California Life Accident and Health Exam Practice 353 Questions with Answers
A
ABC INSURANCE - CORRECT ANSWER JOHN IS THE AGENT FOR ABC INSURANCE
... [Show More] AND JANE IS THE INSURED. WHO IS THE PRINCIPAL IN THIS AGENCY RELATIONSHIP?
A
ABC INSURANCE
B
JOHN
C
JANE
D
NONE
D
ADMITTED - CORRECT ANSWER A(N) ________ INSURER IS AUTHORIZED TO WRITE INSURANCE POLICIES IN A PARTICULAR STATE.
A
DOMESTIC
B
NON-ADMITTED
C
FOREIGN
D
ADMITTED
B
A PERSON WHO NEGOTIATES INSURANCE CONTRACTS ON BEHALF OF AN INSURED - CORRECT ANSWER WHICH OF THE FOLLOWING IS CLASSIFIED AS AN INSURANCE BROKER?
A
A PERSON WHO PLACES COVERAGE FOR HIS/HER OWN INSURANCE
B
A PERSON WHO NEGOTIATES INSURANCE CONTRACTS ON BEHALF OF AN INSURED
C
A PERSON IN THE HOME OFFICE WHO DOES NOT SOLICIT OUTSIDE OF THE OFFICE
D
AN EMPLOYEE WHO NEGOTIATES INSURANCE CONTRACTS FOR HIS/HER EMPLOYER
C
EACH PARTY IS ENTITLED TO RELY UPON THE REPRESENTATIONS OF THE OTHER THAT THERE IS NOTHING CONCEALED OR DISHONEST - CORRECT ANSWER THE INSURANCE CONTRACT IS SAID TO BE A CONTRACT OF UTMOST GOOD FAITH, BECAUSE:
A
CONCEALMENT OF KNOWN FACTS ON THE PART OF THE INSURED WILL VOID THE CONTRACT
B
THE INSURER HAS DRAWN UP THE CONTRACT AND, THEREFORE, THERE IS NO INTENT TO DECEIVE
C
EACH PARTY IS ENTITLED TO RELY UPON THE REPRESENTATIONS OF THE OTHER THAT THERE IS NOTHING CONCEALED OR DISHONEST
D
THE INSURED MUST WARRANT THAT HIS/HER REPRESENTATIONS ARE TRUE
A
THE INSURED IS RESTORED TO THE SAME FINANCIAL CONDITION AS PRIOR TO THE LOSS, WITH NO INTENT OF LOSS OR GAIN - CORRECT ANSWER WHICH OF THE FOLLOWING BEST DESCRIBES A CONTRACT OF INDEMNITY UNDER INSURANCE?
A
THE INSURED IS RESTORED TO THE SAME FINANCIAL CONDITION AS PRIOR TO THE LOSS, WITH NO INTENT OF LOSS OR GAIN
B
THE INSURED INDEMNIFIES THE INSURER FOR ANY EXPENSES IN ADJUSTING THE LOSS
C
THE INSURED SUSTAINS A LOSS AS A RESULT OF THE LOSS
D
SURPLUS - CORRECT ANSWER THE INSURED IS RESTORED TO A FINANCIAL CONDITION AS GOOD AS, OR BETTER THAN, THE INSURED WAS BEFORE THE LOSS
___________ INSURANCE IS USED TO PROVIDE COVERAGE WHEN INSURANCE IS NOT AVAILABLE FROM AN ADMITTED CARRIER.
A
FACULTATIVE
B
DOMESTIC
C
ALIEN
D
SURPLUS
C
PURE RISK - CORRECT ANSWER WHICH OF THE FOLLOWING RISKS IS PROTECTED BY INSURANCE?
A
CERTAIN RISK
B
SPECULATIVE RISK
C
PURE RISK
D
INVOLUNTARY RISK
A
WHEN ONE TAKES ACTION TO MINIMIZE THE SEVERITY OF A POTENTIAL LOSS - CORRECT ANSWER A GOOD EXAMPLE OF RISK REDUCTION MIGHT BE:
A
WHEN ONE TAKES ACTION TO MINIMIZE THE SEVERITY OF A POTENTIAL LOSS
B
THE ELIMINATION OF THE EXPOSURE TO A SPECIFIC RISK
C
THE TRANSFER OF THE RISK TO AN INSURANCE COMPANY
D
INSURING ONLY THOSE RISKS THAT THREATEN THE FINANCIAL STABILITY OF THE INSURED
B
ADMITTED - CORRECT ANSWER AN INSURER THAT IS AUTHORIZED TO DO BUSINESS IN A PARTICULAR STATE IS SAID TO BE:
A
NON-ADMITTED
B
ADMITTED
C
DOMESTIC
D
FOREIGN
C
STOCK - CORRECT ANSWER WHICH INSURER'S OWNER RECEIVES TAXABLE CORPORATE DIVIDENDS AS A RETURN OF PROFIT?
A
MUTUAL
B
RECIPROCAL
C
STOCK
D
FRATERNAL
B
ACCORDING TO THE LAW OF LARGE NUMBERS - CORRECT ANSWER IN INSURANCE, WHEN THE NUMBER OF SIMILAR UNITS INCREASE, THE PREDICTABILITY OF THE LOSS IMPROVES:
A
BECAUSE OF THE SIMILARITY OF UNITS IN LARGE QUANTITIES
B
ACCORDING TO THE LAW OF LARGE NUMBERS
C
BECAUSE OF ACCUMULATED EXPERIENCE
D
ACCORDING TO THE LAW OF AVERAGES
A
A UNILATERAL CONTRACT - CORRECT ANSWER A CONTRACT WHEREBY ONLY ONE PARTY IS BOUND TO FUTURE PERFORMANCE, IS SAID TO BE:
A
A UNILATERAL CONTRACT
B
A BILATERAL CONTRACT
C
A CONDITIONAL CONTRACT
D
AN ALEATORY CONTRACT
A
CAL-GLBA - CORRECT ANSWER THE CALIFORNIA FINANCIAL INFORMATION PRIVACY ACT IS SOMETIMES KNOWN AS:
A
CAL-GLBA
B
CA-FIPA
C
CA-HIPAA
D
CA-FCRA
B
INSURER - CORRECT ANSWER IN CALIFORNIA, ANY PERSON THAT MANUFACTURES AND SELLS INSURANCE COVERAGE BY WAY OF INSURANCE POLICIES OR CONTRACTS MAY BE AN:
A
INSURED
B
INSURER
C
AGENCY
D
AGENT
A
A RISK - CORRECT ANSWER IN THE INSURANCE WORLD, A POTENTIAL FOR A LOSS IS SAID TO BE:
A
A RISK
B
A PERIL
C
A HAZARD
D
AN INSURABLE INTEREST
B
GROUP LIFE INSURANCE - CORRECT ANSWER AN INSURANCE PLAN OWNED BY AN EMPLOYER, CREDITOR OR ASSOCIATION, PROVIDING COVERAGE FOR THE EMPLOYEES, DEBTORS, OR MEMBERS, REFERS TO WHICH OF THE FOLLOWING?
A
ORDINARY LIFE INSURANCE
B
GROUP LIFE INSURANCE
C
INDUSTRIAL LIFE INSURANCE
D
INDIVIDUAL LIFE INSURANCE
A
A POLICY SUMMARY - CORRECT ANSWER A PERSONALIZED COMPUTER-GENERATED ILLUSTRATION DETAILING PREMIUMS, CASH VALUES, INTEREST RATES, AND SURRENDER VALUES IS CALLED __________.
A
A POLICY SUMMARY
B
SALES LITERATURE
C
AN ADVERTISEMENT
D
A HYPOTHETICAL
A
TO PAY THE CLAIM IN FULL SINCE THE CONDITIONS OF THE RECEIPT WERE FULLY SATISFIED - CORRECT ANSWER A PRODUCER SUBMITS A COMPLETED APPLICATION TO THE INSURER ALONG WITH THE PREMIUM CHECK AFTER GIVING THE APPLICANT A CONDITIONAL RECEIPT. IF THE APPLICANT COMPLETES THE REQUIRED MEDICAL EXAM, BUT DIES PRIOR TO THE INSURER ISSUING A POLICY AS APPLIED FOR, WHAT IS THE INSURER'S RESPONSIBILITY?
A
TO PAY THE CLAIM IN FULL SINCE THE CONDITIONS OF THE RECEIPT WERE FULLY SATISFIED
B
TO REFUND PREMIUMS PAID LESS COSTS ASSOCIATED WITH ANY MEDICAL EXAMS
C
TO KEEP THE PREMIUM AND REJECT THE CLAIM
D
TO REFUND ANY AND ALL PREMIUMS PAID
D
CONTACT THE CLIENT TO ASSURE THAT THEY UNDERSTAND THE TRANSACTION - CORRECT ANSWER IN A REPLACEMENT TRANSACTION, ALL OF THE FOLLOWING ARE INSURER DUTIES AND RESPONSIBILITIES, EXCEPT:
A
MAINTAIN COPIES OF THE INFORMATION PROVIDED BY THE PRODUCER
B
ABIDE BY THE STATE REQUIRED HOLDING PERIOD FOR ALL REPLACEMENT DOCUMENTATION
C
NOTIFY THE EXISTING INSURER
D
CONTACT THE CLIENT TO ASSURE THAT THEY UNDERSTAND THE TRANSACTION
A
1,000 - CORRECT ANSWER THE MORTALITY RATE IS BASED ON MORTALITY TABLES WHICH SHOW LIFE EXPECTANCY AND THE DEATH RATE PER _______ PEOPLE LIVING IN THE U.S.
A
1,000
B
100
C
10,000
D
100,000
D
NAME AND OCCUPATION - CORRECT ANSWER WHICH OF THE FOLLOWING IS INCLUDED IN PART I OF A LIFE INSURANCE APPLICATION?
A
FAMILY HEALTH HISTORY
B
HOSPITALIZATIONS AND SURGERIES
C
PRESENT HEALTH
D
NAME AND OCCUPATION
C
ESTATE CONSERVATION - CORRECT ANSWER BUYING LIFE INSURANCE SO THAT THE DEATH BENEFIT WILL BE AVAILABLE FOR PAYING ESTATE TAXES DUE UPON THE DEATH OF THE INSURED IS KNOWN AS:
A
SURVIVOR PROTECTION
B
ESTATE CREATION
C
ESTATE CONSERVATION
D
PRENEED PLANNING
D
THE CASH VALUE - CORRECT ANSWER MONEY ACCUMULATED IN A PERMANENT POLICY THAT THE POLICYOWNER MAY BORROW VIA A POLICY LOAN OR RECEIVE IF THE POLICY IS SURRENDERED, REFERS TO:
A
SAVINGS ACCOUNT
B
ACCUMULATED AT INTEREST ACCOUNT
C
DEFERRED SAVINGS ACCOUNT
D
THE CASH VALUE
C
DECREASING TERM RIDER - CORRECT ANSWER SEAN HAS A HOME WITH A MORTGAGE. HE NEEDS LIFE INSURANCE TO PROTECT HIS FAMILY BUT ALSO WANTS TO LEAVE THEM WITHOUT A MORTGAGE PAYMENT IF HE DIES. IDEALLY WHICH OF THE FOLLOWING RIDERS SHOULD HE ACQUIRE?
A
FAMILY RIDER
B
INCREASING TERM RIDER
C
DECREASING TERM RIDER
D
LEVEL TERM RIDER
A
THE INSURER REFUNDS IT - CORRECT ANSWER AN INSURED OWNS A $50,000 PERMANENT LIFE POLICY THAT SHE PURCHASED 4 YEARS AGO THAT HAS A DISABILITY WAIVER OF PREMIUM. THE INSURED BECOMES DISABLED AND PAYS PREMIUMS DURING THE WAITING PERIOD UNTIL THE WAIVER BEGINS. ONCE THE WAIVER BEGINS, WHAT HAPPENS TO THE PREMIUMS SHE PAID DURING THE WAITING PERIOD?
A
THE INSURER REFUNDS IT
B
IT IS ADDED TO THE POLICY'S CASH VALUES
C
IT IS HELD IN ESCROW UNTIL THE DISABILITY IS OVER THEN REFUNDED
D
IT IS KEPT BY THE INSURER AS PART OF THE COST OF PROVIDING THE BENEFIT
B
PERMANENT - CORRECT ANSWER WHOLE LIFE IS ALSO KNOWN AS ________ PROTECTION.
A
TEMPORARY
B
PERMANENT
C
ABSOLUTE
D
PERIODIC
A
JOINT SURVIVORSHIP - CORRECT ANSWER ALL OF THE FOLLOWING POLICIES END WHEN AN INSURED DIES, EXCEPT:
A
JOINT SURVIVORSHIP
B
JOINT LIFE
C
VARIABLE UNIVERSAL LIFE
D
JUVENILE LIFE
A
$250,000 - CORRECT ANSWER A MARRIED COUPLE PURCHASES A $250,000 JOINT LIFE POLICY. WHEN THE OLDER OF THE TWO DIES, WHAT IS THE AMOUNT PAYABLE TO THE SURVIVOR?
A
$250,000
B
ZERO
C
$500,000
D
$125,000
D
SEPARATE ACCOUNT - CORRECT ANSWER THE OWNER OF A VARIABLE LIFE POLICY MAY ALLOCATE THE PREMIUM INTO A SUB-ACCOUNT WHICH IS OWNED BY THE INSURER, THIS SUB-ACCOUNT IS A PART OF WHAT IS ALSO KNOWN AS THE:
A
SIDE FUND
B
ACCUMULATION ACCOUNT
C
ALLOCATION ACCOUNT
D
SEPARATE ACCOUNT
C
INCREASING TERM - CORRECT ANSWER WHICH TYPE OF TERM PROTECTION HAS AN INCREASING FACE VALUE AS THE INSURED GETS OLDER?
A
LEVEL TERM
B
RENEWABLE TERM
C
INCREASING TERM
D
CONVERTIBLE TERM
B
DEATH BENEFIT - CORRECT ANSWER LEVEL, DECREASING AND INCREASING TERM REFER TO WHICH POLICY FEATURE?
A
CASH VALUE
B
DEATH BENEFIT
C
PREMIUM
D
RENEWABLE AND CONVERTIBLE
D
TAKE A POLICY LOAN FROM THE INSURER - CORRECT ANSWER BERT IS THE OWNER AND INSURED OF A TRADITIONAL WHOLE LIFE INSURANCE POLICY HE PURCHASED 20 YEARS AGO. HE HAS NEVER MISSED A PREMIUM PAYMENT. HE WOULD LIKE TO BUY A NEW CAR BUT HIS BANK ACCOUNT IS RUNNING LOW. HOW CAN HE OBTAIN THE NECESSARY FUNDS WHILE STILL MAINTAINING COVERAGE?
A
REDUCE THE POLICY'S FACE AMOUNT WHICH WILL REDUCE HIS PREMIUM PAYMENT
B
SURRENDER PART OF THE POLICY AND FOR THE BALANCE TAKE A POLICY LOAN
C
SURRENDER THE POLICY BACK TO THE INSURER
D
TAKE A POLICY LOAN FROM THE INSURER
B
IT CAN PROVIDE ADDITIONAL TEMPORARY COVERAGE ON THE INSURED OR ON OTHER MEMBERS OF THE FAMILY - CORRECT ANSWER WHICH OF THE FOLLOWING IS TRUE OF A TERM RIDER WHEN ATTACHED TO A PERMANENT LIFE POLICY?
A
IT ALLOWS THE POLICY TO ACHIEVE PAID UP STATUS AT THE END OF THE TERM
B
IT CAN PROVIDE ADDITIONAL TEMPORARY COVERAGE ON THE INSURED OR ON OTHER MEMBERS OF THE FAMILY
C
IT ONLY PAYS OUT A DEATH BENEFIT IN CASES OF ACCIDENTAL DEATH
D
IT ALWAYS IS IN THE AMOUNT OF THE BASE POLICY
D
ACCIDENTAL DEATH AND DISMEMBERMENT - CORRECT ANSWER WHICH TYPE OF RIDER PAYS OUT A CAPITAL SUM IN CASE AN INSURED LOSES A LIMB OR THEIR EYESIGHT?
A
ACCIDENTAL DEATH
B
RETURN OF PREMIUM
C
DISABILITY BENEFIT
D
ACCIDENTAL DEATH AND DISMEMBERMENT
A
TYPICALLY 6 MONTHS AFTER THE DISABILITY OCCURS - CORRECT ANSWER IF A POLICYOWNER HAS A WHOLE LIFE INSURANCE POLICY WITH A DISABILITY WAIVER OF PREMIUM RIDER, WHEN DOES THE RIDER BENEFIT START IF A QUALIFYING DISABILITY SHOULD OCCUR?
A
TYPICALLY 6 MONTHS AFTER THE DISABILITY OCCURS
B
IMMEDIATELY
C
AFTER THE DOCTOR CERTIFIES THE DISABILITY
D
ONE YEAR AFTER THE CLAIM FORMS ARE RECEIVED BY THE INSURER
D
A SPECIFIED PERIOD OF TIME - CORRECT ANSWER TERM LIFE INSURANCE IS DESIGNED TO PROVIDE COVERAGE FOR ___________.
A
FOR ONE YEAR
B
TO AGE 65
C
AN ENTIRE LIFETIME
D
A SPECIFIED PERIOD OF TIME
C
AS LONG AS THERE IS SUFFICIENT CASH VALUE TO COVER POLICY EXPENSES WHEN DUE, THE INSURED IS NOT REQUIRED TO PAY THE PLANNED PREMIUM - CORRECT ANSWER WHICH OF THE FOLLOWING IS A TRUE CHARACTERISTIC OF A VARIABLE UNIVERSAL LIFE POLICY?
A
THE POLICY REQUIRES ONLY A LIFE LICENSE TO SELL
B
THE INSURER BEARS ALL RISKS IN ACCUMULATING CASH VALUE
C
AS LONG AS THERE IS SUFFICIENT CASH VALUE TO COVER POLICY EXPENSES WHEN DUE, THE INSURED IS NOT REQUIRED TO PAY THE PLANNED PREMIUM
D
THE POLICY HAS A FIXED PREMIUM SCHEDULE
C
ANY REASON - CORRECT ANSWER FOR WHICH OF THE FOLLOWING REASONS MAY AN INSURED RETURN THE POLICY FOR A FULL REFUND WITHIN THE FREE LOOK PERIOD?
A
DEATH OF THE AGENT
B
INCREASE IN PREMIUM
C
ANY REASON
D
DECLINE IN FINANCIAL RATING OF THE INSURANCE COMPANY
A
THE SURRENDER CHARGE - CORRECT ANSWER ON A VARIABLE UNIVERSAL LIFE POLICY WHAT IS THE DIFFERENCE BETWEEN THE CASH VALUE AND THE CASH SURRENDER VALUES?
A
THE SURRENDER CHARGE
B
THE INVESTMENT PERFORMANCE
C
THE AMOUNT OF ANY OUTSTANDING POLICY LOAN
D
THE INTEREST EARNED
D
OWNERSHIP PROVISION - CORRECT ANSWER ___________ IN A POLICY ALLOW THE OWNER TO NAME THE BENEFICIARY, CHOOSE A DIVIDEND OPTION OR SETTLEMENT OPTION, OR BORROW AGAINST THE CONTRACT.
A
INSURING CLAUSE
B
CONSIDERATION CLAUSE
C
INCONTESTABLE CLAUSE
D
OWNERSHIP PROVISION
B
INSURING CLAUSE - CORRECT ANSWER WHICH OF THE FOLLOWING STATES THE OBLIGATION OF THE INSURER AND THE RISK THAT IS CONSIDERED IN A LIFE INSURANCE POLICY?
A
CONSIDERATION CLAUSE
B
INSURING CLAUSE
C
ENTIRE CONTRACT CLAUSE
D
EXCLUSIONS PROVISION
D
2 - CORRECT ANSWER AFTER A LIFE INSURANCE POLICY HAS BEEN IN FORCE FOR MORE THAN _____ YEARS THE POLICY IS CONSIDERED INCONTESTABLE.
A
1
B
3
C
4
D
2
C
PURCHASE A DECREASING BENEFIT POLICY THAT MATCHES THE LOAN REPAYMENT SCHEDULE - CORRECT ANSWER IN ORDER TO MAKE SURE THAT A CREDITOR OF THE INSURED IS NOT PAID MORE THAN THE OUTSTANDING LOAN AT TIME OF CLAIM, THE POLICYOWNER SHOULD:
A
INDICATE THE PERCENTAGE OF THE FACE AMOUNT THE CREDITOR WILL RECEIVE
B
SPECIFY A DOLLAR AMOUNT THE CREDITOR SHOULD RECEIVE AT TIME OF CLAIM
C
PURCHASE A DECREASING BENEFIT POLICY THAT MATCHES THE LOAN REPAYMENT SCHEDULE
D
NAME THE CREDITOR AS A PRIMARY BENEFICIARY
A
WHOLE LIFE - CORRECT ANSWER AN INSURED FORGETS TO PAY HIS INSURANCE PREMIUM. INSTEAD OF THE POLICY LAPSING, THE PREMIUM IS PAID BY THE COMPANY. THIS WOULD SUGGEST THAT A __________ POLICY WAS PURCHASED.
A
WHOLE LIFE
B
DECREASING TERM
C
RENEWABLE TERM
D
LEVEL TERM
B
POLICYOWNER - CORRECT ANSWER THE ___________ DECIDES WHICH DIVIDEND OPTION IS IN EFFECT AND CAN CHANGE THEIR ELECTION AT ANY TIME.
A
BENEFICIARY
B
POLICYOWNER
C
BOARD OF DIRECTORS
D
INSURER
B
NO CLAIM IS PAID OUT - CORRECT ANSWER AN AUNT AND UNCLE PURCHASE A LIFE INSURANCE POLICY ON THEIR NIECE, FOR WHOM THEY ARE THE LEGAL GUARDIANS. BOTH GUARDIANS PERISH IN AN ACCIDENT SOME TIME LATER. WHO RECEIVES THE DEATH BENEFIT?
A
THE PRIMARY BENEFICIARY
B
NO CLAIM IS PAID OUT
C
THE CONTINGENT BENEFICIARY
D
THE NIECE'S ESTATE
B
USING A LIFE INSURANCE POLICY AS COLLATERAL FOR A LOAN - CORRECT ANSWER ALL OF THE FOLLOWING ARE EXAMPLES OF AN ABSOLUTE ASSIGNMENT, EXCEPT:
A
A BUSINESS PERMITS THE CHANGE OF OWNERSHIP OF A COMPANY OWNED POLICY OVER TO A RETIRING EXECUTIVE
B
USING A LIFE INSURANCE POLICY AS COLLATERAL FOR A LOAN
C
A COURT ORDERS THE EXISTING POLICYOWNER TO CHANGE IT TO THEIR EX-SPOUSE
D
A GRANDPARENT SIGNS OVER OWNERSHIP OF A JUVENILE POLICY TO THEIR GRANDCHILD WHO IS NOW REACHED AGE OF MAJORITY
B
PREMIUM REDUCTION - CORRECT ANSWER A LIFE INSURANCE POLICYOWNER RECEIVES AN ANNUAL DIVIDEND. ONE OPTION FOR THIS DIVIDEND IS TO USE IT TO OFFSET THE ANNUAL OBLIGATION TO THE INSURER. WHAT IS THIS OPTION CALLED?
A
CASH
B
PREMIUM REDUCTION
C
PAID UP ADDITIONS
D
CASH SURRENDER
B
IRREVOCABLE - CORRECT ANSWER WHICH OF THE FOLLOWING BENEFICIARY DESIGNATIONS PREVENTS A POLICYOWNER FROM ASSIGNING THE POLICY, TAKING A POLICY LOAN, OR SURRENDERING THE POLICY WITHOUT THE BENEFICIARIES CONSENT?
A
INCONTESTABLE
B
IRREVOCABLE
C
CLASS
D
NAMED
A
COLLATERAL ASSIGNMENT - CORRECT ANSWER THE BANK MAY REQUIRE ITS BORROWERS TO HAVE A LIFE INSURANCE POLICY TO SECURE A LOAN IN THE EVENT OF THE BORROWER'S DEATH. WHICH PROVISION GIVES THE BANK PROPORTIONAL PROTECTION BUT NOT CONTROL OF THE POLICY?
A
COLLATERAL ASSIGNMENT
B
CONSIDERATION CLAUSE
C
POLICY LOAN PROVISION
D
ENTIRE CONTRACT CLAUSE
B
DEATH BENEFIT WILL BE WHAT THE PREMIUM PAID WOULD HAVE PURCHASED AT ISSUANCE AT THE CORRECT AGE - CORRECT ANSWER IF AN APPLICANT FOR LIFE INSURANCE MISSTATES HIS AGE ON THE APPLICATION, WHAT WOULD BE THE CONSEQUENCE IF/WHEN IT IS DISCOVERED?
A
THE POLICY WILL BE VOIDED
B
DEATH BENEFIT WILL BE WHAT THE PREMIUM PAID WOULD HAVE PURCHASED AT ISSUANCE AT THE CORRECT AGE
C
REAL AGE DIVIDED BY ACTUAL AGE, MULTIPLIED BY DEATH BENEFIT
D
PREMIUMS REFUNDED WITH INTEREST, NO DEATH BENEFIT PAID
B
SETTLEMENT - CORRECT ANSWER __________ OPTIONS ALLOW FOR THE DISTRIBUTION OF THE LIFE INSURANCE DEATH BENEFIT, OR ENDOWMENT CONTRACT FACE AMOUNT AT MATURITY, TO THE NAMED BENEFICIARY OR CONTRACT OWNER, AS THE SITUATION WARRANTS.
A
DIVIDEND
B
SETTLEMENT
C
NONFORFEITURE
D
ACCUMULATION
C
LUMP SUM - CORRECT ANSWER INSTEAD OF WAITING TO RECEIVE HER PAYMENTS OVER TIME JEANNE DECIDES TO OBTAIN THE GREATEST AMOUNT OF MONEY OUT OF HER ANNUITY IMMEDIATELY. WHICH OPTION DID SHE CHOOSE?
A
STRAIGHT LIFE OPTION (LIFE INCOME)
B
LIFE INCOME PERIOD CERTAIN
C
LUMP SUM
D
LIFE INCOME WITH REFUND
C
SINGLE PREMIUM DEFERRED ANNUITY - CORRECT ANSWER A LUMP SUM OF MONEY IS PLACED INTO AN ACCOUNT FROM WHICH THE ANNUITANT WILL DRAW PERIODIC BENEFITS BEGINNING MORE THAN A YEAR FROM THE DATE OF PURCHASE. THIS DESCRIBES A:
A
FLEXIBLE PREMIUM DEFERRED ANNUITY
B
FLEXIBLE PREMIUM IMMEDIATE ANNUITY
C
SINGLE PREMIUM DEFERRED ANNUITY
D
SINGLE PREMIUM IMMEDIATE ANNUITY
D
VARIABLE - CORRECT ANSWER GENERALLY, WHICH OF THE FOLLOWING ANNUITIES IS NOT DESIGNED TO GUARANTEE THE PRINCIPAL VALUE OF THE POLICY IN STABLE INTEREST RATE ENVIRONMENTS?
A
FIXED
B
MARKET VALUE ADJUSTMENT
C
INDEXED
D
VARIABLE
B
NOTHING - CORRECT ANSWER UNDER AN ANNUITY WITH A JOINT LIFE PAYMENT OPTION, WHAT WILL THE SURVIVOR RECEIVE UPON THE DEATH OF THE FIRST ANNUITANT?
A
THE UNDISTRIBUTED BALANCE
B
NOTHING
C
THE SAME AMOUNT THEY WERE RECEIVING TOGETHER
D
THE REMAINING PERIOD CERTAIN
A
PERIODIC, FLEXIBLE - CORRECT ANSWER ANNUITIES MAY BE FUNDED WITH EITHER A LUMP SUM OR ON EITHER A ______ OR A ______ BASIS.
A
PERIODIC, FLEXIBLE
B
LIFE, PERIODIC
C
PERMANENT, TEMPORARY
D
GUARANTEED, DISCRETIONARY
A
ANNUITIES - CORRECT ANSWER WHICH PRODUCT, OFFERED BY INSURERS IS SPECIFICALLY DESIGNED TO ALLOW AN INDIVIDUAL'S SAVINGS TO BE DISTRIBUTED TO HIM/HER PERIODICALLY OVER HIS/HER ENTIRE LIFE, REGARDLESS OF HOW LONG HE/SHE LIVES?
A
ANNUITIES
B
PARTICIPATING WHOLE LIFE
C
UNIVERSAL LIFE INSURANCE
D
VARIABLE LIFE INSURANCE
A
CROSS PURCHASE - CORRECT ANSWER A(N)__________ PLAN IS WHEN BUSINESS PARTNERS BUY LIFE INSURANCE POLICIES ON ONE ANOTHER.
A
CROSS PURCHASE
B
ENTITY
C
PARTNERSHIP
D
INDUSTRIAL
D
THIRD-PARTY OWNERSHIP - CORRECT ANSWER A GRANDPARENT PURCHASES A LIFE INSURANCE POLICY ON A GRANDDAUGHTER THIS IS AN EXAMPLE OF _________.
A
TWO PARTY OWNERSHIP
B
KEY PERSON INSURANCE
C
WEALTH TRANSFER
D
THIRD-PARTY OWNERSHIP
B
ACTUARIAL VALUE OF CONTRIBUTIONS IS RELATED TO ACTUARIAL VALUE OF BENEFITS - CORRECT ANSWER ALL ARE TRUE REGARDING FUNDING OF SOCIAL SECURITY, EXCEPT:
A
THE EMPLOYER WITHHOLDS THE EMPLOYEE'S TAX AND REMITS IT WITH THE EMPLOYER'S PORTION
B
ACTUARIAL VALUE OF CONTRIBUTIONS IS RELATED TO ACTUARIAL VALUE OF BENEFITS
C
THE FUNDS ARE KEPT IN A TRUST FUND AND INVESTED IN GOVERNMENT SECURITIES
D
SELF-EMPLOYED INDIVIDUALS PAY BOTH THE EMPLOYER AND EMPLOYEE AMOUNTS
A
A BUSINESS OWNER BUYING A LIFE POLICY ON HIS OWN LIFE - CORRECT ANSWER WHICH OF THE FOLLOWING IS NOT AN EXAMPLE OF THIRD-PARTY OWNERSHIP?
A
A BUSINESS OWNER BUYING A LIFE POLICY ON HIS OWN LIFE
B
A KEY EMPLOYEE POLICY
C
A POLICY USED TO FUND A BUY-SELL AGREEMENT
D
A PARENT PURCHASING A POLICY ON THE LIFE OF HIS OR HER CHILD
C
RETIREMENT, DEATH, AND SURVIVOR - CORRECT ANSWER SOCIAL SECURITY BENEFITS PROVIDED ARE:
A
RETIREMENT, SURVIVORS, AND FICA
B
RETIREMENT, DISABILITY, AND UNEMPLOYMENT
C
RETIREMENT, DEATH, AND SURVIVOR
D
RETIREMENT, DEATH, AND DEPENDENT CARE
A
ACCELERATED BENEFIT (LIVING NEED) - CORRECT ANSWER IF, AS THE RESULT OF AN INJURY OR ILLNESS, THE INSURED IS DEEMED TO BE TERMINAL (I.E., EXPECTED TO DIE WITHIN 1 OR 2 YEARS), WHAT RIDER ADDED TO A LIFE INSURANCE POLICY WOULD ADVANCE A PORTION OF THE FACE VALUE?
A
ACCELERATED BENEFIT (LIVING NEED)
B
DISABILITY RIDER
C
RETURN OF CASH VALUE RIDER
D
VIATICAL RIDER
B
10 - CORRECT ANSWER IF FUNDS ARE PREMATURELY WITHDRAWN FROM A MODIFIED ENDOWMENT CONTRACT (MEC) THEY ARE SUBJECT TO A _____% PENALTY ON ANY GAINS.
A
6
B
10
C
20
D
15
D
THE AMOUNT OF THE ACCELERATED PAYMENT, THE REMAINING DEATH BENEFIT AND CASH VALUES - CORRECT ANSWER IN THE EVENT THAT AN INSURED RECEIVES A PERIODIC BENEFIT AS THE RESULT OF EXERCISING THE ACCELERATED DEATH BENEFIT RIDER, WHAT INFORMATION MUST THE INSURER PROVIDE TO THE INSURED?
A
THE AMOUNT OF TAXABLE INCOME THAT THEY WILL BE REPORTING TO THE IRS
B
THE LIFE EXPECTANCY OF THE INSURED ON A SEMI-ANNUAL BASIS
C
VERIFICATION AND UPDATE OF THE POLICY OWNERSHIP AND BENEFICIARY DESIGNATIONS
D
THE AMOUNT OF THE ACCELERATED PAYMENT, THE REMAINING DEATH BENEFIT AND CASH VALUES
A
TAX AND 10% PENALTY TAX ON THE WITHDRAWAL THAT REPRESENTS EARNINGS - CORRECT ANSWER IF AN ANNUITANT WITHDRAWS FUNDS FROM THEIR ANNUITY PRIOR TO AGE 59 1/2 WHAT IS THE TAX CONSEQUENCE?
A
TAX AND 10% PENALTY TAX ON THE WITHDRAWAL THAT REPRESENTS EARNINGS
B
TAX ON THE TAX DEFERRED PORTION OF THE WITHDRAWAL ALONG WITH A 15% TAX PENALTY
C
TAX ON COST BASIS AND 10% TAX PENALTY ON THE TAX DEFERRED PORTION OF THE WITHDRAWAL
D
TAX ON THE ENTIRE WITHDRAWAL PLUS A 10% TAX PENALTY
C
59 1/2 - CORRECT ANSWER DISTRIBUTIONS FROM A MODIFIED ENDOWMENT CONTRACT (MEC) MADE ON OR AFTER AGE _____ ARE NOT SUBJECT TO ANY TAX PENALTIES.
A
65
B
62
C
59 1/2
D
70 ½
C
60 - CORRECT ANSWER IF A POLICYOWNER OF A LIFE INSURANCE POLICY ACCIDENTLY PAYS IN PREMIUMS IN EXCESS OF THE MEC GUIDELINES, THE INSURER CAN REFUND THE EXCESS WITHIN ______ DAYS OF THE END OF THE CONTRACT YEAR.
A
30
B
10
C
60
D
45
A
PRIVATE - CORRECT ANSWER ERISA SETS MINIMUM STANDARDS FOR PENSION PLANS PRIMARILY IN THE ______ INDUSTRY.
A
PRIVATE
B
PUBLIC
C
PUBLIC AND PRIVATE
D
QUASI-GOVERNMENT
A
WHEN A TRANSFER OF OWNERSHIP TAKES PLACE WHILE THE INSURED WAS ALIVE - CORRECT ANSWER UNLESS AN EXCEPTION APPLIES, LIFE INSURANCE PROCEEDS ARE INCOME TAXABLE IN WHICH OF THE FOLLOWING CIRCUMSTANCES?
A
WHEN A TRANSFER OF OWNERSHIP TAKES PLACE WHILE THE INSURED WAS ALIVE
B
IF A TRANSFER OF OWNERSHIP OCCURS AFTER THE INSURED DIES
C
WHEN A POLICY IS USED FOR COLLATERAL FOR A BANK LOAN
D
WHEN THERE IS A CHANGE OF BENEFICIARY FROM A NON-POLICYOWNER TO THE POLICYOWNER
A
LAST-IN, FIRST OUT (LIFO) - CORRECT ANSWER WITHDRAWALS FROM A NON-QUALIFIED ANNUITY PRIOR TO ANNUITIZATION ARE TAXED ON A ___________ BASIS.
A
LAST-IN, FIRST OUT (LIFO)
B
FIRST-IN, FIRST OUT (FIFO)
C
AVERAGE COST BASIS (ACB)
D
FIRST IN, LAST OUT (FILO)
C
FEDERAL ESTATE - CORRECT ANSWER IF LIFE INSURANCE PROCEEDS ARE PAID TO THE DECEASED'S ESTATE THEY MAY BE SUBJECT TO ________ TAXES.
A
STATE INCOME
B
FEDERAL INCOME
C
FEDERAL ESTATE
D
PROBATE
C
PRESENT HEALTH AND MEDICAL BACKGROUND OF APPLICANT AND FAMILY - CORRECT ANSWER WHICH OF THE FOLLOWING ARE INCLUDED IN PART II OF A HEALTH INSURANCE APPLICATION?
A
ADDRESS
B
OCCUPATION
C
PRESENT HEALTH AND MEDICAL BACKGROUND OF APPLICANT AND FAMILY
D
MARITAL STATUS
B
STATING THAT 'WE HAVE BEEN IN BUSINESS FOR OVER 50 YEARS, FOR MORE INFORMATION CONTACT A LOCAL AGENT.' - CORRECT ANSWER ALL OF THE FOLLOWING ARE A PROHIBITED FORM OF ADVERTISING, EXCEPT:
A
AN ADVERTISEMENT THAT USES THE WORDS 'ONLY', 'JUST', 'MERELY', 'MINIMUM', OR SIMILAR WORDS TO IMPLY A MINIMAL IMPOSITION OF RESTRICTIONS AND REDUCTIONS
B
STATING THAT 'WE HAVE BEEN IN BUSINESS FOR OVER 50 YEARS, FOR MORE INFORMATION CONTACT A LOCAL AGENT.'
C
ADVERTISEMENTS FOR MEDICARE SUPPLEMENTS CONTAINING INFORMATION THAT CREATE UNDO ANXIETY IN THE MINDS OF THE INSUREDS
D
WHEN AN INSURER EXCLUDES COVERAGE FOR PREEXISTING CONDITIONS, AN ADVERTISEMENT OF THE POLICY THAT IMPLIES
B
ACCIDENTAL BODILY INJURY - CORRECT ANSWER THAT THE APPLICANT'S MEDICAL CONDITION OR HISTORY WILL NOT AFFECT ELIGIBILITY OR PAYMENT
TIMOTHY OWNS AN INDIVIDUAL A&H POLICY, AND IN THE EVENT OF AN ACCIDENT, HE IS REQUIRED TO PROVE ONLY THAT THE INJURY ITSELF IS UNFORESEEN AND UNINTENDED. TIM'S POLICY IS BASED ON WHICH OF THE FOLLOWING DEFINITIONS OF ACCIDENT?
A
ACCIDENTAL DISMEMBERMENT
B
ACCIDENTAL BODILY INJURY
C
ACCIDENTAL DEATH
D
ACCIDENTAL MEANS
A
PRODUCER - CORRECT ANSWER WHICH OF THE FOLLOWING HAS PRIMARY RESPONSIBILITY FOR ENSURING THAT THE APPLICATION IS FILLED OUT COMPLETELY?
A
PRODUCER
B
HOME OFFICE UNDERWRITER
C
INSURER
D
ACTUARY
C
A STATEMENT OF GOOD HEALTH - CORRECT ANSWER IN THE EVENT A POLICY IS DELIVERED BY AN AGENT TO THE INSURED, AND THE PREMIUM PAYMENT IS TO BE COLLECTED AT THE TIME OF THIS DELIVERY, NORMALLY WHAT ELSE MUST THE AGENT OBTAIN TO MAKE THE DELIVERY COMPLETE?
A
POSTAGE AND HANDLING FEES
B
AN AFFIDAVIT FROM THE APPLICANT
C
A STATEMENT OF GOOD HEALTH
D
ADDITIONAL PAYMENT REFLECTING LOST INTEREST
C
ACCIDENTAL DEATH - CORRECT ANSWER THIS IS THE ONLY ACCIDENT AND HEALTH INSURANCE POLICY THAT PAYS OUT A LUMP-SUM BENEFIT UPON THE DEATH OF THE INSURED IN CERTAIN SITUATIONS.
A
MEDICAL EXPENSE
B
LONG-TERM CARE
C
ACCIDENTAL DEATH
D
DISABILITY INCOME
D
CONSUMER INVESTIGATIVE REPORT - CORRECT ANSWER THE INSURER'S UNDERWRITER MAY FIND INFORMATION ABOUT AN APPLICANT'S MORAL CHARACTER, HOBBIES, WORK AND GENERAL REPUTATION FROM A:
A
MEDICAL EXAMINATION
B
ATTENDING PHYSICIAN STATEMENT
C
AGENT'S REPORT
D
CONSUMER INVESTIGATIVE REPORT
D
INSPECTION REPORT - CORRECT ANSWER INFORMATION ABOUT AN APPLICANT'S WORK BEHAVIOR OR CHARACTER GATHERED FROM NEIGHBORS OR CO-WORKERS WOULD BE INCLUDED ON AN?
A
MIB
B
APS
C
AGENT'S REPORT
D
INSPECTION REPORT
C
BLANKET PLAN - CORRECT ANSWER WHICH OF THE FOLLOWING TYPES OF LIMITED POLICIES WOULD A COMMON CARRIER PURCHASE TO PROVIDE MEDICAL AND SURGICAL BENEFITS IN EXCESS OF ANY PRIMARY COVERAGE?
A
ACCIDENTAL DEATH AND DISMEMBERMENT
B
SHORT TERM MEDICAL EXPENSE
C
BLANKET PLAN
D
HOSPITAL INDEMNITY
B
LONG-TERM CARE - CORRECT ANSWER WHICH IS NOT CONSIDERED ONE OF THE BASIC BENEFITS REQUIRED OF ALL HMOS?
A
PRE-PAID ROUTINE MEDICAL EXAMS
B
LONG-TERM CARE
C
LABORATORY AND X-RAY SERVICES
D
ANNUAL OPEN ENROLLMENT FOR GROUP PLANS
B
90 - CORRECT ANSWER ACCIDENTAL DEATH AND DISMEMBERMENT PROVIDES THAT THE FACE AMOUNT, OR PRINCIPAL SUM, WILL BE PAID IF THE INSURED DIES DUE TO AN ACCIDENT WITHIN HOW MANY DAYS FROM THE DATE OF THE ACCIDENT?
A
120
B
90
C
150
D
180
D
$2,500 - CORRECT ANSWER WHICH MAJOR MEDICAL PLAN DEDUCTIBLE WILL RESULT IN THE LOWEST PREMIUM?
A
$1,000
B
$1,500
C
$2,000
D
$2,500
C
OPEN PANEL, CLOSED PANEL - CORRECT ANSWER HMOS ARE ESTABLISHED AS EITHER ________, WHICH MEANS THE DOCTOR CAN WORK WITH ANYONE, INCLUDING HMO MEMBERS, OR ________, WHICH MEANS THE DOCTOR CAN ONLY WORK WITH HMO MEMBERS.
A
OPEN GROUP, SPECIFIED GROUP
B
STAFF MODEL, GROUP MODEL
C
OPEN PANEL, CLOSED PANEL
D
VARIABLE GROUP, FIXED GROUP
D
EXCLUSIONS - CORRECT ANSWER WHAT IS THE NAME GIVEN TO CAUSES OR CONDITIONS LISTED IN THE POLICY THAT ARE NOT COVERED AND FOR WHICH NO BENEFITS ARE PAYABLE?
A
PROBATIONARY PERIODS
B
WAITING PERIODS
C
ELIMINATION PERIODS
D
EXCLUSIONS
C
SUPPLEMENTARY MAJOR MEDICAL - CORRECT ANSWER WHICH POLICY UTILIZES A CORRIDOR DEDUCTIBLE AFTER BASIC MEDICAL EXPENSE COVERAGE BENEFITS HAVE BEEN EXHAUSTED AND BEFORE MAJOR MEDICAL BENEFITS BEGIN? [Show Less]