licensing
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?
$300
An agent who willfully violates the insurance code may, after a hearing, pay UP TO _________ per violation as a penalty
$5,000
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?
100%
the health insurance premiums paid for by each partner in a partnership is considered to be
100% tax deductible
In Virginia, at least _____ employee(s) are needed for a small employer medical plan
2
An insured must notify an insurer of a medical claim within how many days after an accident?
20
In Virginia, a grace period of ___ days is required for a life insurance policy paid on an annual basis
31
One becomes eligible for Social Security disability benefits after having been disabled for
5 months
An agent must maintain customer records for _______ year(s) following the completion date of the insurance transaction.
5 years
An insured MUST wait ___ days to bring legal action against an insurer after written proof of loss has been received by the insurer.
60
Larry wants to purchase an individual disability income policy to provide continuous income while disabled. He is also covered by a two-month wage continuation benefit from his employer. What should the policy elimination period be for his individual policy?
60 days
what is a juvenile life insurance policy?
A life policy that covers the life of a minor
An individual currently owns a long-term care policy. At the time of application for similar coverage, which item must be signed by the applicant and retained by the insurer?
A replacement notice
Which of the following statements accurately describes the "time limit on certain defenses"?
After a stated period of time, claims cannot be denied due to material misrepresentation on the application
Traditional individual retirement annuity (IRA) distributions must start by
April 1st of the year following the year the participant attains age 70 1/2
the Change of Occupation provision in a disability income policy states that, in the event the insured changes to a less hazardous occupation, which of the following may apply?
Benefits can be increased in the event of a covered claim
Who normally pays the premiums for group credit life insurance?
Borrower
A preferred provider plan and an indemnity plan are similar in what way?
Both pay on a fee-for-service basis
For employees covered in multiple states under a group health plan, jurisdiction rules cannot alter
COBRA laws
which of the following provisions allows an insured or the insurer to terminate the policy?
Cancelable provision
all of these considered to be a violation of the Federal Fraud and False Statements Act EXCEPT
Claims reimbursement
An agent must notify the Bureau of Insurance for
Conducting business under an assumed name
the affordable care act's premium rating process includes each of the following EXCEPT
Employment status
which of the following health insurance provisions requires that the application becomes part of the policy?
Entire contract clause
An agreement is reached when an insurance contract is formed. Which of the following is NOT considered to be an element of an agreement?
Equity
Which statement concerning an adjustable life insurance policy is FALSE?
Evidence of insurability is required when there is a charge in premium
Which life insurance policy option allows the policyowner to have coverage equal to the net death benefit of the lapsed policy?
Extended term nonforfeiture option
A consumer who has been recently denied insurance, credit, or employment based on an unfavorable consumer report MUST be advised as such. Which of the following does this statute originate from?
Fair Credit Reporting Act
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?
Given written consent by the state insurance regulatory agency
which of these encourage adverse selection in an indemnity dental plan?
Having multiple or periodic open periods
Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?
If Tom's employment is terminated, 20% of the funds could be forfeited
A characteristic of preferred provider organizations (PPO) is
If services is obtained outside the PPO, benefits are reduced and costs increase
All of these are duties that a producer may be required to perform when delivering an insurance policy EXCEPT
Leave a conditional receipt with client
Which of these is NOT used as selection criteria in the underwriting process of a life insurance application?
National origin
Medicare Supplement insurance requires an individual to be at least how old for open enrollment?
No minimum age
Which of the following health insurance plans charges a premium that cannot be increased?
Noncancelable
which of these is NOT an Unfair Claims Settlement Practice?
Offering to settle a claim by arbitration
All of these statements correctly describe an aleatory contract EXCEPT
Only one party makes any kind of legally enforceable offer
Under which circumstances would inflation protection NOT be included in a long-term policy?
Policyowner declines the coverage in writing
In Virginia, which of the following records are not required to be maintained by an agent?
Premium quotes for polices not accepted
Which of these is NOT an Unfair Claims Settlement Practice?
Refusing to pay persons bringing false or fraudulent claims
which of these actions by an agent would NOT likely result in license suspension or revocation?
Sharing compensation with another similarly-licensed agent
Which of the following does a Medicare Advantage enrollee typically pay for?
Small co-pay per visit or per service
which statement concerning the Entire Contract provision in an individual accident and health insurance policy is TRUE?
The agent doesn't have the authority to change the policy or waive its provisions
Why might it be beneficial for an employee to purchase private disability income insurance for workplace injuries when he/she is already covered by worker's compensation?
The benefits arising from a worker's compensation claim could be inadequate to replace the loss of income
Group health issued in Virginia must identify any exclusions, limitations or reductions in coverage on which of the following?
The certificate of coverage
Which of the following is true regarding a person receiving a waiver of premium benefit?
The insured must be disabled for a period of time
The Optionally Renewable provision allows what party to cancel the contract?
The insurer
Which of the following does medical expense insurance NOT typically cover?
Treatment in a government facility
which of these is NOT an advantage of term life insurance?
a cash benefit will be provided if the insured is alive at the end of the policy period
After an applicant reads and signs an insurance application, he/she should be conscious of the fact that
a false statement could lead to loss of coverage
The absolute assignment of a life insurance policy results in
all incidents of ownership transferred to the assignee
Carlos the agent has sold an insurance policy and will be sharing the commission with another individual. Which of the following individuals may Carlos share the commission with?
another licensed but unappointed agent
according to HIPAA regulations, which of the following may reduce a medical plan's pre-existing conditions exclusion?
any period of prior coverage
A policyowner pays the first annual premium for a $50,000 life insurance policy and dies one month after the policy effective date. Which of these statements is normally true?
beneficiary receives $50,000 income tax-free
In a disability buy-self agreement, the policies funding the agreement are owned by the
business entity
which statement regarding the waiver of premium rider is accurate?
cash payment is not directly provided to the policyowner
An agent who attempts to intimidate is engaging in
coercion
An insurance application requires an applicant to make a full, accurate disclosure of the risk factor involved. Using this criteria, an insurance policy is considered what type of contract?
contract of utmost good faith
Any employee insured under a group life insurance plan is normally
covered with term life insurance
the premiums for a group life credit policy must be paid for by the
creditor
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
defamation
how often must the commission examine each domestic insurance company?
every 5 years
death benefits from a life insurance policy are normally considered to be
exempt from federal income tax
Which benefit supplement added to a life insurance policy insures an entire family?
family term rider
which of these may not be deducted from premium payments or the cash value of a variable life insurance policy?
federal premium taxes
Rick owns a variable universal life policy and chooses a variable death benefit option. What will typically happen to the death benefit as a result of this selection?
fluctuate with changes in the cash amount
Death proceeds from a life insurance policy are typically included in a deceased insured's gross estate
for federal income tax records
All individual long-term care policies delivered in Virginia MUST be renewable
for life
When the disclosure of an insured's nonpublic information is involved, what is the insurer obligated to do?
give notice, explain, and allow opting out
What can be expected when a preferred provider organization (PPO) patient decides to use a non-PPO?
higher out-of-pocket expenses
according to the affordable care act, coverage may be restricted
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
incarcerate the agent
the medical information bureau consists of members from which group?
insurance companies
Who is protected with the "other insurance with this insurer" provision?
insurance company
Which health policy clause specifies the amount of benefits to be paid?
insuring
After an insurance application has been originated, the producer normally
is the major personal contact to the insured
health care can be better controlled by utilizing preadmission testing. preadmission testing can reduce the
length of hospitalization
During the early years of a whole life insurance policy, the cash value will normally be
less than the total premiums paid
which of these is not a common life insurance nonforfeiture option?
life income annuity
field underwriting by a producer
may result in the disclosure of hazardous activities of the applicant
according to the affordable care act (ACA), the proportion of premium revenues spent on clinical services and quality improvements is called the
medical loss ratio
In Virginia, false advertising is an example of
misrepresentation
all of the following are covered under the most dental plans EXCEPT for
mouth cancer
In Virginia, any person acting as an agent for an unlicensed insurer is
permissible only if acting as a licensed surplus lines broker
which of these is NOT a factor that influences group health insurance underwriting?
physical exams of group members
How is the insured protected if a payor benefit rider is attached to the life insurance policy?
premium payments are waived in the event the premium payor dies or becomes disabled
A Guaranteed Renewable provision allows
premiums which can only be increased per rate class
Statements made by an insured on an accident and health insurance application are considered to be
representations
Licensed agents in Virginia are authorized to
solicit, receive, and forward applications to the insurer
Kelly purchases a heath insurance policy issued on a conditionally renewable basis. The insurance company has a right to refuse of the policy for
specific reasons stated in the contract
Under a key person disability income policy, benefits will be received as
tax free income to the business
Medicare Part A does NOT provide coverage for
the first 3 pints of blood
the Virginia Life, Accident, and Sickness Insurance Guaranty Fund protects an insured in the event of
the insurers insolvency
what is considered the collateral on a life insurance policy loan?
the policy's cash value
Virginia requires that an insurance agent must complete ___ hour(s) of continuing education on the subject of ethics every reporting period
three
what is the primary reason for the State Corporation Commission's examination of an agent's insurance records?
to determine compliance with state insurance laws and regulations
What would be the disadvantage of naming a trust as beneficiary of a life insurance policy?
trust administration less would reduce policy proceeds
Persuading an insured, to the insured's detriment, to switch policies is called
twisting
In Virginia, once a life insurance policy has been in force for ___ year(s), it becomes incontestable
two
under what circumstances does an accident and health insurer have the right to request an autopsy?
when not prohibited by state law
what is the maximum number of employees an employer may have for qualified medical savings accounts?
50 employees
in a long-term care policy issued in Virginia, any provision limiting preexisting conditions may not exceed
6 months
proceeds of a life insurance policy claim may be issued to a minor ONLY if
a guardian has been appointed to receive proceeds on behalf of the minor
Disability income insurance normally excludes coverage for disabilities that arise from
active military duty
A statement MUST be signed by the ________ for any illustrations used in the sale of a life insurance policy.
agent
Before an individual is permitted to act as an insurance agent, he/she must hold a valid insurance license and be ____ by an authorized insurer
appointed
what happens to the death benefit of a life insurance policy if the insured elects a partial payment from the accelerated (living) benefit provision?
reduced
A life insurance policy's waiver of premium rider has the ability to
relieve the insured of premium payments following an initial waiting period after the insured becomes totally disabled
When a health insurance policy includes a Mandatory Second Surgical Opinion provision, the insured must
seek a second opinion for specified elective surgeries
the highest mortality rate belongs to which group?
Age 70 males
A policyowner has just borrowed from a life insurance policy's cash value. Which of these statements is true?
In the event of death, the loan amount is deducted from the policy proceeds
An accident and health insurer has just received written proof of loss from one of its insureds. The insured must now wait 60 days before
bringing legal action against the insurer
Which report contains information regarding an individual's general reputation and credit standing?
consumer report
If dividend option choices are offered on a whole life insurance policy, the policy MUST
contain a statement that dividends are NOT guaranteed
An annuity's accumulation period may
continue after the purchase payments stop
When a sum of money undergoes capital liquidation, that sum will
decrease in size
Group life plans sold in Virginia typically contain a conversion option. If the insured elects this option, the new policy
does NOT require evidence of insurability
which of the following would permit an insurer to delay a covered disability policy exam?
elimination period
Non-occupational disability coverage is designed for
employees who suffer non-work related disabilites, since work-related disabilities are covered by Workers' Compensation
A(n) ______ insurance company conducts business in a state outside the one in which it is domiciled.
foreign
An annuity contract may be returned for a full refund during the
free look period
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?
good health statement
which of these would not be a valid reason to add the waiver of premium rider to a life insurance policy?
it allows a policy loan to cover premium payment if the policyowner becomes totally disabled
In regards to health insurance, what is meant by the term "primary policy"?
it is the policy that will pay up to its limit before any other policy pays
an insurance policy may be issued with a preferred insurance premium in all of these situations EXCEPT
living in a rural area
In a disability income contract, an insured is considered to be totally disabled under the presumptive disability provision if he/she
loses the ability to speak
Each of the following will trigger a benefit under the presumptive disability provision, EXCEPT
loss of any one limb
The annuitant in a single premium deferred annuity (SPDA)
makes only one premium payment
the pre-existing conditions exclusion under a small employer medical plan
may be partially or fully satisfied by having creditable coverage with a previous employer
Karen is considering replacing her individual accident and health insurance policy with another individual policy. She has had issues in the past with her gall bladder that would be considered a pre-existing condition. How will a pre-existing conditions exclusion affect Karen's new insurance contract?
may reduce her benefits
what is considered a valid reason for an insurer's refusal to pay policy proceeds directly to a minor?
minors are normally not capable of handling money in a reasonable manner
Periodic health claim payments MUST be made at least
monthly
what is the minimum age required for open enrollment in Medicare Supplement insurance?
no minimum age required
Rick the agent handles insurance premiums in an untrustworthy manner. His actions could find him guilty of
not acting as a fiduciary
The premiums paid by an employer for his employee's group life insurance are usually considered to be
partially deductible to the employee
When an insurer discovers (during the claim process) that the insured's age was accidentally misstated on the life insurance application, the insurer will likely
pay an amount the premiums would have purchased at the insured's actual age
Employers often purchase life insurance on a key employee in order to
pay for finding and training a replacement if the employe dies prematurely
what happens to a life insurance policy when the policy loan balance exceeds the cash value?
policy will no longer be in force
A group health certificate for coverage issued in Virginia MUST contain a(n)
summary of policy features and benefits
How is an insured's accident and health claim handled by an insurer if it occurs during the policy's grace period?
the unpaid premium may be subtracted from the reimbursement
The major medical deductible carryover period normally applies to expenses incurred during the last ___ months of the plan year.
three
Misrepresenting pertinent policy provisions relating to coverage after a loss is a(n)
unfair claims settlement practice
how long does protection normally extend to under a limited pay whole life policy?
until age 100
when does interest income for a flexible premium deferred annuity get reported for federal income taxes?
upon receiving distributions from the contract
