| This list shows all of the questions that you missed in the session you just completed. The answer you selected is in bold. The correct answer is highlighted in green. |
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| #7. | Which of the following is NOT a feature of a guaranteed renewable provision? |
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| a) | The insured has a unilateral right to renew the policy for the life of the contract. |
| b) | Coverage is not renewable beyond the insured's age 65. |
| c) | The insured's benefits cannot be reduced. |
| d) | The insurer can increase the policy premium on an individual basis. |
|
| | Guaranteed renewable provision has all the same features that the noncancellable provision does, with the exception that the insurer can increase the policy premium on the policy anniversary date. However, the premiums can only be increased on a class basis, not on an individual policy. |
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| #10. | Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to |
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| a) | 3 years. |
| b) | 5 years. |
| c) | 10 years. |
| d) | 12 years. |
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| | Anyone engaged in the business of insurance whose activities affect interstate commerce, and who knowingly makes false material statements may be fined, imprisoned for up to 10 years or both. If the activity jeopardized the security of the accompanied insurer, the punishment can be up to 15 years. |
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| #49. | Under the Affordable Care Act, a special enrollment period allows an individual to enroll in a qualified health plan within how many days of a qualifying event? |
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| a) | 10 days |
| b) | 30 days |
| c) | 60 days |
| d) | 90 days |
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| | Unless specifically stated otherwise, individuals or enrollees have 60 days from the date of a triggering event to select a qualified health plan. |
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| #50. | The responsibility of making certain that an application for insurance is filled out completely, correctly, and to the best of his or her knowledge is the responsibility of whom? |
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| a) | The applicant |
| b) | The producer |
| c) | The beneficiary of the applicant |
| d) | The insurance company |
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| | It is the responsibility of the producer (agent) to make sure an application for insurance is filled out correctly. |
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| #53. | A Straight Life policy has what type of premium? |
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| a) | A variable annual premium for the life of the insured |
| b) | A level annual premium for the life of the insured |
| c) | An increasing annual premium for the life of the insured |
| d) | A decreasing annual premium for the life of the insured |
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| | Straight Life policies charge a level annual premium for the lifetime of the insured and provide a level, guaranteed death benefit. |
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| #54. | Which of the following is NOT a characteristic of a group long-term disability plan? |
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| a) | The benefit can be up to 66 and 2/3% of one's monthly income. |
| b) | The benefit can be up to 50% of one's yearly income. |
| c) | The elimination period is the same as in the short-term plan's benefit period. |
| d) | The benefit period may be to age 65. |
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| | The maximum benefit is based upon monthly income. |
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| #55. | The automatic premium loan provision is activated at the end of the |
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| a) | Free-look period |
| b) | Elimination period. |
| c) | Policy period. |
| d) | Grace period. |
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| | Provided there is sufficient cash value in the policy, this provision triggers a loan at the end of the grace period to keep a policy in force. |
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| #62. | If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a |
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| a) | Rollover. |
| b) | Settlement option. |
| c) | Nontaxable exchange. |
| d) | Nonforfeiture option. |
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| | A settlement option is exercised when an immediate annuity is purchased with the face amount at death or with the cash value at surrender. |
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| #65. | Which of the following are responsible for making premium payments in an HMO plan? |
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| a) | Insureds |
| b) | Payors |
| c) | Subscribers |
| d) | Producers |
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| | Subscribers are people in whose name the contract is issued. They would be responsible for making premium payments. |
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| #83. | The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true? |
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| a) | The contract can be issued without an annuitant. |
| b) | The annuitant must be a natural person. |
| c) | A corporation can be an annuitant as long as it is also the owner. |
| d) | A corporation can be an annuitant as long as the beneficiary is a natural person. |
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| | Owners of annuities can be individuals or entities like corporations and trusts, but the annuitant must be a natural person, whose life expectancy is taken into consideration for the annuity. |
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| #118. | Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report |
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| a) | Must be advised that a copy of the report is available to anyone who requests it. |
| b) | May sue the reporting agency in order to get inaccurate data corrected. |
| c) | Must be informed of the source of the report. |
| d) | Are entitled to obtain a copy of the report from the party who ordered it. |
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| | Under the Fair Credit Reporting Act, if an insurance policy is declined or modified because of information contained in a consumer report, the consumer must be advised and provided with the name and address of the reporting agency. |
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| #127. | What method do insurers use to protect themselves against catastrophic losses? |
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| a) | Indemnity |
| b) | Pro rata liability |
| c) | Risk management |
| d) | Reinsurance |
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| | Insurers use reinsurance to protect themselves from catastrophic losses. This is a method where the reinsurer indemnifies the ceding insurer for part or all of the losses it sustains related to a policy issued previously. |
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| #133. | An insured is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits? |
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| a) | Full benefits until the blindness lifts |
| b) | No benefits |
| c) | Full benefits |
| d) | Partial benefits |
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| | Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of use of at least two limbs, total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work. Because the insured's blindness was only temporary and the loss of use in only 1 leg, he does not qualify for presumptive disability benefits. |
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| #141. | An insured wants to transfer his personal insurance policy to a friend. Under what conditions would this be possible? |
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| a) | The insured will need a written consent of the insurer. |
| b) | It is impossible to transfer a policy. |
| c) | The insured would have to surrender his policy to the insurer, and his friend could then ask to buy it. |
| d) | The insured can transfer the policy to his friend and then notify the insurer of the change. |
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| | A personal insurance contract is written between an insurance company and an individual, and the company has a right to decide with whom it will and will not do business. An insured can transfer an insurance contract to another person, but he or she must first obtain the written consent of the insurer. |