Practice Test 1 - Missed
Which of the following is NOT true of basic medical expense plans?
Coverage for catastrophic medical expenses
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
Immediate annuity
If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy?
It is only taxable if the cash value exceeds the amount paid for premiums.
What happens if a deferred annuity is surrendered before the annuitization period?
The owner will receive the surrender value of the annuity.
The sole proprietor of a business makes a total salary of $50,000 a year. This year, his medical expenses have reached a total of $75,000. What amount may the sole proprietor deduct in regards to his medical expenses?
$50,000
What limits the amount that a policyowner may borrow from a whole life insurance policy?
Cash value
When a fixed annuity owner pays pays a monthly annuity premium to the insurance company, where is this money placed?
The insurance company's general account
Where would Long-term care services be rendered?
A nursing home or one's own home
Which of the following will NOT be an appropriate use of a deferred annuity?
Creating an estate
Medicare Part A services do NOT include which of the following?
Outpatient Hospital Treatment
Who does the Oregon Medical Insurance Pool protect?
People who have been denied medical coverage
The LEAST expensive first-year premium is found in which of the following policies?
Annually Renewable Term
When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called a(n)
Executive bonus
If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a
Settlement option.
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
Insurers must keep records associated with a given policy for how many years after the policy expiration?
3
On a major medical insurance policy, the amount that an insured must pay on a claim before the insurer will pay is known as
Deductible.
In a replacement situation, all of the following must be considered EXCEPT
Assets.
All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT
At distribution, all amounts received by the employee are tax free.
Which of the following is true regarding a term health policy?
It is nonrenewable.
Which of the following is NOT true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity.
Which of the following is correct regarding credit life insurance?
It insures the life of a debtor.
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner.
The owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producer say?
The policyowner can specify the way proceeds are split in the policy.
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
An insured's premium increases as a result of her age. Which type of policy does she have?
Attained age
Which of the following is licensed solely to advise insureds about their policies?
Consultant
When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will
Issue the policy anyway and pay the face value to the beneficiary.
If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about
Whether an insurable interest exists between the individuals.
All of the following are general requirements of a qualified plan EXCEPT
The plan must provide an offset for social security benefits.
Which of the following statements pertaining to Medicare Part A is correct?
Medicare Part A is automatically provided when an individual qualifies for Social Security benefits at age 65.
Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?
Presumptive disability
What type of care is Respite care?
Relief for a major care giver
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy
Required a premium increase each renewal.
An applicant buys a nonqualified annuity, but dies before the starting date. For which of the following beneficiaries would the interest accumulated in the annuity NOT be taxable?
Spouse
An individual is insured under his employer's group Disability Income policy. The insured suffered an accident while on vacation that left him unable to work for 4 months. If the disability income policy pays the benefit, which of the following would be true?
Benefits that are attributable to employer contributions are fully taxable to the employee as income
An association could buy group insurance for its members if it meets all of the following requirements EXCEPT
Has at least 50 members
All of the following are true regarding a decreasing term policy EXCEPT
The payable premium amount steadily declines throughout the duration of the contract.
When an annuity is written, whose life expectancy is taken into account?
Annuitant
Which of the following ultimately determines the interest rates paid to the owner of a fixed annuity?
Insurer's guaranteed minimum rate of interest
Under most dental plans, what limitations are posed for denture replacement?
Once every 5 years
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
Survivor protection.
If the Director requests information regarding a claim, within how many days must the insurer provide a response?
The death benefit can be increased by providing evidence of insurability.
J transferred his life insurance policy to his son two years before his death. Which of the following is true?
The entire face value of the policy will be included in J's taxable estate.