Part 1

#5. Which of the following entities has the authority to make changes to an insurance policy? a) Insurer's executive officer b) Department of insurance c) Broker d) Producer

a) Insurer's executive officer

Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is: a) Within 45 days b) Weekly c) Biweekly d) Monthly

d) Monthly

#10. Which of the following is TRUE about nonforfeiture values? a) They are required by state law to be included in the policy. b) They are optional provisions. c) A table showing nonforfeiture values for the next 10 years must be included in the policy. d) Policymakers do not have the authority to decide how to exercise nonforfeiture values.

a) They are required by state law to be included in the policy. Nonforfeiture values are required by state law to be included in the policy, and cannot be altered by the policyowner. A table showing the nonforfeiture values for the next 20 years must be included in the policy.

#1. Regarding long-term care coverage, as the elimination period gets shorter, the premium: a) Gets lower. b) Gets higher. c) Remains constant. d) Premiums are not based on elimination periods.

b) Gets higher. LTC policies also define the benefit period for how long coverage applies, after the elimination period. The benefit period is usually 2 to 5 years, with a few policies offering lifetime coverage. Obviously the longer the benefit period, the higher the premium will be; and the shorter the elimination period, the higher the premium will be.

#9 Manny has been injured in an accident. Although she is still receiving benefits from her policy, she does not to pay premiums. Her policy includes: a) Waiver of Benefit rider b) Waiver of Premium rider c) Return of Premium rider d) Benefit of Payment clause

b) Waiver of Premium rider

#8. 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) Cost of living provision. b) Nonforfeiture option. c) Guaranteed insurability rider. d) Paid-up additions option.

c) Guaranteed insurability rider. The Guaranteed Insurability rider allows the policyowner to purchase specific amounts of additional insurance at specific dates or events, without proving continued insurability. Rates for the additions are based upon attained age.

#7. Which of the following statements is TRUE about a policy assignment? a) It is the same as a beneficiary designation. b) It permits the beneficiary to designate the person to receive the benefits. c) It authorizes an agent to modify the policy. d) It transfers rights of ownership from the owner to another person.

d) It transfers rights of ownership from the owner to another person. The policyowner may assign a part of the policy (collateral assignment) or the entire policy (absolute assignment).

#2. With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance? a) Promise to renew the policy at the end of the policy period b) Providing warranties on the application c) Notice of policy cancellation d) Payment of premium

d) Payment of premium The two types of consideration on the part of an insurance applicant are payment of premiums and representations on the application.

#3. An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy? a) Nothing b) $50,000 c) $100,000 d) $200,000

c) $100,000 In joint life policies, the death benefit is paid upon the first death only.

#4. Which of the following entities can legally bind coverage? a) Federal Insurance Board b) Agent c) Insurer d) The insured

c) Insurer Only insurers, not agents, can bind coverage.