More Ins Questions

Question 1

F owns a SPDA. He inherits a large sum of money and wants to invest it to provide an immediate stream of income. Which of the following would be his best option?

Answer 1

F wants an immediate stream of income and the only choice among these is the Single Premium Immediate Annuity (SPIA). The original SPDA (Single Premium Deferred Annuity) cannot be added to because it has only a single premium, and a new SPDA would not offer the immediate stream of income F wants.
The correct answer is: Purchase a separate SPIA.

Question 2

Life insurance plans that involve combinations of whole life, term, and paid-up additions in proportions allowing favorable premiums and adjustable face amounts are called:

Answer 2

Flexible Enhanced Ordinary Life, also called Economatic life policies were introduced to compete with Universal Life. They involve complex combinations of whole life, term, and paid-up additions in proportions allowing favorable premiums and adjustable face amounts. Policy dividends, additional premiums and ?dump-ins? are all used to purchase paid-up insurance that would offset the temporary term coverage.
The correct answer is: Flexible Enhanced Ordinary Life.

Question 3

A type of retirement plan in which the risk of interest income is born by the employer is called a(n):

Answer 3

Employers take the risk of investment results in a Defined Benefit Plan because the plan spells out what benefits the retiree will receive, regardless of how the investments toward that benefit have fared over the years. If there is not enough money in the plan to meet the need, the employer must put more money into the plan.
The correct answer is: Defined Benefit Plan

Question 4

The time between a surviving spouse’s last child’s Social Security benefit payment and the spouse’s 60th birthday is known as which of the following?

Answer 4

No payment is given to the spouse between the last child’s payment and the time when the surviving spouse receives their first retirement income check (at age 60), this time period is called the blackout period - a period without social security payments.
The correct answer is: The Blackout Period

Question 5

A medical plan in which the insured chooses at the time medical services are needed whether they will go to a provider with in or outside the plan network is called a:

Answer 5

Point of Service (POS) plans have non-network provider access; they are an open-ended PPO. Members choose at the time medical services are needed whether they will go to a provider with in or outside the plan network.
The correct answer is: Point of Service Plan

Question 6

A has a “Your Occupation” disability policy. If she currently works as a family physician, which situation would be covered under her policy?

Answer 6

To be covered under a “Your Occupation” disability policy, an insured cannot be able to perform duties of their regular profession or the profession in which they are engaged when the disability begins. There is usually a provision that the insured must be in a doctor’s care. Each of the situations fits that description.
The correct answer is: Any of these situations would be covered.

Question 7

Which of the following is not a reason for which a Medicare supplement policy may be terminated?

Answer 7

A Medicare supplement policy cannot be terminated solely because of the insured’s health, and can only be terminated for the non-payment of premium or material misrepresentation.
The correct answer is: The insured’s health status

Question 8

D has a disability income policy. One day as he is driving to the store D is involved in a serious accident and becomes permanently disabled. Under which mandatory policy provision must D give notice of continued disability?

Answer 8

If benefit coverage may be payable for at least two years, the insured must give notice of continued disability every six months unless legally incapacitated. The correct answer is: Notice of Claim

Question 9

Given that a new group member meets eligibility requirements and applies for group life insurance coverage on day 36, which of the following can be expected?

Answer 9

If group members apply on or before 31 days after meeting eligibility requirements, they cannot be denied coverage. After day 31, pre-existing conditions may be taken into consideration or coverage may be denied. The correct answer is: Coverage may be denied

Question 10

If a person has a technical occupation, under what type of Disability policy will he/she receive more benefits?

Answer 10

Specialist occupational disability applies when the insured is highly trained in a specific field and cannot do those demanding skills due to a disability, even though they can still do much less complicated work but would suffer a reduction in income. With one of the other disability definitions, the individual may be forced to take work less than that to which he/she has been trained at a reduced income.
The correct answer is: Specialist Occupation

Question 11

A family income policy has which of the following characteristics?

Answer 11

A family income policy combines ordinary whole life with decreasing term insurance.
The correct answer is: Combines ordinary whole life with decreasing term insurance

Question 12

If Z is admitted to the emergency room and discharged the same day, how much time does he have to give written notice to his insurer about the claim?

Answer 12

Written notice of a claim must be given within 20 days of the commencement of any loss covered by the policy (or as soon as is reasonably possible). Continuing disability notice is required every six months. 90 days is the time frame in which PROOF OF LOSS must be given to the insurer once the written notice has been submitted.
The correct answer is: 20 days

Question 13

Which of the following policy provisions is not required to be included in medical insurance policies?

Answer 13

Change of Occupation is an optional policy provision.
The correct answer is: Change of Occupation

Question 14

Which of the following is not one of the uses of annuities?

Answer 14

Annuities may be used for tax-deferred growth, but not tax-free growth. The correct answer is: Tax-free growth

Question 15

Which of the following is NOT a privilege that an individual leaving a group can receive within 31 days when converting to a personal policy?

Answer 15

Only members of the group who were covered for at least 5 years can take advantage of the conversion privilege when the group’s policy is terminated.
The correct answer is: When the group policy terminates, all members can purchase an individual policy up to the group policy’s face amount or $10,000.

Question 16

Will insurance coverage always end on a Term-to-65 contract?

Answer 16

A Term-to-65 contract expires at the insured’s age 65, at which time it may be convertible to a whole life policy.
The correct answer is: Coverage is convertible to whole life at age 65

Question 17

Which would NOT be a reason to have a limited coverage plan?

Answer 17

The purpose of limited coverage plans is to provide benefits for such things as cancer, heart disease, travel accident, dental, or vision expenses. The actress could cover her legs under a special risk policy or through a Lloyds of London type policy.
The correct answer is: A potential insured is a famous actress and wants to insure her legs.

Question 18

Which of the following individuals will need to pay a premium for Medicare Part A?

Answer 18

Medicare Part A has no premium for those 65 and over who are receiving or are eligible to receive benefits under Social Security or the Railroad Retirement Board, or those who had or whose spouse had Medicare covered government employment.
The correct answer is: V, a 62 year-old widow, whose husband worked in Medicare covered government employment while he was alive.

Question 19

The Policy Summary that must be given to insureds does NOT include:

Answer 19

The Policy Summary contains 1) the issuing company and producer’s name and address and the procedure to obtain answers about the policy, 2) The policy’s GENERIC name, 3) The policy loan interest rate, 4) Life Cost indexes for 10 and 20 years, 5) The Equivalent Level Annual Dividend, 6) The date of statement preparation, and 7) the following amounts for the first five policy years and representative years thereafter a) The annual premium for the basic policy and all riders, b) The guaranteed death benefit, c) The total guaranteed cash surrender value, d) Cash dividends payable.
The correct answer is: The name the policy is marketed under.

Question 20

After the insured makes a claim, the insurer has how long to open communications with the insured, acknowledge receipt of the claim, and provide necessary claim forms?

Answer 20

After the insured makes a claim, the insurer has 15 days to open communications with the insured, acknowledge receipt of the claim, and provide necessary claim forms.

The correct answer is: 15 days

Question 21

In regards to disability insurance, generally the more specific the definition of what constitutes a total disability, the:

Answer 21

The correct answer is: Higher the premiums will be.

Question 22

J is a college student who also works part time in the summer. Last year he made $2,500. How much of it may he invest in an IRA?

Answer 22

Individual Retirement Annuities, or IRAs, can be established by anyone with earned income. 100% of earned income can be contributed up to a maximum contribution, which is set by the IRS on a regular basis. $6,500 is limit for 2023. The correct answer is: $2,500

Question 23

BJI is a surplus lines insurer offering coverage to bungee jumpers. When MITU Insurance decides it wants to offer a similar coverage policy, charging a premium that is three times that of BJI’s, and BJI must subsequently stop offering coverage, what type of insurer is MITU?

Answer 23

If BJI must stop offering coverage for bungee jumpers as a result of MITU Insurance’s decision, MITU is an admitted insurer and BJI is a surplus or excess lines insurer. The correct answer is: Admitted

Question 24

Tricia, who has group health coverage through her employer, had a baby yesterday. How many days from today does Tricia have to notify the insurer of the birth before coverage will terminate?

Answer 24

The correct answer is: 29 days

Question 25

In a Medical Expense policy, the miscellaneous Medical Expense Benefit usually covers:

Answer 25

Drugs and medicine administered in the hospital are covered by the miscellaneous Medical Expense Benefit.
The correct answer is: Drugs and medicine administered in the hospital.

Question 26

An insurance producer may ask which of the following about HIV or AIDS?

Answer 26

An insurer or agent may ask if: 1) if they have ever had or been treated for HIV, AIDS, or ARC, or 2) if they have ever tested positive for HIV, AIDS or ARC, or 3) they have been advised that a medical condition they have is related to AIDS.
They may NOT ask 1) if the person is homosexual, 2) if they have ever received counseling or advise related to AIDS, or 3) if they have ever had an AIDS-related blood test. The correct answer is: If the individual has ever tested positive for HIV.

Question 27

Which of the following is a characteristic of combined term and permanent insurance plans?

Answer 27

An insured would buy a combined whole life/term policy in order to purchase more insurance for less money than a straight whole life policy. This option may be chosen when they need the extra insurance for a certain period of time, such as until a child is old enough to move out on their own. The insured would still be able to build cash value that would not be available in a straight term policy.
The correct answer is: They offer higher amounts of insurance at a lower cost than straight whole life insurance.

Question 28

An insurer authorized by a state’s insurance department to transact business in that state is called a what?

Answer 28

An admitted insurer is an insurer authorized by a state’s insurance department to transact business in that state. The correct answer is: Admitted Insurer

Question 29

D has end stage renal disease. Which coverage is not available to him?

Answer 29

If a Medicare beneficiary has end stage renal disease, permanent kidney failure, they are not eligible for enrollment in a Medicare Plus Choice Plan. The correct answer is: Medicare Plus Choice

Question 30

In dental care insurance, prophylaxis treatment will cover:

Answer 30

Prophylaxis treatment refers to routine preventive care.
The correct answer is: Routine preventive care.

Question 31

In a group insurance policy, if the sponsor pays the entire premium, what percent of eligible members must participate?

Answer 31

In a non-contributory plan the sponsor pays 100% of the premium. All eligible members must participate. The correct answer is: 100%

Question 32

Medical Cost Management is:

Answer 32

Medical Cost Management controls how policy holders utilize policies though various methods such as requiring mandatory second opinions or requiring the insurers permission before obtaining non- emergency care.
The correct answer is: the use of various methods to control how policy holders utilize policies.

Question 33

Which of the following would most likely be handled by a lump-sum payment from a life insurance policy’s death benefit?

Answer 33

To determine a lump-sum requirement, you just input the usual lump sum needs (paying of debts and mortgages, final expenses (burial, funeral, estate administration, probate, medical, etc.), estate taxes, charitable giving, children’s college expenses, etc. On-going needs would best be handled by an annuity contract, and once the annuity owner dies the policy annuitizes and the payment is made as a lump sum.
The correct answer is: The insured’s debts, estate taxes, final medical expenses and burial expenses

Question 34

Which of the following describes a reason to buy life insurance that would protect a family business from needing to be sold in the event of the owner’s death?

Answer 34

Persons with difficult-to-market assets or assets they want retained (family business) with little liquidity should have life insurance for liquidity to avoid the need to sell or mortgage assets.
The correct answer is: Liquidity

Question 35

Which of the following types of companies does NOT underwrite health insurance?

Answer 35

Health insurance may be underwritten by life insurers, casualty insurers (Worker’s Compensation is a casualty-type policy) and mono-line companies that focus on accident, health or disability coverage. Annuity companies, however, specialize in providing life benefits.
The correct answer is: Annuity companies