Exam 8 Wrong Answers

Question 1

What documentation grants express authority to an agent?

Answer 1

Agent’s contract with the principal

Question 2

All of the following are ways in which a Major Medical policy premium is determined except

Answer 2

The average age of the group

Question 3

An insured and his wife are both involved in a head on collision. The husband dies instantly and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

Answer 3

Common Disaster

Question 4

What is the purpose of establishing the target premium for a universal life policy?

Answer 4

To keep the policy in force

Question 5

A 60-year old participant in a 401k plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?

Answer 5

The amount of the distribution is educed by the amount of a 20% withholding tax

Question 6

Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?

Answer 6

Optionally renewable

Question 7

A person who gives money as consideration for a life insurance policy or interest in the death benefits of a life insurance policy is called a

Answer 7

Viatical settlement purchaser

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

Which of the following policies would be classified as a traditional level premium contract?

Answer 9

Straight life

Question 10

For the purpose of examination by the department, insurers must keep a record of all financial files for at least

Answer 10

5 years

Question 11

What option allows the insured to periodically increase benefit levels without providing evidence of insurability?

Answer 11

Guarantee of Insurability

Question 12

In forming an insurance contract, when does acceptance usually occur?

Answer 12

When an insurer’s underwriter approves coverage

Question 13

What is the amount a physician or supplier bills for a particular service or supply?

Answer 13

Actual charge

Question 14

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

Answer 14

10 days

Question 15

Any licensed person whose activities affect interstate commerce and who knowledge makes false material statements related to the business of insurance may be imprisoned for up to

Answer 15

10 years

Question 16

An individual applies for a life policy. Two years ago he suffered a head injury from an accident so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen?

Answer 16

The policy will not be affected

Question 17

The Commissioner of Insurance is placed in office by which means?

Answer 17

An appointment by the Governor

Question 18

In which Medicare supplemental policies are the core benefits found?

Answer 18

All plans

Question 19

Medicare Advantage is also known as…

Answer 19

Medicare Part C

Question 20

Once a viatical contract has been established, how long does the viator have to rescind the contract?

Answer 20

15 calendar days

Question 21

Which rider, when attached to permanent life insurance policy, provides an amount of insurance on every family member?

Answer 21

Family term rider

Question 22

All of the following could own group life insurance except

Answer 22

A group needing low cost life insurance

Question 23

Which of the following is not a goal of risk retention?

Answer 23

To minimize the insured’s level of liability in the event of loss

Question 24

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

Answer 24

5 days

Question 25

The Fair Credit Reporting Act

Answer 25

Regulates consumer reports

Question 26

The authority granted to an agent through the agent’s contract is referred to as…

Answer 26

Express authority

Question 27

Under an extended term nonforfeiture option, the policy cash value is converted to

Answer 27

The same face amount as in the whole life policy

Question 28

Which of the following best describes the MIB.

Answer 28

It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance

Question 29

If an insurer issued a policy based on the application that had unanswered questions, which of the following will be true?

Answer 29

The policy will be interpreted as if the insurer waived its rights to have an answer on the application

Question 30

Because of the history of cancer in her family, Julie purchased a policy that specifically covers the expense of treating cancer. Her policy would be classified as what type of policy?

Answer 30

Dread Disease Policy

Question 31

What is the purpose of a conditional receipt?

Answer 31

It is intended to provide coverage on a date prior to the policy issue

Question 32

In comparison to a policy that uses the accidental means definition, a policy that uses accidental bodily injury definition would provide a coverage that is…

Answer 32

Broader in general

Question 33

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

Answer 33

Beneficiary’s age

Question 34

Which of the following statements pertaining to Medicare Part A is correct?

Answer 34

Medicare Part A is automatically provided when an individual qualified for Social Security benefits at age 65

Question 35

In group insurance, what is the policy called?

Answer 35

Master policy

Question 36

Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide death benefits should one of them die?

Answer 36

Joint Life

Question 37

Which of the following insurance option would be considered a risk sharing arrangement?

Answer 37

Reciprocal

Question 38

A client has a new individual disability income policy with a 20 day probationary period and a 30 elimination period. Ten days later, the client beaks their leg and is off work for 45 days. How many days of disability benefits will the policy pay?

Answer 38

15 days

Question 39

Which nonforfeiture option provides coverage for the longest period of time?

Answer 39

Reduced paid up

Question 40

All of the following are True statements regarding the accumulation of interest option except

Answer 40

The interest is not taxable since it remains inside the insurance policy

Question 41

Most scheduled plans provide first dollar benefits without

Answer 41

Coinsurance and deductibles

Question 42

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

Answer 42

Principal Sum

Question 43

Which of the following authorities is authorized to issue a temporary insurance producer’s license?

Answer 43

Commissioner

Question 44

What type of insurance would be used for a return of premium rider?

Answer 44

Increasing Term

Question 45

What is the waiting period on a Waiver of a premium rider in life insurance policies?

Answer 45

6 months

Question 46

If another governmental agency takes legal action against a licensee, whose responsibility is it to report the action?

Answer 46

The licensee

Question 47

All of the following are Nonforfeiture options except

Answer 47

Interest only