State Exam Simulator - Practice Exam (missed questions)
What is connected to an individuals death?
-Funeral expenses -Tax liability -Probate costs
what percent of personal life insurance is usually deducted for federal income tax?
0%
what is the minimum benefit period for a long term care policy?
12 months
An insurer must provide an insured with claim forms within __ days after receiving notice of a loss.
15 days
J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?
25,000
Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits?
5 months
the option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a
AD&D rider
A cost of living rider gives the insured?
Additional death benefits
What is NOT connected to an individuals death?
Business Expenses
P owns a $25000 Life Policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does P own?
Endowment at age 70
S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product would S be advised to purchase?
Equity index insurance
The payments on Q's annuity are no less than $250 quarterly. What kind of annuity does Q own?
Flexible Installment Deferred
All of these are considered sources of underwriting info about an applicant
Inspection report Credit report Medical information bureau
T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?
Life Annuity with Period Certain
If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?
Medicare supplement
P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability?
P will still receive declared dividends
Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured
PPO
K owns a Whole life policy. If K wants an increasing Death Benefits to protect against inflation, which dividend option should she choose?
Paid up additional insurance
a contract owner terminates an annuity payment before the income payment period begins. the owner will then receive
The current contract surrender value
which of the following actions does the commissioner of insurance NOT have the power to do?
activate insurance companies financial reserves
group life policies are generally written as
annually renewable term
what product would best serve a retired individual looking to invest a lump sum of money through an insurance company?
annuity
An _________ of benefits of a Health Policy transfers payments to someone other that the policyowner
assignment
who reimburses its insured for covered medical expenses?
commercial insurers
insurance contracts are known as _______ because certain future conditions or acts must occur before any claims can be paid
conditional
additional coverage can be added to a whole life policy by adding a?
decreasing term rider
How are surrender charges deducted in a life policy with a rear-end loaded provision?
deducted when the policy is discontinued
Medicare part B does NOT cover?
inpatient hospital services
individual straight life annuity?
payments are made to the annuitant for life
what is NOT possible with a universal life policy?
premiums may be applied as a credit against income tax
If both the insured and the sole name beneficiary were to die in a common accident, this clause ..?
provides the payments of the proceeds to the insured's estate
an immediate annuity consists of a
single premium
The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs?
social security disability income
what is a warranty?
statement guaranteed to be true
a contract owner terminates an annuity before the income payment begins, the owner will receive?
the current contract surrender value
the amount of coverage on a group credit life policy is limited to?
the insured total loan value
what is considered a valid reason for small businesses to insure the lives of its major shareholders?
to fund a buy sell agreement
What type of reinsurance contract involves two companies automatically sharing their risk exposure?
treaty
what is a quality of a variable life policy
underlying equity investment
What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?
waiver of premium rider
what retirement plan can be started by an employee, even if another plan is in existence?
individual retirement account (IRA)
Which health policy clause specifies the amount of benefits to be paid?
insuring
the agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insureds death is called?
insuring agreement
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
life income
in an individual IRA, roller contributions are
not limited by dollar amount
A Whole life insurance policyowner does not wish to continue making premium payments. What enables the policy owner to sell the policy for more than its cash value?
life settlement contract
a whole life insurance policyowner does not wish to continue making premium payments. which option enables the policyowner to sell the policy for more than its cash value?
life settlement contract
K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?
proceeds with be paid to P's estate --- sole beneficiary outlived the insured
All of these are considered sources of underwriting info about an applicant EXCEPT:
rating services (AM Best, Standards and Poors)
With Optionally Renewable Health policies, the insurer may
review the policy annually and determine whether or not to renew it
a 401(k) plan generally provides its participants with?
salary-deferral contributions
P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA laws, which of the following statements is TRUE?
she DOES need to provide evidence of insurability
what life insurance policies combine term insurance with an investment element?
universal life
a term life insurance policy matures?
upon the insureds death during the term of the policy
which type of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
variable life
which of the following policies is characterized by a flexible premium and death benefit and allows the policyowner control of the investment aspect of the plan?
variable universal life
the provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called?
waiver of premium
An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?
20% is withheld for income taxes
V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable?
4 months
J is issued a Life Insurance policy with a death benefit of $100,000. She pays $600 per year in premium for the first 5 years. The premium increases to $900 per year in the sixth year, and remains level thereafter. The policy's death benefit also remains the same. What kind of life policy is this?
Modified Premium Life
a certificate of __________ permits an insurance company to transact business in Texas
authority
What action will an insurer take if an interest payment on a policy loan is not made on time?
automatically add the amount of interest due to the loan balance
A policy loan is made possible by which of these life insurance policy features?
cash value provision
P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase?
family maintenance policy
What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?
family maintenance policy
Quarterly premium payments increase the annual cost of insurance because
interest to the insurer is decreased while administrative costs are increased
