exam questions
If an insurance company issues a policy even though some questions on the application were unanswered, when can the insurer get the answers to those questions?
NEVER; The insurer has waived its right to those answers by issuing the policy
When term insurance is added to the main policy to enhance the policy to provide added benefit or coverage, it is called a
Term rider
Which of the following services will not be provided by an HMO? A. Inpatient hospital care outside the service area B. Unlimited coverage for treatment for drug rehabilitation C. Treatment of mental disorders D. Emergency care
Unlimited coverage for treatment for drug rehabilitation
An insurer is attempting to determine the insurability of an applicant and decides to obtain medical information from several different sources. Which of the following must be notified of the investigation? A) The Dept. of Insurance B) The medical examiner C) The applicant D) The Medical Information Bureau (MIB)
The applicant
An employee has a Flexible Spending Account (FSA) with a $5,000 annual benefit. This year the employee used $3,000. What would be the amount of the benefit available to the employee next year? A) $7,000 B) $5,000 C) $3,000 D) $2,000
$5,000 unused annual benefit DOES NOT roll over into the following year
An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request? A) 3 days B) 5 days C) 10 days D) 30 days
3 days
Of the 16 credit hours required for continuing education, how many hours must be specific to ethics, state law and producer's duties? A) 1 hour B) 3 hours C) 5 hours D) 8 hours
3 hours
A disability income policy has a waiting period of 7 days. If the insured is disabled for 15 days, how many days of benefits will the policy pay? A) 7 days B) 8 days C) 15 days D) 22 days
8 days
Where are premiums from fixed annuities invested?
A general account
In health insurance, what is co-insurance?
A percentage of the cost of service that the insured and the insurer share
What statementbest defines the probationary period in group health policies
A specified period of time that a person joining a group has to wait before becoming eligible for coverage
If an insured dies, and it is discovered that the insured misstated his/her age or gender, the life insurance company will
Adjust the death benefit to what the premium would have purchased at the actual age or gender
Which of the following types of care could be provided at a community center? A) Skilled care B) Adult day care C) Respite care D) Intermediate care
Adult day care
An elimination (waiting) period may NOT have to be satisfied for a disability in which of the following? A) An insured suffers a relapse of a prior disability within 6 months of the initial covered disability B) An insured suffered the disability from the results of active duty with the US Armed Forces C) An insured is disabled from a work-related accident D) An insured contracts an incurable disease
An insured suffers a relapse of a prior disability within 6 months of the initial covered disability
Which of the following would NOT trigger the payment of Accelerated Death Benefits A) terminal illness B) requiring an organ transplant for the insured to survive C) being permanently institutionalized D) being permanently disabled
Being permanently disabled Accelerated death benefits or living riders allow the early payment of some portion of the death benefit if the insured has conditions such as terminal illness, permanent institutionalized, or a life-threatening medical condition that requires a dramatic medical intervention. Accelerated death benefit does not cover disability.
Which distribution(s) from a Modified Endowment Contract would be taxable as income at the time received to the extent that the cash value of the contract immediately before the payment exceeds the investment in the contract?
Both partial cash surrender and policy loan To avoid the tax penalty, a policy would need to simultaneously satisfy the cash value or guideline premium/corridor tests as well as the 7-pay test
Conrad receives $50,000 from a $100,000 Accidental Death and Dismemberment policy as a result of the loss of his left arm in an accident. Conrad has received the A) Capital Amount B) Contributory Amount C) Primary Amount D) Principal Amount
Capital Amount
An insured and his spouse recently had a child. Which of the following riders would allow the couple to insure the child for a limited period of time at a specified amount? A) Guaranteed Insurability Rider B) Spouse Term Rider C) Children's Term Rider D) Payor Rider
Children's Term Rider
Policy delivery refers to the delivery of the
Completed insurance policy to the applicant. Physical delivery to the person who applied for the contract constitutes delivery. This also starts the free look period.
All variable life insurance policies and any attached rider(s) that are issued in this State must be approved by the
Director of Insurance
In policy replacement, the term "conservative effort" means
Discouraging policyholders from dropping existing policies
An adjustable life policy can assume the form of
EITHER term insurance OR permanent insurance
An applicant may challenge information discovered as a result of an investigative consumer report under which of the following Acts? A) Privacy Protection Act B) Consumer Credit Protection Act C) HIPPA D) Fair Credit Reporting Act (FCRA)
Fair Credit Reporting Act (FCRA)
Under the long-term care marketing regulations, which of the following questions would a producer NOT have to ask the applicant in order to determine if the purchase is suitable? A) what is the amount of your existing health or long-term care insurance? B) how much are you able to pay in premiums? C) do you currently have any Medicare supplement policies? D) are you planning to replace an existing health insurance?
How much are you able to pay in premiums?
Riley reads an agreement on the first page of her policy which includes a list of losses that will be covered by her insurer. What is the name of this agreement? A) Consideration Clause B) Insuring Clause C) Coverage Provisions D) Statement of Loss Coverage
Insuring Clause
The provision that sets forth the basic agreement between the Insurer and the Insured which states the Insurer's promise to pay the death benefit upon the Insured's death is called the A) Payment of Claims B) Declarations C) Consideration D) Insuring Clause
Insuring Clause
In health insurance, the length of the grace period varies according to the
Mode of premium payment
Which of the following would NOT be eligible for coverage under key person? A) The pharmacist in a drug B) The manager of a small store C) The owner of a shop D) The executive officer of a company
NOT ELIGIBLE: The owner of a shop
Dividends received on participating life insurance policies are
NOT TAXABLE because they are RETURN of UNUSED premiums
Which of the following is NOT mandatory under the Uniform Provisions Law as applied to accident and health policies? A) Time Limit on Certain Defenses B) Physical Examination & Autopsy C) Entire Contract D) Probationary Period
Probationary Period
The Guaranteed Insurability Rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT A) Marriage B) Purchase of a new home C) Approx. every 3 years between ages of 25 & 40 D) Birth of a child
Purchase of a new home
A licensee approved to teach a continuing education course may
Receive continuing education credit the same as a person taking the course
Variable insurance and variable annuities are regulated by
SEC, FINRA, Depts. of Insurance
An insured was diagnosed 2 years ago with kidney cancer. She was treated with surgeries and chemo and is now in remission. She also has a 30-year smoking history. The insured is now healthy enough to work and has just started a full-time job. Which describes the health insurance that she will most likely receive.
She would be covered under her employer's group health insurance plan, without higher premiums
When an agent delivered an insurance policy to the insured, he collected the initial premium, as well as a document verifying that the insured had not had any injuries or illness since the application. What is this document called?
Statement of Good Health
All of the following statements about indexed whole life insurance are correct EXCEPT A) there is a guaranteed minimum interest rate B) the cash value depends on the performance of the equity index C) the death benefit is not guaranteed D) the premium is fixed
The death benefit is not guaranteed
An insured commits suicide 18 months after obtaining a life insurance policy. How does this affect the policy's death benefits the insurance company must pay?
The insurance company will pay full death benefits
Under the Payment of Claims provisions, to whom will the insured's benefits be paid if the insured is deceased? A) the insured's beneficiary's first choice B) to any remaining debtors the insured owes C) the insured's primary beneficiary D) the insured's estate even if a beneficiary is living
The insured's primary beneficiary
Which of the following is true about retrospective commissions to insurers in this state? A) they are permitted as long as all the claims are Paid B) they are prohibited C) they are acceptable D) they may vary with the loss experience
They are prohibited
All of the following are required provisions in group life insurances policies in this state EXCEPT A) beneficiaries B) misstatement of age C) conversion to individual life insurance D) warranties made by the applicants
Warranties made by the applicants A policy must contain a provision that states that all statements made by the insured are considered representations and not warranties
Which of the following terms is used to define the period of time during which an annuitant makes payments into an annuity? A) Accumulation period B) Premium building period C) Annuity period D) Loading period
accumulation period
Which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insured's death benefit was caused by an accident as defined in the policy? A) a Guaranteed Insurability Rider B) a Covered Peril Rider C) an Accidental Death Rider D) a Double Indemnity Rider
an Accidental Death Rider
Which of the following losses would likely be covered under the Accidental Death rider? A) suicide B) mountain-climbing accident C) death resulting from a long-term disability D) death caused by a head-on collision
death caused by a head-on collision
Under which of the following conditions would life insurance proceeds be taxable by the federal government? A) if there is a transfer for value B) if collaterally assigned to a lender C) if taken as a lump sum D) if paid to the policyowner
if there is a transfer for value
ALL of the following must sign an application for health insurance EXCEPT the A) Insurer B) The proposed insured C) Applicant D) Producer
Insurer
If an individual willfully violates provisions of the fair credit reporting act (FCRA), what is the maximum civil penalty?
$2,500 This penalty for willfully violating the FCRA, CANNOT EXCEED $2,500
Your client is a sole proprietor and wishes to include his family on a medical expense plan. How much of the cost of the medical expense plan can be deducted (since he is considered self-employed)? A) 0% B) 85% C) 90% D) 100%
100%
A Medicare Supplement Policy must have a free-look period of at least
30 days
Missouri law requires that producers notify the Director of any change of address within A) 90 days B) 5 days C) 10 days D) 30 days
30 days Every producer licensed in Missouri must notify the Director, in writing, within 30 days, of any change of address
A distribution from an employer-sponsored retirement plan or from an IRA is eligible for a tax-free rollover if it is reinvested in an IRA within A) 90 days B) 100 days C) 30 days D) 60 days
60 days
Which of the following would be TRUE of both the fixed-period and fixed-amount settlement options?
Both guarantee the principal and interest will be fully paid out *Neither the fixed-period nor fixed-amount settlement options guarantee income for the life of the beneficiary; however, they both guarantee that the entire principle and interest will be distributed
All of the following are excluded from coverage in an individual health insurance policy EXCEPT A) treatment received in a government hospital B) mental illness C) experimental procedures D) purely cosmetic surgery
Mental Illness, is covered with some limitations
With respect to the Entire Contract Clause in health policies, who has the authority to make changes to an existing policy?
ONLY an executive officer of the company
If an insured submits a written proof of loss, what is the maximum amount of time after submittal that the insured has to initiate legal action
The insured has 3 YEARS to initiate legal action against the insurer
What is the purpose of a benefit schedule?
To state what and how much is covered in the plan
An agent delivers a life policy. He explains a policy change was made and asks the applicant to sign a statement acknowledging the changes were explained. The agent says the premium has not been paid and must be paid before the policy goes into effect. He collects a Statement of Good Health, relinquishes the policy, and leaves. What did he do wrong?
What did he do wrong? He left the policy with the insured WITHOUT collecting the premium
A periodic disclosure provision in universal life insurance polices in Missouri requires that policyowners receive a policy status report A) twice a year B) monthly C) at least once a year D) at least every quarter
at least once a year
Who would be allowed catch-up contributions? A) Anybody who has a traditional IRA B) An IRA owner who contributes less than the allowed maximum amount C) individuals who have dependents D) Individuals age 50 or older
individuals age 50 or older
J's retirement plan meets all federal requirements and entitles him to certain tax benefits as the owner of the plan. What term best describes J's retirement plan? A) Variable B) Deferred C) Qualified D) Unqualified
meets all federal requirements + entitles the owner of the plan to certain tax benefits = QUALIFIED Retirement Plan
Cash Value guarantees in a whole life policy are called A) Nonforfeiture values B) Living Benefits C) Cash Loans D) Dividends
nonforfeiture values
In life insurance, which of the following is NOT required to have an insurable interest in the insured? A) the policyowner B) the insured C) the applicant D) the beneficiary
the beneficiary
The elimination period in a disability income policy is better known as
the period of time an insured must wait, after the onset of an illness or injury, before benefits begin
Keogh (HR-10) plans are qualified plans for A) the self-employed B) government employees C) postal workers D) public school teachers
the self-employed
What is the purpose of a buy-sell agreement?
to allow the business buyout in case of the owner's death
What is the purpose of a disability buy-sell agreement?
to allow the business buyout in case of the owner's disability
An aleatory contract is based on what kind of exchange?
unequal exchange of values
Because of an injury, an insured has been unable to work for 7 months. He wasn't able to pay his life insurance policy premium, yet the policy remained in force. The policy includes A) waiver of premium rider B) guaranteed insurability benefits C) facility of payment clause D) Nonforfeiture options
waiver of premium rider
What is the allotted grace period for an insured who pays a $200 premium on a monthly basis?
10 days
What is the purpose of the impairment rider in a health insurance policy?
To exclude coverage for a specific impairment
What is the purpose of requiring licenses for persons who transact insurance?
To protect the general public
What is the most common name for a single policy that is designated to insure two or more lives with a standard premium, and that pays the death benefit upon the first death? A) Second-to-Die B) Last Survivor C) Survivorship Life D) Joint Life
Joint Life Policy
Group life insurance policies issued in this state must offer a grace period of at least: A) 10 days B) 30 days C) 31 days D) 90 days
31 days
A viatical settlement is a transaction outside the life insurance company where the owner sells the life insurance policy for which of the following? A) more than the face value B) a predetermined multiple of the premium C) the face amount of the policy D) a percentage of the face amount of the policy
A percentage of the face amount of the policy. In a viatical settlement, an insured with a reduced life expectancy sells his or her policy to a 3rd party for a percentage of the face amount
An underwriter is reviewing an applicant with an extensive medical history. Which of the following would give the underwriter a better understanding of how the applicant has been treated for various illnesses? A) Policy application B) Medical Exam C) Attending Physician's Statement D) MIB Report
Attending Physician's Statement
Which provision may be added to a permanent life policy, at no cost, that insures that the policy will not lapse so long as there is cash value? A) application to reduce premium option B) automatic premium loan option C) mode of premium option D) past due premium option
Automatic Premium Loan Option
Which of the following is NOT a standard exclusion in life insurance policies? A) hazardous occupation B) war and military service C) aviation D) disability
Disability Exclusions are policy provisions, which exclude certain types of risks. Aviation, hazardous occupation, and war and military services are most common exclusions. Disability is not a common exclusion.
An insured's cancelable health insurance policy is being cancelled. One day before the policy is scheduled to end, he is involved in a major accident and is hospitalized for a week. Which of the following best describes the coverage that he would receive? A) minimal benefits for the duration of the hospital stay B) No benefits at all C) full benefits, as if the policy were still completely in effect D) one day of full benefits
Full benefits, as if the policy were still completely in effect
Which of the following is NOT a Medicaid qualifier? A) residency B) insurability C) income level D) age
Insurability Medicaid is a program operated by the State, with some Federal funding, to provide medical care for those in need. To qualify for Medicaid, a person must -be poor or become poor - be US citizen or permanent resident alien -must meet other qualifiers (blind, disabled, pregnant, over 65 years, or caring for children receiving welfare benefits
Which of the following is the primary source of information that an insurer uses to evaluate an insured's risk for life insurance? A) risk analysis B) the law of large numbers C) agent's report D) insurance application
Insurance application; is the data gathering tool utilized in evaluating an individual risk
Which of the following would NOT be considered a limited coverage policy? A) special risk policy B) accident only insurance C) travel policy D) major medical expense insurance
Major medical expense insurance
What does Basic Medical Expense cover?
Non-surgical services a physician provides Basic medical expense coverage is often referred to as Basic Physicians Non-Surgical Expense Coverage because it provides coverage for non-surgical services a physician provides. Benefits are limited to visits to patients confined in the hospital. Some policies will also pay for office visits.
When may HIV-related test results be provided to the MIB?
Only if the individual is not identified
An agency's top variable life insurance producer shows prospective actual product performance results. However, the performance results are several years old. The producer is A) using inaccurate information B) Merely using an historical example C) showing the client possible investment outcomes D) fully disclosing the product's performance
Using inaccurate information
A married couple wants to include the entire family in their whole life policy under one rider. Which of the following riders will help them achieve that goal? A) family term B) other-insured term C) inclusive term D) children's term
family term
An IRA owner who is 57 years old wants to make a withdrawal form her traditional IRA. What penalty will be imposed? A) 6% B) 10% C) No penalty D) 20%
10%
Under the Mandatory Uniform Provision - Proof of Loss, the claimant must submit proof of loss within what time period after the loss? A) 60 days B) 90 days C) 2 years D) 30 days
90 days
An applicant misstates his age on his application for a health insurance policy. He states that he is 39, but his actual age is 49. When he files a claim, what will most likely happen?
Benefits paid will be those that would have been purchased at the correct age
Which of the following describes the relationship between a capital sum and principal sum? A) Capital sums are percentages of principal sums B) Principal sums vary, while capital sums do not C) Capital sums vary, while principal sums do not D) Principal sums are percentages of capital sums
Capital sums are percentages of principal sums
While completing a life insurance application the applicant realizes that she should have answered an earlier question differently. What should the agent do to make the necessary change?
Cross out the incorrect information, write in the correct answer, and have the applicant initial the change
When filling out an application for insurance, the applicant makes a mistake. If a fresh application were not available, what could the applicant do to properly correct the mistake?
Cross the incorrect answer out, write the correct one beside it, and initial the answer
During a policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sounds worse than it is. This is an example of A) defamation B) twisting C) false advertising D) controlled business
Defamation It is agains the law for any person to make, publish,or circulate any oral or written statement or literature that is false, maliciously critical of or substantially misrepresents the financial condition of any insurer, and which is intended to injure any person engaged in the insurance business
ALL of the following health insurance disability benefits are income tax free EXCEPT A) employee-paid group disability B) key-person disability benefits C) personally-owned individual disability insurance D) employer-paid group disability
Employer-paid group disability
The "stop-loss" feature on a major medical policy is intended to
Establish a maximum amount of out-of-pocket expense that an insured will have to pay for medical expense in a calendar year
An insured has an individual disability income policy with a 30 day elimination period. He becomes disabled on June 1st for 15 days. When will he collect on his disability income payments?
He won't collect anything, because he did not satisfy the elimination period
Which of the following statements is NOT TRUE regarding health insurance policy provisions? A) All additional provisions written by insurers are cataloged by their respective states B) All individual policies contain Universal Mandatory Provision C) Insurers may only offer optional provisions that are allowed by the state where the policy is delivered D) Insurers may add provisions that are not in conflict with uniform standards
NOT TRUE: All additional provisions written by insurers are cataloged by their respective states
Among people in the same class and life expectancy, which of the following factors can be used to influence premium rates? A) race B) occupation C) ancestry D) marital status
Occupation
A man is an attorney when he applies for a health policy. He decides to become a professional bungee jumper. He files a claim. What should happen? A) His coverage will be dropped B) The man's workers comp will pay the claim in full C) The insurance company will not pay the claim D) The insurance company will pay the claim according to the benefits available, IF the correct premium had been paid
The insurance company will pay the claim according to the benefits available, IF the correct premium had been paid
If an applicant submits the initial premium with an application, which action constitutes acceptance? A) The applicant submits a statement of good health B) The producer delivers the policy C) The insurance company receives the application and initial premium D) The underwriters approve the application
The underwiters approve the application
Which of the following is true regarding copayment and coinsurance for services provided by a physical therapist under a health benefit plan? A) they can be higher than regular copayments under the policy B) they are a flat amount established by the insurer C) they are not allowed D) they must be the same as for the services of a primary care physician
They must be the same as for the services of a primary care physician
A person is planning on becoming a licensed insurance producer in this state. ALL of the following are prerequisites in issuing a license EXCEPT A) file an application with the director B) pass a written examination C) pays a $100 license fee D) file a bond in favor of the state of Missouri
file a bond in favor of the state of Missouri
What happens to the copy of the application for health insurance once the policy is issued?
it becomes part of the entire contract
Which dividend option will increase the death benefit? A) reduced paid-up B) paid-up additions C) accumulation D) extended term
paid-up additions
Which of the following types of insurance products would be appropriate for an individual with a low income and high insurance needs? A) Paid-up at 65 insurance B) a variable annuity C) term insurance D) straight whole life
term insurance
Who is the annuity owner? A) the person on whose life the annuity is written B) the insurer C) the person who purchases the annuity D) the person who receives the benefits
the person who purchases the annuity
What advantage does the "recurrent disability" provision provide to the insured under a disability income policy?
It eliminates the imposition of second elimination period for the same disability. If the insured is re-hospitalized for the same injury, it will be treated as a continuation of the first injury
According to the Time Limit on Certain Defenses provision, statements or misstatements made in the application at the time of the issue cannot be used to deny a claim after the policy has been in force for a minimum of how many years?
2 years The Time Limit on Certain Defenses provision is similar to the incontestability provision found in life insurance policies.
The Probationary Period is
A specified period of time that a person joining a group has to wait before becoming eligible for coverage.
What guarantees that the information explained in the insurance contract is true? A) a warranty B) a representation C) utmost good faith D) a binder
A warranty
Which of the following time periods is the general enrollment period for Medicare Part B? A) Jan. 1 through March 31 each year B) March 1 through May 31 each year C) Jan. 1 through Jan. 31 each year D) March 1 through March 31 each year
Jan. 1 through March 31 each year
What does the application of contract of adhesion mean?
Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured
An individual purchases a life insurance policy and lists his parents as the beneficiaries. He is able to change beneficiaries at any time. What type of beneficiary designation does the policy have? A) Contingent B) Primary C) Revocable D) Irrevoable
Revocable
Under the Mandatory Uniform Provision - Legal Actions, an insured is prevented from bringing a suit against the insurer to recover on a health policy prior to
60 days after written proof of loss has been submitted
A loss resulting from which of the following would qualify for the accidental death rider coverage? A) A health condition B) A disability C) A hazardous hobby D) An automobile accident
An automobile accident
According to the FCRA, all of the following statements are true EXCEPT A) It ensures that consumer reporting agencies are fair in their treatment of consumers B) Investigative consumer reports can be used to obtain information on the applicant's character and reputation C) If an application is declined for an insurance policy, he or she has no right to know what was in the report D) It protects consumers against the circulation of inaccurate information
If an application is declined for an insurance policy, he or she has no right to know what was in the report
Which of the following statements is INCORRECT regarding the Physical Exam & Autopsy Provision A) The insurer also has the right to conduct an autopsy, if not forbidden by state law B) The insurer DOES NOT have the right to conduct an autopsy C) The Physical Exam and Autopsy Provision gives the insurer the right to examine the insured, at its own expense D) The Physical Exam and Autopsy Provision gives the insurer the right to examine the insured as often as may be reasonable necessary while a claim is pending
Incorrect Statement: The insurer DOES NOT have the right to conduct an autopsy
M's life insurance policy prevents his beneficiaries from receiving death benefits should he die while flying his private jet. Where must this be stated in the policy?
On the face of the policy This provision stipulates that life insurance must include a notice of any war or aviation exclusions. The notice must be prominently displayed on the face of the policy and clearly name and explain the exclusions
What is the difference between a straight life policy and a 20-pay whole life policy? A) the benefit settlement option B) the face amount and cash value C) policy maturity date D) premium payment period
Premium payment period
Which of the following statements concerning the Medical Information Bureau is correct? A) The MIB assists underwriters in evaluating and classifying risks B) The MIB report must be attached to each life insurance policy issued C) All applicants for life insurance receive a copy of the findings of the life insurance medical examination D) Information contained in the MIB report is available to all physicians
The MIB assists underwriters in evaluating and classifying risks
A subscriber has been treated for a medical condition by his primary care physician for 3 months with experimental remedies without a significant health improvement before being referred to a specialist. Which of the following types of plans does the subscriber have? A) a gatekeeper HMO plan to control the costs B) a limited benefit plan C) a fully paid indemnity plan that covers his condition only at a specified provider D) major medical insurance with a low deductible and low coinsurance
a gatekeeper HMO plan to control the costs
Level 2 violations of unfair insurance trade practices may result in monetary penalty of up to
$50,000 In response to unfair trade practices, the Director may issue orders, seek civil action, suspend or revoke a license, or impose a $1,000 fine with a maximum penalty of up to $50,000
Under a group health insurance plan, benefits may be extended to all of the following dependents EXCEPT A) A 27-year-old married daughter who is attending college and lives with her parents B) the spouse of the certificate holder C) A 30-year-old mentally handicapped son of the primary certificate holder D) a dependent parent living with a primary certificate holder
A 27-year-old married daughter who is attending college and lives with her parents Unless incapable of self-support, children are only eligible to the age specified in the policy
A husband and wife both incur expenses that are attributed to a single major medical insurance deductible. Which type of deductible do they have in their policy? A) Family B) Flat C) Annual D) Per occurrence
Family
A variable life policyholder who owns a scheduled premium policy experiences many months of negative returns in the policy's subaccounts. In regards to the minimum death benefit,
It will be equal to or greater than the initial face amount
Ed is covered under a health plan provided by his employer. He was told that his insurance would pay the majority of the covered expenses if he would choose to see a provider in his plan's list. If Ed chose to be treated by a provider who was not on the list, his portion of the bill would be greater. Ed is covered by a/an A) Preferred Provider Plan B) Coordinated Plan C) HMO group plan D) Limited health plan
Preferred Provider Plan
On an Accidental Death and Dismemberment (AD&D) policy, the death benefit payable is known as the
Principal Sum
Whose responsibility is it to ensure that the application for health insurance is complete and accurate?
The agent's responsibility
ALL of the following could qualify as a group for the purpose of purchasing group health insurance EXCEPT A) single employer with 14 employees B) an association of 35 people C) Labor Union D) Multiple employer trust
an association of 35 people
If an insured is not entirely satisfied with a policy issued, the insured may return it to the insurance company and receive a refund of the entire premium paid, at which of the following times? A) within 10 days of when the policy was delivered B) before any claim has been filed on the policy C) within 10 days of when the policy was issued D) within 10 days of when the insurer received the first premium
within 10 days of when the policy was DELIVERED
Which of the following is TRUE of level term insurance? A) The policy endows at age 100 B) The policy offers nonforfeiture values C) It is temporary protection D) The premium will increase or decrease based on current interest rates
It is temporary protection
All of the following are TRUE of the Survivorship Life Policy EXCEPT A) the premium would be lower than in a joint life policy B) it can insure more than 2 lives C) the premium is based on the age of each insured D) The death benefit is not paid until the last death
NOT True of Survivorship Life Policy: the premium is based on the age of each insured
Which of the following is NOT required to be included in a life insurance advertisement? A) the type of policy being advertised B) projected profit sharing C) the name of the insurer D) potential changes in premium
NOT required: Projected profit sharing
which of the following is a permissible reason for an insurance company to contest payment of a claim based on statements in the application? A) The insurer has already paid out the expected amount of benefits for the year B) The application contains a correction C) The application material misstatements D) The insured died too soon after applying for the policy
The application contains material misstatements
The Guaranteed Purchase Option is also referred to as the A) Impairment Rider B) Evidence of Insurability Rider C) Future Increase Option D) Multiple Indemnity Rider
Future Increase Option
Which of the following used to be called Medicare + Choice Plans? A) Medicare Supplement Plans B) Original Medicare Plan C) Medicare Advantage Plans D) Medical Insurance
Medicare Advantage Plans
Following a covered loss, the Time Payment of Claims Provision requires that an insurance company pay disability income benefits no less frequently than A) Monthly B) Semi-annually C) Annually D) Weekly
Monthly
The reduction of premium option uses the dividend to reduce A) the previous year's premium B) The premium on any other policy owned by the policyowner C) Next year's premium D) This year's premium
Next year's premium
Which of the following individuals would be a likely candidate to purchase a deferred annuity? A) someone who wants to grow retirement funds tax deferred B) someone who needs to start receiving benefit payments within 6 months of the annuity purchase C) someone who wants to leave the death benefit to the beneficiaries D) someone who cannot afford life insurance
Someone who wants to grow retirement funds tax deferred Deferred annuities are often used to accumulate retirement funds that grow tax deferred income payments, which begin sometime after 1 year from the date of the annuity purchase
Which of the following policies would NOT offer a policy loan option? A) Universal Life B) Variable Universal Life C) Term Life D) Whole Life
Term Life
What must be included in the notice of an insurer's intention to non-renew a health insurance policy?
The reason for non-renewal An insurer must give notice to the policyholder in the event of non renewal. This notice must be accompanied by an explanation for the non-renewal in clear and specific language. This requirement does not apply to non-payment of premium or consensual non-renewal
What would the insurance company do if an insured under a Whole Life Policy with an Accidental Death Rider intentionally kills himself a couple of months after purchasing the policy?
Deny the death benefit, but refund the premium
Which of the following are characteristics of term life insurance? A) Temporary protection, renewability, no cash value B) Adjustable premiums and automatic increases in face amount at any given age C) Coverage to age 100, cash value, and high premiums D) Nonforfeiture provisions and living benefits
Temporary protection, renewability, no cash value
With adjustable life, the owner can change all of the following except A) The length of time the coverage will last B) The insured C) The death benefit D) The premium
The insured The mortality charge is determined by the actuary in the home office. The owner of the policy has no control of this mortality cost
Which of the following statements is INCORRECT regarding the definition of TOTAL disability? A) total disability is the inability to perform partial duties of any occupation for which a person is suited by reason of education, training or experience B) disability is defined differently under certain disability income policies C) Total disability can be the inability to perform any occupation in which a person is reasonably suited by reason of education, training or experience D) total disability can be the inability to perform the duties of one's own occupation
Total disability is the inability to perform partial duties of any occupation for which a person is suited by reason of education, training or experience Total disability is defined differently under some disability income policies. Some Policies use a relatively strict definitions such as the Any Occupation definition, similar to Social Security. Other insurers have a more liberal definition
In regards to the field of insurance, Fiduciary Capacity is defined as
the responsibility of producers to handle funds entrusted to them by the insured
What is the purpose of key-person insurance?
to cover decreased business revenues as a result of the death of a key employee
