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(Indiana) Life and Health Final Exam by: ME :-) > For My Downline (Study This) > Flashcards

For My Downline (Study This) Flashcards

1
Q 
During the course of an insurance business transaction, who does the producer legally represent?
A. Producer
B. Insured
C. Insurance Company
D. Beneficiary
A

Answer: C The Insurance Company

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2
Q

Which type of provider is known for stressing preventative medical care?
A. Multiple Employer Welfare Arrangements (MEWA)
B. Major Medical Provider
C. Health Maintenance Organizations (HMO’S)
D. Preferred Provider Organizations (PPO’s)

A

Answer: C Health Maintenance Organizations (HMO’s)

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3
Q

The Life and Health Insurance Guaranty Association is:
A. An entity that assists in underwriting large insurance policies
B. Funded by admitted insurance companies through assessments
C. Funded by the state government
D. Administered by the Federal Government

A

Answer: B Funded by admitted insurance companies through assessments

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4
Q

T is an insurance license applicant who intends to primarily engage in insurance transactions on himself and his family. If the Insurance Department is made aware of this, T will most likely
A. Not be issued a license
B. Be deemed untrustworthy
C. Issued a license
D. Be directed to apply for a surplus lines license

A

Answer: A Not be issued a license

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5
Q 
What type of insurance company is domiciled in England, but conducts business in Indiana
A. Foreign
B. Domestic
C. Alien
D. Transatlantic
A

Answer: C Alien

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6
Q

S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary?
A. $100,000
B. $50,000
C. Refund of premiums paid plus interest
D. No claim will be paid because cause of death was from natural causes

A

Answer: B $50,000

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7
Q 
Who is responsible for determining if Long-Term Care coverage is appropriate to meeting an applicant’s needs?
A. Commissioner
B. Applicant
C. Producer
D. Insurance Company
A

Answer: C Producer (In Indiana, the Producer is responsible for determining if Long Term Care coverage is appropriate to meeting an applicant’s needs.)

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8
Q 
An annuity promises that, if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an amount equal to the contract value has been paid. This type of annuity is called:
A. An Installment Refund Annuity
B. A Straight Life Annuity
C. A Cash Refund Annuity
D. A Joint Life Annuity
A

Answer: A An Installment Refund Annuity

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9
Q

Why would the Commissioner examine the records of an insurance company?
A. To determine the solvency of the company
B. To set insurance rates for the company
C. To assist in underwriting
D. To assess the company’s value

A

Answer: A To determine the solvency of the company

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10
Q

Which of the following plans is NOT required to meet Minimum Essential Coverage (MEC) standards under the Affordable Care Act (ACA)?
A. Medicare
B. Medicaid
C. Workers’ Compensation
D. Children’s Health Insurance Program (CHIP)

A

Answer: C Workers’ Compensation

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11
Q 
M’s insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?
A. 10 days
B. 30 days
C. 45 days
D. 60 days
A

Answer: C 45 days

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12
Q

A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as:
A. A Fraternal Benefit Society
B. A Stock Insurer
C. A Mutual Insurer
D. The Life and Health Insurance Guaranty Association

A

Answer: A Fraternal Benefit Society

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13
Q 
The investment gains from a Universal Life Policy usually go toward:
A. The Death Benefit
B. The Dividends
C. The Cash Value
D. Paying Off A Policy Loan
A

Answer: C The Cash Value

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14
Q

Traditional Individual Retirement annuity (IRA) distributions must start by:
A. Age 59 ½
B. Age 65
C. April 1st of the year following the year the participant attains age 59 ½
D. April 1st of the year following the year the participant attains age 70 ½

A

Answer: D April 1st of the year following the year the participant attains age 70 ½

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15
Q 
The part of a life insurance policy guaranteed to be true is called a(n):
A. Representation
B. Exclusion
C. Warranty
D. Waiver
A

Answer: C Warranty

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16
Q

Which of the following factors affects the amount of monthly disability benefits payable under Social Security?
A. The cause of the disability
B. The amount of the benefits available from other sources
C. The number of children dependent on the recipient
D. The state in which the recipient lives

A

Answer: B The amount of the benefits available from other sources

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17
Q

If an individual has an Accidental Death and Dismemberment policy and dies, an autopsy can be performed in all these situations, EXCEPT:
A. When the cause of death is unknown
B. When the state prohibits this by law
C. When consent for the autopsy is not obtained
D. When foul play was a contributing factor

A

Answer: B When the state prohibits this by law

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18
Q 
What year was the McCarran-Ferguson Act enacted?
A. 1944
B. 1945
C. 1946
D. 1947
A

Answer: B 1945

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19
Q

All of these statements are true regarding a child qualifying for coverage under the Indiana Children’s Health Insurance Program, EXCEPT:
A. Must be a resident of Indiana to qualify
B. Must be under 19 years of age to qualify
C. Family’s income level must be greater than 150% of Federal poverty level, but less than 200%
D. Must have been born in the United States to qualify

A

Answer: D Must have been born in the United States to qualify

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20
Q 
An individual who in any manner sells, solicits, or negotiates insurance on behalf of insurance companies for compensation is an insurance:
A. Solicitor
B. Adjuster
C. Producer
D. Representative
A

Answer: C Producer

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21
Q

All are true statements regarding the underwriting process, EXCEPT:
A. Signed consent from the applicant must be provided in order to test for AIDS and HIV virus
B. AIDS and HIV virus exams can be conducted in a discriminatory fashion
C. The cost of any examination is paid for by the insurer
D. The original application is the primary source of information used in the underwriting process

A

Answer: B AIDS and HIV virus exams can be conducted in a discriminatory fashion

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22
Q 
What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?
A. Family Maintenance Policy
B. Family Income Policy
C. Survivor Policy
D. Family Survivor Policy
A

Answer: A Family Maintenance Policy

23
Q 
Qualified Long-Term Care policies may take into consideration an applicant’s pre-existing conditions for a maximum of not more than _ month(s) prior to the effective date of coverage.
1
6
12
24
A

Answer: B 6

24
Q

On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer take?
A. Collect initial premium
B. Collect initial premium along with a signed health statement
C. Explain to the applicant the policy is no longer in effect due to change in health condition
D. Collect initial premium and leave a binding receipt

A

Answer: B Collect initial premium along with a signed health statement

25
Q

A “reimbursement policy” pays what amount of covered Long-Term Care expenses?
A. All expenses regardless on the policy limits
B. Actual covered expenses up to the daily maximum
C. A daily dollar amount regardless of the actual incurred expenses
D. The usual, customary, and reasonable expenses regardless of the policy limits

A

Answer: B Actual covered expenses up to the daily maximum

26
Q

T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?
A. Request will be accepted only if in writing by the insured
B. Change will be made only if premiums are paid current
C. Change will be made immediately
D. Request of the change will be refused

A

Answer: D Request of the change will be refused

27
Q

A policy that becomes a Modified Endowment Contract (MEC)
A. Will no longer allow for policy loans
B. Must be placed in an irrevocable trust
C. Can never be reinstated after a lapse
D. Will lose many of its tax advantages

A

Answer: D Will lose many of its tax advantages

28
Q 
A policy of adhesion can only be modified by whom?
A. The agent
B. The applicant
C.The primary beneficiary
D. The Insurance company
A

Answer: D The Insurance company

29
Q 
Additional coverage can be added to a Whole Life policy by adding a(n):
A. Payor rider
B. Accelerated benefit rider
C. Decreasing term rider
D. Automatic premium loan rider
A

Answer: C Decreasing Term Rider

30
Q 
A policy of adhesion can only be modified by whom?
A. The agent
B. The applicant
C. The primary beneficiary
D. The insurance company
A

Answer: D The insurance company

31
Q

Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy
A. Past due premiums on a lapsed policy are waived and coverage is restored
B. The insured is paid a monthly benefit to keep insurance premiums current in the event of total disability
C. Premiums are waived after the insured has been unemployed for a specified time period
D. Premiums are waived after the insured has been totally disabled for a specified time period

A

Answer: D Premiums are waived after the insured has been totally disabled for a specified time period

32
Q 
In the event of employment termination, a person covered by a group policy also has the right to convert such coverage to an individual policy within _ days without proving insurability.
A. 15
B. 30
C. 31
D.45
A

Answer: C 31

33
Q 
Which of the following permits an insurance company to transact business in Indiana?
A. Certificate of admission
B. Certificate of domestication
C. Certificate of authenticity
D. Certificate of authority
A

Answer: D Certificate of authority

34
Q 
Medicare Part B does NOT cover:
A. Occupational therapy
B. Inpatient hospital services
C. Physician and surgeon services
D. Medical equipment rental
A

Answer: B Inpatient hospital services

35
Q

What would the Medical Information Bureau (MIB) identify?
A. Testing positive for marijuana use from a previous screening
B. Existing life insurance coverage with other carriers
C. Credit scores
D. Primary physician

A

Answers: A Testing positive for marijuana use from a previous screening

36
Q

If an insurer offers health coverage to an employee, the insurer MUST inform the employer of all of the following information EXCEPT:
A. The provisions relating to renewability of coverage
B. The provisions relating to exclusions
C. The benefits and premiums available under all health insurance coverage for which the employer is qualified
D. The terms of the insurer’s provider agreements

A

Answer: D The terms of the insurer’s provider agreements

37
Q 
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
A. Modified whole life
B. 20-year paid up policy
C. Endowment
D. Decreasing term
A

Answer: D Decreasing term

38
Q

All of these statements about Equity Indexed Life Insurance are correct, EXCEPT:
A. Cash value has a minimum rate of accumulation
B. If the gain on the index goes beyond the policy’s minimum rate of return, the cash value will mirror that of the index
C. The premiums can be lowered or raised, based on investment performance
D. Tied to an equity index such as the S&P 500

A

Answer: C The premiums can be lowered or raised, based on investment performance

39
Q 
A whole life policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy more than it’s cash value?
A. Cash surrender
B. Life settlement contract
C. Buy-sell arrangement
D. 1031 Exchange
A

Answer: B Life settlement contract

40
Q

To be eligible for Social Security disability benefits, an employee must be unable to perform:
A. Any occupation
B. His/her current occupation
C. Any occupation that reflects the employee’s education level
D. Any occupation that the employee is qualified and willing to do

A

Answer: A any occupation

41
Q 
An insurance company that has qualified and received a Certificate of Authority from the Department of Insurance to sell insurance in this state is considered to be a(n) _ insurer.
A. Reciprocal
B. Accepted
C. Domestic
D. Admitted
A

Answer: D Admitted

42
Q 
The annuity that represents the largest possible monthly payment to an individual annuitant is a(n):
A. Cash Refund
B. Installment refund
C. Straight Life annuity
D. Life annuity with period certain
A

Answer: C Straight life annuity

43
Q 
Which of the following statements about accumulated interest earned on dividends from an insurance policy is TRUE?
A. It is not taxable
B. It is tax deductible
C. It is taxed as capital gains
D. It is taxed as ordinary income
A

Answer: D It is taxed as ordinary income

44
Q

How does a typical Variable Life Policy investment account grow?
A. Tied to price of gold
B. Through mutual funds, stocks, bonds
C. Based on returns from insurer’s general account
D. Tied to Treasury Bills

A

Answer: B Through mutual funds, stock, bonds

45
Q

Which of the following best describes a contingent beneficiary
A. Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured
B. Person designated by the primary beneficiary’s executor to receive policy proceeds
C. Person designated by the state to receive policy proceeds in the event that the primary beneficiary dies
D. Person designated by the insurance company to receive policy proceeds in the event that the primary beneficiary dies

A

A Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured.

46
Q 
N has a Major Medical policy that only pays a portion of N’s medical expenses. N is responsible for paying the remaining balance. This provision is known as:
A. Assignment of Benefits
B. Coinsurance
C. Indemnity
D. Co-deductible
A

Answer: B Coinsurance

47
Q 
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
A. Endowment Policy
B. Modified Whole Life
C. Decreasing Term
D. Universal Life
A

Answer: D Universal Life

48
Q

A variable insurance policy:
A. Guarantees a minimum rate of return
B. Does not allow the policyowner to assume the investment risk
C. Does not guarantee a return on its investment accounts
D. Does not guarantee an assignment provision

A

Answer: C Does not guarantee a return on its investment accounts

49
Q 
A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow?
A. Extended Term rider
B. Cost of Living Adjustment rider
C. Guaranteed insurability option rider
D. Waiver of Premium rider
A

Answer: C Guaranteed Insurability Option rider

50
Q 
Which of the following provisions specifies how long a policyowner’s health coverage will remain in effect if the policyowner does not pay the premium when it is due?
A. Grace Period
B. Consideration
C. Waiver of Premium
D. Reinstatement
A

Answer: A Grace Period

51
Q

What is the purpose of the Indiana Life and Health Insurance Guaranty Association?
A. Ensures that claims filed against insolvent insurance companies will be paid
B. Enforces Indiana’s insurance regulations
C. Approves policy forms
D. Underwrites high-risk insurance applicants

A

Answer: A Ensures that claims against insolvent insurance companies will be paid

52
Q

All of these statements concerning Settlement Options are true, EXCEPT:
A. Increased proceeds can be provided through accumulation of interest
B. Rapid depletion of proceeds can be avoided
C. Proceeds can be administered by the insurance company
D. Only the beneficiary may select

A

Answer: D Only the beneficiary may select

53
Q

The incontestable clause allows an insurer to:
A. Disallow a change of ownership throughout the Contestable period
B. Disallow a change of beneficiary during the Contestable period
C. Contest a claim at anytime if the cause of death was accidental
D. Contest a claim during the contestable period

A

Answer: D contest a claim during the contestable period

54
Q

Under which of the following circumstances will the benefits under COBRA continuation coverage end?
A. Employee has become uninsurable
B. All group health plans are terminated by the employer
C. Employer moves headquarters to another state
D. Employee becomes permanently disabled

A

Answer: B All group health plans are terminated by the employer

(Indiana) Life and Health Final Exam by: ME :-) (1 decks)

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