Insurance MCQ

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Showing posts from December, 2021

Income payments made from an annuity are taxed how?

Income payments made from an annuity are taxed how? Answer: Only partly subject to federal taxation

How is any policy loan recovered by the company if the Extended Term Option goes into effect?

How is any policy loan recovered by the company if the Extended Term Option goes into effect? Answer: The amount is subtracted from any accumulated cash value and the face amount of the term policy is reduced by the same amount

In a whole life insurance policy

In a whole life insurance policy Answer: The cash value is greatest at the end of the policy period, and the insurance protection is greatest at the start of the policy

The life income settlement option under which a beneficiary receives an income from the present time until death

The life income settlement option under which a beneficiary receives an income from the present time until death Answer: Straight Life Income

Parts of the risk selection process

Parts of the risk selection process 1. Physical examination 2. Personal investigation of the proposed insured 3. Choosing prospects for life insurance carefully

The settlement option that provides for the proceeds plus interest to be paid in installments for a specified period of time

The settlement option that provides for the proceeds plus interest to be paid in installments for a specified period of time Answer: Fixed Period Option

A company that has not received permission from the insurance commissioner to do business in this state

A company that has not received permission from the insurance commissioner to do business in this state Answer: An unauthorized company

Within how many days must a producer notify the Commissioner of a change in address?

Within how many days must a producer notify the Commissioner of a change in address? Answer: 30

When transacting insurance business, the producer legally represents the

When transacting insurance business, the producer legally represents the Answer: insurance company

A Long-Term Care policy that provides for home health care must provide coverage that is equivalent to at LEAST

A Long-Term Care policy that provides for home health care must provide coverage that is equivalent to at LEAST Answer: one-half of one year's coverage available for nursing home benefits

Continuing education hours for producers may be granted for participation in all of the following activities EXCEPT

Continuing education hours for producers may be granted for participation in all of the following activities EXCEPT Answer: attending a sales meeting

An insurance advertisement that tends to make a prospect want to find out more about a specific policy is referred to as an

An insurance advertisement that tends to make a prospect want to find out more about a specific policy is referred to as an Answer: institutional advertisement

After notice and a hearing, the Insurance Commissioner may revoke a producer's license for all of the following reasons EXCEPT the

After notice and a hearing, the Insurance Commissioner may revoke a producer's license for all of the following reasons EXCEPT the Answer: producer is found to be insolvent

Which of the following statements is CORRECT about a domestic insurance company in Kansas?

Which of the following statements is CORRECT about a domestic insurance company in Kansas? Answer: It must be organized under Kansas insurance laws

Under the Affordable Care Act, eligibility for dependent children can be determined by which of the following?

Under the Affordable Care Act, eligibility for dependent children can be determined by which of the following? Answer: age

An insurer must offer group medical coverage to all eligible employees of a small employer if the employee

An insurer must offer group medical coverage to all eligible employees of a small employer if the employee Answer: satisfied an applicable waiting period

A producer may only sell products from an insurer after

A producer may only sell products from an insurer after Answer: being properly appointed by the insurer

A temporary license is issued by the Commissioner of Insurance to allow

A temporary license is issued by the Commissioner of Insurance to allow Answer: the personal representative of a deceased producer to provide service to existing policyowners

An advertisement for an Accident & Health policy may include statistical information under which of the following circumstances?

An advertisement for an Accident & Health policy may include statistical information under which of the following circumstances? Answer: If the statisitical information is accurate and the source is cited

Medicare Supplement insurance is guaranteed issue if the policy effective date is within how many months of the insured's Medicare Part B starting date?

Medicare Supplement insurance is guaranteed issue if the policy effective date is within how many months of the insured's Medicare Part B starting date? Answer: 6

A producer is an individual who has been authorized by an insurer to be its representative and to perform all of the following acts EXCEPT

A producer is an individual who has been authorized by an insurer to be its representative and to perform all of the following acts EXCEPT Answer: authorize payment of certain claims

If a producer is found guilty of a felony, he/she is required to notify the Commissioner within how many days?

If a producer is found guilty of a felony, he/she is required to notify the Commissioner within how many days? Answer: 30

All of the following activities could result in the suspension of a producer's license EXCEPT

All of the following activities could result in the suspension of a producer's license EXCEPT Answer: selling any replacement policy that causes an insured to lapse an existing policy

A producer may legally share commissions only with

A producer may legally share commissions only with Answer: another producer who is licensed in the same line of insurance

Insurance producer licenses normally must be renewed every

Insurance producer licenses normally must be renewed every Answer: two years

The Kansas Life and Health Insurance Guaranty Association was established to provide funds

The Kansas Life and Health Insurance Guaranty Association was established to provide funds Answer: to protect an insured in the event of an insurer's insolvency

To verify if replacement is involved in a Medicare Supplement sale, insurance law requires that a question about replacement appear on

To verify if replacement is involved in a Medicare Supplement sale, insurance law requires that a question about replacement appear on Answer: the application form

An insurance producer is BEST defined as

An insurance producer is BEST defined as Answer: a person who has a contract with an insurance company to represent it

Which of the following violations is considered an unfair trade practice?

Which of the following violations is considered an unfair trade practice? Answer: Coercion

An insurance producer who convinces a prospective insured to purchase a policy by exaggerating the benefits of the policy may be found guilty of

An insurance producer who convinces a prospective insured to purchase a policy by exaggerating the benefits of the policy may be found guilty of Answer: misrepresentation

The Replacement of Life Insurance and Annuities regulation is designed to protect the interest of the

The Replacement of Life Insurance and Annuities regulation is designed to protect the interest of the Answer: policyowner

S is covered by a whole life policy. Which insurance product can cover his children?

S is covered by a whole life policy. Which insurance product can cover his children? Answer: Child term rider

A 15-year mortgage is best protected by what kind of life policy?

A 15-year mortgage is best protected by what kind of life policy? Answer: 15-year decreasing term

The investment gains from a Universal Life Policy usually go toward

The investment gains from a Universal Life Policy usually go toward Answer: the cash value

All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for

All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for Answer: Modified Whole Life

How does a typical Variable Life Policy investment account grow?

How does a typical Variable Life Policy investment account grow? Answer: Through mutual funds, stocks, bonds

What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?

What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies? Answer: Family Maintenance Policy

What type of life policy covers 2 lives and pays the face amount after the first one dies?

What type of life policy covers 2 lives and pays the face amount after the first one dies? Answer: Decreasing term

What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death?

What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death? Answer: Face amount plus the policy's cash value

Insurance policies offered on a "take it or leave it" basis are considered what?

Insurance policies offered on a "take it or leave it" basis are considered what? Answer: Contracts of Adhesion

What is the consideration given by an insurer in the Consideration clause of a life policy?

What is the consideration given by an insurer in the Consideration clause of a life policy? Answer: Promise to pay a death benefit

Which of these arrangements allows one to bypass insurable interest laws?

Which of these arrangements allows one to bypass insurable interest laws? Answer: Investor-Originated Life Insurance

T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this?

T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this? Answer: Renewable

A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?

A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision? Answer: Payor provision

All of these are characteristics of an Adjustable Life policy EXCEPT

All of these are characteristics of an Adjustable Life policy EXCEPT Answer: face amount can be adjusted using policy dividends

The federal income tax treatment of employer-provided group health insurance can be accurately described as

The federal income tax treatment of employer-provided group health insurance can be accurately described as Answer: Employee's coverage paid for by the employer is tax-deductible to the employer as a business expenditure

Which of the following statements is correct regarding an employer/employee group health plan?

Which of the following statements is correct regarding an employer/employee group health plan? Answer: the employer receives a master policy and the employees receive certificates

When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?

When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans? Answer: Contributory

J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?

J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy? Answer: $25,000

T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. When T submits a claim, his employer's plan is considered what type of carrier under the Model Group Coordination of Benefits provision?

T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. When T submits a claim, his employer's plan is considered what type of carrier under the Model Group Coordination of Benefits provision? Answer: Primary carrier

The amount of coverage on a group credit life policy is limited to

The amount of coverage on a group credit life policy is limited to Answer: the insured's total loan value

Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?

Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? Answer: policyowner

Which of these is an element of a Variable Life policy?

Which of these is an element of a Variable Life policy? Answer: A fixed, level premium

All of these statements about Equity Indexed Life Insurance are correct EXCEPT

All of these statements about Equity Indexed Life Insurance are correct EXCEPT Answer: The premiums can be lowered or raised, based on investment performance

Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy?

Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy? Answer: increase face amount

Which statement is TRUE regarding a group accident & health policy issued to an employer?

Which statement is TRUE regarding a group accident & health policy issued to an employer? Answer: The employer is the policyowner and each employee receives a certificate of coverage

Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called

Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called Answer: representations

Who makes the legally enforceable promises in a unilateral contract?

Who makes the legally enforceable promises in a unilateral contract? Answer: Insurer

If a contract of adhesion contains questionable language, to whom would the interpretation be in favor of?

If a contract of adhesion contains questionable language, to whom would the interpretation be in favor of? Answer: Insured

Which of these is considered a true statement regarding Medicaid?

Which of these is considered a true statement regarding Medicaid? Answer: Funded by both state and federal governments

The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the

The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the Answer: Waiting Period

Which contract permits the remaining partners to buy-out the interest of a disabled business partner?

Which contract permits the remaining partners to buy-out the interest of a disabled business partner? Answer: Disability Buy-Sell

In Major Medical Expense policies, what is the intent of a Stop Loss provision?

In Major Medical Expense policies, what is the intent of a Stop Loss provision? Answer: Limits an insured's out-of-pocket medical expenses

With a Basic Medical Expense policy, what does the hospitalization expense cover?

With a Basic Medical Expense policy, what does the hospitalization expense cover? Answer: hospital room and board

An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses?

An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses? Answer: $3,000

An individual has a Major Medical policy with a $5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred?

An individual has a Major Medical policy with a $5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred? Answer: $7,000

Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy?

Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy? Answer: Discourages overutilization of the insurance coverage

The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the

The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the Answer: initial deductible

Comprehensive Major Medical policies usually combine

Comprehensive Major Medical policies usually combine Answer: Major Medical with Basic Hospital/Surgical coverage

Which of these options can an individual use their medical flexible spending account to pay for?

Which of these options can an individual use their medical flexible spending account to pay for? Answer: Prescription drugs

D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive?

D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive? Answer: The full face amount

Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges?

Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges? Answer: The maximum amount considered eligible for reimbursement by an insurance company under a health plan

Which of the following phrases refers to the fees charged by a healthcare professional?

Which of the following phrases refers to the fees charged by a healthcare professional? Answer: Usual, customary, and reasonable expenses

A Hospital/Surgical Expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013?

A Hospital/Surgical Expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013? Answer: $1,000

Mary and Philip are married. Philip named Mary as the primary beneficiary of his life insurance policy. His children from a prior marriage are contingent beneficiaries. Under the uniform simultaneous death act, who will receive the death emerging is Mary and Phillip are in a car accident and there is no evidence of who died first?

Mary and Philip are married. Philip named Mary as the primary beneficiary of his life insurance policy. His children from a prior marriage are contingent beneficiaries. Under the uniform simultaneous death act, who will receive the death emerging is Mary and Phillip are in a car accident and there is no evidence of who died first? Answer: Philips children's from his prior marriage

Which beneficiary designation is most appropriate for a person who wants to name his spouse as a beneficiary of his life insurance policy, and simultaneously retain full policy ownership rights

Which beneficiary designation is most appropriate for a person who wants to name his spouse as a beneficiary of his life insurance policy, and simultaneously retain full policy ownership rights Answer: Revocable beneficiary

Which of the following prevents creditors from seizing life insurance policy proceeds as long as there is at least one living named beneficiary, excluding the insured's estate?

Which of the following prevents creditors from seizing life insurance policy proceeds as long as there is at least one living named beneficiary, excluding the insured's estate? Answer: Spendthrift clause

If an irrevocable beneficiary is named on the life insurance policy, all of the following are true:

If an irrevocable beneficiary is named on the life insurance policy, all of the following are true: Answer: The policy owner pays the premium, irrevocable beneficiaries must consent to cancelling the policy, policy owners need consent to assign the policy.

Of the following individuals, who has the right right change the beneficiary designations in a life insurance policy?

Of the following individuals, who has the right right change the beneficiary designations in a life insurance policy? Answer: The policyholder

When Dakota's life insurance policy was written it stated on the policy that Dakota was male. However, Dakota is female. On average, women tend to live several years longer than men. When Dakota died this misstatement was discovered. How did this impact the policy?

When Dakota's life insurance policy was written it stated on the policy that Dakota was male. However, Dakota is female. On average, women tend to live several years longer than men. When Dakota died this misstatement was discovered. How did this impact the policy? Answer: The death benefit was increased.

The stipulated period of time, allotted by the insurance company, to allow a policy holder to make an overdue payment while the policy remains in force and coverage is provided is called the.

The stipulated period of time, allotted by the insurance company, to allow a policy holder to make an overdue payment while the policy remains in force and coverage is provided is called the. Answer: Grace period

Gerry forgets to pay his life insurance premium, and the policy lapses. If he is within the reinstatement period and decides to reinstate his policy, he will be required to take all the following actions:

Gerry forgets to pay his life insurance premium, and the policy lapses. If he is within the reinstatement period and decides to reinstate his policy, he will be required to take all the following actions: Answer: Provide proof of evidence of insurability, pay any back-due interest on an outstanding policy loan, and pay all past-due premiums

Joanna's cash value in her life policy went to zero. Which of the following statements is true about the effect on her cash value ;I've insurance policy?

Joanna's cash value in her life policy went to zero. Which of the following statements is true about the effect on her cash value ;I've insurance policy? Answer: Her policy lapsed and her premium didn't get paid.

Withdrawals or partial surrenders can be made on the cash value of a universal life policy. Which of the following is specified in the policy?

Withdrawals or partial surrenders can be made on the cash value of a universal life policy. Which of the following is specified in the policy? Answer: How much can be withdrawn

The insuring clause of a policy includes all of the following:

The insuring clause of a policy includes all of the following: Answer: The names of covered individuals, the period of coverage of the policy, the effective date of the policy

Marcella purchases a modified life insurance policy at the age of 31. Thinking she could get a slightly better rate on her policy, she lists her age as 21. If the insurance company discovers the error upon Marcella's death, what action will the insurance company take?

Marcella purchases a modified life insurance policy at the age of 31. Thinking she could get a slightly better rate on her policy, she lists her age as 21. If the insurance company discovers the error upon Marcella's death, what action will the insurance company take? Answer: Pay the death benefit based on Marcella's actual age

If a policy loan is unpaid, the automatic premium loan provision has effect of deducting the amount of the loan with interest from the death benefit. What should the policyholder do to avoid this reduction in the death benefit?

If a policy loan is unpaid, the automatic premium loan provision has effect of deducting the amount of the loan with interest from the death benefit. What should the policyholder do to avoid this reduction in the death benefit? Answer: Repay the loan with interest

Julie applies for a health insurance policy. Her consideration consists:

Julie applies for a health insurance policy. Her consideration consists: Answer: Statements made on the application and initial premium.

How long is the loan period on STOLI arrangements?

How long is the loan period on STOLI arrangements? Answer: 2 years

The provision identifies the named insured, type and amount of coverage provided by the policy:

The provision identifies the named insured, type and amount of coverage provided by the policy: Answer: Insuring cause

Jennifer is trying to add her insurance premium payments to her budget. All of the following are accepted payment mode options:

Jennifer is trying to add her insurance premium payments to her budget. All of the following are accepted payment mode options: Answer: Annually, monthly, quarterly

Which provision is mandatory in life insurance policies?

Which provision is mandatory in life insurance policies? Answer: Grace period

All life insurance is either term insurance or cash value insurance. Term insurance insures your life only for a specified time. Which of the following is not true about term insurance?

All life insurance is either term insurance or cash value insurance. Term insurance insures your life only for a specified time. Which of the following is not true about term insurance? Answer: Term insurance builds cash value

What is the primary purpose of the entire contract provisions in s life insurance policy?

What is the primary purpose of the entire contract provisions in s life insurance policy? Answer: Provide assurance that the policyholder has all necessary policy documents in their possession.

In most states, the period of con-testability for material misrepresentations made on a life insurance application is:

In most states, the period of con-testability for material misrepresentations made on a life insurance application is: Answer: 2 years

All of the following are guaranteed features in a variable life insurance policy's?

All of the following are guaranteed features in a variable life insurance policy's? Answer: Period of death protection, premium rate, death benefit

What best describes option and option 1 under a universal life policy?

What best describes option and option 1 under a universal life policy? Answer: The death benefit is the policy face amount or a policy cash value, but not both.

What happens when a universal life policyholder pays these target premium?

What happens when a universal life policyholder pays these target premium? Answer: The policy will resemble whole life insurance

Which of the following policies combined convertible term and whole life, and has lower premiums in the early years which increase to a higher level after a certain number of years?

Which of the following policies combined convertible term and whole life, and has lower premiums in the early years which increase to a higher level after a certain number of years? Answer: Modified whole

After looking at his option, Randy decided on a single premium whole life policy. What is the main advantage of this type of policy?

After looking at his option, Randy decided on a single premium whole life policy. What is the main advantage of this type of policy? Answer: The total premium is lower.

This life insurance policy provides death protection for the insurers entire life, but premiums are not paid for the insured's entire life.

This life insurance policy provides death protection for the insurers entire life, but premiums are not paid for the insured's entire life. Answer: 20-pay life

What is true regarding the cash value in an ordinary whole life policy?

What is true regarding the cash value in an ordinary whole life policy? Answer: It may be used as a policy loan without affecting the death benefit.

The non-guaranteed elements of an insurance policy are:

The non-guaranteed elements of an insurance policy are: Answer: Illustrations

Angela took out $2000 policy loan from her whole life policy. The policy face amount is $200,000. If Angela does not repay the loan, how will the death benefit be affected?

Angela took out $2000 policy loan from her whole life policy. The policy face amount is $200,000. If Angela does not repay the loan, how will the death benefit be affected? Answer: The death benefit will be decreased by $2,000 plus interest.

Which business continuation plan permits decreased shareholders heirs to maintain some ownership while the corporation redeems a portion of the deceased shareholders shares?

Which business continuation plan permits decreased shareholders heirs to maintain some ownership while the corporation redeems a portion of the deceased shareholders shares? Answer: Section 303 plan

The agent must provide the buyers guide to the applicant:

The agent must provide the buyers guide to the applicant: Answer: Upon application or at the time of policy delivery if a 10-day free look is provided.

An individual signed a application for a $100,000 life insurance policy and paid the first premium on January 1st. The agent issued an issued a insurability receipt. A week later, the required medical examination proves the person insurance. If the person dies before the insurer approves the application:

An individual signed a application for a $100,000 life insurance policy and paid the first premium on January 1st. The agent issued an issued a insurability receipt. A week later, the required medical examination proves the person insurance. If the person dies before the insurer approves the application: Answer: The coverage will be retroactively effective. As a result the beneficiary will receive $100,000 death benefit.

What best describes MIB?

What best describes MIB? Answer: Non-profit trade organization that supplies insurability information to member companies.

All of the following are involved in the collection of an applicants medical history.

All of the following are involved in the collection of an applicants medical history. Answer: The agent report, the attending physician statement, the application of the insurance policy.

During a replacement of life insurance, the replacing insurer must

During a replacement of life insurance, the replacing insurer must Answer: obtain a list of all life insurance policies that will be replaced

An annuity contract is issued to consumer over age 65. What is maximum surrender charge for withdrawal of money allowed on this annuity?

An annuity contract is issued to consumer over age 65. What is maximum surrender charge for withdrawal of money allowed on this annuity? Answer: 10%

If claim made on policy during grace period, an insurer is allowed to deduct overdue premium and to charge interest. What is maximum allowed interest?

If claim made on policy during grace period, an insurer is allowed to deduct overdue premium and to charge interest. What is maximum allowed interest? Answer: 8%

Which is among regulations set forth by Florida Replacement Rule?

Which is among regulations set forth by Florida Replacement Rule? Answer: Providing written comparison and summary statement

Which of the following documents must be provided to policy owner or applicant during policy replacement?

Which of the following documents must be provided to policy owner or applicant during policy replacement? Answer: Notice regarding replacement

A customer want to exchange an old contract for new one. What regulation should customer's insurance agent consult?

A customer want to exchange an old contract for new one. What regulation should customer's insurance agent consult? Answer: The Florida Replacement Rule

Under what conditions will proof of insurability not required of an employee wanting to enroll in group insurance?

Under what conditions will proof of insurability not required of an employee wanting to enroll in group insurance? Answer: if employee enrolls within certain time period

An employer offers group coverage of 10,000 to employees. What is true about cost?

An employer offers group coverage of 10,000 to employees. What is true about cost? Answer: the cost of coverage is deductible expense by the employer

Certificates of coverage are issued to

Certificates of coverage are issued to Answer: participants in a group plan

If a life insurer holds proceeds of any policy it issues, which of the following is true.

If a life insurer holds proceeds of any policy it issues, which of the following is true. Answer: The proceeds may be exempt from any creditor's claims against a beneficiary other than policy owner

A paid up nonforfeiture benefit will become effective as specified in the policy unless person entitled elects another available option within how many days after the due date of premium is in default?

A paid up nonforfeiture benefit will become effective as specified in the policy unless person entitled elects another available option within how many days after the due date of premium is in default? Answer: 60

Can a group that's formed for the sole purpose of obtaining group insurance qualify for group coverage?

Can a group that's formed for the sole purpose of obtaining group insurance qualify for group coverage? Answer: No. The group must be formed for a purpose other than obtaining group insurance

In order for debtor group to qualify for group life insurance what is the minimum number of participants joining the plan each year be?

In order for debtor group to qualify for group life insurance what is the minimum number of participants joining the plan each year be? Answer: 100

When a group policy terminates, each individual insured under the policy will be entitled to have an individual policy if insured has been insured under group policy for at least how many years prior to policy termination?

When a group policy terminates, each individual insured under the policy will be entitled to have an individual policy if insured has been insured under group policy for at least how many years prior to policy termination? Answer: 5 years

What term describes the benefit of life insurance policy that the policyowner does not automatically relinquish if policy lapses

What term describes the benefit of life insurance policy that the policyowner does not automatically relinquish if policy lapses Answer: Nonforfeiture Values

What kind of policy does not require proof of insurability?

What kind of policy does not require proof of insurability? Answer: Group insurance

Under a group plan, certificates of insurance must include all the following except

Under a group plan, certificates of insurance must include all the following except Answer: the name of the writing agent

Which rule would apply if an agent knew the applicant is going to cash in an old policy and use the funds to purchase new insurance?

Which rule would apply if an agent knew the applicant is going to cash in an old policy and use the funds to purchase new insurance? Answer: Replacement Rule

All the advertisements, regardless of their source of creation are the responsibility of

All the advertisements, regardless of their source of creation are the responsibility of Answer: insurer

Which is an incorrect statement?

Which is an incorrect statement? Answer: Replacing insurance policies for purpose of making commissions is legal

If a person accumulates more continuing education hours than is necessary to fulfill the requirements of the 2 year period which of the following will occur?

If a person accumulates more continuing education hours than is necessary to fulfill the requirements of the 2 year period which of the following will occur? Answer: The extra hours may be continued into the next period

Which method insurers use to protect themselves against catastrophic losses?

Which method insurers use to protect themselves against catastrophic losses? Answer: reinsurance

An insured submits proof of loss form within 10 days of loss. The insurer however does not acknowledge the form for 3 months. Which of the following violations has the insurer committed?

An insured submits proof of loss form within 10 days of loss. The insurer however does not acknowledge the form for 3 months. Which of the following violations has the insurer committed? Answer: unfair claims settlement

Rebating is an unfair trade practice and it's regulated by law. All of the following are rebating except

Rebating is an unfair trade practice and it's regulated by law. All of the following are rebating except Answer: an agent uses misrepresentation to convince a person to cancel an existing policy and take a new policy from him

Which of the following is true regarding branch agency licensing

Which of the following is true regarding branch agency licensing Answer: agent in charge must be licensed

Which of the following would be an example of unfair claims settlement practice

Which of the following would be an example of unfair claims settlement practice Answer: failing to acknowledge a claim within 30 days

An applicant for a life agent's license may obtain a temporary license for a maximum period of

An applicant for a life agent's license may obtain a temporary license for a maximum period of Answer: 6 months

Which of the following entities protects policyowners, isureds and beneficiares under insurance contracts when insurer fails to perform contractual obligations due to financial impairment?

Which of the following entities protects policyowners, isureds and beneficiares under insurance contracts when insurer fails to perform contractual obligations due to financial impairment? Answer: Insurance Guaranty Association

Failure of a licensee to maintain an appointment with an insurance company within 48 months after the date the license became effective will result in

Failure of a licensee to maintain an appointment with an insurance company within 48 months after the date the license became effective will result in Answer: expiration of the license

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered Answer: an unfair trade practice

Insurance contracts are agreements between which 2 parties?

Insurance contracts are agreements between which 2 parties? Answer: insurer and insured

All of the following are general qualifications for an agent's license except:

All of the following are general qualifications for an agent's license except: a.be a state resident b.pass a criminal background check c.have a high school diploma d.be found competent and worthy Answer: have a high school diploma

Which of the following entities is responsible for agent licensing and administrative supervision?

Which of the following entities is responsible for agent licensing and administrative supervision? Answer: The office of Insurance Regulation

Applications to the insurer must include all the following except:

Applications to the insurer must include all the following except: a.license identification number of agent b.name of insurer. c.name of agent d.credit history report Answer: credit history report

Who examines the books and records of insurance companies in florida?

Who examines the books and records of insurance companies in florida? Answer: The Chief Financial Officer

In order to maintain an insurance license an agent will need to satisfy florida's continuing education requirement of

In order to maintain an insurance license an agent will need to satisfy florida's continuing education requirement of Answer: 24 hours of continuing education in every 2-year period

How is the Insurance Guaranty association funded

How is the Insurance Guaranty association funded Answer: by its members- authorized insurers

What are liquid resources in a life insurance contract?

What are liquid resources in a life insurance contract? Answer: the cash value available to the insured

Which of the following accurately compares business and personal life insurance

Which of the following accurately compares business and personal life insurance Answer: both create immediate payment upon death of insured

Social security was created to protect against all the following except

Social security was created to protect against all the following except a.disability b.sickness in old age c.bad investment choice d.premature death Answer: Bad investment choice

An insurer is helping a married couple determine their children's needs assets and liabilities, in the event the one or both spouses die. What term means that?

An insurer is helping a married couple determine their children's needs assets and liabilities, in the event the one or both spouses die. What term means that? Answer: Survivor Protection

The primary beneficiary of her husband's life policy found no settlement option was stated in the policy on the date of her husband's death. who will select the settlement option in this case?

The primary beneficiary of her husband's life policy found no settlement option was stated in the policy on the date of her husband's death. who will select the settlement option in this case? Answer: the beneficiary

Walter purchased a 15 year level term life insurance with a face amount of 100,000$. The policy contained an accidental death rider, offering a double indemnity benefit. He was severely injured in auto accident and after 10 weeks of hospitalization he dies from injuries. What amount would beneficiary receive as settlement?

Walter purchased a 15 year level term life insurance with a face amount of 100,000$. The policy contained an accidental death rider, offering a double indemnity benefit. He was severely injured in auto accident and after 10 weeks of hospitalization he dies from injuries. What amount would beneficiary receive as settlement? Answer: $200,000

Which explains policy owner's rights to change beneficiaries, choose options and receives proceeds of a policy

Which explains policy owner's rights to change beneficiaries, choose options and receives proceeds of a policy Answer: owner's rights

An insured owns a life insurance policy. In order to pay some of medical bills, she withdraws a portion of policy's cash value.There is a limit for withdrawal and insurer charges a fee. What type of policy does insured most likely have?

An insured owns a life insurance policy. In order to pay some of medical bills, she withdraws a portion of policy's cash value.There is a limit for withdrawal and insurer charges a fee. What type of policy does insured most likely have? Answer: universal life

An insured is involved in car accident and disabled. If policy contains a waiver of premium rider which of the following is true regarding the policy premiums?

An insured is involved in car accident and disabled. If policy contains a waiver of premium rider which of the following is true regarding the policy premiums? Answer: The insured will have to pay premium for 6 months, after which the premiums will be reimbursed and subsequent premiums will be waived.

The two types of assignments are

The two types of assignments are Answer: absolute and collateral

Which apply to free look privilege?

Which apply to free look privilege? Answer: it permits the insured to reject the policy with full refund

Which would not receive death benefit immediately after insured dies?

Which would not receive death benefit immediately after insured dies? Answer: a minor son of the insured

What is true about a spouse term rider

What is true about a spouse term rider Answer: the rider is usually level term insurance

At age 30 a man wants to start an insurance program, but realizing his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs?

At age 30 a man wants to start an insurance program, but realizing his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs? Answer: adjustable life

The term fixed in fixed annuity does not refer to

The term fixed in fixed annuity does not refer to Answer: death benefit

What's not true about variable universal life policy

What's not true about variable universal life policy Answer: the death benefit is fixed

In an adjustable life policy what cannot be changed by the owner

In an adjustable life policy what cannot be changed by the owner Answer: the type of investment

What is not true regarding a decreasing term policy?

What is not true regarding a decreasing term policy? Answer: the payable premium amount steadily declines throughout the duration of the contract

The annuity owner dies when annuity is still in accumulation stage. Which of the following is true?

The annuity owner dies when annuity is still in accumulation stage. Which of the following is true? Answer: The beneficiary will receive the greater of the money paid into the annuity or cash value.

An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10 year term?

An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10 year term? Answer: The insured may renew the policy for another 10 years, but at a higher premium rate

One of applicants for life insurance missed a couple of questions on the application. What should insurer do with application?

One of applicants for life insurance missed a couple of questions on the application. What should insurer do with application? Answer: return to applicant for completion

Which of the following is a statement guaranteed to be true and if untrue may breach an insurance contract?

Which of the following is a statement guaranteed to be true and if untrue may breach an insurance contract? Answer: warranty

What's not a requirement for life insurance illustrations?

What's not a requirement for life insurance illustrations? Answer: must be part of the contract

Which of the following describes the process of policy delivery?

Which of the following describes the process of policy delivery? Answer: After the insurer receives application, it is forwarded to the underwriting department. After the application is approved and the policy is issued the policy is then delivered by person or by mail

Which of the following would provide an underwriter with information concerning applicant's medical history?

Which of the following would provide an underwriter with information concerning applicant's medical history? Answer: The Medical Information Bureau

An applicant who receives preferred risk classification qualifies for

An applicant who receives preferred risk classification qualifies for Answer: lower premiums than a person who receives a standard risk

What type of risk results in highest premium?

What type of risk results in highest premium? Answer: substandard risk

An applicant is denied insurance because of information found on consumer report. Which of the following requires that an insurance company supply the applicant with the name and address of the consumer reporting company?

An applicant is denied insurance because of information found on consumer report. Which of the following requires that an insurance company supply the applicant with the name and address of the consumer reporting company? Answer: Fair Credit Reporting Act

Why should the agent personally deliver the policy when the first premium have been made?

Why should the agent personally deliver the policy when the first premium have been made? Answer: To help insured understand all aspects of the contract

What is the purpose of a disclosure statement in life insurance policies?

What is the purpose of a disclosure statement in life insurance policies? Answer: to explain features and benefits of a proposed policy to the consumer

An insured received a new life insurance policy 5 days ago, but after a closer inspection of the policy provisions, decided to return it to the insurer. What provision would allow the insured to return the policy for a full premium refund?

An insured received a new life insurance policy 5 days ago, but after a closer inspection of the policy provisions, decided to return it to the insurer. What provision would allow the insured to return the policy for a full premium refund? Answer: Free look. The free-look provision generally allows an insured a specified number of days from the delivery date of the policy to look over a new policy and return it for a full premium refund if dissatisfied for any reason. For life policies and annuities in Florida, that time period is extended to 14 days.

Which of the following is NOT a responsibility of the Office of Insurance Regulation?

Which of the following is NOT a responsibility of the Office of Insurance Regulation? Answer: Enacting new insurance laws. New laws are enacted by the state legislature.

The minimum age for purchasing life insurance policy in Florida is

The minimum age for purchasing life insurance policy in Florida is Answer: 15. In Florida, the minimum legal age to enter into a life insurance contract is 15.

A customer with an existing life insurance contract is considering exchanging it for a newer contract. What Florida insurance regulation should the customer's insurance agent consult?

A customer with an existing life insurance contract is considering exchanging it for a newer contract. What Florida insurance regulation should the customer's insurance agent consult? Answer: The Florida Replacement Rule. The Florida Replacement Rule established the procedures followed when a prospective life insurance buyer replaces an existing insurance contract with new insurance.

All of the following information about a customer must be used in determining annuity suitability EXCEPT

All of the following information about a customer must be used in determining annuity suitability EXCEPT Answer: Beneficiary's age. To ensure suitability of annuity products, producers must obtain relevant information about the consumer's age, income, financial status, tax status, financial experience and objectives. Beneficiary's age is not a suitability factor.

A participating insurance policy may do which of the following?

A participating insurance policy may do which of the following? Answer: Pay dividends to the policyowner. A participating insurance policy will pay dividends to the owner based upon actual mortality cost, interest earned and costs.

An agent's client needs additional insurance which the agent's own insurer cannot provide. The agent has to solicit additional coverage from another authorized insurer. This coverage is known as

An agent's client needs additional insurance which the agent's own insurer cannot provide. The agent has to solicit additional coverage from another authorized insurer. This coverage is known as Answer: Excess. A licensed life agent may place excess or rejected risks within the agent's licensing authority with another insurer without being required to have an appointment with that insurer. Excess business is that portion of a risk above the limits of that which the agent's own insurer will accept.

Under special circumstances, continuing education requirements may be extended beyond the 2-year period for a maximum period of

Under special circumstances, continuing education requirements may be extended beyond the 2-year period for a maximum period of Answer: 12 months. Excess classroom hours accumulated during any 2-year period may be carried forward to the next 2-year period. If good cause is shown, the department may grant an extension not to exceed 1 year.

An insurance agent X has been found guilty of a felony and was sentenced to 3 years in prison. What would be the appropriate plan of action?

An insurance agent X has been found guilty of a felony and was sentenced to 3 years in prison. What would be the appropriate plan of action? Answer: Send a written notification to the department of insurance. Agents must notify the Department of Insurance in writing 30 days after being found guilty of a felony or a crime punishable by imprisonment of 1 year or more.

In what way can an agent demonstrate a high standard of ethics?

In what way can an agent demonstrate a high standard of ethics? Answer: Putting the client's best interest before their own. The needs of the client(s) are the priority to a highly ethical agent.

An agent delivers a life insurance policy to the proposed insured. The insured makes a decision not to accept the policy. The insured may return the policy for a full refund of premium within how many days?

An agent delivers a life insurance policy to the proposed insured. The insured makes a decision not to accept the policy. The insured may return the policy for a full refund of premium within how many days? Answer: 14. The free-look provision in Florida allows the insured to return a life policy or annuity after 14 days if dissatisfied for any reason.

In life policies issued in this state, insurers are permitted to charge interest during the policy grace period for the number of days elapsing before the premium is paid. What is the maximum annual interest rate?

In life policies issued in this state, insurers are permitted to charge interest during the policy grace period for the number of days elapsing before the premium is paid. What is the maximum annual interest rate? Answer: 8%. The time that may elapse between a premium's due date and its eventual payment is called the grace period. Insurer's may impose interest charges not to exceed 8% per year for the number of days elapsing before the premium is paid.

If an employer decides to change its life insurance policy to a similar one with a different insurer, which of the following describes the extent that replacement regulations will be exercised?

If an employer decides to change its life insurance policy to a similar one with a different insurer, which of the following describes the extent that replacement regulations will be exercised? Answer: Replacement regulations will not apply in this situation. If a new life insurance policy is provided under a group life insurance policy covering employees or members of an association, replacement regulations do not apply.

An agent has been convicted of a crime punishable by a 1-year imprisonment. Within how many days must the agent notify the department of insurance?

An agent has been convicted of a crime punishable by a 1-year imprisonment. Within how many days must the agent notify the department of insurance? Answer: 30 days. Agents must notify the Department of Insurance in writing 30 days after being found guilty of a felony or a crime punishable by imprisonment of 1 year or more.

What term is used for replacing insurance policies for the sole purpose of making commissions?

What term is used for replacing insurance policies for the sole purpose of making commissions? Answer: Churning. "Churning" is defined as replacing insurance policies for the sole purpose of making commissions.

When does a free-look period begin on a life insurance policy?

When does a free-look period begin on a life insurance policy? Answer: When the policy is delivered to the insured. The free-look provision allows an insured a period of a specified number of days from the delivery date of the policy to look over a new policy and return it for a full premium refund if dissatisfied for any reason.

If an employee is accepted into a group insurance plan, which status will the employee have?

If an employee is accepted into a group insurance plan, which status will the employee have? Answer: Certificate holder. In group insurance, plan participants (insureds) do not receive a policy. Instead, they receive certificates of insurance, indicating that they are covered by the policy.

Licensed life insurance agents are expected to be familiar with which of the following laws?

Licensed life insurance agents are expected to be familiar with which of the following laws? Answer: All of the insurance laws and regulations. While the other laws may have particular significance, an agent should be generally aware of all insurance laws.

Who does the secondary notice provision protect?

Who does the secondary notice provision protect? Answer: Elderly insureds. The secondary notice provision protects elderly insureds, and prevents the policy from lapsing for nonpayment of premium after the grace period without the insurer notifying the policyowner and a designated secondary addressee of the impending lapse in coverage.

The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?

The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract? Answer: Conditional. A conditional contract requires both the insurer and policyowner to meet certain conditions before the contract can be executed, unlike other types of policies, which put the burden of condition on either the insurer or the policyowner.

During partial withdrawal from a universal life policy, which portion will be taxed?

During partial withdrawal from a universal life policy, which portion will be taxed? Answer: Interest. During the withdrawal, the interest earned on the withdrawn cash value may be subject to taxation.

The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called

The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called Answer: Joint and survivor. A joint and survivor option pays while either beneficiary is still living.

Because of financial obligations, John felt that he needed more insurance than the insurer was willing to issue. John's insurance producer told him that he could maximize the death benefit without increasing the face amount by the use of a(n)

Because of financial obligations, John felt that he needed more insurance than the insurer was willing to issue. John's insurance producer told him that he could maximize the death benefit without increasing the face amount by the use of a(n) Answer: Return of premium rider. With the "return of premium" rider attached to the policy, upon the insured's death, the benefit paid will be the face amount plus an amount equal to all the premiums paid on the contract.

The insurer discovered that one of the applicants for life insurance missed a couple of questions on the application. What should the insurer do with the application?

The insurer discovered that one of the applicants for life insurance missed a couple of questions on the application. What should the insurer do with the application? Answer: Return to the applicant for completion. Any unanswered questions need to be answered before the policy is issued. If the insurer receives incomplete applications, they need to be returned to the applicants for completion.

All of the following are examples of third-party ownership of a life insurance policy EXCEPT

All of the following are examples of third-party ownership of a life insurance policy EXCEPT Answer: An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan. A collateral assignment is the transfer of some or all of the death benefits of the policy to a creditor as security for a loan, but does not give the creditor the rights of ownership. In the event of the insured's death, the creditor would only be able to recover that portion of the policy's proceeds equal to the creditor's remaining interest in the loan.

What does "liquidity" refer to in a life insurance policy?

What does "liquidity" refer to in a life insurance policy? Answer: Cash values can be borrowed at any time. Liquidity in life insurance refers to availability of cash to the insured through cash values.

Which of the following is called a "second-to-die" policy?

Which of the following is called a "second-to-die" policy? Answer: Survivorship life. Survivorship life (also referred to as "second-to-die" or "last survivor" policy) is much the same as joint life in that it insures two or more lives for a premium that is based on a joint age.

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will Answer: Issue the policy anyway and pay the face value to the beneficiary. The conditional receipt says that coverage will be effective either on the date of the application or the date of the medical exam, whichever occurs last, as long as the applicant is found to be insurable as a standard risk, and policy is issued exactly as applied for.

Nonforfeiture values guarantee which of the following for the policyowner?

Nonforfeiture values guarantee which of the following for the policyowner? Answer: That the cash value will not be lost. Because permanent life insurance policies have cash values, there are certain guarantees built into the policy that cannot be forfeited by the policyowner. Nonforfeiture values give the insured the right to the cash value even if the policy lapses or is surrendered.