insurance
An insured has a $10,000 term life policy. The annual premium of $200 was due on Feb 1; however, the insured failed to pay the premium. He died on Feb 28. How much would the beneficiary recieve from the policy? 1. $0 2. $200 3. $9,800 4. 10,000
$9,800 b/c they didnt pay the last premium
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? 1. the insured mat renew the policy for another 10 years, but at a higher premium rate 2. the insured must provide evidence of insurability to renew the policy 3. the insured may only convert the policy to another term policy 4. the insured mat renew the policy for another 10 years at the same premium rate
1
An insured wants to transfer his personal insurance policy to a friend. Under what conditions would this be possible? 1. the insured will need a written consent of the insurer 2. It is impossible to transfer a policy 3. the insured would have to surrender the policy to the insurer, and his friend could ask to buy it 4. the insured can transfer the policy to his friend and then notify the insurer of the change
1
Graded-Premium Whole Life policy premiums are typically lower initally, but gradually increase for a period of 5 to 10 years. After the period of increase the premiums will 1. be level thereafter 2. continue to increase 3. return to the initial premium amount 4. decrease again
1
If an annuitant dies before annuitization occurs, what will the beneficiary receive? 1. either the amount paid into the plan or the cash value of the plan, whichever is the greater amount 2. either the amount paid into the plan or the cash value of the plan, whichever is the lesser amount 3. amount paid into the plan 4. cash value of the plan
1
If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy? 1. it is only taxable if the cash value exceeds the amount paid for premiums 2. it is not considered to be taxable 3. it is taxable only if it exceeds the amounts paid for premiums by 50% 4. it is automatically taxable
1
Signing and dating a delivery receipt for a life insurance policy helps to establish all of the following timeframes EXCEPT 1. the grace period 2. the incontestability period 3. the free-look period 4. the right of rescission
1
Under an extended term nonforfeiture option, the policy cash value is converted to 1. the same face amount as in the whole life policy 2. the face amount equal to the cash value 3. a lower face amount than the whole life policy 4. a higher face amount than the whole life policy
1
Which of the following is a key distinction between variable whole life and variable universial life products? 1. Variable whole life has a guaranteed death benefit 2. variable universal life is regulated solely through FINRA 3. Variable whole life allows policy loans from the cash value 4. Variable universial life has a fixed premium
1
in health insurance policies, the purpose of a grace period is to give a policyholder extra time to: 1. pay a premium after a due date 2. submit a proof of loss to an insurer 3. appear for a medical exam to justify claim 4. make an application for reinstatement of a policy
1
small employers who do not otherwise count for the group health insurance plan may be able to obtain similar lost-cost benefits for their employees by joining a 1. multiple employer trust 2. preferred provider organization 3. health maintenance organization d. health care service organization
1
the law of large numbers states that: 1. predictions become more accurate as the number of units being considered increases 2. large losses are easier to predict than small losses 3. small losses are the most predictable 4. all losses are equally predictable
1
what is the named of a health care delivery system involving private insurers who contract with doctors and hospitals to provide services at set prices and allows insureds to choose among designated doctors and hospitals when medical treatment and care is needed? 1. preferred provider organization 2. adminstrative services organization 3. health care services organization 4. health maintenance organization
1
which definition of total disability would be the most restrictive for an insured claiming benefits? 1. inability to perform the duties of any occupations 2. inability to perform all the duties of the insured's regular occupation 3. inability to perform some of the duties of regular occupation 4. inability to perform any one of the duties of the regular occupation
1
which of the following is not a common life insurance non-forfeiture option? 1. taking a full refund of all premiums paid 2. requesting the cash surrender value 3. converting to a lesser amount of paid-up insurance 4. converting to an equal amount of extended term insurance
1
which type of life insurance policy generates immediate cash value? 1. single premium 2. level term 3. decreasing term 4. continuous premium
1
a disability that prevents a person from performing one or more of the regular duties of that persons job and that is a condition that will last for the remainder of the person's life, is a: 1. permanent partial disability 2. permanent total disability 3. temporary partial disability 4. temporary total disability
1 permanent because the person will not recover partial because the insured will have to pay a portion of the expense
Which of the following is not covered under Medicare hospital insurance benefits (Part A))? 1. physican's services 2. semiprivate room and board 3. home health care 4. skilled nursing facility care
1 physician's services are covered under Part B
which of the following is not a characteristic of a whole life continuous premium policy (also known as straight life)? 1. the premiums are paid only until the insured reaches age 70 2. the policy builds a cash surrender value 3. the face amount is a constant amount of protection 4. the policy requires level premium payments
1 straight life policies are designed to provide coverage until age 100
all of the following are characteristics of disability income insurance except; 1. the policies do not have any exclusions 2. each contract defines the disabilities it covers 3. benefits are usually paid in periiodic installments 4. disabilities caused by accidental injury or illness are covered
1 all insurance policies have exclusions
Under the uniform Policy provisions law, a required provision concerning notice of claim obligates a policyholder to giver the insurer notice of a claim within: 1. 20 days of loss or asap 2. 30 days of a loss or asap 3. 60 days of loss or asap 4. 90 days of a loss or asap
1 20 days of a loss
An insured purchased a variable life insurance policy with the face amount of 50,000$. Over the life of the policy, stock performance declined and the cash value fell to 10,000$. If the insured dies, how much will be paid out?
1. 10k 2. 40k 3. 50k X 4. 60k
Which of the following types of policies allows for a flexible premium and a variable investment component?
1. Variable whole life insurance 2. Whole life insurance 3. variable universal life insurance XX 4. guaranteed issue variable life insurance
Which of the following is the most common way to transfer risk?
1. increase control of claims 2. lessen the possibility of loss 3. name a beneficary 4. purchase insurance X
An insurance company is domicilied in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming? 1. unauthorized 2. Foreign 3. Alien 4. Domestic
2
Events in which a person has both the chance of winning or losing are classified as 1. retained risk 2. speculative risk 3. insurable risk 4. Pure risk
2
Pertaining to insurance, what is the definition of a fiduciary responsibility? 1. ofering additional coverage to clients 2. promptly forwarding premiums to the insurance company 3. helping insureds to file claims 4. performing reciews
2
a group major medical policyholder that provides benefits on a self-funding basis may limit its total liability for claims by purchasing 1. supplementary coverage 2. a stop-loss contract 3. coinsurance 4. a deductible
2
a health insurance policy has lapsed b/c of a nonpayment of premium. If the policy does not require an application for reinstatement, the policy must be reinstated on: 1. acceptance of the overdue premium by the agent 2. acceptance of the overdue premium by the insurer 3, receipt by the agent of a written request for reinstatement 4. receipt by the insurer of a written request for reinstatement
2
all the following are true about a presumptive disability except: 1. such a condition is considered to be total and permanent 2. examinations to verify the loss will be required only every 2 years 3. loss of two limbs qualifies as a presumptive disability 4. loss of eyesight qualifies as a presumptive disability
2
all the following are true about group life insurance except: 1. it may be written to include dependent coverage 2. each individual insured receives an insurance policy 3. coverage is usually available without medical exams 4. group policy provisions include a grace period
2
blue cross and blue shield are: 1. health maintenance organizations 2. prepaid health care service organizations 3. administrative service organizations 3. preferred provider organizations
2
how long must an insurer keep records of electronic transmission to customers? 1. 3 years 2. 5 years 3. 6 years 4. 1 year
2
in a group life insurance policy, the employer may select all of the following except 1. the premium payor 2. the beneficiary 3. the type of insurance 4. the amount of insurance
2
the cash surrender value of a whole life insurance policy will equal the face amount of coverage: 1. on the insured's 65th birthday 2. if the insured lives to be age 100 3. on the date final payment is made under any limited payment plan 4. on any date that total premiums paid exceed the amount of insurance
2
Restrictions are usually placed on the amount of insurance that an agent can write on their own property, family, employers, and friends. This type of insurance is known as a: 1. admitted business 2. controlled business 3. authorized business 4. unauthorized business
2 controlled business
All the following are true about term life insurance except: 1. term insurance is temporary insurance 2. term insurance is one of the most expensive forms of protection 3. there is no cash value when a term policy expires 4. term insurance policies are written for a specified number of years
2 term insurance provides the most amount of protection for a given amount of premium dollars. has no cash value or non-forfeiture values
Not all disabilities are covered by Social Security disability benefits. To be covered, a disability must be serious enough to be expected to be fatal OR to last at least: 1. 6 months 2. 12 months 3. 18 months 4. 24 months
2 12 months
social security disability benefits begin after a waiting period, generally, benefits begin with the: 1. 3rd month of disability 2. 6th month of disability 3. 9th month of disability 4 18th month of disability
2 benefits begins after 5 month waiting period in the 6th month
if a life insurance policy loan is made and the insured person dies before it is repaid, the beneficiary will receive: 1. the cash value, minus the outstanding loan amount 2. the death benefit, minus the outstanding loan amount 3. the full face value of the policy 4. nothing
2 death benefit minus any outstanding loan amount and interest on the loan
eligibility for social security disability benefits depends on having earned the required work credits, which are accumulated in units of time. During each calendar year, a full-time worker may earn up to: 1. three work credits 2. four work credits 3. six work credits 4. twelve work credits
2 4 work credits
if a health insurance policy has lapsed and is later reinstated, the reinstated policy will cover only sickness that begins: 1. after the date of reinstatement 2. at least 10 days after date of reinstatement 3. at least 20 days after reinstatement date 4. at least 30 days after reinstatement date
2 10 days
which of the following terms means that an insurance contract is dependent on an uncertain outcome? 1. valued 2. aleatory 3. unilateral 4. adhesion
2 aleatory
A 403(b) plan, commonly referred as a Tax Sheltered Annuity (TSA), is available to be used by 1. postal employees 2. self-employed persons 3. teachers and not-for-profit organizations 4. government workers
3
For variable products, underlying assets must be kept in 1. a money market account 2. a general account 3. a seperate account 4. a revenue account
3
The two types of assignments are 1. Complete and partial 2. complete and proportional 3. absolute and collateral 4. Absolute and partial
3
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary? 1. single life 2. fixed-amount 3. life income with period certain 4. joint and survivor
3
Which nonforfeiture option provides coverage for the longest period of time? 1. paid-up option 2. accumulated at interest 3. reduced paid-up 4. extended term
3
Which of the following annuity riders ensures that the owners will receive from an annuity at least the amount paid for the annuity? 1. Guarateed minimum accumulation 2. guaranteed lifetime earning 3. guarateed lifetime withdrawl 4. guaranteed minimum income
3
Which of the following is NOT a legitimate use of annuities by buisnesses? 1. providing deferred compensation for employees 2. providing an investment vehicle 3. creating a tax shelter 4. funding employee retirement plans
3
a residual disability benefits provides income benefit if an insured: 1. has exhausted all partial disability benefits 2. has exhasuted all temporary disability benefits 3. returns to work and cannot earn as much as earned before the disability 4. is receiving no other benefits during a waiting period
3
all of the following are requirements of eligibility for Social Security disability income benefits except 1. fully insured status 2. waiting period of 5 months 3. being age 65 4. inability to perform any gainful work
3
all of the following could own group life insurance except 1. an alumni group 2. a debtor group 3. a group needing low-cost life insurance 4 a group sponsored by an employer
3
all the following are true about a coordination of benefits provision in group health insurance except: 1. it establishes which plan pays first 2. it is designed to prevent overcompensation for incurred losses 3. it coordinates benefits under all available group and individual policies 4. it limits benefits when insurance is provided udner more than one plan
3
in health insurance policies, a preexisting condition is one that 1. an insurer puts forth as a prerequisite to acceptance of the risk 2. an applicant suspects already exists when completing the application 3. an applicant recieved medical advice or treatment for prior to applying 4. an insurer requires the applicant to agree before it issues a policy
3
which of the following annuity riders ensures investors will receive a set amount of income annually? 1. guaranteed lifetime earnings 2. guaranteed lifetime withdrawl 3. guaranteed minimum income benefit 4. guaranteed minimum accumulation benefit
3
which of the following statements regarding Business Overhead Expense policies is not true? 1. any benefits received are taxable to the business 2. leased equipment expenses are covered by the plan 3. benefits are usually limited to six months 4. premiums paids for BOE are tax-deductible
3
a type of life insurance that is usually written for small amount, and that requires frequent premium payments collected by the agent is called: 1. group life insurance 2. key executive life insurance 3. industrial life insurance 4. credit life insurance
3 industrial life insurance
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? 1. adhesion 2. conditional 3. aleatory 4 good health
3 b/c its an uneven exchange
The part of a health insurance policy that states the kind of benefits provided and the circumstances under which they will be paid is the: 1. definitions 2. conditions 3. benefit clause 4. face of the policy
3 benefit clause
under contract law, the payment of money in exchange for a service would be known as: 1. an offer 2. agreement 3. consideration 4. implied authority
3 consideration
the social security program provides all of the following benefits except: 1. survivors benefits 2. disability benefits 3. deferred compensation benefits 4. retirement income benefits
3 deferred compensation benefits
disability income policies often do not begin paying benefits immediately when an insured person becomes disables. Usually, the disability must continue for a period of time before benefits begins. This period is known as the: 1. trial period 2. probationary period 3. elimination period 4. verification period
3 elimination period
under a provision known as time payment of claims in a health insurance policy, after receiving a proof of loss, all benefits other than those that are paid periodically are supposed to be paid: 1. within 30 days 2. within 60 days 3. immediately 4. at the end of the month
3 immediately
all the following are true about group health insurance except: 1. it has fewer limitations on benefits than individual insurance 2. all participants are insured under a single master contract 3. all members of the insured group must be covered 4. it is rated on a group basis
3. on 75% of members in a group plan must be covered
An applicant buys a nonqualified annuity, but dies before the starting date. For which of the following beneficiaries would the contract's interest NOT be taxable? 1. charitable organizations 2. dependents 3. annuitant 4. spouse
4
An individual is purchasing a permanent life insurance policy with aface value of 25k. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following opitions should be included in the policy? 1. dividend options 2. guaranteed renewable opition 3. nonforfeiture options 4. guaranteed insurability opitions
4
Harry has just received his life insurance policy. In reviewing the title page, Harry was able to ascertain the following information EXCEPT 1. his children have been covered by a child rider 2. he had purchased a 20 year renewable term insurance policy in the face amount of $150,000 3. his total annual premium amount 4. his spouse had been assigned the primy beneficiary
4
If an insured changes his payment plan from monthly to annually, what happens to the total premium? 1. stays the same 2. doubles 3. increases 4. decreases
4
Members covered by a group health insurance plan receive a document that summarizes the benefits and the important policy provisions. This document is known as a 1. Master policy 2. Member's policy 3. Coordination of benefits 4. Certificate
4
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? 1. as of the policy delivery date 2. as of the first of the month after the policy issue 3. as of the policy issue date 4. as of the application date
4
The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called: 1. guaranteed insurability 2. waiver of cost of insurance 3. PAyor benefit 4. Waiver of premium
4
The type of term insurance that provides increasing death benefits as the insured ages is called 1. flexible term 2. interest-sensitive term 3. age-sensitive term 4. increasing term
4
a type of insurance that provides death benefits for a permanent loss of sight or limbs is known as 1. medical expense insurance 2. disability income insurance 3. life insurance with coinsurance 4. accidental death and dismemberment insurance
4
all the following are true about Medicare supplement policies except: 1. the policies are subject to approval by state insurance departments 2. they supplement Medicare by paying toward deductibles and co-payments 3. they may cover some services not covered by Medicare 4. they are sold by state and fed government agencies
4
health insurance policies have a consideration clause, which states that the insurance is provided in consideration of what? 1. has coverage under two or more policies 2. has to pay a portion of cover expenses 3. is covered in full, after paying the deductible amount 4. has coverage under his or her own policy and under the spouse's policy
4
individual health insurance policies may include a provision concerning unpaid premiums. When the provision applies, if a premium payment is overdue when a claim for benefits is made: 1. Coverage is suspended until the premium is paid 2. The insurer may pay the claim and then cancel the policy 3. A written demand for premium payment will be sent to the insured 4. the insurer may deduct the overdue premium from the benefits
4
the main difference between immediate and deferred annuities is 1. how the annuity is purchased 2. the number of insureds 3. the amount of each payment 4. when the income payments begin
4
under group life insurance conversion privilege, an employee who terminates membership in the insured group is allowed to: 1. continue to participate in the group plan by taking over premium payments 2. continue to participate in the group plan until cover elsewhere 3. convert to an individual policy if evidence of insurability is given 4. convert to an individual policy without evidence of insurability
4
what happens when a policy is surrendered for cash value? 1. coverage ends but the policy can be reinstated at anytime 2. the policy can be reinstated by paying back all policy loans and premiums 3. the policy can be converted to term coverage 4. coverage ends and the policy cannot be reinstated
4
what is the name of a health care delivery system providing prepaid doctor and hospital care, emphasizing preventative care, and charging a fixed periodic fee to its enrolled members? 1. preferred provider organization 2. administrative service organization 3. health care service organization 4. health maintenance organization
4
when an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called a 1. key person policy 2. fraternal association 3. aleatory contract 4. executive bonus
4
which of the following characteristics might make a risk uninsurable ? 1. if a loss occured, it would result in economic hardship 2. the risk of loss can be defined in terms of specific number of dollars 3. expected loss can be predicted due to a large number of exposure units 4. the risk of loss exists because of catastrophic exposure
4
which of the following element in an indexed universal life policy is tied to an index? 1. death benefit 2. face amount 3. premiums 4. cash value
4
which of the following individuals must have insurable interest in the insured? 1. beneficiary 2. underwriter 3. producer 4. policy owner
4
which of the following is a feature of a variable annuity ? 1. payments into the annuity are kept in the company's general account 2. interest rate is guarenteed 3. securities license is not required 4. benefit payment amounts are not guaranteed
4
which of the following is not required on an illustration used in the sale of a life insurance policy? 1. generic name of policy 2. name of insurer 3. underwriting or rating classifacation upon which the illustration is based 4. the name of the primary and secondary beneficiaries
4
which of the following is not true of regarding the annuitant? 1. the annuitant's life expectancy is taken into consideration for the annuity 2. the annuitant receives the annuity benefits 3. the annuitant must be a natural person 4. the annuitant cannot be the same person as the annuity owner
4
which of the following is true regarding a policy with a face value of less than 10k? 1. an insured cannot return the policy 2. if it's returned during the free look period, the contract will be cancelled, but the insurer will retain the premium paid 3. the policy can be cancelled with full refund of premium at anytime 4. if it's returned during the free look period, the agreement will be void
4
which of the following life insurance policies does not build cash value? 1. Universial life 2. variable life 3. whole life 4. guaranteed universial life
4
under the uniform policy provisions law, a required provision concerning proof of loss obligates a policyholder to file a written proof of loss within: 1. 20 days after loss 2. 30 days after loss 3. 60 days after loss 4. 90 days after loss
4 90 days
Workers compensation programs provide each of the following types of benefits except: 1. death benefits 2. medical benefits 3. disability benefits 4. retirement benefits
4 retirement benefits
for an employer-paid (noncontributory) group health insurance, the percentage of eligible group members that must be covered is: 1. 50% 2. 65% 3. 75% 4. 100%
4 when the employer pays all the premium it is required to cover all eligible group members
An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable? 1. $50,000 2. 18,000 3. $15,000 4. 3,000
4 b/c you already paid 15,000
each of the following is a significant consideration in the underwriting of individual health insurance risks except: 1. occupation 2. age of applicant 3. physical condition 4. geographic location
4 geographic location
in health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments: 1. whenever an insured is unable to work 2. during the time an insured is confined in a hospital 3. following an accidental injury, but not during sickness 3. after an insured has become totally disabled as defined in the policy
4 totally disabled
Regarding the taxation of Business Overhead policies, A. Premiums are deductible and benefits are taxed. B. Premiums are not deductible and benefits are taxed. C. Premiums are not deductible, but benefits are deductible. D. Premiums are not deductible, but expenses paid are deductible.
A
the principal purpose of the Medicaid program is to assist in providing medical care to person who are:
Medicaid is a joint federal-state program designed to provide health care to people who are unable to afford
in the medical insurance field, the term coinsurance means that an insured person:
coinsurance means that the insured will have to pay a portion of expenses usually 20% and the insurance company pays 80%