Life and Health Insurance 6

A large corporation pension plan purchased an accumulation annuity contract where all of the participating employees received certificates of participation. What is this contract called?

a. 403(b) plan 

b. Group deferred annuity 

c. Group immediate annuity 

d. Joint and survivor group plan

What is taken into consideration when defining "total disability" in a disability income insurance policy?

a. Number of days spent in the hospital

b. The amount of additional coverage the insured has

c. The insured's education, training, and experience

d. The elimination period

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

a. implied authority 

b. express authority 

c. apparent authority 

d. acknowledged authority

How much is normally paid to a policyowner in a life (viatical) settlement?

a. Total premiums paid plus interest

b. Full face amount

c. More than the face amount

d. Less than the death benefit

Which of these would NOT be a valid reason to add the waiver of premium rider to a life insurance policy?

a. Prevents a policy from lapsing in the event of total disability

b. Premiums waived by the insurer do not have to be repaid by the policyowner

c. Policy's cash value would still increase as policy premiums are being waived

d. It allows a policy loan to cover premium payments if the policyowner becomes totally disabled

Which benefit can be found in an equity indexed annuity, but not in a fixed annuity?

a. Protection against living too long

b. Equity loans

c. A fixed rate of return

d. Protection against long-term inflation

Which of the following is NOT an allowable exclusion for long-term care insurance policies?

a. Self-inflicted injuries

b. Acute care

c. Custodial care outside the U.S.

d. Care for incurable conditions

Which statement regarding universal life insurance is correct?

a. Cash value accumulations have a guaranteed minimum interest rate

b. Policyowner can change the face amount but not the premium

c. Policyowner can change the premium but not the face amount

d. Partial withdrawals cannot be made from the policy's cash value

When disability buy-sell insurance benefits exceed a partner's cost basis, which of the following is correct?

a. The excess is taxed as a capital gain to the partner

b. The excess is taxed as ordinary income to the partner

c. The excess is partially taxable to the partner

d. The full amount is non-taxable to the partner

Short-term group disability income benefits are

a. always paid income-tax free to the employee

b. a percentage of weekly earnings up to to a stated maximum

c. only payable if the disability was work-related

d. taxable to the employee when the plan is fully contributory

The automatic premium loan provision can be accurately described as a

a. provision that charges a premium for the right to borrow against the cash value

b. provision that provides a loan for necessary expenditures such as hospital bills, mortgage payments etc

c. provision that automatically waives an unpaid premium at the end of the grace period

d. provision that provides a policy loan to pay any premiums by the end of the grace period

Which is an accurate description of the premium in a graded premium life insurance policy?

a. Level premium for a stated number of years then increases annually for the remainder of the contract

b. Level premium for a stated number of years then decreases annually for the remainder of the contract

c. Annual decreases in premium for a stated number of years then remains level

d. Annual increases in premium for a stated number of years then remains level

Jerry has an indemnity plan which covers dental expenses. Typically, these type of plans

a. has a limited network of dentists to chose from

b. cover preventative care once every six months

c. never require a deductible for major services

d. cover oral surgery as a result from an injury

The insurance coverage in a variable life insurance policy may vary based on the value of

a. the AM Best rating the company has received

b. its underlying investments

c. the consumer price index

d. the total premiums paid

All of these statements concerning group credit life insurance are false EXCEPT

a. Cash value loans are allowable

b. Dividends can reduce the premium payments

c. The face amount and premiums are flexible

d. The face amount is based on the outstanding loan balance

Which of these individuals may NOT obtain a temporary producer license?

a. An appointed employee who is replacing a deceased producer

b. A personal representative of a licensed producer who has been called to active duty in the military

c. The executor of the estate of a deceased licensed producer

d.  An employee of a retired licensed producer

Medicaid will pay for nursing home expenses under what condition?

a. Must have permanent kidney failure

b. Must be age 65 or older

c. Must be receiving Social Security disability benefits

d. Must have financial need

When an annuity contract has been fully surrendered, how will the surrender charges affect the final contract settlement?

a. Final contract settlement will be reduced

b. Final contract settlement will be increased

c. Final contract settlement will not be affected

d. Final contract settlement will be held in escrow until surrender charges are paid

When issuing disability income coverage to a substandard risk, an insurance company may

a. raise the deductible

b. shorten the benefit period

c. raise the benefit limits

d. reduce the premium

How long must a producer maintain customer records for an insurance transaction?

a. One year

b. Two years

c. Three years

d. Four years

Which of these is NOT relevant when determining the amount of personal life insurance needed?

a. Existing life insurance coverage

b. Local unemployment rates

c. Household income

d. Household debt

Which of the following is NOT a function of accident and health insurance?

a. Pays a death benefit as a result of natural causes

b. Covers the loss of income from a disability

c. Covers the cost of medical care as a result of an accident

d. Pays for hospice care in the event of a terminal illness

What is considered the collateral on a life insurance policy loan?

a. No collateral is needed

b. The policy's cash value

c. The policy's face value

d. The equity in a policyowner's home

Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?

a. 20% of the funds are subject to taxes

b. 80% of the funds are invested in a separate account

c. If Tom's employment is terminated, 20% of the funds could be forfeited

d. If Tom's employment is terminated, 80% of the funds could be forfeited