Exam 9 Wrong Answers

Question 1

A policy owner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?

Answer 1

Automatic premium loan

Question 2

An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued?

Answer 2

Adjust the claim benefit to reflect the insured’s true age

Question 3

For an individual who is eligible for Medicare at age 65, and who is still employed and covered under the employer’s plan, which of the following is true?

Answer 3

The employer plan is primary coverage and Medicare is secondary coverage

Question 4

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

Answer 4

10 days

Question 5

A long term care shopper’s guide must be presented at what point?

Answer 5

Prior to the time of application

Question 6

What is the main purpose of a Retained Asset Account?

Answer 6

To serve as a temporary storage of funds for the beneficiary

Question 7

Which universal Life option has gradually increasing cash value and a level death benefit?

Answer 7

Option A

Question 8

In a replacement situation, all of the following must be considered except

Answer 8

Assets

Question 9

Which of the following is true about the requirements regarding HIV exams?

Answer 9

The applicant must give prior informed written consent

Question 10

Which nonforfeiture option has the highest amount of insurance protection?

Answer 10

Extended Term

Question 11

A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as…

Answer 11

Critical Illness

Question 12

A 70-year old individual who bought a Part B Medicare policy 2 months ago just began kidney dialysis treatments this week. The individual is now applying for Medicare supplement policy, which would begin in 8 months. Which of the following could the insurer do to avoid paying for the dialysis?

Answer 12

Declare a pre existing condition

Question 13

Which of the following is not true of Disability Buy-Sell coverage?

Answer 13

Benefits are considered taxable income to the business

Question 14

All of the following are characteristics of group life insurance except…

Answer 14

Premiums are determined by the age, sex and occupation of each individual certificate holder

Question 15

Which of the following is true regarding a term health policy?

Answer 15

It is nonrenewable

Question 16

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

Answer 16

The insurer can increase the policy premium on an individual basis

Question 17

When the policy premium wasn’t submitted with the application, what should the agent obtain from the insured upon policy delivery?

Answer 17

A statement of good health

Question 18

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day…

Answer 18

Elimination period

Question 19

Which of the following is true regarding Continuing Education required for those holding a Pennsylvania producer license?

Answer 19

24 hours each licensing period

Question 20

Which is not true regarding an insured who is considered to be a standard risk?

Answer 20

The insured may have to pay slightly higher premiums

Question 21

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

Answer 21

Payment of claims

Question 22

Which of the following will vary the length of the grace period in health insurance policies?

Answer 22

The mode of the premium payment

Question 23

What is the benefit of choosing extended term as a nonforfeiture option?

Answer 23

It has the highest amount of insurance protection

Question 24

Which of the following is an eligibility requirement for all Social Security Disability Income benefits?

Answer 24

Have attained fully insured status

Question 25

Which of the following is an example of a limited pay life policy?

Answer 25

Life Paid up at Age 65

Question 26

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy’s cash value, which is currently $20,000. What would be the face amount of the new term policy?

Answer 26

$50,000

Question 27

In a long term care policy, preexisting condition limitations…

Answer 27

Must appear as a separate paragraph and be clearly labeled

Question 28

A couple owns a life insurance policy with a Children’s Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

Answer 28

Proof of insurability is not required

Question 29

What documentation grants express authority to an agent?

Answer 29

Agent’s contract with the principal

Question 30

A Universal Life Insurance policy is best described as a/an

Answer 30

Annually Renewable Term policy with a cash value account

Question 31

Where would the underwriter find relevant information not presented by the applicant but communicated by the producer?

Answer 31

Application

Question 32

What happens if a deferred annuity is surrendered before the annuitization period?

Answer 32

The owner will receive the surrender value of the annuity

Question 33

Which of the following is true regarding the annuity period?

Answer 33

It may last for the lifetime of the annuitant

Question 34

Prior to license renewal, all insurance producers must successfully complete a minimum of…

Answer 34

24 credit hours of CE

Question 35

Lietuya Insurance Company issued 150 viatical settlement contracts but does not hold the proper certifications to legitimately conduct business. Which of the following terms best describes Lietuya’s business practices?

Answer 35

Fraudulent viatical settlement act

Question 36

All other factors being equal, the least expensive first year premium payment is found in…

Answer 36

Annually Renewable Term

Question 37

What is the purpose of the rehabilitation benefit disability insurance?

Answer 37

To cover the expenses of retraining the insured to return to work

Question 38

A producer licensed in Pennsylvania must notify the Insurance Department of any change of address in his or her residence or business address within how many days?

Answer 38

30

Question 39

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

Answer 39

Prior authorization

Question 40

Medicare Part A services do not include which of the following?

Answer 40

Outpatient hospital treatment

Question 41

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

Answer 41

Increasing term

Question 42

Other than for a qualified life event, when can a change be made in benefits for a Flexible Spending Account (FSA)?

Answer 42

During the open enrollment period

Question 43

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

Answer 43

The same face amount as in the whole life policy

Question 44

What is the civil penalty for violating a cease and desist order of the Commissioner?

Answer 44

$10,000