2nd Garantee Exam

Question 1

An insurer can decide to not renew an Optionally Renewable policy

Answer 1

On premium due dates

Question 2

Who would be the insured in business disability insurance?

Answer 2

Key employees

Question 3

Life insurance creates an immediate estate. Which of the following best explains this statement?

Answer 3

The face amount of the policy is payable to the beneficiary upon the death of the insured

Question 4

All of the following statements are true regarding an ordinary straight life policy except

Answer 4

It does not have a guaranteed death benefit

Question 5

An employee that becomes ineligible for group coverage because of termination of employment or change in status, must exercise extension of benefits under COBRA

Answer 5

Within 60 days

Question 6

Which of the following statements is true of a Combination Dental Plan?

Answer 6

It is a combination of a scheduled and nonscheduled dental plan

Question 7

In which of the following scenarios would a producer be allowed to obtain insurance through an unauthorized insurer?

Answer 7

If there are no authorized insurers for a specific type of coverage in this state

Question 8

A married couple wants to include the entire family in their whole life policy under one rider. Which of the following riders will help them achieve that goal?

Answer 8

Family term

Question 9

An applicant completes an application for a disability policy and pays the initial premium. The producer gives the applicant a conditional receipt. Insurance coverage for the applicant will become effective when

Answer 9

The insurance company accepts the risk

Question 10

Which of the following policies would not offer a policy loan option?

Answer 10

Term life

Question 11

All of he following are characteristics of group health insurance plans except

Answer 11

The parties that hold a group health insurance contract are the employees and the employer

Question 12

Utilization management consists of an evaluation of the appropriateness, necessity and quality of health care, and may include

Answer 12

Prospective and concurrent review

Question 13

An insured’s life expectancy is 6 months. How often may a viatical settlement provider contact the insured and inquire about the insurer’s health status?

Answer 13

Once a month

Question 14

Which of the following best defines the Probationary Period in group health policies?

Answer 14

A specified period of time that a person joining a group has to wait before becoming eligible for coverage

Question 15

What type of an interest rate is guaranteed in universal life policies?

Answer 15

Contract interest rate

Question 16

Conrad receives $50,000 from a $100,000 Accidental Death and Dismemberment policy as a result of the loss of his left arm in an accident. Conrad has received the

Answer 16

Capital Amount

Question 17

Regarding health insurance, all of the following are tax deductible except

Answer 17

Employee paid group disability income

Question 18

An individual buys a disability policy on May 1 with a waiver of premium rider. The insured becomes disabled June 1. It is determined the insured is permanently totally disabled on July 1; and he receives his first benefit payment on July 15. When does the waiver of premium provision start?

Answer 18

June 1

Question 19

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?

Answer 19

Extended term

Question 20

What is the difference between a straight life policy and a 20 pay whole life policy?

Answer 20

Premium payment period

Question 21

How often must organizations consult the National Do Not Call Registry?

Answer 21

Every 31 days

Question 22

An agent’s first year commission cannot exceed what percentage of the renewal commission for servicing a Medicare Supplement policy in its second year?

Answer 22

200%

Question 23

An insured bought an insurance policy that requires him to pay $150 in premiums on the 15th of each month. He then takes an extended vacation and forgets to pay the premium. Ten days later, his policy is still in effect and has not lapsed. Which policy provision allowed for this?

Answer 23

Grace period

Question 24

Which of the following is not a characteristic of a managed care plan?

Answer 24

Risk retention

Question 25

An insured’s hospital policy states that it will pay him a flat fee of $75 per day for each day he is hospitalized. The policy pays benefits on what basis?

Answer 25

Indemnity

Question 26

With Adjustable Life, the owner can change all of the following except

Answer 26

The insured

Question 27

What is the maximum civil penalty per violation of the regulations of the Insurance Code that define acts that are subject to fines or license suspension or revocation?

Answer 27

$5,000

Question 28

An insurer must notify the consumer in writing that an investigative consumer report has been requested within how many days of the initial request?

Answer 28

3 days

Question 29

All of the following are features of catastrophic plans except

Answer 29

High premiums

Question 30

All of the following could qualify as a group for the purpose of purchasing group health insurance except

Answer 30

An association of 35 people

Question 31

Once an insurer receives a claim, within how many days must the insurer provide claims forms to the insured?

Answer 31

10 working days

Question 32

Under which of the following conditions would life insurance be taxable by the federal government?

Answer 32

If there is a transfer for value

Question 33

A new homebuyer wants to purchase a life insurance policy that would protect his family against losing the home, should he die before the mortgage was paid. The most inexpensive type of policy that would accomplish this need would be

Answer 33

Decreasing term

Question 34

Which of the following does not need to be included on the first page of a Medicare supplement policy?

Answer 34

Premium rates

Question 35

Which statement best describes agreement as it relates to insurance contracts?

Answer 35

One party accepts the exact terms of the other party’s offer

Question 36

HMOs are known as what type of plans?

Answer 36

Service