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NEVADA LIFE INSURANCE EXAM QUESTIONS AND
100% CORRECT ANSWERS
“Notice Regarding Replacement - CORRECT ANSWER A document that must be sent to the
Department of Insurance during the replacement of life insurance."
"Underwriting information - CORRECT ANSWER Important data collected to assess risk and
determine policy eligibility."
"Sales proposals - CORRECT ANSWER Documents presented to potential clients outlining
insurance products and terms."
"Retention period for notices - CORRECT ANSWER The duration for which agents must keep
copies of notices and sales proposals, typically 5 years."
"Solicitation - CORRECT ANSWER The act of seeking to sell insurance products to potential
clients."
"Complete file maintenance - CORRECT ANSWER Requirement for insurers to keep a copy of
each document used in the sale of life insurance products."
"3 years - CORRECT ANSWER A duration related to life insurance."
"5 years - CORRECT ANSWER A duration related to life insurance."
"10 years - CORRECT ANSWER A duration related to life insurance."
"Allowable exclusions of Medicare supplement insurance - CORRECT ANSWER All of the
above are allowable exclusions: Dental treatment, Hearing aids, and Emotional disorders."
"Eligibility for coverage on the Health Insurance Marketplace - CORRECT ANSWER A
permanent resident lawfully present in the U.S. is eligible for coverage."
"Classification of health plans under ACA - CORRECT ANSWER Health plans are classified
based on the amount of covered costs as Metal level classification."
"Common variations in a Long-term care policy - CORRECT ANSWER The most common
variations include the number of days of confinement covered, number of home health visits covered, and the amount paid for nursing home care."
"Which of the following terms is used to describe a person, other than a viator, that enters into or effectuates a viatical settlement contract? A Viatical settlement purchaser B Viatical settlement broker C Viatical settlement effectuator
D Viatical settlement provider - CORRECT ANSWER D"
"Within how many months must a person be expected to die from a sickness in order to be classified as terminally ill? A 3 B 6 C 12
D 24 - CORRECT ANSWER D"
"For how long must agents retain copies of notices and sales proposals for life insurance applications? A 1 year B 5 years C 10 years
D 3 years - CORRECT ANSWER D"
"To which of the following would the rule prohibiting a viatical settlement contract within 5 years of a policy issue date apply? AThe owner is getting a divorce BThe owner's spouse dies CThe owner needs money for downpayment on the first home
DThe owner files for bankruptcy - CORRECT ANSWER C"
"Which of the following will be included in a policy summary? AComparisons with similar policies BPrimary and secondary beneficiary designations CPremium amounts and surrender values
DCopies of illustrations and application - CORRECT ANSWER C"
"An organization that operates on a lodge system and provides a formal life insurance plan to its members is classified as a AReciprocal association. BFraternal insurer. CMutual company.
"What is continuous care coverage in this state? ALimited benefit coverage BLong-term care coverage CDisability income coverage
DWorkers compensation coverage - CORRECT ANSWER D"
"For what time period can coverage be excluded on permissible pre-existing conditions applicable to a Medicare supplement insurance policy? A3 months after the effective date of the policy B6 months after the effective date of the policy C30 days after the effective date of the policy
D2 months after the effective date of the policy - CORRECT ANSWER B"
"What is the maximum age for qualifying for a catastrophic plan? A B C
D62 - CORRECT ANSWER B"
"How soon from the delivery of a Medicare Supplement policy may the insured return it for a full refund? A10 days B20 days C30 days
DAny time - CORRECT ANSWER C"
"Long term care insurance policies can ALimit coverage for the treatment of Alzheimer's disease. BBe cancelled due to the deterioration of the insured's mental health. CLimit coverage for the treatment of alcoholism.
DBe cancelled due to the age of the insured. - CORRECT ANSWER C"
"According to the PPACA metal levels classification, if a health plan is expected to cover 90% of the cost for an average population, and the participants would cover the remaining 10%, what type of plan is that? AGold BPlatinum CBronze
DSilver - CORRECT ANSWER B"
"A woman obtains health coverage through the Marketplace on October 1. Two weeks later she finds out that she is 3 months pregnant. Which of the following is true about coverage for pregnancy? APregnancy may be covered with the insurer's special approval. BPregnancy will be covered immediately. CPregnancy will only be covered if additional premium is paid.
DPregnancy will not be covered as a pre-existing condition. - CORRECT ANSWER B"
"The Patient Protection and Affordable Care Act mandates that insurers provide coverage for adult children of the insured up to the age of A19. B21. C26.
D30. - CORRECT ANSWER C"
"What amount of care is provided in LTC's intermediate care? A24-hour care BNon-medical daily care CDaily care, but not nursing care
DDaily care by medical personnel - CORRECT ANSWER D"
"How many consecutive months of coverage (other than in an acute care unit of a hospital) does LTC insurance cover in Nevada? A B C
D6 - CORRECT ANSWER B"
"Which of the following is correct about a group health insurance policy? AIt can exclude newborn children from coverage. BIt cannot exclude coverage for VA hospital treatment. CIt can provide coverage for handicapped children.
DIt cannot exclude coverage from an occupational accident. - CORRECT ANSWER C"
"The insurance commissioner is empowered to
B. Examine all domestic insurance companies prior to issuing certificates of authority -
CORRECT ANSWER B. Examine all domestic insurance companies prior to issuing
certificates of authority"
B. It covers eligible expenses for staff - CORRECT ANSWER B. It covers eligible expenses for
staff" "As defined under the Nevada insurance law, an Insurance transaction includes all of the following except:
Investigation of a claim - CORRECT ANSWER Investigation of a claim"
"If copayments are required for medical services in a health plan, they are required
C. Regardless of any deductible - CORRECT ANSWER C. Regardless of any deductible"
"The commissioner may consider which of the following to determine if a TPA is operating profitably?
A. The financial statement - CORRECT ANSWER A. The financial statement"
"Which of the following statements is correct about Division of Insurance hearings? C. The Insurance Commissioner may not suspend the effective date of a previous action when a
hearing is pending - CORRECT ANSWER C. The Insurance Commissioner may not suspend
the effective date of a previous action when a hearing is pending" "The expenses incurred by the Insurance Commissioner for a financial examination of a life or health insurance company are funded by the:
A. Company examined - CORRECT ANSWER A. Company examined"
"Which of the following statements about policy delivery is correct? D. The Producer should explain the policy to the insured to increase the chance that the insured
will understand the policy's benefits and keep it. - CORRECT ANSWER D. The Producer
should explain the policy to the insured to increase the chance that the insured will understand the policy's benefits and keep it." "When a firm established a contributor group term life insurance contract, what percentage test must be met for the participation a. 50% b. 60%
c. 75%
d. 100% - CORRECT ANSWER c 75%"
"Louis owns a $10,000 term life policy. He paid the $200 annual premium on Feb 1. Louis fails to pay the second annual premium and dies on Feb 28 of the following year. How much will the beneficiary receive from Louis' insurance company a. $ b. $10, c. $9,
d. Non of the above - CORRECT ANSWER c. $9,800"
"All of the following statements are true with regard to the 10 day free look provision in a life insurance policy EXCEPT a. the 10 day free look period begins when the insured receives the contract b. an insured who returns the policy within the 10 days free look period will receive a full refund of premiums paid c. if a conditional receipt was issued, a pro rata refund will be made if the insured returns the policy within the free look period d. to get a refund, the policy holder must return the policy within 10 days from the date the policy
was received - CORRECT ANSWER c. if a conditional receipt was issued, a pro rata refund will
be made if the insured returns the policy within the free look period" "All of the following are common life insurance policy provisions EXCEPT a(n) a. entire contract clause b. insuring clause c. free look period
d. premium deductibility option - CORRECT ANSWER d. premium deductibility option"
"An insured may receive protection against the unintentional lapse of his life insurance contract by requesting the a. cash savings amount b. extended term option c. at interest option
d. automatic premium loan - CORRECT ANSWER d. automatic premium loan"
"Under a group life insurance policy, an employee demonstrates her evidence of participation b producing a a. master policy b. certificate of insurance c. group policy
d. premium receipt - CORRECT ANSWER b. certificate of insurance"
"Viatical settlement provider - CORRECT ANSWER An entity that provides funds for a
viatical settlement."
"Terminally ill - CORRECT ANSWER A classification for a person expected to die from a
sickness within 24 months."
"Disclosure statement - CORRECT ANSWER A document that explains features and benefits
of a proposed life insurance policy to the consumer."
"Viatical settlements - CORRECT ANSWER Financial arrangements where a viator sells their
life insurance policy to a third party."
"Accelerated death benefits - CORRECT ANSWER Benefits provided by the insurer that
issued the original policy to cover medical expenses."
"Chronic illness - CORRECT ANSWER An illness that persists over a long period of time."
"Fatal illness - CORRECT ANSWER An illness that is expected to result in death."
"Malignant illness - CORRECT ANSWER A severe and progressive illness, often cancerous."
"Fraternal insurer - CORRECT ANSWER An insurer that must be nonprofit and sell
insurance only to its members."
"Collateral assignment - CORRECT ANSWER A temporary transfer of rights in a life
insurance policy to secure a loan."
"Absolute assignment - CORRECT ANSWER A complete transfer of ownership of a life
insurance policy."
"Insurer - CORRECT ANSWER A company that provides insurance coverage to
policyholders."
"Life insurance products - CORRECT ANSWER Financial products that provide a payout
upon the insured's death."
"Policyowner - CORRECT ANSWER The individual who owns a life insurance policy."
"Policy illustrations - CORRECT ANSWER Documents that show potential benefits and
values of a life insurance policy."
"Buyer's Guide - CORRECT ANSWER A document that provides information to help
consumers understand life insurance options."
"Policy Summary - CORRECT ANSWER A brief overview of the key features of a life
insurance policy."
"As long as the insurer remains in business - CORRECT ANSWER The duration of a policy's
validity based on the insurer's operational status."
"Buyer's Guide - CORRECT ANSWER A generic consumer publication that explains life
insurance in general terms to assist the applicant in the decision-making process."
"Viatical settlement - CORRECT ANSWER An arrangement between a viatical company and a
terminally ill insured."
"Replacement rule - CORRECT ANSWER The rule that applies if an agent knows an applicant
is going to cash in an old policy and use the funds to purchase new insurance."
"Absolute assignment - CORRECT ANSWER The type of assignment given to the viatical
settlement company when a viator sells a life insurance policy."
"Purpose of the buyer's guide - CORRECT ANSWER To allow the consumer to compare the
costs of different policies."
"5 years prohibition rule - CORRECT ANSWER The rule prohibiting a viatical settlement
contract within 5 years of a policy issue date applies when the owner needs money for a down payment on the first home."
"Policy summary - CORRECT ANSWER A document that includes premium amounts and
surrender values."
"Fraternal insurer - CORRECT ANSWER An organization that operates on a lodge system and
provides a formal life insurance plan to its members."
"Suitable option for terminally ill insured - CORRECT ANSWER Viatical settlement."
"Policy summary contents - CORRECT ANSWER Includes information about premium
amounts, cash values, surrender values, and death benefits for specific policy years."
"Replacing producer's response - CORRECT ANSWER The producer must provide the
applicant with a Notice Regarding Replacement."
"Definition of continuous care coverage in this state - CORRECT ANSWER Workers
compensation coverage"
"Time period for returning a Medicare Supplement policy for a full refund - CORRECT
ANSWER 30 days"
"Long term care insurance policies can be cancelled due to - CORRECT ANSWER the age of
the insured"
"Type of plan that covers 90% of costs for an average population according to PPACA -
CORRECT ANSWER Platinum"
"Coverage for pregnancy under Marketplace insurance after finding out about pregnancy -
CORRECT ANSWER Pregnancy will be covered immediately"
"Age up to which insurers must provide coverage for adult children - CORRECT ANSWER 26"
"Amount of care provided in LTC's intermediate care - CORRECT ANSWER Daily care by
medical personnel"
"Consecutive months of coverage LTC insurance covers in Nevada - CORRECT ANSWER 24"
"Correct statement about a group health insurance policy - CORRECT ANSWER It can
provide coverage for handicapped children"
"Basis for exclusion of coverage in a Medicare supplement policy - CORRECT ANSWER None
of the above"
"Who can provide skilled nursing care - CORRECT ANSWER Doctor"
"Minimum hours of approved instruction required for accident and health producers to sell
continuous care coverage - CORRECT ANSWER 8 hours"
During replacement of life insurance, a replacing insurer must do which of the following? A Send a copy of the Notice Regarding Replacement to the Department of Insurance B Obtain a list of all life insurance policies that will be replaced C Guarantee a replacement for each existing policy
D Designate a new producer for a replaced policy - CORRECT ANSWER B"
"Which of the following documents must be provided to the policyowner or applicant during policy replacement? A Buyer's Guide and Policy Summary B Policy illustrations C Notice Regarding Replacement
D Disclosure Authorization Form - CORRECT ANSWER C"
"What is the purpose of a disclosure statement in life insurance policies? A To protect agents and insurers against lawsuits B To explain features and benefits of a proposed policy to the consumer C To obtain important underwriting information from the applicant
D To help consumers compare policy prices - CORRECT ANSWER B"
"Which of the following statements would best describe the difference between viatical settlements and accelerated death benefits? A Viaticals require higher premiums. B Viaticals use mortality tables; accelerated death benefits are determined by morbidity. C Viaticals are funded by a third party; accelerated death benefits are provided by the insurer that issued the original policy.
D Viaticals are used to fund retirement; accelerated death benefits fund medical expenses. -
CORRECT ANSWER C"
"Which of the following means having an illness or sickness that can reasonably be expected to result in death in 24 months or less? A Chronic illness B Fatal illness C Malignant illness
D Terminal illness - CORRECT ANSWER D"
"Which of the following insurers must be nonprofit and sell insurance only to its members? A Reciprocal B Fraternal C Service
D Mutual - CORRECT ANSWER B"
"When a viator sells a life insurance policy, A Collateral assignment is given to the insurance company. B Absolute assignment is given to the viatical settlement company. C Collateral assignment is given to the viatical settlement company.
D Absolute assignment is given to the insurance company. - CORRECT ANSWER B"
"Who is a person, other than a viator, that enters into a viatical settlement contract?
B 6
C 12
D 24 - CORRECT ANSWER D"
"What is the purpose of the buyer's guide? A To provide the name and address of the agent/producer issuing the policy B To list all policy riders C To provide information about the issued policy
D To allow the consumer to compare the costs of different policies - CORRECT ANSWER D"
"Which of the following documents delivered to the policyowner includes information about premium amounts, cash values, surrender values and death benefits for specific policy years? AA privacy notice BA buyer's guide CA policy summary
DA notice regarding replacement - CORRECT ANSWER C"
"How must a replacing producer respond to an applicant wishing to replace existing life insurance? AThe producer must request the permission of the existing insurer. BThe producer has no specific duties. CThe producer must provide the applicant with a Notice Regarding Replacement.
DThe producer must collect the existing policies and turn them over to the replacing insurer. -
CORRECT ANSWER C"
"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? A1 year B2 years C5 years
D10 years - CORRECT ANSWER A"
"What is the name for the owner of a life insurance policy who enters into a viatical settlement contract? AViatical settlement purchaser BViator CPolicyowner
DViatical settlement provider - CORRECT ANSWER B"
"Fred and Jody are covered under a group health insurance plan at his place of employment. When Jody gave birth to their first child, what must he do in order to have coverage for their child?
ANotify the insurer on the anniversary date of the plan BNotify the employer within 10 days CNotify the insurer immediately and provide proof of insurability DNotify the insurer within 31 days in order for coverage to continue without any evidence of
insurability - CORRECT ANSWER D"
"For an agent to sell continuous care coverage, the agent must meet all of the following requirements EXCEPT A Be licensed as a casualty insurance producer. B Receive approval from the Commissioner. C Be licensed as an accident and health insurance producer.
D Be licensed as a life insurance producer. - CORRECT ANSWER D"
"According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan? A10% B30% C40%
D60% - CORRECT ANSWER D"
"In all health care plans under the Affordable Care Act (ACA), how many essential benefit categories are there? A B C
D15 - CORRECT ANSWER B"
"Which of the following is NOT a metal level of coverage offered under the Patient Protection and Affordable Care Act? AIron BGold CSilver
DBronze - CORRECT ANSWER A"
"The following are allowable exclusions of Medicare supplement insurance EXCEPT ADental treatment. BHearing aids. CEmotional disorders.
DAll of the above are allowable exclusions. - CORRECT ANSWER D"
"Which of the following individuals will be eligible for coverage on the Health Insurance Marketplace?
"Accident and health producers may qualify to sell continuous care coverage if they complete a minimum of how many hours of approved instruction in workers compensation and employer liability insurance? A5 hours B8 hours C12 hours
D20 hours - CORRECT ANSWER B"
A producer who knowingly makes a false or fraudulent statement on an insurance application may be subject to which of the following.
A Felony - CORRECT ANSWER A felony"
"All insurance companies and producers who sell Group Life or Accident and Health policies in Nevada MUST: A. obtain a receipt when delivering individual certificates to insureds B. deliver to the policyholder individual certificates to insureds C. deliver a policy to each insured member of a group
D. notify the Commissioner when individual certificates have been issued - CORRECT
ANSWER B. deliver to the policyholder individual certificates to insureds"
"Which of the following is required to have a Certificate of Registration? A. An insurance producer B. A surplus lines broker C. An administrator
D. An insurance consult - CORRECT ANSWER C. An administrator"
"In Nevada, a health policy must contain which of the following information? A. The name of the producer who sold it B. The effective date of coverage C. The name of the beneficiary
D. The name of the administrator - CORRECT ANSWER B. The effective date of coverage"
"When a criminal violation of the insurance code has occurred, the Nevada Insurance Commissioner is required to report the violation to the
District Attorney - CORRECT ANSWER District Attorney"
"Which of the following statements about policy delivery is correct? A. The producer should deliver the policy before the free look period expires B. The producer should deliver the policy in person and advise the insured to call the insurance home company's office if there are any questions. C. The producer should mail the policy to the insured to reduce the chance that the insured will reconsider and return the policy D. The producer should explain the policy to the insured to increase the chance that the insured
will understand the policy's benefits and keep it. - CORRECT ANSWER D. The producer
should explain the policy to the insured to increase the chance that the insured will understand the policy's benefits and keep it." "The Affordable Care Act requires that every state makes available a Marketplace where:
A. Affordable health insurance coverage may be subsidized with advance premium tax credits -
CORRECT ANSWER A. Affordable health insurance coverage may be subsidized with
advance premium tax credits" "Which of the following statements is Correct about he Division of Insurance hearings? C. The Insurance Commissioner may not suspend the effective date of a previous action when a
hearing is pending - CORRECT ANSWER C. The Insurance Commissioner may not suspend
the effective date of a previous action when a hearing is pending" "The expenses incurred by the Insurance Commissioner for a financial examination of a life or health insurance company are funded by the :
A Company examined - CORRECT ANSWER A Company examined"
"How long after the policy expiration MUST an insurance producer maintain accessible electronic or paper records?
C. 3 years - CORRECT ANSWER C. 3 years"
Jason is the insured in a $100,000, 10 year renewable term policy. Soon after taking out the policy, he develops a serious heart condition. Which of the following statement is CORRECT? a. Since the condition manifested after the policy was issued, he will not be able to renew his policy. b. Jason will be able to renew his policy c. It will be necessary for Jason to show evidence of insurability in order to renew the policy
d. If Jason renews his policy, it will be rated for his health condition. - CORRECT ANSWER b.
Jason will be able to renew his policy"
