| 1) | QUESTION ID 78: Tim was involved in a serious Car Accident that left him paralyzed and confined to a wheel chair. He works as an Administrative Assistant so his disability has not affected his ability to return to the same job. What type of his disability benefits would Tim receive? | |
| No benefits | ||
| Rehabilitation only | ||
| Presumptive Benefits | ||
| Loss of USE | ||
| Incorrect | 76% got this correct |
| 2) | QUESTION ID 67; Which Disability occupation definition has a more liberal definition, and therefore provides a better benefit for the insured? | |
| Hazardous occupation | ||
| Any occupation | ||
| Own occupation | ||
| Liberal occupation | ||
| Unanswered | 72% got this correct |
| 3) | QUESTION ID 24: Within how many months must a person be expected to die from a sickness in order to be classified as “terminally ill”? | |
| 3 | ||
| 24 | ||
| 6 | ||
| 12 | ||
| Unanswered | 81% got this correct |
| 4) | QUESTION ID 80: Disability Income Policies include certain conditions describing how the policy will respond. Which of the following conditions would NOT be required in order to qualify for benefits? | |
| Be in a Convalescent Center | ||
| Under a Physicians Care | ||
| Have income prior to the disability | ||
| Proof of disability | ||
| Unanswered | 62% got this correct |
| 5) | Jim has a Whole life policy with a face amount of $50,000 and a cash value of $10,000. If the policy lapses and goes into the automatic Non-Forfeiture option, Jim will receive: | |||
| A check in the amount of $10,000 from his insurance company | ||||
| A paid-up Whole life policy with a face amount of $50,000 | ||||
| A term policy with a face amount of $50,000 for a specified period of time | ||||
| Nothing, since the policy has lapsed | ||||
| FeedbackBy law, all cash value policy must contain Non-Forfeiture options or provisions, which are Cash, Reduced Paid-Up and Extended Term, which is the automatic option. After a policy lapses, the policy owner may select whichever option they want. If they don’t select an option with a certain period of time, the insurer must automatically give them the Extended Term option, where the cash value is used to buy a new term life policy for the same face amount as the prior policy for a specified period of time, which depends upon the insured’s age, the amount of cash value available and the face amount. | ||||
| Unanswered | 76% got this correct |
| 6) | QUESTION ID 1696: John is a Dentist he injured his hands while playing catch. Being unable to use his hands left him totally disabled for a year. Fortunately he had purchased a policy that would help pay his rent and other expenses. What type of policy did Dr. John buy? | |
| Business Overhead Expense Policy | ||
| Employers Liability | ||
| Short Term DI | ||
| Reimbursement Policy | ||
| Unanswered | 75% got this correct |
| 7) | QUESTION ID 1705: John owns a Corporation and his Company buys a disability policy on a Key Executive. The Corporation owns the policy, pays the premium and will receive the benefit if the Key Executive is disabled. How will the benefit be handled in relationship to taxation? | |
| The benefit received is tax-free | ||
| The amount is income to the Executive | ||
| The Taxes are paid. | ||
| Premiums are deductible | ||
| Unanswered | 78% got this correct |
| 8) | QUESTION ID 83: Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled? | |
| Disability Buy Sell | ||
| Proprietary Transfer | ||
| Ownership Transition | ||
| Transfer of Ownership | ||
| Unanswered | 90% got this correct |
| 9) | QUESTION ID 84: Which of the following is a payment system for Health Care where the provider is paid for each service given? | |
| Pre-paid visit basis | ||
| Lump sum payment | ||
| Fee for service | ||
| Premium payment | ||
| Unanswered | 83% got this correct |
| 10) | An applicant for Life insurance who has a history of driving too fast is: | |||
| A morale hazard | ||||
| Negligent | ||||
| A moral hazard | ||||
| A physical hazard | ||||
| FeedbackA hazard is defined as something that increases the risk. A morale hazard is presented by a careless or reckless person, such as one who drives too fast. A moral hazard is presented by a dishonest person, such as one who turns in a fraudulent claim. An example of a physical hazard would be smoking. A driver cannot be negligent unless they injure someone or damage someone’s property. | ||||
| Unanswered | 69% got this correct |
| 11) | QUESTIOIN ID 85: A Medical Insurance plan in which the Health Care provider is paid a regular fixed amount for providing care to the insurer and does not receive additional amounts of compensation dependent upon the procedure performed, is called? | |
| Reimbursement plan | ||
| Indemnity plan | ||
| Prepaid plan | ||
| Fee-for-Service plan | ||
| Unanswered | 85% got this correct |
| 12) | QUESTION ID 86: John’s physician submits claim information to his insurer before she actually performs a medical procedure on him. She is doing this in order to see if the procedure is covered under his insurance plan, and, if so, how much it will cover. This is an example of: | |
| Suspended treatment | ||
| Concurrent review | ||
| Claims-delayed treatment | ||
| Prospective review | ||
| Unanswered | 60% got this correct |
| 13) | When an annuitant dies before annuitizing the contract, his beneficiary will receive: | |||
| Nothing | ||||
| The face amount of the policy | ||||
| The premiums paid in | ||||
| The value of the account | ||||
| FeedbackWhen an annuitant dies during the accumulation period of an annuity, the beneficiary will receive the accumulated value of the account, which includes all premiums paid in by the annuitant plus any accumulated interest. Of course, the interest will be taxable to the beneficiary. | ||||
| Unanswered | 58% got this correct |
| 14) | QUESTION ID 508: Which rider waives the policy premium and pays a monthly income to the insured? | |
| Waiver of Cost of Insurance | ||
| Paid up Addition | ||
| Disability Income Benefit | ||
| Waiver of Premium | ||
| Unanswered | 92% got this correct |
| 15) | QUESTION ID 510: Within a specified number of days a policyholder may return a policy for a full refund, this is called? | |
| Temporary Assignment | ||
| Free Look | ||
| Grace Period | ||
| Reinstatement | ||
| Unanswered | 80% got this correct |
| 16) | QUESTION ID 550: HIPAA applies to groups of ____________ | |
| More than 2, less than 50 | ||
| 2 or more | ||
| 3 or more | ||
| 5 or less | ||
| Unanswered | 66% got this correct |
| 17) | All of the following are true regarding Decreasing Term life insurance EXCEPT: | |
| It is often used by financial institutions who write Credit Life for debtors | ||
| The face amount goes down over the term of the policy | ||
| The premium goes down as the coverage decreases | ||
| It is often used as Mortgage Protection coverage | ||
| Unanswered | 55% got this correct |
| 18) | QUESTION ID 25: Which of the following allows the policy holder to “dump” in additional funds to shorten the premium paying period? | |
| Indeterminate | ||
| Interest Sensitive | ||
| Limited Payment | ||
| Continuous Premium | ||
| Unanswered | 87% got this correct |
| 19) | QUESTION ID 484: An applicant for insurance misstates her age at the time her Life Insurance application is taken. This misstatement may result in: | |
| Recession of the policy. | ||
| Adjustment in the death benefit | ||
| No charge | ||
| Automatic lapse | ||
| Unanswered | 64% got this correct |
| 20) | A beneficiary received $200,000 in proceeds from a Life Insurance policy. He selected a 20 year fixed period payout at 5% interest and received annual payments of $12,500. How much of each payment will be excluded from tax: | |||
| None | ||||
| $2,500 | ||||
| $10,000 | ||||
| $12,500 | ||||
| FeedbackAlthough life insurance proceeds are not subject to tax, the interest is. To find the tax free amount, divided $200,000 by 20 years, so $10,000 a year is tax free. Any amount received in excess of that amount is interest and is taxable as ordinary income. | ||||
| Unanswered | 68% got this correct |
| 21) | QUESTION ID 556: The term maximum benefit refers to the upper limit of: | |
| The total lifetime benefits the insurer will pay | ||
| The benefits that cover a personal payment for any type of claim | ||
| Taxable income for benefits under the policy | ||
| What the covered person is expected to pay over a lifetime | ||
| Unanswered | 77% got this correct |
| 22) | QUESTION ID 507: Which of the following would reduce a policy owner’s next year’s premiums? | |
| One-year Term Dividend option | ||
| Accumulated at Interest Dividend option | ||
| Reduction of Premium Dividend option | ||
| Paid-up Addition Dividend option | ||
| Unanswered | 78% got this correct |
| 23) | QUESTION ID 3: A Variable Annuity has a payout that is: | |
| Guaranteed in the contract | ||
| Tied to an index like S&P 500 | ||
| Contingent upon the profitability of the investment portfolio | ||
| The same from one payment to the next | ||
| Unanswered | 86% got this correct |
| 24) | QUESTION ID 557: Tricare refers to a Health Care system exclusively designed for: | |
| Military personnel | ||
| The financially needy | ||
| Individuals over the age of 65 | ||
| Employees in organizations with fewer than 50 people | ||
| Unanswered | 75% got this correct |
| 25) | All of the following are true about Life Insurance provisions EXCEPT: | |||
| The reinstatement provision applies after a policy lapses for non-payment | ||||
| An absolute assignment is a change in the ownership of the policy | ||||
| A revocable beneficiary may be changed at any time | ||||
| Mutual insurers may pay dividends to stockholders | ||||
| FeedbackMutual insurers might pay dividends to policyholders, not stockholders. Mutuals are owned by their policyholders and do not issue stock. Instead, they issue ‘participating’ policies, where the policyholders might participate in the company profits in the form of dividends, which are never guaranteed. | ||||
| Unanswered | 57% got this correct |
| 26) | QUESTION ID 90: Leo is receiving Hospice Care. His insurer will pay for painkillers, but not for an operation to reduce the size of his tumor. What term best fits this arrangement? | |
| Limited Coverage | ||
| Cost-Containment | ||
| Claims Saving | ||
| Selective coverage | ||
| Unanswered | 93% got this correct |
| 27) | QUESTION ID 91: Which of the following must be provided by an HMO plan? | |
| Eye care | ||
| Dental Care | ||
| Long Term Care | ||
| Preventive Care | ||
| Unanswered | 66% got this correct |
| 28) | A client paid $20,000 in cash to buy a Single Premium Deferred Annuity, which after 10 years has grown to $35,000. If he takes a partial distribution of $15,000, how will it be taxed: | |||
| No tax is due since the amount withdrawn is less that his cost basis | ||||
| The entire distribution is taxable as ordinary income | ||||
| The entire distribution is taxable as capital gain | ||||
| The entire $35,000 is taxable since partial distributions are not allowed | ||||
| FeedbackOn annuity partial distributions, the first money out is the interest portion, which is this cased is $15,000, all of which is taxable as ordinary income. If the annuitant is under age 59 ½, a 10% IRS premature distribution penalty could also apply. | ||||
| Unanswered | 67% got this correct |
| 29) | QUESTION ID 13: If an annuitant dies before the annuitization occurs, what will the beneficiary receive? | |
| Cash value of the plan | ||
| Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount | ||
| Amount paid into the plan | ||
| Either the amount paid into the plan or the cash value of the plan, whichever is the lesser amount | ||
| Unanswered | 68% got this correct |
| 30) | QUESTION ID 19: What do annuity units represent? | |
| Market values | ||
| Guaranteed values | ||
| Cash value | ||
| Shares in an investment account and are invested in the stock market | ||
| Unanswered | 92% got this correct |
| 31) | QUESTION ID 1: A common purpose to purchase an annuity is to: | |
| Reciprocal exchange | ||
| Risk retention group | ||
| Provide future income security, and payments that do not fluctuate | ||
| Make tax reinvestments | ||
| Unanswered | 77% got this correct |
| 32) | A client paid $4,500 in premiums into a $50,000 Whole Life insurance policy. If he dies when his cash value is $5,000, how much will be taxable to the beneficiary: | |||
| None | ||||
| $ 5,000 | ||||
| $45,500 | ||||
| $50,000 | ||||
| FeedbackProceeds payable to a Life Insurance beneficiary in a lump sum are not taxable. | ||||
| Unanswered | 81% got this correct |
| 33) | QUESTION ID 25: _______ annuities are invested in securities, hopefully maintaining a constant purchasing power, as a protection against inflation. | |
| Separate | ||
| Variable | ||
| General | ||
| Guaranteed | ||
| Unanswered | 75% got this correct |
| 34) | On Health insurance, the actuarial table used by insurers to determine product benefits and pricing is known as the | |||
| Mortality table | ||||
| Medical information table | ||||
| Morbidity table | ||||
| Medical classification table | ||||
| FeedbackMorbidity tables are to Health insurance, as mortality tables are to Life insurance. Morbidity tables measure the frequency of illness, sickness and disease at each age, and the actual number of individuals who incurred an illness, sickness or disease at each age. Morbidity tables are based upon the Law of Large numbers. | ||||
| Unanswered | 90% got this correct |
| 35) | QUESTION ID 22: What is the penalty if a deferred annuity is surrendered prior to age fifty-nine and a half? | |
| 2% | ||
| 5% | ||
| 10% | ||
| 15% | ||
| Unanswered | 68% got this correct |
| 36) | QUESTION ID 90: Which of the following are groups of employers that pool their risks in order to self-insure? | |
| Multiple employer Welfare Arrangements | ||
| Multiple Employer Trusts | ||
| Labor Unions | ||
| Alumni groups | ||
| Unanswered | 89% got this correct |
| 37) | All of the following are underwriting risk classifications EXCEPT: | |||
| Standard | ||||
| Adverse | ||||
| Preferred | ||||
| Sub-standard | ||||
| FeedbackUnderwriters protect insurers by selecting business that will be profitable at the premium rate charged. A standard risk is presented by the average person with no health problem, dangerous hobby or occupation. A sub-standard risk presents more risk than average and will pay a higher premium. A preferred risk presents less risk than average and will receive a discount. If an applicant presents too much risk, the underwriter may surcharge (rate-up) the policy, add an exclusion or reject the applicant entirely. Most people are insurable as standard risks. | ||||
| Unanswered | 90% got this correct |
| 38) | An insurer domiciled in another country, but doing business in this state, is know as a(n) _____________ company: | |||
| International | ||||
| Foreign | ||||
| Off shore | ||||
| Alien | ||||
| FeedbackInsurers may be domestic, foreign or alien, depending upon where they are incorporated (domiciled). An alien insurer is domiciled in a foreign country. A foreign insurer is domiciled in another state. A domestic insurer is domiciled in this state. | ||||
| Unanswered | 66% got this correct |
| 39) | QUESTION ID 8: Equity Indexed Annuities: | |
| Invest conservatively | ||
| Are more risky than Variable Annuities | ||
| Are security instruments | ||
| Seek higher returns | ||
| Unanswered | 91% got this correct |
| 40) | QUESTION ID 93: In Group insurance, what is the policy called? | |
| Individual policy | ||
| Master policy | ||
| Certificate of Authority | ||
| Association | ||
| Unanswered | 78% got this correct |
| 41) | QUESTION ID 89: When employees are actively at work on the date coverage can be transferred to another insurance carrier, what happens to their coinsurance and deductibles? | |
| Coinsurance carries over, but deductibles are generally higher | ||
| They carry over from the old plan to the new plan | ||
| Deductibles carry over, but coinsurance is generally higher | ||
| They have to be re-evaluated | ||
| Unanswered | 84% got this correct |
| 42) | QUSETION ID 96: Which state has jurisdiction over a Group policy that covers individuals that reside in more than one state? | |
| The state that has the most coverage | ||
| The state in which the policy was delivered | ||
| The state in which the majority of individuals live | ||
| The employer has a choice as to which state has jurisdiction over the policy | ||
| Unanswered | 76% got this correct |
| 43) | Insurance contracts are considered to be ‘aleatory’, which means that they: | |||
| Are one sided (unilateral) | ||||
| Are based upon the Doctrine of Utmost Good Faith | ||||
| Are subject to the Doctrine of Adhesion | ||||
| Have an unequal exchange | ||||
| FeedbackWhile all of the above are true about insurance contracts, an ‘aleatory’ contract is one that has an unequal exchange due to its uncertain outcome. For example, your client buys medical expense insurance, but never has a claim, while another client buys a policy today and has a large claim tomorrow. The outcome depends on chance. Remember, consideration is defined as the exchange of value, and need not be equal. | ||||
| Unanswered | 79% got this correct |
| 44) | QUESTION ID 96: What type of information is not included in a Certificate of Insurance? | |
| The certificate tells what is covered in the policy | ||
| The certificate tells how long the coverage will last | ||
| The certificate will include the cost the company is paying for monthly premiums | ||
| The certificate tells how to file a claim | ||
| Unanswered | 73% got this correct |
| 45) | Medicare Part B covers all of the following EXCEPT: | |||
| Physicians services | ||||
| Clinical Laboratory services | ||||
| Home Health care | ||||
| Hospitalization | ||||
| FeedbackMedicare is part of Social Security and beneficiaries are eligible for enrollment in Part A Hospital Insurance at age 65 at no premium charge. However, Part B of Medicare is designed to cover Physicians and related services for an additional premium charge. | ||||
| Unanswered | 76% got this correct |
| 46) | On Disability Income insurance, the period of time between the onset of a disability and the time benefits start is known as the: | |||
| Waiting period | ||||
| Probationary period | ||||
| Underwriting period | ||||
| Enrollment period | ||||
| FeedbackDisability Income policies have a time deductible, instead of a dollar deductible. The period of time between the onset of a disability due to sickness or accident is the Waiting period, which is also known as the Elimination period, which is selected by the insured when they buy the policy. The longer it is, the lower the premium, and vice-versa. The probationary period limits coverage on new policies for pre-existing conditions. | ||||
| Unanswered | 86% got this correct |
| 47) | QUESTION ID 84: What is the purpose of the Coordination of Benefits Provision in Health Care? | |
| To insure that the insured receives all necessary treatment needed | ||
| To determine what is paid by primary and secondary insurance companies, in case of a claim | ||
| To allow the parent to choose which plan covers a dependent child | ||
| To protect a secondary insurance company from paying a claim | ||
| Unanswered | 88% got this correct |
| 48) | QUESTION ID 47: Which type of Dental Care includes fluoride treatments? | |
| Orthodontic | ||
| Preventive | ||
| Replacement | ||
| Restorative | ||
| Unanswered | 71% got this correct |
| 49) | QUESTION ID 534: Which letters identify the Medicare Supplement Benefit Plans? | |
| Letters A-K | ||
| Letters A-L | ||
| Letters A-J | ||
| Letters A-M | ||
| Unanswered | 91% got this correct |
| 50) | QUESTION ID 535: Which of the following are most often an elimination period regarding a Long Term Care policy? | |
| 10, 20, 30, or 40 days | ||
| 30, 60, 90, or 180 days | ||
| 5, 10, 15, or 20 days | ||
| 10, 15, 25, or 35 days | ||
| Unanswered | 71% got this correct |
| 51) | QUESTION ID 532: When must an insurance company present an outline of coverage to a person? | |
| At the time of application | ||
| Within 30 days of policy delivery | ||
| When the person inquires about a particular policy or at the time of application, depending on which occurs first | ||
| When the policy is delivered | ||
| Unanswered | 67% got this correct |
| 52) | The primary purposes of state insurance regulation include all of the following EXCEPT: | |||
| Determine insurer solvency | ||||
| Interpret policy provisions | ||||
| Rate regulation | ||||
| Prevent unfair discrimination | ||||
| FeedbackInsurance policies are legal contracts and their provisions are subject to interpretation by the courts, not the state Insurance Department. | ||||
| Unanswered | 86% got this correct |
| 53) | QUESTION ID 530: What type of care provides relief to a family care giver? | |
| Skilled Care | ||
| Home Health Care | ||
| Respite Care | ||
| Adult Day Care | ||
| Unanswered | 69% got this correct |
| 54) | QUESTION ID 517: Following hospitalization because of an accident, Bill was confined in a Skilled Nursing facility. Medicare will pay full benefits in this facility for how many days? | |
| 100 | ||
| 20 | ||
| 80 | ||
| 3 | ||
| Unanswered | 81% got this correct |
| 55) | QUESTION ID 100: Group Accidental Death and Dismemberment premiums are: | |
| Fully contributory | ||
| Partially deductible to the employer | ||
| Deductible to the employer as a business expense | ||
| Not deductible to the employer | ||
| Unanswered | 87% got this correct |
| 56) | Twelve months ago, a 39 year tourist broke his neck in a swimming pool accident while on vacation and suffered paralysis, from which he is not expected to recover. He may be eligible to receive disability income benefits from: | |||
| Medicare | ||||
| Long Term Care (LTC) | ||||
| Social Security | ||||
| Workers Compensation | ||||
| FeedbackAfter a 5 month waiting period, Social Security provides disability income benefits for those whose disability is expected to last at least 12 months or result in their death and are incapable of performing the duties of any occupation. Medicare covers medical expenses, not disability income. LTC covers custodial care in a nursing home. Workers Compensation only covers occupational, job-related injury or sickness. | ||||
| Unanswered | 71% got this correct |
| 57) | QUESTION ID 115: Which of the following determines whether insurance benefits are taxed? | |
| Contract provisions | ||
| Sub-Contract provisions | ||
| If the premiums were or were not taxed | ||
| State statutes | ||
| Unanswered | 66% got this correct |
| 58) | When reading his new Medical Expense policy, an insured discovers that he has no coverage for pre-existing sicknesses that reoccur during a specified period of time after his new policy was issued. He is reading the: | |||
| Waiting period | ||||
| Probationary period | ||||
| Elimination period | ||||
| Eligibility period | ||||
| FeedbackMost new Medical Expense policies contain a probationary period that states that there is no coverage if a pre-existing sickness that the insured was treated for during a specified time prior to the new policy’s effective date reoccurs within a specified time after the new policy was issued. Also known as the pre-existing condition clause, the probationary period protects the insurer against adverse selection. | ||||
| Unanswered | 75% got this correct |
| 59) | QUESTION ID 1: When an insured purchases insurance with the intention of incurring a loss and subsequently filing a claim, it is called a: | |
| Legal hazard | ||
| Morale hazard | ||
| Moral hazard | ||
| Indemnity | ||
| Unanswered | 61% got this correct |
| 60) | QUESTION ID 97: Benefits received from a Business Overhead expense policy: | |
| Replace a disabled employer’s salary | ||
| Are not taxable | ||
| Are taxable | ||
| Replace an employer’s pension | ||
| Unanswered | 69% got this correct |
| 61) | QUESTION ID 1719: “In an individual long-term care insurance plan, the insured is able to deduct the premiums from taxes. What income taxation will be imposed on the benefits received?” | |
| No tax | ||
| Premium tax | ||
| All taxes | ||
| Income tax | ||
| Unanswered | 76% got this correct |
| 62) | QUESTION ID 266: If there is a material change in a Modified Endowment contract: | |
| MEC reverts to a Life Insurance policy | ||
| The required premium will increase | ||
| The insurer must notify the Department of Insurance | ||
| A new 7-pay test is required | ||
| Unanswered | 82% got this correct |
| 63) | QUESTION ID 1870: What type of care is received at home, and usually involves therapy? | |
| Intermediate Care | ||
| Home Health Care | ||
| Respite Care | ||
| Custodial Care | ||
| Unanswered | 66% got this correct |
| 64) | QUESTION ID 271: Melanie pays only part of her total number of IRA premiums before she dies. Her daughter wants to know what effect this will have on Melanie’s estate. Which of the following is true? | |
| Premiums left unpaid will be deducted from Melanie’s estate | ||
| IRAs have no effect on estates | ||
| Only the premiums paid will be included in Melanie’s estate | ||
| Any IRA funds will be directed to the state | ||
| Unanswered | 81% got this correct |
| 65) | QUESTION ID 1894: Sue wants care that provides transportation to and from centers that have a variety of activities. What type of care does Sue desire? | |
| Respite Care | ||
| Adult Day Care | ||
| Home Health Care | ||
| Custodial Care | ||
| Unanswered | 69% got this correct |
| 66) | QUESTION ID 1889: Mr. Smith needs help dressing and bathing himself. What type of care does he need? | |
| Adult Care | ||
| Custodial Care | ||
| Home Health Care | ||
| Skilled Care | ||
| Unanswered | 84% got this correct |
| 67) | A peril is defined as a: | |||
| Risk | ||||
| Exposure | ||||
| Cause of loss | ||||
| Uncertainty of loss | ||||
| FeedbackA peril is a cause of loss, such as death in Life Insurance, or accident or sickness in Health Insurance. | ||||
| Unanswered | 79% got this correct |
| 68) | QUESTION ID 281: When a Life insurance policy is replaced with another Life Insurance policy, to enable postponement of tax consequences, this is referred to as a: | |
| Tax deferred growth | ||
| Non-Forfeiture Option | ||
| Section 1035 Exchange | ||
| Bail Out Provision | ||
| Unanswered | 88% got this correct |
| 69) | QUESTION ID 289: Who pays for a Non-Contributory Plan? | |
| Employer | ||
| Employee | ||
| Employee and employer | ||
| Taxes from Federal Government | ||
| Unanswered | 77% got this correct |
| 70) | When does a ‘contingent beneficiary’ receive the proceeds of a Life insurance policy: | |||
| Only in the event of a Common Disaster, where both the insured and the primary beneficiary die as a result of the same accident | ||||
| When the primary beneficiary has died before the insured dies and no new primary beneficiary has been appointed | ||||
| When the primary beneficiary is under the legal age of 18 | ||||
| When the insured dies before the primary beneficiary dies | ||||
| FeedbackUnder Common Disaster, the proceeds of a Life insurance policy will still go to the primary beneficiary if they outlive the insured by a specified number of days, often 30. However, if there is no primary beneficiary designated on a Life insurance policy at the time of an insured’s death, the proceeds will go to the contingent beneficiary. Underage children may be designated as primary beneficiaries, although they cannot sign a release. | ||||
| Unanswered | 63% got this correct |
| 71) | QUESTION ID 284: Which of the following is not a 401(k) arrangement? | |
| Pure salary | ||
| Bonus plan | ||
| Thrift plan | ||
| Sheltered plan | ||
| Unanswered | 74% got this correct |
| 72) | Which of the following is true about Variable Life insurance: | |||
| Insurers must determine the value of the separate account daily | ||||
| The minimum death benefit is guaranteed | ||||
| The cash value is guaranteed | ||||
| The death benefit cannot increase above the minimum | ||||
| FeedbackProducers selling Variable Life need a state Life Insurance license and a federal Securities license. Although the cash value is not guaranteed, the minimum death benefit is, although the death benefit may increase above the minimum. Most insurers value the separate account on a quarterly basis. | ||||
| Unanswered | 76% got this correct |
| 73) | QUESTION ID 282: Which benefits are subject to FICA withholdings for Social Security purposes? | |
| Benefits paid to most qualified disabled employers | ||
| Benefits paid to disabled employees, which are attributable to the employer’s contribution | ||
| Benefits paid to unqualified employees | ||
| Benefits paid to unqualified employers | ||
| Unanswered | 78% got this correct |
| 74) | QUESTION ID 263: Health Savings accounts enable medical expenses to be paid with: | |
| Planned income | ||
| Taxed income | ||
| Pre-tax income | ||
| Taxable donations | ||
| Unanswered | 76% got this correct |
| 75) | When a policy owner adds a rider to a Life Insurance policy to cover all of his children, the premium is based upon: | |||
| The number of children | ||||
| The health of the children | ||||
| The ages of the children | ||||
| A flat premium | ||||
| FeedbackMost insurers offer a Children’s Rider, which covers all of the insured’s children up to a certain age for a flat fee, regardless of how many children there are or their health. Coverage usually ends at age 18 (or 21), at which time the child may convert their coverage to an individual Whole Life policy without evidence of insurability. | ||||
| Unanswered | 86% got this correct |
| 76) | QUESTION ID 6: What report includes information about an applicant’s character, and includes interviews with neighbors or friends? | |
| Protection Report | ||
| Investigative Consumer Report | ||
| Consumer Report | ||
| Agency Report | ||
| Unanswered | 92% got this correct |
| 77) | QUESTION ID 256: A 403(b) plan, commonly referred to as a TSA, is available and commonly used by: | |
| Postal employees | ||
| Government workers | ||
| Teachers and non-profit organizations | ||
| Self-employed persons | ||
| Unanswered | 82% got this correct |
| 78) | The person upon whose life a Life insurance policy is based is the: | |||
| Policyholder | ||||
| Owner | ||||
| Beneficiary | ||||
| Insured | ||||
| FeedbackIf a person buys a Life insurance policy upon themselves, they would be considered to be both the policyholder/owner and the insured. However, if you buy a policy on someone else, such as your spouse, you are the policyholder/owner and your spouse is the insured person. The policyholder/owner of the policy has all the rights of ownership, such as the right to take a loan, take cash surrender and to name the beneficiary. Of course, you can’t buy a policy on another person unless you have an ‘insurable interest’ in that person at the time of application. | ||||
| Unanswered | 51% got this correct |
| 79) | Upon annutization of an annuity, proceeds are usually paid to the: | |||
| Beneficiary | ||||
| Owner | ||||
| Annuitant | ||||
| Insured | ||||
| FeedbackOn an annuity, the contract owner is the party who buys the annuity and receives proceeds when the contract is annuitized. The annuitant is the party whose life the annuity contract is based. The beneficiary receives the proceeds if the annuitant dies and is often the owner of the contract as well. There is no ‘insured’ in an annuity contract. | ||||
| Unanswered | 86% got this correct |
| 80) | QUESTION ID 2: An insurance company that is owned by its policyholders and can pay annual dividends to them is considered: | |
| Reciprocal exchange | ||
| Mutual company | ||
| Risk Retention Group | ||
| Stock Company | ||
| Unanswered | 82% got this correct |
| 81) | QUESTION ID 7: Large numbers of similar risks, describes which of the following terms? | |
| Loss | ||
| Peril exclusion | ||
| Homogeneous | ||
| Sharing | ||
| Unanswered | 79% got this correct |
| 82) | QUESTION ID 407: If the policyholder chooses to pay premiums for a specified number of years, the policy is referred to as: | |
| An Adjustable Policy | ||
| Accrued Premium Whole Life | ||
| Variable Whole Life Policy | ||
| Limited Payment | ||
| Unanswered | 90% got this correct |
| 83) | QUESTION ID 691: Mike was under the influence of alcohol at the time his application was completed. Mike would not be issued a valid contract because the contract would not contain: | |
| Offer and acceptance | ||
| Legal purpose | ||
| A Competent party | ||
| Consideration | ||
| Unanswered | 68% got this correct |
| 84) | If an annuitant buys an immediate Life annuity with a 10 year period certain, the insurer will pay monthly payments for: | |||
| A maximum of 10 years | ||||
| 10 years or for life, whichever is less | ||||
| A minimum of 10 years, maximum of life | ||||
| For the life of the annuitant and 10 years to the beneficiary | ||||
| FeedbackImmediate annuities have no accumulation period and are usually purchased by clients with money they have been saving for retirement. If the annuitant selects a life payout with a 10 year period certain, payments are guaranteed to be made for at least 10 years, either to the annuitant or to a beneficiary if the client dies within the 10 year period. However, after 10 years there is no beneficiary, but payments will continue to the annuitant until they die. The period certain eliminates some of the risk. | ||||
| Unanswered | 94% got this correct |
| 85) | QUESTION ID 159: Who must sign the application, in addition to the applicant? | |
| Executive officer | ||
| Commissioner | ||
| Agent | ||
| Underwriter | ||
| Unanswered | 82% got this correct |
| 86) | QUESTION ID 9: Each of the following is a true statement describing insurance, except: | |
| Insurance transfers risk from the insured to the insurer | ||
| Insurance is used when covering Speculative Risk | ||
| The payment of a small certain loss (the premium) is traded for the large uncertain possibility of loss (the claim) | ||
| Uses the principle of Law of Large Numbers to help predict loss | ||
| Unanswered | 83% got this correct |
| 87) | QUESTION ID 134: Joe has just been diagnosed with a quickly-spreading, fatal form of cancer; his doctor predicts that he will live for a month. He applies for an individual Health Insurance policy. What risk classification will he most likely receive? | |
| Declined | ||
| Substandard | ||
| Poor | ||
| Provisional | ||
| Unanswered | 74% got this correct |
| 88) | All of the following are true regarding Modified Endowment Contracts (MEC) EXCEPT: | |||
| Cash surrender of the contract prior to age 59 ½ may lead to taxes plus penalties | ||||
| Increasing the premium on an existing Whole Life policy could cause it to become a MEC | ||||
| A decrease in the death benefit on an existing Whole Life policy could cause it to become a MEC | ||||
| Issuing an MEC is a violation of the state Insurance Code | ||||
| FeedbackA MEC is a life insurance policy whose premiums exceed what would have been paid to fund a similar type of life insurance with 7 annual premiums. In other words, since MECs build cash value too fast, they are considered to be an investment rather than life insurance. Although they are not illegal, a policy classified as a MEC loses its favorable tax treatment. Cash surrenders prior to age 59 ½ may lead to both taxes and penalties and loans are taxable as well.A ‘material’ change could also cause an existing life insurance to become a MEC, such as decreasing the death benefit during the first 7 years of the policy or increasing the premium after the initial 7 year policy period. All MECs issued by the same insurance company to the same policy owner during any 12 month period will be treated as one MEC. | ||||
| Unanswered | 61% got this correct |
| 89) | QUESTION ID 414: The word level and level term refers to the: | |
| Cash value | ||
| Face amount | ||
| Length of the policy | ||
| Premium | ||
| Unanswered | 89% got this correct |
| 90) | QUESTION ID 129: An insurer hires a representative to advertise its company at a local convention. The representative lies about the details of some of the policies, in an attempt to secure more business for the company. Who is responsible for the representative? | |
| The representative | ||
| The underwriters | ||
| The agent | ||
| The insurer | ||
| Unanswered | 92% got this correct |
| 91) | Which type of qualified retirement plan is designed for public school teachers: | |||
| 401K | ||||
| IRA | ||||
| Keogh | ||||
| TSA | ||||
| FeedbackTax Sheltered Annuities (also known as 403b plans) are tax qualified plans that allow employees of public educational institutions and certain other employees of non-profit, religious or charitable organizations to contribute before tax dollars up to certain limits on a payroll deduction basis. Since account earnings are tax deferred, upon withdrawal both the contributions and the earnings are taxable as ordinary income. TSA’s are similar to 40lk plans in that employers may make matching contributions. | ||||
| Unanswered | 80% got this correct |
| 92) | QUESTION ID 10: Which would be eligible to obtain SGLI? | |
| Small employers | ||
| Military personnel | ||
| The elderly | ||
| Low income individuals and families | ||
| Unanswered | 82% got this correct |
| 93) | QUESTION ID 1676: In a group prescription drug plan, the insurer typically pays what amount? | |
| None | ||
| Co-payment | ||
| Full amount until the deductible is met | ||
| Always pays the full amount | ||
| Unanswered | 72% got this correct |
| 94) | QUESTION ID 1680: Which of the following is not false regarding a person with HIV? | |
| The person may be declined | ||
| The person may not be declined | ||
| The person may be declined only if they have symptoms | ||
| The person will definitely be declined | ||
| Unanswered | 90% got this correct |
| 95) | QUESTION ID 11: A Key Person Insurance Policy can pay for which of the following? | |
| Costs associated with training a new replacement employee | ||
| Hospital bills | ||
| Loss of personal income | ||
| Medicare | ||
| Unanswered | 82% got this correct |
| 96) | QUESTION ID 148: Which of the following groups would most likely be covered under a Blanket Accident Policy? | |
| Factory workers at the automobile assembly plant | ||
| Students at a public school | ||
| Independent contractors who work for a general contractor | ||
| Office workers for a retail business | ||
| Unanswered | 89% got this correct |
| 97) | A policy that will pay the insured a flat daily rate for each day they are hospitalized is known as: | |||
| Medical Expense | ||||
| Hospital Confinement Indemnity | ||||
| Long Term Care | ||||
| Accidental Death and Dismemberment | ||||
| FeedbackA Hospital Confinement Indemnity policy will pay the insured a flat daily rate, such as $200 a day, for each day they are hospitalized, regardless of cause. This type of policy pays in addition to any other type of health insurance the insured may have, including Medical Expense. Since Hospital Confinement polices do not follow the Principle of Indemnity, it is possible for the insured to collect more than they actually lost. | ||||
| Unanswered | 72% got this correct |
| 98) | QUESTION ID 12: Which of the following is usually true of a participating Life insurance Policy? | |
| An attorney in fact manages the company | ||
| May be converted to a term life policy | ||
| Pays dividends to stockholders | ||
| Pays dividends to policy owners | ||
| Unanswered | 96% got this correct |
| 99) | QUESTION ID 122: A Dread Disease policy would be best used for which of the following: | |
| Prescription Drugs | ||
| Dental | ||
| Vision | ||
| Cancer | ||
| Unanswered | 79% got this correct |
| 100) | QUESTION ID 28: Equity Indexed Universal Life is a Universal Life policy with what kind of index as its investment feature? | |
| Universal | ||
| Equity | ||
| Consumer Price | ||
| Consumer Investment | ||
| Unanswered | 86% got this correct |
| 101) | QUESTION ID 1674: Bill’s insurance policy only pays for medical costs related to accidents. Which of the following types of policies does he have? | |
| Limited Benefits | ||
| Restrictive | ||
| Accident Only | ||
| Accidental Death | ||
| Unanswered | 69% got this correct |
| 102) | Which of the following is eligible for an IRC Section 1035 exchange: | |||
| Variable annuity to life insurance | ||||
| Fixed annuity to universal life | ||||
| Endowment to universal life | ||||
| Whole life to universal life | ||||
| FeedbackThe Internal Revenue Code allows certain policy holders to make a tax deferred exchange of one life insurance policy for another if certain criteria are met. The laws states that: 1) an ordinary life contract may be exchanged for another life insurance contract, or for an endowment or for an annuity; 2) an endowment may be exchanged for another endowment; and 3) an annuity may be exchanged for another annuity. An annuity or endowment cannot be exchanged for ordinary life insurance. | ||||
| Unanswered | 91% got this correct |
| 103) | QUESTION ID 13: Mortality tables are statistical tables used by Life Insurance companies to help predict: | |
| Premium amounts in future years | ||
| Unexpected losses | ||
| The probability of diseases for specific groups of individuals | ||
| Life expectancy and the death rates for specific groups of individuals | ||
| Unanswered | 85% got this correct |
| 104) | QUESTION ID 29: Ernest purchased a $100,000 Joint Life policy that covered himself and his wife Sarah. Eight years later, Ernest died in an automobile accident. How much will Sarah receive from the policy? | |
| $200,000 | ||
| $100,000 | ||
| Nothing | ||
| $50,000 | ||
| Unanswered | 69% got this correct |
| 105) | QUESTION ID 126: Accidental Death and Dismemberment benefits cover ____and ____ amounts. | |
| Accident and Sickness | ||
| Principal and Capital | ||
| Income and Sickness | ||
| Income and Medical | ||
| Unanswered | 80% got this correct |
| 106) | QUESTION ID 14: Life insurance premiums are determined by several factors pertaining to the insured, including age, occupation and: | |
| Location of residence | ||
| Number of children | ||
| Avocation | ||
| Marital status | ||
| Unanswered | 73% got this correct |
| 107) | QUESTION ID 30: Your client wants both protection and savings from insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client? | |
| Life annuity, Period Certain | ||
| Limited Pay Whole Life insurance | ||
| Increasing Term Insurance | ||
| 10-year Endorsement | ||
| Unanswered | 97% got this correct |
| 108) | QUESTION ID 160: Who must sign the application, in addition to the agent? | |
| Executive officer | ||
| Commissioner | ||
| Applicant | ||
| Underwriter | ||
| Unanswered | 67% got this correct |
| 109) | Which of the following is true if the Cost of Living rider is attached to a Life insurance policy: | |||
| The rider costs extra but increases in coverage are free | ||||
| The policy limit will automatically go up or down based upon the rate of inflation | ||||
| The rider causes the policy limit to increase, but the premium increases as well | ||||
| Any increase in policy limit is subject to proof of insurability | ||||
| FeedbackThe Cost of Living rider is designed make sure that the insured’s policy limit keeps pace with inflation. The rider costs extra as do future increases in coverage, although increases are not subject to insurability, meaning no physical exam is required. | ||||
| Unanswered | 55% got this correct |
| 110) | QUESTION ID 403: All of the following are characteristics of a Universal Life policy EXCEPT: | |
| The policy has a cash value account at a guaranteed interest rate and endowment insurance | ||
| The insurance company reserves the right to adjust the mortality charges and/or interest rate | ||
| The planned premium pays for mortality charges and expenses and any excess is returned to the policy owner | ||
| In effect, Universal Life is a combination of term insurance and a separate savings account joined in a single contract | ||
| Unanswered | 71% got this correct |
| 111) | QUESTION ID 418: When would a 20-pay whole life policy endow? | |
| When the insured reaches age 100, or until the insured’s death | ||
| After 20 payments | ||
| In 20 years | ||
| When the insured is 20 years old | ||
| Unanswered | 63% got this correct |
| 112) | QUESTION ID 3 : What are unincorporated groups of individuals termed as subscribers called? | |
| Large Insurers | ||
| Mutual Insurers | ||
| Reciprocal Insurers | ||
| Risk Insurers | ||
| Unanswered | 70% got this correct |
| 113) | QUESTION ID 412: The death benefit in a Variable Universal Life Policy: | |
| Depends on the investment performance of the sub-account | ||
| Is guaranteed to be higher than when the policy is originally issued | ||
| Is fixed | ||
| Always equals the face amount stated in the policy | ||
| Unanswered | 70% got this correct |
| 114) | QUESTION ID 15: Which of the following is the term used for the inability to perform at least two Activities of Daily Living? | |
| Type II Disability | ||
| Type I Disability | ||
| Chronically ill | ||
| Terminally ill | ||
| Unanswered | 81% got this correct |
| 115) | QUESTON ID 489: Bonnie wants to name her husband as the beneficiary of her Life Policy. She also wishes to retain all of the rights of ownership. Bonnie should have her husband named as the: | |
| Tertiary beneficiary | ||
| Secondary beneficiary | ||
| Revocable beneficiary | ||
| Irrevocable beneficiary | ||
| Unanswered | 71% got this correct |
| 116) | Which of the following is true regarding Variable Life insurance: | |||
| The death benefit and the face amount are always the same | ||||
| The minimum face amount is guaranteed | ||||
| The death benefit can vary above or below the face amount | ||||
| The insured’s premiums are invested in a general account | ||||
| FeedbackAt inception date, the face amount and death benefit of a Variable Life insurance policy are the same. However, although the minimum face amount is guaranteed, the death benefit may vary above the minimum if the separate account does well. | ||||
| Unanswered | 73% got this correct |
| 117) | QUESTION ID 506: Which of the following statements is true about a policy assignment? | |
| It is valid during the insurer’s lifetime only, because the death benefit is payable to the named beneficiary. | ||
| It transfers the owner’s rights under the policy to the extent expressed in the assignment form | ||
| It is the same as a beneficiary designation | ||
| It permits the beneficiary to designate the person or persons to receive the benefits | ||
| Unanswered | 93% got this correct |
| 118) | QUESTION ID 16: Which is the least expensive way to pay a premium? | |
| Annually | ||
| Semi-annually | ||
| Quarterly | ||
| Monthly | ||
| Unanswered | 85% got this correct |
| 119) | QUESTION ID 488: Bill owns a Life Insurance policy on his fifteen-year-old daughter, Jenna. The policy contains the Optional Payor Benefit rider. If Bill becomes disabled, what will happen to the Life Insurance premiums? | |
| Jenna will have to pay premiums for six months. If, at the end of this period, her father is still disabled, she will be refunded the premiums. | ||
| The company will waive the premiums, until Jenna is an age predetermined in the policy | ||
| The premiums will become tax deductible until Jenna’s 21st birthday | ||
| Nothing. Bill has become disabled, not Jenna. Her life insurance policy will not be affected | ||
| Unanswered | 84% got this correct |
| 120) | QUESTION ID 17: Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy? | |
| The Key Person is the owner and the employer is the beneficiary | ||
| The employer is the owner and beneficiary | ||
| The employer is the owner and the Key Person is the beneficiary | ||
| The Key Person is the owner and beneficiary | ||
| Unanswered | 64% got this correct |
| 121) | Straight Whole Life and Limited Pay Whole have all of the following in common EXCEPT: | |||
| Both reach maturity at age 100 | ||||
| The cash value equals the face amount at maturity | ||||
| Both require premium payments as long as the insured lives | ||||
| Both have level premiums | ||||
| FeedbackLimited-pay Whole Life (such as LP 65 or 20 PL) only require that the insured pay premiums for a limited period of time. For example, a LP 65 must be paid up by age 65 and a 20 PL must be paid up in 20 years. Straight Whole Life requires premiums to be paid until age 100, or prior death, which ever occurs first. However, both reach maturity at age 100. | ||||
| Unanswered | 85% got this correct |
| 122) | QUESTION ID 18: Richard becomes angry when his insurer asks for his mortgage expenses when attempting to determine the Human Value of his Life Insurance Policy. What should Richard do? | |
| Ask that this information be omitted | ||
| Report the insurer to the Department of Insurance | ||
| Sue the insurer | ||
| Answer the question, since it’s required for Life underwriting | ||
| Unanswered | 83% got this correct |
| 123) | QUESTION ID 500: When the policy owner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option? | |
| Life Income Period Certain | ||
| Fixed Period. | ||
| Extended Term | ||
| Fixed Amount | ||
| Unanswered | 51% got this correct |
| 124) | QUESTION ID 19: When a replacement is involved, a replacing insurance company is responsible for all of the following EXCEPT: | |
| Obtain from the producer a list of the applicant’s contracts to be replaced | ||
| Include a policy summary on the proposed Life Insurance in the communication with the existing company | ||
| Provide a copy of the Important Notice Regarding Replacement of Life insurance to the applicant | ||
| Send the existing insurance company a written notice of replacement | ||
| Unanswered | 56% got this correct |
| 125) | QUESTION ID 482: All of the following are TRUE statements regarding the Accumulation at Interest Option EXCEPT: | |
| The interest is credited at a rate specified by the policy | ||
| The annual dividend is retained by the company. | ||
| The interest credited under this option is not taxable since it remains inside the insurance policy | ||
| The policyholder has the right to withdraw the accumulations at any time. | ||
| Unanswered | 74% got this correct |
| 126) | QUESTION ID 499: When a Whole Life Policy lapses or is surrendered prior to maturity, the cash value can be used to: | |
| Receive payments for a fixed amount | ||
| Purchase a Term rider to attach to the policy. | ||
| Pay back all premiums owed plus interest | ||
| Purchase a Single Premium policy for a reduced face amount | ||
| Unanswered | 72% got this correct |
| 127) | Mary and Kate are 22 year old identical twins in good health who each have $250 a year to spend on life insurance. Mary elects to buy 10 year level term while Kate buys traditional whole life insurance. All of the following are true EXCEPT: | |||
| Mary’s premium will increase in 10 years | ||||
| Mary’s policy will not develop any cash value | ||||
| Kate’s premium will remain level | ||||
| Kate’s policy will have a higher death benefit | ||||
| FeedbackTerm insurance is less expensive than whole life at issue because it is pure protection and has no cash value. On level term, both the face amount (death benefit) and the premium remain level for the term of the policy, which may be 5, 10, 15 or even 20 years. However, since the premium is based upon the insured’s average age during the term, it will increase upon renewal.Whole life is more expensive since it based upon the ‘level premium concept’, which states that since the level premiums paid are higher than needed to provide pure protection, a cash value (a savings account that belongs to the policy owner) will develop over a period of time. Since whole life premiums are higher than term insurance premiums, for the same amount of premium, less coverage could be purchased. | ||||
| Unanswered | 93% got this correct |
| 128) | QUESTION ID 501: Which of the following applies to the ten day Free Look privilege? | |
| It allows the insurer ten days to pay the initial premium. | ||
| It permits the insurer to return the policy for a full refund of premiums paid | ||
| It can be waived only by the insurance company | ||
| It is granted only at the option of the agent | ||
| Unanswered | 71% got this correct |
| 129) | On a Universal Life (UL) insurance policy, when the insured pays a premium the insurer will do all EXCEPT: | |||
| Add it to the cash value account | ||||
| Credit interest to the account | ||||
| Subtract expenses | ||||
| Apply it towards future surrender charges | ||||
| FeedbackAlthough UL is a type of Whole Life insurance, the protection features of the policy are separate from the cash value account. Premiums paid are credited to the cash value where they earn tax deferred interest at the current rate. From this, the insurer subtracts their expenses, such as administrative expenses and the cost of mortality or death. While UL policies may contain surrender charges that apply in the early years of the policy, they cannot be offset by premium payments. | ||||
| Unanswered | 68% got this correct |
| 130) | QUESTION ID 4: Within how many days of requesting an Investigative Consumer Report must an insurer notify the consumer in writing that the report will take place? | |
| 14 | ||
| 3 | ||
| 5 | ||
| 7 | ||
| Unanswered | 85% got this correct |
| 131) | QUESTION ID 5: The implied authority of an agent is normally influenced by the ______authority of the agent. | |
| Professional | ||
| Qualified | ||
| Expressed | ||
| Fiduciary | ||
| Unanswered | 58% got this correct |
| 132) | All of the following are true regarding Viatical Settlements EXCEPT: | |||
| Amounts received are taxable to the policy owner | ||||
| They are done by clients who need to raise money to pay medical bills | ||||
| The policy is sold at a discount | ||||
| An absolute assignment of policy ownership is required | ||||
| FeedbackWhen a policy owner with a terminal illness sells their life insurance policy to an investor, it is known as a Viatical Settlement. The policy owner assigns his ownership in his policy to an investor in return for a discounted current payment. The investor names himself as beneficiary and will receive tax free proceeds upon the death of the insured. Income received is not taxable to the former policy holder. | ||||
| Unanswered | 72% got this correct |
| 133) | All of the following are types of Ordinary life insurance EXCEPT: | |||
| 20 pay-life | ||||
| Group life | ||||
| Life paid-up at 65 | ||||
| Endowment | ||||
| FeedbackOrdinary life insurance includes Whole life, Term and Endowment, all of which base their rates and benefits upon the Commissioner’s Standard Ordinary Mortality Table, which predicts how long individuals will live on the average. Group life is not considered to be Ordinary life, since rates and benefits are based upon the characteristics of the group rather than the population in general. | ||||
| Unanswered | 78% got this correct |
| 134) | The Social Security ‘black-out’ period ends when a surviving spouse reaches age: | |||
| 55 | ||||
| 60 | ||||
| 62 | ||||
| 65 | ||||
| FeedbackWidows or Widowers of any age who have dependent children in their care are entitled to a monthly benefit after their spouse dies until their youngest child reaches age 16. At that time, the widow/widower’s benefits are ‘blacked-out’ until they become eligible for Social Security retirement benefits, which may be as early as age 60 for surviving spouses.For example, a woman whose youngest child is age 6 becomes a widow at age 40. The widow will receive monthly benefits from Social Security until that child reaches age 16. At that time, the woman’s Social Security benefits will stop (she is now age 50) and she won’t receive anything further from Social Security until she reaches her earliest retirement age of 60. So, in this case, her benefits are ‘blacked-out’ for 10 years. It is during this time she needs to utilize the proceeds of her late husband’s life insurance policy. | ||||
| Unanswered | 83% got this correct |
| 135) | The ‘black-out’ period under Social Security starts when the youngest child is age: | |||
| 16 | ||||
| 18 | ||||
| 21 | ||||
| 25 | ||||
| FeedbackWidows or Widowers of any age who have dependent children in their care are entitled to a monthly benefit after their spouse dies until their youngest child reaches age 16. At that time, the widow/widower receives no benefit from Social Security until they are eligible for retirement, which may be as early as age 60. This is referred to as the ‘black-out’ period. | ||||
| Unanswered | 78% got this correct |
| 136) | QUESTION ID 242: Riley purchased a Non-Cancellable Health Insurance policy 1 year ago. All of these are circumstances when the insurance company could cancel or void his policy EXCEPT: | |
| Riley reaches the maximum age limit specified in his policy | ||
| Riley does not pay his premium | ||
| Riley does not like his policy | ||
| Within two years of his application, the insurer discovers a misrepresentation | ||
| Unanswered | 76% got this correct |
| 137) | QUESTION ID 20: In which part of the application would I find information on an applicant’s medical background? | |
| Agent’s Report | ||
| Part 1 | ||
| Part 3 | ||
| Part 2 | ||
| Unanswered | 87% got this correct |
| 138) | QUESTION ID 230: If a contract is not guaranteed renewable, then fraudulent statements may be contested at any time after ___ years. | |
| 3 years | ||
| 2 years | ||
| 5 years | ||
| 4 years | ||
| Unanswered | 63% got this correct |
| 139) | If an IRA participant dies before distributions begin and his spouse is his beneficiary: | |||
| All funds must be distributed within 5 years | ||||
| Required minimum distributions must begin when participant would have been age 70 ½ | ||||
| The spouse can roll-over all funds to a new IRA | ||||
| All funds must be distributed immediately | ||||
| FeedbackIf the spouse is the IRA owner’s sole beneficiary and the owner dies before distributions begin, the surviving spouse can take withdrawals over her life expectancy, but withdrawals must start no later than the date on which the deceased IRA owner would have been age 70 1/2.Or, the surviving spouse may elect to treat the IRA as being her own and start distributions when she turns age 70 1/2, with required minimum distributions based upon her life expectancy at that time. | ||||
| Unanswered | 79% got this correct |
| 140) | QUESTION ID 21: What does “liquidity” refer to in a life insurance policy? | |
| The insured is receiving payments each month in retirement | ||
| The policy owner receives dividend checks each year | ||
| Cash values can be borrowed at any time | ||
| The death benefit replaces the assets that would have accumulated if the insured had not died | ||
| Unanswered | 66% got this correct |
| 141) | QUESTION ID 22: Key Person Life Insurance does NOT reimburse a company for which of the following? | |
| For a loss of leadership resulting from a key person’s death. | ||
| For a reduction of profits resulting from a key person’s death. | ||
| For increased pension liability resulting from a key person’s death. | ||
| For a loss of previous business results from a key person’s death. | ||
| Unanswered | 74% got this correct |
| 142) | QUESTION ID 231: Most insurers issue Health insurance policies for delivery in many states. Because each state regulates and mandates the requirement for policies delivered to their residents, instead of having a policy form for each state, the insurer attaches: | |
| A waiver of other state requirements | ||
| The Conformity with State Statutes provision | ||
| Nothing. An insurer’s policy only needs to conform to the regulations of the state where the insurer is domiciled | ||
| A Miscellaneous Optional provision | ||
| Unanswered | 48% got this correct |
| 143) | QUESTION ID 252: Which of the following is true regarding a Term Health Policy? | |
| It is Conditionally Renewable | ||
| It is Non-Renewable | ||
| It is Guaranteed Renewable | ||
| It is Non-Cancellable | ||
| Unanswered | 75% got this correct |
| 144) | QUESTION ID 239: Under a Health insurance policy, benefits other than death benefits, that have not otherwise been assigned, will be paid to: | |
| The insured | ||
| Creditors | ||
| Beneficiary of the death benefit | ||
| The spouse of the insured | ||
| Unanswered | 65% got this correct |
| 145) | QUESTION ID 250: Which of the following is a false statement? | |
| Term is temporary | ||
| Term is non-renewable | ||
| Term is cancellable | ||
| Term is non-cancellable | ||
| Unanswered | 84% got this correct |
| 146) | QUESTION ID 498: What is the manner or frequency that the policyholder pays the policy premium called? | |
| Grace period | ||
| Mode | ||
| Modification | ||
| Provision | ||
| Unanswered | 85% got this correct |
| 147) | QUESTION ID 23: Which is generally true regarding insurered’s who have earned preferred status? | |
| They can borrow higher amounts from their policies | ||
| They can decide when to pay their monthly premiums | ||
| They keep a higher percentage of any interest earned on their policies | ||
| Their premiums are lower. | ||
| Unanswered | 90% got this correct |
| 148) | QUESTION ID 58: Insurer A wants to buy a disability income policy that pays a maximum monthly benefit of $1,200. To make sure that the disability benefit keeps up with inflation, the insurer would need to add: | |
| 5% more to the premium each year | ||
| A Guaranteed Purchase Option Rider | ||
| A Cost of Living Rider | ||
| None of the above | ||
| Incorrect | 67% got this correct |
| 149) | Which of the following types of annuities will continue to make payments to a beneficiary after the annuitant has died: | |||
| Pure life | ||||
| Period certain | ||||
| Straight life | ||||
| Life income | ||||
| FeedbackPure life, straight life or life income annuities are all the same thing, and have no beneficiary. If the annuitant dies, payments stop. However, a period certain annuity guarantees a certain number payments, even if the annuitant dies. For example, if an annuitant with a 10 year period certain dies after 5 years, payments would continue on to the beneficiary for another 5 years. | ||||