Exam Wrong Answers 2 Flashcards
When a policyowner designates a group of individuals as the beneficiary of a life insurance death benefit without specifically naming the individuals, this is called…
Class designation
An insured is receiving hospice care. His insurer will pay for painkillers but not for an operation to reduce the size of the tumor. What term best fits this arrangement?
Cost containment
Which of the following statements is correct concerning taxation of long term care insurance?
Excessive benefits may be taxable
Which of the following is not a feature of a guaranteed renewable provision?
The insurer can increase the policy premium on an individual basis
When is the insurability conditional receipt given?
When the premium is paid at the time of application
How soon after the due date should the insurer pay the agent appointment fees?
Within 30 days
A hospital indemnity policy will pay
A benefit for each day the insured is in a hospital
Which of the following is not true regarding variable universal life policy?
The death benefit is fixed
Underlying assets for variable annuity contracts must be maintained in what type of account?
Separate account
All of the following are Nonforfeiture options except
Interest only
A producer sold an insurance policy. Subsequently his license was suspended. In this case, how much of the commission will the producer receive?
All
Which of the following is the most common time for errors and omissions to occur on the part of an insurer?
Policy delivery
An insured’s disability income policy includes an additional monthly benefit rider. For how many years can the insured expect to receive payment from the insurer before Social Security benefits begin?
1
How are contributions to a tax sheltered annuity treated with regards to taxation?
They are not included as income for the employee, but are taxable upon distribution
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, hat would be considered
An unfair trade practice
Which of the following best describes annually renewable term insurance?
It is level term insurance
Regarding Medicare Select policies, what are restricted network provisions?
They condition the payment of benefits
The relation of earnings to insurance provision allows the insurance company to limit the insured’s benefit to his/her average income over what period of time?
2 years
All of the following are true regarding rebates except
Rebates are allowed if it’s in the best interest of the client
For how long must a company maintain a complete file of all advertisements used?
At least 4 years
Which of the following statements is incorrect concerning Medicare part b coverage?
Part B coverage is provided free of charge when an individual turns age 65
An insured purchased a life policy in 2010 and died in 2017. The insurance company discovers at that time that the insured had concealed information during the application process. What can they do?
Pay the death benefit
Which of the following includes information regarding a person’s credit, character, reputation and habits?
Consumer report
The Medicare supplement renewal commissions paid in the third year must be as high as the commission of which year?
2nd
All of the following are unfair claims settlement practices except
Suggesting negotiations in settling the claim
Which of the following hospice expenses would not be covered in w cost containment setting?
Antibiotics
A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as
Critical illness
What are the 2 types of flexible spending accounts?
Health care accounts
Dependent care accounts
Which of the following long term care benefits would provide coverage for care for functionally impaired adults on a less than 24 hour basis?
Adult day care
Under which plan does preventative dental treatment not apply toward the deductible?
Nonscheduled
Which of the following products requires a securities license?
Variable annuity
When an a player is still employed upon reaching age 65 and eligible for Medicare, which of the following is the employee’s option?
Remain on group health insurance plan and defer eligibility for Medicare until retirement
What is the term used for an applicant’s written request to an insurer for the company to issue a contract, based on the information provided?
Application
Which of the following provisions in annuity contracts allow the owner to surrender the annuity if interest rates drop to a specified level?
Bail out
Which of the following riders would not cause the death benefit to increase?
Payor benefit rider
Which of the following is true regarding a term health policy?
It is nonrenewable
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
Which of the following is an example of a limited pay life policy?
Life paid up at Age 65
What is the shortest possible elimination period for group short term disability benefits provided by an employer?
0 days
When a reduced paid up Nonforfeiture option is chosen, what happens to the face amount of the policy?
It is reduced to the amount of what the cash value would buy as a single premium
Which of the following would be considered an unfair claims settlement practice?
Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered
Why is it essential for an insurer to document all correspondence with an insured?
Errors and omissions
The insurer may suspect that a moral hazard exists if the policy holder
Is not honest about his health on an application for insurance
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Limited pay whole life
When a life insurance policy stipulates that the beneficiary will receive payments in specified installments or for a specified number of years, what provision prevents the beneficiary from changing or borrowing from the planned installments?
Spendthrift provision
Which of the following may not be included in an insurance company’s advertisement?
That its policies are covered by a state guaranty association
Which authority is not stated in an agent’s contract but is required for the agent to conduct business?
Implied
The Omnibus Budget Reconciliation Act of 1990 requires that large group health plans must provide primary coverage for disabled individuals under
Age 65 who are not retired
The gatekeeper of an HMO helps
Control specialist costs
A domestic insurer issuing variable contracts must establish one or more…
Separate accounts
Insurance producers that do not have company appointments are considered a/an
Representative of the consumer
Which of the following licensees is classified as a representative of the insurance company and not allowed to represent an insured or claimant?
Producer
If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?
It is a percentage of cash value and decreases over time
All of the following are true about variable products except
The premiums are invested in the insurer’s general account
Unless otherwise required policy holders must be notified of an increase in premium rates that triggers the contingent benefit on lapse. How long does the insurer have to provide this notice?
30 days
All of the following are duties and responsibilities of producers at the time of application except
Change an incorrect statement on the application by personally initialing next to the corrected statement
In the executive bonus plan, who is the owner of the policy and who pays the premium?
Executive is the owner and the executive pays the premium
Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?
Disability buy-sell
The death protection component of universal life insurance is always
Annually renewable term
When the insured selects the extended term Nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?
Equal to the original policy for as long as the cash values will purchase
All other factors being equal, the least expensive first year premium payment is found in…
Annually renewable term
Concerning group Medical and Dental insurance, which of the following statements is incorrect?
Employee benefits are tax deductible the year in which they were received
