Practice Exam 2 wrong and flagged

Which of the following is primarily used for rapid cash accumulation? a.annual renewable term b.universal life c.endowment contract d.whole life

c.endowment contract

If the employer offers a nonmedical group health insurance plan where the employees pay a portion of premiums, the plan must have what minimum percentage of participation? a.75% b.50% c.100%For group health insurance, there must be a minimum of 75% participation to qualify for coverage. Chapter 1 & 7, page 24ish d.0%

a. 75%

Under Nonforfeiture Law, an insurer CANNOT defer payment of cash surrender value past how many months? a.12 months b.24 months c.2 months d.6 months

d. 6 months

A person injures their neck on May 1st and recovers 3 weeks later. On June 1st the person injures their back, and the plan has a 31 day elimination period. When will this person be eligible for benefits? a.July 1st b.June 1st c.May 15th d.June 15th

a. July 1st

N and M are identical twins with the same jobs. When N applied for health insurance, his premium was set at $200. M applied for the same health plan but was charged a higher rate of $300 which the insurer based the up-charge on M's single marital status where N was married. What is the insurer guilty of? a.Unfair Trade Practices b.Nothing c.Unfair Privacy Practices d.Unfair Claims Practices

a. Unfair Trade Practice

The provision in a health insurance contract that outlines the conditions that the insurer will pay a claim against is known as: a.insuring clause b.renewability clause c.owners rights provision d.consideration clause

a. insuring clause

Reduced Paid Up is best described as which of the following? a.Nonforfeiture Option b.Dividend Option c.Cash Value Option d.Settlement Option

a.Nonforfeiture Option

Suicide is excluded for which reason? a.To protect the insurer from insureds purchasing insurance for that sole purpose b.To allow the insurer to determine sane and insane suicides c.To allow the beneficiary to determine if they would like an autopsy performed d.Suicide is not covered.

a.To protect the insurer from insureds purchasing insurance for that sole purpose

Which of the following policies will provide for a guaranteed level premium? Select one: a.Variable whole life b.Variable Universal life c.Interest Sensitive life d.Indeterminate Premium

a.Variable whole life

Long Term Care benefits are paid on which basis? a.expense incurred b.prepaid c.fee for service d.usual reasonable

a.expense incurred

Name the renewability option under the National Association of Insurance Commissioners Uniform Policy Provisions that may be purchased with a single premium for the longest amount of time: a.noncancellable b.optional renewable c.cancellable d.guaranteed renewable

a.noncancellable

Insured's in a viatical settlement are known as: a.Insured's. b.Viators c.Counselors d.Brokers.

b. Viators

Withdrawals from a whole life policy while the person is alive is covered under which provision of the policy? a.settlement options b.cash value provision c.riders d.long term care provision

b. cash value provision

Changes made to a policy are covered under which clause in a contract? a. beneficiary clause b. entire contract c.riders d.nonforfeiture clause

b. entire contract

All of the following may be considered limited plans, except: a.basic hospital b.life insurance c.accidental death and dismemberment d.travel insurance

b. life insurance

Which of the following is true regarding the Automatic Premium Loan and policy loans in general? a.The loan may exceed the cash value stated in the contract. b.If the loan is not paid back the interest will be tacked on at the end. c.Policy loans may be paid back without interest. d.Policy loans do not need to be paid back.

b.If the loan is not paid back the interest will be tacked on at the end.

A woman is searching for a life insurance policy where she has a separate account with self directed investments. Which policy would she prefer? a.10 Pay Life b.Variable Universal Life c.Universal Life d.Endowment Contract

b.Variable Universal Life

An insured who is age 90 would like to sell their life insurance to a 3rd party for cash up front. The insured is currently in good health and not terminally ill. What is the insured allowed to do? a. nothing b.a life settlement c.a viatical settlement d.change an irrevocable beneficiary

b.a life settlement

When an insurer terminates an agents appointment, which of the following must the insurer perform? a.notify agent within 30 days b.cancel all policies sold c.notify department of insurance d.provide commissions for 200%

c. Notify the department of insurance

Under a life insurance contract, all of the following are deemed nonforfeiture options except: automatic premium loan b.cash value c.extended term d.paid up insurance

c. extended term

Which of the following best describes a variable whole life policy? a.flexible premiums b.varying premiums c.guaranteed minimum death benefit d.convertible

c. guaranteed minimum death benefit

The insured has a disability policy including the payment of claims provision. What is the purpose of this provision? a. to determine if the insured is totally disabled b.to determine material misrepresentations in an application c.to determine who gets paid in a claim d.to determine when benefits are paid in a claimThe payment of claims clause will state who is paid from the policy. Disability insurance pays the disabled

c. to determine who gets paid in a claim

When is a person considered covered with a nonmedical conditional receipt? a.when the application is filled out b.when the premiums are paid c.when all of the conditions are met d.when a medical exam is taken

c. when all of the conditions are met

The producer must provide notification that the insureds credit will be pulled under the Fair Credit Reporting Act: a.Within 20 days of rating up a policy b.At the time of initial appointment c.At the time the application is filled out and signed by both parties d.6 months after the first claim was made

c.At the time the application is filled out and signed by both parties

Which of the following cash account policies may the insured not take a withdrawal from at any time they want? a.Adjustable Life b.Whole Life c.Immediate Annuity d.Life Paid up @ 65

c.Immediate Annuity

An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called? a.HR 10 plan b.401(k) plan c.Profit sharing plan d.Tax-sheltered account plan

c.Profit sharing plan

A beneficiary receives a $25,000 death benefit from an insured. The policy had $4000 in cash value with $1,500 in premiums paid; which of the following applies to the beneficiary?a.$1,500 is taxable. b.$4,000 is taxable. c.The $25,000 is tax free. d.$26,000 is taxable.

c.The $25,000 is tax free.

The form that allows an insured to change whom will receive the payment of claims is known as what? Select one: a.Designation of benefits b.Coordination of benefits c.Time payment of claims d.Change of beneficiary

d. Change of beneficiary

A student pilot is applying for life insurance and receives the standard rate with no increases in premiums. What did the insurer most likely do? a.added a hazardous occupation exclusion b.nothing special was performed c.added an illegal occupation exclusion d.added an aviation exclusion

d. add an aviation exclusion

Survivorship policies are best used for what purpose? a.Annuity payment planning b.Premium waivers (waiver of premium) c.Profit making d.Estate planning (conservation)

d. estate planning (conversion)

Which of the following is NOT a duty of the commissioner of insurance? a.Set claims reserves b.Investigate agents c.Help create state insurance laws d.Activate claims reserves

d.Activate claims reserves

Which of the following is true in a noncontributory long-term nonmedical Key Person policy? a.The employer is covered for all future losses b.Premiums are to be shared between the employer and employee c.Benefits will be shared between the shareholders of the company d.Benefits are received without any taxes needing to be paid

d.Benefits are received without any taxes needing to be paid

Which type of annuity is most likely to be purchased with a lump sum? a.Deferred annuity b.Endowment annuity c.Life annuity d.Immediate annuity

d.Immediate annuity

A certificate of authority is used for what purpose? To give an insured a premium receipt b.To give the commissioner full discretionary powers c.To appoint an agent to work for an insurer d.To allow an insurer to transact business

d.To allow an insurer to transact business

Which of the following policies might not have a non-forfeiture table? a.whole life b.variable life c.universal life d.adjustable life

d.adjustable life

The portion of a contract that states the agent may make no changes to the contract is known as: a.personal contract b.unilateral contract c.aleatory contract d.entire contract

d.entire contract

A person lives in a different state than they work in. When they purchase insurance through the marketplace, which one should they utilize? a.the state they work in b.neither of the states c.both of the states d.the state they live in

d.the state they live in

A long term care rider added onto a life insurance policy would have which of the following provisions? a. covers the costs that Medicare does not b.increasing benefits without proving insurability c.disabled for over 5 months d.unable to perform 2 activities of daily living

d.unable to perform 2 activities of daily living

What is the minimum benefit period for Long Term Care? a.24 months b.12 months c.90 daysLong Term Care must provide for at least 12 months of coverage but may have smaller benefit periods such as only 14 days for respite care etc. d.36 months

b. 12 months

Partners X and Y enter into a business contract that is going very well. They decide they need to protect the business and purchase a 50/50 buy-sell policy covering each others interests in the business. Which of the following best describes this agreement? a.The benefits are taxable on a 50/50 basis b.The premiums are tax deductible on a 50/50 basis c.The benefits are tax free d.The benefits are taxable upon the payment of the claim

c.The benefits are tax free

The promises of an insurer is found in which clause? a.insuring clause b.time limit on certain defenses c.consideration clause d.payment of claims clause

c.consideration clause

All of the following are TRUE about Adjustable Life EXCEPT: a.the insured may control their premiums b.the insured may control their length of coverage c.death benefits may be increased without proving insurability d.conversion may be done without proving insurability

c.death benefits may be increased without proving insurability

When an insurer evaluates claims and handles risk appropriately, which method of risk handling is being used? a.implied b.prospective review c.management d.express

c.management

A person has $20,000 whole life policy with an accidental death and dismememberment rider. The insured intentionally takes their life 3 years later, how much total will be paid out? a.40,000 b.10,000 c.0 d.20,000

d. $20,000

When will contributions to an IRA become owned by the insured? .a.65 b.immediately c.70 1/2 d.59 1/2

b.immediately

An insured who has access to the conversion privilege will most likely allow an insured to perform which function? a.never switch a policy b.switch to another policy after 5 years c.switch to another policy at any time within 31 days upon termination d.switch to another policy within 3 years

b.switch to another policy after 5 years