MISSED Practice Exam Questions: Life and Health
Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death? a)Refund of premiums b)Principal sum c)Capital sum d)Double the amount of the death benefit
b) principal sum
The minimum number of credits required for partially insured status for Social Security disability benefits is a)4 credits. b)6 credits. c)10 credits. d)40 credits.
b) 6 credits
If an insurer terminates a producer's appointment, the Commissioner must be notified within how many days? a)10 b)30 c)60 d)90
b) 30
Which of the following is an example of liquidity in a life insurance contract? a)The money in a savings account b)The cash value available to the policyowner c)The death benefit paid to the beneficiary d)The flexible premium
b)The cash value available to the policyowner
For the purpose of examination by the department, insurers must keep a record of all financial files for at least a)4 years. b)5 years. c)7 years. d)3 years.
b) 5 years
In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years? a)1 b)3 c)5 d)10
C) 5
All of the following are true regarding the Medical Information Bureau (MIB) EXCEPT a)MIB reports are based upon information supplied by doctors and hospitals. b)MIB information is reported to underwriters in coded form. c)MIB reports contain previous insurance information. d)Insurers may not refuse to accept an application solely due to information in an MIB report.
A) MIB reports are based upon information supplied by doctors and hospitals
within how many days of requesting investigative consumer report must an insurer notify the consumer in writing? a) 3 days b) 5 days c) 10 days d) 14 days
a) 3 days
Which of the following is NOT an enrollment period for Medicare Part A applicants? a)Special enrollment b)General enrollment c)Automatic enrollment d)Initial enrollment
c) automatic enrollment
n a major medical insurance policy, the amount that an insured must pay on a claim before the insurer will pay is known as a)Inside limit. b)Coinsurance. c)Deductible. d)Copayment.
c) deductible
In which of the following cases will the insured be able to receive the full face amount from a whole life policy? a)If there are no named beneficiaries when the policy is paid up b)At age 65 c)If the insured lives to age 100 d)As soon as the cash value exceeds the face amount
c) if the insured lives to age 100
The Federal Fair Credit Reporting Act a)Regulates telemarketing. b)Prevents money laundering. c)Regulates consumer reports. d)Protects customer privacy.
c) regulates consumer reports
According to OBRA, what is the minimum number of employees required to constitute a large group? a)15 b)20 c)50 d)100
d) 100
The benefits for individual disability plans are based on a)The employer's net worth. b)The number of employees of the company. c)A percentage of the worker's income. d)A flat amount.
d) a flat amount
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?a)Life with period certain b)Fixed amount c)Interest only d)Fixed period
d) fixed period
which of the following statements is incorrect? a) 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 b) no insurance producer may charge a fee for the completion of an application for a contract of insurance c) the licensee may charge a fee in addition to a commission to a person for the sale, solicitation, or negotiation of a contract of insurance d) the fee charged by the licensee must be disclosed in advance in writing to the person and must be reasonable in relationship to the services provided
a) 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
Which of the following would NOT be considered an exception to the National Do Not Call List? a)Calls based from outside of the United States b)Calls for which the consumer has given prior written permission c)Calls which are not commercial or do not include unsolicited advertisements d)Calls by or on behalf of tax-exempt nonprofit organizations
a) calls based from outside the united states
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement? a)Term insurance only b)Permanent insurance only c)Universal life insurance only d)Any form of life insurance
d) any form of life insurance
How long is an open enrollment period for Medicare supplement policies? a)6 months b)1 year c)30 days d)90 days
a) 6 months
Which of the following is NOT covered under Plan A in Medigap insurance? a)The first three pints of blood each year b)The Medicare Part A deductible c)Approved hospital costs for 365 additional days after Medicare benefits end d)The 20% Part B coinsurance amounts for Medicare approved services
b ) the Medicare Part A deductible
Licensees must make a report of any action taken against them in another jurisdiction or by another governmental agency in Pennsylvania within how many days of the final disposition of the matter? a)10 b)30 c)60 d)90
b) 30
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium? a)Straight whole life b)Universal life c)Variable life d)Decreasing term
b) universal life
Concerning group Medical and Dental insurance, which of the following statements is INCORRECT? a)Employee paid premiums may be deducted if certain conditions are met. b)Employee benefits are tax deductible the year in which they were received. c)Benefits received by the employee are free from federal income tax. d)Premiums paid by the employer are deductible as a business expense.
b)Employee benefits are tax deductible the year in which they were received.
What is the duration of the free-look period for Medicare supplement policies? a)10 days b)15 days c)30 days d)60 days
c) 30 days
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? a)10 days b)3 days c)5 days d)7 days
c) 5 days
An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?. a)Conditional receipt b)Disclosure rule c)Fair Credit Reporting Act d)Consumer Privacy Act
c) Fair Credit Reporting Act
With regards to premium rates, which of the following statements is NOT true? a)After a premium rate is filed, the insurer must wait 30 days or until approval is received from the Commissioner before using the new rate. b)If a premium rate is disapproved, the Commissioner must hold a hearing if requested by the insurer. c)The Commissioner sets all insurance premium rates used in Pennsylvania. d)Pennsylvania is a "prior approval" state in that premiums rates must be filed with the Insurance Department and approved by the Commissioner.
c)The Commissioner sets all insurance premium rates used in Pennsylvania.
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT a)The interest is credited at a rate specified by the policy. b)The policyholder has the right to withdraw the accumulations at any time. c)The interest is not taxable since it remains inside the insurance policy. d)The annual dividend is retained by the company.
c)The interest is not taxable since it remains inside the insurance policy.
Once it has been reasonably proven that a person has knowingly violated the Insurance Code regarding unfair methods of competition, the Department may impose a civil penalty of a)$1,000 for each violation. b)$2,000 for each violation. c)$3,000 for each violation. d)$5,000 for each violation.
d) $5,000 for each violation
Within how many days must a producer respond to an inquiry from the Commissioner? a)3 days b)10 days c)15 days d)30 days
d) 30 days
If an insurer appoints a producer, which authority must be notified?a)Federal Directory of Insurers b)State Insurance Regulation Board c)Commissioner d)Department of Insurance
d) Department of Insurance
a business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. the business owner decided to use her $250,000 life insurance policy to secure the loan; what provision makes this possible? a)collateral assignment b) insurable interest c) modification clause d) ownership provision
a) collateral assignment
which document is used to assess risk associated with an applicant's lifestyle and character? a) investigative consumer report b) character assessment c) non-medical risk assessment d) applicant lifestyle assessment
a) investigative consumer report
Which of the following is NOT the purpose of HIPAA? a) to provide immediate coverage to new employees who had previously been covered for 18 months b) to guarantee the right to buy individual policies to eligible individuals c) to prohibit discrimination against new employees based on their health status d) to limit exclusions for pre-exisiting conditions
a) to provide immediate coverage to new employees who had previously been covered for 18 months
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.
c) they earn lower interest rates
Which provision states that the insurance company must pay Medical Expense claims immediately? a)Legal Actions b)Relation of Earnings to Insurance c)Time of Payment of Claims d)Payment of Claims
c) time of payment of claims
Which nonforfeiture option provides coverage for the longest period of time? a)Extended term b)Paid-up option c)Accumulated at interest d)Reduced paid-up
d) Reduced paid-up
What is the amount a physician or supplier bills for a particular service or supply? a)Assignment b)Coinsurance c)Approved amount d)Actual charge
d) actual charge
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the a)Reinstatement clause. b)Insuring clause. c)Misstatement of Age clause. d)Incontestability clause.
d) incotestability clause
Which of the following ultimately determines the interest rates paid to the owner of a fixed annuity? a)Investment performance of the company b)Investment performance of the insured c)Statewide predetermined annual interest rate d)Insurer's guaranteed minimum rate of interest
d) insurer's guaranteed minimum rate of interest
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)Term to specified age b)Ordinary life policy c)Limited pay whole life d)Level term
d) level term
If a business owner becomes totally disabled, a Business Overhead Expense policy will pay all of the following EXCEPT a)Rent. b)Utilities. c)Employee payroll. d)Loss of the owner's income.
d) loss of the owner's income
Which of the following individuals must have insurable interest in the insured? a)Beneficiary b)Underwriter c)Producer d)Policyowner
d) policyowner
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?a)Universal Life - Option B b)Equity Indexed Universal Life c)Variable Universal Life d)Universal Life - Option A
d) universal life-option A
In forming an insurance contract, when does acceptance usually occur? a)When an insurer delivers the policy b)When an insurer receives an application c)When an insured submits an application d)When an insurer's underwriter approves coverage
d) when an insured's underwriter approves coverage
The automatic premium loan provision is activated at the end of the a)Grace period .b)Free-look period c)Elimination period. d)Policy period.
a) Grace period
Every insurer marketing Long-Term Care insurance must establish marketing procedures to ensure all of the following EXCEPT a)LTC policies are marketed effectively to prospective insureds. b)Comparisons of policies are fair and accurate. c)Excessive insurance will not be sold. d)Every reasonable efforts is made to identify an applicant's other insurance.
a) LTC policies are marketed effectively to prospective insureds
An application for a viatical settlement provider license must be submitting to which of the following? a)The Insurance Department b)The Viatical Settlement Association c)The Governor's Office d)The NAIC
a) The Insurance Department
all of the following are true regarding the guaranteed insurability rider except a) the rider is available to all insureds for no additional premium b) the insured may purchase additional insurance up to the amount specified in the base policy c) the insured may purchase additional coverage at the attained age d) it allows the insured to purchase additional amounts of coverage without proving insurability only at specified dates and events
a) the rider is available to all insureds for no additional premium
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
b) adjusted to the insured's age at the time of renewal
What type of insurance would be used for a Return of Premium rider? a)Annually Renewable Term b)Increasing Term c)Level Term d)Decreasing Term
b) increasing term
Which of the following is INCORRECT regarding a $100,000 20-year level term policy? a)If the insured dies before the policy expired, the beneficiary will receive $100,000. b)The policy will expire at the end of the 20-year period. c)At the end of 20 years, the policy's cash value will equal $100,000. d)The policy premiums will remain level for 20 years.
c)At the end of 20 years, the policy's cash value will equal $100,000.
Under which of the following circumstances can financial institutions share insurance coverage information with third parties, for the purpose of soliciting the purchase of insurance? a)Under no circumstances; nonpublic personal financial information cannot be shared with third parties b)If a consumer decides to opt out c)If a consumer does not sign and return the notice of disclosure within 30 days d)Whenever it is requested by the Commissioner
c)If a consumer does not sign and return the notice of disclosure within 30 days
Which of the following is true regarding a waiver of a surrender charge on an annuity contract? a)The charge can only be waived if the annuitant needs the funds for medical expenses. b)The surrender charge will be applied to all premature surrenders. c)The surrender charge waiver only applies to immediate annuity. d)The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days.
d)The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days.
If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept? a)Reasonable expectations b)Cease and desist c)Nonforfeiture d)Indemnity
a) reasonable expectations
Which of the following statements about a suicide clause in a life insurance policy is TRUE? a)Suicide is excluded for a specific period of years and covered thereafter. b)Suicide is covered for a specific period of years and excluded thereafter. c)Suicide is covered as long as the policy is in force. d)Suicide is excluded as long as the policy is in force
a) suicide is excluded for a specific period of years and covered thereafter
Which clause allows both the insured and dentist to know in advance which benefits will be paid? a)Fixed Rate b)Precertification c)Preadmission d)Advanced Benefit Notification
b) precertification
Which of the following types of agent authority is also called "perceived authority"? a)Express b)Implied c)Fiduciary d)Apparent
d) apparent
A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change? a)Value Adjustment Rider b)Return of Premium Rider c)Inflation Rider d)Cost of Living Rider
d) cost of living rider
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are a)Not taxable since the IRS treats them as a return of a portion of the premium paid. b)Paid at a fixed rate every year. c)Taxable as ordinary income. d)Guaranteed.
a) not taxable since the IRS treats them as a return of a portion of the premium paid
Which of the following does NOT have to be disclosed in a long-term care (LTC) policy? a)The aggregate amount of premiums due b)The meaning of the terms "reasonable" and "customary" c)Any limitations or conditions of eligibility for LTC benefits d)Any riders or endorsements
a) the aggregate amount of premiums due
which of the following best describes the unfair practice of defamation? a) assuming the name and identity of another person b) issuing false advertising material c) making derogatory oral statements about another insurer's financial condition d) refusing to deal with other insurer's
c) making derogatory oral statements about another insurer's financial condition
what is the civil penalty for violating a cease and desist order? a) $1,000 b) $5,000 c) $10,000 d) $50,000
c)$10,000
The term "illustration" in a life insurance policy refers to a)Pictures accompanying a policy. b)Charts and graphs. c)A presentation of nonguaranteed elements of a policy. d)A depiction of policy benefits and guarantees.
c)A presentation of nonguaranteed elements of a policy.
Which of the following statements is correct regarding a whole life policy? a)Cash values are not guaranteed. b)The policy premium is based on the attained age. c)The death benefit may increase or decrease during the policy period. d)The policyowner is entitled to policy loans.
d) the policyowner is entitled to policy loans
Which of the following is true regarding Medicare supplement policies? a)They must be available to those aged 60 and over. b)They must be guaranteed renewable. c)They must have a 15-day free-look period. d)They must contain a minimum of Plans A and B.
b) they must be guaranteed renewable
The paid-up addition option uses the dividend a)To accumulate additional savings for retirement. b)To purchase a smaller amount of the same type of insurance as the original policy. c)To purchase a one-year term insurance in the amount of the cash value. d)To reduce the next year's premium
b) to purchase a smaller amount of the same type of insurance as the original policy
Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option? a)It is a life contingency option. b)The beneficiary receives the remainder of the principal amount upon the annuitant's death. c)Payments can be made in installments and as a single cash refund. d)It does not guarantee that the entire principal amount will be paid out.
d) it does not guarantee that the entire principal will be paid out
Which of the following is true regarding a term health policy? a)It is conditionally renewable. b)It is guaranteed renewable. c)It is noncancellable. d)It is nonrenewable.
d) it is nonrenewable
The most the Insurance Guaranty Association will pay for net cash surrender values is a)$250,000. b)$500,000. c)$1,000,000. d)$100,000.
d)100,000
Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium? a)Automatic premium loan b)Extended term c)Reinstatement d)Reduced paid-up option
a) automatic premium loan
Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce a)Without receiving written consent from an insurance regulatory authority. b)Under any circumstances. c)Unless they have served an appropriate prison sentence. d)Without receiving written consent from a Federal Judge.
a) without receiving written consent from an insurance regulatory authority
Which of the following is an example of an unfair claims settlement practice? a)Using arbitration when the insured and insurer cannot reach agreement b)Failure to promptly settle a claim when liability has been clearly established c)Denying coverage after a reasonable investigation has been conducted d)Making claims payments which clearly indicate under which coverage payment has been made
b) failure to promptly settle a claim when liability has been clearly established
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a a)Nonforfeiture option. b)Guaranteed insurability rider. c)Paid-up additions option. d)Cost of living provision.
b) guaranteed insurability rider
Which of the following best describes a bail-out provision? a)It decreases the annuity surrender value. b)It allows the owner to surrender the annuity without a charge. c)It waives the surrender charge for the annuitants confined to a long-term care facility. d)It allows the owner to receive a higher interest rate at certain timeframe.
b) it allows the owner to surrender an annuity without a charge
Bethany studies in England for a semester. While she is there, she is involved in a train accident that leaves her disabled. If Bethany owns a general disability policy, what will be the extent of benefits that she receives? a)Full b)50% c)25% d)None
d) none
If an insurer appoints a producer, which authority must be notified?a)Department of Insurance b)Federal Directory of Insurers c)State Insurance Regulation Board d)Commissioner
a) Department of insurance
Which of the following is the basic source of information used by the company in the risk selection process? a)Consumer report b)Application c)Agent's report d)Warranty
b) application
Under the Insurance Fraud Protection Act, when can a person who has been convicted of a crime involving dishonesty or a breach of trust engage in the business of insurance?y a)Never; a person cannot be involved in the business of insurance after a conviction b)After paying fines or serving a prison sentence c)No sooner than 7 years after the conviction d)After obtaining the consent of the Department of Insurance
d) after obtaining the consent of the department of insurance
an insured misstated her age on an application for an individual health insurance policy. the insurance company found the mistake after the contestable period had expired. the insurance company will take which of the following actions regarding any claim that has been issued? a) deny any claims and cancel the policy b) deny paying a claim based on misrepresentation c) pay the full amount of a claim because the contestable period has ended d) adjust the claim benefit to reflect the insured's true age
d) adjust the claim benefit to reflect the insured's true age
In a long-term care policy, pre-existing condition limitations a)Must appear as a separate paragraph and be clearly labeled. b)Apply to 12 months from the effective date of coverage. c)Never have specific exclusions. d)Are not permitted.
a) must appear as a separate paragraph and be clearly labeled
An insurer may provide commissions to an agent for the sale of a long-term care policy only if the first year commission is NOT greater than what percentage of the first year premium? a)25% b)50% c)55% d)15%
b) 50%
Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?a)Consumer Privacy Act b)The Fair Credit Reporting Act c)Unfair Trade Practices Lawd )The Guaranty Association
b) The Fair Credit Reporting Act
A hospital indemnity policy will pay a)Any expenses incurred by the stay in the hospital, minus coinsurance payments and deductibles. b)A benefit for each day the insured is in a hospital. c)Income lost while the insured is in the hospital. d)All expenses incurred by the stay in the hospital.
b) a benefit for each day the insured is in the hospital
If a settlement option is not chosen by the policyowner or the beneficiary, which option will be used? a)Fixed amount b)Lump sum c)Life income d)Fixed period
b) lump sum
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?a)Pay the full death benefit and refund excess premium b)Pay a reduced death benefit c)Pay the full death benefit d)Pay nothing; there was a misrepresentation on the application
b) pay a reduced death benefit
an insured purchased a life policy in 2010 and died in 2017. the insurance company discovers at the time that the insured had misstated information during the application process. what can they do? a) sue for the right to not pay the death benefit b) pay the death benefit c) refuse to pay the death benefit because of the misstatement on the application d) pay a decreased death benefit
b) pay the death benefit
Which renewability provision are you most likely to see on a travel accident policy? a)Conditionally renewable b)Period of time c)Noncancellable d)Optionally renewable
b) period of time
A licensed producer moving to Pennsylvania may become licensed as a resident if the producer submits a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state?a)30 b)60 c)90 d)180
c) 90
What type of insurance would be used for a Return of Premium rider? a)Decreasing Term b)Annually Renewable Term c)Increasing Term d)Level Term
c) Increasing Term
According to the provisions of the Patient Protection and Affordable Care Act, all of the following are required preventive care services EXCEPT a)Well-woman visits and counseling. b)Screenings for autism and behavioral disorders in children. c)Cervical cancer exams for all women starting at age 40. d)Diet counseling for adults.
c) cervical cancer exams for all women starting at age 40
What does "level" refer to in level term insurance? a)Cash value b)Interest rate c)Face amount d)Premium
c) face amount
If an insurer changes a form that it uses to transact insurance, it must do which of the following? a)Submit it to the Department of Insurance so it can be kept in the insurer's official records b)Nothing, as long as the insurer has a Certificate of Qualification. c)File the form with the Commissioner for approval d)File the form with the NAIC for approval
c) file the form with the Commissioner for approval
An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits? a)Full benefits for 2 years b)No benefits c)Full benefits d)Partial benefits
c) full benefits
The type of dental plan which is incorporated into a major medical expense plan is a: a) stand-alone dental plan b) blanket dental plan c) integrated dental plan d) supplemental dental plan
c) integrated dental plan