insurance exam
Mateo applies for an insurance policy that will have an annual premium payment of $1,000 ($510 semi-annually, $260 quarterly, and $100 monthly) if issued. Which of the following premium checks would be adequate consideration if he chose to pay monthly?
$100
If Alvin purchases a Variable Universal Life Policy with a face amount of $250,000, and chooses death benefit Option B, upon his death the amount of the benefit payable to the beneficiary would be _________ if the policy had $25,000 in cash values.
$275,000
W has a health insurance policy with an 80/20 coinsurance provision and a $1,000 deductible that is payable each year. If in January W has an outpatient procedure that cost $900, how much will W have to pay, assuming a new deductible must be met?
$900
The mortality rate is based on mortality tables which show life expectancy and the death rate per _______ people living in the U.S.
1,000
A SIMPLE plan is available to companies that have ______ employees or less.
100
A producer can reinstate their license once it has lapsed without retaking a prelicensing course and without taking a new license exam within:
12 months
The Federal Americans with Disabilities Act applies to employers with more than:
15 employees
How large must a group plan be for the requirement to include maternity benefits on the same basis as nonmaternity benefits to apply?
15 members
If an insurance company requests additional information regarding a claim, upon receiving the additional information, how many days does the insurer have to pay or deny the claim?
21
A Medicare Supplement or LTC policy's free look period is:
30 days
A Small Employer is defined as any person, firm, corporation, partnership, or association that is actively engaged in business and has ______ employees or less.
50
The lowest monthly Social Security retirement benefit would occur if started at age _______.
62
Which of the following is the correct number of days in the grace period for each premium mode?
7 days for weekly, 10 days for monthly, 31 for all others
The Double Indemnity Rider requires that the insured die within _____ days of the accident.
90
T has some heart health issues, but needs some additional life insurance coverage. What options should T consider?
A group life insurance plan
A payor benefit rider is used to keep what type of policy in force?
A jumping juvenile policy
Part B of Medicare excludes which of the following medical expenses?
A regular dental checkup
To purchase the greatest amount of coverage, for the least amount of initial premium, a client would purchase which of the following
A term policy
Overseas foreign travel emergency coverage is a Medicare supplement:
Additional benefit
When can a policyowner make a change in the policy's coverage or other benefits if an irrevocable beneficiary has been named?
After the irrevocable beneficiary dies
_____________ is/are not considered material to the policy issuance.
Age and/or gender
If you are charged with a violation of Alabama State Insurance Law, which of the following is/are true?
All of the answers listed
The authority created when a producer/agent exceeds the authority stipulated in his/her contract, and when the insurer does nothing to counter the public impression that such authority exists (i.e., the producer/agent accepting premiums on lapsed policies) is known as ______ authority:
Apparent
The benefits of an individual disability income policy:
Are received tax-free and generally limited to a percentage of monthly income
With equity-indexed life, the interest credited to the policy is:
Based on a percentage of the increase in a stipulated stock index
A person who negotiates insurance contracts with insurers on behalf of an applicant is known as a(n):
Broker
Permanent insurance differs from term insurance with regard to:
Cash value accumulation
In a reinsurance transaction, the company that wishes to transfer all or a portion of the financial risk of loss is known as the _______ company.
Ceding
Alice is the insured, Bill is the primary beneficiary, and Claire is the contingent beneficiary. Bill dies and Alice names Dale as the new primary beneficiary. Alice dies, so who receives the policy proceeds?
Dale
When an insured decides to change her mode of premium payment from monthly to annually, the total premium due would:
Decrease
Edward applies for a disability insurance policy. He pays the initial premium at the time of application and receives a conditional receipt. Three days after the insurance company conducts a medical examination, but before it issues a policy, Edward suffers a stroke. Upon reviewing the results of his medical exam, the company discovers that Edward has been diagnosed with high blood pressure and atherosclerosis. Under the terms of the conditional receipt, the insurance company:
Denies the claim because the insurer would not have issued the policy as applied for as standard or better
Allen purchases an estate builder (jumping juvenile) policy for his 5-year old son, Donald. Suppose that when Donald reaches age 21 his father presents him with the policy as a gift. Which of the following statements is NOT correct?
Donald must change the beneficiaries immediately
George has named each of his three sons as per capita primary beneficiaries of a $30,000 life insurance policy. If all three sons are living at the time of George's death, which statement best describes the amount each will receive?
Each son receives $10,000
____________ is the initial step of the total process of insuring a health risk.
Field underwriting
The investor must do all of the following in a STOLI/IOLI transaction, except:
Fill out the application for life insurance on behalf of the insured
This rider allows for the insured to obtain additional insurance in between the specified ages including marriage and the birth or adoption of a child, when the need for insurance coverage may increase without having to prove insurability. It is called the ________ rider:
Guaranteed Insurability
Which of the following types of care is excluded in a Long-Term Care policy?
Hospitalization in the Intensive Care Unit
In determining the proper amount of life insurance coverage for an insured, the ________ approach measures the projected future earnings and the value of the insured's services in the event of his or her premature death.
Human Life Value
Which of the following IS required when an application for an annuity is taken?
If the application is taken over the phone, the applicant must be provided an Annuity Disclosure document no later than 5 days after completing the application
Why should a policyowner be especially careful when deciding to increase the amount of an outstanding policy loan?
If the outstanding loan balance, plus interest, equals or exceeds the cash value of the policy, the company could cancel the insurance
Life insurance benefits are usually paid ____________, unless another mode of settlement has been selected.
In a lump sum
All of the following about Universal Life are true, except:
Increases in face amount do not require proof of insurability if under $100,000
Debit life insurance is classified as which of the following?
Industrial
The settlement option under which the principal never decreases unless the beneficiary withdraws it is the:
Interest option
If an annuity lifetime benefit is selected in most cases, it is an _________ election.
Irrevocable
All of the following are true about a buy/sell agreement, except:
It can only be funded with term life insurance
What happens to the overall annual premium cost once a term rider expires?
It decreases
All of the following are true of insurance in general, except:
It eliminates risk
Why have many states prohibited STOLI/IOLI transactions?
It is a violation of the insurable interest rule
The factors that determine the amount of each payment under the fixed period settlement option are:
Length of the fixed period, face amount of the policy and interest
Albert, as the owner of a life insurance policy insuring his son David, wants a Settlement Option that, if David were to die, would provide guaranteed payments to Albert and his wife Lois, until both of them die. Albert should choose:
Life Income Joint and Survivor
Cranston wants a Settlement Option for his beneficiary that will guarantee the beneficiary an income as long as the beneficiary lives. Cranston should choose:
Life Income Only
Jasmine has deposited $100,000 into a single premium immediate annuity. If Jasmine were to die before receiving $100,000 in payments, the balance of the $100,000 would be paid to her sister. Jasmine has selected the:
Life Income with Refund Option
For which policy type is the threshold for deductibility lower after one reaches the age of 65?
Long-term care insurance only
A basic medical plan provides a specified dollar limit per medical procedure as stated in the policy. This specified amount is the:
Maximum benefit the policy will pay for that procedure
Which type of Accident and Health policy would provide reimbursement for expenses involved with a broken hip?
Medical Expense Policy
Loading includes all of the following, except:
Mortality
As a general rule, most insurance companies will allow the insured to change to another type of insurance policy without a medical examination if the:
New premium is higher than the original
When group health insurance is being replaced, ongoing claims under the former policy must continue under the new policy, overriding any preexisting condition exclusion. This is a requirement under which of the following?
No Loss - No Gain Statutes
Which of the following is a limited form of medical expense coverage added to a disability income policy?
Non-disabling injury rider
If it is known or should be known by the agent that an existing policy is going to be lapsed, forfeited, surrendered or terminated in favor of a new policy, the agent must submit a:
Notice of Replacement
In Individual Disability Income underwriting, the single most important rating factor from an underwriting standpoint is the applicant's:
Occupation
A dread disease policy covers:
Only the disease or diseases specified on the policy, usually those that occur relatively infrequently
The extended term nonforfeiture option provides:
Paid-up term coverage equal to that of the original policy
Which of the following types of policies is eligible for policy dividends?
Participating
An insured owning an Adjustable Life Policy enjoys a policy that has characteristics of both ______ and _______.
Permanent and Term
Twisting involves which of the following?
Policy replacement
Which of the following best describes the general tax rules regarding employer sponsored group disability income insurance plans?
Premiums are deductible, the benefits are taxable
The following statement is true concerning the income received from an individually owned disability income policy:
Premiums paid with after tax dollars, Income benefit not taxable
Which of the following things IS NOT one of the factors considered when using the needs approach to determine the kind and amount of insurance appropriate for an individual?
Present salaries of all wage earners in the home
With an Accidental Death and Dismemberment policy, which of the following pays for accidental death?
Principal amount
In any health or disability income policy, there is a period during which no benefits will be paid for illness of any kind. This period usually does not apply to accidents, only to illness. The term that describes this interim is the:
Probationary period
Normally, when the insurer determines that the insured is an acceptable risk, the insurer will send the policy to the ____________.
Producer
How can an annuity payout an income benefit income tax free?
Purchase the annuity within a Roth IRA account
An existing term life insurance policy may be exchanged for a new term life insurance policy on the ______ date.
Re-Entry
Which of the following nonforfeiture options provides the longest period of coverage?
Reduced paid-up
Which of the following terms refers to the risk management technique of assuming the responsibility for a loss?
Retention
Susan, age 65, inherits a substantial sum of money and wants to have the money distributed to her over the rest of her life starting next month. Which product offered by the life insurance industry will allow her to accomplish her objective?
Single Premium Immediate Annuity
Once the gross amount of dollars required to fund an insured's needs has been determined using the needs analysis approach, what is the next step?
Subtract any assets available to fund financial needs after death
Which of the following best describes producer field underwriting?
Taking the time to probe beyond the stated questions on the application based upon the applicant's responses
The interest earned on dividends is:
Taxable
Life insurance protection for a specified period of time is provided by what type of policy?
Term
Who pays all future premiums after the Viatical Settlement?
The Viatical Company
What happens if an applicant discovers that there has been inaccurate or incomplete information in any report used during the underwriting process for life insurance?
The applicant has the right to challenge the inaccurate or incomplete information
When an applicant completes the insurance application in its entirety and provides the producer with a premium check, what in effect has taken place?
The applicant is making an offer to the insurer
Which statement is incorrect regarding COBRA?
The employee or beneficiary must respond to the notification of his/her right to continue coverage within 90 days, if he/she wants to continue the coverage
What is the net amount at risk in a Whole Life Insurance policy?
The face amount less the cash values
All of the following can determine the death benefit settlement option, except:
The insurer
All of the following statements about noncancellable policies are true, except:
The insurer may choose not to renew the policy, but only on the policy renewal or anniversary date
If an insured's policy includes the waiver of premium rider, what happens when the age is reached where the rider no longer applies?
The premium for the policy is reduced
All of the following are situations in which the insurer is obligated to pay out a death benefit after the insured has died, except:
The premiums have not been paid and have been overdue for 3 years
In determining the proper amount of life insurance, the Needs Analysis Approach takes into consideration all of the following factors, except:
The projected future value of services provided by the insured
Which of the following best describes the consideration on the part of an insurer?
The promise to pay in the event of a covered claim
In which of the following circumstances was the small business owner able to deduct the premiums they paid for insurance?
The sole proprietor of a small firm buys an overhead expense policy
Universal Life is similar to Whole Life in all of the following ways, except:
The timing and amount of premium is flexible
Which of the following do Fixed and Variable Annuities have in common?
The types of settlement options available at annuitization
What differences exist between the treatment of sole proprietors and partners when it comes to the taxation of medical expense insurance?
There is no difference
Group health insurance plans apply which of the following restrictions to dependent coverage on children of the primary insured up to age 26?
They must be under age 26
How is it possible for an insurance company to payout more to an individual annuitant than what they had paid into the policy and any earnings credited?
Those who die early leave reserves behind to allow funding for those who live a very long time
The agent's primary underwriting role is:
To make sure the application provides the proper information
A producer submits a completed application to the insurer along with the premium check after giving the applicant a conditional receipt. If the applicant completes the required medical exam, but dies prior to the insurer issuing a policy as applied for, what is the insurer's responsibility?
To pay the claim in full as long as the conditions of the receipt were fully satisfied by the insurer
If a policyowner has a whole life insurance policy with a disability waiver of premium rider, when does the rider benefit start if a qualifying disability should occur?
Typically 6 months after the disability occurs
When soliciting insurance, producers are governed by state rules and regulations under the title of ___________.
Unfair Trade Practices
If an annuity uses units instead of dollars to determine the value of the policy, then it is a(n) _________ annuity.
Variable
Which of the following annuities uses unit values rather than dollars to account for its value?
Variable
When are Errors and Omissions claims filed?
When clients file a report or a complaint
