LIFE INSURANCE

Which of these is true regarding the exchange of consideration among parties involved in an insurance contract?

Can be unequal

The premiums paid by an employer for his employee's group life insurance are usually considered to be?

Tax-deductible to the employer

Kevin has an existing life insurance policy and assigns it to another insurer for a new contract. How would this transaction be treated for tax purposes?

As a section 1035 exchange

Which of these is NOT a common life insurance nonforfeiture option?

Life income annuity

Linda is covered with long-term care insurance and has early-stage Alzheimer's. She is still able to reside in her home while receiving primary care, as opposed to moving into a nursing home. All of the following long-term benefits encourage home health care EXCEPT?

Custodial Care

An accident and health insurer has just received written proof of loss from one of its insurers. The insured must now wait 60 days before?

Bringing legal action against the insurer

Health care costs can be better controlled by utilizing pre-admission testing. Pre-admission testing can reduce the?

Length of hospitalization

The "Use ir or Lose it" rule applies to

Flexible Savings Account

fee-for-service is a method of administering health insurance benefit payments in which

The cost of each service is scheduled

Use of XYZ Insurance Company brochures, business cards, and rating guides is an example of?

Apparent Authority

A life insurance illustration showing future premiums being paid out of no guaranteed values must disclose that?

The policy owner may need to resume premium payments depending on actual results

When the court orders an insured to provide a child's health insurance, the insurer must allow the child to be enrolled?

At any time

Which of these statements is NOT a characteristic of the law of large numbers?

Rates can be calculated to compensate for losses

In Arizona, when personal information is collected from a source other then the accident and health insurance applicant or public records, a notice or information practices must be given to the applicant no later than the date of?

Application

How does the cost for a survivorship life policy compare to the cost of combining two separate individual life insurance policies?

Survivorship life policy is lower

How does a continuous premium whole life policy differ from a limited payment whole life policy?

The time period in which premiums will be paid

An agent's authority to bind an insurer to an insurance contract may be granted in the?

Agent's contract and the insurance company's appointment

Which statement concerning the Entire Contact provision in an individual accident and health insurance policy is TRUE?

The agent doesn't have the authority to change the policy or waive its provisions

Under the Fair Credit Reporting Act, which statement is true?

The consumer who was investigated must be advised that credit, insurance, or employment was denied because of an unfavorable report.

Field underwriting by a producer?

May result in the disclosure of hazardous activity of the applicant.

When group benefits under COBRA have expired, a fully insured group policy can be converted to a(n)

Individual health policy

In a qualified retirement plan, the yearly contributions to an employee's account?

Are restricted to maximum limits set by the IRS

The unwritten authority given to a producer to carry out necessary incidental acts of the agency agreement is called?

Implied authority

Which provision makes the application part of the annuity contract?

Entire Contract clause

Arizona Law require the Human Immunodeficiency Virus (HIV) consent form to?

Disclose the types of individuals or organizations that may receive a copy of the test results

Under which marketing system do insurers solicit customers by mass media advertising and mail without their services of an agent?

Direct Response

A policy owner has just borrowed from a life insurance policy's cash value. Which of these statements is true?

In the event of death, the loan amount is deducted from the policy proceeds

According to federal fraud and false statement regulation, what is required for a prohibited person to transact insurance business in this state?

Written consent from the state insurance regulatory agency

Employer-paid qualifies long-term care insurance premiums are typically?

Excluded from the employee's gross income

When replacing a life insurance policy, which of the following is advisable?

Wait until the new policy Is issued and deliver before surrendering existing policy

Which of these may NOT be deducted from premium payments or the cash value of a variable life insurance policy?

Federal premium taxes

A policy owner pays the first annual premium for a $50,000 Life Insurance policy and dies one month after the policy effective fate. Which of these statements is normally true?

Beneficiary receives $50,000 income tax-free

A life policy that has premiums that are lower than normal during the early years is called?

Modified Life

Which life insurance settlement option pays a stated monthly benefit until both principal and interest are exhausted?

Fixed amount installment option

What type of doctor-ordered care assists an individual with performing basic daily activists such as bathing, dressing, eating?

Custodial Care

Which of these occurrences could improve an insurer's ability to reduce premiums?

Rate of earnings on investments increase

An insured covered under a Disability Income policy is disabled and collecting benefits for a period of two months. He returns to work and is again disabled from the same cause, whereupon benefits continue to be paid. This is an example of which of the following?

Recurrent disability

A life annuity with a period certain is characterized as?

Guaranteeing benefit payments for a stated minimum period of time

Which life insurance policy option allows the policy owner to have coverage equal to the Net death benefit of the lapsed policy?

Extended term nonforfeiture option

For purposes of Disability Income Insurance, earned income would include all of the following EXCEPT

Dividends

What must the insurer provide to certificate holders when a group Medicare Supplement insurance policy is terminated and not replaced?

An offer of conversion to individual coverage

If a producer misleads or fails to adequately disclose the title and true nature of a policy offered to a potential insured, it may be considered

Misrepresentation

James had individual health insurance with two different insurers. The "insurance with other insurers" provision states that an insurer can pay benefits on a pro-data basis if?

No notification was given to the insurer prior to the claim that the insured has other health coverage

Medicare Supplement insurance that provides a preventative medical care benefit will often cover?

Yearly physics examinations

Which factor determines the maximum disability income benefits that can be purchased by an applicant?

The applicant's income

When a large sum of money is used to structure monthly payments, which product is typically used?

An immediate annuity

All of these are duties that a producer may be required to perform when delivering an insurance policy EXCEPT?

Leave a conditional receipt with client

A material change in a modified endowment contract (MEC) results in?

The seven pay test, adjusted for cash value, applies again

Terry receives long-term physical therapy at her residence. What type of insurance would cover this service?

Home health care

Unless it is regarding fraud, which of the following statements about the contestability of a life insurance policy is true?

The policy can usually only be contested by the insurer during the first two years of the contract

What does a 401(k) plan generally provide its participants?

Salary-deferral option

An employer has a group life coverage for his employees. How would an employee in poor health be treated in this situation?

Eligible for the same type of coverage as the other employees

According to the Affordable Care Act (ACA), the proportion of premium revenues spent on clinical services and quality improvements is called the?

Medical loss ratio

Which of the following is considered to be a prosthodontic dental procedure?

Bridgework

A health plan offered by private insurance companies is?

A Medicare Supplement

Which statement concerning a deferred annuity contract is correct?

The owner converge beneficiary, annuitant, or neither

In what situation would Disability income insurance premiums be a deductible expense?

Corporation paying for group disability income coverage for its employees

Which of these policies is considered a whole life policy?

Single premium life

Tori has an annuity that pays her a $500 per month income benefit for life for ten years, whichever is longer. What kind of annuity is this?

Fixed life annuity with period certain

The administrator of a reciprocal insurer who manages the premiums collected from the group's members is called?

An attorney in fact

All of these are used to prevent adverse selection in a group dental plan EXCEPT

Decreased employee participation

Which of the following statements BEST describes employer contributions for employer provided health insurance?

Employ contributions are deductible

Which of these is NOT considered to be a cost connected with an individual's death?

Business expenses

Scott has a life insurance policy in which the dividends are left with the insurance company. This particular policy may be paid up when the cash value plus accumulated dividends?

Equal the Net single premium for the same amount at the insured's attained age

In Arizona, an insurer providing small employer group medical plans may discontinue an employer's coverage if?

The insurer no longer offers the plan to any employer

An insured, age 67, is covered under a disability income policy. What will the insurer require in order for the insured to continue coverage?

The insured must work for a stated number of hours per week

Which tax is normally associated with an individual's death?

Federal estate tax

Which of these statements reflects an accurate portrayal of Medicare SELECT?

Insured uses preferred providers in exchange for paying lower premiums

A producer working for an insurance company may be personally liable for?

Acts performed which are prohibited in the agency contract

Elimination periods normally apply to?

Disability policies

According to HIPAA regulations, which of the following may reduce a medical plan's pre-existing conditions exclusion?

Any period of prior coverage

During the first two years a life insurance policy is in force, the insurer may contest a policy for all of the following reasons EXCEPT?

Misstatement of age in the application

A teacher recently retired at age 63 and has a tax sheltered annuity (TSA). Periodic deposits total $120,000 and the value of the contract is now worth $200,000. How much is taxed if the current value is surrendered today?

$200,000

The major medical deductible carryover period normally applies to expenses incurred during the last _____ months of the plan year.

Three

Which of these situations would NOT potentially involve a prison sentence under Federal Law?

Transacting Insurance with a nonresident license

Individual's covered with employer-paid group health plans will normally receive tax-free benefits under all these plans EXCEPT?

Disability income

How is a claim handled by a health insurer if it occurs during the policy's grace period?

The unpaid premium may be deducted from the reimbursement

What action can an insurer take to discourage malingering and false disability claims?

When an insured has two disability policies with the same insurer, the insurer sets limits in the amount of benefits an insured can collect

In Arizona Life and Disability Insurance Guaranty Fund protects an insured in the event of?

The insurer's insolvency

A business may purchase an annuity for all of the following reasons EXCEPT?

Funding a non-qualified deferred compensation plan

Which of the following can be defined as a cause of a loss?

Peril

Under the Telemarketing Sales Rule, telemarketing call May ONLY be received between the hours of?

8:00 AM to 9:00 PM

In what situation could an insurance policy's coverage be modified?

Applicant is a substandard risk

What type of risk involves the potential for loss with no possibility for gain?

Pure risk

Which statement regarding a single premium life insurance policy is NOT correct?

Additional premiums may be required under certain conditions

An annuity becomes incontestable after I has been in force for?

2 Years

Major medical plans typically exclude coverage for which if the following benefits?

Custodial Care

EXCEPT for fraud, the time after issuance of a policy during which an insurance company may contest a health insurance claim due to the statements on an application is?

2 Years

An insured is covered with a health insurance policy. If the insured would like to cancel the policy, he/she must?

Notify the insurance company in writing

According to the Pregnancy Discrimination Act of 1978, employers must treat pregnancy in the same manner as?

Any other disability

Which of the following is NOT subject to the promise to pay in an insuring clause?

How the premium is calculated

Which of these life insurance policies does NOT contain a cash value provision?

Decreasing term life

Disability income insurance normally excludes coverage for disabilities that arise from?

Active duty military

Which of these is NOT used as a selection criteria in the underwriting process of a life insurance application?

National Origin

Which of the following is considered a Limited accident and health plan?

Cancer plan

The annuitant in a single premium deferred annuity (SPDA)?

Received immediate benefit payments

Andy is in need of health care performed by skilled medical practitioners, but only in an intermittent basis. What level of care will his doctors likely prescribe?

Intermediate Care

Which statement regarding whole life insurance is accurate?

Insurance coverage can continue for life

Mike allied for life insurance and was issued a conditional receipt. He is later found to be insurance and is issued a policy. When does his coverage become effective?

Date of issuance of the conditional receipt

The Medical Information Bureau consists of members from which group?

Insurance companies