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Insurance1
Life/Health Insurance
| Question | Answer |
|---|---|
| An insurance company incorporated under the laws of the State of Oklahoma would be considered a | Domestic insurer |
| If a licensed insurance producer dies, which of the following would be able to receive a temporary license? | The surviving spouse |
| What is not a risk management technique? | ascertain the risk |
| What is NOT true regarding insurance | insurance is a device for handling speculative risk |
| Who does the insurance producer represent under agency law? | The principal |
| Risk is defined as | a chance of loss |
| Insurance is considered what type of risk management technique? | Transfer |
| A producer has a responsibility to act in the best interest of the insured. This responsibility is known as | Fiduciary obligation |
| What is not true regarding the responsibilities of a producer to the insurer under agency law? | A producer receives unlimited authority from the insurer. |
| What is not an element of an insurable risk? | Loss must be intentional |
| Policy replacement laws would govern? | replacing a whole life policy with a different company |
| True statement regarding a producer selling insurance for a fraternal insurer? | to receive a commission the producer must be licensed and have an insurer appointment |
| This is not true of "speculative risk" | Insurance can be written on speculative risk |
| This is true of "speculative risk" | Gambling is associated with speculative risk, speculative risk has a possibility for gain, speculative risk has possibility for loss. |
| What are 3 sources of regulation of the insurance business? | State regulation, Federal regulation & Unilateral practice |
| The life and healthy guaranty association would cover policies issued by which of the following types of insurers? | Alien Insurer |
| Which policy would be subject to the "Policy Replacement Law?" | Allowing a whole life policy to lapse to purchase another whole life policy. |
| BlueCross/BlueShield is considered what type of insurer? | Medical service org. |
| Three responsibilities include? | Delivery the policy, explaining the policy provisions & collecting the initial premium for the policy. |
| What is not a producer's responsibility? | Changing provisions in the policy. |
| What is false about a stock insurance company? | Policyowners have voting rights. |
| Pure risks are the subject of insurance, but not all pure risks are insurable. Which of the following would make a risk uninsurable? | A nuclear or war catastrophic loss exposure exists. |
| When must an "insurable interest" exist in life insurance? | At the time the application is completed. |
| What is true regarding mortality tables? | Mortality tables predict the probability of losses based on the number of deaths in a given year |
| The law of large numbers states that ? | The larger the number of units considered the more predictable are the losses. |
| Insurable risks must involve? | the possibility of loss only |
| An insurance company that is owned by the policyowners who receive the company's profits in the form of dividends is a? | Mutual insurer |
| A stock insurance company is owned by? | the shareholders |
| What is not a responsibility the producer has to his insured? | To invest insurer's premium |
| An insurer licensed to sell insurance in Oklahoma is referred to as? | An admitted insurer |
| Under the OKlahoma Insurance Code, a temporary producer licensee can be? | Issued to the representative of a deceased or disabled producer for a period of 180 days. |
| Giving something of value as an illegal inducement for someone to purchase insurance is known as? | Rebating |
| The illegal act of replacing an insurance policy through misrepresentation of the benefits and disadvantages of an insurance policy is called? | twisting |
| In the case of death or disability of a licensed insurance producer, a temporary license may be issued to another person for an initial period of up to? | 180 days - 6 months |
| A notice of hearing involving a producer's misconduct must be given at least? | 5 days in advance |
| Not True regarding the Oklahoma Life and Health Insurance Guaranty Association | Is an association of domestic insurers only that promote the insurance industry. |
| Oklahoma Life and Health Insurance Guaranty Association | Insures up to $300,000 total life insurance death benefits, insures up to $100,000 total cash value benefits, & Requires that all authorized insurers in the State be members of the assoc. |
| If the Insurance Department suspends a producer's license, all of the following would be notified EXCEPT? | The producer's client |
| The Oklahoma Insurance Guaranty Association was created to protect? | Policyowners and claimants when an admitted insurer becomes insolvent |
| The illegal practice of a producer making derogatory statements or distributing maliciously critical info against anyone in the insurance business is called? | Defamation |
| An Oklahoma insurance producer is required to keep business records and client file info for a minimum period of? | 3 Years |
| The Oklahoma Insurance Commissioner is? | elected to a 4 year term |
| A producer who wishes to appeal an order of the Oklahoma Insurance Department may file a petition with the state judicial system within? | 30 days |
| The maximum obligation of the Oklahoma Life & Health Insurance Guaranty Association for all life insurance death benefits applicable to any one life is? | $300,000. |
| Misrepresenting a life insurance policy for the purpose of inducing a policyowner to lapse, forfeit, or surrender an existing life insurance policy and replace it is called? | Twisting |
| After conducting an examination of an insurer, the Oklahoma Insurance Department will provide a written examination report to the insurer within? | 30 Days |
| Responsibility of the Oklahoma Insurance Department is to? | Approve Rates |
| The funds provided by the Oklahoma Life & Health Insurance Guaranty Association are? | assessed to the member insurers |
| The illegal practice of making maliciously critical or derogatory statments about an insurer with the intent of causing injury is known as? | Defamation |
| The illegal practice of a producer making incomplete comparisons or misrepresenting the terms of an insurance policy for the purpose of inducing someone to change or replace an existing policy is called? | Twisting |
| The illegal practice of a producer returning premiums or providing special favors to a prospective insurance buyer as an inducement to purchase nsurance is called? | Rebating |
| The replacing insurer would require all of the following except? | guarantee a 10 day free look |
| Under the Oklahoma Insurance Code, a producer is a representative of which of the following? | Insurer |
| The maximum obligation of the Oklahoma Life & Health Insurance Guaranty Association for all cash surrender values under life insurance policies covering any one life is | $100,000 |
| A legally acceptable attempt by the existing insurance company to retain the business after replacement form has been received is called? | conservation |
| An illegal replacement of an existing policy is called? | Twisting |
| The major difference between Whole Life Insurance and Universal Life Insurance is? | Whole Life premiums are fixed and Universal Life are flexible |
| Which life insurance policy places the risk of investment performance upon the insured? | Variable Life |
| True statement regarding Universal Life | Policy consists of annually renewable term insurance and cash account |
| The type of life insurance policy is where the cash values are invested in securities or equity products is? | Variable Life |
| Regarding a Universal Life insurance policy, which is not flexible? | taxes |
| Which is the following non-forfeiture options has the highest death benefit? | extended term |
| What is true about variable life? | The return is not guaranteed |
| All of the following are true regarding the withdrawal of cash value deposits from a Universal Life Insurance policy, EXCEPT? | Withdrawal of deposits are determined by the beneficiary. |
| Regarding a Universal Life Policy, the rate of cash value increase is? | guaranteed at a minimum rate but may earn excess interest above the guarantee |
| The policy owner would know the actual costs of the policy including mortality, interest and administration on all of the following policies, except? | Whole Life - (Universal, variable, variable universal life - you will) |
| The accelerated death benefit would be available in ? | If the insured needs cash to pay for a medical expenses due to a terminal illness. |
| NOT true regarding the accelerated death benefit | A portion of the cash value is advanced in a lump sum. |
| The benefit in a life insurance policy that allows for the payment of a portion of the death benefit during the lifetime of the insured is? | Accelerated death benefits. |
| Regarding the "reinstatement provision" all of the following are true Except? | premiums will be based on the insure's attained age. |
| How is the interest rate on a whole life policy loan determined? | by the amount specified in the policy. |
| When a revocable beneficiary is used? | It can be changed at any time by the policyowner |
| The owner of a life insurance policy has the right to transfer all rights to another person, this policy provision is the | assignment clause |
| What will the beneficiary receive if the insured commits suicide w/in the first two years of the policy? | The premiums paiAd on the policy. |
| Automatic premium loans are? | available for permanent policies. |
| If the Commissioner has reason to believe that a person or insurer has violated the Insurance Code, the Commissioner may set a hearing. The notice of the hearing must be gven how many days in advance? | 10 days in advance |
| Any agent who fails to comply with the continuing education requirements may, after notice and hearing be subject to a fine of up to | $500.00 |
| A disclosure statement is required at various times during the solicitation and effectuation of an accelerated benefit rider. At what point in time is a revised disclosure statement required? | At the time of payment of an accelerated benefit. |
| The replacing insurer must maintain copies of the notice, statement, and notification to the replaced insurer for at least? | 3 years. |
| A factor that would be an underwriting consideration for a small employer carrier would be? | the percentage of participation by the employees |
| Each insurer must maintain at its principal office a complete file containing every printed, published, or prepared advertisement of its policies for a period of at least? | 4 years |
| COBRA applies to employers with at least | 20 employees |
| NOT true regarding Equity Indexed Annuities? | They earn lower interest rates than fixed annuities. |
| 3 TRUE statements regarding Equity Indexed Annuities- | They Insurance company keeps a percentage of the returns, they have guaranteed minimum interest rates, they are less risky than variable annuities. |
| Alden is involved in a small plane accident that renders him permanently deaf, although he does not sustain any other major injuries. Alden is still able to perform his current job. To what extent will he receive Presumptive Disability benefts? | FULL BENEFITS |
| Upon policy delivery, the agent must make sure that all of the following are obtained from the applicant EXCEPT? | Signed waiver of premium |
| An individual has just borrowed $10,000 from his bank on a 5-year note. The note is due in installments. What type of life insurance policy would be best suited to this situation? | Decreasing Term |
| If both the insured and the primary beneficiary died in the same car acccident and it is impossible to determine who died first, which of the following will most likely receive the death benefit? | The insured's secondary beneficiary |
| 2 types of assignments? | Absolute and collateral |
| Benefit periods for individual short-term disabilty policies will usually continue from? | 6 months to 2 years |
| NOT true regarding the convertibility option under a term life insurance policy. | Upon conversion, the death benefit of the permanent policy will be reduced by 50%. |
| The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract? | Conditional Contract |
| NOT True regarding the guaranteed insurability rider. | This rider is available to all insured. |
| All of the following are true regarding the guaranteed insurability rider | The insured may purchase additional insurance up to the amount specified in the base policy. ** It allows the insured to purchase additional amounts of insurance w/out proving insurability only at a specified dates or events ***purchase attained age |
| Policy Loans Not TRUE | Policy loan can be made on policies that do not accumulate cash value |
| Which provision concerns the insured duty to provide the insurer with reasonable notice in the event of a loss? | Notice of Claim |
| How long must an insurer retain an advertisement for its long-term care policies | 3 years |
| Group disability income insurance premiums paid by the employer are? | Deductible by the employer as an ordinary business expense |
| Inspection reports may be obtained by an insurance company from? | An independent investigating firm |
| Which renewability provision are you most likely to see on a travel accident policy? | Period of time |
| A 27-year old professional has limited income and can only budget $15 per month for life insurance. Which life insurance policy would provide the largest face amount for that amount of premium? | Term insurance |
| What is not a benefit of a suvivorship life policy? | Protection from the policyowner's creditors |
| Which rider can be included in a life insurance policy w/out additional premium due? | Automatic premium loan |
| MEWA"S are? | Are groups of at least 2 employers who pool their risks to self-insure. Can be sponsored by insurance companies and MEWA employers retain full responsibility for any unpaid claims |
| Death benefit in a variable whole life policy- | The death benefit may increase over the life of the policy. The death benefit may not decrease below the initial face amount The initial face amout is guaranteed |
| Which of the following is NOT true regarding uniform mandatory provisions concerning claims? | An insured must notify the insurer of a claim on forms prescribed by the insurer. |
| With respect to a variable annunity, when is the number of annunity units determined? | At the time of the initial payout. |
| What would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner? | Payment of Claims |
| Combination plans are comprised of two types of plan features | Basic and comprehensive |
| A policy which covers medical costs related to a specific condition is called? | A Dread Disease Policy |
| What health insurance provision describes the insured's right to cancel coverage? | Renewal Provision |
| A variable annuity has a payout that is | Contingent upon the profitablity of the investment portfolio |
| Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive? | Nothing; the payments will cease. |
| Which policy would have an IRS required corridor or gap between the cash value and the death benefit? | Universal Life-Option A |
| 3 Features of a guaranteed renewable provision | The insured has a unilateral right to renew the policy for the life of the contract, coverage is not renewable beyond the insureds age 65 & the insured's benefits cannot be reduced. |
| What is not a feature of a guaranteed renewable provision? | The insurer can increase the policy premium on an individual basis. |
| When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy? | It is reduced to the amount of what the cash value would buy as a single premium. |
| What is considered an advantage of owning a term insurance? | It provides the highest amount of coverage for a temporary period of time. |
| What are the members of the MIB required to report? | Adverse medical info about individuals |
| What is not a feature of a noncancellable policy? | The insurer may terminate the contract only at renewal for certain conditions. |
| What is true about nonforfeiture values? | They are required by state law to be included in the policy. |
| What is NOT TRUE regarding the death benefit in a variable whole life policy | The death benefit does not change |
| A variable annuity has a payout that is? | contingent upon the profitability of the investment portfolio |
| The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as? | incontestability clause |
| What is the typical deductible for basic surgical expense insurance? | 0 |
| Another term for "no deductible" | "first dollar basis" |
| If the insured chose the reduced paid-up insurance nonforfeiture option, then? | The amount purchased will be as much as the cash value will purchase at the insured's current age |
| If a group policy terminates, the member will be entitled to have an individual policy issued as long as they are insured at the date of termination and have been insured under the plan for at least? | 5 years |
| The replacing insurer must maintain copies of the notice, statement and notification to the replaced insurer for at least? | 3 years |
| If a consumer requests additional info, how many days for compliance? | 5 days |
| Who receives dividends from a stock company? | Stockholders |
| what is the advantage of reinstating a policy instead of applying for a new one? | Original age is used |
| What provisions may be included in a long-term care policy issued to an individual? | noncancellable and guaranteed renewable |
| Equity indexed annuities | seek higher returns |
| A universal life insurance policy is best described as? | An annually renewable policy with a cash value account. |
| under a pure life annuity, an income is payable by the company- | Only for the life of an annuitant |
| A variable whole life policy does not guarantee the? | Cash Value |
| Which component must increase in the increasing term insurance? | Death benefit |
| What is a similarity between equity indexed annuities and fixed annuities? | They have a guaranteed minimum interest rate |
| The cash value under a MEC accumulates | On a tax-deferred basis |
| Which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting and incurring profits and losses? | Stock |
| What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? | 2,500. |
| A Universal Life Insurance policy is best described as | An Annually Renewable Term policy with a cash value account |
| What is NOT true about beneficiary designations? | The beneficiary must have insurable interest in the insured. |
| Which of the following best describes the difference between PURE LIFE and LIFE WITH GUARANTEED MINIMUM settlement options? | Life with Guaranteed Minimum will pay the remaining principal to the beneficiary. |
| What is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly Benefit rider? | 1 year |
| What characteristic does NOT describe managed care? | Unlimited access to providers |
| Your customer doesn't mind paying a higher premium as long as he gets a life insurance product that would allow for a faster growth of the cash value. What kind of policy would you recommend? | An endowment policy. |
| Which of the following statements about a suicide clause in a life insurance policy is true? | Suicide is excluded for a specific period of years and covered thereafter. |
| If an annuitant selects the straight life annuity settlement option, in order to receive all of the money out of the contract, it would be necessary to ? | Live at least to his life expectancy. |
| NOT true regarding insurance policy loans | Policy loan can be made on policies that do not accumulate cash value. |
| Ann is funding an annuity that will supplement her retirement. B/c she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poors 500 Index. | She would likely purchase an Equity Indexed Annuity |
| Under a pure life annuity, an income is payable by the company | Only for the life of the annuitant |
| An insured receives an annual life insurance dividend check. What term best describes this arrangement? | Cash Option |
| A single mother wants to make sure that if she becomes disabled, she and her child would be protected financially. WHich of the following insurance plans would best suit her needs? | Total Disability plan |
| Universal Life Option B includes the annual increase in cash value; the death benefit under this option | Gradually increases each year by the amount that the cash value increases. |
| Under which of the following annuities is the exact monthly benefit not known in advance? | Variable annuity |
| When must insurable interest exist in a life insurance policy? | At the time of application |
| What is NOT true regarding the death benefit in a variable whole life policy? | The death benefit does not change |
| Medicare PartA services do NOT include which of the following? | Outpatient Hospital Treatment |
| An applicant is considered to be a high-risk, but not so much that the insurer wants to deny coverage. What is not true? | The insurer will issue a conditional coverage |
| Under which of the following types of receipts will the coverage begin immediately even if the applicant is later found uninsurable? | Unconditonal |
| The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the? | 1-year term option |
| Anyone who is willing to pay a premium | is not qualified for Medicare Part A |
| The cash value under a MEC accumulates | On a tax-deferred basis |
| What type of annuity promises to pay to a beneficiary, in a lump sum, the difference between the amount paid into the contract and the benefits received prior to the annuitants death? | Cash refund annuity |
| What is the main purpose of the total disability plan? | To protect individuals or families against the economic loss after a total disability of the wage earner. |
| WHich of the following would provide an underwriter with info concerning an applicants health history? | The MIB |
| Following hospitalization b/c of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days? | 20 |
| The paid-up addition option uses the dividend | To purchase a smaller amount of the same type of insurance as the original policy. |
| After the elimination period, a totally disabled insured qualified and started receiving benefits from his disability income policy that has a waiver of premium rider. What will most likely happen to the premiums paid during the EP? | Premiums will be refunded. |
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