Exam Review Missed Questions

Question 1

When an employee covered under a health reimbursement account changes employers, the HRA

Answer 1

Stays with the employer.

Question 2

An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium?

Answer 2

It will increase because the insured will be 5 years older than when the policy was originally purchased.

Question 3

Who assumes control over an insurance company’s funds and management if it becomes insolvent?

Answer 3

Department of Insurance

Question 4

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?

Answer 4

As of the application date

Question 5

A married couple’s retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?

Answer 5

Joint and survivor

Question 6

An insurer receives a report regarding a potential insured that includes the insured’s financial status, hobbies and habits. What type of a report is that?

Answer 6

Inspection Report

Question 7

Heath insurance premium rates subject to the Small Group Rate and Renewability Act cannot exceed the index rate for any other class of business by more than

Answer 7

20%

Question 8

Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service?

Answer 8

Copayment

Question 9

Which of the following statements concerning buy-sell agreements is true?

Answer 9

Buy-sell agreements are normally funded with a life insurance policy.

Question 10

Another name for a substandard risk classification is

Answer 10

Rated.

Question 11

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

Answer 11

Universal Life – Option A

Question 12

Which of the following is NOT the purpose of HIPAA?

Answer 12

To provide immediate coverage to new employees who had been previously covered for 18 months

Question 13

If during the underwriting process an insurer obtains personal information about an applicant from the applicant, when must the insurer provide notice of its information practices?

Answer 13

At the time of policy delivery

Question 14

Which of the following insurance coverages would be allowed with an MSA?

Answer 14

long term care

Question 15

If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?

Answer 15

It is a percentage of the cash value and decreases over time.

Question 16

Which of the following is true regarding inpatient hospital care for HMO members?

Answer 16

Care can be provided outside of the service area.

Question 17

Which of the following best describes a bail-out provision?

Answer 17

It allows the owner to surrender the annuity without a charge.

Question 18

When employees are actively at work on the date coverage can be transferred to another insurance carrier, what happens to coinsurance and deductibles?

Answer 18

They carry over from the old plan to the new plan.

Question 19

The minimum number of credits required for partially insured status for Social Security disability benefits is

Answer 19

6 credits.

Question 20

When converting group coverage to individual coverage after termination of employment, the individual policy can be any form of insurance EXCEPT

Answer 20

term insurance

Question 21

What are the 2 types of Flexible Spending Accounts?

Answer 21

Health Care Accounts and Dependent Care Accounts

Question 22

What type of benefit helps to pay for accidental injuries that are not severe enough to qualify as disabilities?

Answer 22

Medical Reimbursement Benefit

Question 23

The Omnibus Budget Reconciliation Act of 1990 (OBRA) requires that large group health plans must provide primary coverage for disabled individuals under

Answer 23

Age 65 who are not retired.

Question 24

According to the provisions of the Patient Protection and Affordable Care Act, all of the following are required preventive care services EXCEPT

Answer 24

Cervical cancer exams for all women starting at age 40.

Question 25

Which of the following is TRUE regarding variable annuities?

Answer 25

The annuitant assumes the risks on investment.

Question 26

Which of the following is NOT true regarding Equity Indexed Annuities?

Answer 26

They earn lower interest rates than fixed annuities.

Question 27

Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?

Answer 27

Automatic premium loan

Question 28

To sell variable life insurance policies, an agent must receive all of the following EXCEPT

Answer 28

SEC registration.

Question 29

The premium of a survivorship life policy compared with that of a joint life policy would be

Answer 29

lower

Question 30

An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true?

Answer 30

The insured was in compliance with the policy requirements regarding claims.

Question 31

Which of the following is available to employers of all sizes?

Answer 31

HRA's

Question 32

Which of the following is excluded in a dental insurance plan?

Answer 32

Lost dentures

Question 33

If during the underwriting process an insurer obtains personal information about an applicant from the applicant, when must the insurer provide notice of its information practices?

Answer 33

At the time of policy delivery

Question 34

Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?

Answer 34

Indemnity

Question 35

The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the

Answer 35

Insuring clause.

Question 36

Which of the following is TRUE regarding the insurance amount in a credit life policy?

Answer 36

The creditor can only insure the debtor for the amount owed.

Question 37

Which of the following is NOT true regarding policy loans?

Answer 37

Money borrowed from the cash value is taxable.

Question 38

All of the following are considered to be supplemental benefits under an HMO plan EXCEPT

Answer 38

Preventive services.

Question 39

An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen?

Answer 39

The policy will not be affected.

Question 40

An insured’s long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged $100 per day. How much will the insurance company pay?

Answer 40

$120 a day

Question 41

What type of health care plan allows insureds to select a physician or hospital from a list of providers without being required to submit claim forms?

Answer 41

Preferred Provider Organization

Question 42

What is the advantage of reinstating a policy instead of applying for a new one?

Answer 42

The original age is used for premium determination.

Question 43

Variable Whole Life insurance is based on what type of premium?

Answer 43

Level fixed

Question 44

An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?

Answer 44

Fraud

Question 45

If during the underwriting process an insurer obtains personal information about an applicant from the applicant, when must the insurer provide notice of its information practices?

Answer 45

At the time of policy delivery

Question 46

In a replacement situation, all of the following must be considered EXCEPT

Answer 46

Assets.

Question 47

All of the following are beneficiary designations EXCEPT

Answer 47

Specified.

Question 48

All of the following long-term care coverages would allow an insured to receive care at home EXCEPT

Answer 48

Skilled care.

Question 49

A licensed agent has completed 30 hours of continuing education (CE) in one licensing period. How many hours can be carried over into the next CE period?

Answer 49

0

Question 50

Which of the following is an eligibility requirement for all Social Security Disability Income benefits?

Answer 50

Have attained fully insured status

Question 51

Which of the following renewability provisions would be allowable on an individual long-term care policy issued for delivery in New Mexico?

Answer 51

Noncancellable

Question 52

What is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly Benefit rider?

Answer 52

1 year

Question 53

Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?

Answer 53

Any form of life insurance

Question 54

All of the following statements describe a MEWA EXCEPT

Answer 54

MEWAs are groups of at least 3 employers.

Question 55

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as

Answer 55

Survivor protection.

Question 56

A temporary insurance license may last for what time period?

Answer 56

180 days

Question 57

Which of the following is true regarding a term health policy?

Answer 57

It is nonrenewable.

Question 58

Health coverage becomes effective when the

Answer 58

First premium has been paid and the application has been approved.

Question 59

An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds

Answer 59

$50,000

Question 60

Which of the following is NOT true regarding Equity Indexed Annuities?

Answer 60

They earn lower interest rates than fixed annuities.

Question 61

Which of the following is available to employers of all sizes?

Answer 61

HRAs

Question 62

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

Answer 62

Common Disaster

Question 63

Why should the producer personally deliver the policy when the first premium has already been paid?

Answer 63

To help the insured understand all aspects of the contract

Question 64

An advertisement for a health insurance product was just published in the newspaper. What is the earliest date that this ad may claim its application is due? Within

Answer 64

10 days.

Question 65

A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as

Answer 65

Critical illness.

Question 66

Under the Fair Credit Reporting Act, if a consumer challenges the accuracy of the information contained in a consumer or investigative report, the reporting agency must

Answer 66

Respond to the consumer's complaint.

Question 67

Which of the following are the main factors taken into account when calculating residual disability benefits?

Answer 67

Present earnings and earnings prior to disability

Question 68

What type of tax is associated with death proceeds from a life insurance policy?

Answer 68

Federal estate tax

Question 69

In disability income insurance, if an insured is considered disabled if they cannot perform any job they are suited for by prior education, training or experience, they fall under which definition of total disability?

Answer 69

Any occupation

Question 70

Which of the following is a characteristic of a Reciprocal Insurance Exchange?

Answer 70

The chief administrator of the insurer is called an "attorney-in-fact".

Question 71

How are contributions to a tax-sheltered annuity treated with regards to taxation?

Answer 71

They are not included as income for the employee, but are taxable upon distribution.

Question 72

When must producers renew their licenses?

Answer 72

Biennially by the last day of their birth month

Question 73

An insured has health insurance that covers them at work and at home. This policy was written on what basis?

Answer 73

Occupational

Question 74

What is the best way to change an application?

Answer 74

Start over with a fresh application

Question 75

An Adjustable Life policyowner can change which of the following policy features?

Answer 75

The coverage period

Question 76

The owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producer say?

Answer 76

The policyowner can specify the way proceeds are split in the policy.

Question 77

How long is the open-enrollment period under an employer group health insurance plan?

Answer 77

30 days

Question 78

The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?

Answer 78

The annuitant must be a natural person.

Question 79

What is the maximum age for qualifying for a catastrophic plan?

Answer 79

30

Question 80

In this state, agents must be appointed by an insurer within how many days of obtaining a license?

Answer 80

60 days

Question 81

When benefits are paid directly to the insured under a health insurance policy, the policy provides benefits on what type of basis?

Answer 81

Reimbursement

Question 82

All of the following are requirements for life insurance illustrations EXCEPT

Answer 82

They must be part of the contract.

Question 83

Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner?

Answer 83

Payment of Claims

Question 84

Which of the following is true of a PPO?

Answer 84

Its goal is to channel patients to providers that discount services.

Question 85

Regarding the return of premium option for LTC policies, what happens to the premium if the policy lapses?

Answer 85

The insurer will return a percentage of the premiums paid.

Question 86

An insured committed suicide one year after his life insurance policy was issued. The insurer will

Answer 86

Refund the premiums paid.

Question 87

An underwriter is reviewing the medical questions in the application and needs further information due to a medical situation the applicant had in the past. What will the underwriter require?

Answer 87

Attending Physician Statement

Question 88

an insured had $500 left in his health reimbursement account when he quit his job. What happens to that money?

Answer 88

The insured can have access to the $500 at his previous employers discretion.

Question 89

which of the following treatments would be covered by endodontics?

Answer 89

root canal.

Question 90

what annuity guarantees to pay an income to the annuitant each year as long as helives and upon death. The annuity will refund the remaining payments to a beneficiary?

Answer 90

installment refund.

Question 91

at what age may an individual purchase an insurance contract?

Answer 91

15

Question 92

under which condition would an employees group medical benefits be exempt from income taxes?

Answer 92

an employees gorup medical benefits are generally exempt from taxiation as income.

Question 93

the death protection componenet of universal life insurance is always

Answer 93

annually renewable term

Question 94

Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?

Answer 94

Disability Buy-Sell

Question 95

Which of the following statements regarding conditional receipts is true?

Answer 95

They are temporary insuring agreements.

Question 96

A provision found in insurance policies which prevents the insured from collecting twice for the same loss is called

Answer 96

Subrogation.

Question 97

Which of the following is true of a PPO?

Answer 97

Its goal is to channel patients to providers that discount services.

Question 98

A couple owns a life insurance policy with a Children’s Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

Answer 98

Proof of insurability is not required.

Question 99

All of the following apply to short-term disability plans EXCEPT

Answer 99

Both group and individual plans are renewable.

Question 100

Which of the following is NOT a qualified IRA distribution?

Answer 100

Withdrawing funds to purchase an investment property