Exam 18 Wrong Answers

Question 1

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

Answer 1

Guaranteed insurability option

Question 2

An individual is insured under his employer’s group disability income policy. The insured suffered an accident while on vacation that left him unable to work for 4 months. If the disability income policy pays the benefit, which of the following would be true?

Answer 2

Benefits that are attributable to employer contributions are fully taxable to the employee as income

Question 3

How many eligible employees must be included in a contributory plan?

Answer 3

75%

Question 4

If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this?

Answer 4

Jumping juvenile policy

Question 5

The risk management technique that is used to prevent a specific loss by not exposing oneself to that activity is called

Answer 5

Avoidance

Question 6

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report

Answer 6

Must be informed of the source of the report

Question 7

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

Answer 7

100%

Question 8

Which of the following statements is not correct concerning Cobra Act of 1985?

Answer 8

It required all employers, regardless of the number or age of employees, to provide extended group health coverage

Question 9

For how many days of skilled nursing facility care will Medicare pay benefits?

Answer 9

100

Question 10

Which of the following is not true regarding the life with guaranteed minimum annuity settlement option?

Answer 10

It does not guarantee that the entire principal amount will be paid out

Question 11

Which of the following is called a “second to die” policy

Answer 11

Survivorship life

Question 12

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

Answer 12

$2,500

Question 13

When an insured combines two periods of disability into one, the insured must have suffered a

Answer 13

Recurrent disability

Question 14

According to Obra, what is the minimum number of employees required to constitute a large group?

Answer 14

100

Question 15

The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured’s employment is called

Answer 15

Nonoccupational coverage

Question 16

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as

Answer 16

Legal actions

Question 17

What is the advantage of reinstating a policy instead of applying for a new one?

Answer 17

The original age is used for premium determination

Question 18

Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined at its own expense, while a claim is pending?

Answer 18

Unlimited

Question 19

Which of the following is not a feature of a noncancellable policy?

Answer 19

The insurer may terminate the contract only at renewal for certain conditions

Question 20

All of the following are true regarding the guaranteed insurability rider except

Answer 20

This rider is available to all insureds with no additional premium

Question 21

Nonforfeiture values guarantee which of the following for the policyowner?

Answer 21

That the cash value will not be lost

Question 22

The insuring clause of a disability policy usually states all of the following except

Answer 22

The method of premium payment

Question 23

While a claim is pending, an insurance company may require

Answer 23

An independent examination as often as reasonably required

Question 24

Shortly after a replacement transaction on a Medicare supplement policy, the insured decided to cancel the policy, but is unsure whether the free look provision applies. The insured could find that information in the

Answer 24

Notice regarding replacement

Question 25

Which of the following are the main factors taken into account when calculating residual disability benefits?

Answer 25

Present earnings and earnings prior to disability

Question 26

Within how many days must a producer respond to an inquiry from the Commissioner?

Answer 26

30 days

Question 27

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?

Answer 27

The beneficiary will receive only payments of interest earned on the death benefit

Question 28

What document describes an insured’s medical history, including diagnoses and treatments?

Answer 28

Attending Physician’s Statement

Question 29

Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage?

Answer 29

Health Maintenance Organization plan

Question 30

What document grants express authority to an agent?

Answer 30

Agent’s contract with the principal

Question 31

The part of Medicare that helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care is known as

Answer 31

Part A

Question 32

The term “illustration” in a life insurance policy refers to

Answer 32

A presentation of non guaranteed elements of a policy

Question 33

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

Answer 33

Fixed period

Question 34

When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply?

Answer 34

Case management provision

Question 35

In order to minimize adverse selection, employer group dental plans may require employees who enroll after they were initially eligible to participate to do all of the following except

Answer 35

Increase benefits for a period of one year

Question 36

The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?

Answer 36

2 years

Question 37

Which of the following is true regarding Medicare supplement policies?

Answer 37

They must be guaranteed renewable

Question 38

If a consumer requests additional information concerning an investigative consumer report,how long does the insurer or reporting agency have to comply?

Answer 38

5 days