question

reciprocal

answer

risk sharing, mutual agreements among

question

apparent athority

answer

words and actions

question

warrenty

answer

statement in insurance that is guaranteed to be true

question

offer made

answer

application submitted

question

What type of beneficiary designation allows the benefit to pass from a deceased primary beneficiary to the beneficiary's heirs, instead of splitting the benefit among surviving primary beneficiaries?

answer

Per stirpes Per stirpes class designation provides distribution by family line or branch in the event a beneficiary predeceases the insured.

question

Quincy's has a $1,000 HRA account. He incurred $750 in medical expenses the first year of the plan and $1,200 in the second year. What is the maximum amount Quincy is entitled to recover for his expenses under the plan?

answer

$1,950 Employees are allowed to roll-over unused balances at the end of the year so Quincy could apply $250 to the second year's expenses

question

In group insurance, what is the policy called?

answer

Master policy In group insurance the policy is called the master policy and is issued to the policyowner, which could be the employer, an association, a union, or a trust.

question

In long-term care insurance, what type of care is provided with intermediate care?

answer

Occasional nursing or rehabilitative care Intermediate care is nursing and rehabilitative care provided by medical personnel for stable conditions that require assistance on a less frequent basis than skilled care.

question

Who guarantees a conventional fully-insured group plan?

answer

The insurer A conventional fully-insured plan is administered and guaranteed by an insurance company. In return for the premium collected from the insured by the insurer, the insurer assumes the risk of paying the cost of medical expenses that may or may not occur during the policy period

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. There is no individual underwriting for group life insurance.

question

How are funds contributed to a tax-sheltered annuity treated for taxation?

answer

The contributions are not included as income for the employee, but are taxable upon distribution. Funds contributed are excluded from the employee's current taxable income, but are taxable upon withdrawal.

question

Which of the following is a characteristic of a Reciprocal Insurance Exchange?

answer

The chief administrator of the insurer is called an "attorney-in-fact". A "reciprocal" is an unincorporated aggregation of individuals, called subscribers, who exchange insurance risks. If the premiums charged for coverage are not sufficient to pay the losses of the group, subscribers may be assessed an additional premium. A reciprocal is administered by an attorney-in-fact who is empowered to bind each subscriber to assume a share of the losses of the group.

question

While a claim is pending, an insurance company may require

answer

An independent examination as often as reasonably required. While a claim is pending, an insurance company may require an independent exam as often as reasonably required.

question

A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as

answer

Usual, customary and reasonable The usual, customary and reasonable approach for determining insurance benefits is based upon the fees normally charged for specific procedures in the geographic location where the services are provided.

question

Which state has jurisdiction over a group policy that covers individuals that reside in more than one state?

answer

The state in which the policy was delivered

question

If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?

answer

Reasonable expectations

question

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the

answer

One-year term option.

question

When must an IRA be completely distributed when a beneficiary is not named?

answer

December 31 of the year that contains the fifth anniversary of the owner's death.

question

Even though "sickness" is a peril covered by a health insurance policy, coverage may be limited or excluded because of all of the following EXCEPT

answer

Exemption periods.

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 Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of use of at least two limbs, total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work. Because Garrett's blindness was only temporary and the loss of use in only 1 leg, he does not qualify for presumptive disability benefits

question

Which of the following would be considered a nonmedical insurance application?

answer

An application on which the medical information is completed by the applicant and the agent only

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

In life insurance policies, cash value increases

answer

Grow tax deferred.

question

Which of the following is correct concerning the taxation of a Key Person Life Insurance Policy premiums and death benefit?

answer

Premiums are not deductible as a business expense and the death benefit is not taxable to the company.

question

Which of the following best describes the MIB?

answer

It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. The Medical Information Bureau (MIB) is a nonprofit trade organization which receives adverse medical information from insurance companies and maintains confidential medical impairment information on individuals.

question

What is the maximum period of coverage under Oregon state continuation rules for group health insurance?

answer

6 months Continuation of coverage will last for a maximum of 6 months after the date that coverage would have ended if the person had not applied for continued coverage.

question

A life insurance policyowner has the flexibility to increase the amount of premium and then decrease it at a later date. The person is also allowed to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount. What type of policy is this?

answer

Universal life The policyowner has the flexibility to increase the amount of premium going into the policy and to later decrease it again. In fact, the policyowner may even skip paying a premium and the policy will not lapse as long as there is sufficient cash value at the time to compensate for the nonpayment of premium.

question

Which of the following riders would NOT cause the Death Benefit to increase?

answer

Payor Benefit Rider

question

Which of the following would help prevent a universal life policy from lapsing?

answer

Target premium

question

Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?

answer

Fixed amount Under the installments for a fixed amount option, the annuitant selects the amount of each payment, and the insurer determines how long they will pay benefits. This option pays a specific amount until the funds are exhausted. There are no life contingencies.

question

How often may a life settlement provider contact an insured regarding the insured's health status if the insured's life expectancy is more than one year?

answer

Once every 3 months

question

All insurance companies admitted to sell life and/or health insurance contracts in Oregon must, as a condition to maintain their certificate of authority,

answer

Maintain membership in the Oregon Life and Health Insurance Guaranty Association.

question

Which of the following is true regarding the annuity period?

answer

It may last for the lifetime of the annuitant. The "annuity period" is the time during which accumulated money is converted into an income stream. It may last for the lifetime of the annuitant or for a shorter specified period of time depending on the benefit payment option selected.

question

Which of the following best describes a misrepresentation?

answer

Issuing sales material with false statements about policy benefits Misrepresentation is issuing, publishing or circulating any illustration or sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of dividends, etc. This includes oral statements

question

Regarding long-term care coverage, as the elimination period gets shorter, the premium

answer

Gets higher. LTC policies also define the benefit period for how long coverage applies, after the elimination period. The benefit period is usually 2 to 5 years, with a few policies offering lifetime coverage. Obviously the longer the benefit period, the higher the premium will be; and the shorter the elimination period, the higher the premium will be.

question

This state provides for a temporary license for all of the following EXCEP

answer

A producer's retirement.

question

Which of the following is true regarding dividend-related taxation?

answer

Dividends are not taxable. Dividends are not considered to be income for tax purposes, since they are the return of unused premiums. The interest earned on the dividends, however, is subject to taxation as ordinary income.

question

Which type of service under a nonscheduled plan typically has large deductibles and pays around 50% for the services provided?

answer

Major service Major services under nonscheduled plans, which cover treatments such as inlays, crowns, dentures and orthodontics, either have large deductibles or the insured pays 50% of the costs.

question

What kind of policy allows withdrawals or partial surrenders?

answer

Universal life

question

All of the following may be excluded from coverage in a Major Medical Expense policy, EXCEPT

answer

Emergency surgery.

question

Which of the following types of insurance policies is most commonly used in credit life insurance?

answer

Decreasing term Credit insurance is a special type of coverage written to insure the life of the debtor and pay off the balance of a loan in the event of the death of the debtor. It is usually written as decreasing term insurance.

question

What is the amount a physician or supplier bills for a particular service or supply?

answer

Actual charge

question

What is a characteristic of a 501(c)(9) trust?

answer

All of the above are characteristics of a 501(c)(9) plan Some small employers do not have enough employees to form a group large enough to qualify for group insurance. These employers may join with other employers in the same or similar industry and form a trust to provide health coverages. They may operate as a non-profit trust under the IRS code. The plan may be "employer-pays-all" (noncontributory) or may require the employee to pay a portion of the costs (contributory).

question

In order for an insured under Medicare Part A to receive benefits for care in a skilled nursing facility, which of the following conditions must be met?

answer

The insured must have first been hospitalized for 3 consecutive days. Part A covers the cost of care in a skilled nursing facility as long as the patient was first hospitalized for 3 consecutive days, and the services are medically necessary and only up to amounts deeme

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

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?

answer

Limited pay whole life insurance

question

What is another name for an Administrative-Services Only arrangement

answer

Third-party administrator An Administrative-Services Only is an arrangement whereby an insurer agrees to provide certain services to a self-insured entity, such as providing printed claim forms, and the processing and auditing of claims. The insurer does not provide any insurance protection under an ASO arrangement.

question

An individual has been contributing to a retirement account after taxes are taken out of his paycheck. His financial advisor told him that he will be allowed to make contributions after age 70½. The account owner does not have to pay taxes on the growth of his account. What type of retirement account is it?

answer

Roth IRA Roth IRAs have several distinguishing features. Unlike traditional IRAs, the account owner can continue beyond age 70½, and distributions do not have to begin at age 70½. The contributions are not tax-deductible.

question

Which of the following would be considered an unfair claims settlement practice?

answer

A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

question

Sue has an HSA and is planning to leave her current job for a new job. When she leaves her job, what will happen to her HSA?

answer

It will continue because it is owned by Sue, not her employer

question

In a small employer medical plan, a pre-existing condition provision applies to conditions for which medical advice or treatment was received within what time frame before the effective date of coverage?

answer

6 months A pre-existing condition provision in a small employer health benefit plan may exclude coverage for a condition for which medical advice, diagnosis, care or treatment was recommended or received 6-months before the effective date of the coverage.

question

How many pints of blood will be paid for by Medicare Supplement core benefits?

answer

First 3

question

An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history 1 year later. What will probably happen?

answer

The policy will not be affected.

question

Which of the following statements regarding deferred compensation funds is INCORRECT?

answer

They are usually qualified plans.

question

A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis?

answer

Guaranteed

question

A prospective insured receives a conditional receipt and dies before the policy is issued. The company will

answer

Pay the policy proceeds only if it would have issued the policy.

question

Which of the following is NOT true regarding the annuitant?

answer

The annuitant cannot be the same person as the annuity owner.

question

A prospective deferred annuity owner is concerned about what would happen if he surrendered the annuity before the annuitization period. The agent most likely explained which of the following

answer

Nonforfeiture option guarantees that the owner will receive a surrender value of the contract.

question

Which of the following statements concerning group health insurance is CORRECT?

answer

The employer is the policyholder.

question

The minimum number of credits required for partially insured status is

answer

6

question

When can a Long-Term Care policy deny a claim for losses incurred because of a pre-existing condition?

answer

Within 6 months of the effective date of coverage

question

What insurance concept is associated with the words "Weiss" and "Fitch"?

answer

Guides describing company financial integrity

question

Paul is a producer in Washington and wants to become a producer in Oregon. The Director will waive certain examination requirements, provided that Washington would waive these same requirements if an Oregon producer sought licensure in Washington. What term is used to describe this phenomenon?

answer

Reciprocity

question

M is the owner of a $225,000 life policy with a triple indemnity rider for accidental death. When M is killed in a car accident, it is determined that the accident was his fault and that he was intoxicated at the time of the accident. The triple indemnity rider in M's policy specifies that the death must not be contributed to by the insured in any manner. In this case, the beneficiary will receive

answer

$225,000.

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

Who makes up the Medical Information Bureau?

answer

Insurers

question

Equity indexed annuities

answer

Seek higher returns.

question

To which of the following policies would the State regulations on illustrations NOT apply?

answer

An individual variable life policy

question

If a company has a Simplified Employee Pension plan, what type of plan is it?

answer

A defined contribution plan for a small business

question

Which of the following statements about the reinstatement provision is true?

answer

It requires the policyowner to pay, with interest, all overdue premiums before the policy is reinstated.

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

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

answer

50%

question

What type of information is NOT included in a certificate of insurance?

answer

The cost the company is paying for monthly premiums

question

When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply?

answer

Case management provision

question

Premium payments for personally-owned disability income policies are

answer

Not tax deductible.

question

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT

answer

Unearned premiums are retained by the insurance company.

question

An insured had paid only part of her total number of IRA premiums before she died. What effect will this have on the insured's estate?

answer

Only the premiums paid will be included in the estate

question

When an employee covered under a health reimbursement account changes employers, the HRA

answer

Stays with the employer.

question

Which of the following is NOT covered under a "core" policy, Plan A in Medigap insurance?

answer

The Medicare Part A deductible.

question

An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?

answer

False advertising

question

What is the benefit of choosing extended term as a nonforfeiture option?

answer

It has the highest amount of insurance protection

question

All of the following LTC coverages would encourage an insured to receive care at home EXCEP

answer

Child care.

question

The three main differences between fixed and variable annuities include all of the following EXCEPT

answer

Mortality

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

The part of Medicare that helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care, is known as

answer

Part A.

question

Concerning group Medical and Dental insurance, which of the following statements is INCORRECT?

answer

Employee benefits are tax deductible the year in which they were received.

question

A man 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 two terms are associated directly with the way an annuity is funded?

answer

Single payment or periodic payments

question

Annually renewable term policies provide a level death benefit for a premium that

answer

Increases annually.

question

A projection of insurance needs that is based upon the capitalization of an applicant's future earnings is

answer

Human life value approach.

question

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?

answer

Benefits that are attributable to employer contributions are fully taxable to the employee as income.

question

A claimant, who is totally and permanently disabled, is eligible for Social Security Disability benefits after an elimination period of

answer

5 months.

question

SIMPLE Plans require all of the following EXCEPT

answer

At least 1,000 employees.

question

What is NOT a benefit of a POS plan?

answer

It allows guaranteed acceptance of all applicants

question

Which of the following is NOT a goal of risk retention?

answer

To minimize the insured's level of liability in the event of loss

question

What is the difference between the Medicare approved amount for a service or supply and the actual charge?

answer

Excess charge

question

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?

answer

Making comparisons between different policies

question

In a life settlement contract, whom does the life settlement broker represent?

answer

The owner

question

The insurer must be able to rely on the statements in the application, and the insured must be able to rely on the insurer to pay valid claims. In the forming of an insurance contract, this is referred to as

answer

Utmost good faith

question

Which of the following is NOT true regarding an annuity certain?

answer

Benefits stop at the annuitant's death.

question

When must the Medicare Supplement Buyer's Guide be presented?

answer

At the time of application

question

A teacher may defer a portion of his earned income into a(n)

answer

403(b) (TSA).

question

Which of the following would be tax free?

answer

Death benefit received in a lump-sum settlement

question

A prospective deferred annuity owner is concerned about what would happen if he surrendered the annuity before the annuitization period. The agent most likely explained which of the following?

answer

Nonforfeiture option guarantees that the owner will receive a surrender value of the contract.

question

During replacement of life insurance, a replacing insurer must do which of the following?

answer

Obtain a list of all life insurance policies that will be replaced

question

What do long-term care policies offer to policyholders to account for inflation?

answer

They offer the option of purchasing coverage that raises benefit levels accordingly.

question

Which nonforfeiture option provides coverage for the longest period of time?

answer

Reduced paid-up

question

Which of the following is excluded in a dental insurance plan?

answer

Lost dentures

question

An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true?

answer

The insured was in compliance with the policy requirements regarding claims.

question

Which of the following statements is correct concerning taxation of long-term care insurance?

answer

Excessive benefits may be taxable.

question

An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?

answer

$10,000, no tax consequence

question

All of the following are true of the federal tax advantages of a qualified plan, EXCEPT

answer

The planned premium pays for mortality charges and expenses and any excess is returned to the policyowner

question

Which of the following statements is an accurate comparison between private and government insurers?

answer

Private insurers may be authorized to transact insurance by state insurance departments.

question

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

answer

Time of Payment of Claims

question

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

answer

Depreciation period

question

All of the following statements about Medicare Part B are correct EXCEPT

answer

It is a compulsory program.

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

Which of the following describes the tax advantage of a qualified retirement plan?

answer

The earnings in the plan accumulate tax deferred.

question

An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of

answer

Rebating.

question

The proprietors of a business may deduct the cost of a medical expense plan because they are considered to be self-employed individuals instead of employees. What is the highest percentage that may be deducted?

answer

100% of the taxpayer's annual earned income

question

Under which condition would an employee's group medical benefits be exempt from income taxes?

answer

An employee's group medical benefits are generally exempt from taxation as income.

question

What is the term that most accurately describes the provision designed to relieve life insurance premium payment for minors whose parents have died or become disabled?

answer

Payor Benefit

question

An insurance company receives an application with some information missing and issues the policy anyway. What is this called?

answer

Waiver

question

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

answer

Reduced adverse selection

question

An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?

answer

The old policy should stay in force until the new policy is issued.

question

Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days?

answer

20

question

The two types of assignments are

answer

Absolute and collateral.

question

If $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per year for ten years, which of the following would be taxable annually?

answer

$3,000

question

Which of the following is NOT true regarding annuity payments?

answer

A "deferred annuity" is characterized by the time during which payments are made into the annuity and gain interest on a nontaxable basis

question

How soon following the occurrence of a covered loss, or after the insurer becomes liable for periodic payments for income benefits, must an insured submit written proof of such loss to the insurance company?

answer

Within 90 days or as soon as reasonably possible but not to exceed one year.

question

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

answer

Dread Disease Policy.

question

Carol is insured under her employer's group life insurance plan at her place of employment. All of the following statements about her coverage are true EXCEPT

answer

Carol could choose what type of insurance her conversion policy provided (Term or Permanent).

question

Life insurance benefits for minors must be placed in the hands of either a guardian or a trustee. Which of the following is true?

answer

The guardian may or may not be accountable for assets

question

Albert and Bryan are partners in a business. They purchase a Buy-sell agreement, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?

answer

Any form of life insurance

question

A dental plan that provides coverage based upon a specified maximum scheduled amount for each procedure and pays on a 'first dollar' basis with no deductible or coinsurance is a

answer

Basic or scheduled plan.

question

Ken has a life insurance policy with a face amount of $500. He pays a premium each week to the agent who sold him the policy. What kind of policy did Ken purchase?

answer

Industrial life

question

What is a retrospective-rating arrangement?

answer

Method of establishing a premium on an a large group

question

Which of the following best describes annually renewable term insurance?

answer

It is a level term insurance.

question

All of the following statements describe a MEWA EXCEPT

answer

MEWAs are groups of at least 3 employers.

question

Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits

answer

$50,000

question

Which of the following is true about the premium on the children's rider in a life insurance policy?

answer

It remains the same no matter how many children are added to the policy.

question

The First Street Church plans to sponsor a summer camp for the youth of their congregation. They would like to purchase insurance that would pay benefits should one of the youth get injured while participating in the camp activities. The type of policy they would likely need is a/an

answer

Blanket.

question

All of the following are true of Key Person insurance EXCEPT

answer

The plan is funded by permanent insurance only.

question

A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

answer

The insured's premiums will be waived until she is 21.

question

Which of the following are the main factors taken into account when calculating residual disability benefits?

answer

Present earnings and earnings prior to disability

question

When a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has a face amount

answer

Equal to the original policy for as long a period of time that the cash values will purchase.

question

When an insured purchased her disability income policy, she misstated her age to the agent. She told the agent that she was 30 years old, when in fact, she was 37. If the policy contains the optional misstatement of age provision

answer

Amounts payable under the policy will reflect the insured's correct age.

question

Which of the following would be required to be licensed as an insurance producer

answer

A salaried employee who advertises and solicits insurance

question

Which of the following is not covered under Part B of a Medicare policy?

answer

Dental Care

question

Which of the following terms is used to name the nontaxed return of unused premiums?

answer

Dividend

question

Which of the following is true regarding a modified guaranteed annuity?

answer

The owner is guaranteed a fixed interest rate for a specific period of time.

question

An insured decides to surrender his Whole Life insurance policy which he had purchased 30 years ago. He had paid annual premiums of $500 while the policy was in force (which added up to $15,000). When he surrendered the policy, the cash surrender value was $18,000. What part of the surrender value would be income taxable?

answer

$3,000 The difference between the premiums paid and the cash value would be taxable. In this example, he difference between the premiums paid ($15,000) and the cash value ($18,000) is $3,000.

question

When must an insurance company present an outline of coverage to a person?

answer

At the time of application

question

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT

answer

It is a life contingency option.

question

A participating insurance policy may do which of the following?

answer

Pay dividends to the policyowner

question

Ashley purchases a $90,000 annuity with a single premium and begins taking payments 2 months after that. What type of annuity does Ashley have?

answer

Immediate

question

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

answer

Required a premium increase each renewal.

question

All of the following are characteristics of a Universal Life policy EXCEPT

answer

The planned premium pays for mortality charges and expenses and any excess is returned to the policyowner.

question

Can an individual who belongs to a POS plan use an out-of-network physician?

answer

Yes, and they may use any preferred physician, even if not part of the HMO

question

The purpose of the Life and Health Insurance Guaranty Association is to

answer

Help protect policyowners and beneficiaries against financial loss caused by the insolvency of an insurance company.

question

Jim is covered by a high deductible health plan. He makes regular contributions to this HSA. How are those contributions treated in regards to taxation?

answer

The contributions are tax-deductible

question

Sam has a life insurance policy from a participating company and receives quarterly dividends. Sam has instructed the company to apply his dividends to the policy to increase the death benefit. The dividend option that Sam has chosen is called

answer

Paid-up additions.

question

Which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss?

answer

Notice of Claim

question

When is the earliest a policy may go into effect?

answer

When the application is signed and a check is given to the agent

question

Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option?

answer

It provides a higher monthly benefit than a pure life annuity.

question

Your client has a Social Insurance Supplement (SIS) rider on his disability policy. After he becomes disabled, he receives payments from the company. Shortly thereafter, he also begins receiving Social Security benefit payments. Which of the following will happen?

answer

The SIS payment will be reduced dollar-for-dollar by the Social Security benefit payment.

question

An insurer invests the money it receives from premiums paid by its insureds. Which of the following is true regarding the interest earned on these investments?

answer

It is used to lower premiums.

question

Which of the following is NOT allowed in credit life insurance?

answer

Creditor requiring that a debtor buys insurance from a certain insurer

question

Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value?

answer

Predicted needs of the family after the insured's death.

question

All of the following statements are true regarding installments for a fixed amount EXCEPT

answer

The payments will stop when the annuitant dies.

question

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

answer

Other-insured rider.

question

The owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producer say?

answer

The policyowner can specify the way proceeds are split in the policy.

question

Which of the following statements about group life is correct?

answer

The cost of coverage is based on the ratio of men and women in the group.

question

Which of the following will vary the length of the grace period in health insurance policies?

answer

The mode of the premium payment

question

A Universal Life insurance policy has two types of interest rate that are called

answer

Guaranteed and Current

question

What document must be made part of the insurance policy entire contract?

answer

Copy of the original application

question

A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

answer

Proof of insurability is not required.

question

What is the maximum civil penalty for individual producers for violating the Insurance Code?

answer

$1,000

question

An individual has just been diagnosed with a quickly-spreading, fatal form of cancer; his oncologist predicts that he will live for 5 months. He applies for individual life insurance. What risk classification will he most likely receive?

answer

Declined

question

Why do group health providers usually require a certain amount of participation in the plan by eligible employees?

answer

To guard against adverse selection and reduce cost

question

Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability?

answer

Residual disability

question

Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid

answer

For 20 years or until death, whichever occurs first.

question

All of the following could own group life insurance EXCEPT

answer

A group needing low-cost life insurance.

question

In long-term care (LTC) policies, as the benefit period lengthens, the premium

answer

Increases.

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