Louisiana life and health insurance Exam 2026 Study Guide Questions with 100% verified correct answers Graded A+

Louisiana life and health insurance Exam 2026 Study Guide Questions with 100% verified correct answers Graded A+ Which of the following policies does NOT build cash value? • Term • Straight Life • Endowment • Variable Life - Correct Ans-TERM Term life insurance does not build cash value. What happens to the coverage under a children's term rider when that child reaches a certain specified age? • Coverage decreases automatically • Coverage increases automatically • Coverage remains as long as proof of insurability is provided • Coverage is eliminated - Correct Ans-Coverage is eliminated When a child reaches a certain specified age under a children's term rider, he or she is eliminated from coverage. A life insurance policy that has premiums fully paid up within a stated time period is called? • stated payment insurance • limited universal insurance • stated modified insurance • limited payment insurance - Correct Ans-Limited Payment Insurance Limited payment insurance is characterized by premiums that are fully paid up within a stated period, after which no further premiums are required. Insurance Insurance Insurance Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this? • Increasing Term Life policy • Nonparticipating policy • Modified Whole Life policy • Universal Life policy - Correct Ans-Universal Life Policy A permanent life insurance policy where the policyowner pays premiums for a specified number of years is called a(n)? • adjustable policy • limited pay policy • level term policy • variable universal policy - Correct Ans-Limited Pay Policy A permanent life insurance policy where the policyowner pays premiums for a specified number of years is called a limited pay policy. Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true? - Correct Ans-The policy may be paid up early by using policy dividends A life insurance replacement transaction could result in a(n) - Correct Ans-surrender charge Which of the following is INELIGIBLE to participate in a Section 125 Plan? - Correct Ans-An S-Corp Owner with a greater than 2% share The least expensive option to pay off a 30-year mortgage balance would be? • convertible term life • decreasing term life • adiustable term life • increasing term life - Correct Ans-Decreasing Term Life Which type of policy combines the flexibility of a universal life policy with investment choices? • Adiustable universal life policy • Flexible universal life policy • Variable universal life policy Insurance Insurance • Modified universal life policy - Correct Ans-Variable Universal Life Policy When the structure and flexibility of a universal life policy are combined with investment choices, the result is a variable universal life policy. Which of these is NOT subject to income taxation under a Modified Endowment Contract (MEC)? • Loan against the cash value • Policy withdrawal • Policy dividend • Death benefit - Correct Ans-Death Benefit The death benefit would NOT be subject to income tax under a Modified Endowment Contract (MEC). A limited payment whole life policy provides? • protection for 20 ears • lifetime protection • protection for more than one person • discounted premiums - Correct Ans-Lifetime Protection Premiums on limited payment whole life insurance are paid for a limited number of years, but the benefits last a lifetime. A life insurance policy written on one contract for two people in which it is payable upon the first death is called? •Split • Shared • Joint • Survivorship - Correct Ans-Joint A joint life insurance policy covers the lives of two people and is payable upon the first death. What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death? • Dual Life insurance • Joint Life insurance • Last Survivor Life insurance Insurance Insurance • Shared Life insurance - Correct Ans-Last Survivor Life Insurance Coverage of two or more individuals with the death benefit payable upon the last person's death is a feature of last survivor insurance. A life insurance policy that is subject to a contract interest rate is referred to as? • adiustable life • group life • term life • universal life - Correct Ans-Universal Life Universal life is subject to a contract interest rate or a current annual interest rate. Term insurance is appropriate for someone who? • seeks living benefits for themselves • seeks a policy that builds cash value • seeks temporary protection and lower premiums • seeks permanent protection and higher premiums - Correct Ans-Seeks temporary protection and lower premiums What happens to the coverage under a children's term rider when that child reaches a certain specified age? • Coverage decreases automatically • Coverage increases automatically • Coverage remains as long as proof of insurabilitv is provided • Coverage is eliminated - Correct Ans-Coverage is Eliminated A partial surrender is allowed in which of the following life policies? • Adjustable whole life • Universal life • Decreasing term life • Limited whole life - Correct Ans-Universal Life What types of life insurance are normally used for key employee indemnification? • term, whole, and universal life insurance • increasing term insurance • joint, credit, and group life insurance Insurance Insurance • adjustable, permanent, and limited-pay life insurance - Correct Ans-Term, whole, and universal life insurance What is a corridor in relation to a Universal Life insurance policy? • The gap between the total death benefit and the policy's cash value • The gap between when a claim is filed and when the death benefit is received • The amount of interest that has accumulated in the policy's cash value • The point in time when the policy's cash value reaches $0 - Correct Ans-The gap between the total death benefit and the policy's cash value A spouse and child can be added to the primary insured's coverage as what kind of rider? • Dependent term • Guaranteed insurability • Primary term • Family term - Correct Ans-Family Term Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive? • Adjustable life policy • Modified life policy • Endowment policy • Universal life policy - Correct Ans-Endowment Policy Pre-death distributions from a modified endowment contract (MEC) receive different tax treatment than other life insurance policies because? • the MEC has tax deductible premiums • the MEC is considered an illegal product • the MEC tends to be an investment vehicle • the MEC does not accumulate cash value - Correct Ans-The MEC tends to be an investment vehicle Reggie purchased a life insurance policy with a face amount of $500,000. After 15 years, the cash value has accumulated to $100,000 and the policy's face amount has become $600,000. Which type of life insurance policy is this? • Adjustable life • Credit life Insurance Insurance • Modified life • Universal life - Correct Ans-Universal Life A universal life policy pays a death claim in the amount of the death benefit plus the savings element. The type of multiple protection coverage that pays on the death of the last person is called a(n)? • joint life policy • survivorship life policy • annuity joint policy • dual life policy - Correct Ans-Survivorship Life Policy Under a multiple protective policy, the policy that pays on the death of the last person is called a survivorship life policy. Index whole life insurance contains a securities component that acts as a(n)? • hedge against inflation • premium stabilizer • means to lowering taxes on earnings • incentive to purchase more coverage - Correct Ans-Hedge against Inflation The securities component of index whole life insurance is considered an effective hedge against inflation. A single premium cash value policy can be described as? • a policy that is paid up after only one payment • a policy that only requires an annual payment • a policy that is guaranteed issue • a policy that covers two or more lives - Correct Ans-A policy that is paid up after only one payment What is the underlying concept regarding level premiums? • Levels premiums build cash value quicker in the early years • The early years are charged more than what is needed • The early years are charged less than what is needed • Level premiums can only be paid annually - Correct Ans-The early years are charged more than what is needed. Insurance Insurance James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount? • The original face amount will be paid to the beneficiary • The policy will be voided with no death benefits paid • The death benefit paid will be what the premium would have purchased at the correct age • The amount of premiums paid will be returned with interest - Correct Ans-The death benefit paid will be what the premium would have purchased at the correct age. Under the Misstatement of Age provision, the amount paid will be what the premium would have purchased at the correct age. A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due? • Reduction of premium dividend option • Extended term option • Paid-up option • Cash dividend option - Correct Ans-Reduction of premium dividend option A waiver of premium rider allows an insured to waive premium payments if the insured is? • temporarily disabled • unemployed • completely and permanently disabled • experiencing financial hardship - Correct Ans-Completely and Permanently Disabled Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Matt? • is killed while committing a felony • does of a stroke • does instantly from a car accident • is injured in a skiing accident and dies 18 months later - Correct Ans-Dies instantly from a car accident An insured individual and the policy's beneficiary die from the same accident. The common disaster provision states the insurer will continue as if? • the insured outlived the beneficiary • the beneficiary outlived the insured Insurance Insurance • no beneficiary was ever named • the insured and beneficiary died at the same time - Correct Ans-The insured outlived the beneficiary All of these are common exclusions to a life insurance policy EXCEPT? • accidental death • military service • aviation • hazardous occupations - Correct Ans-Accidental Death Which of these is considered to be a Living Benefit option in a life insurance policy? • Reinstatement • Waiver of premium • Accelerated death benefit • Pavor benefit - Correct Ans-Accelerated Death Benefit Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following statements is TRUE? • Net death benefit will be reduced if the loan is not repaid • No interest will be charged on loan balance • Term life policies are the only type of insurance that allows policy loans • A loan can be taken out for up to the face amount of the policy - Correct Ans-Net death benefit will be reduced if the loan is not repaid A provision that allows a policyowner to withdraw a policy's cash value interest free is a(n)? • partial surrender • waiver of premium • automatic premium loan • grace period - Correct Ans-Partial Surrender What is the purpose for having an accelerated death benefit on a life insurance policy? • It allows for a spouse to be added as a rider to a life insurance policy • It allows for policy loans to be advanced to the insured in the event of unemployment • It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill Insurance Insurance • It allows for a third party to purchase a life insurance policy at a discounted rate and immediately advance a portion of the death benefit - Correct Ans-It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill. Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? • $400 • $800 • $2,000 • $4,000 - Correct Ans-$4,000 Of the following dividend options, which of these is taxable? • Reduction of premium • One year term • Paid-up additions • Accumulation at interest - Correct Ans-Accumulation at interest A rider that assures premiums will be paid on a juvenile policy until the child reaches a specific age is called a(n)? • waiver of premium rider • payor rider • automatic premium loan rider • juvenile waiver rider - Correct Ans-Payor Rider The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of? • any interest payable from an outstanding policy loan balance • past due premiums that have not been paid by the end of the grace period • the outstanding policy loan balance • any surrender charges owed by the policyowner - Correct Ans-Past due premiums that have not been paid by the end of the grace period. In a life insurance cash value policy, the automatic premium loan provision authorizes the insurance company to withdraw from the policy's cash values the amount of premiums due if the premium has not been paid by the end of the grace period. Which of the following is considered to be an alternative to a life settlement? Insurance Insurance • Accelerated death benefit rider • Waiver of premium rider • Extended term option • Decreasing term insurance - Correct Ans-Accelerated death benefit rider Dorian exercised a nonforfeiture option by using his life policy's cash value to purchase an extended term insurance option. When the term insurance expires,? • he has the option of resuming the original policy and paying the same premium • the coverage can be extended with a lump sum payment • all remaining cash values are paid to the policyowner • the protection ends - Correct Ans-The protection ends Which of these is NOT a characteristic of the Accelerated Death Benefit option? • The face amount and policy premium are not affected by the payment •Before payment of the benefit is made, specific conditions must exist, such as suffering from a terminal Iliness • There may be a dollar limit on the maximum benefit • The benefit can be offered as a rider at a specific extra cost or may be at no cost - Correct Ans-The benefit can be offered as a rider at a specific extra cost or may be at no cost Which of these is NOT a qualifying event for Medicare? • On Social Security disability for over 2 years • Kidney failure • Age 65 or older • Falling below the federal poverty level - Correct Ans-Falling below the federal poverty level An insurer has days to file a notice of appointment to the Commissioner. • 10 • 15 • 20 • 25 - Correct Ans-15 The Fair Credit Reporting Act protects consumers • from insolvent insurers • by recommending insurers with good AM Best ratings • with guidelines regarding credit reporting and distribution Insurance Insurance • by providing consumer credit counseling - Correct Ans-With guidelines regarding credit reporting and distribution What is the MINIMUM benefit period that must be offered by a Long-Term Care policy? • 6 months • 12 months • 18 months • 24 months - Correct Ans-12 months Before a producer may sell, solicit, or negotiate insurance for an insurer, the producer must have a(n) • appointment • certificate • bond • binder - Correct Ans-Appointment The agreement between an insurance producer and insurer under which the insurance producer, for compensation, may sell, solicit, or negotiate policies issued by the insurer is called an appointment. An example of endodontic treatment is a • bridge • crown • filling • root canal - Correct Ans-Root Canal Endodontics is the branch of dentistry dealing with diseases of the dental pulp. Root canals would be an example As classified by the Affordable Care Act (ACA), a Silver Plan offers • 60% actuarial level of coverage provided • 70% actuarial level of coverage provided • 80% actuarial level of coverage provided • 90% actuarial level of coverage provided - Correct Ans-70% actuarial level of coverage provided Benefits for a Medicare Supplement policy Insurance Insurance • may duplicate Medicare benefits • must not duplicate Medicare benefits • may duplicate specific Medicare benefits • are provided by Medicare - Correct Ans-Must not duplicate Medicare benefits Which of these is NOT considered a form of life insurance advertisement? • Billboard announcing a new insurance product • Sales presentation materials • Brochures handed out at a promotional event • Buyer's Guide - Correct Ans-Buyer's Guide Which of these is a requirement for obtaining a resident insurance producer license in this state? • Pass the appropriate examination • Graduate from high school • Graduate from a 4-year college • Be a resident of this state for at least 5 years - Correct Ans-Pass the appropriate examination Written notice of a health insurance claim should be given to the insurer within ___ days after the occurrence of any loss covered by the policy. • 20 • 30 • 45 • 60 - Correct Ans-20 Long-term care policies sold in Louisiana may exclude coverage related to • injuries • substance addictions • dementia • Alzheimer's disease - Correct Ans-Substance Addictions When a small employer health insurance plan is offered, it must be available • to all eligible employees who apply • to all eligible employees after a 12-month waiting period • only to employees who provide evidence of insurability • only to employees under age 65 - Correct Ans-To all eligible employees who apply Insurance When the Commissioner of Insurance requests a producer's business records, they must be produced • after holding a hearing • within 30 days • upon request • at the producer's convenience - Correct Ans-Upon Request A producer must notify the Commissioner within __ days of a felony conviction. • 30 • 45 • 60 • 90 - Correct Ans-30 Within __ days after policy delivery, both Medicare Supplement and Long-Term Care policies can be returned for a 100% premium refund. • 15 • 20 • 25 • 30 - Correct Ans-30 A producer who sells most of his/her insurance policies to family members is said to be engaging in • rebating • controlled business • coercion • replacement - Correct Ans-Controlled Business An example of unfair discrimination would be • charging different premiums for policyholders in the same risk classification • charging a higher rate for insurance based on an insured's age • charging a higher rate for insurance based on an insured's health status • charging a higher rate for insurance based on an insured's risk classification - Correct Ans-Charging different premiums for policyholders in the same risk classification The required grace period for a life insurance policy sold in Louisiana is days. • 15 • 30 Insurance Insurance Insurance • 45 • 60 - Correct Ans-30 Upon receipt of proof of loss, an insurer MUST pay a life insurance death benefit claim • promptly • within 10 days • within 15 days • within 20 days - Correct Ans-Promptly All of the following actions are considered rebating EXCEPT • sharing commissions with other producers • offering a country club membership as an inducement to purchase insurance • offering employment as an incentive to purchase insurance • giving back commissions to a client - Correct Ans-Sharing commissions with other producers All of these types of benefits may be covered by a nonprofit health service plan EXCEPT • dental • disability income • vision • hospital expense - Correct Ans-Disability Income A nonprofit health service plan may NOT issue a contract that covers disability income benefits. An insurance producer who convinces a prospective insured to purchase a policy by exaggerating the benefits of the policy may be found guilty of • twisting • illegal placement • coercion • misrepresentation - Correct Ans-Misrepresentation It is illegal to issue, publish, or circulate any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, the payment of dividends, etc. This also refers to oral statements. Committing this illegal act is called misrepresentation. Insurance Terminally-ill life insurance policyowners may sell their policy at a discount to a third party. This type of agreement is called a(n) • annuitized settlement • viatical settlement • accelerated benefit • nonforfeiture value - Correct Ans-Viatical Settlement Viatical settlements allow policyholders to sell their policies for a percentage of the face amount for a cash payment. In Louisiana, small employer health plans require a MINIMUM of _ employee(s). • 1 • 2 • 3 • 4 - Correct Ans-1 A small employer is defined as having at least 1 employee but no more than 50. Within how many days must a producer submit a change in address? • 7 • 10 • 20 • 30 - Correct Ans-30 A licensed producer who changes a residential or business address must notify the Commissioner within 30 days. Maria the producer would like to advertise an annuity product on a highway billboard. Which of the following must be included in the advertisement? • Her home address • Her name • The annuity's guaranteed interest rate • Commissioner's name - Correct Ans-Her name An individual who has a contract with an insurance company to represent it is called a(n) • producer Insurance Insurance Insurance • representative • Commissioner • administrator - Correct Ans-Producer "Insurance producer" or "producer" is a person required to be licensed pursuant to the laws of this state to sell, solicit, or negotiate insurance. An insurer need NOT pay interest on death benefits if the proceeds of the life policy are paid within • 20 days after the date of the death of the insured • 30 davs after the date of the death of the insured • 40 days after the date of the death of the insured • 50 davs after the date of the death of the insured - Correct Ans-20 days after the date of the death of the insured The ___________ of Coverage describes policy features, benefits, exclusions, and riders in a Long-Term Care policy. • Description • Outline • Proof • Summary - Correct Ans-Outline The document that describes policy features, benefits, exclusions and riders in a Long Term Care policy is known as the Outline of Coverage. An Outline of Coverage must be delivered to a prospective applicant for long-term care insurance at the time of initial solicitation. A(n) ___________ sells, solicits, or negotiates insurance on behalf of insurance companies for compensation. • adiuster • administrator • producer • representative - Correct Ans-Producer A company that is authorized by the Commissioner to transact insurance business in Louisiana is called a(n) • reciprocal insurer • authorized insurer Insurance Insurance • accepted insurer • legal insurer - Correct Ans-Authorized Insurer When a company is licensed by the Department of Insurance to do business in this state, it becomes an authorized company. Charles is a producer who is licensed in Louisiana but resides in Mississippi. Charles is considered to be a(n) • nonresident producer • admitted producer • reciprocal producer • foreign producer - Correct Ans-Nonresident Producer A producer licensed in Louisiana but a resident in another state is called a nonresident producer. According to Louisiana law, group life insurance conversion privileges must NOT • allow a new policy to be issued • allow a time period to convert group life coverage to an individual life policy • allow a rate increase • require evidence of insurability - Correct Ans-Require Evidence of Insurability Which entity regulates claim settlement practices? • Attorney generals • Better Business Bureau • NAIC • State insurance departments - Correct Ans-State insurance departments A business entity wishing to act as an insurance producer MUST • obtain a producer's license • obtain a certificate of authority • secure a $500,000 bond • meet specific annual sales levels - Correct Ans-Obtain a producer's license After an annuity has been in force for _ year(s), it becomes incontestable. • 1 • 2 • 3 Insurance Insurance • 4 - Correct Ans-2 Which of the following is NOT a requirement to obtaining a Louisiana insurance producer license? • Must complete a prelicensing course • Must be age 21 • Must be age 18 • Must submit the application with fees - Correct Ans-Must be age 21 A domestic insurance company in Louisiana MUST • be organized under Louisiana insurance laws • own real estate in Louisiana • write insurance on risks located only in Louisiana • honor the charter of the National Association of Insurance Commissioners (NAIC) - Correct Ans-Be organized under Louisiana Insurance Laws Which of the following actions by a producer would NOT result in a license suspension or revocation? • Found guilty of misrepresentation in obtaining the license • Misrepresenting the terms of an existing insurance contract • Sharing commissions with other licensed producers • Misappropriating an insured's premium payment - Correct Ans-Sharing commissions with other licensed producers When is a Group Health policy required to provide coverage for a newborn child? •When the policyowner notifies the insurance company • At the moment of birth •When the required additional premium is paid • No more than 10 days after date of birth - Correct Ans-At the moment of birth A life insurance applicant in Louisiana may backdate the application for up to month(s). • 5 • 6 • 7 • 8 - Correct Ans-6 Insurance Backdating of life insurance policy applications is allowed if the policies are not backdated earlier than 6 months from the time the policy was applied for. After a disability policy has been in force for year(s), it is considered incontestable. • 1 • 2 • 3 • 4 - Correct Ans-3 After an accident and health policy has been in force for 3 years, it is considered incontestable. All Louisiana licensed producers MUST complete which of the following continuing education requirements? • 12 hours annually • 24 hours every 2 vears • 24 hours every 3 years • 12 hours every 2 years - Correct Ans-24 hours every 2 years Producers must complete 24 hours of continuing education per line of authority every two years in order to renew their licenses. A Medicare Supplement policy can be cancelled by the insurer for • excessive filing of claims • poor health • smoking • nonpayment - Correct Ans-Nonpayment Sharon the producer intentionally submitted a false statement in support of a claim. This is considered a form of • inducement • twisting • fraud • discrimination - Correct Ans-Fraud Greg has recently been terminated from his job that covered him for group life insurance. How long does he have to convert his coverage to an individual policy? • 30 davs Insurance Insurance • 31 days • 45 days • 60 days - Correct Ans-31 days A person covered by a group policy also has the right to convert such coverage to an individual policy within the conversion period (31 days) without proving insurability. If this right is exercised, the employee is responsible for the payment of premium. How many days is a temporary producer's license valid? • 30 • 60 • 90 • 180 - Correct Ans-180 Which of the following unfair trade practices involves a producer who makes malicious public statements regarding an insurer's financial condition? • Boycotting • Defamation • Unfair discrimination • Misrepresentation - Correct Ans-Defamation The _________ is the individual responsible for payment to an HMO. • policyowner • subscriber • insured • proctor - Correct Ans-Subscriber Coverage for newborns under an accident and health plan MUST include coverage for • lost wages of the mother • disability of the mother • birth abnormalities • delivery costs - Correct Ans-Birth Abnormalities When the insured gives birth, coverage for eligible newly born children consists of coverage for injury or sickness including birth abnormalities. Which license is REQUIRED in order to solicit Long Term Care insurance in the State of Louisiana? Insurance Insurance Insurance • Life Insurance Producer License • Long Term Care Insurance Producer License • Limited Lines Insurance Producer License • Health Insurance Producer License - Correct Ans-Health Insurance Producer License A Health Insurance Producer License is required in order to solicit Long Term Care insurance in the State of Louisiana. A form of medical health insurance covering the treatment and care of gum disease is called • Medicaid • Major Medical • Franchise health policy • Dental expense insurance - Correct Ans-Dental Expense Insurance How often must an insurance producer's license in Louisiana be renewed? • Every year • Every two years • Every three years • Every five years - Correct Ans-Every two years An insurer may exclude preexisting conditions on a Medicare Supplement policy for months. • 6 • 8 • 10 • 12 - Correct Ans-6 A Medicare Supplement policy cannot deny claims for losses occurring more than 6 months after the effective date of coverage because of a pre-existing condition. The Louisiana Life and Health Insurance Guaranty Association • serves as an arbitrator for disputed claims • is funded by the state government • protects insureds from insurance company insolvency • assists in the underwriting of large insurance policies - Correct Ans-Protects insureds from insurance company insolvency Insurance Insurance Which of these is NOT an Unfair Claims Settlement Practice? • Refusing to pay a claim without conducting a reasonable investigation • Compelling an insured to initiate a lawsuit by offering less on an insurance claim • Settling a claim by arbitration • Failing to acknowledge and act promptly with respect to an insurance claim - Correct Ans-Settling a claim by arbitration An Arkansas resident producer who would like to solicit insurance in Louisiana MUST obtain a nonresident license in Louisiana. Which of these is NOT a requirement for obtaining a nonresident license? • Have good character • Be competent • At least 18 vears old • Pass Louisiana's state licensing exam - Correct Ans-Pass Louisiana's state licensing exam A nonresident licensee from another state is not required to take a licensing examination if they are already in good standing with their state of residence. On occasion, insurable interest may exist in the absence of economic interest. Which of the following examples does this pertain to? • Business associates • Business competitors • A husband and wife • Students in a classroom - Correct Ans-A Husband and Wife A foreign insurance company doing business in Louisiana • is not subject to Louisiana insurance laws • is a company that was formed under the laws of another state • is a company that was formed under the laws of another country • is only authorized to write business outside the United States - Correct Ans-Is a company that was formed under the laws of another state A cease and desist order Insurance Insurance • mav onlv be issued to producers • may only be issued to insurers • forbids a stated practice listed in the order • is issued when an insurer does not meet a minimum sales quota - Correct Ans-Forbids a stated practice listed in the order An insurance producer decides to conduct business under an assumed name. The Commissioner MUST be notified of this change • upon subsequent license renewal • after using the assumed name • prior to using the assumed name • within 10 days of using the assumed name - Correct Ans-Prior to using the assumed name In order for a business entity to be licensed as a producer, • at least 5 individual licensed producers must be employed by the business entity • a licensed producer must be designated as responsible for compliance with state insurance laws • an officer must be designated as responsible for compliance with state insurance laws • the owner must successfully pass the state licensing exam - Correct Ans-a licensed producer must be designated as responsible for compliance with state insurance laws A producer license is NOT required when • selling insurance • soliciting insurance • underwriting insurance • negotiating insurance - Correct Ans-Underwriting Insurance Which of the following permits an insurance company to transact business in Louisiana? • Certificate of admission • Certificate of authoritv • Certificate of domestication • Certificate of authenticity - Correct Ans-Certificate of Authority Jim recently sold his whole life insurance policy under a viatical settlement contract. The proceeds of this contract could be subject to the claims of • creditors Insurance • debtors • beneficiaries • the insurer - Correct Ans-Creditors All of the following are considered to be fraud EXCEPT • Depositing premiums into a personal bank account for personal use • Collecting an insurance charge that is less than what is required • Intentionally collecting a higher premium payment that is required • Willful misappropriating premiums collected - Correct Ans-Collecting an insurance charge that is less than what is required. The identity of the ______ must be made clear in every health insurance advertisement. • Governor • insured • insurer • Commissioner - Correct Ans-Insurer An individual who has a contract with an insurance company to represent it is called a(n) • producer • representative • Commissioner • administrator - Correct Ans-Producer After the first payment is made, the grace period for an accident and health policy is • 30 davs • 31 days • 45 davs • 60 days - Correct Ans-30 days Which of the following annuity payout options makes no additional payments regardless of when the annuitant dies? - Correct Ans-Life only According to HIPAA, when an insured individual leaves an employer and immediately begins working for a new company that offers group health insurance, the individual - Correct Ans-is eligible for coverage upon hire Insurance Insurance Insurance A change in an insurance application requires - Correct Ans-an initial made by the applicant A business entity wishing to act as an insurance producer MUST? - Correct Ans-Obtain a producer's license Fixed annuities provide each of the following EXCEPT A) Guaranteed interest B) Retirement funds C) Hedge against inflation D) Tax advantage - Correct Ans-Hedge against inflation A policyholder has a major medical plan with a 80%/20% coinsurance and a deductible of $75. If the insured has previously met her deductible and receives a bill for $175, how much will the insurer pay? - Correct Ans-$140.00. Because the insured has previously met her deductible, the eligible expenses for a claim is the entire $175.00. The insurance company pays 80% of $175.00, or $140.00. What kind of insurance provides coverage for one or more necessary or appropriate diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services in a setting other than an acute care unit of a hospital? - Correct Ans-long term care Shirley has a Medigap policy, which is designed to pay costs associated with - Correct Ans-Medicare Parts A and B Which market index is normally associated with an indexed annuity's rate of return? - Correct Ans-S&P 500 The waiting period for a disability insurance policy - Correct Ans-Excludes payments for a short-term injury or illness A rehabilitation benefit is intended to? - Correct Ans-prepare the insured to return to employment A beneficiary change can occur - Correct Ans-normally at any time during the policy term Which of the following actions by a producer would NOT result in a license suspension or revocation? - Correct Ans-Sharing commissions with other licensed producers Insurance Insurance *Which type of annuity stops all payments upon the death of the annuitant? - Correct Ans-Life annuity The type of annuity in which all payments cease upon the death of an annuitant is referred to as a life annuity. Which of the following does Medicare Part D cover? - Correct Ans-prescription drugs Individual health policies sold in Louisiana require dependent children coverage up to age? - Correct Ans-26 An individual who has a contract with an insurance company to represent it is called a(n) - Correct Ans-producer What is the contract called that is issued to an employer for a Group Medical Insurance Plan? - Correct Ans-Master policy A pharmacy benefit covers prescription drugs derived from a list called a(n) - Correct Ans-drug formulary A fee for service health insurance plan will normally cover? - Correct Ans-a disease Diseases are usually covered by fee for service health insurance plans. Which of these is NOT considered a form of life insurance advertisement? - Correct Ans-Buyer's Guide The suicide clause of an life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid - Correct Ans-Minus indebtedness and without interest A life insurance policy owner was injured in an automobile accident which results in a total and permanent disability. Which rider would pay a monthly amount because of this disability? - Correct Ans-Disability income rider An insurance producer is often responsible for field underwriting during the application process. All of these are possible field underwriting roles EXCEPT? - Correct Ans providing commission information to the applicant Craig purchased a life insurance policy for enabling his heirs to pay estate taxes. What is this called? - Correct Ans-Estate conservation Insurance Insurance Level premium permanent insurance accumulates a reserve that will eventually - Correct Ans-equal the face amount of the policy Major Medical expense plans provide coverage for each of the following EXCEPT? - Correct Ans-work-related injuries An alien insurer - Correct Ans-is an insurer operating in the U.S. but headquartered outside the U.S. A domestic insurance company in Louisiana MUST - Correct Ans-Be organized under Louisiana insurance laws Which of the following is NOT part of an insurance contract? - Correct Ans-Certificate Authority Which of these factors is NOT taken into consideration when determining the cost of a long-term care policy? - Correct Ans-personal income A producer who sells most of his/her insurance policies to family members is said to be engaging in - Correct Ans-Controlled business Coordination of Benefits regulations applies to all of the following plans EXCEPT - Correct Ans-Preferred provider organization plan An insurer is REQUIRED to offer which of the following to each long-term care applicant at the time of purchase? - Correct Ans-Inflation protection Advertising regulations exist in order to - Correct Ans-Demonstrate full and truthful disclosures to the public Simon has purchased a fixed immediate annuity. His payment amount will be dependent upon principal, interest, and the contract's - Correct Ans-income period The type of policy where the insurer can send a notice to the insured that the policy has been cancelled in the middle of the term is called - Correct Ans-cancelable The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of - Correct Ans-Past due premiums that have not been paid by the end of the grace period Within how many days must a licensee submit a change of address? - Correct Ans-30 Insurance Insurance What will the beneficiary receive if an annuitant dies during the accumulation period? - Correct Ans-The greater of the accumulated cash value or the total premium paid An annuitant is guaranteed to NOT outlive their benefits with a(n) - Correct Ans Guaranteed lifetime withdrawal benefit All of these are standard exclusions found in a life insurance policy EXCEPT - Correct Ans-disability A provision that allows a policy owner to temporarily give up ownership rights to secure a loan is called a(n) - Correct Ans-collateral assignment Richard owns an insurance policy that is renewable only at the option of the insurance company. His policy is considered to be - Correct Ans-Optionally renewable A single premium cash value policy can be described as? - Correct Ans-a policy that is paid up after only one payment The entire contract includes the actual policy and the - Correct Ans-application A nonresident producer from a state outside of Louisiana may become licensed in Louisiana IF a(n) - Correct Ans-Reciprocal arrangement exists with the state of domicile A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called - Correct Ans-A self-funded plan An example of unfair discrimination would be - Correct Ans-Charging different premiums for policyholders in the same risk classification The required grace period for a life insurance policy sold in Louisiana is ____ days? - Correct Ans-30 Which of the following nursing home option would BEST suit an individual who needs some nursing care and supervision but NOT full-time care? - Correct Ans-assisted living facilities A life insurance policy that is subject to a contract interest rate is referred to as - Correct Ans-Universal Life Which of the following is NOT information found in a life insurance buyer's guide? - Correct Ans-How to take legal action against an insurance company Mortality is calculated by using a large risk pool of - Correct Ans-people and time Insurance Insurance In an insurance contract, the insurer is the only party legally obligated to perform. Because of this, an insurance contract is considered - Correct Ans-unilateral The reinstatement provision in a health insurance policy is - Correct Ans-mandatory Which of these is NOT considered to be a common life insurance nonforfeiture option? - Correct Ans-Life income annuity In what form do disability income policies typically pay benefits? - Correct Ans-Periodic income if a health policy is reinstated after it had lapsed for nonpayment, there is a waiting period of ___ days before a claim covering sickness will be covered. - Correct Ans-10 All of the following are included as part of a contract in the entire contract provision EXCEPT the - Correct Ans-changes made by the producer A nonparticipating policy will - Correct Ans-not pay dividends How often must the Commissioner examine each domestic insurance company? - Correct Ans-every 5 years The election of COBRA for continuation of health coverage will - Correct Ans-maintain the same coverage and increase premium Bill requires some nursing care and supervision but NOT full-time care. Which of these nursing home options would best serve him? - Correct Ans-Assisted living An assisted living facility would best suit an individual who needs some nursing care and supervision but not full-time care. When the Commissioner of Insurance requests a producer's business records, they must be produced - Correct Ans-Upon request *An insurer has the right to recover payment made to the insured from the negligent party. These right are called - Correct Ans-Subrogation What is an insurance policy's grace period? - Correct Ans-Period of time after the premium is due but the policy remains in force Insurance Insurance After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? - Correct Ans-File written proof of loss A securities license is required for a life insurance producer to sell - Correct Ans variable life insurance A producer must notify the Commissioner within _____ days of a felony conviction. - Correct Ans-30 According to Louisiana law, group life insurance conversion privileges must NOT - Correct Ans-require evidence of insurability A company that is authorized by the Commissioner to transact insurance business in Louisiana is called a(n) - Correct Ans-Authorized insurer The Louisiana Life and Health Insurance Guaranty Association - Correct Ans-protects insureds from insurance company insolvency An insurance producer who convinces a prospective insured to purchase a policy by exaggerating the benefits of the policy may be found guilty of - Correct Ans Misrepresentation Ownership of a life insurance policy may be temporarily transferred with a(n) - Correct Ans-collateral assignment All of the following actions are considered rebating EXCEPT - Correct Ans-Sharing commissions with other producers Andy the annuitant dies before the annuity start date. Which of the following is a TRUE statement? - Correct Ans-Premiums paid plus interest earned is returned to the beneficiary *Which of the following is NOT a type of Medicare Advantage Plan? - Correct Ans Social Security Disability Income (SSDI) *A group Disability Income plan that pays tax-free benefits to covered employees is considered? - Correct Ans-fully contributory All of the following are functions of an insuring clause EXCEPT? - Correct Ans-Primarily describes the free-look period Which of the following is a reinstatement condition? - Correct Ans-Proof of insurability Insurance Insurance In an insurance contract, the element that shows each party is giving something of value is called - Correct Ans-consideration Before a producer may sell, solicit, or negotiate insurance for an insurer, the producer must have a(n) - Correct Ans-appointment Which of these is NOT a characteristic of the Accelerated Death Benefit option? - Correct Ans-The benefit can be offered as a rider at a specific extra cost or may be at no cost How long after its effective date will an individual life insurance policy become incontestable? - Correct Ans-2 years Which situation would qualify an individual for receiving benefits from a qualified long term care policy? - Correct Ans-Becoming cognitively impaired (mentally ill) A long-term care policy typically provides all of the following levels of care EXCEPT - Correct Ans-acute care A disability elimination period is best described as a - Correct Ans-time deductible An insurance producer decides to conduct business under an assumed name. The Commissioner MUST be notified of the change - Correct Ans-Prior to using the assumed name If an insured dies during the grace period with no premiums paid - Correct Ans-the policy would be payable, minus the premium amount An insurer need NOT pay interest on death benefits if the proceeds of the life policy are paid within - Correct Ans-20 days after the date of the death of the insured An insurer need not pay interest on benefits if the proceeds of the policy are paid within 20 days after the date of death of the insured. "Maximum benefits" refers to the - Correct Ans-upper limit of the total lifetime benefits the insurance company will pay What is the nonforfeiture value of an annuity before annuitization? - Correct Ans-All premiums paid, plus interest, minus any withdrawals and surrender charges Written notice of a health insurance claim should be given to the insurer within ___ days after the occurrence of any loss covered by the policy. - Correct Ans-20 Insurance Insurance Benefits provided by a Medicare Supplement policy must NOT - Correct Ans-duplicate Medicare benefits Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death? - Correct Ans Results The "results clause" states the insurer is excused from paying the amount only if the death is a result of war. An insurer has __ days to file a notice of appointment to the Commissioner. - Correct Ans-15 Tyler purchased a disability policy with a waiver of premium rider on April 1. He is disabled on May 1. On June 1, he receives proof of permanent and total disability, and submits a claim. He begins receiving benefits on June 15. When are his premiums waived? - Correct Ans-May 1 *Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies? - Correct Ans-Payor benefit The purpose of the Coordination of Benefits provision in group accident and health plans is to - Correct Ans-avoid overpayment of claims Over the course of a year, which premium payment mode is most expensive? - Correct Ans-monthly A foreign insurance company doing business in Louisiana - Correct Ans-is a company that was formed under the laws of another state Which of these is NOT subject to income taxation under a Modified Endowment Contract (MEC)? - Correct Ans-Death benefit The death benefit would NOT be subject to income tax under a Modified Endowment Contract (MEC). The typical long-term care insurance policy is designed to provide a minimum of __ year(s) of coverage. - Correct Ans-1 Insurance Insurance Long-term care insurance in any insurance policy is designed to provide coverage for a minimum benefit period of 1 year. A professional liability for which producers can be sued for mistakes of putting a policy into effect is called - Correct Ans-errors and omissions A whole life insurance policy accumulates cash value that becomes - Correct Ans-the policy loan value which the insured may borrow against Which of the following is typically NOT eligible for coverage in a group health policy? - Correct Ans-temporary employee Julie has a $100,000 30-year mortgage on her new home. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30 year period? - Correct Ans-Decreasing term insurance A Medicare Supplement basic benefit is - Correct Ans-the first 3 pints of blood per year *Which of these annuities require premium payments that vary from year to year? - Correct Ans-Flexible premium deferred annuity Craig submits a $500 claim for medical expenses. With a past due premium of $100, the insurer pays $400. Which of the Uniform Optional Provisions covers this situation? - Correct Ans-Unpaid premium Coming from an insurance point of view, which of the following is the main risk associated with disability? - Correct Ans-loss of income *Long-Term Care policies or certificates issued in Louisiana are required to have - Correct Ans-a nonforfeiture value Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence? - Correct Ans-Section 1035 exchange An employee under a group insurance policy has the right to name a beneficiary and the right to - Correct Ans-convert to an individual policy in the event of employment termination Kathy pays a monthly premium on her health insurance policy. How long is her grace period? - Correct Ans-10 days