Insurance Test
What is the primary reason for the State Corporation Commission's examination if an agents insurance records? a) to determine an agent's sales quota b) to determine an agent's solvency c) to determine compliance with state insurance laws and regulations d) to determine an agent's renewal status
to determine compliance with state insurance laws and regulations
Jerry has an indemnity plan which covers dental expenses. Typically, these type of plans: a) has a limited network of dentists to choose from b) cover preventative care once every six months c) never require a deductible for major services d) cover oral surgery as a result from an injury
answer: cover preventative care once every six months
Long-term care insurance policies may contain exclusions for all the following EXCEPT: a) acute care b) care outside the US c) care for intentionally self inflicted injury d)care for incurable conditions
care for incurable conditions
an accident and health insurance policy's premium requirements are set forth in which of the following provisions? a) Insurance clause b) entire contract clause c) consideration clause d) premium mode
consideration clause
Reductions in coverage are one feature of _______ in Health insurance policies. a) optional provisions b) mandatory provisions c) cost containment d) the insuring clause
cost containment
Viatical settlement proceeds may be subject to the claims of: a) creditors b) adjusters c) insurers d) beneficiaries
creditors
What action may the Bureau of Insurance take when it finds that a license applicant is not competent or untrustworthy? a)Report the information to the Attorney General b) Decline to issue the license c) place the applicant on probation d) refuse to renew the license for five years
decline to issue the license
Disability income policies provide protection for which of the following? a) economic death b) Physical death c) Hospital expense d)custodial care
economic death
Which of these statements regarding the extended term insurance nonforfeiture option in a life policy is accurate? a) evidence of insurability is required b) coverage remains until death of the insured c) the premium to purchase the coverage comes from the policy's cash value d) cash value will continue to grow
answer: the premium to purchase the coverage comes from the policy's cash value
An insurer MUST charge the same individual life insurance premium for two individuals who share: a) the same risk class and have equal life expectancy b) the same age c) the same occupation d) the same employer
answer: the same risk class and have equal life expectancy
at what point must a newborn be covered under an individual or group accident and health insurance policy? a) when the policyowner notifies the insurance company b) when the required additional premium is paid c) at the moment of birth d) no more than 10 days after date of birth
at the moment of birth
An insurance policy may be issued with a preferred insurance premium in all of these situations EXCEPT: a) good credit history b) living in a rural area c) good health history d) being a nonsmoker
living in a rural area
In a speech to a local association, an agent incorrectly stated that XYZ Insurance Company is in financial difficulty and not paying claims. The agent may be guilty of a)False advertising b) Defamation c) Commingling d)Alienation
Defamation
Joe is a life insurance policyowner who has failed to pay interest on his policy loan. What will result from this nonpayment? a) The insurer can charge a higher rate of interest b) loan amount is increased to reflect the amount of interest due c) future loan privilege's will be suspended d) the loan balance becomes due immediately
loan amount is increased to reflect the amount of interest due
Which of these is NOT used as selection criteria in the underwriting process of a life insurance? a) credit report b) national origin c) age of applicant d) sex of applicant
national origin
Which of the following health insurance plans charges a premium that cannot be increased? a) guaranteed renewable b) cancelable c) non cancelable d) conditionally renewable
non cancelable
The authority to change the beneficiary in an individual annuity lies with the: a) annuitant b) owner c) beneficiary d) administrator
owner
An insurance company or agent must respond within _______ days to an insured's request to access personal information collected on him/her by the insurer. a) 15 b) 30 c) 45 d) 60
30
Peter, age 50, surrenders his modified endowment contract (MEC). How is the gain treated in terms of federal income taxes? a) The gain is treated as taxable income and a penalty tax is imposed on the gain b)The gain is treated as taxable income but no additional penalties are applied c) The gain is not taxable but a penalty is assessed d) Surrendering an MEC is considered a tax and penalty-free transaction
The gain is treated as taxable income and a penalty tax is imposed on the gain
Which of the following is true regarding a person receiving a waver of premium benefit? a) the insured must expect a total recovery within two years b) the insured will not qualify for short-term disability c) the insured will not qualify for workers compensation d) the insured must be disabled for a period of time
The insured must be disabled for a period of time
Virginia requires advertisements for Accident and Health insurance policies covering ONLY a specified illness to prominently display: a) The premium guarantee b) a statement that the policy is limited c) A schedule of payments d) The policy exclusions
a statement that the policy is limited
An agent who violates the insruance code may, after a hearing, pay up to _________ per violation as a penalty. a) $1,500 b) $3,000 c) $5,000 d) $10,000
answer: $5,000
All of the following are covered under most dental plans EXCEPT for: a) x-rays b) tooth extractions c) cleanings d) mouth cancer
mouth cancer
Which life insurance policy provision prohibits a beneficiary form "commuting, encumbering, withdrawing, and assigning" any portion of the proceeds prior to actual receipt from the company? a) insuring clause b) spendthrift clause c) nonforfeiture provision d)collateral provision
spendthrift clause
What minimum percentage of all eligible employees must participate in a group life insurance plan if the premiums are completely paid for by the employer? a)0% b)50% c)75% d)100%
100%
Which report contains information regarding an individual's general reputation and credit standing?: a) credit report b) Consumer report c) MIB report d) Agent's report
Consumer report
In what situation would disability income insurance premiums be deductible expense? a) Partnership paying for the group disability income coverage for the partners b) Corporation paying for group disability income coverage for its employees c) individual paying for his/her own individual disability policy d) parent paying for a child's individual disability policy
Corporation paying for group disability income coverage for its employees
Mike applied for life insurance and was issued a conditional receipt. He is later found to be insurable and is issued a policy. When does his coverage become effective? a) Date of issuance of the conditional receipt b) Date the policy was approved C) Date of policy delivery d) Date the insurer received the application
Date of issuance of the conditional receipt
Which of these is NOT a factor that influences group health insurance underwriting? a) Physical exams of group members b) Number of individuals in the group c) Group's claims experience d) Type of occupation group is involved in
Physical exams of group members
Virginia offers an extended COBRA insurance plan for companies with: a)100 employees b) 50 employees c) 20 t0 50 employees d) 2-19 employees
answer: 2-19 employees
An insured is covered under a group long-term disability policy. Under this type of policy, the definition of disability based on any occupation typically applies: a) only to part-time employees b) only to white collar employees c) during the probation period d) after two years of disability
after two years of disability
An insured files for an accident and health insurance policy claim eight days after the premium due date. The benefit payable is $500 and the overdue premium is $200. Assuming that the policy pays on a first-dollar basis and contains the unpaid premium provision, how much will the insurer pay? a) $0 b) $200 c) $300 d) $500
answer: $300
Any person who unknowingly violates Bitginia insurance law may be punished for each violation by a penalty to exceed: a) $500, with $10,000 Cap b) $750, with $10,000 Cap c) $1,000 wi8th $5,000 Cap d) 1,000 with $10,000 Cap
answer: 1,000 with $10,000 Cap
The free look period provided in a life insurance policy is usually: a) 10 days b) 31 days c) 45 days d) 60 days
answer: 10 days
A life insurance policy loan in Virginia cannot exceed an interest rate of : a) 2% b) 5% c) 8% d) 10%
answer: 10%
COBRA extends coverage for a surviving spouse but at a rate not more than _____ of the group premium. a) 25% b)50% c)75% c)102%
answer: 102%
Carlos' agent license has been suspended due to non-renewal. He may apply for reinstatement within the ___ month period following the date when the license should have been renewed a) 3 b) 6 c) 12 d) 24
answer: 12
An insured must notify an insurer of a medical claim within how many days after an incident? a) 10 b) 20 c) 30 d)40
answer: 20
Upon meeting company requirements, a lapsed life insurance policy may be reinstated within ____ year(s) a) 1 b) 3 c) 5 d) 7
answer: 3
Social security disability income requirements state that in order to become fully insured on a permanent basis, you must have worked in a covered occupation for: a) 10 quarters b) 20 quarters c) 30 quarters d) 40 quarters
answer: 40 quarters
Larry wants to purchase an induvial disability income policy to provide continuous income while disabled. eh is also covered by a two month wage continuation benefit from his employer. what should the policy elimination period be for this individual policy? a) 30 days b) 60 days c) 90 days d) 120 days
answer: 60 days
At what age do most people become eligible for Medicare? a) 59 1/2 b) 62 c) 65 d) 72
answer: 65
What type of employee welfare plans are not subject to ERISA regulations? a) Church plans b) Major Medical Plans c) Corporate d) qualified plans
answer: Church plans
What must be given to a life insurance applicant when the agent receives an application and the initial premium? a)Agent's report b)Conditional receipt c) Commission disclosure d)Good health statement
answer: Conditional receipt
Which of these is NOT an Unfair Claims Settlement Practice: a)refusing to pay claims without conducting a reasonable investigation b) compelling insureds to z a lawsuit by offering less on insurance claims c) Denying unsubstantiated claims on a timely basis d) failing to acknowledge and promptly with respect o insurance claims
answer: Denying unsubstantiated claims on a timely basis
When an applicant applies for a large amount of life insurance coverage, which of the following would likely NOT be an underwriting requirement? a)Consumer report b)Eye examination c)Urine sample d)Blood sample
answer: Eye examination
Most Medicare Supplement information used by an insurer must be approved by the State. Which of the following types of information does NOT require State approval? a) Billboard advertisements paid for by the insurer b) Brochures issued by the insurer c) Radio advertisements approved by the insurer d) Government publications
answer: Government publications
Which of the following provisions permits an insurer to return a portion of the premium and pay benefits on a pro rate basis if it finds that an insured has duplicate coverage? a) change of occupation b) relation of earning to insurance c) Insurance with other insurers d) other insurance in this insurer
answer: Insurance with other insurers
When a policy loan is requested by a policyowner and it requires the consent of the beneficiary, what kind of beneficiary designation is this? a) collateral beneficiary b) Revocable beneficiary c) Irrevocable beneficiary d) per stripes beneficiary
answer: Irrevocable beneficiary
Custodial care is normally covered under: a) major medical insurance b) Medicare part B c) Long-term disability insurance d) Long-term care insurance
answer: Long-term care insurance
Which of these policies is considered to be a comprehensive health policy? a) Major medical policy b) Surgical policy c) Limited benefit policy d) Health Savings Account
answer: Major medical policy
Skilled nursing facility expenses are sometimes covered by _______, but ONLY if the insured was hospitalized prior to entering the facility. a) HMO's b) Medicare c) Medicaid d)Medicare Supplements
answer: Medicare
Which individual would be best suited for Medicare Supplement insurance? a)Medicare enrollee b) Medicaid enrollee c) social security recipient d) HMO subscriber
answer: Medicare enrollee
Kim is covered under two medical expense plans. Plan A pays up to $5,000. Plan B pays up to $4,000. If she incurs $7,000 in expenses, the coordination of benefits provision dictates that: a) Plan A pays up to $7,000 b) Plan A pays up to $3,500 and Plan B pays up to $3,500 c) Plan A pays $80 and Plan B pays 20% d) Plan A pays up to $5,000 and Plan B pays up to $2,000
answer: Plan A pays up to $5,000 and Plan B pays up to $2,000
When does the producer give a premium receipt for a life insurance application? a) when the application has been approved b) When the initial premium has been paid with the application c) During the medical exam d) when the completed application has been collected
answer: When the initial premium has been paid with the application
Which of these is NOT an advantage of term life insurance? a) the greatest amount of coverage can be provided for the initial premium paid b) it can be provided as a rider to another policy c) a cash benefit will be provided if the insured is alive at the end of the policy period d) temporary insurance needs can be met
answer: a cash benefit will be provided if the insured is alive at the end of the policy period
What is a juvenile life insurance policy? a)coverage normally sold as a term rider b)a life policy that covers the parents of a minor c)a life policy that covers the life of a minor d) a life policy that covers the lives of both the parents and their children
answer: a life policy that covers the life of a minor
Which of the following statements accurately describes the "time limit on certain defenses? a) after a stated period of time, claims cannot be denied due to material misrepresentation on the application b) all claims can be disputed after two years c) an insured cannot file a lawsuit within 90 days of the claim being filed d) The right to return to an accident and health policy must be within 10 days of policy delivery
answer: after a stated period of time, claims cannot be denied due to material misrepresentation on the application
In what situation could an insurance policy's coverage be modified? a) applicant is a preferred risk b) applicant is an substandard risk c) applicant is a standard risk d) applicant is uninsurable
answer: applicant is an substandard risk
In the event of premium default, which life insurance provision will use the cash value to keep the policy in force? a) waiver of premium b) automatic premium loan c) reinstatement d) policy loan
answer: automatic premium loan
In regards to health insurance, employees age 65 or older are typically required to: a) be offered the same group health benefits offered to the younger employees B) provide evidence of insurability for medical insurance offered by the employer c) choose Medicaid as their primary provider d) choose Medicare as their primary provider
answer: be offered the same group health benefits offered to the younger employees
Voluntarily terminating an insurance policy is also known as: a)discontinuation b)elimination c) estoppel d) cancellation
answer: cancellation
An agent does NOT need to notify the Bureau of Insurance of a: a) change of address b) name change c) change in financial status d) felony conviction
answer: change in financial status
An employee welfare plan exempt from ERISA regulations would be: a)church plans b)indemnity plans c) split dollar plans d) accident only plans
answer: church plans
All of these are considered to be a violation of the Federal Fraud and False Statements Act EXCEPT: a) overvaluing land b) abstracting funds c) false entries on reports d) claim reimbursement
answer: claim reimbursement
Which of the following statements is true regarding accident and health insurance claims that reimburse on an indemnity basis? a) no proof of loss is needed b) claims can be sent directly to the insured c) claims are required to be sent to the health provider d) no claim form is needed
answer: claims can be sent directly to the insured
A prospective client was intimidated by an agent to purchase an insurance contract. The agent could be found guilty of: a)coercion b)rebating c)defamation d)sliding
answer: coercion
An agent who attempts to intimidate is engaging in: a)coercion b)twisting c) defamation d) discrimination
answer: coercion
The payment of the first premium, the promise to pay a covered loss, and the agreement to abide by policy conditions are all examples of: a) consideration b) legal purpose c) representation d) acceptance
answer: consideration
The courts will normally interpret a policy in favorof the insured when the meaning of the policy is not clear. This is because an insurance policy is a(n): a) warranty contract b) aleatory contract c) contract of adhesion d) unilateral contract
answer: contract of adhesion
Which of the following reduces the opportunity for over insurance? a) reduction in coverage provision b) coordination of benefits provision c) insuring clause d) conformity with state statues
answer: coordination of benefits provision
Any employee insured under a group life insurance plan is normally: a) given a master certificate b) covered on a noncontributory basis c) required to show proof of insurability d) covered with term life insurance
answer: covered with term life insurance
an agent who makes derogatory remarks about another insurance company during the sale of insurance has engaged in: a) defamation b) misrepresentation c) rebating d) coercion
answer: defamation
Which annuity allows contributions to an IRA? a) single premium Immediate Annuity (SPIA) b) annuity certain c) deferred d) life with period certain
answer: deferred
Which of the following health insurance provisions required that the application becomes part of the policy? a) consideration clause b) insuring clause c) entire contract clause d) application clause
answer: entire contract clause
How often must the Commission examine each domestic insurance company? a) every year b) every two years c) every three years d) every 5 years
answer: every 5 years
How are benefit payments from individually-owned medical expense policies treated for tax purposes? a) exempt from income taxes b) taxes as ordinary income c) taxed as a dividend d) tax credit given for amount of benefit payment
answer: exempt from income taxes
The "Notice to buyer" on the first page of each long-term care policy delivered in Virginia: a)explains that some long-term care costs may not be covered b) provides the addresses of approved long-term care facilities c)states the possible disadvantages of replacing coverage d) states the cost of the coverage
answer: explains that some long-term care costs may not be covered
Major Medical policies typically are characterized by which of the following? a) corridor deductible b) flat deductible c) probationary period d) first dollar coverage
answer: flat deductible
What is considered a valid reason for small corporations to insure the lives of its major stockholders? a) to provide income for the surviving dependents b) reduce the company's tax liability c) to pay for final expenses d) fund a buy-sell agreement
answer: fund a buy-sell agreement
An insured may be required to sign which document at policy delivery to ensure there has not been any adverse medical conditions since the time of the application? a) binding receipt b) good health statement c) agent's report d) MIB disclosure
answer: good health statement
What is the name of the rider that provides an additional purchase option in a life insurance policy? a) Payor Rider b) Cost of living rider c) waiver of premium rider d) guaranteed insurability rider
answer: guaranteed insurability rider
Life Annuity with Period Certain is characterized as a) guaranteeing benefit payments for a stated period of time after reaching age 65 b) guaranteeing a minimum interest rate c) guaranteeing lifetime benefit payments for two or more people d)guaranteeing benefit payments for a stated minimum number of years
answer: guaranteeing benefit payments for a stated minimum number of years
An agent's license may only be suspended or revoked if the agent: a) has been afforded a right to a hearing b) has engaged in replacement of existing policy c) filed for bankruptcy d) did not meet a sales quota
answer: has been afforded a right to a hearing
The type of health insurance in which underwriting procedures are the most restrictive is: a) accidental b) individual c) group d) employer paid
answer: individual
Which of these procedures is NOT designed for ambulatory care centers? a) inpatient surgery b) vaccinations c) outpatient surgery d) physical examinations
answer: inpatient surgery
Which of the following situations would qualify an insured to receive funds from an accelerated (living) benefit rider? a) insured is expected to remain in a nursing home for life b) insured has entered a substance abuse facility c) Insured has declared bankruptcy d) insured recovering from a broken leg
answer: insured is expected to remain in a nursing home for life
Under which circumstance may an insurer discontinue a small employer group medical plan? a) insurer discontinues offering the plan to all employers b) the group's overuse of medical services c) overall health condition of the employees has deteriorated d) employer has filed for bankruptcy
answer: insurer discontinues offering the plan to all employers
A life insurance beneficiary died after receiving only six payments under the policy's life income settlement option. What happens with the remaining balance of the death proceeds? a) transfers to the insured's estate b) transfers to the beneficiaries' estate c) donated to charity d) kept by the insurance company
answer: kept by the insurance company
The owner of a single premium deferred annuity is entitled to do all of these EXCEPT: a) make additional payments into the annuity b) choose the length of the payout period c) choose who will be the recipient of the annuity payments d) cash surrender the contract
answer: make additional payments into the annuity
According to the Affordable Care Act (ACA), the proportion of premium revenues spent on clinical services and quality improvements is called the: a) medical loss ratio b) market essential coverage c) medical rebate d) minimum issue reform
answer: medical loss ratio
What is considered a valid reason for an insurer's refusal to pay policy proceeds directly to a minor? a) minors are not capable of having insurable interest b) minors are normally not capable of handling money in a reasonable manner c) minors are usually not capable of paying for an insurance premium d) minors cannot legally enter into a contract
answer: minors are normally not capable of handling money in a reasonable manner
An agent who informs an applicant that there are no exclusions in an insurance policy has engaged in: a) defamation b) misrepresentation c) coercion d) rebating
answer: misrepresentation
Periodic health claim payments MUST be made at least: a) monthly b) weekly c) daily d) annually
answer: monthly
James the agent has sold a life insurance contract to a client without using an illustration, even though his insurer offers one. For this particular transaction, the applicant: a) must sign a statement that no illustration was provided b) will be automatically declined for coverage c) is not guaranteed the terms of the contract d) is entitled to monetary compensation
answer: must sign a statement that no illustration was provided
Tim is covered by an accident and health insurance policy that may not be changed in any way by the insurer up to a stated age, as long as the premiums are paid. What type of policy is this? a) optionally renewable b) noncancelable c) guaranteed renewable d)conditionally renewable
answer: noncancelable
If a Medicare Supplement policy is cancelled by the insurer, which of these circumstances does NOT require prior approval by the State Corporation Commission? a) multiple Medicare supplement policies on the same person b) nonpayment of premium c) unsuitable coverage d) cancelling a class of insureds
answer: nonpayment of premium
Paul is an agent who is licensed in Virginia but a resident of Maryland. P is considered to be a(n) _____ agent. a) nonresident b) foreign c) alien d) reciprocal
answer: nonresident
An insured is covered with a health insurance policy. If the insured would like to cancel the policy, he/she must: a) wait until the end of the calendar year b) notify the insurance company in writing c) notify the insurance company by telephone d) provide a reason for canceling
answer: notify the insurance company in writing
Which of these is NOT an Unfair Claims Settlement Practice? a) refusing to pay claims without conduction a reasonable investigation b) compelling insureds to initiate lawsuit by offering less on insurance claims c) offering to settle a claim by arbitration d) failing to acknowledge and act promptly with respect to insurance claims
answer: offering to settle a claim by arbitration
Which would NOT be a location where skilled nursing care is provided? a) hospital b) custodial care facility c) nursing home d) personal residence
answer: personal residence
The standard provisions of an accident and health insurance policy require that the: a) policy, endorsements, and attached papers constitute the "entire contact" b) policy summary, conditional receipt, and initial premium constitute the "entire contact" c) change of occupation provision is mandatory d) grace period be no shorter than 60 days
answer: policy, endorsements, and attached papers constitute the "entire contact"
What typically changes at the re-entry option date found in some term life policies? a) beneficiary b) amount of coverage c) premium d) contestable period
answer: premium
a pre-existing condition exclusion in an accident and health insurance policy pertains to: a) prior insurance coverage b) prior financial matters c) prior health matters d) prior occupations
answer: prior health matters
When a producer submits an application that discloses personal information regarding the applicant, who supplies the privacy notice? a) producer b) insurer c) underwriter d) fiduciary
answer: producer
An agent has indicated to a potential client that the proposed life insurance policy is covered by the Virginia Life, Accident, and Sickness Insurance Guaranty Association. This action taken by the agent is: a) permitted and encouraged b) prohibited by law c) legal in every state d) permitted only with the Commissioner's authorization
answer: prohibited by law
According to the State Corporation Commission, the purpose of licensing prospective agents in the state of Virginia is: a) qualifying the agent to represent an authorized insurer for soliciting and negotiating their insurance products b) tracking sales c) permitting the payment of fees to quality agents d) determining those who are eligible for appointment
answer: qualifying the agent to represent an authorized insurer for soliciting and negotiating their insurance products
What effect can be long-term care benefit rider have on a life insurance policy? a) increased cash value b) decreased cash value c) increased death benefit d) reduced death benefit
answer: reduced death benefit
Which of these is NOT an Unfair Claims Settlement Practice? a) misrepresenting pertinent policy provisions relating to coverage after a loss b) refusing to pay persons bringing false or fraudulent claims c) compelling insureds to initiate a lawsuit by offering less on insurance claims d) failing to acknowledge and act promptly with respect to insurance claims
answer: refusing to pay persons bringing false or fraudulent claims
When a lapsed policy's premium has been paid current, it has the potential of being: a) restored b) renewed c) reinstated c) reinstituted
answer: reinstated
The marketing of Medicare Supplements is regulated to prevent all of the following EXCEPT: a) sale of excessive insurance b) replacement of any existing coverage c) inaccurate policy provisions d) failure to display notice of limitations to buyer
answer: replacement of any existing coverage
When an insurer markets its Medicare Supplement products in Virginia, which method is acceptable? a) advertising the insurer's guaranty association coverage b) using methods of intimidation and coercion c) replacing an existing policy with one that has greater benefits d) using cold lead advertising
answer: replacing an existing policy with one that has greater benefits
According to the IRS, a company may NOT do which of the following in regards to funds in a qualified retirement plan? a) Transfer the funds to a new custodian b)Invest the funds in mutual funds c) transfer vested funds to terminated employees d) repossess the funds for business purposes
answer: repossess the funds for business purposes
What is Old Age and Survivors Health Insurance (OASDHI) also known as? a) Medicare b) social security c) Medicaid d) FICA
answer: social security
Licensed agents in Virginia are authorized to: a) rate coverages b) approve coverages c) solicit, receive, and forward applications to the insurer d) classify rates
answer: solicit, receive, and forward applications to the insurer
An example of rebating would be: a) a mutual insurance company paying dividends to its policy owners b) reducing the premiums across the board for a specific risk class c) using intimidation in order to restrain or monopolize the business of insurance d) splitting the commission with the buyer on a sale of insurance
answer: splitting the commission with the buyer on a sale of insurance
Which statement concerning the Entire Contract provision in an individual accident and health insurance policy is TRUE? a) The agent can waive policy provisions and change the policy with the insurer's consent b) The agent has the authority to waive the policy's provisions under certain conditions c) The agent has the authority to change the policy under certain conditions d) the agent doesn't have the authority to change the policy or wave its provisions
answer: the agent doesn't have the authority to change the policy or wave its provisions
What is payable to the policyowner if a whole life policy is surrendered prior to its maturity date? a) the loan value b) the cash value c) the face amount minus any past due premiums and outstanding loans d) nothing
answer: the cash value
Which statement concerning adjustable life insurance is accurate? a) cash value loans are not permitted b) the face amount and premiums can be charged simultaneously by the policyowner c) settlement options are limited d) only the face amount can be changed by the policyowner
answer: the face amount and premiums can be charged simultaneously by the policyowner
The insured's consideration given for a health insurance policy is: a) the first premium payment and the application b) the initial premium payment only c) the application d) the initial premium and an investigative report
answer: the first premium payment and the application
Which disability buy-self insurance benefits exceed a partner's cost basis, which of the following is correct? a) the excess is taxed as a capital gain to the partner b) the excess is taxed as ordinary income to the partner c) the excess is partially taxable to the partner d) the full amount is non-taxable to the partner
answer: the full amount is non-taxable to the partner
James is covered with health insurance by two different insurers. The "insurance with other insurers" provision in an individual health insurance policy allows an insurer to pay benefits to the insured on a pro-rata basis when: a) the policy's maximum lifetime benefit level has been paid b) the policy is beyond the incontestable period c) the insurer was not notified prior to the claim to the claim that the insured has other health coverage d) the policy is beyond the free-lock period
answer: the insurer was not notified prior to the claim to the claim that the insured has other health coverage
The Virginia Life, Accident, and Sickness Insurance Guaranty Fund protects an insured in the event of: a) high inflation b) disability c) unemployment d) the insurer's insolvency
answer: the insurer's insolvency
A material change in a modified endowment contract (MEC) results in: a) the contact becoming void b) the new contestable period c) the seven pay test adjusted for cash value, applies again d) a tax penalty
answer: the seven pay test adjusted for cash value, applies again
What would be the disadvantage of naming a trust as beneficiary of a life insurance policy? a) trusts cannot be formed for life insurance purposes b) trust administration fees would reduce policy proceeds c) trusts cannot be used if a minor is the beneficiary d) Trustee must be a bark or brokerage
answer: trust administration fees would reduce policy proceeds
An agent's insurance records must be provided to the State Corporation Commission: a) within 30 days of the request b) under no circumstances c) upon request of the state corporation commission d) upon approval of the governor
answer: upon request of the state corporation commission
A policyowner with a terminal illness who sells his life insurance policy to a third party is called a: a) viable b) viatical c) viator d) viatee
answer: viator
Which life insurance policy would be eligible to include an automatic premium loan provision? a) increasing term b) level term c) decreasing term d) whole life
answer: whole life
Scott has a life insurance policy in which the dividends are left with the insurance company. This particular policy may be paid up when the cash value plus accumulated dividends: a) equal the net single premium for the same face amount at the insured's attained age b) can purchase extended term coverage for a period of two years or more c) equal the non forfeiture value of the policy d) can purchase a paid-addition
equal the net single premium for the same face amount at the insured's attained age
An example of misrepresentation is: a) making any public statement or advertisement that contains false information or unsubstantiated criticisms about an insurance company b) charging different premiums for policyholders in the same risk classification c) offering a premium rebate or a special advantage of any kind to consumers as an inducement to purchase a contract of insurance d) falsifying the terms, benefits, advantages, or conditions of an insurance policy
falsifying the terms, benefits, advantages, or conditions of an insurance policy
John has a criminal record in which he was convicted of a felony that involved dishonesty. Under Federal law, how would John be able to engage in insurance transactions? a)completing a court-ordered prison sentence b) completing a court-ordered probation period c) paying a fine of up to $50,000 d) given written content by the state insurance regulatory agency
given written content by the state insurance regulatory agency
Dan owns a disability income insurance policy which provides ONLY nonoccupationally coverage. Which of the following circumstances would likely NOT be covered under his plan? a) he is injured in an automobile accident while driving to work b) He suffers third-degree burns while on vacation c) he falls from the roof of his personal residence while replacing shingles d) he falls and breaks his hip at work
he falls and breaks his hip at work
With life insurance, the needs approach is used primarily in determining a)which insurance company to purchase the coverage from b)how much life insurance a client should apply for c)the type of life insurance that should be purchased d)a budget for the surviving dependents to follow in the event of the client's death
how much life insurance a client should apply for
According to the Affordable Care Act, coverage may be rescinded: a) if purchased through the employer b) if obtained by the individual c) if facilitated through the navigator d) if intentionally false statements were offered
if intentionally false statements were offered
If the State Corporation Commission believes that an agent is incompetent or untrustworthy, it has the authority to perform all of the following functions EXCEPT: a) issue a cease and desist order b) subpoena a respondent c) issue monetary fines d) incarcerate the agent
incarcerate the agent
Which health policy clause specifies the amount of benefits to be paid? a)Insuring b)Consideration c) free-look d) payment mode
insuring
How is the insured protected if a payor benefit rider is attached to the life insurance policy? a) premiums are waived if the payor becomes financially insolvent b) policy loan will automatically cover the premiums if payor becomes disabled or dies c) premium payments are waived in the even the premium payor dies or become disabled d) policy loan will automatically cover the premiums if payor becomes financially insolvent
premium payments are waived in the even the premium payor dies or become disabled
Which of the following would NOT be a reason for purchasing life insurance on a child's life? a) Provide benefits for the child if the parents die b) pay for the child's unreal expenses c) provide a start on the child's personal insurance d) help provide funds for the child's education
provide benefits for the child if the parents die
A life insurance policyowner sells her policy to a third party in a viatical settlement. Under this transaction, the policyowner: a) must pay income taxes on the full amount received b) receives an amount more than the policy's death benefit c) receives the policy's full death benefit d) receives an amount less than the policy's death benefit
receives an amount less than the policy's death benefit
An insured covered under a disability income policy is disabled and collecting benefits for a period of two months. He returns to work and is again disabled from the same cause, whereupon benefits continue to be paid. This is an example of which of the following? a) presumptive disability b) concurrent disability c) residual disability d)recurrent disability
recurrent disability
Omar is covered by a disability income policy. He is hurt while performing an occupation more hazardous than the occupation listed in his policy. The policy's change of occupation provision will have what effect? a)increase the benefit level b) reduce the benefit level c) increase the premiums d) decrease the premiums
reduce the benefit level
Which of the following would prevent a person from obtaining a Virginia resident agent license? a) Not graduating from high school b) residing in a state outside of Virginia c) residing in Virginia less than five years d) Being under the age of 25
residing in a state outside of Virginia
The outline of coverage for a Medicare supplement policy provides information about: a) services, benefits, copayments, deductibles, exclusions, premiums, and the insurer b) the policy's beneficiary c) the policyowner's consumer reports used in the underwriting process d) local health providers that are available for this coverage
services, benefits, copayments, deductibles, exclusions, premiums, and the insurer
fee-for-service is a method of administering health insurance benefit payment in which: a) the insurer is reimbursed directly b) the cost of each service is bundled into one payment c) the cost of each service is scheduled d) the insurer pays for services through a voucher system
the cost of each service is scheduled
The Optionally Renewable provision allows what party to cancel the contract? a) the policyowner b) the insured c)the insurer d) either the insurer or the policyowner
the insurer
Who may terminate coverage under a cancelable health insurance policy? a) the insured only b) the insurer only c) the insurer or the insured d) an officer of the insurer
the insurer or the insured
How is a collateral assignment used in a life insurance contract? a) transfers permanent ownership rights to a creditor b) assigns complete ownership rights to a creditor c) transfers specific ownership rights to a creditor d) assigns ownership rights to the primary beneficiary
transfers specific ownership rights to a creditor
Which of the following statements about universal life insurance is NOT true? a) death benefit can be increased b)premiums are fixable c) universal life insurance normally has a minimum guaranteed cash value for duration of the policy d) the cash value interest rate must equal or exceed a guaranteed minimum value
universal life insurance normally has a minimum guaranteed cash value for duration of the policy
How long does protection normally extend to under a limited pay whole life policy? a) It depends on the performance of the underlying investment account b) when premiums are no longer required as stated in the contract c) until age 65 d) until age 100
until age 100
During the application process, a statement made by an applicant that becomes part of the contract is considered to be a(n): a) warranty b) representation c) waiver d) exclusion
warranty