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P is a producer who notices 5 questions on a life application were not answered. What actions should P take? - ✔✔Set up a meeting with the applicant to answer the remaining questions Which of the following does Social Security NOT provide benefits for? - ✔✔Dismemberment An Accident/Health policyholder has days to return the policy and receive a full refund on premiums - ✔✔ 10 Under a Renewable Term policy, - ✔✔the renewable premium is calculated on the basis of the insured's attained age Which of the following BEST describes a short-term medical expense policy? - ✔✔Nonrenewable W is a 39-year old female who just purchased an annuity to provide income for life starting at age 60. All of these would be acceptable annuity choices EXCEPT a(n) - ✔✔Immediate annuity How are Roth IRA distributions normally taxed? - ✔✔Distributions are received tax-free An insurance applicant was recently denied insurance coverage. The applicant is requesting access from the insurer to recorded personal information regarding this decision. Under the
Information and Privacy Protection Act, the insurer MUST make the information available within business days - ✔✔ 30 What is a warranty? - ✔✔is a statement guaranteed to be true S is a life insurance policyowner and enters into a written agreement to receive immediate cash in exchange for the sale and transfer of her life insurance policy. This agreement is referred to as a(n) - ✔✔Viatical Settlement How is the Life and Health Insurance Guaranty Associated funded? - ✔✔from member companies Quarterly premium payments increase the annual cost of insurance because - ✔✔interest to the insurer is decreased while the administrative costs are increased Who does an insurance broker in North Carolina represent? - ✔✔Insured When an existing life insurance policy is being reissued with a reduction in cash value, the agent must sign the - ✔✔Notice Regarding Replacement of Life Insurance of Annuity Whole Life insurance policies are contractually guaranteed to provide each of the following, EXCEPT - ✔✔partial withdrawal features beyond a surrender charge period K works for XYZ Clothing Store from September through December each year. K works 45 hours a week for this period of time. The employer's Group Policy would consider K - ✔✔not eligible for the insurance because as a seasonal employee K does not meet the definition of "employee" under NC law
In North Carolina, a health policy that is paid on a quarterly basis requires a grace period of - ✔✔31 days When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following? - ✔✔Residual disability Which of these types of coverage is best described as a short term medical policy? - ✔✔Interim coverage An insurance company that is formed under North Carolina laws is referred to as a(n) - ✔✔domestic company Information obtained from a phone conversation to the proposed insured can be found in which of these reports? - ✔✔Inspection report For an individual health policy that is paid for on a monthly basis, the Grace Period provision is a MINIMUM of how many days - ✔✔Ten If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best desribes this policy is called - ✔✔noncancelable Which of the following consists of an offer, acceptance, and consideration - ✔✔Contract
In Major Medical Expense policies, what is the intent of a Stop Loss provision? - ✔✔Limits an insured's out-of-pocket medical expenses Which of the following is an effort to influence a person to buy an insurance product from you?
- ✔✔Soliciting Which Federal law allows an insurer to obtain an inspection report on a potential insured? - ✔✔Fair Credit Reporting Act The insuring clause - ✔✔States the scope and limits of the coverage When can a policyowner change a revocable beneficiary? - ✔✔Anytime When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply? - ✔✔Conversion provision What type of policy would offer a 40 - year old the quickest accumulation of cash value? - ✔✔ 20 - pay life All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death EXCEPT - ✔✔Interest Only A CEO's 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
A Hospital/Surgical Expense policy was purchased for a family of four in March 2013. The policy was issued with $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013? - ✔✔$1, When does a life insurance contract become effective if the initial premium is not collected during the application process? - ✔✔When producer delivers policy and collects initial premium K has an Accidental Death and Dismemberment (AD&D) insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? - ✔✔Daughter An immediate annuity consists of a - ✔✔single premium Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase? - ✔✔Applicant's monthly income According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options? - ✔✔Monthly An agent takes an individual Disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to: - ✔✔determine if the applicant is an acceptable risk by completing standard underwriting procedures Which type of life insurance beneficiary requires his/her consent when a change of beneficiary is attempted by the policyowner? - ✔✔Irrevocable beneficiary
Lapsed individual life insurance may be reinstated within? - ✔✔ 5 years When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits? - ✔✔Recurrent Disability 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 NOT need to provide evidence of insurability North Carolina insurance law specifically allows the Commissioner to issue a temporary license to which of the following individuals? - ✔✔A surviving spouse of a deceased agent C was injured while deep sea diving and requires a hospital stay. C has a Major Medical policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000? - ✔✔$ An engineering firm that would suffer financially from the death of a project manager should purchase a:
- ✔✔Key Person Life Policy Who is normally considered to be the owner of a 403(b) tax-sheltered annuity? - ✔✔The employee Before an insurer can increase the rates for individual accident and health policyowners, the insurer must provide written notice at least days before the effective rate increase. - ✔✔ 30
A(n) Life policy offers the owner investment in products such as money-market funds, long-term bonds and equities - ✔✔Variable Which of the following MUST be included with the continuation of coverage of a group Hospital, Surgical, and Major Medical policy? - ✔✔Hospital expenses Which of these terms accurately defines an underwriter's assessments of information on a life insurance application? - ✔✔Risk classification Which of these is an element of a Variable Life policy? - ✔✔A fixed, level premium The Commissioner of Insurance has notified an insurer that an individual Health Policy form does not comply with North Carolina laws. The insurer may - ✔✔not issue the form in connection with any new application In a Disability Income policy, which of these clauses acts as a deductible? - ✔✔Elimination Period Which of these Nonforfeiture Options continue a build-up of cash value? - ✔✔Reduced Paid-Up B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of - ✔✔additional Whole Life coverage at specified times
Which of these actions should a producer take when submitting an insurance application to an insurer? - ✔✔Inform insurer of relevant information not included on the application The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the: - ✔✔Waiting Period Which is true concerning a Variable Universal Life policy? - ✔✔Policyowner controls where the investment will go and selects the amount of the premium payment An agent inducing an insured to lapse, forfeit, or surrender insurance through misrepresentation is committing the illegal act of - ✔✔twisting Which of the following health insurance coverages is BEST suited for meeting the expenses of catastrophic illness? - ✔✔Major Medical A terminated employee must have been covered for at LEAST month(s) under a Group Health Insurance policy immediately prior to termination in order to be eligible for continuation of coverage. - ✔✔ 3 K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective? - ✔✔The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured
R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity? - ✔✔Residual Disability Medicare Part A and Part B do NOT pay for - ✔✔dental work Group/voluntary long-term care policy premiums are typically deducted from the employee's income and - ✔✔are less costly as compared to individual long term care coverage When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans - ✔✔Contributory The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to: - ✔✔continue group health benefits In regards to representations or warranties, which of these statements is TRUE? - ✔✔If material to the risk, fake representations will void a policy T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called - ✔✔Time Limit on Certain Defenses (Incontestability) Which type of plan normally includes hospice benefits? - ✔✔Managed care plans
K sent a renewal premium payment to her insurer that would extend her coverage beyond the policy's maximum age limit. If the insurer accepts this premium payment, it - ✔✔must continue the coverage to the end of the period of time for which the premium was accepted An insurer receives proof of loss for an acceptable medical expense claim under an Individual Health Insurance Policy. Under the Time of Payment of Claims provision, the insurer MUST pay the benefits - ✔✔immediately Which of these statements is INCORRECT regarding the federal income tax treatments of life insurance? - ✔✔Entire cash surrender value is taxable XYZ insurance company would like to begin conducting business in North Carolina. Before XYZ can issue or deliver a Health policy, the form, classification of risks, and premium rates MUST be filed with the - ✔✔Commissioner of Insurance Which of the following policies combines investment choices with a form of Term coverage? - ✔✔Variable Universal Life A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision? - ✔✔Payor provision Which of the following is NOT an unfair method of competition or deceptive practice? - ✔✔Demonstrating that a policy has higher benefits by using a comparison The Commissioner of Insurance may examine the records of an insurance company in order to - ✔✔determine the solvency of the company
Which of these life products is NOT considered interest-sensitive? - ✔✔Modified Whole Life E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? - ✔✔F If an annuity is terminated prior to beginning of the income payment period, the contract owner receives - ✔✔The contract surrender value at that time On delivery of a policy, a signed statement of good health is typically requested if: - ✔✔The application was submitted without the initial premium Which of the following reimburses its insureds for covered medical expenses? - ✔✔Health maintenance organizations D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed? - ✔✔Level term Equity indexed annuities are invested in which of the following: - ✔✔S&P 500 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
Which of the following claims are typically excluded from Medical expense policies? - ✔✔Intentionally self-inflicted injuries 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 Which of the following types of policies pays a benefit if the insured goes blind? - ✔✔AD&D Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees? - ✔✔Portion of the premiums paid for by the employer may be a tax deduction Which of these is considered a true statement regarding Medicaid? - ✔✔Funded by both state and federal governments G purchased a Family Income policy at age 40, The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income? - ✔✔ 10 years The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the: - ✔✔Insuring cluase Medicare is intended for all of the following groups EXCEPT - ✔✔Those enrolled as a full-time student
