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Wfg > Quiz 2 50-105 > Flashcards

Quiz 2 50-105 Flashcards

1
Q
  1. Henry buys a $10,000 Whole Life Policy in 2003 and pays an annual premium of $100. He dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did Henry include on the Policy?
    a) Accelerated death benefit rider
    b) Return of Premium Rider
    c) Family Income Rider
    d) Term Rider
A

b) Return of Premium Rider

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2
Q
  1. A Variable Insurance Policy
    a) Guarantees a minimum rate of return
    b) Does not allow the Policy Owner to assume the Investment Risk
    c) Does not guarantee a Return on its investment accounts
    d) Does not guarantee an assignment provision
A

c) Does not guarantee a Return on its investment accounts

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3
Q
  1. Key person insurance is intended to
    a) allow a key person to purchase the business
    b) help retain key employees by offering added benefits
    c) give premium-grade benefits to key employees
    d) cover business losses due to the death of a key employee
A

d) cover business losses due to the death of a key employee

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4
Q
  1. A Life Policy with a Death Benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as?
    a) Adjustable Life
    b) Graded Premium Life
    c) Variable Life
    d) Modified Whole Life
A

c) Variable Life

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5
Q
  1. How long is a person expected to be disabled in order to receive Social Security disability benefits?
    a) 4 months
    b) 6 months
    c) 12 months
    d) 18 months
A

c) 12 months

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6
Q
  1. All of these insurance products require an Agent to have proper FINRA securities registration in order to sell them Except for?
    a) Variable Life
    b) Modified Whole Life
    c) Universal Variable Life
    d) Variable Annuity
A

b) Modified Whole Life

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7
Q
  1. Which statement is NOT true regarding Social Security benefits?
    a) Benefit eligibility is based upon fully insured status
    b) Benefits are designed to replace the entire amount of the worker’s earnings
    c) Disability is expected to continue for 12 months or result in death
    d) Worker must be totally and permanently disabled for at least 5 months and unable to work again to be eligible for benefits
A

b) Benefits are designed to replace the entire amount of the worker’s earnings

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8
Q
  1. Which of the following statements about a Variable Whole Life Policy is correct?
    a) It provides a minimum guaranteed Death Benefit
    b) It is a Combination of a Limited Period Endowment and a Decreasing Term Policy
    c) Its Premium and Benefits are variable
    d) It has a guaranteed rate of return
A

a) It provides a minimum guaranteed Death Benefit

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9
Q
  1. Which type of worker has Social Security benefits available to them?
    a) Fully insured
    b) Currently insured
    c) Partially insured
    d) Presently insured
A

a) Fully insured

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10
Q
  1. 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

d) Universal Life

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11
Q
  1. Rating an individual’s need for long-term care benefits can be measured by
    a) deductibles
    b) gatekeeper authority
    c) activities of daily living
    d) custodial need
A

c) activities of daily living

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12
Q
  1. Which is true concerning a Variable Universal Life Policy?
    a) Policy Owner controls where the investment will go and selects the amount of the premium payment
    b) Policy Owner has no say where investment goes but can choose the premium mode
    c) The investment vehicle for this type of policy is held in the insurer’s general portfolio
    d) The death benefit can vary but the policy owner has no say in the Premium amount PAID
A

a) Policy Owner controls where the investment will go and selects the amount of the premium payment

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13
Q
  1. All of these statements concerning Medicare are true EXCEPT
    a) Medicare is primarily funded by Federal payroll and self-employment taxes
    b) Long-term care is covered by Medicare Part C
    c) Hospice is covered by Medicare Part A
    d) Doctors’ services are covered by Medicare Part B
A

b) Long-term care is covered by Medicare Part C

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14
Q
  1. What kind of special need would a policy owner require with an Adjustable Life Insurance Policy?
    a) Level Premiums
    b) Flexible Premiums
    c) Flexible non forfeiture options
    d) Level death benefits
A

b) Flexible Premium’s

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15
Q
  1. ESOPs are typically invested in
    a) non-qualified plans
    b) IRAs
    c) employer stock
    d) annuities
A

c) employer stock

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16
Q
  1. All of these are characteristics of an Adjustable Life Policy Except?
    a) Adjustable Premiums
    b) Adjustable Premium Payment Period
    c) Combination of Term and Whole Life Insurance
    d) Face Amount can be adjusted using Policy Dividends
A

c) Combination of Term and Whole Life Insurance

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17
Q
  1. How are Roth IRAs treated for tax purposes?
    a) Non-deductible contributions and tax-free distributions
    b) Deductible contributions and taxable distributions
    c) Distributions taxable as capital gains
    d) Distributions taxable as income tax
A

a) Non-deductible contributions and tax-free distributions

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18
Q
  1. Henry would like to purchase $100,000 of Permanent Protection on his wife and $50,000 of Term Coverage on himself under the same policy. What kind of policy should he purchase?
    a) Joint Policy
    b) Joint Survivor Policy
    c) Whole Life Policy with another insured rider
    d) Whole Life Policy with a Guaranteed Insurability option
A

c) Whole Life Policy with another insured rider

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19
Q
  1. A situation in which there is ONLY a chance of loss or no loss is a
    a) pure risk
    b) particular risk
    c) speculative risk
    d) fundamental risk
A

A) pure risk

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20
Q
  1. When is the face amount paid under a Joint Life and Survivor policy?
    a) When Policy reaches maturation
    b) Upon Death of the first insured
    c) Upon Death of the last insured
    d) When one of the insureds becomes disabled and no longer able to make premium payments
A

c) Upon Death of the last insured

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21
Q
  1. An insurer having a large number of similar exposure units is considered important because
    a) the insurer can decrease its reserves
    b) the greater the number insured, the more accurately the insurer can predict losses and set appropriate premiums
    c) its financial rating will improve
    d) the greater the number insured, the more premiums it collects
A

b) the greater the number insured, the more accurately the insurer can predict losses and set appropriate premiums

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22
Q
  1. What policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?
    a) Family Lump Sum Policy
    b) Family Maintenance Policy
    c) Family Survivor Policy
    d) Family Income Policy
A

b) Family Maintenance Policy

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23
Q
  1. Which of the following would NOT be accomplished with the purchase of an insurance policy?
    a) Greater peace of mind
    b) Risk is eliminated
    c) Payments made for covered losses
    d) Uncertainty is reduced
A

b) Risk is eliminated

24
Q
  1. Which of the following would NOT be accomplished with the purchase of an insurance policy?
    a) Greater peace of mind
    b) Risk is eliminated
    c) Payments made for covered losses
    d) Uncertainty is reduced
A

b) Risk is eliminated

25
Q
  1. A medical care provider which typically delivers health services at its own local medical facility is known as a?
    a) Health Maintenance Organization
    b) Regional Provider
    c) Multiple Employer Trust
    d) Preferred Provider Organization
A

a) Health Maintenance Organization

26
Q
  1. A hazard can be best described as
    a) the potential for loss
    b) the tendency for poorer than average risks to seek out insurance
    c) a condition that may increase the likelihood of a loss occurring
    d) a risk that has the potential for both loss and gain
A

c) a condition that may increase the likelihood of a loss occurring

27
Q
  1. The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n)?
    a) Closed panel
    b) Open panel
    c) Co-op panel
    d) Capitation panel
A

a) Closed panel

28
Q
  1. Major medical expense plans typically use a cost containment measure for emergency hospital care. This is referred to as a(n)
    a) capitation
    b) exclusion
    c) limitation
    d) deductible
A

d) deductible

29
Q
  1. Which of these statements is FALSE, regarding a Preferred Provider Organization (PPO)?
    a) PPO’s normally have more providers to choose from as compared to an HMO
    b) Prices are negotiated in advance for PPO providers
    c) In-network PPO providers offer members better coverage of incurred expenses
    d) PPO’s are NOT a type of managed care systems
A

d) PPO’s are NOT a type of managed care systems

30
Q
  1. An insured is protected from the expense of a catastrophic illness by which of the following health insurance provisions?
    a) Self-insurance
    b) Stop-loss
    c) Deductible
    d) Reimbursement
A

b) Stop-loss

31
Q
  1. Which of the following is NOT a limited benefit plan?
    a) Cancer policies
    b) Life insurance policies
    c) Dental policies
    d) Critical illness policies
A

b) Life insurance policies

32
Q
  1. All of these are examples of cost sharing in a health insurance policy EXCEPT
    a) Copayments
    b) Deductibles
    c) Coinsurance
    d) Coordination
A

d) Coordination

33
Q
  1. Which statement BEST describes dental care indemnity coverage?
    a) Services are reimbursed before the insurer receives the invoice
    b) Services are reimbursed after insurer receives the invoice
    c) In-network dentists must always be used.
    d) Very limited list of providers
A

b) Services are reimbursed after insurer receives the invoice

34
Q
  1. Which of the following terms is NOT associated with a Major Medical policy?
    a) Stop-loss
    b) Comprehensive
    c) Deductible
    d) Capitation
A

d) Capitation

35
Q
  1. Which of these coverage types is best described as a short term medical policy? a) Interim coverage
    b) Provisional coverage
    c) Transitional coverage
    d) Conversion coverage
A

a) Interim coverage

36
Q
  1. When an insurance company requests an attending physician’s report , the request must be accompanied by a
    a) conditional receipt
    b) buyer’s guide
    c) copy of the signed authorization
    d) policy illustration
    An insurer’s request for an attending physician’s report must be accompanied by a copy of the signed authorization
A

c) copy of the signed authorization

37
Q
  1. B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death if B is killed from an accident on a commercial flight, what will the policy pay B’s beneficiary?
    a) $100,000
    b) $200,000
    c) $300,000
    d) $400,000
A

c) $300,000

38
Q
  1. How does a conditional receipt differ from a binding receipt?
    a) Conditional receipts always provide insurance which starts from the date of receipt
    b) Binding receipts always require an initial premium payment
    c) Binding receipts always provide insurance which starts from the date of receipt
    d) Conditional receipts always require an initial premium payment
A

c) Binding receipts always provide insurance which starts from the date of receipt

39
Q
  1. MEDICARE is intended for all of the following groups EXCEPT?
    a) Those enrolled as a Full-time student
    b) Those receiving social security disability benefits, for at least 24 months
    c) Those afflicted with chronic kidney failure
    d) Those 65 and older
A

a) Those enrolled as a Full-time student

40
Q
  1. The objective of underwriting is to
    a) assign the highest premium possible
    b) avoid selecting a disproportionate number of good risks
    c) decline as many applications as possible
    d) avoid selecting a disproportionate number of bad risks
A

d) avoid selecting a disproportionate number of bad risks

41
Q
  1. Medicare Part A and Part B, do NOT pay for?
    a) Dental work
    b) Hospitalization
    c) Skilled nursing care
    d) Physical therapy
A

a) Dental work

42
Q
  1. Which is a life insurance policy that does NOT require a physical exam?
    a) Non-medical
    b) Graded
    c) Substandard
    d) Noncancelable
A

a) Non-medical

43
Q
  1. What is the maximum Social Security Disability benefit amount an insured can receive?
    a) 50% of the insured’s Primary Insurance Amount PIA
    b) 75% of the insured’s Primary Insurance Amount PIA
    c) 100% of the insured’s Primary Insurance Amount PIA
    d) 100% of the insured’s Primary Insurance Amount PIA, minus any monies received from a retirement plan
A

c) 100% of the insured’s Primary Insurance Amount PIA

44
Q
  1. What is the proper order of initial life insurance premiums, lowest to highest?
    a) Ordinary life, single premium, modified premium
    b) Modified premium, ordinary life, single premium
    c) Single premium, modified premium, ordinary life
    d) Ordinary life, modified premium, single premium
A

b) Modified premium, ordinary life, single premium

45
Q
  1. The individual most likely to buy a Medicare Supplement Policy would be a(n)?
    a) Unemployed 64 year old female
    b) 62 year old male covered by Medicaid
    c) 68-year old male covered by Medicare
    d) Uninsured 60 year old male
A

c) 68-year old male covered by Medicare

46
Q
  1. An insurance policy written after 1988 that fails to pass the seven-pay test is
    a) an endowment policy
    b) a modified life policy
    c) a single premium contract
    d) a modified endowment contract
A

d) a modified endowment contract

47
Q
  1. What is the minimum number of activities of daily living (ADL) an insured must be unable to perform to qualify for Long-Term Care benefits?
    a) 1
    b) 2
    c) 3
    d) 4
A

b) 2

48
Q
  1. A life insurance policy’s limit of liability would be
    a) determined by the Department of Insurance
    b) the policy’s face amount
    c) the total premiums paid
    d) determined by insurance company’s reinsurer
A

b) the policy’s face amount

49
Q
  1. LTC Policies usually pay for eligible benefits using the following method?
    a) Delayed
    b) Fee for Service
    c) Expense incurred
    d) Respite
A

c) Expense incurred

50
Q
  1. Mike and Ike are 30 year old identical twins. Both are in excellent health. Each brother purchases a life policy that has a $750 annual premium. Mike buys a 10-year renewable term policy. Ike purchases a whole life policy. All of the following statements are true EXCEPT
    a) Mike’s policy will develop no cash value over the policy’s term
    b) Ike may eventually take out a policy loan
    c) Ike will have a level premium
    d) Mike has the option of using his cash value to purchase a reduced amount of paid-up whole life insurance
A

d) Mike has the option of using his cash value to purchase a reduced amount of paid-up whole life insurance

51
Q
  1. Which mode of Payment is NOT used by Health Insurance Policies?
    a) Monthly premium
    b) Annual premium
    c) Single premium
    d) Semi Annual premium
A

c) Single premium

52
Q
  1. Which statement is true regarding policy dividends?
    a) Dividends are always guaranteed
    b) Nonparticipating policies issue dividends
    c) Dividends are always taxable
    d) A dividend option is selected by the insured at the time of policy purchase Insureds elect a dividend option at the time of policy
A

d) A dividend option is selected by the insured at the time of policy purchase Insureds elect a dividend option at the time of policy

53
Q
  1. Joan applies for an insurance policy on herself and submits the initial premium with the application she is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?
    a) Binding
    b) Initial premium
    c) Conditional
    d) Contingent
A

c) Conditional

54
Q
  1. Henry is involved in an accident and becomes totally and permanently disabled. His insurance policy continues in force without payment of further premiums. Which policy provision is responsible for this?
    a) Waiver of premium provision
    b) Insuring provision
    c) Return of premium provision
    d) Automatic premium loan provision
A

a) Waiver of premium provision

55
Q
  1. An agent gives a conditional receipt to a client for an insurance policy, after collecting the initial premium. When will the policy become effective?
    a) When the policy is issued
    b) The date of policy deliver
    c) When the conditions of the receipt are met
    d) The date the sales appointment was set
A

c) When the conditions of the receipt are met

Wfg (3 decks)

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