State Exam Study Guide Flashcards
(109 cards)
1
Q
The securities component of index whole life insurance is considered to be?
A
An effective hedge against inflation
2
Q
Long-term care insurance is designed to provide a minimum benefit period of?
A
1 year (12 months)
3
Q
The primary reason for purchasing life insurance is to provide?
A
Death benefits
4
Q
If Ashley dies 36 months after the monthly annuity payments begin, the balance of the annuity fund is?
A
forfeited to the insurer
5
Q
An annuity is designed to create an estate. True or False?
A
False
6
Q
Which settlement option pays a stated amount to an annuitant but no residual value to a beneficiary?
A
Life Income
7
Q
Group long term disability benefit amounts are usually limited to what percentage of the participants income?
A
60%
8
Q
Which clause states that insureds are totally disabled when they cannot perform regular duties of their regular occupations?
A
Own Occupation Clause
9
Q
A clause that protects a policy owner from a misrepresentation caused by an innocent mistake on the application is?
A
Incontestable clause aka incontestability clause
10
Q
Medicare Part B insurance is partially funded by?
A
user premiums
11
Q
What is the annuity payment option that provides an income for guaranteed period of time whether or not the annuitant is living?
A
Life with period certain
12
Q
When can an insurer cancel a Medicare supplement plan?
A
After nonpayment
13
Q
Under traditional fixed annuity contracts, the party who assumes the investment risk is the?
A
The insurer
14
Q
If the loan benefit is not repaid, what will happen to Kylan’s net death benefit?
A
It will be reduced
15
Q
An insurance contract in which the company makes promises that are legally enforceable is?
A
unilateral
16
Q
A waiver of premium rider found in a life insurance contract requires the insured’s disability to be?
A
total and permanent
17
Q
According to Gramm-Leach-Bailey act, an insurer must notify insurance consumers of its policies and procedures for consumer?
A
privacy
18
Q
A decreasing term policy is issued with a decreasing death benefit and?
A
level premiums
19
Q
Which category of risk will provide an individual with the lowest premiums?
A
preferred
20
Q
What is a payment method for settling a health care provider claim?
A
fee-for-service
21
Q
When naming his own estate as beneficiary of a life insurance policy, an insured may?
A
direct policy proceeds are designed to pay off outstanding debts before the estate is settled
22
Q
Upon revocation of a producer’s license, who is responsible for notifying the insurers represented by the producer?
A
The Commissioner of Insurance
23
Q
What condition qualifies an insured for total disability classification under a disability income policy?
A
partial
24
Q
What provision requires an insurer to adjudicate benefits immediately upon receipt of an acceptable written proof of loss?
A
timely payment of claim
25
Unfair methods of competition in the business of insurance would include all of the following EXCEPT?
making direct comparisons between your insurance and those of competitors
26
To assign a policy as collateral for a loan with an irrevocably designated beneficiary, the insured must?
obtain his brother’s written consent
27
Medicare supplement policies are provided by?
private insurers
28
An insurer may take an applicant's marital status into account when determining?
who is eligible for dependent coverage
29
The statement 'We have issued the policy in consideration of the representations in your applications and the payment of the first-term premium' refers to which type of clause?
A consideration clause
30
The purpose of the spendthrift clause in a life insurance policy is to?
prevent creditors of a beneficiary from claiming any future death benefits payable to the beneficiary
31
What is the death benefit of an individual who purchased a standard whole life policy with a $250,000 death benefit at age 40 and died at age 70?
$250,000
32
Which is NOT considered to determine an individual term life insurance premium?
interest
33
The Louisiana Code prohibits all of the following practices EXCEPT?
Boycott that results in restraint of trade in the insurance business
34
What is the purpose of a grace period in life insurance policies?
To prevent unintentional policy lapse
35
What information must be included in the statement accompanying an insurance claim payment made by an insurer?
The coverage under which the payment is being made
36
An illness or disease which is first diagnosed and treated while the policy is in force is considered?
A sickness
37
Which type of insurer is sometimes referred to as a nonparticipating insurer?
A Stock insurer
38
Which type of policy contains both a minimum and target premium?
A universal life policy
39
Term life insurance is more appropriate than whole life insurance when the?
Maximum protection is needed, but the insured cannot afford premium payments for permanent insurance
40
If Jeremy dies during the third year of his $100,000, 10 year level term life insurance policy, how much will his beneficiary receive?
$100,000
41
All of the following factors are used in determining premiums EXCEPT?
Liquidity
42
What information must each Licensee report within 30 days to the commissioner of insurance?
A change of address
43
The types of life insurance policies used to cover key employee indemnification are?
universal, term and whole life insurance
44
Insurable interest is a component of which element in a contract?
Legal Purpose
45
What provision requires an insurer to adjudicate benefits immediately upon receipt of an acceptable written proof of loss?
Timely payment of claim provision
46
The ownership provision of a life insurance policy states that during the insured individual's lifetime, the rights and privileges belong to?
The owner only
47
Which provision in an interest sensitive life insurance policy allows the policy owner to withdraw the policy’s cash value interest free?
A partial surrender
48
A producer’s actions and deeds demonstrate what kind of authority?
Apparent authority
49
In addition to the actual policy, an entire contract includes which of the following?
The application that the insurance was written under
50
An insurer would consider which of the following when determining whether to accept a group life plan?
Average age of the clients
51
Long term care policies will NOT cover necessary medical services one receives in?
an outpatient facility
52
Which clause states that insureds are totally disabled when they cannot perform the major duties of their regular occupations?
own occupational clause
53
A primary factor of universal life insurance is that it is?
Flexible
54
A decreasing term policy is issued with a decreasing death benefit and?
Level premiums
55
When some purchases insurance as a result of threats made by the producer, there has been a violation of?
Unfair trade practices laws
56
Which type of policy allows the policy owner to pay the entire premium in a shorter period of time before the policy matures?
Limited payment whole life
57
Each of the following are examples of a fixed annuity contract except?
Funds are invested into a separate account
58
Medicare supplement policies are provided by?
Private insurers
59
The settlement option that pays a specified amount to an annuitant but pays no residual value to a beneficiary is known as?
Life income
60
What is the insured's tax liability for any benefits paid from the disability plan if the employer pays 60% of the premium?
He must pay taxes on 60% of the benefits received
61
Under traditional fixed annuity contracts, the party who assumes the investment risk is the?
Insurer
62
The reason for using consumer reporting agencies to gather information about insurance applicants is to obtain?
Verifiable information at little expense to the insurer
63
A waiver of premium rider in a life insurance contract requires the insured's disability to be?
Total and permanent
64
If a policy owner selects a settlement option prior to maturity, who has the ability to change that option?
No one does but the policy owner
65
What is the focus of major medical insurance?
Providing coverage for hospitalization expenses
66
In which of the following relationships would there not be insurable interest?
Business owner to business customer
67
What provides for the continuation of benefits if the owner dies prematurely?
Buy-sell funding
68
What type of annuity did an individual buy if it gives her spouse an income for 20 years, and if the spouse dies, the income will be paid to their children?
Life annuity with period certain
69
What annuity payout has no additional payouts regardless of when the annuitant dies?
Life only
70
What annuity payment option provides an income for a guaranteed period of time whether or not the annuitant is alive?
Period certain
71
Emily is receiving tax deferred growth until retirement. In what phase would Emily's annuity be?
Accumulation period
72
Which provision would MOST LIKELY address the concern of disability insurance benefits decreasing over time?
Cost of living benefit
73
An insurer may take into account whether the applicant is male or female when determining?
Rates
74
Which policy feature explains how life insurance creates an immediate estate?
The death benefit is payable to the beneficiary of the insured in a lump sum
75
Individual disability income policies usually limit the monthly benefit to a percentage of an insured's income to reduce?
Over insurance
76
A producer's license may be suspended?
Only after a hearing in a court of law
77
A waiver is defined as the?
Intentional and voluntary giving up of a known right
78
If a producer states that XYZ insurance company is in financial difficulty and not paying claims, the producer may be guilty of?
Defamation
79
Which is NOT considered to determine an individual TERM life insurance premium?
aggregate claim amounts
80
Backdating a life insurance policy is the practice of?
Making the policy effective on a date earlier than the present
81
Which type of beneficiary designation allows the policy owner to name 'all my children' as beneficiary?
Class
82
The PRIMARY reason for purchasing life insurance is to provide?
death benefits
83
Purchasing insurance is an example of which method of handling risk?
Transference
84
Coverage of two or more individuals with the death benefit payable upon the remaining person's death is a feature of?
Last survivor insurance
85
Under the exclusion clause, which scenario would not be covered if death resulted?
Army officer killed in the line of duty
86
A company wants to offer a retirement plan to its employees. The plan will NOT qualify for favorable tax treatment if it is?
temporary
87
What changes are made to both coverage and premiums under the Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage?
Coverage remains the same while premiums increase
88
When the insured desires to give explicit directives of how the policy proceeds are to be distributed, it is most appropriate to name what type of beneficiary?
Individual
89
Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence?
Section 1035 exchange
90
In a hospital indemnity plan, an elimination period refers to the number of days?
An insured must wait before becoming eligible to receive benefits for each hospital stay
91
According to the Health Insurance Portability and Accountability Act (HIPAA) regulations, health coverage for eligible individuals must be offered on what basis?
Guaranteed issue
92
An applicant purchases a life insurance policy to avoid the forced sale of assets upon his death. What is this action called?
Estate conservation
93
Many major medical policies contain an out of pocket MAXIMUM feature that limits?
Health insurance expenses payable by the insured
94
An individual who is NOT acceptable by an insurer at standard rates because of health, habits or occupation is called a?
Substandard risk
95
If an insurer named her four children as beneficiaries in equal shares to her $60,000 life insurance policy and her eldest child dies prior to the insured, how will the proceeds be distributed if designated per capita?
The three surviving children will each receive $15,000
96
Which coverage will pay benefits for a covered accident of illness without first requiring a period of total disability?
A traditional disability policy
97
Prior to annuitization, what is the nonforfeiture value of an annuity?
All premiums paid, plus interest, minus any withdrawals and surrender charges
98
With a deferred annuity, how soon can the benefit payments begin?
At least 12 months after the date of purchase
99
Which of the following is TRUE regarding the suitability of a Long term Care Insurance Policy?
The agent must have resonance grounds for believing that the recommendation is suitable for the customer
100
As a less costly alternative to providing treatment during a hospital stay, insurers may provide benefits for?
Ambulatory outpatient care
101
What is the advantage of a children’s term insurance rider added to the primary insured’s coverage?
Conversion to permanent coverage without evidence of insurability
102
All of the following are true concerning Louisiana licensee residency requirements except?
An application for a resident license constitutes an election of residency in Louisiana
103
What must occur before a producer can receive commissions under an appointment with an additional insurer?
The appointment must be recorded by the Commissioner of Insurance
104
An individual may become licensed as a nonresident producer without passing a written examination by?
Having a reciprocal agreement with the state of domicile
105
Risks are generally not insured if?
The loss is expected
106
Which method for assessing the consumer’s need for life insurance involves predicting the future earning potential of the individual?
Needs approach
107
Which of the following is a covered peril in health insurance?
Accidental injury
108
A producer who attempts to intimidate a prospective insured is guilty of?
Coercion
109
