Exam 10 Wrong Answers

Question 1

An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?

Answer 1

Full benefits

Question 2

An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it?

Answer 2

Deferred

Question 3

Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured’s accidental death?

Answer 3

Principal sum

Question 4

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

Answer 4

3 days

Question 5

Which of the following statements is Not correct regarding Medicare?

Answer 5

Medicare Advantage must be provided through HMOs

Question 6

What is necessary in order to be eligible to receive benefits from a long term care policy?

Answer 6

The insured must be unable to perform some activities of daily living

Question 7

What type of insurance would be used for a Return of Premium rider?

Answer 7

Increasing Term

Question 8

Which document helps ensure that full and fair disclosure is provided to the recipient of a policy?

Answer 8

Outline of Coverage

Question 9

An insurer wishes to compare the information given in an insurance application with previous insurance applications by the same applicant but for different companies. What organization can help the insurer accomplish this?

Answer 9

The Medical Information Bureau

Question 10

Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant’s spouse receive in benefits?

Answer 10

$50,000

Question 11

An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this?

Answer 11

Reinstatement provision

Question 12

An applicant is considered to be high risk but not so much that the insurer wants to deny coverage. Which of the following is not true?

Answer 12

The insurer will issue conditional coverage

Question 13

To sign up for a Medicare prescription drug plan, individuals must first be enrolled in…

Answer 13

Medicare part A

Question 14

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

Answer 14

Payment of claims

Question 15

An employer 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. Which of the following statements best describes what will happen?

Answer 15

The insurer will pay the full death benefit from the group policy to the beneficiary.

Question 16

Another name for a substandard risk classification is

Answer 16

Rated

Question 17

Which of the following is not a feature of a guaranteed renewable provision?

Answer 17

The insurer can increase the policy premium on an individual basis

Question 18

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

Answer 18

Reimbursement

Question 19

A policy will pay the death benefit if the insured dies during the 20-year period, and nothing if death occurs after the 20-year period. What type of policy is this?

Answer 19

Level term

Question 20

In a non contributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective?

Answer 20

100%

Question 21

Which of the following types of policies allows the policy owner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?

Answer 21

Universal life

Question 22

Which of the following statements regarding Business Overhead Expense policies is not true?

Answer 22

Benefits are usually limited to six months

Question 23

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 23

$120 per day

Question 24

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

Answer 24

Preventative services

Question 25

An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called

Answer 25

Paid up additions

Question 26

An employee is insured under her employer’s group life plan. If she terminates her group coverage, which of the following statements is incorrect?

Answer 26

The insured may choose to convert to term or permanent individual coverage

Question 27

Which of the following will not be an appropriate use of a deferred annuity?

Answer 27

Creating an estate

Question 28

A return of premium term life policy is written as what type of term coverage?

Answer 28

Increasing

Question 29

If an insurance company offers Medicare supplement policies, it must offer which of the following plans?

Answer 29

A

Question 30

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

Answer 30

Insuring clause

Question 31

To avoid violations of unfair claims settlement regulations, insurers are required to acknowledge the receipt of a claim within how many days?

Answer 31

10 days

Question 32

What is the goal of the HMO?

Answer 32

Early detection through regular checkups

Question 33

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will…

Answer 33

Pay the policy proceeds only if it would have issued the policy

Question 34

Which of the following would not be considered an exception to the National Do Not Call List?

Answer 34

Calls based from outside of the United States

Question 35

All of the following statements concerning the use of life insurance as an Executive Bonus are correct Except

Answer 35

The policy is owned by the company

Question 36

Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray?

Answer 36

50/50

Question 37

All of the following violations may result in an agent’s imprisonment except

Answer 37

Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction

Question 38

An insured is scheduled to have two cavities filled. He knows in advance that benefits will be paid for the procedure. Which clause is responsible for the advanced notification?

Answer 38

Prior authorization