what is the benefit of choosing extended term as a nonforfeiture option?
it has the highest amount of insurance protection
which of the following is the most common time for errors and omissions to occur
policy delivery
what is the civil penalty for violating a cease and desist order of the commissioner?
$10,000
all of the following are correct about the required provisions of a health insurance policy except
a reinstated policy provides immediate coverage for an illness
within how many days of requesting an investigative consumer report must an
3 days
an insured committed suicide one year after his life insurance policy issued
refund the premium paid
all other factors being equal, which of the following types of annuities will generally provide the highest monthly income?
straight life
which law was passed to authorize the NAIC to develop a standardized model for Medicare supplements policies?
OBRA
which of the following is NOT true regarding policy loans?
money borrowed from the cash value is taxable
all of the following statements about equity index annuities are correct EXCEPT
the annuitant receives a fixed amount of return
all of the following are characteristics of a group life insurance plan EXCEPT
there is a requirement to prove insurability on the part of the participants
according to OBRA, what is the minimum number of employees required to constitute a large group?
100
the owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. what will the soliciting insurance prod
the policyowner can specify the way proceeds are split in the policy
which of the following is an example of third-party ownership?
group insurance
according to the time limit on certain defenses provision, the insurer cannot void the policy for any misstatements on the application if the policy was in force for what time period
3 years
if a consumer requests additional information concerning an investigative consumer report how long does the agency have to reply
5 days
sarah is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. which of the following is true?
there is nothing wrong with the above situation
which of the following best describes a pure life annuity settlement option?
pure life provides payment for as long as the annuitant is alive
a policy provision conflicts with state statues. which of the following will happen?
the provision may be altered to conform to the statutes if the conformity with state statutes provisions is included in the policy
licensees must make a report of any action taken against them in another jurisdiction or by another government agency in pennsylvania how many days of the final disposition of the matter?
30
an insured is the recipient of an accidental death and dismemberment (AD&D) policy purchased by his employer. the policy pays in case of accidental death. if the insured died as a result of an accidental stipulated in the policy, how will the benefits be
benefits received are considered income tax free
insurers are required to give the insured converting to an individual policy notice of their conversion privilege
15 days prior to group policy expiration
all of the following are considered to be basic benefits of an HMO plan EXCEPT
prescription drugs
under the accidental death and dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the case of accidental death?
principal sum
the patient protection and affordable acre act includes all of the following provisions EXCEPT
individual tax deductions for premiums paid
which of the following is a characteristic of a reciprocal insurance exchange
the chief administrator of the insurer is called an "attorney-in-fact
when a insurance policy is cancelled and the insured has selected the extended term nonforteiture option, the case term insurance that has a face amount
equal to the origional policy for as long a period of time that the cash value will purchase
which is the closest term to "authorized" insurer?
admitted
events or conditions that increase the chances of an insured loss occurring are referred to as
hazards
most policies will pay the accidental death benefit as long as the death is caused by the accident and occurs within how many days
90
if an individual is covered under a disability income policy that includes an accidental death and dismemberment, which will he receive from the policy if he loses sight in both eyes as result of fire
principal sum
which of the following information regarding an insured is NOT included in an investigative consumer report
medical history
an insured wants to transfer his personal insurance policy to a friend. under what conditions would this be possible
the insured will need written consent of the insurer
what documentation grants express authority to an agent
agents contract with the principal
in respect to the consideration clause, which of the following is consideration on the part of the insurer
promising to pay in accordance with the contract terms
M is the owner of a $100,000 life policy with a triple indemnity rider for accidental death. When M is killed in a car accident that was his fault. the triple indemnity rider in M's policy specifies that the death must not be contributed by the insured wh
$100,000
based on the Human Life Value Approach, which of the following is NOT used to determine an individual's life value?
predicted needs of the family after the insured's death
which of the following is true regarding dividend-related taxation?
dividends are not taxable
under a pure life annuity, an income is payable by the company
only for the life of the annuitant
All of the following qualify for medicare part A Except
Anyone who is willing to pay a premium
CAN-SPAM legislation requires that any commercial email must contain an opt out mechanism, how many days does a company have to cease their distribution?
10 business days
Z falls from the roof of his house while fixing it and damages his spinal column enough to render him disables for a year. his Insurance contains a disability income rider. which of the following benefits will Z receive?
Monthly premium waver and monthly income
Bob has sold his life insurance policy to a viatical settlement provider. How long does the provider now have to inform bob with written notification that his insurance has been viaticated
20 days
In insurance policies, contract ambiguities are automatically ruled in the favor of the insured. What privilege does the insurer have
the right to determine the wording of the policy
In life insurance policies, cash value increases
grow tax deferred
All other factors being equal, the least expensive first year premium payment is found in
annually renewable term
in which medicare supplemental policies are the core benefits found?
all plans
who must sign the notice regarding replacement?
both the applicant and agent
insurers must notify the commissioner's office a to whether or not a life insurance policy will be marketed with illustrations. Certification of that notice must be provided annually within how many does of the anniversary of the original certification?
30 days
what is the tax consequence of amounts received from a traditional IRA after the money was left in the tax deferred account by the beneficiary?
income tax on distributions and no penalty
which of the following is true about the premium on the children's rider in a life insurance policy?
it remains the same no matter how many children are added to the policy
under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive
nothing, the payments will cease
which of the following is NOT true of life settlements?
the settler must be terminally ill
an individual has been diagnosed with alzheimer's disease. he is insured under a life insurance policy with the accelerated benefits rider which of the following is true regarding taxation of the accelerated benefits?
A portion of the benefit up to a limit is tax free; the rest is taxable income
which of the following is not true of disability buy sell coverage?
benefits are considered taxable income to the business
a whole life insurance policy with performance based upon the current interest rate being credited and the current mortality cost being
current assumption whole life
How is emergency care covered for a member of HMO?
a member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area
which of the following is NOT an enrollment period for Medicare part A applicants?
automatic enrollment
an absolute assignment is a
transfer of ownership rights in a policy
which of the following best describes fixed-period settlement option?
both the principal and interest will be liquidated over a selected period of time
which of the following is NOT among the goals of a Medicare Supplement application
presuming the applicant is eligible for Medicaid, based on the nature of the policy
which of the following is true regarding benefits paid to disabled employees?
they may be subject to taxation if the premium was paid by the employer
which of the following will vary the length of the grace period in health insurance policies?
the mode of the premium payment
all of the following are examples of risk retention EXCEPT
premiums
which of the following is INCORRECT concerning taxation of disability income benefits?
if paid by the individual, the premiums are tax deductible
the owner of the life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producer say
the policyowner can specify the way proceeds are split in the policy
which of the following is true for both equity indexed annuities and fixed annuities?
they have a guaranteed minimum interest rate
which of the following is NOT required to be stated in the outline of coverage provided with long-term care policy?
basic information about supplementary policies
Based on Human Life Value Approach, which of the following is NOT used to calculate and individual's life value?
Predicted needs of the family after the insured's death
What insurance concept is associated with the words "Weiss" and "Fitch
guides describing company financial integrity
What type of insurance would be used for a Return of Premium rider?
Increasing term
An applicant is considered to be high-risk, but not so much that the insurer wants to deny coverage. which of the following is NOT true?
the insurer will issue a conditional coverage
Under an extended term insurance policy, the policy cash value is converted to
the same face amount as in the whole life policy
all of the following statements about medicare supplement insurance policies are correct EXCEPT
Medigap policies cover the cost of extended nursing home care
what is the maximum penalty for habitual willful noncompliance with Fair Credit Reporting Act?
$2,500
what concept is associated with "exclusion ratio"?
annuities payments
which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?
Universal life option A
which of the following authorities monitors the financial strength of insurers?
department of insurance
Elijah and Mary are to receive the proceeds of a life insurance policy jointly until the first one dies. If either one should die within a specified time, the other will receive benefits until the end of the specified time. This settlement option is known
joint life with term certain
All of the following types of distributors are considered exceptions to the early distribution rule and therefore are not subject to the penalty tax EXCEPT
participant's debt
Under a 20pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid
for 20 years or until death, whichever occurs first
an insured is the recipient of an Accidental Death and Dismemberment (AD&D) policy purchased by the employer. The policy pays triple indemnity in the case of accidental death. If the insured died as a result of an accident stipulated in the policy, how wi
benefits received are considered income tax free
what form of the annuity settlement options provides payment to an annuitant for the rest of the annuitant's life and ceases and the annuitant's death?
pure life
when an insured purchased her disability income policy, she misstated her age to the agent. She told the agent she was 30 years old when in face she was 37. if the policy contains the optional misstatement of age provision
amounts payable under the policy will reflect the insured's correct age
an insured neglects to pay a legitimate claim that is covered under the terms of the policy. which of the following terms describes what was violated?
consideration
an agent misrepresents the details of an insured's new insurance contract that will be replacing the current contract. which of the following will happen?
suspension of license
the dividend option in which the policy owner uses dividends to purchase a term policy for one year is referred to as the
one-year term option
what is the purpose of the rehabilitation benefit in disability insurance?
to cover the expense of retraining the insured to return to work
the relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over what period of time?
2 years
if the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, insurance company should do which of the following
adjust the benefit in accordance with the increase in risk
what is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly benefit rider?
1 year
under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy
a statement that is sufficiently clear to identify the insured and the nature of the claim
Insurers are required to give the insured converting to an individual policy notice of their conversion privlege
15 days prior to group policy expiration
which of the following is true regarding dividend- related taxation?
dividends are not taxable
in reference to fixed annuities, what comprises most of a life insurance company's general account?
conservative investments like bonds
which of the following situations would be addressed by the uniform simultaneous death with a common disaster provision?
the insured and primary beneficiary are injured in the same car accident and the beneficiary dies within 30 days of the insured
which of the following is NOT true regarding an annuity certain?
benefits stop at the annuitant's death
which of the following entities has the authority to make changes to an insurance policy?
insurer's executive officer
which of the following is NOT true regarding a variable universal life policy?
the death benefit is fixed
the dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the
one-year term option
the clause that protects the proceeds of a life insurance policy from creditors after the death of the insured is known as the
spendthrift clause
when a reduced paid up nonforfeiture option is chosen, what happens to the face amount of the policy?
it is reduced to the amount of what the cash value would buy as a single premium
a long term care shopper's guide must be presented at what point?
prior to the time of application
insurance producers that do not have company appointments are considered a/an
representative of the consumer
under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is
monthly
twin brothers are starting a new business. they know it will take several years to build the business to the point that they can pay off the debt incurred from starting the business. what type of insurance would be the most affordable and still provide a
joint life
an individual has been diagnosed with Alzheimer's disease. he is insured under a life insurance policy with the accelerated benefits rider. which of the following is true regarding taxation of the accelerated benefits?
a point of the benefit up to a limit is tax free, the rest taxable income
which of the following statements is an accurate comparison between private and government insurers?
private insurers may be authorized to transact insurance by state insurance departments
when is the earliest a policy may go into effect?
when the application is signed and a check is given to the agent
your client is planning to retire. she has accumulated $100,000 in a retirement annuity, and now wants to select the benefit option monthly amount for as long as she lives. as her agent you should recommend
straight life
which of the following is NOT true regarding the policy
money borrowed from the cash value is taxable
your client has a Social insurance supplement (SIS) rider on his disability policy. after he becomes disabled, he receives payments. Shortly thereafter, he also begins receiving Social Security benefit payments. which of the following will happen?
the SIS payment will be reduced dollar-for-dollar by the Social security benefit payment
which of the following is true regarding a single life settlement option?
it provides income the beneficiary cannot outlive
in reference to fixed annuities, what compromises most of a life insurance company's general account?
conservative investments like bonds
when ken purchased his life insurance policy he was a window washer. he has since changed occupations and now manages.. & tells insurer of his change of occupation. the insurer should
consider decreasing the premium
the death benefit in a variable universal life policy
depends on the performance of a separate account
what provision can reduce the disability benefit based upon the insured's current income?
relation of earnings to insurance
who is responsible for paying producer appointment fees?
the appointing insurer
which provision states that the insurance company must pay medical expense claims immediately
time of payment of claims
which of the following situations would be addressed by the uniform simultaneous death with common disaster provision?
the insured and primary beneficiary are injured in the same car accident, and the beneficiary dies within 30 days of the insured
which of the following is NOT a way to determine the interest rate in the Universal Life Policy?
estimate market conditions for the life of the policy
what required provisions protects against unintentional lapse of the policy?
grace period
within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
in insurance, an offer is usually made when
the application is submitted
at times, it is possible for a life insurance agent to affect a savings of premium rates by back dating an application for life insurance. what is maximum amount of time that an application may be back dated?
6 months
all of the following statements about medicare part B are correct EXCEPT
it is a compulsory program
albert and bryan are partners in a business. they purchase a buy sell agreement which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. what type of insurance may be used to fu
any form of insurance
how long must insurers maintain the evidence from the agent that a disclosure statement about a life insurance policy was delivered to the applicant
3 years
under an extended term insurance policy, the policy csh value is converted to
the same face amount as the whole life policy
an insured has a level term life insurance policy that is guaranteed renewable and also includes a re-entry provision allowing the insured to renew the policy and
pay a lower renewal premium by proving insurability
if a deferred annuity is surrendered prematurely, a surrender charge is imposed. how is the surrender charge determined
the surrender charge is a percentage of the cash value and the decrease over time
the patient protection and affordable care act includes all of the following provisions EXCEPT
individual tax deductions for premiums paid
an insured owns a $50,ooo whole life policy. at age 47 the insured decides to cancel his policy and exercise the cash value, which is currently $20,000. what would be the face amount of the new policy
$50,000
if an insured constantly uses the automatic premium loan option to pay the policy premium,
the policy will terminate when the cash value is reduced to nothing
the full premium was submitted with the application for life insurance, and the policy was issued two weeks later, when does coverage become effective?
as of application date
which of the following would not be considered a misrepresentation on the part of the insurer?
backdating policies to secure a lower premium to the insured
which of the following is NOT required to be stated in the outline coverage provided with a long term care policy?
basic information about supplementary policies
which of the following are the main factors taken into account when calculating residual disability benefits?
present earnings and earnings prior to disability
if a consumer requests additional information concerning an investigative consumer report how long does the consumer have to reply
5 days
the Omnibus budget reconciliation act of 1990 requires the employer health plan to provide primary coverage for individual's kidney disease before medicare becomes primary for how many months?
30months
pete is hospitalized with a back injury. upon checking his disability income policy, pete learns that will
this would indicate that his policy was probably written with a 30 day
elimination period
which option for universal life allows the beneficiary to collect both the death benefit and cash value upon the death
option B
to be eligible under HIPPA regulations, for how long should and individual converting to an individual health plan have been covered by group plan?
18 months
an individual was just caught acting as an exclusive general agent- even though he not properly licensed. assuming that this occurred what is the maximum penalty he faces?
3rd degree misdemeanor and $1,000 fine
all of the following coverages are usually included under dental insurance plans EXCEPT
teeth whitening
what method do insurers use to protect themselves against catastrophic loses?
reinsurance
when benefits are paid directly to the insured under a health insurance policy, the policy provides benefits on what type of basis?
reimbursement
one of the differences between group underwritting and individual underwritting is that there is little or no medical information required for participants in groups of
50 or more
which of the following is true regarding dividend related taxation?
dividends are not taxable
which of the following statements is true regarding the cash value in a universal life policy?
the insurer credits the cash value in the policy with a current interest rate
which of the following is NOT true regarding policy loans
money borrowed from the cash value is taxable
which of the following is true regarding single life settlement option?
it provides income the beneficiary cannot outlive
a new employee who meets HIPPA eligibility requirements must be issued health coverage on what basis?
Guaranteed
which of the following is NOT an advantage of an HRA for an employer?
HRA's are defined benefit programs
if a life insurance policy develops cash value faster than a seven-pay whole life contract it is
modified endowment contract
an agent offers his client free tickets to a sporting even in exchange for the purchase of an insurance policy. the agent is
rebating
issue age policy premiums increase in response to which of the following factors?
increased benefits
an insurer that holds a certificate of authority in the state in which it transacts business is considered a/an
authorized insurer
if an insurance company offers medicare supplement policies it must offer which of the following plans?
A
all the following statements about equity index annuities are correct EXCEPT
the annuitant receives a fixed amount of return
even though "sickness" is a peril covered by a health insurance policy, coverage may be limited or excluded because of all of the following EXCEPT
exemption periods
according to the 2001 CSO table, at what age will the terminal reserves be reached?
120
all other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in the joint life policy?
lower
the patient protection act and affordable care act includes all of the following provisions EXCEPT
individual tax deductions of premiums paid
an insured decides to surrender his whole life insurance policy which he purchased 30 years ago. the insured was paying annual premiums while the policy was in force (which added up to $15,000). when he surrendered the policy, the cash surrender value was
$3,000 or difference btw premiums paid and cash value
the insurance code identifies all of these as prohibited acts that can cause suspension, revocation or denial of an insurance producer license for licensee or applicant with the exception of
commission of any misdemeanor
under the mandatory uniform provision notice of claim, the first notice of injury or sickness covered under an accident and health policy must contain
a statement that is sufficiently clear to identify the insured and the nature of the claims
all of the following types of distributions are considered exceptions to the early distribution rule and therefore are not subject to the rule except
participant's debt
lisa and lena own a shop together, they are partners in their business of 2 years. lisa is a designer, lena is a seamstress, lisa worries that if lena becomes disabled that would affect their business. she inquires about purchasing disability buy sell ins
a disability buy sell plan protects the insured in case of disability. it allows the policyowner to buy out the partner's interest in the business and the benefits are tax free
an insurer devises an intimidation strategy in order to corner a large portion of the insurance market. which of the following best describes this practice?
illegal
which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends plus interest and cash value to pay the policy up early?
paid-up option
an applicant is considered to be high risk, but not so much that the insurer wants to deny coverage. which of the following is NOT true?
the insurer will issue a conditional coverage
which of the following is NOT a goal of risk retention?
to minimize the insured's level of liability in the event of a loss
what is the maximum penalty for habitual willful noncompliance with the Fair Credit reporting act?
$2,500
the policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal be paid to their children when they reach a certain age. which settlement option should the policyown
interest only option
which of the following statements pertaining to medicare part A is correct?
medicare part A is automatically provided when an individual qualifies for social security benefits at age 65
which of the following characteristics applies to defined benefit plans but not defined contribution plans?
the amount of contributions made by the employer is determined by an actuarial formula
which entity regulates variable life policies?
both state government and the insurance department
the period of time immediately following a disability during which benefits are not payable is
the elimination period
which of the following best describes gross annual premium?
annual cost of mortality plus expenses
according to the time limit on certain defenses provision, the insurer cannot void the policy for any misstatements on the application (except for fraud) if the policy was in force for what time period?
3 years
what must happen when an individual policy or annuity has been delivered by hand to the policyowner?
a delivery receipt must be signed
all of the following coverages are usually included under a dental insurance plan EXCEPT
teeth whitening
how long will the beneficiary receive payments under the single life settlement option?
until the beneficiary's death
an insured purchases a policy in 2008 and died in 2013. the insurance company discovers at the same that the insured information during application process. what can they do?
pay the death benefit
a term insurance policy that provides coverage, with level premium and level death benefit, for the number of years equal to the average life expectancy of the insured, is what kind of contract?
life expectancy contract
in a noncontributory health insurance plan what percentage of eligible employees must participate in the plan before the plan can become effective
%100
in a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become affective
5 days
an agent misrepresents the details of an insured's new insurance contract that will be replacing the current contract. which of the following will most likely happen
suspension of license
the dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the
one year term option
after the elimination period a totally disabled insured qualified and started receiving benefits from his disability income policy that has a waiver of premium rider. what will most likely happen to the premiums paid into the policy during the elimination
premiums will be refunded
which of the following individuals are responsible for making premium payments in an HMO plan?
subscribers
under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid
for 20 years or until death, whichever occurs first
which of the following is NOT an enrollment period for Medicare Part A applicant?
automatic enrollment
which of the following is the closest term to an "authorized" insurer?
admitted
which of the following would be least likely to be considered a legitimate need that would be paid by insurance proceeds?
vacation travel expenses
what form of the annuity settlement options provides payments to an annuitant for the rest of the annuitant's life and ceases at the annuitant's death?
pure life
an individual applied for an insurance policy and paid the initial premium. five days later he had to submit to a medical exam, after which the insurer issued a conditional receipt. if the policy is issued what would be the policy's effective date
the date of medical exam
which of the following is not true regarding annuity certain
benefits stop at the annuitants death
adopting parents must inform their insurer that a child has been added to the family within
31 days
which of the following statements about group life is correct?
the cost of coverage is based on the ratio of men and women in the group
an insurer that holds a certificate of authority in the state in which it transacts business is considered an
authorized insurer
if an insurance company offers medicare supplement policies, it must offer which of the following plans
A
which of the following is NOT a way to determine the interest rate in a Universal Life Policy?
estimate market conditions for the life of the policy
what does "level" refer to in level term insurance?
face amount
all of the following are true regarding a decreasing term policy EXCEPT?
the payable premium amount steadily declines throughout the duration of the contract
a life insurance policy does not have a war clause. if the insured is killed during a time of war what will the beneficiary receive from the policy?
the full death benefit
which of the following is true for both quality indexed annuities and fixed annuities?
the have a guaranteed minimum interest rate
insurance producers that do not have company appointments are considered a
representative of the consumer
what option allows the insured to periodically increase benefit levels without providing evidence of insurability?
guarantee of insurability
with regards to premium rates, which of the following statements is NOT true?
the commissioner sets all insurance premium rates used in PA
under an extended term insurance policy, the policy cash value is converted to
the same face amount as the whole life policy
in respect to the consideration clause, which of the following is consideration on the part of the insurer?
promising to pay in accordance with the contact terms
which of the following is NOT true of section 1035 policy exchanges?
any exchange made under section 1035 of the internal revenue code must be completed within 3o days
if a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, its called
a joint life annuity