Certification Exam

A hearing must be held before a producer's license can be suspended or revoked. Prior to the hearing, the Commissioner is required to

  1. give notice to the producer's insurance company

  2. give written notice to the producer

  3. give oral notice to the producer

  4. give notice to the NAIC

A license may be denied, suspended, or revoked if the licensee

  1. does not meet a sales quota

  2. files for bankruptcy

  3. engages in replacement of an existing policy

  4. is found guilty of misrepresentation in obtaining the license

Long-term care policies in Delaware will cover all of the following EXCEPT

  1. Alcoholism

  2. Senility

  3. Alzheimer's

  4. Dementia

Small employer health plans must be

  1. guaranteed renewable

  2. conditionally renewable

  3. optionally renewable

  4. cancelable

A(n) _______ insurance company is one formed in a country other than the United States.

  1. reciprocal

  2. alien

  3. domestic

  4. foreign

ABC Life Insurance company's home office is located in Massachusetts and is incorporated in Massachusetts. In Delaware they are considered to be

  1. Assessment Mutual Company

  2. Foreign

  3. Domestic

  4. Non-Admitted

Which of the following actions by a producer would NOT result in a license suspension or revocation?

  1. misappropriating premiums

  2. incompetence

  3. bankruptcy filing

  4. untrustworthiness

To maintain continued coverage for a newborn under an accident and sickness policy, the policyowner must provide notification of birth and payment of premium to the insurance company within a MAXIMUM of how many days after birth?

  1. Fifteen

  2. Sixty

  3. Seven

  4. Thirty-one

A licensee's business records must be maintained and made available for inspection by the Commissioner for a period of

  1. 4 years

  2. 2 years

  3. 3 years

  4. 5 years

An example of an unfair claims settlement practice is

  1. making it mandatory that proof of loss be provided for each claim

  2. requiring a time limit for submitting a claim

  3. paying a claim in a timely matter

  4. turning down a claim without providing the basis of denial

A producer receives the initial premium from an applicant and deposits the money into a personal bank account for 2 weeks. This illegal action is called

  1. co-funding

  2. amalgamation

  3. commingling

  4. integration

An example of an unfair claims settlement practice is

  1. misrepresenting insurance policy provisions affecting a loss

  2. requiring a time limit for submitting a claim

  3. paying a claim in a timely matter

  4. requesting a third-party arbitrator to resolve a disagreement

A Producer that uses an unlicensed office staff to solicit and transact insurance could face

  1. imprisonment

  2. license suspension

  3. fines and imprisonment

  4. community service

Under a health policy, an insured must give Notice of Claim to the insurance company within a MAXIMUM of how many days after the occurrence or commencement of a loss?

  1. Twenty

  2. Ninety

  3. Ten

  4. Fifteen

An example of rebating would be

  1. a mutual insurance company paying dividends to its policyowners

  2. using intimidation in order to restrain or monopolize the business of insurance.

  3. offering a client something of value not stated in the contract in exchange for their business

  4. reducing the premiums across the board for a specific risk class

An individual who has a contract with an insurance company to represent it is called a(n)

  1. representative

  2. producer

  3. director

  4. administrator

What is the maximum contest-ability period for most health insurance policies?

  1. 3 years

  2. 2 years

  3. 5 years

  4. 1 year

When L applies for a Health Insurance Policy, L unintentionally fails to list a previous visit to a cardiologist. If the insurance company contests the policy, it MUST do so within 2 years

  1. from the date of issue

  2. of paying a claim for an illness or inquiry related to the misstatement

  3. from proof of loss being submitted

  4. after it discovers the misstatement

Defamation occurs when a producer makes a false statement intended to

  1. misrepresent the provisions of an insurance policy

  2. restrict fair trade

  3. replace an existing insurance policy with another

  4. malign another insurer

Which of the following is a prohibited form of marketing Long-Term Care insurance?

  1. Paid testimony

  2. Radio advertising

  3. Television advertising

  4. Cold lead advertising

Which Unfair Trade Practice involves a producer suggesting that an insurance policy is like a share of stock?

  1. Sliding

  2. Intimidation

  3. Twisting

  4. Misrepresentation

Rebating is

  1. allowed only with the Commissioner's written consent

  2. punishable by incarceration

  3. the act of spreading falsehoods about an insurer with the intent to harm

  4. not allowed on any level

Delaware requires that an insurance producer must complete __ hours of continuing education on the subject of law and ethics every reporting period.

  1. 1

  2. 2

  3. 3

  4. 0

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?

  1. Indemnity

  2. Consideration

  3. Subrogation

  4. Legal action

Who does an insurance broker represent?

  1. insured

  2. Commissioner

  3. beneficiary

  4. insurer

Someone in a position of financial trust is called a(n)

  1. administrator

  2. insured

  3. fiduciary

  4. officer

Who is a mutual insurance company owned by?

  1. Its board of directors

  2. Its policyholders

  3. Its employees

  4. The State of Delaware

A producer is suggesting replacement if a prospective insured is given all of the following advice EXCEPT

  1. Borrow all of your cash value from your current policy to purchase a new policy

  2. Discontinue premiums and put them into a new policy

  3. Take Reduced Paid-Up insurance and use present premiums for a new policy

  4. Convert your Term insurance to Whole Life

A producer MUST do which of the following during a sales presentation for a participating life insurance policy?

  1. Explain the surrender cost indexes for 5 and 10 years

  2. Include a statement that dividends are not guaranteed

  3. Present the mortality table used for the policy

  4. Explain the applicable Nonforfeiture values

A producer who sells an individual life insurance policy in Delaware MUST deliver to the policyowner

  1. an Underwriting Report Disclosure

  2. An Annual Financial Statement of the insurer

  3. A Policy Summary and Buyer's Guide

  4. A Prospectus and Ledger Statement

The results of an HIV test may be forwarded to the applicant's

  1. blood relatives

  2. spouse

  3. primary physician

  4. employer

The violation of a cease and desist order may result in all of the following EXCEPT

  1. $11,500 penalty

  2. Revocation of license

  3. Suspension of license

  4. Community service

All of the following circumstances are grounds for revocation of a license EXCEPT

  1. being charged with a misdemeanor unrelated to insurance activity

  2. failure to pay child support

  3. having a license revoked or suspended in another state

  4. being convicted of a felony

In a _______ insurance company, the policyholders elect its governing bodies.

  1. Stock

  2. Mixed

  3. Governing

  4. Mutual

Benefits from a Credit Life or Disability policy are paid to the

  1. Policyowner

  2. Insured

  3. Debtor

  4. Creditor

In Delaware, an insurer licensed to conduct business in Delaware, but domiciled in New Jersey, is called a(n)

  1. domestic company

  2. alien company

  3. foreign company

  4. non-admitted company

In order to terminate a producer's appointment, the insurer MUST

  1. request a hearing before the Commissioner of Insurance

  2. receive the Governor's approval

  3. send notice of the termination to the Commissioner

  4. send notice of the termination to the NAIC

The conversion period for a terminated employee to convert group life coverage to an individual plan is

  1. 45 days

  2. 61 days

  3. 31 days

  4. 30 days

Which of the following is NOT an example of a producer's breach of fiduciary duty?

  1. allowing premiums to be submitted electronically

  2. misappropriation of premiums

  3. conversion of premiums

  4. improper withholding of premiums

The life insurance and annuity replacement regulation defines replacement as

  1. exchanging an existing policy for a new policy

  2. accepting a reduced paid-up policy

  3. cash surrendering an existing policy

  4. reducing the face value of an existing policy

Insurance producers do NOT have a fiduciary responsibility to

  1. insureds

  2. applicants

  3. other producers

  4. insurance companies

A small employer group is an employer that employs how many?

  1. No more than 100 employees

  2. No more than 50 employees

  3. No more than 25 employees

  4. No more than 75 employees

Delaware law provides for a grace period of NOT less than how many days for a monthly-premium health insurance policy?

  1. 7

  2. 10

  3. 15

  4. 31

One definition of replacement is "the act of replacing an existing insurance policy with another". Replacement is

  1. legal and requires no disclosure

  2. not legal in the state of Delaware

  3. allowed only if the policy originated outside the state of Delaware

  4. closely regulated and requires full disclosure

P is a producer who is licensed in Delaware but a resident of Nebraska. P is a(n) ______ producer.

  1. nonresident

  2. foreign

  3. alien

  4. reciprocal

Which of the following statements about Credit Life insurance is true?

  1. The creditor may require the borrower to buy coverage from a specific insurer

  2. Credit life insurance insures the life of the creditor

  3. An debtor may use existing coverage already in force

  4. Credit life is typically written as increasing term insurance

Which statement regarding the Misstatement of Age provision is considered to be true?

  1. Insurer may void the policy if a misstatement of age is discovered

  2. Misstatement of Age provision is valid only during the contestable period

  3. Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered

  4. Requires that a new policy must be applied for if a misstatement of age is found on the current policy

The Commissioner must give ____ days written notice prior to holding a hearing regarding a producer's violation of an unfair trade practice.

  1. 40

  2. 20

  3. 10

  4. 30

With regards to credit life insurance, the amount of credit life insurance purchased shall not exceed the

  1. initial indebtedness

  2. interest charged by the lender

  3. applicant's annual income

  4. applicant's average monthly income

A brochure that contains untrue statements regarding a competitor's ability to pay claims is circulated. Which Unfair Trade Practice has occurred?

  1. defamation

  2. rebating

  3. coercion

  4. false advertising

Under a Long Term Care policy, which benefit would be typically excluded or limited?

  1. Intermediate nursing

  2. Skilled nursing

  3. Alcohol rehabilitation

  4. Home health care

Which Long Term Care insurance statement is true?

  1. Pre-existing conditions must be covered after the coverage has been in force for six months

  2. Benefits are usually payable for alcohol rehabilitation

  3. Can only be offered to individuals under the age of 70

  4. Inflation protection is usually not offered

What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive?

  1. Primary Insurance Amount (PIA)

  2. Total taxes paid into FICA

  3. Number of dependents

  4. State of residence

When does a life insurance contract become effective if the initial premium is not collected during the application process?

  1. After all medical and personal information has been evaluated

  2. When insurer receives initial premium from the producer

  3. When producer delivers policy and collects initial premium

  4. After application has been approved by the underwriters

B's policy provides coverage on an in-hospital basis only and contains a limited daily room and board benefit. Which of these policies does B have?

  1. Basic Surgical

  2. Comprehensive Major Medical

  3. Basic Hospital

  4. Critical illness

Comprehensive Major Medical policies usually combine:

  1. Major Medical with Disability Income coverage

  2. Basic Hospital/Surgical with Accidental coverage

  3. Major Medical with Basic Hospital/Surgical coverage

  4. Basic/Hospital/Surgical with Disability Income coverage

When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve?

  1. Establishes the investment risk level acceptable to the individual

  2. Places a dollar value on the life of the individual

  3. Establishes the needs of the individual and his dependents

  4. Takes into account the present value of future income earned by the breadwinner

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 then take?

  1. Collect initial premium and leave a binding receipt

  2. Collect initial premium along with a signed health statement

  3. Collect initial premium

  4. Explain to the applicant the policy is no longer in effect due to change in health condition

A Life insurance policyowner would like to take out a policy loan against the cash value in his Whole Life policy. The interest rate applied to this loan may vary over time. This is referred to as a(n) ________ rate loan.

  1. Fixed

  2. Variable

  3. Fluctuating

  4. Increasing

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

  1. tax-deductible to the employee

  2. taxable income to the employee

  3. tax-deductible to the employer

  4. partially deductible to the employee

S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product would S be advised to purchase?

  1. Return of premium policy

  2. Graded whole life policy

  3. Equity index insurance

  4. Endowment

Why is an applicant's signature required on a life insurance application?

  1. To give Power of Attorney to the producer if needed

  2. To attest that the statements on the application are accurate to the best of the applicant's knowledge

  3. To attest that all statements on the application are guaranteed to be true

  4. To attest that the statements on the application are warranties

Which of the following policies is characterized by a flexible premium and death benefit and allows the policyowner control of the investment aspect of the plan?

  1. Variable life

  2. Universal life

  3. Adjustable life

  4. Variable universal life

Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges?

  1. The maximum premium an insurer can charge for their health insurance based on geography

  2. The maximum amount an employer can contribute to a contributory health plan

  3. The maximum amount considered eligible for reimbursement by an insurance company under a health plan

  4. The maximum deductible an insured can be charged

Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?

  1. insurer

  2. policyowner

  3. beneficiary

  4. insured

Any changes made on an insurance application requires the initials of whom?

  1. Applicant

  2. Agent

  3. Beneficiary

  4. Insured

A $20,000 life insurance policy application is completed, however the producer does not collect the initial premium. At what point does the coverage go into effect?

  1. Upon policy approval

  2. When the applicant receives the policy and pays the initial premium

  3. When the MIB report is received

  4. Upon a completed medical examination

The cash value in a(n) ____________ Life policy may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors.

  1. Universal

  2. Term

  3. Endowment

  4. Graded

When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld?

  1. 30%

  2. None

  3. 10%

  4. 20%

K, age 45, and his wife, age 43, have three children. They purchase a Family Policy that covers K's wife to age 65. All of these situations will pay a death benefit EXCEPT

  1. K's wife dies at age 60

  2. K's wife dies at age 66

  3. A child dies at age 15

  4. A child dies at age 18

How long does an individual have to "rollover" funds from an IRA or qualified plan?

  1. No limit

  2. 120 days

  3. 60 days

  4. 90 days

A 15-year mortgage is best protected by what kind of life policy?

  1. Modified whole life

  2. 15-year level term

  3. Adjustable life

  4. 15-year decreasing term

Dividends paid from a life insurance policy are

  1. taxable

  2. guaranteed

  3. issued by the Department of Insurance

  4. issued by the insurer

When can a policyowner change a revocable beneficiary?

  1. After the consent of the current beneficiary

  2. Never

  3. Anytime

  4. Only if primary beneficiary dies

J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions?

  1. Waiver of Premium

  2. Payor clause

  3. Automatic Premium Loan provision

  4. Reinstatement provision

Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?

  1. Have the customer sign a blank application, then take the application back to his office to complete prior to sending it off to the insurance company

  2. Have the customer fill out the application and send it to his office for him to sign, then send it off to the insurance company

  3. Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company

  4. Complete the application over the phone with the customer, sign the application for the customer, then send the application off to the insurance company

L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will:

  1. adjust the death benefit to a reduced amount

  2. adjust the death benefit to an increased amount

  3. pay the death benefit in full

  4. deny the claim

A characteristic of Preferred Provider Organizations (PPOs) would be:

  1. Physicians are paid on a capitation basis

  2. A primary care physician is required

  3. Not allowed to see out-of-network physicians

  4. Discounted fees for the patient

A life insurance application may be rejected on the basis of all of these factors EXCEPT

  1. Medical history

  2. Weight

  3. Gender

  4. Hobbies

T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase?

  1. Interest-Sensitive Whole Life

  2. Variable Universal Life

  3. Ten-Year Renewable Term

  4. Ten-Year Endowment

Insurance policies are considered aleatory contracts because

  1. they are "take it or leave it" contracts

  2. the contract is voidable upon proof of fraud

  3. both parties consent to the contract

  4. performance is conditioned upon a future occurrence

How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?

  1. If the primary beneficiary dies before the insured

  2. If the insured died of natural causes

  3. If the primary beneficiary is a minor at the time of the insured's death

  4. If the insured died of accidental causes

P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability?

  1. P cannot assign ownership of the policy while premiums are being waived

  2. P will have to pay income taxes on the amount of premiums waived

  3. P cannot borrow against the policy's cash value while disabled

  4. P will still receive declared dividends

When must insurable interest be present in order for a life insurance policy to be valid?

  1. When the application is made

  2. Within the incontestability period

  3. Before the insured dies

  4. When the insured dies

A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value?

  1. 1031 Exchange

  2. Life settlement contract

  3. Cash surrender

  4. Buy-sell arrangement

K applies for a life 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?

  1. Initial Premium

  2. Binding

  3. Conditional

  4. Contingent

Which of these terms accurately defines an underwriter's assessment of information on a health insurance application?

  1. Inspection report

  2. Risk classification

  3. Warranty review

  4. Insurable interest

N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot?

  1. Concealment

  2. Collateral assignment

  3. Exclusion

  4. Misrepresentation

Which of the following statements is CORRECT about accelerated death benefits?

  1. Must have a terminal illness to qualify

  2. Those on Social Security disability automatically qualify for this benefit

  3. The full face amount is available as an accelerated benefit

  4. This provision is usually provided with an increase in premium

What is the initial requirement for an insured to become eligible for benefits under the Waiver of Premium provision?

  1. Insured must be hospitalized

  2. Insured must demonstrate financial need

  3. Insured must be under a physician's care

  4. Insured must be unemployed

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?

  1. Limited-pay policy

  2. Level term policy

  3. Whole life policy

  4. Decreasing term policy

A producer does not have the authority to change a policy or waive any of its provisions. The health provision that best describes this statement is called the

  1. Grace Period

  2. Incontestable

  3. Entire Contract

  4. Time Limit on Certain Defenses

Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?

  1. Revocable assignment

  2. Irrevocable assignment

  3. Collateral assignment

  4. Beneficiary change

What is being delivered during a policy delivery?

  1. Application and initial premium to the insurer

  2. Policy summary sheet and disclosure material to the proposed insured

  3. A binding receipt to the proposed insured

  4. Insurance contract to the proposed insured

According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid?

  1. 60 days

  2. 7 days

  3. 10 days

  4. 31 days

The advantage of reinstating an original life policy is

  1. the interest charged on policy loans will be lowered

  2. a new incontestable period will begin

  3. the premiums are based on a younger age

  4. the premiums are based on the current age of the insured

Under an individual Health Insurance policy, the Time Limit of Certain Defenses provision states that nonfraudulent misstatements first become incontestable two years

  1. from the date that the policy was issued

  2. from the date of the sales appointment

  3. from the date that the application was signed

  4. from the date initial premium was collected

In order to establish a Health Reimbursement Arrangement (HRA), it MUST:

  1. be established by the employer

  2. be offered in conjunction with other employer provided health benefits

  3. limit the benefits to prescription drugs only

  4. limit the amount of money the employee can contribute toward the account

An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the:

  1. the first premium is paid

  2. producer completes the application

  3. insurer dates the policy

  4. medical examination is given

Long Term Care policies will usually pay for eligible benefits using which of the following methods?

  1. Fee for service

  2. Expense incurred

  3. Delayed

  4. Respite

In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?

  1. Unenforceable

  2. Adhesion

  3. Subrogation

  4. Unilateral

When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the:

  1. Entire Contract provision

  2. Legal Contract clause

  3. Insuring clause

  4. Time Limit on Certain Defense provision

Which statement regarding the Misstatement of Age provision is considered to be true?

  1. Insurer may void the policy if a misstatement of age is discovered

  2. Requires that a new policy must be applied for if a misstatement of age is found on the current policy

  3. Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered

  4. Misstatement of Age provision is valid only during the contestable period

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?

  1. 10 days

  2. 60 days

  3. 45 days

  4. 30 days

If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?

  1. Insured's estate

  2. Insured's contingent beneficiary

  3. Primary beneficiary's estate

  4. Primary beneficiary's next of kin

A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following?

  1. Aviation exclusion

  2. Guaranteed Insurability rider

  3. Impairment rider

  4. Accidental Death Benefit rider

A(n) ________ contained in a life insurance policy states that the policy will NOT cover certain risks.

  1. exclusion

  2. limitation

  3. elimination

  4. curtailment

Which of these is considered a mandatory provision?

  1. Insurance with Other Insurers

  2. Misstatement of Age

  3. Payment of Claims

  4. Change of Occupation

A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?

  1. Payor provision

  2. Accelerated Benefits provision

  3. Waiver of Premium provision

  4. Assignment provision

The Legal Actions provision of an insurance contract is designed to do all of the following, EXCEPT:

  1. protect the insured from having claim research delayed

  2. provide the insurer adequate time to research a claim

  3. protect the producer

  4. give the insured guidelines for pursuing legal action against and insurer

Which of the following is an example of a nonforfeiture option?

  1. Conversion option

  2. Reduced Paid-Up option

  3. Guaranteed insurability option

  4. Inflation option

Which Federal law allows an insurer to obtain an inspection report on a potential insured?

  1. Medical Information Bureau Act

  2. Freedom of Information Act

  3. Fair Credit Reporting Act

  4. Medical Information Act

A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled?

  1. Utilities and office rent

  2. Contributions to employee retirement plans

  3. Owner's salary

  4. Meals and entertainment

A(n) _________ beneficiary may be changed by the policyowner WITHOUT the consent of the beneficiary.

  1. Tertiary

  2. Replaceable

  3. Revocable

  4. Irrevocable

A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached?

  1. Waiver of Premium

  2. Return of Premium

  3. Accelerated Benefits

  4. Cost of Living

When must insurable interest exist for a life insurance contract to be valid?

  1. During the contestable period

  2. When the insured dies

  3. Inception of the contract

  4. Throughout the entire length of the contract

A level premium indicates:

  1. the premium stays level until the policy's renewal date

  2. the premium is fixed for the entire duration of the contract

  3. the premium is fixed for a period stated in the contract, then becomes variable

  4. the premium can only be changed with the consent of the insurer

If an individual is covered under an Accidental Death Policy and dies, an autopsy can be performed in all these situations, EXCEPT:

  1. When the state prohibits this by law

  2. When consent for the autopsy is not obtained

  3. When the cause of death is unknown

  4. When foul play was a contributing factor

Which of the following medical expenses does Cancer insurance NOT cover?

  1. Arthritis

  2. Radiation treatment

  3. Physician visit

  4. Chemotherapy

After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?

  1. Nothing

  2. Contact the insurer again requesting forms

  3. File a lawsuit

  4. File written proof of loss

Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies?

  1. Blanket Accident policy

  2. Accident Reimbursement Accounts

  3. Disability Income policy

  4. Accident Savings Plans

X owns a Disability Income policy. X recently suffered a disability which was due to the same cause as a previous disability. These disabilities both occurred over a four-month span. Which of the following provisions allows X's second disability to be covered without a new elimination period?

  1. Delayed Disability

  2. Partial Disability

  3. Recurrent Disability

  4. Residual Disability

In the event of an illness, a(n) _______ _______ policy would reimburse an insured for loss of earnings.

  1. Medicare Supplement

  2. Family Income

  3. Earnings Indemnity

  4. Disability Income

What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?

  1. Conversion

  2. Owner's rights

  3. Nonforfeiture options

  4. Entire contract

An insurance company receives E’s application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet?

  1. Entire Contract clause

  2. MIB clause

  3. Insuring clause

  4. Consideration clause

An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision?

  1. 7

  2. 10

  3. 31

  4. 20

In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments:

  1. After an insured has become totally disabled as defined in the policy

  2. Following an accidental injury, but not during sickness

  3. Whenever an insured is unable to work

  4. During the time an insured is confined in a hospital

Which health policy clause specifies the amount of benefits to be paid?

  1. Payment mode

  2. Insuring

  3. Consideration

  4. Free-look

A policyowner would like to change the beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy and make the change permanent. Which type of designation would fulfill this need?

  1. Primary

  2. Irrevocable

  3. Revocable

  4. Contingent

Which of the following BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition?

  1. More restrictive

  2. Double indemnity

  3. Less restrictive

  4. Benefits are taxable

All students attending a large university could be covered by:

  1. a commercial insurance policy

  2. a jumbo group policy

  3. a franchise policy

  4. a blanket policy

The insured and insurance company will share the cost of covered losses under which health policy feature?

  1. Payment of Claims provision

  2. Assignment provision

  3. Share clause

  4. Subrogation clause

A(n) ___________ of benefits of a Health Policy transfers payments to someone other than the policyowner.

  1. assignment

  2. designation

  3. allocation

  4. transfer

Health insurance benefits NOT covered due to an act of war are:

  1. excluded by the insurer in the contract provisions

  2. assigned to a reinsurer

  3. charged a higher premium

  4. given a longer probationary period

T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?

  1. $10,000 per month benefit if the cause was accidental

  2. More than $5,000 per month benefit if cause was work-related

  3. $5,000 per month benefit

  4. Less than $5,000 per month benefit regardless of the cause

T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide?

  1. Income that cannot be outlived by the owner

  2. Tax-free income

  3. Income for a fixed period stated in the contract

  4. Inflation protection

The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is:

  1. Entire Contract

  2. Grace Period

  3. Physical Examination and Autopsy

  4. Time Limit on Certain Defenses

Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is:

  1. Key Employee Life

  2. Contributory

  3. Business Overhead Expense

  4. Disability Income

In a Disability Income policy, which of these clauses acts as a deductible?

  1. Deductible Period

  2. Elimination Period

  3. Waiver Period

  4. Probationary Period

If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best describes this policy is called:

  1. noncancellable

  2. cancellable

  3. guaranteed renewable

  4. conditionally renewable

Insurers may request a hearing within ____ if their policy is rejected

  1. 60 Days

  2. 30 Days

  3. 20 Days

  4. 90 Days

A noncontributory group term life plan is characterized by:

  1. the cost of the plan is shared by both employer and employee

  2. the entire cost of the plan is paid for by the employee

  3. both employer and employee must provide evidence of insurability

  4. the entire cost of the plan is paid for by the employer

Which type of contract liquidates an estate through recurrent payments?

  1. 401(k)

  2. Whole life insurance

  3. Universal life insurance

  4. Annuity

Which of these statements concerning an Individual Straight Life annuity is accurate?

  1. The payments are received tax-free

  2. Only available to employees of nonprofit charitable, educational, and religious organizations

  3. Payments are made to an annuitant for life

  4. Life expectancy of the annuitant is not a factor

The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the:

  1. Grace Period

  2. Waiver of Premium

  3. Probation Period

  4. Elimination Period

All of the following statements regarding a Tax Sheltered Annuity (TSA) are true EXCEPT

  1. TSA's are available to public school employees

  2. Income derived from the TSA is received income tax-free

  3. Contributions to the TSA are tax-deductible

  4. Interest earned by TSA is tax deferred

Which of the following statements is correct regarding an employer/employee group health plan?

  1. The employer receives both the certificates and master policy

  2. The employer receives a master policy and the employees receive certificates

  3. The employees receives both the certificates and master policy

  4. The employer receives a certificate and the employees receive a master policy

Which of the following statements is true about most Blue Cross/Blue Shield organizations?

  1. They are nonprofit organizations

  2. They are owned by hospitals and physicians

  3. They are federally sponsored

  4. They are the same as private insurance companies

Which of the following is an alternative method of providing health insurance?

  1. Consumer Cooperative

  2. TRI-CARE

  3. Medicaid

  4. Medicare

Which of the following is NOT a characteristic of Preferred Provider Organizations (PPOs)?

  1. PPOs provide equal benefits and costs for services obtained in-network and out of network.

  2. PPO's operate on a fee-for-service basis.

  3. PPOs are available for both individual and group plans.

  4. PPO's are only available through social insurance programs.