Missed FX Questions

The minimum fine for violation of Insurance Code is

$1,000

The maximum fine for violating the Insurance Code is

$25,000

During a sales presentation, a producer intentionally makes a statement which may mislead the insurance applicant

Misrepresentation

An individual's tendency to be dishonest would be indicative of a

Moral hazard

SIMPLE Plans require

No more than 100 employees; Employees must receive a minimum of $5,000 in annual compensation; No other qualified plan can be used

An insured neglected to pay his premiums, so his policy lapsed. He filed a reinstatement application and another premium and was reinstated shortly thereafter. Five days after reinstatement, he had a consultation with a general physician. which part of the consultation be covered?

None, the insured must wait 30 days to determine the order of benefits

Premium payments for personally-owned disability income policies are

Not tax deductible

During replacement of life insurance, a replacing insurer must

Obtain a list of all life insurance policies that will be replaced

An applicant is discussing his options for medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A & B, what is the insurance company obligated to do?

Offer the supplement policy on a guaranteed issue basis

Utilized when the insurer accumulates dividends at interest & then uses the accumulated dividend, plus interest, and the policy cash value to pay off the policy early?

Paid-up option

An underwriter may reject an application for health insurance if the rejection is based upon

Prescription use

Under AD&D coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?

Principle sum

The Gramm-Leach-Bliley Act was passed to

Protect private customer information filed with a financial instistution

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must

Respond to the consumer's complaint

Equity indexed annuities

Seek higher returns

A domestic insurer issuing variable contracts must establish one or more

Separate accounts

Consideration in a policy

Something of value exchanged between parties; The premium amount paid at the time of application; The promise to pay covered losses

The interest earned on policy dividends is

Taxable

An example of a producer being involved in an unfair trade practice of rebating

Telling a client that his first premium will be waived if he purchase the insurance policy today

Types of beneficiary designations

Tertiary, contingent and primary

What entity established the Do-Not-Call Registry?

The Federal Trade Commission (FTC)

True of accumulation of interest option

The annual dividend is retained by the company; The interest is credited at a rate specified by the policy; The policyholder has the right to withdraw the accumulations at any time

True of beneficiary designation

The beneficiary may be a natural person; The policy does not have to have a beneficiary named in order to be valid; Trusts can be valid beneficiaries

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?

The capital amount in a lump sum

If an insurance company cancels a producer's appointment then

The commissioner must be notified within 30 days

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

The group plan will not pay because the employee was injured at work.

True regarding an insured who is considered to be a standard risk

The insured may have to pay slightly higher premiums

An employee is insured under her employer's group life plan. If she terminates her group coverage, what is true

The insured would not need to prove insurability for a conversion policy; The insured may convert coverage to an individual policy within 31 days; The premium for individual coverage will be based upon the insured's attained age.

An applicant is considered to be high-risk, but not so much that the insurer wants to deny coverage.

The insurer can rate up the policy; The insurer can increase the premium

True regarding installments for a fixed period annuity settlement option

The insurer determines the amount for each payment; It will pay the benefit only for a designated period of time; The payments are not guaranteed for life

According to the rights of renewability rider for cancellable policies, what is correct?

The insurer must provide the insured a written notice of the cancellation; Claims incurred before cancellation must be honored; An insurance company may cancel the policy at anytime

Regarding the return of premium option for LTC policies, what happens to the premium if the policy lapses?

The insurer will return a percentage of the premiums paid

What best describes what the annuity period is?

The period of time during which accumulated money is converted into income payments

A policy summary must be delivered with

The policy producer's name and address; The insurance company's home office address; The generic name of the policy issued premium, cash value, surrender value & death benefit figures

Generally considered when underwriting group insurance

The size of the group; The nature of the group; The group's past claim experience

An example of a fiduciary responsibility

The trust that a client places in the producer in regard to handling premiums

An HSA holder who is 65 years old decides to use the money in the account for a nonhealth expense. Which of the following is true?

There will be a tax

True statements about Medicare supplement insurance policies

They cover Medicare deductibles and co payments; They supplement Medicare benefits; They are issued by private insurers.

Requirements for life insurance illustrations

They must differentiate between guaranteed and projected amounts; They may only be used as approved; They must identify non guaranteed values

A health insurance policy clause that prevents an insurance company from denying payment of a claim after a specified period of time is know as

Time limit on certain defenses clause

Which provision states that the insurance company must pay medical expense claims immediately?

Time of Payment of Claims

After a hearing, if the Commissioner finds that a licensee is using unfair methods of competition, the commissioner may issue a cease and desist order against that person and levy a fine of how much?

Up to $1,000 for each violation.

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of premium

A producer's license has been revoked for a violation of the Insurance Code. When can the producer apply for a new license?

Within 1 year of the revocation

When can a Long-Term Care policy deny a claim for losses incurred because of a pre-existing condition?

Within 6 months of the effective date of coverage

Provision in annuity contracts that allow the owner to surrender the annuity if the interest rates drop to a specified level

Bail-out

Concerning group Medical and Dental insurance

Benefits received by the employee are free from federal income tax; Premiums paid by the employer are deductible as a business expense; Employee paid premiums may be deducted if certain conditions are met

Similarity between annuities and life insurance

Both annuities and life insurance use mortality tables

A policy available to business owners that provides payment for normal business expenses in the event that the owner is disabled is called

Business Overhead Expense

When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care

Case management 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

Contracts of adhesion

Describes a specific dollar amount of the cost of care that must be paid by the member

Copayment

The needs approach method of determining value of an individual's life

Coverage is based on the predicted needs of the family; The death of an insured must be premature; It must be assumed that the death of the insured will occur immediately

Which component increases in the increasing term insurance?

Death beneifit

When must an IRA be completely distributed when a beneficiary is not named?

December 31st of the year that contains the 5th anniversary of the owner's death

A health insurance policy may cover all of the following risks

Dental expenses; Loss of income due to disability; Medical expenses

MECs

Distributions before age 59 1/2 incur a 10% penalty on policy gains; Policy loans are taxable distributions; Accumulations are tax deferred

If an annuitant dies before annuitization occurs, what will the beneficiary receive?

Either the amount paid into the plan or the cash value, whichever is the greater amount

When a life insurance policy is cancelled and the insured has selected the extended term non forfeiture option, the cash value will be use to purchase term insurance that has a face amount

Equal to the original policy for as long a period of time that the cash value will purchase

Which nonforfeiture option has the highest amount of insurance protection?

Extended Term

An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?

False advertising

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

False advertising

When an insurance agency published an advertising brochure, it emphasized the company's financial stability & sound business practices. In reality, its financial health is terrible, and the company will soon have to file bankruptcy. What describes this advertisement?

False financial statement

As it pertain to group heath insurance, COBRA stipulates that

Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense

Penalties for violating the statutes pertaining to sharing of commissions

License revocation; Fine up to $5,000; Imprisonment for up to 2 years

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 payment continues to a designated beneficiary?

Life in some with period certain

All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?

Lower

A producer has completed 40 hours of continuing education this licensing period. How many can be carried over to the next period?

10

A producer has been notified by the Commission to stop using an unapproved trade name. How many days does the producer have to change the trade name before facing a fine?

10 days

According to OBRA, what is the minimum number of employees required to constitute a large group?

100

In a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective?

100%

A license life producer has completed 12 of his continuing education hours for this period. How many more will he have to finish

12

Temporary licenses can last for how long

180 days

An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan?

2 years

What is the minimum required number of continuing education credit in ethics every licensing period?

3

If a resident producer or solicitor has a change of residential or business address, how soon must the licensee notify the commissioner

30 days

In instances where a coordination of benefits provision is necessary, and 2 relevant plans cannot agree on the order of benefits, they have to pay the claim on equal shares. How long do they have to determine the order of benefits?

30 days

When a resident producer changes his residence address, the Insurance Department must be notified within

30 days

How many years must an employee be insured under the group plan to convert to individual insurance after termination

5

Insurer examinations must occur no less frequently than every

5 years

How long is an open enrollment period for Medicare supplement policies?

6 months

If a life insurance policy develops cash value faster than a seven-pay whole life contract, it is

A Modified Endowment Contract

A loss that will be covered by a group medical expense policy?

A pre-existing condition

Which of the following producers will be required to complete continuing education hours to renew his license?

A producer licensed 4 years ago who holds only one line of authority

When the policy premium wasn't submitted with the application, what should the agent obtain from the insured upon delivery?

A statement of good health

If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following

Adjust the benefit in accordance with the increased risk

Bail-out provision

Allows the owner to surrender the annuity with a charge

A universal life insurance policy is best descried as

An annually renewable term policy with a cash value account

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

An unfair trade practice

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market

Illegal practice

The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period

Incontestability clause

The entity that must approve all Medicare supplement advertisements

Insurance Commissioner or Director

What is used for the Human Life Value Approach?

Insured's annual expenses; Effect of inflation over time; Insured's current future income

What entity has the power to make changes to an insurance policy?

Insurer's executive officer

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

Interest only option

In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary, and reasonable, the extra cost

Is not covered

True regrading group annuity

It can be qualified; It can be tax deferred; It can be noncontributory

How is the amount of Social Security disability benefits calculated?

It is based upon the worker's Primary Insurance Amount (PIA), which is calculated from their Average Indexed Monthly Earnings over their highest 35 years.

Describe hospice care

It provides continuous care; It provides care in a home-like setting; It provides care to terminally-ill people

Reinstatement provision

It requires the policy owner to pay all overdue premiums with interest before the policy is reinstated