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A policyowner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision?
a. Partial disability
b. Nondisabling injury
c. Presumptive disability
d. Flat amount disability
Partial disability
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A life annuity with period certain is characterized as
a. guaranteeing benefit payments for a stated period of time after reaching age 65
b. guaranteeing a minimum interest rate
c. guaranteeing lifetime benefit payments for two or more people
d. guaranteeing benefit payments for a stated minimum number of years
guaranteeing benefit payments for a stated minimum number of years
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If a disability income policy contains a cost-of-living adjustment rider, benefits must typically be increased
a. at the insurer's discretion
b. at least once per year from policy issue
c. at least once per year from when benefits begin
d. based on the performance of the S&P
at least once per year from when benefits begin
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Participants of a small group medical plan MUST be given advance notice of at least ___ days prior to the plan's discontinuation.
a. 30
b. 60
c. 120
d. 180
180
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If a Medicare Supplement policy is cancelled by the insurer, which of these circumstances does NOT require prior approval by the Arizona Department of Insurance?
a. Multiple Medicare Supplement policies on the same person
b. Nonpayment of premium
c. Unsuitable coverage
d. Cancelling a class of insureds
Nonpayment of premium
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XYZ Corp gives money to an employee to purchase a life insurance policy and allows the employee to select the beneficiary. What kind of plan is this?
a. Split-dollar
b. Cross purchase
c. Key employee
d. Deferred compensation
Split-dollar
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The owner's cost basis for a non-qualified deferred annuity is typically the same as the
a. annuity's cash value
b. total premiums paid
c. benefits payable to the annuitant
d. interest earned within the annuity
total premiums paid
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A life annuity feature which provides benefit payments for a minimum number of years, no matter when the annuitant dies, is called
a. fixed period
b. period certain
c. installment refund
d. straight life
period certain
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A producer is proposing that a policyowner replace an existing individual health insurance policy with a new one. Under the new contract, a pre-existing conditions exclusion
a. may increase the insured's benefits
b. is optional for the policyowner
c. may reduce the insured's benefits
d. does not affect the new policy
may reduce the insured's benefits
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The interest credited to the cash values of personally-owned non-qualified annuities is considered
a. a tax credit
b. tax-deferred
c. tax-deductible
d. tax-exempt
tax-deferred
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An individual may receive Medicare Part A Hospital benefits, regardless of age, as long as the person has received which of the following benefits for at least 24 months?
a. Unemployment
b. Workers compensation
c. Medicaid
d. Social Security Disability
Social Security Disability
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A life insurance company just paid a $100,000 death benefit to a beneficiary. When the insured died, the cash value was $15,000 and the total premiums-paid equaled $10,000. How much of the proceeds will be added to the beneficiary's gross income for federal income tax purposes?
a. Nothing
b. $5,000
c. $100,000
d. $105,000
Nothing
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What year was the Mental Health Parity and Addiction Equity Act established?
a. 2004
b. 2006
c. 2008
d. 2010
2008
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What is the elimination period of an individual disability policy?
a. Time period an insured must wait before coverage begins
b. Time period a disabled person must wait before benefits are paid
c. Time period after the policy issue date in which the provisions are still contestable
d. The point in time when benefits are no longer payable
Time period a disabled person must wait before benefits are paid
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What would be the disadvantage of naming a trust as beneficiary of a life insurance policy?
a. Trusts cannot be formed for life insurance purposes
b. Trust administration fees would reduce policy proceeds
c. Trusts cannot be used if a minor is the beneficiary
d. Trustee must be a bank or brokerage
Trust administration fees would reduce policy proceeds
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John received a one-time distribution of $50,000 from his modified endowment contract (MEC). Prior to that, the contract's cash value was $150,000, the contract investment amount was $100,000, and the death benefit was $500,000. What percentage of the $50,000 distribution was taxable as ordinary income?
a. 0%
b. 25%
c. 50%
d. 100%
100%
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