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Life and Health Pretest Questions and
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A CORRECT statement about the regulatory authority of the Director is that the Director may ✔✔mandate the financial restructuring of insolvent producers
If a producer that the sale of a Medicare Supplement policy involves replacement, the producer must take all of the following actions EXCEPT ✔✔submit a written replacement notice to the replacing insurance company
The Replacement of Life Insurance and Annuities regulation is designed to protect the interest of the ✔✔the policyowner
Which of the following statements is CORRECT if an insured converts his Life policy to Paid- Up Insurance and buys new insurance? ✔✔the transaction is considered replacement
The term of coverage for Credit insurance ✔✔begins when the debtor becomes obligated to the creditor
An insurance producer is BEST defined ✔✔a person who has a contract with an insurance company to represent it
A cancer policy is considered incontestable after what MAXIMUM period of time? ✔✔2 years
Which of the following statements about the Suicide clause is CORRECT with regard to an Individual Life Policy? ✔✔Suicide may be excluded up to a year from date of issue of coverage while sane or insane
All of the following are true regarding the grievance and appeals process for a health insurance policy EXCEPT ✔✔exercising grievance rights waives any right to pursue litigation
C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on her life, which of these statements would be true? ✔✔ABC is the policyowner, C is the insured, and ABC is the beneficiary
Variable Whole Life Insurance can be described as ✔✔both an insurance and securities product
When can a policyowner change a revocable beneficiary ✔✔anytime
What is the underlying concept regarding level premiums? ✔✔The early years are charged more than what is needed
On a life insurance policy, who is qualified to change the beneficiary designation? ✔✔policyowner
life insurance application must be signed by all of these EXCEPT ✔✔beneficiary
Which of these terms accurately defines an underwriter's assessment of information on a life insurance application? ✔✔risk classification
Which Federal law allows an insurer to obtain an inspection report on a potential insured? ✔✔fair credit reporting act
In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and ✔✔initial premium
What is the purpose of the U.S.A. Patriot Act? ✔✔to detect and defer terrorism
Before a life insurance policy is issued, which of these components of the contract is required? ✔✔an applicants signature
From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant? ✔✔fair credit report act
A noncontributory group term life plan is characterized by ✔✔the entire cost of the plan is paid by the employer
A person who is insured within a group contract will be given a ✔✔certificate
Group life insurance policies are generally written as ✔✔annually renewable term
If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have ✔✔contributory
An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age ✔✔59 1/
Who elects the governing body of a mutual insurance company? ✔✔policyholders
An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the ✔✔fair credit reporting act
When does a Guaranteed Insurability Rider allow the insured to buy additional coverage? ✔✔at future dates specified in the contract with no evidence of insurability required
S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT ✔✔beneficiarys age
Which of these provisions require proof of insurability after a policy has lapsed ✔✔reinstatement
The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and ✔✔initial premium
When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n ✔✔exclusion
The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called ✔✔reinstatement
The incontestable clause allows an insurer to ✔✔contest a claim during the contestable period
Which of these is NOT considered to be a right given to a policyowner ✔✔Modify a provision in the insurance contract
T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay? ✔✔50,
What benefit does the Payor clause on a Juvenile Life policy provide? ✔✔Premiums are waived if payor becomes disabled
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 receive dividends
What kind of special need would a policyowner require with an Adjustable Life insurance policy ✔✔flexible premiums
N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase ✔✔30-pay life
All of these statements about Equity Indexed Life Insurance are correct EXCEPT ✔✔The premiums can be lowered or raised, based on investment performance
A variable insurance policy ✔✔does not guarantee a return on its investment accounts
Which of these is an element of a Variable Life policy ✔✔fixed level premiums
Which of these would be considered a Limited-Pay Life policy ✔✔life paid up to age 70
Term insurance has which of the following characteristics ✔✔Expires at the end of the policy period
Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability? ✔✔Conversion privilege
What type of insurance offers permanent life coverage with premiums that are payable for life ✔✔whole life
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death ✔✔full face amout plus cash value
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time ✔✔decreasing term
How does a typical Variable Life Policy investment account grow ✔✔mutual stocks, bonds, funds
Which of these require an offer, acceptance, and consideration ✔✔contract
The part of a life insurance policy guaranteed to be true is called a ✔✔waiver
Which of the following statements is correct regarding an employer/employee group health plan ✔✔employer receives master policy, employee receives certificate
Which of the following statements BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition ✔✔less restrictive
Which contract permits the remaining partners to buy-out the interest of a disabled business partner ✔✔disability buy-sell
Which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual Accident and Health insurance? ✔✔Disability income policy premiums are tax-deductible
An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses ✔✔Loss of eyesight due to an accidental injury
XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is ✔✔100%
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
The individual who provides general medical care for a patient as well as the referral for specialized care is known as a ✔✔primary care physician
The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n ✔✔closed panel
Medicare is intended for all of the following groups EXCEPT ✔✔those enrolled as full time students
Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy ✔✔Discourages overutilization of the insurance coverage
An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/ Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses ✔✔3,
Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deducitble ✔✔carryover provision
With a Basic Medical Expense policy, what does the hospitalization expense cover ✔✔hospital room and board
N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as ✔✔coinsurance
Which of the following BEST describes a Hospital Indemnity policy ✔✔coverage that pays a stated amount per day of a covered hospitalization
Which of the following services is NOT covered under a hospitalization expense policy ✔✔surgeon fees
Which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT ✔✔If the employee paid for qualified medical expenses, the reimbursements may be tax-free
Which of the following will a Long Term Care plan typically provide benefits for ✔✔home health care
S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company not responded to the claim. S can take legal action against the insurer beginning ✔✔November 1
Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract? ✔✔entire contract
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 period during which the company may dispute a claim's validity is called ✔✔time limit on certain defenses
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 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
Which of the following statements about the classification of applicants is INCORRECT ✔✔Substandard applicants are never declined by underwriters
Which of the following BEST describes how pre-admission certifications are used ✔✔Used to prevent nonessential medical costs
The provision in a health insurance policy that interrupts premiums being paid to the insurer while the insured is disabled is called the ✔✔waiver of premiums
T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect ✔✔less then 5000 regardless of the clause
K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income ✔✔disability income
What does a Guaranteed Insurability rider provide a Disability Income policyowner ✔✔The ability to periodically increase the amount of coverage without evidence of insurability
Which type of contract liquidates an estate through recurrent payments ✔✔annuity
Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance ✔✔entire cash surrender is taxable
