Life and Health Insurance Review Exam|
Latest Update Graded A+
#3. An insured misstated her age on an application for an individual health insurance policy. The
insurance company found the mistake after the contestable period had expired. The insurance
company will take which of the following actions regarding any claim that has been issued?
a) Adjust the claim benefit to reflect the insured's true age
b) Deny any claims and cancel the policy
c) Deny paying a claim based on misrepresentation
d) Pay the full amount of a claim because the contestable period has ended
(a) Adjust the claim benefit to reflect the insured's true age
#4. Which of the following is INCORRECT concerning Medicaid?
a) It is solely a federally administered program.
b) It provides medical assistance to low-income people who cannot otherwise provide for themselves.
c) It pays for hospital care, outpatient care, and laboratory and X-ray services.
d) The federal government provides about 56 cents for every Medicaid dollar spent.
(a) It is solely a federally administered program
#5. The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable
dividend check each year. She has decided that she would rather use the dividends to help pay for her
next premium. What option would allow her to do this?
a) Cash option
b) Reduction of premium
c) Paid-up addition
d) Accumulation at interest
(b) Reduction of premium
#6. What is the purpose of the rehabilitation benefit in disability insurance?
a) To cover the expenses of retraining the insured to return to work
b) To compensate the insured for the lost income
c) To refund the insured's premium paid during the disability
d) To help the insured recover from a disability
(a) To cover the expenses of retraining the insured to return to work
#7. Under the 401(k) bonus or thrift plan, the employer will contribute
a) All of the money to the plan.
b) 30% of what the employee contributes.
c) 75% of what the employee contributes.
d) An undetermined percentage for each dollar contributed by the employee.
(d) An undetermined percentage for each dollar contributed by the employee
#8. How long does a temporary producer's license last for the surviving spouse of a deceased
producer?
a) 150 days
b) 180 days
,c) 1 year
d) 90 days
(b) 180 days
#9. Insurers may change which of the following on a guaranteed renewable health insurance policy?
a) Individual rates
b) No changes are permitted.
c) Rates by class
d) Coverage
(c) Rates by class
#10. Once it has been reasonably proven that a person has knowingly violated the Insurance Code
regarding unfair methods of competition, the Department may impose a civil penalty of
a) $1,000 for each violation.
b) $2,000 for each violation.
c) $3,000 for each violation.
d) $5,000 for each violation.
(d) 5,000 for each violation
#11. Who must pay for the cost of a medical examination required in the process of underwriting?
a) Underwriters
b) Department of Insurance
c) Insurer
d) Applicant
(c) Insurer
#12. In a long-term care policy, pre-existing condition limitations
a) Must appear as a separate paragraph and be clearly labeled.
b) Apply to 12 months from the effective date of coverage.
c) Never have specific exclusions.
d) Are not permitted.
(a) Must appear as a separate paragraph and be clearly labeled
#14. Which of the following would be considered an unfair claims settlement practice?
a) Requesting the insured swear under oath concerning the facts of the claim
b) Delaying the settlement of a claim for 30 days in order for the insured to conduct an investigation
c) Advising the insured that if the claim goes to arbitration, the insured would probably receive less
than what is currently being offered
d) Requesting the insured to submit a signed proof of loss statement, after the insured has already
verbally advised the insurer of the claim
(c) advising the insured that if the claim goes to arbitration, the insured would probably receive less
than what is currently being offered
#15. In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT
a) The premium.
,b) The amount of insurance.
c) The type of investment.
d) The length of coverage.
(c) The type of investment
#17. A licensee serving in the military is unable to fulfill her continuing education requirement. What
would the licensee have to do to renew the license?
a) Nothing; licenses of active duty military service personnel are automatically reinstated for a full
licensing term.
b) The licensee must complete the continuing education requirements and pay the lapse renewal
fees. Requirements cannot be waived.
c) The licensee may submit a request to the department to have requirements and fees waived. The
department will then determine if the request is permissible.
d) Nothing; the license is automatically reinstated for an additional 6 months following return from
military service.
(c) The licensee may submit a request to the department to have requirements and fees waived. The
department will then determine if the request is permissible
#18. Which of the following types of policies allows the policyowner to skip premium payments,
provided that there is enough cash value in the policy to cover the premium amount?
a) Flexible life
b) Variable life
c) Adjustable life
d) Universal life
(d) Universal Life
#19. If an insured continually uses the automatic premium loan option to pay the policy premium,
a) The insurer will increase the premium amount.
b) The policy will terminate when the cash value is reduced to nothing.
c) The face amount of the policy will be reduced by the automatic premium loan amount.
d) The cash value will continue to increase.
(b) The policy will terminate when the cash value is reduced to nothing
#20. Under a nonscheduled plan, what portion of the balance could an insured expect to pay for basic
services?
a) 50%
b) 80%
c) 100%
d) 20%
(d) 20%
#21. All of the following are advantages of an HMO or PPO for a Medicare recipient EXCEPT
a) Elective cosmetic procedures are covered.
b) Prescriptions might be covered, unlike Medicare.
c) Health care costs can be budgeted.
d) There are no claims forms required.
(a) elective cosmetic procedures are covered
, #25. Which of the following is true regarding health insurance underwriting for a person with HIV?
a) The person may only be declined if he/she has symptoms.
b) The person may not be declined for medical coverage solely based on HIV status.
c) A person may be declined for HIV but not AIDS.
d) The person may be declined.
(b) The person may not be declined for medical coverage solely based on HIV status
#29. Which statement accurately describes group disability income insurance?
a) There are no participation requirements for employees.
b) Short-term plans provide benefits for up to 1 year.
c) The extent of benefits is determined by the insured's income.
d) In long-term plans, monthly benefits are limited to 75% of the insured's income.
(c) The extent of benefits is determined by the insured's income
#32. When is the insurability conditional receipt given?
a) When the premium is paid at the time of application
b) After the application has been approved and the premium has been paid
c) When an insured individual needs to obtain an insurability receipt for tax purposes.
d) If the application is approved before the premium is paid
(a) when the premium is paid at the time of the application
#33. An insured has a $1,000 HRA account through his employer. He incurred $750 in medical
expenses the first year of the plan. How much, if anything, will the insured be able to roll over toward
the next year's expenses?
a) $0
b) $250
c) $750
d) $1,000
(b) 250
#34. How long must insurers maintain the evidence from the agent that a disclosure statement about
a life insurance policy was delivered to the applicant?
a) 3 months
b) 6 months
c) 1 year
d) 3 years
(d) 3 Years
#35. How often must the Commissioner examine rating organizations?
a) Annually
b) Every 2 years
c) Every 3 years
d) Every 5 years
(d) Every 5 years
Latest Update Graded A+
#3. An insured misstated her age on an application for an individual health insurance policy. The
insurance company found the mistake after the contestable period had expired. The insurance
company will take which of the following actions regarding any claim that has been issued?
a) Adjust the claim benefit to reflect the insured's true age
b) Deny any claims and cancel the policy
c) Deny paying a claim based on misrepresentation
d) Pay the full amount of a claim because the contestable period has ended
(a) Adjust the claim benefit to reflect the insured's true age
#4. Which of the following is INCORRECT concerning Medicaid?
a) It is solely a federally administered program.
b) It provides medical assistance to low-income people who cannot otherwise provide for themselves.
c) It pays for hospital care, outpatient care, and laboratory and X-ray services.
d) The federal government provides about 56 cents for every Medicaid dollar spent.
(a) It is solely a federally administered program
#5. The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable
dividend check each year. She has decided that she would rather use the dividends to help pay for her
next premium. What option would allow her to do this?
a) Cash option
b) Reduction of premium
c) Paid-up addition
d) Accumulation at interest
(b) Reduction of premium
#6. What is the purpose of the rehabilitation benefit in disability insurance?
a) To cover the expenses of retraining the insured to return to work
b) To compensate the insured for the lost income
c) To refund the insured's premium paid during the disability
d) To help the insured recover from a disability
(a) To cover the expenses of retraining the insured to return to work
#7. Under the 401(k) bonus or thrift plan, the employer will contribute
a) All of the money to the plan.
b) 30% of what the employee contributes.
c) 75% of what the employee contributes.
d) An undetermined percentage for each dollar contributed by the employee.
(d) An undetermined percentage for each dollar contributed by the employee
#8. How long does a temporary producer's license last for the surviving spouse of a deceased
producer?
a) 150 days
b) 180 days
,c) 1 year
d) 90 days
(b) 180 days
#9. Insurers may change which of the following on a guaranteed renewable health insurance policy?
a) Individual rates
b) No changes are permitted.
c) Rates by class
d) Coverage
(c) Rates by class
#10. Once it has been reasonably proven that a person has knowingly violated the Insurance Code
regarding unfair methods of competition, the Department may impose a civil penalty of
a) $1,000 for each violation.
b) $2,000 for each violation.
c) $3,000 for each violation.
d) $5,000 for each violation.
(d) 5,000 for each violation
#11. Who must pay for the cost of a medical examination required in the process of underwriting?
a) Underwriters
b) Department of Insurance
c) Insurer
d) Applicant
(c) Insurer
#12. In a long-term care policy, pre-existing condition limitations
a) Must appear as a separate paragraph and be clearly labeled.
b) Apply to 12 months from the effective date of coverage.
c) Never have specific exclusions.
d) Are not permitted.
(a) Must appear as a separate paragraph and be clearly labeled
#14. Which of the following would be considered an unfair claims settlement practice?
a) Requesting the insured swear under oath concerning the facts of the claim
b) Delaying the settlement of a claim for 30 days in order for the insured to conduct an investigation
c) Advising the insured that if the claim goes to arbitration, the insured would probably receive less
than what is currently being offered
d) Requesting the insured to submit a signed proof of loss statement, after the insured has already
verbally advised the insurer of the claim
(c) advising the insured that if the claim goes to arbitration, the insured would probably receive less
than what is currently being offered
#15. In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT
a) The premium.
,b) The amount of insurance.
c) The type of investment.
d) The length of coverage.
(c) The type of investment
#17. A licensee serving in the military is unable to fulfill her continuing education requirement. What
would the licensee have to do to renew the license?
a) Nothing; licenses of active duty military service personnel are automatically reinstated for a full
licensing term.
b) The licensee must complete the continuing education requirements and pay the lapse renewal
fees. Requirements cannot be waived.
c) The licensee may submit a request to the department to have requirements and fees waived. The
department will then determine if the request is permissible.
d) Nothing; the license is automatically reinstated for an additional 6 months following return from
military service.
(c) The licensee may submit a request to the department to have requirements and fees waived. The
department will then determine if the request is permissible
#18. Which of the following types of policies allows the policyowner to skip premium payments,
provided that there is enough cash value in the policy to cover the premium amount?
a) Flexible life
b) Variable life
c) Adjustable life
d) Universal life
(d) Universal Life
#19. If an insured continually uses the automatic premium loan option to pay the policy premium,
a) The insurer will increase the premium amount.
b) The policy will terminate when the cash value is reduced to nothing.
c) The face amount of the policy will be reduced by the automatic premium loan amount.
d) The cash value will continue to increase.
(b) The policy will terminate when the cash value is reduced to nothing
#20. Under a nonscheduled plan, what portion of the balance could an insured expect to pay for basic
services?
a) 50%
b) 80%
c) 100%
d) 20%
(d) 20%
#21. All of the following are advantages of an HMO or PPO for a Medicare recipient EXCEPT
a) Elective cosmetic procedures are covered.
b) Prescriptions might be covered, unlike Medicare.
c) Health care costs can be budgeted.
d) There are no claims forms required.
(a) elective cosmetic procedures are covered
, #25. Which of the following is true regarding health insurance underwriting for a person with HIV?
a) The person may only be declined if he/she has symptoms.
b) The person may not be declined for medical coverage solely based on HIV status.
c) A person may be declined for HIV but not AIDS.
d) The person may be declined.
(b) The person may not be declined for medical coverage solely based on HIV status
#29. Which statement accurately describes group disability income insurance?
a) There are no participation requirements for employees.
b) Short-term plans provide benefits for up to 1 year.
c) The extent of benefits is determined by the insured's income.
d) In long-term plans, monthly benefits are limited to 75% of the insured's income.
(c) The extent of benefits is determined by the insured's income
#32. When is the insurability conditional receipt given?
a) When the premium is paid at the time of application
b) After the application has been approved and the premium has been paid
c) When an insured individual needs to obtain an insurability receipt for tax purposes.
d) If the application is approved before the premium is paid
(a) when the premium is paid at the time of the application
#33. An insured has a $1,000 HRA account through his employer. He incurred $750 in medical
expenses the first year of the plan. How much, if anything, will the insured be able to roll over toward
the next year's expenses?
a) $0
b) $250
c) $750
d) $1,000
(b) 250
#34. How long must insurers maintain the evidence from the agent that a disclosure statement about
a life insurance policy was delivered to the applicant?
a) 3 months
b) 6 months
c) 1 year
d) 3 years
(d) 3 Years
#35. How often must the Commissioner examine rating organizations?
a) Annually
b) Every 2 years
c) Every 3 years
d) Every 5 years
(d) Every 5 years
