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NEVADA LIFE AND HEALTH INSURANCE EXAM
QUESTIONS WITH CERTIFIED SOLUTIONS
A VERIFIED A+ PASS.
“Nevada requires that coverage for newborns begins "from the moment of birth" and a premium
must be paid within: - CORRECT ANSWER 31 Days"
"Which parts of a life insurance policy are guaranteed to bear true? - CORRECT ANSWER
Warranty" "P, age 50, purchased an annuity that P will fund with $500/month for 25 years. The annuity will
then pay P retirement payments after the 15 years. Which type of of annuity did P purchase? -
CORRECT ANSWER Deferred"
"B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what will the policy
pay B's beneficiary? - CORRECT ANSWER $300,000"
"M purchased an Accidental Death and Dismemberment (AD&D) policy and names his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of
beneficiary is his son? - CORRECT ANSWER Revocable"
"What is the underlying concept regarding level premiums? - CORRECT ANSWER The early
years are charged more than what is needed"
"Which of the following is NOT an example of a producer's breach of fiduciary duty? - CORRECT
ANSWER Allowing premiums to be submitted electronically"
"How long can pre-existing conditions be excluded for in long-term care policies? - CORRECT
ANSWER 6 months"
"Who is a mutual insurance company owned by> A. Its board of directors B. Its policyholders C. The State of Florida
D. Its employees - CORRECT ANSWER B. Its Policyholders"
"The USA PATRIOT ACT was enacted in: A. 2001
B. 2002
C. 2003
D. 2004 - CORRECT ANSWER A. 2001"
"P is self-employed and owns an Individual Disability Income Policy. He becomes totally disables on June 1 and receives a $2,000 a month for the next 10 months. How much of this income is subject to federal income tax? A. $20, B. $14, C. $6,
D. $0 - CORRECT ANSWER D. $0"
"What is the elimination period of an individual disability policy? A. Time period an insured must wait before coverage begins B. Time period a disabled person must wait before benefits are paid C. Time of period after the policy issue date in which the provisions are still contestable
D. The point in time when benefits are no longer payable - CORRECT ANSWER B. Time
period a disabled person must wait before benefits are paid" "A Disability Income Policy-owner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a five-month period. The insurer may cover the second disability without a new elimination period under the: A. Residual Disability Provision B. Presumptive Disability Provision C. Recurrent Disability Provision
D. Partial Disability Provision - CORRECT ANSWER C. Recurrent Disability Provision"
"Which of these is NOT relevant when determining the amount of personal life insurance needed? A. Existing life insurance coverage B. Local unemployment rate C. Household Income
D. Household Debt - CORRECT ANSWER B. Local unemployment rate"
"A 55 year old recently received a $30,000 distribution from a previous employer's 401K plan, minus $6,000 withholding. Which federal taxes apply if non of the funds were rolled over? A. Only income taxes on $30, B. Only income taxed on $20, C. Income taxes plus a 10% penalty tax on $30,
D. Income taxes plus a 10% penalty tax on $24,000 - CORRECT ANSWER C. Income taxes plus
a 10% penalty tax on $30,000 (all withdrawals from a qualified retirement plan are taxable as
D. 12 - CORRECT ANSWER B. 6 (each partner owns, is the beneficiary of and pays the
premiums for life insurance on the other partners equal to his or her share of the purchase price)" "Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?
- CORRECT ANSWER Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company." "This type of deductible provision states that should more than one family member be involved in a common accident, or suffer the same illness, only one individual deductible amount shall be applied.
- Individual Deductible
- Corridor Deductible
- Family Maximum Deductible
- Common Accident Deductible - CORRECT ANSWER Common Accident Deductible (a common accident deductible provision states that should more than one family member be involved in a common accident, or suffer the same illness, only one individual deductible amount shall be applied." "An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that results from an automobile accident. Assuming the plan had a $1000 deductible and an 80/ Coinsurance Clause, how much will the insured be responsible to pay with $11,000 in covered medical expenses?
- $
- $3,
- $8,
- $11,000 - CORRECT ANSWER $3,000 ($1,000 deductible + 20% of the remaining bill = $3000)" "Which type of life insurance beneficiary requires his/her consent when a change of beneficiary is attempted by the policy-owner?
- Irrevocable Beneficiary
- Tertiary Beneficiary
- Primary Beneficiary
- Revocable Beneficiary - CORRECT ANSWER Irrevocable Beneficiary" "What is Nevada's definition of Life Insurance replacement?
- A transaction in which coverage on an existing policy is increased
- A transaction in which group life coverage is converted to an individual policy
- A transaction in which a new policy is bought and an old policy is terminated
- A transaction in which a policy-owner reinstates a lapsed policy - CORRECT ANSWER - A transaction in which a new policy is bought and an old policy is terminated" "What type of policy would only provide for specific types of illnesses (cancer, stroke, etc)?
- MEWA
- Blanket Insurance
- Dread Disease Insurance
- Disability Insurance - CORRECT ANSWER - Dread Disease Insurance" "An employee of 2p years recently retired at age 59 1/2. This employee's group life contract can be:
- Converted to an individual permanent policy at an individual rate
- Converted to an individual policy at a group rate
- Continued at an individual rate
- Continued at a group rate - CORRECT ANSWER Converted to an individual permanent policy at an individual rate" "Which provision allows the policy-owner to change a term life policy to a permanent one without providing proof of good health?
- Modifications
- Conversion
- Exchange
- Adjustable - CORRECT ANSWER Conversion" "Which of the following terms is defined as any transaction in which new life insurance or a new annuity is to be purchased and existing life insurance or annuity is to be terminated or discontinued?
- Rebating
- Replacement
- Conservation
- Solicitation - CORRECT ANSWER Replacement" "The Accelerated Death Benefit provision in a life insurance policy is also known as a(n):
- 1035 exchange
- Inter vivos gift
- Nonforfeiture option
- Living Benefit - CORRECT ANSWER Living Benefit" "Which provision is NOT a requirement in a group life policy?
- Conversion
- Grace Period
- 10% tax penalty for early withdrawal
- Capital gains tax
- Ordinary income tax and a 10% tax penalty for early withdrawal
- Ordinary income tax - CORRECT ANSWER Ordinary income tax and a 10% tax penalty for early withdrawal" "Consumer reports requested by an underwriter during the application process of a life insurance policy can be used to determine:
- driving history
- probability of making timely premium payments
- if applicant is a tobacco user
- overall health of the applicant - CORRECT ANSWER Probability of making timely premium payments (The purpose of these reports is to provide a picture of an applicant's general character and reputation, mode of living, finances, and any exposure to abnormal hazards.)" "Which of these actions should a producer take when submitting an insurance application to an insurer?
- Issue a binding receipt to an applicant if no initial premium is submitted
- Disclose to the applicant the amount of commissions to be earned on this transaction
- Inform insurer of relevant information not included on the application
- Arrange for a copy of the Attending Physician Statement (APS) to be sent to the producer -
CORRECT ANSWER Inform insurer of relevant information not included on the application
(one of the actions a producer should take when submitting an application is to advise the insurer of any other relevant information not contained the application.)" "Which type of plan normally includes hospice benefits?
- Short-term disability plans
- Group life plans
- Workers' Compensation
- Managed care plans - CORRECT ANSWER Managed care plans" "In order for a domestic, foreign, or alien insurance company to conduct business, it must be authorized by whom?
- The National Association of Insurance Commissioners (NAIC)
- The state where they are conducting business
- The attorney general in the state where they are domiciled
- Homeland Security - CORRECT ANSWER The state where they are conducting business" "Nevada's 10-day free-look period for life insurance policies begins at the:
- date of delivery
- date of approval
- date of application
- date of physical exam - CORRECT ANSWER Date of delivery" "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 wasn't the ability to increase his policy benefits as his practice and income grow?
- Extended Term rider
- Cost of Living Adjustment rider
- Guaranteed Insurability Option rider
- - CORRECT ANSWER Guaranteed Insurability Option rider" "A written agreement to provide a Life Insurance Policy holder immediate cash in exchange for the sale and transfer of a Life Insurance Policy is a:
- Variable Life Policy
- Viatical Settlement
- Equity Index Annuity
- Health Care Savings Account - CORRECT ANSWER Viatical Settlement" "A policy of adhesion can only be modified by whom?
- The agent
- The applicant
- The primary beneficiary
- The insurance company - CORRECT ANSWER The insurance company" "Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures?
- Administrative-services-only plan
- Commercial insurer
- Preferred provider organization
- Health maintenance organization - CORRECT ANSWER Commercial insurer" "A producer MUST deliver a Notice to Applicant Regarding Replacement of Accident & Sickness insurance of which of the following times?
- Before the application is taken and underwritten
- Within five days after the application is made
- When the application is taken
- After the policy has been in effect for ten days - CORRECT ANSWER When the application is taken" "According to the Mandatory Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even thought the premium has not been paid?
"A Business Overhead Expense policy would cover which of the following if the a business owner becomes disabled?
- Contributions to employee retirement plans
- Utilities and office rent
- Owner's salary
- Meals and entertainment - CORRECT ANSWER Utilities and office rent" "Which of the following consists of an offer, acceptance, and consideration?
- Warranty
- Estoppel
- Contract
- Representation - CORRECT ANSWER Contract" "The waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond:
- 1 month
- 3 months
- 6 months
- 12 months - CORRECT ANSWER 6 months" "What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence for insurability?
- Entire contract
- Owner's rights
- Nonforfeiture options
- Conversion - CORRECT ANSWER Conversion" "On delivery of a policy, a signed statement of good health is typically requested if:
- A conditional receipt was given to the applicant
- The quarterly premium payment mode was selected
- The policy contacting a guaranteed insurability rider
- The application was submitted without the initial premium - CORRECT ANSWER The application was submitted without the initial premium" "Every insurance producer/broker MUST maintain all records, books, and documents for insurance transactions for a period of not less than:
- 5 years
- 3 years
- 2 years
- 1 year - CORRECT ANSWER 3 years"
"A mutual insurance company and a stock insurance company have one main different between
them. What is this major contrast? - CORRECT ANSWER A stock company is owned by its
shareholders and a mutual company is owned by its policy-holders" "The underwriting process involves all of these, EXCEPT for:
- Credit report
- Policy loan
- Risk classification
- Application - CORRECT ANSWER Policy loan" "T is an employe covered under a Group Life policy. It T's employment is terminated, the conversion privilege gives T the right to convert:
- to an individual policy only by providing evidence of insurability
- to an individual policy, only if the employer pays the premiums
- to an individual policy upon employment termination
- to an individual policy with a higher amount of coverage - CORRECT ANSWER To an individual policy upon employment termination" "A non-contributory group term life plan is characterized by:
- the entire cost of the plan is paid for by the employer
- the entire cost of the plan is paid for by the employee
- the cost of the plan is shred by both employer and employee
- both employer and employee must provide evidence of insurability - CORRECT ANSWER The entire cost of the pan is paid for by the employer" "With Disability income insurance, an insurance company may limit the monthly benefit
amount a prospective policy holder may obtain because of the insured's: - CORRECT
ANSWER Gross income at the time of purchase"
"Which of the following health insurance coverages is BEST suited for meeting the expenses of a
catastrophic illness? - CORRECT ANSWER Major Medical"
"Pre-existing conditions may be excluded on a medicare supplement policy for up to -
CORRECT ANSWER 6 Months"
Health care accounts and Dependent care accounts - CORRECT ANSWER What are the 2
types of Flexible Spending Accounts?"
"Cash value is guaranteed - CORRECT ANSWER Concerning a Whole Life Policy, which of the
following statements is correct?"
"Individual members of the group may select the level of benefits for their own coverage -
CORRECT ANSWER Underwriting a group health insurance plan that is paid for by the
employer requires all of the following EXCEPT"
"High-deductible health plan - CORRECT ANSWER To be eligible for a Health Savings
Account, an individual must be covered by a"
"Face amount - CORRECT ANSWER Which policy component decreases in decreasing term
insurance?"
"Acute care in a hospital - CORRECT ANSWER Which of the following is NOT covered under a
long-term care policy?"
"Term rider - CORRECT ANSWER Which of the following, when attached to a permanent life
insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members?"
"Deferred - CORRECT ANSWER An individual has been making periodic premium payments
on an annuity. The annuity income payments are schedules to begin after 1 year since the annuity was purchased what type of annuity is it?"
"Daily care by medical personnel - CORRECT ANSWER What amount of care is provided in
LTC's intermediate care?"
"$500,000 - CORRECT ANSWER What is the maximum amount that the Nevada Life &
Health Insurance Guaranty Association may be obligated to pay with respect to major medical insurance for one life?"
"1 year - CORRECT ANSWER A life producer applying for a viatical settlement broker license
may be exempt from the prelicensing education and examination requirement if the producer has held an active life license for at least how many years?" "The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries
were alive - CORRECT ANSWER An insured has chosen joint and 2/3 survivor as the
settlement option. What does this mean to the beneficiaries?"
"Increasing term - CORRECT ANSWER What type of insurance would be used for a Return of
Premium rider?"
"Survivor protection - CORRECT ANSWER A producer is helping a married couple determine
the financial needs of their children in the event one or both should die prematurely"
"The benefit received is tax free - CORRECT ANSWER A corporation is the owner of the
beneficiary of the key persion life policy. If the corporation collect the policy benefit, then"
"Attained age - CORRECT ANSWER The premium charged for exercising the Guaranteed
Insurability Rider is based upon the insured's"
"renewal provision - CORRECT ANSWER Which health insurance provision describes the
insured's right to cancel coverage?"
"Impairment rider - CORRECT ANSWER Which of the following riders would NOT increase
the premium for a policyowner?"
"Brokers do not need to be appointed - CORRECT ANSWER Which of the following is true
regarding insurance company appointment for a broker?"
"Provider - CORRECT ANSWER Who is a person, other than a viator, that enters into a
viatical settlement contract?"
"FINRA - CORRECT ANSWER An agent selling variable annuities must be registered with"
"Whole life - CORRECT ANSWER An insured bought a policy 20 years ago. The policy stated
that 20 years later the cash value would be $480 per $1,000 of coverage. What type of policy does the insured have?"
"Loan values and retirement income - CORRECT ANSWER What are the "living benefits" of
whole life insurance?"
"The premiums are invested in the insurer's general account - CORRECT ANSWER All of the
following are true about variable products EXCEPT"
"Annuitization period - CORRECT ANSWER In an annuity, the accumulated money is
converted into a stream of income during which time period?"
"It is designed to pay on a first dollar expense basis - CORRECT ANSWER Which of the
following is NOT true of a major-medical health insurance policy?"
"Relative value - CORRECT ANSWER Todd has been informed that he has a hernia which
requires repair. When Todd researches the cost, he learns that his insurance plan will cover 200
liable for periodic payments for income benefits, must an insured submit written proof of such loss to the insurance company"
"Disability income - CORRECT ANSWER A waiver of premium provision may be included
with which kind of health insurance policy"
"Annuitant - CORRECT ANSWER When an annuity is written, whose life expectancy is taken
into account?"
"It will pay double or triple the face amount - CORRECT ANSWER Which of the following
statements is true concerning the accidental death rider"
"income for 2 or more recipients until they die - CORRECT ANSWER Life income joint and
survivor settlement option guarantees"
"level or flexible - CORRECT ANSWER Which two terms are associated directly with the
premium?"
"$50,000 - CORRECT ANSWER An insured owns a $50,000 whole life policy. At age 47, the
insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?" "It requires all employers, regardless of the number or age of employees, to provide extended
group health coverage - CORRECT ANSWER Which of the following statements is NOT
correct concerning the COBRA Act of 1985?"
"Insurer - CORRECT ANSWER Which of the following entities can legally bind coverage?"
"Insuring clause - CORRECT ANSWER Which provision of a life insurance policy states the
insurers duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?"
"Annuity - CORRECT ANSWER Which of the following products will protect an individual
from outliving his or her money?"
"Common disaster - CORRECT ANSWER An insured and his wife are both involved in a head-
on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?"
"Cash value in excess of the premiums paid is taxed upon policy surrender - CORRECT
ANSWER Which of the following is true regarding taxation of cash value in a life insurance
policy?"
"90 days of a loss - CORRECT ANSWER Under the uniform required provision proof of loss
under a health insurance policy should normally be filed within how many days?"
"the commissioner - CORRECT ANSWER Which of the following entities ultimately
determines if an advertisement is deceptive or confusing?"
"A mutual insurer - CORRECT ANSWER Insurance companies may be classified according to
the legal form of their ownership. The type of company organized to return any surplus money to their policyholders is"
"Defamation - CORRECT ANSWER Which of the following terms describes making false
statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance?" "Which of the following statements if CORRECT about an agent who is taking an insurance
application? - CORRECT ANSWER The agent should have the applicant initial any changes
made on the application." "Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the
following contractual elements? - CORRECT ANSWER Legal Purpose (Insurable Interest)"
"A primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy. Which of the following will occur when the insured dies?
CORRECT ANSWER Proceeds will go to the contingent beneficiary."
"Health coverage provided under the Affordable Care Act (ACA) shall be made available for
dependents until the child attains the age of: - CORRECT ANSWER 26"
"An insured is past due on his life insurance premium, but is still within the Grace Period. What
will the beneficiary receive if the insured dies during this Grace Period? - CORRECT ANSWER
Full face amount minus any past due premiums."
"The phrase "This policy will only pay for a semi-private room" is an example of a(n): -
CORRECT ANSWER Internal Limit"
"All of the following actions are considered rebating, EXCEPT: - CORRECT ANSWER Sharing
commissions with other licensed and appointed agents" "An insured's inability to perform two or more activities of daily living may trigger which type of
policy rider? - CORRECT ANSWER Long term care"
"Which juvenile following provisions guarantees that premiums will be waived if a Juvenile Life
policy owner becomes disables? - CORRECT ANSWER Payor Clause"
"Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?
- CORRECT ANSWER Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company." "Which of the following circumstances would cause a Medicare Supplement policy to be
cancelled? - CORRECT ANSWER The insured fails to pay the premium"
"K pays on a $20,000 20-year Endowment policy for 10 years and dies from an automobile accident. How Much will the insurance company pay the beneficiary? A. Return of premiums paid B. Cash Value plus interest C. 20,000 death benefit
D. Face amount plus interest? - CORRECT ANSWER C. $20,000 death benefit"
"The Misstatement of Age Provisions requires that if the age of the insured is misstated, then any amount payable is: A. Forfeited B. An amount that the premiums paid would have purchased at the current age or ages C. An amount consists of the premiums paid for the policy if the policy was issued for over three years
D. Reduced by a specified percentage of the face amount - CORRECT ANSWER B. An amount
that the premiums paid would have purchased at the current age or ages" "When is the face amount paid under a Joint Life and Survivorship policy? A. When policy reaches maturation B. Upon death of the first insured C. Upon death of the last insured
D. When one of the insureds becomes disables and no longer able to make premium payments -
CORRECT ANSWER C. Upon the death of the last insured"
"Which of the following is a characteristic of variable annuity? A. Underlying equity investments B. Does not have surrender charges C. Does not provide a transfer of ownership
D. Selling this product requires only a life license - CORRECT ANSWER A. Underlying equity
investments" "Which of the following BEST describes Credit Life Insurance? A. Insurance purchased on a mandatory basis with money bowled from a bank of credit institution. B. Insurance issued on a debtor to cover outstanding balances on installment loans C. Insurance that allows an insured to use a policy's cash value to pay outstanding debts
D. Low-cost insurance issued through the mail by credit card companies - CORRECT
ANSWER B. Insurance issued on a debtor to cover outstanding balances on installment loans"
"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? A. Joint B. Noncontributory C. Contributory
D. Participating - CORRECT ANSWER C. Contributory"
"N is covered under an individual Disability policy with a 30-day Elimination period and a monthly benefit of $500. N is totally disabled for 3 1/2 months. N's total benefit received on this claim is: A. $2, B. $1, C. $1,
D. $1,250 - CORRECT ANSWER D. $1,250 (waited for 3.5 months, so the math would be $500+
"Which of the following is required for an insurance producer applicants who are required to pass a written examination? A. Fingerprint-based criminal background check B. Credit report C. High school diploma
D. Sponsoring insurance company - CORRECT ANSWER A. Fingerprint-based criminal
background check" "A local care provider which typically delivers health services as its own local medical facility is known as a: A. Health Maintenance Organization B. Regional Provider
