Scheduled maintenance: Wednesday, February 8 from 10PM to 11PM PST
Upgrade to remove ads
Only $35.99/year

Practice Exam

Terms in this set (73)

Which of the following statements is CORRECT regarding an individual applying for life or health insurance?

A. The applicant waives all privacy rights
B. The applicants medical history may be analyzed and reported
C. The applicants family medical history is always required
D. The applicants medical history is irrelevant
B. the applicants medical history may be analyzed and reported
What does a life insurance policy guarantee to the stated beneficiary upon the death of the insured?
A. Policy Dividend
B. Policy's cash value
C. Funeral Expense Fund
D. Specified amount of money
D. Specified amount of money
Which of the following does Coordination of Benefits allow?
A. Allows the secondary payor to reduce their benefit payments so no more than 100% of the claim is paid.
B. Allows both a group health plan and individual health plan to coordinate their benefit payments
C. Allows the deductible to be spread out between all the health providers
D. Allows each health provider to pay 100% of the claim
A. Allows the secondary payor to reduce their benefit payments so no more than 100% of the claim is paid.
Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence?
A. Section 1040 exchange
B. Section 1035 exchange
C. Nonforfeiture Option
D. Spendthrift Option
B. Section 1035 exchange
What is the tax liability for employer contributions in Health Savings Accounts (HSA's)?
A. Taxable as regular income to the employee
B. Tax-Deductible expense to the employee
C. No tax payment needed
D. Taxable to the employee when they exceed 7 1/2 % AGI
C. No tax payment needed
What is involved when a life insurance policy has been backdated?\
A. Setting a policy's effective date prior to a preexisting condition
B. Redating a policy after it has been issued
C. Reinstating a lapsed policy
D. Making the policy effective on an earlier date than the present
D. Making the policy effective on an earlier date than the present
All of these are responsibilities of the superintendent except:
A. Administering oaths
B. Subpoena a witness
C. Approving policy forms
D. Endorsing insurers
D. Endorsing insurers
An agent's license has been suspended for non-renewal. The agent may apply for reinstatement:
A. within 3 months of the license renewal date
B. within 6 months of the license renewal date
C. within 12 months of the license renewal date
D. within 18 months of the license renewal date
C. within 12 months of the license renewal date
Which of these is a method of determining the level of funds required for ongoing support in the event of the breadwinner's death?
A. Financial loss value
B. Human life value
C. Assessment value
D. Replacement value
B. Human Life Value
Simon has purchased a fixed immediate annuity. His payment amount will be dependent upon principal, interest, and the contract's
A. surrender charge
B. death benefit
C. cash refund
D. income period
D. income period
Which of the following is NOT a required provision in an accident and health insurance policy?
A. Legal actions
B. Grace period
C. Change in occupation
D. reinstatement
C. Change in occupation
Ohio requires advertisements for accident and health insurance policies covering ONLY a specified illness to prominently display
A. The premium guarantee
B. A statement that the policy is limited
C. A schedule of payments
D. The policy exclusions
B. A statement that the policy is limited
Inducement is BEST defined as:
A. making a false statement intended to malign another insurer
B. making an unfair comparison of two insurance policies
C. offer to buy, sell, give or allow the prospective insured employment, stock, or special favors in exchange for insurance transaction
D. charging a higher rate for insurance based on an insureds race, religion or national origin
C. offer to buy, sell, give or allow the prospective insured employment, stock, or special favors in exchange for insurance transaction
Tyler purchased a Disability Policy with a waiver of premium Rider on April 1. he is the same old on May 1. on June 1, he receives proof of permanent and total disability and submits a claim. he begins receiving benefits on June 15. when are his premiums waived?
A. April 1
B. May 1
C. June 1
D. June 15
B. May 1
premiums are waived beginning at the date of disability
Which of these is a true statement regarding HIC's?
A. HIC must establish a complaint system
B. HIC operate on a prepayment basis
C. Urgent care services are provided
D. Benefits are provided on a reimbursement basis
B. HIC operate on a prepayment basis
Small employers who are sponsored by an insurer to provide group benefits to its employees are called
A. Fraternal Benefit Society
B. Surplus lines brokers
C. Lloyd of London
D. MEWA
D. MEWA
Which of these is NOT considered a supplemental health insuring corporation (HIC) service?
A. Outpatient medical services
B. Foot Care Services
C. dental care
D. chiropractic care
A. Outpatient medical services. It is considered a basic service.
Index whole life insurance contains a securities component that acts as a(n)
A. hedge against inflation
B. premium stabilizer
C. means to lowering taxes on earnings
D. incentive to purchase more coverage
A. hedge against inflation
How soon can payments begin in a deferred annuity?
A. anytime after date of purchase
B. anytime within 12 months after date of purchase
C. a minimum of 6 months after date of purchase
D. a minimum of 12 months after date of purchase
D. a minimum of 12 months after date of purchase
An example of endodontic treatment:
A. bridge
B. Crown
C. filling
D. root canal
D. root canal
A disability income policy can prevent an insured from earning a higher income than if he/she were working by utilizing
A. elimination periods
B. probationary periods
C. benefit limits
D. deductibles
C. benefit limits
Which type of long-term care benefit would be most appropriate for a stroke victim who requires speech therapy administered at her home?
A. Respite care
B. Continuing care
C. Home health care
D. Custodial care
Prescription drugs
C. Home health care
Long term care insurance applications must contain plain and unambiguous health questions. The exception to this rule would be applications for:
A. Inflation rider
B. guaranteed issue
C. nonguaranteed issue
D. secondary issue
B. guaranteed issue
Fixed period settlement options are considered to be a form of a(n)
A. cash value loan
B. variable life policy
C. annuity
D. endowment
C. annuity
Sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of
A. costs that exceed 7 1/2 % of AGI
B. costs that exceed 10% of AGI
C. 100% of costs
D. no deduction permitted
C. 100% of costs
Which of these preventative care services is NOT provided by health insuring corporation (HIC) primary care physicians?
A. Child immunizations
B. Routine examinations
C. Adult hearing screenings
D. well baby examinations
C. Adult hearing screenings
In most dental plans, a deductible typically is NOT applied to
A. preventative and diagnostic services
B. restorative dentistry
C. orthodontics
D. oral surgery
A. preventative and diagnostic services
The role of the federal government was expanded when Medicaid was established by allowing the state to
A. Form a large PPO on a statewide level
B. Purchase health insurance from the federal government
C. Receive matching funds to expand public assistance programs
D. Defer all costs to the federal government for public assistance programs
C. Receive matching funds to expand public assistance programs
insurance agent kelly offers a prospect a $1,000 shopping card if an insurance policy is purchased through her. What illegal activity is this an example of ?
A. defamation
B. twisting
C. rebating
D. coercion
C. rebating
The first payment for newborn accident and health coverage is due ___days after the birth
A. 45
B. 31
C. 30
D. 14
B. 31
Medical Expense Insurance would cover
A. an injury occurring at the insured residence
B. an injury occurring at work
C. and injury caused by war
D. elective surgery
A. an injury occurring at the insured residence
A group disability income plan that pays tax free benefits to covered employees is considered:
A. non=contributory
B. partially contributory
C. group contributory
D. fully contributory
D. fully contributory
The cause of a loss is referred to as a(n)
A. hazard
B. adversity
C. peril
D. risk
C. peril
Which approach predicts a person's earning potential and determines how much of that amount would be devoted to dependents?
A) Future value approach
B) Earnings approach
C) Needs approach
D) Human life value approach
D) Human life value approach
All of these statements concerning whole life insurance are false EXCEPT
A. policyowner can take out a policy loan up to the face amount
B. when a whole life policy is surrendered, income taxes may be owed
C. coverage is normally temporary
D. The death benefit is not affected by outstanding loans
B. when a whole life policy is surrendered, income taxes may be owed
Which type of life insurance is normally associated with a Payor Benefit rider?
A. Juvenile insurance
B. Family Income Insurance
C. Spouse Insurance
D. Term rider
A. Juvenile insurance
Under the Affordable Care Act, a large employer that does NOT provide health insurance and owes an employer mandate penalty MUST pay an annual penalty, which is calculated by multiplying $2,000 by
number of full time employees minus 30
The typical long-term care insurance policy is designed to provide a minimum of __ year(s) of coverage.
A. 1
B. 3
C. 5
D. 7
A. 1
Which of the following is INELIGIBLE to participate in a Section 125 Plan?
A. Key Employee in a C-Corp
B. Highly Compensated Employee in an S-Corp
C. A C-Corp Owner with a greater than 2% share
D. An S-Corp Owner with a greater than 2% share
D. An S-Corp Owner with a greater than 2% share
The election of COBRA for continuation of health coverage will?
A. increase the coverage and lower premium
B. maintain the same coverage and increase premium
C. increase out-of-pocket costs and lower premium
D. decrease out-of-pocket costs and maintain same premium
B. maintain the same coverage and increase premium
A waiver of premium rider allows an insured to waive premium payments if the insured is
A) temporarily disabled
B) unemployed
C) completely and permanently disabled
D) experiencing financial hardship
C) completely and permanently disabled
A whole life policy option where extended term insurance is selected is called a(n)?
A. dividend option
B. settlement option
C. nonforfeiture option
D. interest-only option
C. nonforfeiture option
An example of elective cosmetic surgery would be
A. reconstructive breast surgery after a mastectomy
B. removing excess fat from an insureds waistline
C. surgery to correct a birth defect
D. reconstructive surgery after suffering injuries from an automobile accident
B. removing excess fat from an insureds waistline
Fixed annuities provide each of the following EXCEPT
A. Guaranteed interest
B. Retirement funds
C. Hedge against inflation
D. Tax advantage
C. Hedge against inflation
A life insurance policy must give the policyowner at least how many days after delivery of the policy to return the policy for a full premium refund
A. 7 days
B. 10 days
C. 14 Days
D. 30 Days
B. 10 days
Which of the following statements is NOT true regarding a Critical Illness Plan?
A. Pays a lump sum to the insured upon the diagnosis of a critical illness
B. The insurer may have a list of critical illnesses they will cover
C. Coverage is limited to a single devastating disease
D. Also known as Specified Disease Plans
C. Coverage is limited to a single devastating disease
Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. Which of these statements is true?
A. The policy automatically converts to whole life after the 10-year period
B. The face amount will remain constant and the premium will increase over the 10-year period
C. The premium will remain constant and the face amount will increase over the 10-year period
D. The face amount and premium will remain constant over the 10-year period
D. The face amount and premium will remain constant over the 10-year period
An insurance company advertises an accident and health insurance product in a local Ohio newspaper and refers to dollar amount benefits. This insurer must also disclose which of the following in the advertisement?
A. The Superintendents signature of endorsement
B. The number of claims filed in the previous year
C. Any applicable benefit reduction
D. The companys underwriting guidelines
C. Any applicable benefit reduction
In order for a contract to be valid, it must:
a. Be in writing
b. Be signed and witnessed by an attorney
c. Contain an offer and acceptance
d. Be properly filed with the state
c. Contain an offer and acceptance
a partial surrender is allowed in which of the following life policies
A. adjustable whole life
B. universal life
C. Decreasing term life
D. Limited whole life
B. universal life
Tom has a home health care benefit and is confined to his home. Which of these benefits is NOT typically covered?
A. Part-time nursing care
B. Full-time nursing care
C. Physical therapy
D. Home health aides
B. Full-time nursing care
Typically, Long-Term Disability benefits are coordinated with which benefit plan?
A. Social Security
B. Individual Retirement Account
C. Life insurance
D. Accrued sick time
A. Social Security
Craig purchased a life insurance policy for enabling his heirs to pay estate taxes. What is this called?
A) Estate conservation
B) Liquidity maintenance
C) Survivor fund
D) Human value protection
A) Estate conservation
Donald is the primary insured of a life insurance policy and adds a children's term rider. What is the advantage of adding this rider?
A. Can be converted to permanent coverage without evidence of insurability
B. Coverage can be different for each child
C. Premiums on this rider are not required until the limiting age is reached
D. Increases the policy's overall cash value
A. Can be converted to permanent coverage without evidence of insurability
A clause that allows an insurer the right to terminate coverage at any anniversary date is called a(n)
A. conditionally renewability clause
B. optional renewability clause
C. selective renewability clause
D. cancelable clause
B. optional renewability clause
Which of the following protects a policyowner from a misrepresentation caused by an innocent mistake?
A. Reinstatement clause
B. Entire Contract clause
C. Incontestable clause
D. Nonforfeiture clause
C. Incontestable clause
An insurance company has just received a request for verification from a viatical settlement provider. The insurer is required to respond within ________ calendar days to this request.
A. 30
B. 60
C. 90
D. 120
A. 30
pat owns a 20-pay life policy with a paid-up dividend option. which of the following statements is true?
A. the policy may be paid up early by using policy dividends
Which of the following does a life insurance policy summary normally include?
A. The policy's cash value
B. Agent's report
C. Policyowner's MIB report
D. Stated beneficiary
A. The policy's cash value
Pete the agent recently had his license suspended because he was found to be in violation of a state insurance law. Due to this suspension, Pete:
A. May be assessed the administrative costs sustained by the Department.
B. will be eligible for license reinstatement in 3 months
C. will lose his ability for appeal
D. may not be in communication with current clients in regard to the suspension
A. May be assessed the administrative costs sustained by the Department.
All of the following are core benefits of Medicare Supplement Plan A EXCEPT
A. the first three pints of blood received
B. Medicare part B coinsurance or copayment
C. Medicare part A hospice coinsurance or copayment
D. Deductible payments for the first 60 days of hospitalization under Medicare hospitalization insurance
D. Deductible payments for the first 60 days of hospitalization under Medicare hospitalization insurance
Medicare Part A does not pay for medical benefits provided for treatment in a skilled nursing facility beyond
A. 30 days
B. 60 days
C. 100 days
D. 120 days
C. 100 days
Which of the following are the premium payments for a Universal life policy NOT used for?
A. Death benefits
B. Cash value
C. Loading costs
D. Separate account investments
D. Separate account investments
A health insurance policy where the insurer has the right to terminate the policy for reasons other than the insured's health is called
A. limited renewable
B. conditionally renewable
C. guaranteed renewable
D. conditionally cancelable
B. conditionally renewable
Kathy's annuity is currently experiencing tax-deferred growth until she retires. Which phase is this annuity in?
A. Payout period
B. Accumulation period
C. Deferred period
D. Growth period
B. Accumulation period
Which type of policy combines the flexibility of a universal life policy with investment choices?
A. Adjustable univeral life policy
B. Flexible universal life policy
C. Variable univeral life policy
D. modified universal life policy
C. Variable univeral life policy
Loss of income insurance provides
A.an individual the means to replace wages
B.. an individual the ability to collect workers' compensation
C. an individual the ability to continue with medical coverage after a disability
D. unlimited income replacement to a disabled person
A.an individual the means to replace wages
Jennifer is required to pay a specific sum out of pocket before any benefits are paid in a year. Her health policy most likely contains a(n)
A. stop-loss provision
B. deductible
C. copayment
D. out of pocket provision
B. deductible
Written notice for a health claim must be given to the insurer ___ days after the occurrence of the loss.
A. 10
B. 20
C.31
D. 60
B. 20
In what form do disability income policies typically pay benefits?
A. Lump sum
B. Periodic income
C. Tax credit
D. Annuity
B. Periodic income
An example of health insuring corporation (HIC) specialty care provider is a (n):
A. A general practitioner
B. family medicine physician
C.HIC medical director
D. Neurologist.
D. Neurologist.
When does a life insurance policy typically become effective?
A. When the policy is issued
B. When initial premium is collected and policy is issued
C. When the application is completed and signed
D. When the completed application is signed and initial premium is collected
B. When initial premium is collected and policy is issued
The purpose of Medicare Supplement Insurance is to address gaps in Medicare coverage, which can include:
A. Medicare in-hospital deductible
B. replacing HMO coverage
C. covering chiropractic treatment
D. treatment provided in a government hospital
A. Medicare in-hospital deductible
Students also viewed