STATE INSURANCE TEST
11 To continue health coverage for a newborn, the policyowner must notify the insurer of birth and provide the first premium payment within _____ days of birth.
31
21 In the event of employment termination, a person covered by a group policy also has the right to convert such coverage to an individual policy within _____ days without proving insurability.
31
80 An insured pays premiums on an annual basis for an individual health insurance policy What is the MINIMUM number of days for the Grace Period provision?
31
93 What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?
50%
63 A life insurance policy can be backdated before the application date for up to
6 months
46.2 Eligible employees must be added to group health coverage NO LATER than day of employment.
90
17.2 Which of these is an element of a Variable Life policy?
A fixed, level premium
149.2 Which statement is TRUE regarding a Variable Whole Life policy?
A minimum guaranteed Death benefit is provided
15 Which of these is an example of twisting?
A producer misrepresents a policy to induce a policyowner to surrender an existing policy
4 The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n):
Accidental Death and Dismemberment rider (AD&D)
52.2 What action should a producer take if the initial premium is NOT submitted with the application?
Forward the application to the insurer without the initial premium
79.2 A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow?
Guaranteed Insurability Option rider
117.2 Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate for the overall risk class?
Guaranteed Renewable
8 Which of these is NOT a reason for purchasing life insurance on the life of a minor?
If both parents were to die, it would provide death benefits to the child
103 The type of annuity that can be purchased with one monetary deposit is called a(n):
Immediate annuity
115 What kind of Accidental Death and Dismemberment (AD&D) insurance beneficiary requires his/her consent when a change of beneficiary is made?
Irrevocable beneficiary
136.2 Which type of life insurance beneficiary requires his/her consent when a change of beneficiary is attempted by the policyowner?
Irrevocable beneficiary
45.2 Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy?
Issue the policy with an altered Time of Payment of Claims provision
127.2 Which statement regarding third-party ownership of a life insurance policy is true?
It is used extensively in estate-planning as well as business circumstances
28 K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?
Level
125 Which of these is NOT relevant when determining the amount of personal life insurance needed?
Local unemployment rate
44 Which type of plan normally includes hospice benefits?
Managed care plans
107 Life insurance coverage will frequently contain an Accelerated Benefits rider attached to the policy. What would be considered a "qualifying event" under these riders?
Medical condition resulting in a significantly-shortened lifespan
155 Which of the following provides funding for the Indiana Life and Health Insurance Guaranty Association?
Member company assessments
95.2 Which of the following BEST describes how a Preferred Provider Organization (PPO) is less restrictive than a Health Maintenance Organization (HMO)?
More physicians to choose from
156 In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy?
Owner's Rights
122.2 The provision that defines to whom the insurer will pay benefits to is called:
Payment of Claims
88.2 The insured and insurance company will share the cost of covered losses under which health policy feature?
Payment of Claims provision
28.2 Which life insurance rider typically appears on a Juvenile life insurance policy?
Payor Benefit rider
154 Who is responsible for determining if Long-Term Care coverage is appropriate to meeting an applicant's needs?
Producer
43.2 What must the policyowner provide to the insurer for validation that a loss has occurred?
Proof of Loss
69 Which of the following is an example of a nonforfeiture option?
Reduced Paid-Up option
119.2 When an existing life insurance policy is terminated so that a new life insurance policy can be purchased, this transaction is referred to as:
Replacement
134 Which of the following are Equity Indexed annuities typically invested in?
S&P 500
143 What does a 401 (k) plan generally provide its participants?
Salary-deferral contributions
16.2 K has inherited a large sum of money. K purchases an annuity with this sum on July 1, and starts receiving payments August 1 . These payments will continue for as long as she and her spouse lives. Which type of annuity did K purchase?
Single Premium Immediate Joint with Survivor Annuity
18.2 Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?
Subrogation
67.2 Which of the following costs would a Basic Hospital/Surgical policy likely cover?
Surgically removing a facial birthmark
10 What type of life insurance are credit policies issued as?
Term
132 Upon policy delivery, a signed good health statement is requested from the applicant. Why would this be necessary?
The initial premium was NOT submitted with the application
42 If an insurer offers health coverage to an employee, the insurer MUST inform the employer of all of the following information EXCEPT:
The terms of the insurer's provider agreements
41 According to Indiana Law, how long can statements made by an Applicant on a Health insurance policy be contested?
Two years
36.2 Which of the following is considered an element of a Variable Life Policy?
Underlying equity investment
37 In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?
Unilateral
78 At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act?
Upon completion of the application
112 Which of the following phrases refers to the fees charged by a healthcare professional?
Usual, customary, and reasonable expens
107.2 A(n) _____ Life policy offers the owner investment in products such as money-market funds, long-term bonds and equities.
Variable
94.2 When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?
Void the policy only if it is discovered during the Contestable period and proven to be material
82.2 A Return of Premium life insurance policy is:
Whole life and Increasing term
6.2 A contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of
adhesion
63.2 An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the:
applicant's physician
78.2 Insurance policies are considered aleatory contracts because
performance is conditioned upon a future occurrence
59 M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the:
policy proceeds
1.2 A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a:
risk retention group
72 The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is:
the cost
120.2 Life insurance replacement regulation protects the interests of
the policyowner
45 Under a Graded Premium Whole Life policy
the premium increases each year during the early years of the contract and remains the same after that time
89 Group Life policies in Indiana are required to contain a conversion privilege that allows for conversion:
to an individual policy for a stated period of time
66.2 A producer who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out has committed:
twisting
13 When is the face amount paid under a Joint Life and Survivor policy?
upon death of the last insured
130 If a 10-Year Term Life policy contains a Renewability provision, the policy will renew
without evidence of insurability
111 A producer must notify the Insurance Commissioner within
30
129 An insurer that terminates a producer's appointment must notify the Commissioner within _____ days of the date of termination.
30
52 ABC Insurance Company fails to pay death proceeds after satisfactory proof of loss was submitted. ABC must then begin paying interest on the death proceeds after _____ days of receiving proof of loss.
30
150.2 The conversion provision in a group health insurance policy:
is mandated by state requirements
22 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
85 All of the following statements about Major Medical benefits are true, EXCEPT:
Benefits have no maximum limit
118.2 Whose life is covered on a life insurance policy that contains a payor benefit clause?t
Child
152.2 An applicant for a resident insurance producer's license MUST meet which of the following requirements?
Complete a prelicensing examination
92.2 When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?
Conversion provision
33.2 Which of these actions does NOT constitute life insurance policy replacement?
Convert term coverage to a whole life policy
142.2 A CEOs personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant?
Disability Income
29.2 An employee requested that the balance of her 401 (k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee?
Distribution is subject to federal income tax withholdin
106.2 Dividends paid from a life insurance policy are
issued by the insurer
81.2 A disabled dependent's continued coverage under a family health plan would be discontinued if,
documentation of the disability is not provided to the insurer
110 T purchased a $100,000 single premium, Straight Life annuity 5 years ago. He has received monthly payments since the inception of the annuity. If T dies, the insurance company
does NOT have to make any further payments
17 M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect, EXCEPT:
free-look period has expired
26.2 Which of the following will a Long Term Care plan typically provide benefits for?
home health care
104 The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the:
initial deductible
31.2 An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the:
insurer dates the policy
13.2 J was reviewing her Health Insurance policy and noticed the phrase "This policy will only pay for a semi-private room". This phrase is considered to be a(n)
internal limi