Missed from Practice Test Flashcards
(39 cards)
If a licensed person is moving to Pennsylvania, he or she may become licensed as a resident if they submit a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state?
90 days
Which of the following are NOT fundable by annuities?
a) A person’s retirement
b) Estate liquidation
c) Death benefits
d) Cash accumulation for any reason
D. Death Benefits
When would a 20-pay whole life policy endow?
When the insured reaches age 100
A limited-pay whole life policy, just like straight life, endows for the face amount if the insured lives to age 100. The premium is, however, completely paid off in 20 years.
When a person applies for Medicare supplement insurance, whose responsibility is it to confirm that the applicant does not already have accident or sickness insurance in force?
Insurer.
Although it is illegal for an applicant to intentionally misrepresent himself in an insurance application, it is the insurer’s ultimate responsibility to make sure that the applicant does not already have another accident or sickness policy in force.
If the owner prematurely surrenders his deferred annuity before the annuitization period begins, which of the following is most likely to occur?
If a deferred annuity is surrendered prematurely, a surrender charge is imposed. The charge is generally a percentage that reduces over time until it ends.
While a claim is pending, how often can an insurance company require an independent exam?
As often as reasonably required.
What are the personal uses of life insurance?
Personal uses of life insurance include survivor protection, estate creation and conservation, cash accumulation, and liquidity.
Which authority is NOT stated in an agent’s contract but is required for the agent to conduct business?
Implied authority is not written in the agent’s contract but is required in order for the agent to conduct business. Implied authority exists because not every single detail of an agent’s authority can be written in a contract.
Which of the following is true regarding a term health policy?
a) It is conditionally renewable.
b) It is guaranteed renewable.
c) It is noncancellable.
d) It is nonrenewable.
It is nonrenewable.
In term health policies, the owner has no rights of renewal.
Which of the following insurance providers would be considered a risk sharing arrangement?
a) Surplus lines
b) Reciprocal
c) Stock
d) Mutual
When insurance is obtained through a reciprocal insurer, the insureds are sharing the risk of loss with other subscribers of that reciprocal.
Your client plans to retire at age 50. He would like to purchase an annuity that would provide income from the time he retires to the age when social security and other pension funds become available. What settlement option should he consider?
Annuity Certain option allows the annuitant to select the time period or the amount for the benefits. Under the installments for a fixed period, distribution begins on a specific date and stops on a specific date.
Which of the following is NOT a way to determine the interest rate in a Universal Life Policy?
a) Maintain a profit margin between the interest credited on in-force policies and the interest earned on their own investment portfolio
b) Estimate market conditions for the life of the policy
c) Declare the annual rate by the company’s board of directors
d) Tie current interest rates to Treasury Bills
b) Estimate market conditions for the life of the policy
Some insurers tie their current interest rates to Treasury Bills, while others maintain a specified spread (profit margin) between the interest that they credit on their in-force policies and the interest that they are earning on their own investment portfolio. Some insurers have their current interest rate declared by the company’s board of directors each year, if not more frequently.
Alden is involved in a small plane accident that renders him permanently deaf, although he does not sustain any other major injuries. Alden is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?
Full Benefits
Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of at least two limbs (Loss of use does not qualify in some policies.), total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work.
An employee quits his job on May 15 and doesn’t convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. What will happen?
The insurer will pay the full death benefit from the group policy to the beneficiary.
The employee usually has a period of 31 days after terminating from the group in order to exercise the conversion option. During this time, the employee is still covered under the original group policy.
The paid-up addition option uses the dividend to…
purchase a single premium policy in addition to the face amount of the permanent policy.
When a group health insurance plan is terminated, how long is an extension of benefits provided for any totally disabled employee or dependent?
Group insurance plans, which are terminated generally, provide for an extension of benefits to any totally disabled employee or dependent. This extension of benefits is generally provided up to a period of 12 months or until the individual is no longer totally or continuously disabled.
A producer licensed in Pennsylvania must notify the Insurance Department of any change of address in his or her residence or business address within how many days?
Every producer licensed in Pennsylvania must notify the Insurance Department in writing, within 30 days, of any change of address in his or her residence or business address. The producer must also notify all the entities for which the producer holds an appointment.
Who can surrender a deferred annuity contract?
If the need arises, a deferred annuity contract may be surrendered only by the annuity owner. At surrender the owner receives the value of the annuity minus a surrender charge.
Which of the following terms is used to name the nontaxed return of unused premiums?
The return of unused premiums is called a dividend. Dividends are not considered to be income for tax purposes, since they are the return of unused premiums.
When a producer holding a certificate or a broker’s license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within
within 30 days. Time parameters for sending notice of a change of address are established by the Insurance Code.
What is the elimination period for Social Security disability benefits?
5 months
An agent selling variable annuities must be registered with
FINRA (formerly NASD) and hold a securities license in addition to a life agent’s license in order to sell variable annuities.
How many policies are necessary to cover a cross purchase (buy/sell agreement) between 3 people?
Since each person would have a policy on each of the other people, among the 3 owners, the total number of policies would be six.
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 a $100 per day. How much will the insurance company pay?
Most LTC policies will pay the benefit amount in a specific fixed dollar amount per day, regardless of the actual cost of care.
