question

With a Straight Life policy, what happens if the insured lives to age 100

answer

The policy matures and the cash value is paid to the insured.

question

Most policies will pay the accident death benefits as long as the death is caused by the accident and occurs within

answer

90 days.

question

What is the maximum period of coverage under COBRA?

answer

36 months

question

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

answer

The surviving beneficiary will continue receiving 2/3 of the benefit paid when the insured was alive.

question

What percentage of individually-owned disability income is taxable?

answer

0%

question

How are the variable annuities regulated?

answer

By state and federal agencies

question

An insured committed suicide 6 months after his life insurance policy was issued. The insurer will

answer

Refund the premiums paid.

question

Which of the following conditions would a disability income policy most likely NOT require in order to qualify for benefits?

answer

A specified income status prior to the disability

question

In Pennsylvania, a "pre-existing condition" is defined as a disease or condition for which medical attention was received at least

answer

90 days prior to the effective date of coverage.

question

An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan?

answer

2 years

question

After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true?

answer

By law, the new, individual policy must provide the same benefits as the group insurance policy.

question

Amanda is scheduled for a root canal. Which type of treatment is this?

answer

Endodontics

question

Which of the following is deemed to be consideration on the part of the applicant, in respect to the Consideration Clause?

answer

Payment of premium

question

As it pertains to group health insurance, COBRA stipulates that

answer

Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.

question

Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?

answer

Income period

question

What of the following must an alien insurer obtain in order to transact insurance within a given state?

answer

Certificate of Authority

question

An applicant is discussing his options for Medicare supplement coverage with his agent. He is eligible for the Medicare supplement plans. What is the insurance company obligated to do?

answer

Offer the supplement policy on a guaranteed issue basis

question

The paid-up addition option uses the dividend

answer

To purchase a smaller amount of the same type of insurance as the original policy.

question

Which of the following is true regarding a term health policy?

answer

It is nonrenewable.

question

Which of the following is true regarding benefits paid to disabled employees?

answer

They may be subject to taxation if the premium was paid by the employer.

question

All of the following are differences between individual and group health insurance EXCEPT

answer

Individual insurance does not require medical examinations, while group insurance does require medical examinations.

question

Your client owns a Market Value Adjusted Annuity. In order to pay for a series of large, unexpected medical bills, he decides to surrender his policy prematurely. Which of the following will determine the penalty that that annuity owner will have to pay?

answer

Current interest rate at the time of surrender

question

For an individual who is eligible for Medicare at age 65, and who is still employed and covered under the employer's plan, which of the following is true?

answer

The employer plan is primary coverage, and Medicare is secondary coverage

question

Which of the following expenses is NOT covered by a health insurance policy?

answer

Funeral

question

According to the incontestability provision, which of the following is a reason an insurer can deny a claim on a policy that has been in force for 2 years?

answer

Insured stopped paying premiums

question

A 12-year-old child applies for a life insurance policy. The applicant excels in school and leads a very healthy lifestyle. What risk classification would this applicant most likely receive?

answer

Declined

question

All of the following are characteristics of a Major Medical Expense policy EXCEPT

answer

Blanket coverage.

question

Which of the following is NOT the purpose of HIPAA?

answer

To provide immediate coverage to new employees who had been previously covered for 18 months

question

Which provision states that the insurance company must pay Medical Expense claims immediately?

answer

Time of Payment of Claims

question

An insured's long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged a $100 per day. How much will the insurance company pay?

answer

$120 a day

question

Pete has a major medical policy with a $500 deductible and a co-insurance clause of 80/20. If he incurs medical expenses of $4,000, the insurer would pay

answer

$2,800.

question

The death protection component of Universal Life Insurance is always

answer

Annually Renewable Term

question

What would be considered a disadvantage of owning a fixed annuity?

answer

Decrease in purchasing power of the benefit in times of inflation

question

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?

answer

Adjust the benefit in accordance with the increased risk.

question

Which of the following would qualify as a Section 1035 exchange?

answer

Cash Value Life Insurance Policy to a Cash Value Life Insurance Policy

question

Children's riders attached to whole life policies are usually issued as what type of insurance?

answer

Decreasing term

question

In long term care policies, the term "chronically ill" means an individual who is unable to perform at least 2 activities of daily living - for at least

answer

90 days.

question

A Universal Life Insurance policy is best described as

answer

An Annually Renewable Term policy with a cash value account.

question

How many eligible employees must be included in a contributory plan?

answer

75%

question

A term insurance policy that provides coverage, with level premium and level death benefit, for the number of years equal to the average life expectancy of the insured, is what kind of contract?

answer

Life expectancy contract

question

Most LTC plans have which of the following features?

answer

Guaranteed renewability

question

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

answer

An unfair trade practice.

question

An agent had his license suspended, but continued to transact insurance. In this situation, which of the following penalties could he face?

answer

$10,000 fine

question

The President of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?

answer

Corporations are never legal annuitants.

question

What option allows the insured to periodically increase benefit levels without providing evidence of insurability?

answer

Guarantee of insurability

question

What is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly Benefit rider?

answer

1 year

question

Every insurer marketing Long-Term Care insurance must establish marketing procedures to ensure all of the following EXCEPT

answer

LTC policies are marketed effectively to prospective insureds.

question

A person is enrolled in Part A of Medicare and not Part B. Three months into coverage, he applies for a Medicare supplement policy. Which of the following is true?

answer

The insurer can deny coverage.

question

Which is NOT true regarding an insured who is considered to be a standard risk?

answer

The insured may have to pay slightly higher premiums.

question

If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?

answer

The surrender charge is a percentage of the cash value and decreases over time.

question

When is a suicide covered by a life insurance policy?

answer

If the policy has been in force for more than 2 years

question

What type of annuity can be purchased with a single premium and provides benefit payments immediately?

answer

Immediate

question

Two equal partners in a business worth $150,000 are using a Cross Purchase plan to protect against the death of each other. Which of the following statements would be correct?

answer

Partner A buys a policy on partner B in the amount of $75,000 naming Partner A as beneficiary.

question

A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?

answer

Joint life

question

All of the following are considered to be supplemental benefits under an HMO plan EXCEPT

answer

Preventive services.

question

Annuity contracts grow tax deferred. That means that

answer

There is no current income taxation upon the growth in the annuity.

question

Which of the following can surrender a deferred annuity contract?

answer

Only the annuity owner

question

An agent offers his client free tickets to the Super Bowl game in exchange for the purchase of an insurance policy. The agent is guilty of

answer

Rebating.

question

Which of the following statements about a suicide clause in a life insurance policy is true?

answer

Suicide is excluded for a specific period of years and covered thereafter.

question

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?

answer

Illegal

question

Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT

answer

The loss may be intentional.

question

Insurers must notify the Commissioner's office as to whether or not a life insurance policy will be marketed with illustrations. Certification of that notification must be provided annually within how many days of the anniversary of the original certification?

answer

30 days

question

Felix has a disability income policy with an annual premium of $300 and a benefit amount of $300 per month. Felix was disabled and because of the policy's elimination period, had no income at the time it was due. The policy contains the optional Unpaid Premium provision. Now that the elimination period has been satisfied, Felix's first disability payment will be

answer

Nothing.

question

If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?

answer

The surrender charge is a percentage of the cash value and decreases over time.

question

A policy which covers medical costs related to a specific condition is called a

answer

Dread Disease Policy.

question

For how many days of skilled nursing facility care will Medicare pay benefits?

answer

100

question

Garrett is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits?

answer

No benefits

question

Violation of unfair discrimination law may result in all of the following penalties EXCEPT

answer

Fines of up to $1,000 for each act.

question

All of the following are correct about the required provisions of a health insurance policy EXCEPT

answer

A reinstated policy provides immediate coverage for an illness.

question

Which of the following distinguishes a Group Life Policy from an Individual Life Insurance Policy?

answer

Reduced adverse selection

question

Which of the following is NOT an enrollment period for Medicare Part A applicants?

answer

Automatic enrollment

question

All of the following are characteristics of a group life insurance plan EXCEPT

answer

There is a requirement to prove insurability on the part of the participants.

question

A situation in which a person can only lose or have no change represents

answer

Pure risk.

question

Anna loses her left arm in an accident that is covered by her Accidental Death and Dismemberment policy. What kind of benefit will Anna most likely receive from this policy?

answer

The capital amount in a lump sum

question

Which of the following is true regarding health insurance?

answer

It could provide payments for loss of income.

question

Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy?

answer

An individual who was previously covered by group health insurance for 6 months is eligible.

question

When is the insurability conditional receipt given?

answer

When the premium is paid at the time of application

question

Mortality - Interest + Expense =

answer

Gross premium

question

A long stretch of national economic hardship causes a 7% rate of inflation. Devonne notices that the face value of her life insurance policy has been raised 7% as a result. What is the name of the provision that caused this change?

answer

Cost of Living Rider

question

When a producer holding a certificate or a brokers license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within

answer

30 days.

question

Which provision may be added to a permanent life policy, at no cost, that insures that the policy will not lapse so long as there is cash value?

answer

Automatic Premium Loan option

question

When is a suicide covered by a life insurance policy?

answer

If the policy has been in force for more than 2 years

question

If a new individual long-term care policyholder is not satisfied with a new policy, within how many days can the insured return the policy for a full premium refund?

answer

30

question

An insured owns a term policy with a guaranteed renewable option. When the end of the policy draws near, the insured answers medical questions in order to prove insurability and qualifies for a discounted premium rate. Which option best describes this scenario?

answer

Re-entry

question

Which of the following is an example of a non-qualified retirement plan?

answer

Executive bonus plan

question

After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true?

answer

By law, the new, individual policy must provide the same benefits as the group insurance policy.

question

In which of the following locations would skilled care most likely be provided?

answer

In an institutional setting

question

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?

answer

Implied

question

The benefits received by the business in a Disability Buy-Sell policy are

answer

Income tax free

question

Which of the following statements is true regarding the cash value in a Universal life policy?

answer

The insurer credits the cash value in the policy with a current interest rate.

question

The policy, in combination with the application, is joined together into one entity called the

answer

Entire Contract

question

What type of benefit helps to pay for accidental injuries that are not severe enough to qualify as disabilities?

answer

Medical Reimbursement Benefit

question

In forming an insurance contract, when does an acceptance usually occur?

answer

When an insurer approves a prepaid application

question

Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service?

answer

Copayment

question

What is the penalty for IRA distributions that are below the required minimum for the year?

answer

50%

question

In order to become licensed to become a viatical settlement provider, an application must be made with

answer

The Insurance Department

question

Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within

answer

90 days of a loss.

question

Which of the following is not true of Disability Buy-Sell coverage?

answer

Benefits are considered taxable income to the business.

Insurance Exam Questions – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards