Insurance Exam
Which of the following is true regarding METs?
They allow several small employers purchase less expensive insurance together.
What is the name of a clause that is included in a policy that limits or eliminates the death benefit if the insured dies as a result of war or while serving in the military?
War or military service
An insurance company forwards fixed annuity premiums to their general account, where the money is invested. The guaranteed minimum interest is set at 2.5%. During an economic downswing, the investments only drew 2%. What interest rate will the insurer pay to its policyholders?
2.5%
How long is the right to examine period for new individual annuities issued in this state?
10 days
While a claim is pending, an insurance company may require
An independent examination as often as reasonably required.
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be
Authorized.
All of the following are personal uses of life insurance EXCEPT a) Estate creation. b) Cash accumulation. c) Buy-sell agreement. d) Survivor protection.
Buy-sell agreement.
According to the provisions of the Patient Protection and Affordable Care Act, all of the following are required preventive care services EXCEPT - Cervical cancer exams for all women starting at age 40. - Diet counseling for adults. - Well-woman visits and counseling. - Screenings for autism and behavioral disorders in children.
Cervical cancer exams for all women starting at age 40.
Which of the following will NOT be an appropriate use of a deferred annuity?
Creating an estate
Which of the following authorities monitors the financial strength of insurers?
Department of Insurance
Which of the following statements is correct concerning taxation of long-term care insurance? - Benefits may be taxable as ordinary income. - Premiums may be taxable as income. - Premiums are not deductible in any case. - Excessive benefits may be taxable.
Excessive benefits may be taxable.
The authority granted to an agent through the agent's contract is referred to as
Express authority.
A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis?
Guaranteed
Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage?
Health Maintenance Organization plan
What are the two components of a universal policy
Insurance and cash accounts
Which of the following ultimately determines the interest rates paid to the owner of a fixed annuity?
Insurer's guaranteed minimum rate of interest
Variable whole life is based on what type of premium
Level fixed
Which of the following is the term used when a person in a fiduciary position has used assets in manner for which they were not intended such as the wrongful taking or use of money belonging to another? - Rebating - Fiduciary capacity - Misappropriation of funds - Fraud
Misappropriation of funds
A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard?
Morale
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?
Mutual
What is mandatory for health insurance policies?
Physical examination and autopsy
Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value?
Predicted needs of the family after the insured's death.
If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a
Settlement option.
What would be classified as a traditional level premium contract
Straight life
What would help a universal life policy from lapsing
Target premium
Which of the following entities established the Do-Not-Call Registry?
The Federal Trade Commission
A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid?
The benefits will be coordinated
What determines the cash value of a variable life policy
The performance of the policy portfolio
Which of the following best defines target premium in a universal life policy? - The corridor of insurance - The recommended amount to keep the policy in force throughout its lifetime - The maximum amount the policyowner may pay on a policy - The minimum amount to make sure the policy is annually renewable
The recommended amount to keep the policy in force throughout its lifetime
When a producer holding a certificate or a broker's license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within
30 days.
Which statement best defines a Multiple Employer Welfare Arrangement (MEWA)? - A group health plan that covers medical expenses arising from work related injuries - A joining together by employers to provide health benefits for employee - A plan that provides hospice care for terminally ill employees - A government health plan that provides health care for the unemployed
A joining together by employers to provide health benefits for employee
Which of the following statements is INCORRECT? - A licensee may charge a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business. - A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business. - No insurance producer may charge a fee for the completion of an application for a contract of insurance. - The fee charged by the licensee must be disclosed in advance in writing to the person and must be reasonable in relationship to the services provided.
A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business.
All of the following are true of the Key Person disability income policy EXCEPT - It is typically written to protect the company in the event a key employee becomes disabled and is unable to work. - The income may be used to find a replacement for the key employee. - Benefits are considered taxable income to the business. - Premiums are not deductible to the business.
Benefits are considered taxable income to the business.
According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to annuitization, the owner is entitled to which of the following? - Guaranteed surrender value - No payments - Annuity dividends - Full premium refund without any charges
Guaranteed surrender value
Which of the following statements is TRUE about a policy assignment? - It transfers rights of ownership from the owner to another person. - It is the same as a beneficiary designation. - It permits the beneficiary to designate the person to receive the benefits. - It authorizes an agent to modify the policy.
It transfers rights of ownership from the owner to another person.
Which statement is NOT true regarding a Straight Life policy? - Its premium steadily decreases over time, in response to its growing cash value. - The face value of the policy is paid to the insured at age 100. - It usually develops cash value by the end of the third policy year. - It has the lowest annual premium of the three types of Whole Life policies.
Its premium steadily decreases over time, in response to its growing cash value.
Untrue statements on the application unintentionally made by insureds that, if discovered, would alter the underwriting decision of the insurance company, are called
Material misrepresentations.
When an employee is still employed upon reaching age 65 and eligible for Medicare, which of the following is the employee's option? - Enroll in Medicare, while the company must provide additional retirement benefits - Enroll in Medicare when eligible; otherwise, Medicare benefits will be forfeited. - Wait until the next birthday to enroll - Remain on the group health insurance plan and defer eligibility for Medicare until retirement
Remain on the group health insurance plan and defer eligibility for Medicare until retirement
Which of the following is an example of a peril covered in an accident and health insurance policy? Sickness Alcoholism Smoking Death
Sickness
According to the privacy of consumer financial information regulation, if a consumer decides to opt out, this means
The consumer directs the licensee not to disclose the consumer's nonpublic personal financial information to a third party.
Which of the following statements about group life is correct? - The cost of coverage is based on the ratio of men and women in the group. - The premiums are higher than in an individual policy because there is no medical exam. - The group sponsor receives a Certificate of Insurance. - The policy can be converted to an individual term insurance policy.
The cost of coverage is based on the ratio of men and women in the group.
Which of the following is NOT a characteristic of an insurable risk? - The loss must be catastrophic. - The loss must be due to chance. - The loss must be measurable. - The loss exposure must be large.
The loss must be catastrophic.
If an insured continually uses the automatic premium loan option to pay the policy premium,
The policy will terminate when the cash value is reduced to nothing.
Under an extended term nonforfeiture option, the policy cash value is converted to
The same face amount as in the whole life policy.
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
Which life insurance policy would be considered time sensitive
Universal life
An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this?
Unpaid premium
The paid-up addition option uses the dividend to
purchase a smaller amount of the same type of insurance as the original policy.
Under which of the following circumstances can financial institutions share insurance coverage information with third parties, for the purpose of soliciting the purchase of insurance? - Under no circumstances; nonpublic personal financial information cannot be shared with third parties - If a consumer decides to opt out - If a consumer does not sign and return the notice of disclosure within 30 days - Whenever it is requested by the Commissioner
If a consumer does not sign and return the notice of disclosure within 30 days
