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Insurance > Missed Test Questions > Flashcards

Missed Test Questions Flashcards

1
Q

The reinsurance agreement that automatically accepts all new risks presented by the company seeking or requesting reinsurance from the reinsurer is know as a _______ agreement.

A

Treaty

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2
Q

The relationship of a person who acts on behalf of a company whereby the person’s actions can bind the company is known as _______

A

The Law of Agency

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3
Q

A contract that is drafted by an insurer and receives no input or alteration from the insured, is considered a _______

A

Contract of adhesion

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4
Q

If an applicant or insured discovers errors in their Credit Report, the Fair Credit Reporting Act requires the reporting agency to ______

A

Provide inaccurate information given out within the previous 2 years

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5
Q

What are Fiduciary Responsibilities?

A

Anyone acting as an insurance producer or agent for agent for an insurer shall be held responsible in a trust or fiduciary capacity for any money collected or received for the insurer

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6
Q

When the insured is not contractually obligated to do anything other than keep the policy in force

A

Unilateral Contract

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7
Q

Each of the following choices are true of whole life, except:
A. The policy can be converted into a term life insurance plan at anytime
B. The death benefit and cash values are guaranteed
C. As an insured ages, the premiums remain the same
D. They have nonforfeiture values and options are offered

A

A. The policy can be converted into a term life insurance plan at anytime

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8
Q 
Which of the following policies must be sold by prospectus?
Universal Life
Variable Whole Life
Ordinary Whole Life
Equity Indexed Whole Life
A

Variable Whole Life

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9
Q

A universal life policy has a death benefit of $125,000 and a cash accumulation value of $15,000. Generally, what will happen to the policy if there is a $5,000 partial withdrawal?

A

The death benefit and cash accumulation will be reduced by the partial withdrawal

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10
Q

The surrender charge schedule for a variable universal life policy generally _____ over time

A

Decreases

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11
Q

Which Nonforfeiture Option allows the owner to forego the premiums and retain the same face amount until the cash surrender value is exhausted?

A

Extended Term

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12
Q

The period of time over which distributions of the accumulated balance is made to the annuitant is referred to as the ____ Period

A

Annuitization Period

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13
Q

Surrender charges typically ______ over time.

A

Decrease

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14
Q 
Which of the following Annuities is generally not backed by the insurer's general account assets?
Fixed
Market Value Adjustment
Indexed
Variable
A

Variable

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15
Q 
Buy-Sell agreements are used for all of he following entities, except:
Partnership
Sole Proprietorship
Large Public Corporations
Closely held Businesses
A

Large Public Corporations

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16
Q

How many times can you move funds in an IRA directly from one financial institution to another while still maintaining the assets within an IRA account

A

As often as you want

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17
Q

The basis of a life insurance policy is ________

A

Premiums paid less dividends or withdrawals

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18
Q

A SEP uses employer funded _______ accounts

A

IRA

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19
Q

What must you do to open an IRA

A

Earn income or be married to a spouse that has earned income

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20
Q

Information about an applicant’s work behavior or character gathered from neighbors or co-workers would be included on an?

A

Inspection Report

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21
Q

The specified period that must elapse before new coverage is effective for non-accidental losses is known as the ______ period

A

Probationary period

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22
Q

Reimbursement benefits may be paid directly to the medical providers under which condition?

A

Assignment of benefits

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23
Q

The ______ alerts insurer home office underwriters of errors, omissions, or misrepresentation made on insurance applications

A

MIB

24
Q

which is not correct concerning a Blue Cross and Blue Shield Plan?
A.In most states, they are considered not-for-profit
B. They are fee for service plans
C. Benefits are paid directly to the insured individual
D. They offer both individual and group coverage

A

C. Benefits are paid directly to the insured individual

25
Q

Clarice pays a $99 monthly health insurance premium, due on the first day of each month. After paying her premium on April 1, how much of her premium has been earned by the insurance company on April 10.

A

$33

26
Q

What provides dental services for an insured?

A

Endodontist
Prosthodontist
Periodontist

27
Q

A procedure used by dental insurance carriers to determine the benefit to be paid is known as

A

Precetification

28
Q

Medical Expense Policy would continue to cover their unemployed 25-year-old child who is habitually unemployed.

A

True it provides dependent coverage up to age 26

29
Q

Benefits are funded by a combination of taxes and premium dollars and coverage is elective

A

Medicare Part B

30
Q

How many pints of blood does Medicare Part A cover for inpatient blood transfusions

A

3 Pints

31
Q

Managed Health Care attempts to contain cost by controlling the behavior of participants in all of the following ways

A

Controlled Provider Access
Copayments and/or coinsurance
Preventive Care

32
Q

Once issued, the application becomes part of the ______, when attached.

A

Entire Contract

33
Q

An insured should receive necessary claim forms within _____ days of notice of claim

A

15

34
Q

How many employers do you have to have for COBRA to apply?

A

Applies to employers with 20 or more employees

35
Q

When a group member terminates employment, he or she has 31 days to purchase an individual policy without proof of insurability.

A

Conversion Privilege

36
Q

Who isn’t eligible for group rates?

A

Groups formed to reduce premiums

37
Q

COBRA covers participants who have resigned for 36 months following the date of their resignation

A

False

38
Q

An insured with an individual LTC policy is deducting premiums he is paying for the plan on his income taxes. Once he begins to receive benefits from this plan what will be the tax consequences on this income?

A

Not taxable. LTC benefits are usually not subject to federal income tax

39
Q

All insurers transacting insurance in Hawaii are required to be members of the _______

A

Association

40
Q

_______ may require, as a condition to the lending of money or extending credit, that the debtor obtain insurance through a particular insurer or group of insurers, or producer or group of producers.

A

No person

41
Q

A person who violates a cease and desist order is not subject to ______

A

a specified period of imprimsonment

42
Q

A person may act as producer for an unauthorized insurer if it is a transaction for which a ________ to do business is not required of an insurer.

A

Certificate of Authority

43
Q

What is not among the powers and duties of the Commissioner?

A

Act to protect the best interests of authorized insuers

44
Q

A producer must report any change in name or address within _____ days

A

30

45
Q

Permitting individuals of the same class and equal life expectancy to be charged different rates for life insurance or annuities is an example of what type of unfair trade practice?

A

Discrimination

46
Q

Property insurers must have ______ and Health insurers must have ______ in capital and surplus.

A

$750,000 and $450,000

47
Q

A nonresident licensee may only be authorized for the line(s) of insurance for which the licensee is ________

A

Authorized in his/her home state

48
Q

It is illegal for a producer to give any part of his/her ______ to an insured

A

Commission

49
Q

The interest on policy loans for a personal whole life policy is not tax-deductible

A

True

50
Q

Required Minimum Distributions must begin from traditional IRAs by April 1st of the year following the year the account owner turns ___.

A

70 1/2

51
Q

Defined Benefit plan’s retirement check is usually based on ________

A

The length of time the employee was with the firms and his/her highest salary

52
Q

What is the main purpose that IRC section 1035 was enacted?

A

To allow for continued tax-deferral on any gains in an existing policy when a policy owner moves into a new one

53
Q

If a non qualified variable annuity owned for 15 years is surrendered, what is the income tax consequence?

A

Any amount received in excess of its cost basis is taxable as ordinary income

54
Q

Earnings in a 403(b) are deducted from ____ and grow ________

A

a teacher’s salary, tax-deferred

55
Q

Any funds distributed in a MEC are subject to a _______ treatment,

A

Last-in, first-out tax (LIFO) meaning gains will be taxed before principal

Insurance (5 decks)

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