insurance life and health
What is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application? a)90 days after the effective policy date b)6 months after the effective policy date c)1 year after the effective policy date d)As long as the policy is in force
As long as the policy is in force
What characteristic makes whole life permanent protection? a)Guaranteed level premium b)Living benefits c)Coverage until death or age 100 d)Guaranteed death benefit
Coverage until death or age 100
The HMO Act of 1973 required employers to offer an HMO plan as an alternative to regular health plans if the company had more than 25 employees. How has this plan since changed? a)The source of funding has changed. b)The minimum number of employees has decreased. c)The minimum number of employees has increased. d)Employers are no longer forced to offer HMO plans.
Employers are no longer forced to offer HMO plans.
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?
Equal to the original policy for as long as the cash values will purchase.
An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n) a)Equity Indexed Annuity. b)Variable Annuity. c)Flexible Annuity. d)Immediate Annuity.
Equity Indexed Annuity
The Director, or his designated examiner, may examine the conduct of any insurance company operating in Missouri. The Director must conduct a financial examination of every insurer licensed in Missouri at least a)Every five years. b)Every year. c)Every other year. d)Every three years.
Every five years.
Which of the following statements is true regarding LTC insurance? a)Every policy must offer reduced paid-up insurance to the applicant. b)LTC policies may not include any riders. c)LTC policies do not have a free-look period. d)Every policy must offer nonforfeiture benefits to the applicant.
Every policy must offer nonforfeiture benefits to the applicant.
A guaranteed renewable disability insurance policy a)Cannot be cancelled by the insured before age 65. b)Is renewable at the insured's option to a specified age. c)Is renewable at the option of the insurer to a specified age of the insured. d)Is guaranteed to have a level premium for the life of the policy.
Is renewable at the insured's option to a specified age.
Credit life insurance is usually issued as what type of policies? a)Variable life b)Annuity c)Term life d)Whole life
Term life
Which of the following definitions would make it easier to qualify for total disability benefits? a)The more strict "own occupation" b)The more liberal "own occupation" c)The more strict "any occupation" d)The more liberal "any occupation"
The more liberal "own occupation"
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
Warranty
If an insured continually uses the automatic premium loan option to pay the policy premium, a)The cash value will continue to increase. b)The insurer will increase the premium amount. c)The policy will terminate when the cash value is reduced to nothing. d)The face amount of the policy will be reduced by the automatic premium loan amount.
he policy will terminate when the cash value is reduced to nothing.
An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy? a)$0 b)$200 c)$9,800 d)$10,000
9,800
A hospital indemnity policy will pay
A benefit for each day the insured is in a hospital.
If a policyholder declines the nonforfeiture benefit, what must the insurer provide to the client upon the lapse of the policy? a)A full refund of premiums b)Pro Rata premiums c)A contingent benefit d)An aleatory benefit
A contingent benefit
Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain a)A statement from the insured's employer showing that the insured was unable to work. b)An estimate of the total amount of medical and hospital expense for the loss. c)A complete physician's statement. d)A statement that is sufficiently clear to identify the insured and the nature of the claim.
A statement that is sufficiently clear to identify the insured and the nature of the claim.
In insurance, an offer is usually made when a)An applicant submits an application to the insurer. b)The insurer approves the application and receives the initial premium. c)The agent hands the policy to the policyholder. d)An agent explains a policy to a potential applicant.
An applicant submits an application to the insurer.
All of the following are examples of third-party ownership of a life insurance policy EXCEPT a)A company purchases a life insurance policy on their manager, who is an important part of the operation. b)When an insured purchased a new home, the insured made an absolute assignment of a life insurance policy to the mortgage company. c)An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan. d)An insured couple purchases a life insurance policy insuring the life of their grandson.
An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan.
The LEAST expensive first-year premium is found in which of the following policies? a)Annually Renewable Term b)Increasing Term c)Decreasing Term d)Level Term
Annually Renewable Term
A Universal Life Insurance policy is best described as a/an
Annually Renewable Term policy with a cash value account.
Which of the following entities can legally bind coverage? a)Federal Insurance Board b)Agent c)Insurer d)The insured
Insurer
All of the following are legitimate reasons for a group health insurance policy nonrenewal EXCEPT a)Nonpayment of premium. b)Insurer discontinues all group coverage in the service area. c)Any misrepresentation by the plan sponsor on the application for insurance. d)Not enough employees participating in the group plan.
Any misrepresentation by the plan sponsor on the application for insurance.
What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided? a)Insurance Request Form b)Request for Insurance c)Application d)Policy Request
Application
All of the following are requirements to obtain an insurance producer license in Missouri EXCEPT a)Be at least 18 years of age. b)Be of good moral character. c)Pass a written examination on the line(s) of insurance for which a license is sought. d)Attend an approved prelicensing course.
Attend an approved prelicensing course
What document describes an insured's medical history, including diagnoses and treatments?
Attending Physician's Statement
What coverage, written in conjunction with hospital expense policies, covers surgeons' fees, anesthesiologist, and the operating room? a)Stop Loss b)Basic Surgical Expense c)Basic Medical Expense d)Major Medical Expense
Basic Surgical Expense
Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?
Buyer's Guide
An insured receives an annual life insurance dividend check. What term best describes this arrangement? A Cash option B Reduction of Premium C Annual Dividend Provision D Accumulation at Interest
Cash option
The provision that provides for the sharing of expenses between the insured and the insurance company is a)Deductible. b)Divided cost. c)Coinsurance. d)Stop-loss.
Coinsurance.
A policyowner would like to replace an existing policy with a new one. After having compared the two policies, the insurer has advised the policyowner not to continue the replacement process. What is the insurer's action called? a)Coercion b)Retaining c)Intervening cause d)Conservation
Conservation
In a relative value system of determining coverage for a given procedure, what term describes the total amount payable per point? a)Relative value b)Translation factor c)Practical value d)Conversion factor
Conversion factor
All of the following are true about group disability Income insurance EXCEPT a)The waiting period starts at the onset of the injury or sickness. b)The longer the waiting period, the lower the premium. c)Coverage applies both on and off the job. d)Benefits are usually short term.
Coverage applies both on and off the job.
What is another name for interest-sensitive whole life insurance?
Current assumption life
Which of the following is NOT typically excluded from life policies? a)Death due to plane crash for a fare-paying passenger b)Self-inflicted death c)Death that occurs while a person is committing a felony d)Death due to war or military service
Death due to plane crash for a fare-paying passenger
Which of the following is NOT an example of a valid insurable interest? a)Employer in key employee's life b)Child in parents' lives c)Debtor in the life of the creditor d)Business partners in each other's lives
Debtor in the life of the creditor
Which nonforfeiture option has the highest amount of insurance protection? a)Extended Term b)Conversion c)Decreasing Term d)Reduced Paid-up
Extended Term
Life insurance death proceeds are a)Taxable to the extent that they exceed 7.5% of the beneficiary's adjusted gross income. b)Taxed as a capital gain. c)Taxed as ordinary income. d)Generally not taxed as income.
Generally not taxed as income.
Which of the following is INCORRECT concerning taxation of disability income benefits? a)If paid by the individual, the premiums are tax deductible. b)If the employer paid the premiums, income benefits are taxable to the insured as ordinary income. c)If the insured paid the premiums, any disability income benefits are tax-free. d)If the benefits are for a permanent loss, the benefits paid to the employee are not taxable.
If paid by the individual, the premiums are tax deductible.
A Return of Premium term life policy is written as what type of term coverage? a)Increasing b)Decreasing c)Renewable d)Level
Increasing
Which of the following entities has the authority to make changes to an insurance policy? a)Insurer's executive officer b)Department of Insurance c)Broker d)Producer
Insurer's executive officer
All of the following are Nonforfeiture options EXCEPT a)Cash surrender b)Extended term c)Reduced paid-up d)Interest only
Interest only
The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose? a)Joint and survivor b)Fixed amount option c)Interest only option d)Life income with period certain
Interest only option
Which of the following best describes a misrepresentation? a)Making a maliciously critical statement that is intended to injure another person b)Discriminating among individuals of the same insuring class c)Issuing sales material with exaggerated statements about policy benefits d)Making a deceptive or untrue statement about a person engaged in the insurance business
Issuing sales material with exaggerated statements about policy benefits
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that? a)Survivorship Life Policy b)Second-to-Die c)Family Income Policy d)Joint Life Policy
Joint Life Policy
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this? a)Level term b)Term to specified age c)Ordinary life policy d)Limited pay whole life
Level term
The Director can revoke an insurance producer license for any of the following causes, EXCEPT a)Violation of any insurance law in another state. b)Licensee fails to comply with an administrative or court order imposing a child support obligation. c)Licensee providing materially incorrect or untrue information in the license application. d)Licensee is charged with bank robbery.
Licensee is charged with bank robbery.
Which of the following settlement options in life insurance is known as straight life? a)Single life b)Life with period certain c)Fixed amount d)Life income
Life income
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? a)Single life b)Fixed-amount c)Life income with period certain d)Joint and survivor
Life income with period certain
If a dental plan is integrated, it is combined with what type of plan? a)Secondary dental b)Supplemental c)Life d)Medical
Medical
An insured is covered under a Medicare policy that provides a list of network healthcare providers that the insured must use to receive coverage. In exchange for this limitation, the insured is offered a lower premium. Which type of Medicare policy does the insured own? a)Medicare Part A b)Medicare Supplement c)Medicare Advantage d)Medicare SELECT
Medicare SELECT
Under the Affordable Care Act, which classification applies to health plans based on the amount of covered costs? a)Guaranteed and nonguaranteed b)Grandfathered and nongrandfathered c)Risk classification d)Metal level classification
Metal level classification
If one takes Social Security retirement benefits at age 62, what needs to be done at age 65 to qualify for Medicare? a)Apply for coverage through the state b)Appear for a physical at the Social Security office c)Apply at a local Social Security office d)Nothing
Nothing
The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the a)One-year term option. b)Paid-up option. c)Accelerated endowment. d)Paid-up additions.
One-year term option.
A participating insurance policy may do which of the following? a)Require 80% participation b)Pay dividends to the policyowner c)Provide group coverage d)Pay dividends to the stockholder
Pay dividends to the policyowner
Which of the following will be included in a policy summary? a)Comparisons with similar policies b)Primary and secondary beneficiary designations c)Premium amounts and surrender values d)Copies of illustrations and application
Premium amounts and surrender values
Which of the following answers does NOT describe the principal goal of a Preferred Provider Organization? a)Provide the subscriber a choice of hospitals b)Provide medical services at a reduced cost c)Provide medical services only from physicians in the network d)Provide the subscriber a choice of physicians
Provide medical services only from physicians in the network
An insured committed suicide 6 months after his life insurance policy was issued. The insurer will a)Pay nothing. b)Refund the premiums paid. c)Pay the policy's cash value. d)Pay the full death benefit to the beneficiary.
Refund the premiums paid.
Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance? a)Reinstatement rule b)Conversion rule c)Disclosure rule d)Replacement rule
Replacement rule
Under the Fair Credit Reporting Act, if a consumer challenges the accuracy of the information contained in a consumer or investigative report, the reporting agency must a)Send an actual certified copy of the entire report to the consumer. b)Respond to the consumer's complaint. c)Defend the report if the agency feels it is accurate. d)Change the report.
Respond to the consumer's complaint.
Health insurance policies are required to provide coverage for general anesthesia for dental care provided to all of the following EXCEPT a)Senior citizens above age 65 b)Children under age 5 c)A severely disabled person d)A person with a behavioral condition requiring hospitalization when dental care is provided
Senior citizens above age 65
Which of the following special policies covers unusual risks that are NOT normally included under Accidental Death and Dismemberment coverage? a)Specified Disease Policy b)Credit Disability c)Special Risk Policy d)Limited Risk Policy
Special Risk Policy
Which of the following riders is often used in business life insurance policies when the policyowner needs to change the insured under the policy? a)Term rider b)Guaranteed insurability rider c)Payor benefit rider d)Substitute insured rider
Substitute insured rider
which of the following is not covered under basic hospital expense coverage A. Surgeon Fees B. Hospital room and board C. Lab charges D. X ray charges
Surgeon Fees
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as a)Juvenile protection provision. b)Survivor protection. c)Life planning. d)Survivorship insurance.
Survivor protection.
Which of the following is called a "second-to-die" policy? a)Juvenile life b)Joint life c)Survivorship life d)Family income
Survivorship life
The premiums paid by the employer in a business life insurance policy are A. Never taxable to the employee B. Tax deductible by the employer C. Tax Deductible by the employee D. Always taxable to the employee
Tax deductible by the employer
Nonforfeiture values guarantee which of the following for the policyowner? A That the policy premiums will never increase B That the cash value will not be lost C That the dividends will be paid annually D That the death benefit will be paid in a lump sum
That the cash value will not be lost
Which of the following information will be stated in the consideration clause of a life insurance policy?
The amount of premium payment
The initial amount of credit life insurance may NOT exceed a)The amount to be repaid under the contract. b)An amount set by statute and adjusted regularly for inflation. c)The borrower's monthly income. d)The borrower's annual income.
The amount to be repaid under the contract
An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy? a)The capital amount in monthly installments b)The principal amount in monthly installments c)The capital amount in a lump sum d)The principal amount in a lump sum
The capital amount in a lump sum
An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true?
The group plan will not pay because the employee was injured at work.
An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy? a)The insured is in an accident and incurs a large claim. b)The insured does not pay the premium. c)The insured reaches the maximum age limit specified in the policy. d)Within two years of the application, the insurer discovers a misrepresentation.
The insured is in an accident and incurs a large claim.
If an insured continually uses the automatic premium loan option to pay the policy premium, A The policy will terminate when the cash value is reduced to nothing. B The face amount of the policy will be reduced by the automatic premium loan amount. C The cash value will continue to increase. D The insurer will increase the premium amount.
The policy will terminate when the cash value is reduced to nothing
Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated? a)Those who have no history of claims b)Those who have been insured under the plan for at least 5 years c)Those who have worked in the company for at least 3 years d)Those who have dependents
Those who have been insured under the plan for at least 5 years
What is the purpose of the insurability provision in group life policies issued in this state? a)To require the insurer to provide certificates of insurance to individual insured b)To guarantee insurability for all eligible applicants c)To allow the insurer to require proof of insurability from individual insured d)To automatically renew coverage for a new policy term
To allow the insurer to require proof of insurability from individual insured
What is the purpose of establishing the target premium for a universal life policy? a)To accumulate cash value faster b)To pay up the policy faster c)To cover all policy expenses d)To keep the policy in force
To keep the policy in force
If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it? a)A legal (but unethical) contract b)Unilateral c)Adhesion d)Conditional
Unilateral
Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
Universal Life
which of the following types of policies allows for a flexible premium and a variable investment component? A. variable whole life insurance B. Whole life insurance C. Variable Universal Life insurance D. Guaranteed Issue variable life insurance
Variable Universal Life insurance
When is the earliest a policy may go into effect? A. After the underwriter reviews the policy B. When the application is signed and a check is given to the agent C. when the first premium is paid and the policy has been delivered D. When the insurer approves the application
When the application is signed and a check is given to the agent
In individual health insurance coverage, the insurer must cover a newborn from the moment of birth, and if additional premium payment is required, how many days should be allowed for payment? a)Within 10 calendar days b)Within 15 working days c)Within 31 days of birth d)Within a reasonable period of time
Within 31 days of birth
If more than one family member covered under the same major medical policy is injured in the same accident, the family only has to pay one deductible. This is due to the a)Carry-over provision. b)Elimination period. c)Common accident provision. d)Integrated deductible.
common accident provision
Contracts that are prepared by one party and submitted to the other party on a take it or leave it basis are classified as Aleatory contracts Binding contracts contracts of adhesion unilateral contracts
contracts of adhesion
Which of the following best describes the aleatory nature of an insurance contract? a)Only one of the parties being legally bound by the contract b)Ambiguities are interpreted in favor of the insured c)Policies are submitted to the insurer on a take-it-or-leave-it basis d)Exchange of unequal values
exchange of unequal values
In which of the following locations would skilled care most likely be provided? a)At a physician's office b)In an institutional setting c)At the patient's home d)In an outpatient setting
in an institutional setting
In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost a)Is not covered. b)Must be covered by the insurer. c)Counts toward deductible. d)Counts toward coinsurance.
is not covered
Which of the following best describes annually renewable term insurance? a)It is level term insurance. b)It requires proof of insurability at each renewal. c)Neither the premium nor the death benefit is affected by the insured's age. d)It provides an annually increasing death benefit.
it is level term insurance
The insuring clause of a disability policy usually states all of the following except A.that insurance against loss is provided B.the types of losses covered C.the method of premium payment D. the identities of the insurance company and the insured
the method of premium payment
A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as a)Relative-value schedule. b)Benefit schedule. c)Gatekeepers. d)Usual, customary and reasonable.
usual, customary, and reasonable
A petition for adoption must be filed within how many days of birth in order for health coverage to extend to an adopted child? a)90 days b)365 days c)30 days d)10 days
30 days
What is the period of coverage for events such as death or divorce under COBRA? a)36 months b)60 days c)31 days d)12 months
36 months
A return of premium term life policy is written as what type of term coverage? decreasing level increasing renewal
increasing
An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy? a)Nothing b)$50,000 c)$100,000 d)$200,000
$100,000
A brain surgeon has an accident and develops tremors in her right arm. Which disability income policy definition of total disability will cover her for all losses? a)"Any occupation" - less restrictive than other definitions b)"Any occupation" - more restrictive than other definitions c)"Own occupation" - less restrictive than other definitions d)"Own occupation" - more restrictive than other definitions
"Own occupation" - less restrictive than other definitions
Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be A. Discounted B. Adjusted to the insured's age at the time of renewal C. Determined by the health of the insured D. Based on the issue age of the insured
Adjusted to the insured's age at the time of renewal
All of the following statements are correct regarding credit life insurance EXCEPT a)Benefits are paid to the borrower's beneficiary. b)The amount of insurance permissible is limited per borrower. c)Premiums are usually paid by the borrower. d)Benefits are paid to the creditor.
Benefits are paid to the borrower's beneficiary.
Which of the following best describes fixed-period settlement option? a)The death benefit must be paid out in a lump sum within a certain time period. b)Income is guaranteed for the life of the beneficiary. c)Both the principal and interest will be liquidated over a selected period of time. d)Only the principal amount will be paid out within a specified period of time.
Both the principal and interest will be liquidated over a selected period of time.
In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is a)More limited in general. b)More limited in duration. c)Broader in duration. d)Broader in general.
Broader in general
What type of policy allows the insurance company to cancel a policy at any time? a)Renewable b)Guaranteed renewable c)Noncancellable d)Cancellable
Cancellable
If an insured changes his payment plan from monthly to annually, what happens to the total premium? a)Doubles b)Increases c)Decreases d)Stays the same
Decreases
Which of the following types of insurance policies is most commonly used in credit life insurance? a)Increasing term b)Whole life c)Equity indexed life d)Decreasing term
Decreasing term
Which of the following statements about occupational vs. nonoccupational coverage is TRUE? a)Group medical expense policies and individual medical expense policies always cover both occupational and nonoccupational injuries. b)Individual disability policies never cover nonoccupational injuries. c)Only group disability income policies can be written on an occupational basis. d)Disability insurance can be written as occupational or nonoccupational.
Disability insurance can be written as occupational or nonoccupational
Underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT a)Pre-existing conditions that were previously covered may not be covered under the replacing policy. b)Benefits may change. c)Premiums always stay the same. d)Due to age or health, the policy may change dramatically.
Premiums always stay the same.
Insurers may change which of the following on a guaranteed renewable health insurance policy? a)Individual rates b)No changes are permitted. c)Rates by class d)Coverage
Rates by class
What is the waiting period on a Waiver of Premium rider in life insurance policies? a)30 days b)3 months c)5 months d)6 months
6 months
Which policy component decreases in decreasing term insurance? a)Cash value b)Dividend c)Premium d)Face amount
Face amount
A child with phenylketonuria (PKU) will have its physician-recommended foods covered by a health insurance policy, provided the child is under what maximum age? a)1 months old b)3 months old c)3 years old d)6 years old
6 years old
At what age may an individual make withdrawals from an HSA for nonhealth purposes without being penalized? 55 59/12 62 65
65
An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage? a)$25 b)$25.50 c)$100 d)$102
$102
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? a)Revocation of license b)$2,500 c)$1,000 d)$100 per violation
$2,500
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy? a)$20,000 b)$25,000 c)$50,000 d)The face amount will be determined by the insurer.
$50,000
An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any, would be paid by the secondary insurer? a)$0 b)$500 c)$1,000 d)$2,000
$500 Once the primary insurer has paid the full available benefit, the secondary insurer will cover what the first company will not pay, such as deductibles and coinsurance. The insured will, then, be reimbursed for out-of-pocket costs.
What percentage of individually-owned disability income benefits is taxable? a)0% b)50% c)100% d)Amount paid by insured
0%
A licensed life insurance producer in Missouri completed 20 hours of continuing education credits in order to renew her license. How many hours of continuing education credit will this producer need to complete in order to renew her license the next term? a)10 b)0 c)12 d)16
12
A producer completed an insurance transaction in 2007. When can the producer dispose of the records for this transaction? a)2008 b)2009 c)2010 d)2012
2010
The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over the last a)6 months. b)12 months. c)18 months. d)24 months.
24 months.
How many hours of continuing education must be completed in ethics and Missouri law each licensing period? a)16 b)1 c)3 d)5
3
All individual health policies issued in the state of Missouri which provide coverage for hospital treatment must also provide coverage for treatment of alcoholism, which may be limited to how many days? a)60 b)180 c)There is no limit for the treatment of chemical dependency d)30
30
In order for a life insurance policy with graded death benefits to be issued to an individual over the age of 76, the first year death benefit must be at least what percentage of the total face amount on the policy? a)50% b)75% c)100% d)Graded death benefits cannot be issued to someone over the age of 75
50%
The Director may waive the continuing education reporting requirements for any of the following, EXCEPT a)A licensee who resides outside the United States. b)A licensee on active duty in the U.S. Armed forces. c)A licensee age 65 or older. d)A licensee with serious physical injury or illness.
A licensee age 65 or older.
Which of the following licensees could be exempt from renewing their license biennially on the anniversary date of issuance? a)A producer who has not written any insurance business in Missouri in the past year. b)A producer who attains age 60. c)A producer whose appointment with an insurer has been revoked. d)A licensee called to active duty with the U.S. Armed forces.
A licensee called to active duty with the U.S. Armed forces.
The term "illustration" in a life insurance policy refers to a)A presentation of nonguaranteed elements of a policy. b)A depiction of policy benefits and guarantees. c)Pictures accompanying a policy. d)Charts and graphs.
A presentation of nonguaranteed elements of a policy.
Under which condition would an employee's group medical benefits be exempt from income taxes? a)An employee's group medical benefits are generally exempt from taxation as income. b)An employee's group medical benefits are never exempt from taxation as income. c)When the premiums and other unreimbursed medical expenses exceed 5% of the employee's adjusted gross income d)When the premiums and other unreimbursed medical expenses exceed 10% of the employee's adjusted gross income
An employee's group medical benefits are generally exempt from taxation as income.
No insurance policy form can be issued, delivered, or used in this state unless it has been a)Reviewed by the Department and approved by the Governor. b)Developed by the Director. c)Filed with and approved by the Guaranty Association. d)Approved by the Department of Insurance.
Approved by the Department of Insurance.
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective? a)As of the first of the month after the policy issue b)As of the policy issue date c)As of the application date d)As of the policy delivery date
As of the application date
All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT a)Funds accumulate on a tax-deferred basis. b)Employee and employer contributions are not counted as income to the employee for income tax purposes. c)At distribution, all amounts received by the employee are tax free. d)Employer contributions are tax deductible as ordinary business expense
At distribution, all amounts received by the employee are tax free.
Which of the following is TRUE about credit life insurance? a)Debtor is the policy beneficiary. b)Creditor is the policyowner. c)Debtor is the annuitant. d)Creditor is the insured.
Creditor is the policyowner.
To maintain an insurance license, all Missouri producers must successfully complete the required continuing education. All of the following statements concerning continuing education are correct, EXCEPT a)Excess CE credits may not be applied toward the next requirement period. b)Each licensee is required a minimum of 16 hours every two years. c)Required CE hours must be divided between the producer's lines of authority. d)CE requirement may be extended for up to 1 year.
Excess CE credits may not be applied toward the next requirement period
In the Executive Bonus plan, who is the owner of the policy, and who pays the premium? a)Board of directors is the owner, and the board of directors pays the premium. b)Company is the owner, and the company pays the premium. c)Executive is the owner, and the executive pays the premium. d)Company is the owner, but the executive pays the premium.
Executive is the owner, and the executive pays the premium.
The Director may suspend, revoke, or refuse to renew an insurance producer license for any of the following causes EXCEPT a)Improperly withholding or converting money received in the course of doing insurance business. b)Failing to comply with any administrative or court order directing payment of state or federal income tax. c)Failing to notify the Director of a change of address. d)Violating any insurance law or regulation.
Failing to notify the Director of a change of address.
Which of the following provisions in universal life policies stipulates that a written notice of the termination of coverage must be sent to the policyowner? a)Policy guarantees b)Illustrations c)Periodic disclosure d)Grace period and lapse
Grace period and lapse
As it pertains to group health insurance, COBRA stipulates that a)Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense. b)Retiring employees must be allowed to convert their group coverage to individual policies. c)Terminated employees must be allowed to convert their group coverage to individual policies. d)Group coverage must be extended for terminated employees up to a certain period of time at the employer's expense
Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.
Which of the following is NOT among the lines of authority for which an insurance producer may qualify in the state of Missouri? a)Personal lines b)Group health insurance c)Surplus lines d)Variable life and annuities
Group health insurance
Fixed annuities provide all of the following EXCEPT a)Hedge against inflation. b)Equal monthly payments for life. c)Minimum guaranteed rate of interest. d)Future income payments.
Hedge against inflation.
Which of the following is correct regarding credit life insurance? a)It has a maximum term of 20 years. b)It insures the life of a debtor. c)It is purchased on an installment basis. d)It insures the life of a creditor.
It insures the life of a debtor.
What is the purpose of a conditional receipt? a)It is intended to provide coverage on a date prior to the policy issue. b)It guarantees that a policy will be issued in the amount applied for. c)It serves as proof that the applicant has been determined insurable. d)It is given only to applicants who fully prepay the premium.
It is intended to provide coverage on a date prior to the policy issue.
In a survivorship life policy, when does the insurer pay the death benefit? a)If the insured survives to age 100 b)Upon the last death c)Upon the first death d)Half at the first death, and half at the second death
Upon the last death
Under workers compensation, which of the following benefits are NOT included? a)Income benefits b)Death benefits c)Legal benefits d)Medical and rehabilitation benefits
Legal benefits
The premium of a survivorship life policy compared with that of a joint life policy would be a)As high. b)Half the amount. c)Lower. d)Higher.
Lower.
The corridor deductible derives its name from the fact that it is applied between the basic coverage and the a)Comprehensive expense coverage. b)Interval expense coverage. c)Limited coverage. d)Major medical coverage.
Major medical coverage.
Which of the following statements is NOT correct regarding Medicare? a)Medicare Advantage must be provided through HMOs. b)Medicare Advantage may include prescription drug coverage at no cost c)Medicare Part A provides hospital care. d)Medicare Part B provides physician services.
Medicare Advantage must be provided through HMOs.
An insured is covered under a medicare policy that provides a list of network healthcare providers that the insured must use to receive coverage. In exchange for this limitation, the insured is offered a lower premium. Which type of medicare policy does the insured own? A. Medicare part A B. Medicare supplement C. Medicare advantage D. Medicare Select
Medicare Select
Which of the following is NOT true regarding policy loans? a)Policy loans can be repaid at death. b)An insurer can charge interest on outstanding policy loans. c)A policy loan may be repaid after the policy is surrendered. d)Money borrowed from the cash value is taxable.
Money borrowed from the cash value is taxable.
An insured is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits? a)Full benefits until the blindness lifts b)No benefits c)Full benefits d)Partial benefits
No benefits
What must a health carrier do within 72 hours of receiving a request for an expedited review? a)Acknowledge receipt of the request b)Notify the requesting enrollee of the carrier's established written procedures for an expedited review c)Notify the requesting enrollee of the carrier's determination d)Provide written confirmation of the carrier's decision
Notify the requesting enrollee of the carrier's determination
Which of the following documents provides a disclosure of a Medicare supplement policy? a)Statement of renewal provisions b)Policy summary c)Outline of coverage d)Buyer's guide
Outline of coverage
Which of the following explains the policyowner's right to change beneficiaries, choose options, and receive proceeds of a policy? a)The Consideration Clause b)Assignment Rights c)Owner's Rights d)The Entire Contract Provision
Owner's Rights
Which of the following may NOT be included in an insurance company's advertisement? a)Policies may include conditions under which the insurer may require evidence of insurability. b)Policies may include illustrations of nonguaranteed benefits. c)Policies issued by the company are protected by the state Guaranty Association. d)Some of the company policies may have limitations and exclusions.
Policies issued by the company are protected by the state Guaranty Association.
Life insurers are prohibited from including any of following in advertisements EXCEPT a)Policy appraisals and analyses. b)Endorsements by government entities. c)Explanations that premiums may be withdrawn. d)A guarantee of company earnings.
Policy appraisals and analyses.
All of the following are required provisions in group health policies in this state EXCEPT a)Pre-existing conditions exclusions. b)Certificate of insurance. c)Misstatement of age. d)Proof of loss.
Pre-existing conditions exclusions.
Regarding the taxation of Business Overhead policies a)Premiums are not deductible, but benefits are deductible. b)Premiums are not deductible, but expenses paid are deductible. c)Premiums are deductible, and benefits are taxed. d)Premiums are not deductible, and benefits are taxed.
Premiums are deductible, and benefits are taxed.
Regarding the taxation of Business Overhead policies, a)Premiums are not deductible, but benefits are deductible. b)Premiums are not deductible, but expenses paid are deductible. c)Premiums are deductible, and benefits are taxed. d)Premiums are not deductible, and benefits are taxed.
Premiums are deductible, and benefits are taxed.
In which of the following instances would the premium be tax deductible? a)Premiums paid by a mother on her son's policy b)Premiums paid by an employer on the life of a key person c)Premiums paid by an employer on a $30,000 group term life insurance plan for employees d)Premiums paid by an individual on his/her own life insurance
Premiums paid by an employer on a $30,000 group term life insurance plan for employees
Which of the following are the main factors taken into account when calculating residual disability benefits? a)Employee's full-time status and length of disability b)Present earnings and standard cost of living c)Present earnings and earnings prior to disability d)Earnings prior to disability and the length of disability
Present earnings and earnings prior to disability
In the case of producer solicitation, at what point must a long-term care Shopper's Guide must be presented to the applicant? a)At the time of policy delivery b)Prior to the time of application c)At the time of application d)Between the completion of the application and the delivery of the policy
Prior to the time of application
Todd has been informed that he has a hernia which requires repair. When Todd researches the cost, he learns that his insurance plan will cover 200 points worth of surgical expenses. Each point represents $10, which means that $2000 of his surgery will be covered by his insurance plan. What system is Todd's insurance company using? a)Point-based medical b)Conversion factor c)Relative value d)Basic Surgical
Relative value
Which of the following would an accident-only policy NOT cover? a)Death from a motorcycle accident b)Amputation of a leg that was burned during a house fire c)Surgery to repair a wrist damaged by tendonitis. d)Hospitalization costs due to a boating accident
Surgery to repair a wrist damaged by tendonitis.
Which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members? a)Guaranteed insurability rider b)Change of insured rider c)Term rider d)Accidental death and dismemberment ride
Term rider
Variable life insurance policies, as well as any riders, endorsements and other documents attached to them, must be approved by a)The Guaranty Association b)The NAIC c)The State d)The Director
The Director
All of the following entities regulate variable life policies EXCEPT a)The Guaranty Association. b)Federal government. c)The SEC. d)The Insurance Department
The Guaranty Association.
The annual contribution limit of a Dependent Care Flexible Spending Account is set by a)The insured. b)The IRS. c)The employer. d)The insurer.
The IRS.
When does credit life insurance coverage take effect? a)The date the debtor becomes obligated to the creditor b)The date the policy is delivered c)30 days after the first payment is received d)The date the application is completed
The date the debtor becomes obligated to the creditor
Who is responsible for covering the expenses associated with the examination of domestic insurers? a)The Insurance Guaranty Association b)The examined insurer c)The Director d)The Department of Insurance
The examined insurer
Which of the following best describes the "first-dollar coverage" principle in basic medical insurance? a)The insurer covers the first claim on the policy. b)Deductibles and coinsurance are taxed first. c)The insured is not required to pay a deductible. d)The insured must first pay a deductible.
The insured is not required to pay a deductible.
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT a)The beneficiary's life expectancy. b)Projected interest rates. c)Face amount of the policy. d)The insured's age at death.
The insured's age at death.
What must contain a notice of the graded death benefit in a life insurance policy with graded death benefits? a)The policy underwriting explanation b)The policy's provisions section c)The policy's exclusions section d)The policy application
The policy application
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE? a)The policy will be interpreted as if the insured did not have an answer to the question. b)The policy will be void. c)The insurer may deny coverage later, because of the information missing on the application. d)The policy will be interpreted as if the insurer waived its right to have an answer on the application.
The policy will be interpreted as if the insurer waived its right to have an answer on the application.
Which of the following products requires a securities license? a)Variable annuity b)Fixed annuity c)Equity Indexed annuity d)Deferred annuity
Variable annuity
Which of the following statements regarding the Change of Beneficiaries Provision is false? a)The policyowner has the right to change beneficiaries in any case. b)A policyowner can change beneficiaries without the consent of the former revocable beneficiary. c)The policyowner cannot change beneficiaries if he/she has chosen to have an irrevocable beneficiary, unless the policyowner has the permission of the irrevocable beneficiary. d)All policies that allow a death benefit must at least provide the option of a change of beneficiary provision
The policyowner has the right to change beneficiaries in any case.
Which of the following statements is correct regarding a whole life policy? a)The policy premium is based on the attained age. b)The death benefit may increase or decrease during the policy period. c)The policyowner is entitled to policy loans. d)Cash values are not guaranteed.
The policyowner is entitled to policy loans.
Which of the following statements is correct regarding a whole life policy? a)The policyowner is entitled to policy loans. b)Cash values are not guaranteed. c)The policy premium is based on the attained age. d)The death benefit may increase or decrease during the policy period.
The policyowner is entitled to policy loans.
How does a member of an HMO see a specialist? a)The member is allowed to choose his or her own specialist. b)The primary care physician refers the member. c)The insurer chooses the specialist. d)HMOs do not cover specialists.
The primary care physician refers the member.
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries? a)One of the beneficiaries will receive 1/3 and the other 2/3 of the proceeds when the insured dies. b)The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive. c)The beneficiary will receive 2/3 of the lump sum up front, and the remaining 1/3 will be paid over time. d)The beneficiary will receive 2/3 of the total benefit, with the final 1/3 payable when the first beneficiary dies.
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.
Which of the following is NOT true regarding Equity Indexed Annuities? a)They have guaranteed minimum interest rates. b)They are less risky than variable annuities. c)They earn lower interest rates than fixed annuities. d)The insurance company keeps a percentage of the returns.
They earn lower interest rates than fixed annuities.
All of the following are requirements for life insurance illustrations EXCEPT a)They must identify nonguaranteed values. b)They must differentiate between guaranteed and projected amounts. c)They must be part of the contract. d)They may only be used as approved.
They must be part of the contract.
Insurers usually do not reimburse claimants for 100% of income lost due to disability. What is the reason for insurer limitations on coverage amounts? a)To pay no more than 50% of the pre-disability income b)To provide an incentive for the insured to return to work c)To make sure there is enough money to reimburse all the claims d)To reimburse only for the premiums paid into the policy
To provide an incentive for the insured to return to work
The paid-up addition option uses the dividend a)To purchase a one-year term insurance in the amount of the cash value. b)To reduce the next year's premium. c)To accumulate additional savings for retirement. d)To purchase a smaller amount of the same type of insurance as the original policy.
To purchase a smaller amount of the same type of insurance as the original policy.
Which of the following is a key distinction between variable whole life and variable universal life products? a)Variable whole life allows policy loans from the cash value. b)Variable universal life has a fixed premium. c)Variable whole life has a guaranteed death benefit. d)Variable universal life is regulated solely through FINRA.
Variable whole life has a guaranteed death benefit.
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? a)War or military service b)Limited benefit c)Aviation d)Hazardous occupation
War or military service
When may an insured deduct unreimbursed medical expenses paid under a long-term care policy? a)Only if the insured is age 65 or older b)All LTC expenses are tax deductible. c)Only if the insured does not itemize the expenses d)When the expenses exceed a certain percentage of the insured's adjusted gross income
When the expenses exceed a certain percentage of the insured's adjusted gross income
Can an individual who belongs to a POS plan use an out-of-network physician? a)Yes, but they must use the HMO physician first b)Yes, and they may use any preferred physician, even if not part of the HMO c)No d)Yes, but they must use the POS physician first
Yes, and they may use any preferred physician, even if not part of the HMO
Annually renewable term policies provide a level death benefit for a premium that a)Remains level.b)Fluctuates.c)Increases annually.d)Decreases annually.
increases annually
How many pairs of glasses in a 12-month period will a vision expense insurance plan cover? a)One b)Two c)Three d)Unlimited
one
In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid? a)10 days b)25 days c)30 days d)45 days
45 days
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?
6 credits
Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death? a)A business partner of the insured b)The wife of the deceased insured c)The former wife of the deceased insured d)A minor son of the insured
A minor son of the insured
Which of the following persons is required to hold a producer license? a)A person who negotiates insurance contracts b)A person who creates insurance advertisements c)A person who takes messages related to claims d)A person who administers employee benefits
A person who negotiates insurance contracts
An individual has been diagnosed with Alzheimer's disease. He is insured under a life insurance policy with the accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits? a)Principal is tax free, but interest is taxed. b)The entire benefit will be received tax free. c)The entire living benefit is considered taxable income. d)A portion of the benefit up to a limit is tax free; the rest is taxable income.
A portion of the benefit up to a limit is tax free; the rest is taxable income.
What is the main purpose of the Seven-pay Test? a)It requires level premium payments for 7 years. b)It ensures that the policy benefits are paid out in 7 years. c)It guarantees the minimum interest. d)It determines if the insurance policy is a MEC.
It determines if the insurance policy is a MEC
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT? a)The premium for individual coverage will be based upon the insured's attained age. b)The insured may choose to convert to term or permanent individual coverage. c)The insured would not need to prove insurability for a conversion policy. d)The insured may convert coverage to an individual policy within 31 days.
The insured may choose to convert to term or permanent individual coverage.
Which of the following is NOT a feature of a noncancellable policy? a)The insurer may terminate the contract only at renewal for certain conditions. b)The premiums cannot be increased beyond the amount stated in the policy. c)The guarantee to renew coverage usually applies until the insured reaches certain age. d)The insured has the right to renew the policy for the life of the contract.
The insurer may terminate the contract only at renewal for certain conditions
An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?
The insurer will pay the full death benefit from the group policy to the beneficiary.
An insured purchased a variable life insurance policy with a 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? a)$10,000 b)$40,000 c)$50,000 d)$60,000
$50,000
An insured pays a monthly premium of $100 for a health insurance policy. What would be the duration of the grace period under the policy? a)7 days b)10 days c)31 days d)60 days
10 days
What percentage of a company's employees must take part in a noncontributory group life plan? a)0% b)25% c)75% d)100%
100%
How many consecutive months of coverage (other than in an acute care unit of a hospital) must LTC insurance provide in this state? a)12 b)24 c)36 d)6
12
A client has a new individual disability income policy with a 20-day probationary period and a 30-day elimination period. Ten days later, the client breaks their leg and is off work for 45 days. How many days of disability benefits will the policy pay?
15 days
The time limit of certain defenses provision prohibits insurers from denying a claim due to misrepresentation, as long as the policy has been in force for at least a)6 months. b)1 year. c)2 years. d)5 years.
2 years.
Group health insurance is characterized by all of the following EXCEPT a)A master contract. b)Lower administrative costs. c)Conversion privilege. d)Adverse selection.
Adverse selection.
Under a Key Person disability income policy, premium payments a)Are made by the business and are tax-deductible. b)Are made by the business and are not tax-deductible. c)Are made by the employee and are not tax-deductible. d)Are made by the employee and are tax-free.
Are made by the business and are not tax-deductible
An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do?
Ask her to sign a statement of good health
To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested? a)When the applicant's credit is checked b)When the policy is delivered c)At the initial interview d)At the time of application
At the time of application
What happens when a policy is surrendered for its cash value? a)Coverage ends but the policy can be reinstated at any time. b)The policy can be reinstated by paying back all policy loans and premiums .c)The policy can be converted to term coverage. d)Coverage ends and the policy cannot be reinstated.
Coverage ends and the policy cannot be reinstated.
What does "level" refer to in level term insurance? a)Cash value b)Interest rate c)Face amount d)Premium
Face amount
What type of premium do both Universal Life and Variable Universal Life policies have? a)Increasing b)Flexible c)Level fixed d)Decreasing
Flexible
In a direct transfer, how is money transferred from one retirement plan to a traditional IRA? a)From the participant to the new plan b)From the original plan to the original custodian c)From trustee to trustee d)From trustee to the participant
From trustee to trustee
Which of the following is NOT a requirement for companies that issue variable contracts in this State? a)Maintain a capital of $2,500,000 b)Have surplus of at least $3,000,000 c)Have a license to transact insurance d)Be considered in good standing by the Director
Have surplus of at least $3,000,000
Which of the following riders would NOT increase the premium for a policyowner? a)Impairment rider b)Payor benefit rider c)Waiver of premium rider d)Multiple indemnity rider
Impairment rider
The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the a)Consideration clause. b)Probationary period. c)Insuring clause. d)Incontestability clause.
Insuring clause
Concerning Medicare Part B, which statement is INCORRECT? a)It provides partial coverage for medical expenses not fully covered by Part A. b)It is fully funded by Social Security taxes (FICA). c)It is known as medical insurance. d)It offers limited prescription drug coverage.
It is fully funded by Social Security taxes (FICA).
Which of the following statements about the reinstatement provision is true? a)It guarantees the reinstatement of a policy that has been surrendered for cash. b)It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated. c)It permits reinstatement within 10 years after a policy has lapsed. d)It provides for reinstatement of a policy regardless of the insured's health.
It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.
Which of the following statements is TRUE about a policy assignment? a)It authorizes an agent to modify the policy. b)It transfers rights of ownership from the owner to another person. c)It is the same as a beneficiary designation. d)It permits the beneficiary to designate the person to receive the benefits
It transfers rights of ownership from the owner to another person.
An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium? a)It will remain the same for the new 5-year term. b)It will decrease for the new 5-year term since the insured is now a lesser risk to the company. c)It will increase each year during the next 5 years as the face amount increases each year. d)It will increase because the insured will be 5 years older than when the policy was originally purchased.
It will increase because the insured will be 5 years older than when the policy was originally purchased.
Every insurer marketing Long-Term Care insurance must establish marketing procedures to ensure all of the following EXCEPT a)Every reasonable efforts is made to identify an applicant's other insurance. b)LTC policies are marketed effectively to prospective insureds. c)Comparisons of policies are fair and accurate. d)Excessive insurance will not be sold.
LTC policies are marketed effectively to prospective insureds
Variable Whole Life insurance is based on what type of premium? a)Increasing b)Flexible c)Graded d)Level fixed
Level fixed
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report a)Are entitled to obtain a copy of the report from the party who ordered it. b)Must be advised that a copy of the report is available to anyone who requests it. c)May sue the reporting agency in order to get inaccurate data corrected. d)Must be informed of the source of the report.
Must be informed of the source of the report.
An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point?
Neither approved the application nor issued the policy
The Director has just finished examining a domestic insurer. When is the Director next required to examine that insurer? a)No sooner than 3 years from now b)Next year c)2 years from now d)No later than 5 years from now
No later than 5 years from now
All of the following are the most common variations in a Long-Term Care policy EXCEPT a)Number of family dependents. b)The amount paid for nursing home care. c)Number of days of confinement covered. d)Number of home health visits covered.
Number of family dependents
Don has both a basic expense and a major medical policy. He is injured in an accident, which requires several major surgeries. This quickly exhausts Don's basic expense policy. What must Don do before his major medical policy can pick up where the basic expense policy left off?
Pay a special deductible on his major medical policy
Which of the following riders would NOT cause the Death Benefit to increase?
Payor Benefit Rider
Which of the following provisions is mandatory for health insurance policies? a)Recurrent disability b)Unpaid premiums c)Intoxicants and narcotics d)Physical examination and autopsy
Physical examination and autopsy
A guaranteed renewable health insurance policy allows the a)Policyholder to renew the policy to a stated age and guarantees the premium for the same period. b)Policy to be renewed at time of expiration, but the policy can be canceled for cause during the policy term. c)Insurer to renew the policy to a specified age. d).Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.
Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class
All of the following are characteristics of group life insurance EXCEPT a)Amount of coverage is determined according to nondiscriminatory rules. b)Individuals covered under the policy receive a certificate of insurance. c)Certificate holders may convert coverage to an individual policy without evidence of insurability. d)Premiums are determined by the age, sex and occupation of each individual certificate holder.
Premiums are determined by the age, sex and occupation of each individual certificate holder
Which of the following describes taxation of individual disability income insurance premiums and benefits? a)Premiums are tax deductible, but benefits are not taxable. b)Premiums are tax deductible, and benefits are taxable. c)Premiums are not tax deductible, and benefits are not taxable. d)Premiums are not tax deductible, but benefits are taxable.
Premiums are not tax deductible, and benefits are not taxable.
An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary? a)Revocable b)Primary c)Contingent d)Irrevocable
Revocable
A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the a)Revocable beneficiary. b)Secondary beneficiary. c)Contingent beneficiary. d)Irrevocable beneficiary.
Revocable beneficiary
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT a)Delivery receipt. b)Signed waiver of premium. c)Statement of good health. d)Payment of premium.
Signed waiver of premium
Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option? a)Length of income period b)Amount of interest c)Size of each installment d)Predetermined length of time stated in the contract
Size of each installment
All of the following are true regarding a decreasing term policy EXCEPT a)The contract pays only in the event of death during the term and there is no cash value. b)The face amount steadily declines throughout the duration of the contract. c)The payable premium amount steadily declines throughout the duration of the contract. d)The death benefit is $0 at the end of the policy term.
The payable premium amount steadily declines throughout the duration of the contract.
All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT a)Any type of insurance policy may be used. b)The employer pays a bonus to a selected employee to fund the policy. c)It is considered a nonqualified employee benefit. d)The policy is owned by the company.
The policy is owned by the company.
An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is true? a)The insured should ask for a new policy to be delivered. b)The policy will not be legal until it is delivered by an agent. c)There is nothing wrong with this form of policy delivery. d)The insured should complain to the insurer.
There is nothing wrong with this form of policy delivery.
Which of the following is the best reason to purchase life insurance rather than annuities? a)To create regular income payments b)To liquidate a sum of money over a lifetime c)To create an estate d)To liquidate a sum of money over a period of years
To create an estate
Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending? a)2 examinations per week of the claim processing period b)Unlimited c)None at all d)1 examination per week of the claim processing period
Unlimited
Which of the following provisions is NOT mandatory for health insurance policies in this state?a)Reinstatement b)Legal actions c)Unpaid premiums d)Claim forms
Unpaid premiums
All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT a)Most term policies contain a convertibility option. b)Upon conversion, the premium for the permanent policy will be based upon attained age. c)Upon conversion, the death benefit of the permanent policy will be reduced by 50%. d)Evidence of insurability is not required.
Upon conversion, the death benefit of the permanent policy will be reduced by 50%