditional receipt? a)It is intended to provide coverage on a date prior to the policy issue. b)It guarantees that a policy will be issued in the amount applied for. c)It serves as proof that the applicant has been determined insurable. d)It is given only to applicants who fully prepay the premium.
a)It is intended to provide coverage on a date prior to the policy issue.
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? a)Mutual b)Reciprocal c)Nonprofit service organization d)Stock
a)Mutual
What is the official name for the Social Security program? a)Old Age Survivors Disability Insurance b)Social Insurance Program c)Defined Benefit Retirement Insurance d)Qualified Pension Plan
a)Old Age Survivors Disability Insurance
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy a)Required a premium increase each renewal. b)Built cash values. c)Required proof of insurability every year. d)Decreased death benefit at each renewal.
a)Required a premium increase each renewal.
All of the following long-term care coverages would allow an insured to receive care at home EXCEPT a)Skilled care. b)Custodial care in insured's house. c)Respite care. d)Home health care.
a)Skilled care.
Insured Z's health insurance policy year begins in January. His policy contains a carry-over provision. In November, he has a small claim which is less than his deductible. Which of the following is true? a)The insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible. b)The deductible will be waived. c)The insured is now eligible for an integrated deductible until the new policy year. d)The insured must satisfy this year's deductible, but next year's deductible will begin when or if he makes a claim in the following calendar year.
a)The insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible.
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term? a)The insured may renew the policy for another 10 years, but at a higher premium rate. b)The insured must provide evidence of insurability to renew the policy. c)The insured may only convert the policy to another term policy. d)The insured may renew the policy for another 10 years at the same premium rate.
a)The insured may renew the policy for another 10 years, but at a higher premium rate.
In a life settlement contract, whom does the life settlement broker represent? a)The owner b)The insurer c)The beneficiary d)The life settlement intermediary
a)The owner
Which of the following determines the cash value of a variable life policy? a)The performance of the policy portfolio b)The company's general account c)The policy's guarantees. d)The premium mode
a)The performance of the policy portfolio
Which of the following is TRUE about nonforfeiture values? a)They are required by state law to be included in the policy. b)They are optional provisions. c)A table showing nonforfeiture values for the next 10 years must be included in the policy. d)Policyowners do not have the authority to decide how to exercise nonforfeiture values.
a)They are required by state law to be included in the policy.
Which of the following statements is TRUE concerning irrevocable beneficiaries? a)They can be changed only with the written consent of that beneficiary. b)They may be changed at any time. c)They can never be changed. d)They may be changed only on the anniversary date of the policy.
a)They can be changed only with the written consent of that beneficiary.
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have? a)Universal life b)Adjustable life c)Term life d)Limited pay
a)Universal life
Most LTC plans have which of the following features? a)Open enrollment b)Guaranteed renewability c)No elimination period d)Variable premiums
b)Guaranteed renewability
It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability? a)Address b)Sexual orientation c)Age d)Occupation
b)Sexual orientation
Which of the following groups would most likely be covered under a blanket accident policy?a)Independent contractors who work for a general contractor b)Students at a public school c)Office workers for a retail business d)Factory workers at the automobile assembly plant
b)Students at a public school
How is it determined whether an insurer is allowed to write business in a state? a)The insurer's net income will determine whether a company will be allowed to write business in a state. b)The insurer's domicile or location of incorporation will determine whether a company is domestic, foreign, or alien. c)The insurer's domicile will determine whether an insurance company is domestic, foreign, or alien. d)The insurer's location of incorporation will determine whether a company is domestic, foreign, or alien.
b)The insurer's domicile or location of incorporation will determine whether a company is domestic, foreign, or alien.
Once an individual is licensed as an insurance producer for life or accident and health insurance, how many hours of training must the producer complete initially to sell long-term care insurance partnership policy? a)4 hours b)6 hours c)8 hours d)12 hours
c)8 hours
The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower-echelon employees. This plan would be funded with before-tax corporate dollars, and it does not meet government approval standards. This annuity plan is a)Subject to government standards. b)Illegal. c)A nonqualified annuity plan. d)An executive annuity plan.
c)A nonqualified annuity plan.
Which of the following individuals is eligible for a Health Savings Account?a)Suzie is a dependent on her parent's tax returns b)Tomas is insured by a Low Deductible Health Plan (LDHP) c)Allison is insured by a High Deductible Health Plan (HDHP) d)Margaret is 68 years old
c)Allison is insured by a High Deductible Health Plan (HDHP)
Which of the following entities can legally bind coverage? a)Federal Insurance Board b)Agent c)Insurer d)The insured
c)Insurer
Which of the following is an example of a limited-pay life policy? a)Level Term Life b)Straight Life c)Life Paid-up at Age 65 d)Renewable Term to Age 70
c)Life Paid-up at Age 65
An insured is covered under a Medicare policy that provides a list of network healthcare providers that the insured must use to receive coverage. In exchange for this limitation, the insured is offered a lower premium. Which type of Medicare policy does the insured own?a)Medicare Supplement b)Medicare Advantage c)Medicare SELECT d)Medicare Part A
c)Medicare SELECT
An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point?a)Approved the application b)Issued the policy c)Neither approved the application nor issued the policy d)Both approved the application and issued the policy
c)Neither approved the application nor issued the policy
An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use? a)Reduction of premium b)Accumulation at interest c)Paid-up option d)One-year term
c)Paid-up option
Which of the following answers does NOT describe the principal goal of a Preferred Provider Organization? a)Provide the subscriber a choice of hospitals b)Provide medical services at a reduced cost c)Provide medical services only from physicians in the network d)Provide the subscriber a choice of physicians
c)Provide medical services only from physicians in the network
When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy, as well as a refund of all of the premiums paid. Which rider is attached to the policy? a)Decreasing term b)Accidental death c)Return of premium d)Cost of living
c)Return of premium
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT a)Payment of premium. b)Delivery receipt. c)Signed waiver of premium. d)Statement of good health.
c)Signed waiver of premium.
Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option? a)Length of income period b)Amount of interest c)Size of each installment d)Predetermined length of time stated in the contract
c)Size of each installment
All of the following are unfair claims settlement practices EXCEPT a)Failing to adopt and implement reasonable standards for settling claims. b)Failing to acknowledge pertinent communication pertaining to a claim. c)Suggesting negotiations in settling the claim. d)Refusing to pay claims without conducting a reasonable investigation.
c)Suggesting negotiations in settling the claim.
Any references to policy dividends must include a statement of what? a)That the policy is subject to verification b)That the dividends are subject to surcharges c)That the dividends are not guaranteed d)That the dividends are subject to taxation
c)That the dividends are not guaranteed
Which of the following is NOT true regarding the annuitant? a)The annuitant receives the annuity benefits. b)The annuitant must be a natural person. c)The annuitant cannot be the same person as the annuity owner. d)The annuitant's life expectancy is taken into consideration for the annuity.
c)The annuitant cannot be the same person as the annuity owner.
Which statement is NOT true regarding underwriting group health insurance? a)The cost of the policy is partially determined by the ratio of males to females in the group. b)Everyone in the group is covered, regardless of their medical history. c)The group is assessed individually for insurability. d)The premiums are reassessed annually.
c)The group is assessed individually for insurability.
Which of the following is NOT a feature of a noncancellable policy? a)The guarantee to renew coverage usually applies until the insured reaches certain age. b)The insured has the right to renew the policy for the life of the contract. c)The insurer may terminate the contract only at renewal for certain conditions. d)The premiums cannot be increased beyond the amount stated in the policy.
c)The insurer may terminate the contract only at renewal for certain conditions.
Which of the following is true regarding optional benefits with long-term care policies? a)They are offered at no additional cost to the insured. b)They are included in all policies. c)They are available for an additional premium. d)Only standard benefits are available with LTC policies.
c)They are available for an additional premium.
All of the following are true regarding the guaranteed insurability rider EXCEPT a)The insured may purchase additional insurance up to the amount specified in the base policy. b)It allows the insured to purchase additional amounts of insurance without proving insurability only at specified dates or events. c)This rider is available to all insureds with no additional premium. d)The insured may purchase additional coverage at the attained age.
c)This rider is available to all insureds with no additional premium.
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another? a)False advertising b)Rebating c)Twisting d)Switching
c)Twisting
According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT a)Claims incurred before cancellation must be honored. b)An insurance company may cancel the policy at any time. c)Unearned premiums are retained by the insurance company. d)The insurer must provide the insured a written notice of the cancellation.
c)Unearned premiums are retained by the insurance company.
Which of the following terms will be permissible in describing a life insurance policy in company advertisements? a)Investment plan b)Retirement plan c)Variable plan d)Risk-free plan
c)Variable plan
In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid? a)10 days b)25 days c)30 days d)45 days
d)45 days
Once the person meets the stringent requirements for disability benefits under Social Security, how long is the waiting period before any benefits will be paid? a)12 months b)Benefits will be paid immediately. c)90 days d)5 months
d)5 months
If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following? a)Cancel the policy b)Increase the premium c)Exclude coverage for on-the-job injury d)Adjust the benefit in accordance with the increased risk
d)Adjust the benefit in accordance with the increased risk
The LEAST expensive first-year premium is found in which of the following policies? a)Increasing Term b)Decreasing Term c)Level Term d)Annually Renewable Term
d)Annually Renewable Term
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement? a)Term insurance only b)Permanent insurance only c)Universal life insurance only d)Any form of life insurance
d)Any form of life insurance
All of the following apply to short-term disability plans EXCEPT a)Group plans can provide benefit periods of up to 52 weeks. b)Individual plans can provide benefit periods of up to 2 years. c)A benefit period of 26 weeks is most common for group plans. d)Both group and individual plans are renewable.
d)Both group and individual plans are renewable.
f more than one family member covered under the same major medical policy is injured in the same accident, the family only has to pay one deductible. This is due to the a)Integrated deductible. b)Carry-over provision. c)Elimination period. d)Common accident provision.
d)Common accident provision.
Which of the following reports will provide the underwriter with the information about an insurance applicant's credit? a)Inspection report b)Agent's report c)Any federal report d)Consumer report
d)Consumer report
The insurance policy, together with the policy application and any added riders form what is known as a(n) a)Certificate of coverage. b)Contract of adhesion. c)Blanket policy. d)Entire contract.
d)Entire contract.
With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance? a)Promise to renew the policy at the end of the policy period b)Providing warranties on the application c)Notice of policy cancellation d)Payment of premium
d)Payment of premium
Which of the following is an example of a producer being involved in an unfair trade practice of rebating? a)Inducing the insured to drop a policy in favor of another one when it is not in the insured's best interest b)Charging a client a higher premium for the same policy as another client in the same insuring class c)Making deceptive statements about a competitor d)Telling a client that his first premium will be waived if he purchases the insurance policy today
d)Telling a client that his first premium will be waived if he purchases the insurance policy today
If policyowners repeatedly replace policies from the same agent, this is most likely evidence that a)The agent is reputable and generally trusted by policyholders; the more replacements, the better. b)The agent made a commendable effort to offer the best possible policy for his or her clients. c)The agent needs more training on the suitability of policies for clients. d)The agent knew that replacement was intended in connection with the sale and intentionally violated the replacement regulation.
d)The agent knew that replacement was intended in connection with the sale and intentionally violated the replacement regulation.
Manny has been injured in an accident. Although she is still receiving benefits from her policy, she does not have to pay premiums. Her policy includes a)Return of Premium rider .b)Benefit of Payment clause. c)Waiver of Benefit rider. d)Waiver of Premium rider.
d)Waiver of Premium rider.
The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called a)Guaranteed insurability. b)Waiver of cost of insurance. c)Payor benefit. d)Waiver of premium.
d)Waiver of premium.
