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Health&Life
Exam Prep
| Question | Answer |
|---|---|
| An insured is involved in a car accident. He 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 | No benefits |
| Who is protected by an Interim Insuring Agreement | The applicant and the insurer |
| Which of the following is INCORRECT concerning taxation of disability income benefits, | If paid by the individual the premiums are tax deductible. |
| Which of the following is NOT a way to determine the interest rate in a Universal Life Policy | Estimate market conditions for the life of the policy. |
| A temporary license may be obtained for all of the following situations EXCEPT | A producer's retirement |
| All of the following would NOT be considered eligible expenses under an ICHIA policy EXCEPT | AIDS treatment. |
| The Waiver of Cost of Insurance rider is found in what type of insurance | Universal Life |
| What authority is responsible for examining the operations of insurance companies in this state | The Commissioner. |
| If the Commissioner issues a cease and desist order but the producer continues the same activities the producer can face a fine up to which of the following amounts per violation | $50000. |
| Which of the following would NOT be eligible for a health insurance policy from the Indiana Comprehensive Health Insurance Association | A person who applied for Medicaid 90 days prior to applying for the Association policy. |
| A long-term care shopper's guide must be presented at what point | Prior to the time of application |
| An insured was involved in an accident and could not perform her current job for 3 years If the insured could reasonably perform another job similar skills after 1 month for how long would she be receiving benefits under an OWN OCCUPATION disability plan | 2 years. |
| An employee is insured under her employer's group life plan If she terminates her group coverage which of the following statements is INCORRECT | The insured may choose to convert to term or permanent individual coverage - When group coverage is converted to an individual policy the insurer will determine the type of coverage usually permanent insurance. |
| The Probationary Period is | A specified period of time that a person joining a group has to wait before becoming eligible for coverage. |
| Annuity contracts grow tax deferred That means that | There is no current income taxation upon the growth in the annuity. |
| Which statement regarding insurable risks is NOT correct | , Insureds cannot be randomly selected, Granting insurance must not be mandatory ---selecting insureds randomly will help the insurer to have a fair proportion of good risks to poor risks. |
| A hospital indemnity policy will pay, | A benefit for each day the insured is in a hospital |
| A corporation is the owner and beneficiary of the key person life policy If the corporation collects the policy benefit then | The benefit is received tax free |
| Which of the following riders would NOT cause the Death Benefit to increase | Payor Benefit Rider |
| Every company possessing a certificate of authority must notify the Commissioner of the election or appointment of every new director or principal officer within | 30 days |
| What is a standard time limit for a pre-existing condition period in an ICHIA policy | 3 months. |
| Under the Fair Credit Reporting Act if the consumer challenges the correctness of the information contained in his/her report the reporting agency must | Respond to the consumer's complaint |
| All of the following apply to defined benefit plans EXCEPT | Contributions are tied to the company profits |
| Which of the following is TRUE regarding a policy issued to a labor union insuring members of the organization for the benefit of persons other than the union or organization | The members eligible for insurance under the policy must be all the members of the union or organization |
| In the transaction of insurance which of the following is considered to be representing the client | The broker |
| When a producer is trying to reinstate a lapsed license what kind of fees would he be required to pay, | The producer will have to pay a penalty 3 times the unpaid renewal fees. |
| In a defined contribution plan | The contribution is known and the benefit is unknown |
| n case of a loss the indemnity provision in insurance policies, | Restores an insured person to the same financial state as before the loss. |
| What type of annuity can be purchased with a single premium and provides benefit payments immediately | Immediate. |
| The insurer may suspect that a moral hazard exists if the policyholder | Is not honest about his health on an application for insurance. |
| All of the following would be different between qualified and nonqualified retirement plans EXCEPT | Taxation on accumulation---Taxation on accumulation is deferred in both types of plans |
| Which of the following is NOT true regarding a business entity, Business entity does not need an insurance license- | A business entity acting as an insurance producer is required to obtain an insurance producer license- The Commissioner will approve a business entity’s license if the required fees are paid and the business entity has designated an individual producer |
| An association could buy group insurance for its members if it meets all of the following requirements EXCEPT, | Has at least 50 members --Must have 100 members. |
| Under the Accidental Death and Dismemberment (AD&D) coverage what type of benefit will be paid to the beneficiary in the event of the insured’s accidental death, | Principal sum. |
| What required provision protects against unintentional lapse of the policy, | Grace period. |
| What is a major problem with naming a trust as the beneficiary of a life insurance policy, | They are expensive to administer. |
| Which of the following is TRUE regarding variable annuities | The annuitant assumes the risks on investment. |
| Under the Replacement Regulation Rule 16.1 which of the following statements would best describe the producer’s duties, | The producer must conduct a reasonable investigation to determine if a replacement will take place. |
| Who is responsible for making sure that agents are properly trained in the use of the suitability standards for LTC policies, | Insurer. |
| n franchise insurance premiums are usually, | Lower than individual policies but higher than group policies. |
| Which of the following is NOT an example of controlled business, | A licensee writes policies solely for friends and their families. |
| An individual applies for a life policy Two years ago he suffered a head injury from an accident He has hospitalized for drug abuse but does not remember this The insurer issues the policy and learns of his history 1 year later What will probably happen | The policy will not be affected |
| The classification Small Employer means any person actively engaged in a business that on at least 50% of its working days during the preceding year employed, | At least 2 and not more than 50 persons |
| Equity Indexed Annuities, | Equity Indexed Annuities invest on an aggressive basis in order to yield higher returns Equity Indexed Annuities have guaranteed minimum interest rates less risky than variable annuities and earn higher interest rates than fixed annuities |
| An insured has an Accidental Death & Dismemberment policy with a principal value of $50,000 He loses sight in both eyes in a hunting accident How much will he receive | $50,000 |
| Installments for a fixed account | Installments for a fixed amount option has no life contingencies A specific amount of benefits will be paid until funds are exhausted whether or not the annuitant is living. |
| group Medical and Dental insurance | any premium paid by the employer is deductible as a business expense However premiums provided by the employee are only deductible if certain conditions are met Group medical and dental expense benefits are received income tax free by the employee. |
| Under which circumstance can a producer receive a commission and a consultant’s fee for the same transaction | A producer makes a disclosure about the compensation arrangements prior to the transaction. |
| typical maximum benefit offered by major medical plans | 1 Million |
| In forming an insurance contract when does acceptance usually occur | When an insurer's underwriter approves coverage. |
| The policy owner pays for her life insurance annually Until now she has collected a nontaxable dividend check each year She has decided that she would rather use the dividends to help pay for her next premium What option would allow her to do this | Reduction of premium |
| Under workers compensation which of the following benefits are NOT included | Legal Benefits |
| An insured is involved in a car accident. 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 | ,None |
| What type of insurance would be used for a Return of Premium rider | Increasing Term |
| A banker is ready to close on a customer's loan The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan This is an example of, | Coercion. |
| In a group prescription drug plan the insured typically pays what amount of the drug cost | Copayment. |
| Which of the following statements about occupational vs. nonoccupational coverage is TRUE | Disability insurance can be written as occupational or nonoccupational. |
| An agent selling variable annuities must be registered with | FINRA |
| Contracts that are prepared by one party and submitted to the other party on a "take it or leave it" basis are classified as | Contracts of adhesion |
| ll of the following are requirements for life insurance illustrations EXCEPT | They must be part of the contract. Not altered by an agent and must clearly state that it is not part of the contract It is legal to list nonguaranteed values in the contract but they must be specifically labeled as projected not guaranteed values. |
| The Affordable Care Act requires all US citizens and legal residents to have qualifying health care coverage This is known as, | The individual mandate |
| Which of the following would be deducted from the death benefit paid to a beneficiary if a partial accelerated death benefit had been paid while the insured was still alive | Amount paid with the accelerated benefit plus the earnings lost by the insurance company in interest income from the accelerated benefit |
| Another name for a substandard risk classification is | Rated |
| MEWAs | MEWAs are groups of at least 2 employers who pool their risks to self-insure MEWAs can be sponsored by an insurance company an independent administrator or another group established to provide group benefits for participants. |
| A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely This is a personal use of life insurance known as | Survivor protection |
| Policy Loans | Money borrowed from the cash value is not taxable Policy loans can be repaid at any time including surrender and death An insurer can charge interest on outstanding policy loans |
| Every insurer marketing Long-Term Care insurance must establish marketing procedures to ensure all of the following EXCEPT | LTC policies are marketed effectively to prospective insureds--- Additionally companies must have marketing guidelines to insure that excessive insurance is not sold or issued. |
| The Waiver of Cost of Insurance rider is found in what type of insurance | Universal Life |
| When a life insurance policy stipulates that the beneficiary will receive payments in specified installments or for a specified number of years what provision prevents the beneficiary from changing or borrowing from the planned installments | Spendthrift provision |
| An insured pays a monthly premium of $100 for her health insurance What would be the duration of the grace period under her policy | 10 days |
| Premium payments for personally-owned disability income policies are | Not tax deductible |
| Rule 38.1 is also known as | Group Coordination of Benefits |
| A married couple's retirement annuity pays them $250 per month The husband dies and his wife continues to receive $125.50 per month for as long as she lives When the wife dies payments stop | Joint and survivor |
| In Indiana controlled business is | Limited to 25% of a producer's annual commission income |
| Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income? | Depreciation period |
| Accumulation at Interest option | The interest credited under this option is TAXABLE, whether or not the policy owner receives it. |
| Under the Affordable Care Act, a special enrollment period allows an individual to enroll in a qualified health plan within how many days of a qualifying event? | 60 days |
| In Indiana all of the following may act as insurance consultants EXCEPT | An individual who holds both the producer’s and consultant’s license. |
| Which of the following is NOT covered under a "core" policy Plan A in Medigap insurance | The Medicare Part A deductible. |
| An individual applied for an insurance policy and paid the initial premium The insurer issued a conditional receipt Five days later the applicant had to submit to a medical exam If the policy is issued what would be the policy's effective date | Medical Exam |
| What type of benefit helps to pay for accidental injuries that are not severe enough to qualify as disabilities | Medical Reimbursement Benefit. |
| Which of the following will be included in a policy summary | Premium amounts and surrender values |
| Under SIMPLE plans participating employees may defer up to a specified amount each year and the employer then makes a matching contribution up to an amount equal to what percent of the employee’s annual wages | 3% |
| What is the elimination period for Social Security disability benefits | 5 months |
| Viatical settlement regulations in Indiana | 30 Day look period |
| An insurance producer has not been appointed to an insurance company Who is the producer considered to represent | Client |
| An insured has a Level Term Life Insurance policy that is guaranteed renewable and also includes a re-entry provision The re-entry provision would allow the insured to renew the policy and | Receive a Lower Premium with proof of Insurability. |
| Under an individual disability policy the MINIMUM schedule of time in which claim payments must be made to an insured is | Monthly |
| Universal Policy Provisions | Any premium amounts not required to pay for mortality and expenses create the cash account. |
| What is the benefit of choosing extended term as a nonforfeiture option | It has the highest amount of insurance protection. |
| A participating insurance policy may do which of the following | Pay dividends to the policyowner |
| Living Rider | provides for the payment of part of the policy death benefit if the insured is diagnosed with a terminal illness that will result in death within 2 years |
| An insured owes his insurer a premium payment Since then he incurs medical expenses The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference What is the name of this provision | Unpaid Premium |
| The factor added to the net premium to cover the costs of the insurer in obtaining and maintaining the business is called | Loading or Expenses |
| Qualifications for Cobra | Divorce voluntary termination of employment an employee's change from full time to part time or the death of the employee |
| Which of the following will be EXEMPT from continuing education requirements | A limited lines credit producer. |
| Noncontributory group plan | The employer receives a master policy and employees receive a certificate of insurance. |
| If a member of a Blue Cross/Blue Shield (BC/BS) obtains medical treatment from a non-participating provider the insurer will pay | The same amount as a Participating Provider |
| Which of the following methods to designate a beneficiary literally means "by the head | Per Capita |
| Examination of Companies | Under certain circumstances the Commissioner may waive examination of foreign and alien companies however all domestic companies are subject to examination at any time (but at least every 5 years). |
| An insured has a primary group health plan and an excess plan each covering losses up to $10,000 The insured suffered a loss of $15,000 Disregarding any copayments or deductibles how much will the excess plan pay? | $5000 |
| What type of Annuity will allow and insurer to invest and guarantee how much a return will be once the policy is over | Fixed Annuity |
| type of policy that is less expensive than a variable policy- also offers the benefit of higher security against a decline in stock market, allows insured the security with a fixed universal policy but has potential of growth like a variable policy. | Equity Indexed Universal Policy |
| Interest Sensitive whole life policy is appropriate for which group of individuals | people needing permanent insurance with a fixed premium (premium won't change even if health does). |
| Insurance policy with a key feature that allows an insured to take premium dollars and invest it in multiple types of investment options (most expensive cash life Policy) | Variable Life Insurance |
| The cash value from investments in Universal grows at what rate | a variable rate that is adjusted monthly(Due to market changes). |
| Customer can use the interest gained on a policy to pay premium is they have this type of policy | Universal life. |
| Adjustable policies differ from others how | Do not require additional purchase of coverage or cancellation when life event change. |
| Newly married 33 year old and doesn't know what future holds What type of policy would be good for him, | Adjustable life allows flexibility to change coverage during life of policy he could amend premiums coverage amts and length of policy |
| what type of policy would an insured obtain if he or she doesn't want to continue making premiums payments after a set # of years | Limited pay life insurance either 10 15 or 20 years Coverage continues till death of insured. |
| What happens if the insured no longer wants to make premiums on a traditional whole life policy and asks carrier to cancel it | The insured would collect part of the premium already paid to carrier- Traditional policies contain cash surrender which allows cancellation. |
| Traditional whole life policies are a type of insurance policy that will provide coverage under what circumstance | It is for the entire life of the insured |
| Which of the following statements concerning buy-sell agreements is true? | Buy-sell agreements are normally funded with a life insurance policy. A buy-sell agreement is simply a contract that establishes what will be done with a business in the event that an owner dies. policy. |
| The authority granted to an agent through the agent's contract is referred to as | Express Authority. |
| What is the name of the insured who enters into a viatical settlement? | Viator |
| Which type of life insurance policy allows the policyowner to pay more or less than the planned premium? | Universal Life |
| Which of the following is TRUE regarding a policy issued to a labor union insuring members of the organization for the benefit of persons other than the union or organization? | must be all the members of the union premiums must be paid either from funds of the union, or contributed by members . insurer may exclude or limit the coverage. |
| An insured is covered by a high-deductible health plan and makes regular contributions to this HSA. How are those contributions treated in regards to taxation? | The contributions are tax deductible |
| An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. They plan on raising them due to financial strain? | Fraud |
| What documentation grants express authority to an agent? | Agent's contract with the principal |
| All other factors being equal, the least expensive first-year premium payment is found in | Annually Renewable Term |
| What is the purpose of a fixed-period settlement option? | To provide a guaranteed income for a certain amount of time |
| Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage? | Health Maintenance Organization plan |
| A small hardware store owner is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability? | Business overhead expense policy |
| An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT? | The insured may choose to convert to term or permanent individual coverage. |
| Insurance producers who willfully violate the Indiana Insurance Code are committing a Class A misdemeanor. What is the maximum punishment they may be subjected to? | Up to 365 days in jail |
| ABC insurance company receives an incomplete application and issues the policy anyway. Six months later ABC realizes the missing information. What term is used that prevents ABC from forcing the policyowner to answer further questions? | Estoppel |
| When a replacement is involved, a replacing insurance company is responsible for all of the following EXCEPT | Provide a copy of the Important Notice Regarding Replacement of Life Insurance to the applicant. |
| An insured becomes disabled at age 22 and can no longer work. She meets the definition of total disability under Social Security. What other requirement must the insured have met to receive Social Security disability benefits? | Have accumulated 6 work credits in the past 3 years |
| If an insurer becomes insolvent, which of the following would pay benefits to policyholders? | The Guaranty Association |
| Which of the following is INCORRECT concerning taxation of disability income benefits? | If paid by the individual, the premiums are tax deductible |
| 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? | It will continue because it is owned by Sue, not her employer |
| Which of the following is an example of a peril covered in an accident and health insurance policy? | Sickness |
| An expired license can be reinstated within 12 months without the requirement of an examination if | The producer met the continuing education requirements before license expiration. |
| Maximum benefits for a major medical plan are usually lifetime | Maximums. |
| During a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. This describes | Misrepresentation |
| If a death benefit is not paid out in a timely manner, the interest begins to accrue | At the same rate as the policy loan |
| What is the goal of the HMO? | Early detection through regular checkups |
| A person buys an individual long-term care policy and is not satisfied with the provisions. Within how many days will the insured be able to return the policy for a full premium refund? | 30 days |
| Which of the following statements is true regarding the cash value in a Universal life policy? | The insurer credits the cash value in the policy with a current interest rate. |
| In a defined contribution plan, | The contribution is known and the benefit is unknown. |
| After the elimination period, a totally disabled insured qualified and started receiving benefits from disability income policy that has a waiver of premium rider. What will happen to the premiums paid into the policy during the elimination period? | Premiums will be refunded |
| Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain | A statement that is sufficiently clear to identify the insured and the nature of the claim. |
| If a consumer requests additional information concerning an Investigative Consumer Report, how long does the insurer or reporting agency have to comply? | 5 days |
| 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? | It is used to lower premiums |
| If an annuitant dies before annuitization occurs, what will the beneficiary receive? | Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount |
| Which of the following statements about the reinstatement provision is true? | It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated. |
| In insurance policies, contract ambiguities are automatically ruled in the favor of the insured. What privilege does the insurer have in order to balance this? | The right to determine the wording of a policy |
| All of the following entities regulate variable life policies EXCEPT | The Guaranty Association. |
| If the insured is several days late in filing proof of loss form, the claim cannot be denied if the insured can show good cause. | An insured must notify the insurer of a claim on forms prescribed by the insurer |
| How much time does the insurer have to pay the death benefit to the beneficiary of a life insurance policy after the receipt of proof of death? | 2 months |
| 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? | $3,000 If $100,000 of life insurance proceeds were used in a settlement option paying $13,000 per year for 10 years, $10,000 per year would be income tax free (as principal) and $3,000 per year would be income taxable (as interest). |
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mick1121
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