Louisiana Life and Health exam study
questions and 100% correct answers
Which of the following is NOT part of an insurance contract?
•Policy
•Application
•Riders
•Certificate of authority - ANSWER- Certificate of authority
The taxable portion of each annuity payment is calculated using which method?
•Exclusion ratio
•Taxable ratio
•Cost basis
•Tax basis - ANSWER- Exclusion ratio
Which of the following enables a life policy to be replaced with another life policy and
results in the postponement of the tax consequence?
•Section 1040 exchange
•Section 1035 exchange
•Nonforfeiture option
•Spendthrift option - ANSWER- •Section 1035 exchange
Which situation accurately describes a reduced paid-up nonforfeiture option?
•Policy has a decreased face amount
•Face amount of the new policy equals that of the original policy
•Cash value is surrendered to policy owner
•Premiums must continue to be paid - ANSWER- Policy has a decreased face amount
A common exclusion with a vision plan is what?
•eyeglass frames
•the examination
•contact lenses
•lasik surgery - ANSWER- LASIK surgery
,A health insurance policy that allows an insurer to change the policy owners premiums,
but NOT cancel the policy is called a(n)
•guaranteed renewable policy
•conditionally renewable policy
•optionally renewable policy
•non-cancelable policy - ANSWER- Guaranteed renewable policy
Proof of loss on a health insurance claim must be submitted to an insurer ___ days after
the insured's date of loss - ANSWER- 90
And insured need not pay interest on death benefit if the proceeds on the life policy are
paid within
•20 days after the date of the death of the insured
• 30 days after the date of the death of the insured
•40 days after the date of the death of the insured
•50 days after the date of the death of the insured - ANSWER- 20 days after the date of
the death of the insured
When a producer is replacing an ordinary life insurance policy, the producer must take
all of the following actions EXCEPT
•Provide the applicant with a copy of the sales proposal
•Submit the producers insurance company a copy of the signed Notice Regarding
Replacement
• Obtain the beneficiary's signature
• provide the applicant with a Notice Regarding Replacment - ANSWER- Obtain the
beneficiary's signature
When a preferred provider organization (PPO) insured goes out of network, which of the
following actions occur?
• The insured will pay a reduced amount
• The benefits are taxable
• The insured has lower out of pocket expenses
• The insurer will pay a reduced amount - ANSWER- The insurer will pay a reduced
amount
As classified by the affordable care act (ACA), A silver plan offers
,• 60% of actuarial level provided
• 70% of actuarial level provided
• 80% of actual level provided
• 90% of actuarial level provided - ANSWER- 70% of actuarial level provided
Which of these is considered a major tax advantage of life insurance
• tax credits are available for life insurance premiums paid
• annual earnings are tax free
• premiums are tax-deductible by employees pay by employer employer
• income tax is typically not owed on proceeds paid directly to a beneficiary - ANSWER-
Income tax is typically not owed on proceeds paid directly to a beneficiary
And insurer has ____ days to file a notice of appointment to the commissioner
•10
•15
•20
•25 - ANSWER- 15
How are annuities given favorable tax treatment?
•Gains are tax deductible
•Gains are tax exempt at distribution
•Gains are taxed at distribution
•Gains are converted to tax credits - ANSWER- Gains are taxed at distribution
All of the following are examples of a
business continuation plan EXCEPT
• Key person insurance
• cross-purchase agreement
• stock redemption plan
• deferred compensation - ANSWER- Deferred compensation
If the beneficiary dies from the same accident as the insured individual - ANSWER-
, Ken is a producer who has obtained consumer information reports under false
pretenses. Under the fair credit reporting act, what is the maximum penalty that may be
imposed on Ken?
•$1,000
•$3,000
•$5,000
•$7,000 - ANSWER- $5,000
An individual will most likely have an insurable interest in insuring a person's life, if?
•An economic interest exists for the continuance of the insured's life
•A financial interest exists at the time of the insured's death
•There is any blood relationship with the insured
•A business relationship exists - ANSWER- An economic interest exists for the
continuance of the insured's life
The open enrollment period for Medicare supplements begins at age
•62
•65
•67
•70 - ANSWER- 65
Coordination of benefits regulation applies to all of the following plans EXCEPT
•Group vision plan
•Preferred provider organization plan
•Self-funded group health plan
•Group health plan - ANSWER- Preferred provider organization plan
Lisa has recently bought a fixed annuity. Which of these is considered to be a
disadvantage of owning this type of annuity?
•Payments cease 5 years after an annuitants death
•During periods of inflation, annuitants will experience an increase in purchasing power
of their payments
•During periods of inflation, annuitants will experience a decrease in purchasing power
of their payments
questions and 100% correct answers
Which of the following is NOT part of an insurance contract?
•Policy
•Application
•Riders
•Certificate of authority - ANSWER- Certificate of authority
The taxable portion of each annuity payment is calculated using which method?
•Exclusion ratio
•Taxable ratio
•Cost basis
•Tax basis - ANSWER- Exclusion ratio
Which of the following enables a life policy to be replaced with another life policy and
results in the postponement of the tax consequence?
•Section 1040 exchange
•Section 1035 exchange
•Nonforfeiture option
•Spendthrift option - ANSWER- •Section 1035 exchange
Which situation accurately describes a reduced paid-up nonforfeiture option?
•Policy has a decreased face amount
•Face amount of the new policy equals that of the original policy
•Cash value is surrendered to policy owner
•Premiums must continue to be paid - ANSWER- Policy has a decreased face amount
A common exclusion with a vision plan is what?
•eyeglass frames
•the examination
•contact lenses
•lasik surgery - ANSWER- LASIK surgery
,A health insurance policy that allows an insurer to change the policy owners premiums,
but NOT cancel the policy is called a(n)
•guaranteed renewable policy
•conditionally renewable policy
•optionally renewable policy
•non-cancelable policy - ANSWER- Guaranteed renewable policy
Proof of loss on a health insurance claim must be submitted to an insurer ___ days after
the insured's date of loss - ANSWER- 90
And insured need not pay interest on death benefit if the proceeds on the life policy are
paid within
•20 days after the date of the death of the insured
• 30 days after the date of the death of the insured
•40 days after the date of the death of the insured
•50 days after the date of the death of the insured - ANSWER- 20 days after the date of
the death of the insured
When a producer is replacing an ordinary life insurance policy, the producer must take
all of the following actions EXCEPT
•Provide the applicant with a copy of the sales proposal
•Submit the producers insurance company a copy of the signed Notice Regarding
Replacement
• Obtain the beneficiary's signature
• provide the applicant with a Notice Regarding Replacment - ANSWER- Obtain the
beneficiary's signature
When a preferred provider organization (PPO) insured goes out of network, which of the
following actions occur?
• The insured will pay a reduced amount
• The benefits are taxable
• The insured has lower out of pocket expenses
• The insurer will pay a reduced amount - ANSWER- The insurer will pay a reduced
amount
As classified by the affordable care act (ACA), A silver plan offers
,• 60% of actuarial level provided
• 70% of actuarial level provided
• 80% of actual level provided
• 90% of actuarial level provided - ANSWER- 70% of actuarial level provided
Which of these is considered a major tax advantage of life insurance
• tax credits are available for life insurance premiums paid
• annual earnings are tax free
• premiums are tax-deductible by employees pay by employer employer
• income tax is typically not owed on proceeds paid directly to a beneficiary - ANSWER-
Income tax is typically not owed on proceeds paid directly to a beneficiary
And insurer has ____ days to file a notice of appointment to the commissioner
•10
•15
•20
•25 - ANSWER- 15
How are annuities given favorable tax treatment?
•Gains are tax deductible
•Gains are tax exempt at distribution
•Gains are taxed at distribution
•Gains are converted to tax credits - ANSWER- Gains are taxed at distribution
All of the following are examples of a
business continuation plan EXCEPT
• Key person insurance
• cross-purchase agreement
• stock redemption plan
• deferred compensation - ANSWER- Deferred compensation
If the beneficiary dies from the same accident as the insured individual - ANSWER-
, Ken is a producer who has obtained consumer information reports under false
pretenses. Under the fair credit reporting act, what is the maximum penalty that may be
imposed on Ken?
•$1,000
•$3,000
•$5,000
•$7,000 - ANSWER- $5,000
An individual will most likely have an insurable interest in insuring a person's life, if?
•An economic interest exists for the continuance of the insured's life
•A financial interest exists at the time of the insured's death
•There is any blood relationship with the insured
•A business relationship exists - ANSWER- An economic interest exists for the
continuance of the insured's life
The open enrollment period for Medicare supplements begins at age
•62
•65
•67
•70 - ANSWER- 65
Coordination of benefits regulation applies to all of the following plans EXCEPT
•Group vision plan
•Preferred provider organization plan
•Self-funded group health plan
•Group health plan - ANSWER- Preferred provider organization plan
Lisa has recently bought a fixed annuity. Which of these is considered to be a
disadvantage of owning this type of annuity?
•Payments cease 5 years after an annuitants death
•During periods of inflation, annuitants will experience an increase in purchasing power
of their payments
•During periods of inflation, annuitants will experience a decrease in purchasing power
of their payments
