L&H Practice Exam Questions
An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. How much will the beneficiary receive from the policy?
$200,000
Once a viatical contract has been established, how long does the viator have to rescind the contract?
15 calendar days
Within how many days must a producer respond to an inquiry from the Commissioner?
30 days
Which of the following statements is INCORRECT?
A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business.
The term "illustration" in a life insurance policy refers to
A presentation of nonguaranteed elements of a policy.
An insured misstates her age at the time the life insurance application is taken. This misstatement may result in
Adjustment in the amount of death benefit.
In which Medicare supplemental policies are the core benefits found?
All plans
In reference to the standard Medicare Supplement benefits plans, what does the term standard mean?
All providers will have the same coverage options and conditions for each plan.
Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy?
An individual who was previously covered by group health insurance for 6 months is eligible.
The death protection component of Universal Life Insurance is always
Annually Renewable Term
Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?
Apparent
If an insurer appoints a producer, which authority must be notified?
Department of Insurance
Which is TRUE about the cash surrender nonforfeiture option?
Funds exceeding the premium paid are taxable as ordinary income.
What is the purpose of a conditional receipt?
It is intended to provide coverage on a date prior to the policy issue.
When a reduced paid-up nonforfeiture option is chosen, what happens to the face amount of the policy?
It is reduced to the amount of what the cash value would buy as a single premium.
Which of the following is true regarding a single life settlement option?
It provides income the beneficiary cannot outlive.
A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?
Joint and survivor
Which of the following statements is NOT correct regarding Medicare?
Medicare Advantage must be provided through HMOs.
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
Mutual
Which renewability provision allows an insurer to terminate a policy for any Cancellablereason, and to increase the premiums for any class of insureds?
Optionally renewable
Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?
Premiums are not tax deductible as a business expense.
Which of the following is correct regarding the taxation of group medical expense premiums and benefits?
Premiums are tax deductible and benefits are not taxed.
Which type of life insurance policy generates immediate cash value?
Single Premium
An insurer wishes to compare the information given in an insurance application with previous insurance applications by the same applicant but for different companies. What organization can help the insurer accomplish this?
The Medical Information Bureau
All of the following statements about equity index annuities are correct EXCEPT
The annuitant receives a fixed amount of return.
The annuitant dies while the annuity is still in the accumulation stage. Which of the following is TRUE?
The beneficiary will receive the greater of the money paid into the annuity or the cash value.
Which of the following is NOT a characteristic of a group long-term disability plan?
The benefit can be up to 50% of one's yearly income.
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
The death benefit can be increased by providing evidence of insurability.
Which of the following is correct regarding selecting a primary care physician in a PPO plan?
The insured may choose medical providers not found on the preferred list.
All of the following are true regarding a decreasing term policy EXCEPT
The payable premium amount steadily declines throughout the duration of the contract.
All of the following statements are true regarding installments for a fixed amount EXCEPT
The payments will stop when the annuitant dies.
How soon after the due date should the insurer pay the agent appointment fees?
Within 30 days
