Apush Practice exam ACTUAL
QUESTIONS AND CORRECT ANSWERS
If a disability income policy contains a cost-of-living adjustment rider, benefits
must typically be increased - CORRECT at least once per year from when
benefits begin
Which of these statements regarding the extended term insurance nonforfeiture
option in a life policy is accurate? - CORRECT the premium to purchase the
coverage comes from the policy's cash value
Which of the following is not a reason for a business to buy key person life
insurance? - CORRECT an increased pension liability if the key employee dies
Qualified long-term care premiums are treated for tax purposes as - CORRECT
...
Individuals covered with employer-paid group health plans will normally
receive tax-free benefits under all of these plans EXCEPT - CORRECT
disability income
A life insurance policy's contingent beneficiary is the - CORRECT person who
receives the death benefits if the primary beneficiary dies before the insured
Ken is age 65 and has 2 years until he receives Social Security retirement
benefits. At his current age, which is true about Medicare Part A Hospital
Insurance coverage? - CORRECT It is available through application to Social
Security
When does the insured stop making payments under a thirty-payment whole life
policy? - CORRECT At the time of death or 30 years after the policy's
inception, whichever comes first
,The powers directly given to a producer in an agency contract are called -
CORRECT express
Which of the following relationships demonstrates insurable interest in the
absence of economic interest? - CORRECT marriage partners
An accident and health insurance policy's premium requirements are set forth in
which of the following provisions? - CORRECT Consideration clause
Sarah, age 88, is a life annuitant who has lived beyond her life expectancy. The
funds for additional benefit payments will be derived primarily from funds that
were - CORRECT not distributed to life annuitants who died before life
expectancy
Under HIPAA requirements, eligibility for the pre-existing conditions exclusion
waiver under new coverage is lost if - CORRECT there is a break in coverage of
more than 63 days
The health insurance premiums paid for by each partner in a partnership is
considered to be - CORRECT 100% tax deductible
An annuity which starts paying monthly benefits within a month after issuance
is called a(n) - CORRECT immediate annuity
Which of the following best describes the tax treatment of medical expense
policies for the self-employed? - CORRECT 100% of medical expense plan
premiums are tax deductible
What is the insurer responsible for when a producer is acting within the scope of
authority granted in the agency contract? - CORRECT responsible for acts by
the producer that are authority only
,What does a fixed life annuity offer protect against? - CORRECT savings
depletion due to longevity
Which of the following types of insurers limits the exposures it writes to those
of its owners? - CORRECT captive insurer
An agent whose actions exceed the authority granted by contract is - CORRECT
not backed by the insurer
Use of XYZ Insurance Company brochures, business cards, and rating guides is
an example of - CORRECT apparent authority
What kind of arrangement gives the policyowner the right to change the
beneficiary? - CORRECT Revocable designation
Which of these procedures is NOT designed for ambulatory care centers? -
CORRECT inpatient surgery
What is the guaranteed cash value of a whole life insurance policy when the
insured turns 65 years old? - CORRECT less than the policy's face amount
Alan is an enrollee of a health maintenance organization (HMO) which uses a
gatekeeper system. If there ever comes a time when he needs emergency health
services, what should he do? - CORRECT proceed to the nearest emergency
room
Which statement is INCORRECT about the interest-only settlement option in a
life insurance policy? - CORRECT interest on proceeds must be paid by the
beneficiary
, What happens to a life insurance policy when the policy loan balance exceeds
the cash value? - CORRECT policy will no longer be in force
When using the needs approach for life insurance planning, a lump sum may be
created to provide for all of the following EXCEPT - CORRECT employee
benefits
Which of the following would permit an insurer to delay a covered disability
policy claim? - CORRECT elimination period
Emily is disabled. In order to become eligible for Social Security disability
income benefits, she must be - CORRECT Fully insured, according to Social
Security
An agent gives a conditional receipt to a client for an insurance policy after
collecting the initial premium. When will the policy become effective? -
CORRECT When the conditions of the receipt are met.(A conditional receipt
indicates that certain conditions must be met in order for the insurance coverage
to go into effect)
Short-term group disability income benefits are - CORRECT a percentage of
weekly earnings up to a stated maximum
Medicare supplement insurance that provides a preventative medical care
benefit will often cover - CORRECT Yearly Physical Examinations
Typically, states will permit the grouping of two or more small employers in the
same industry for obtaining group health insurance at a favorable rate. This
grouping of employers is known as a multiple employer - CORRECT trust
What effect can a long-term care benefit rider have on a life insurance policy? -
CORRECT reduced death benefit
QUESTIONS AND CORRECT ANSWERS
If a disability income policy contains a cost-of-living adjustment rider, benefits
must typically be increased - CORRECT at least once per year from when
benefits begin
Which of these statements regarding the extended term insurance nonforfeiture
option in a life policy is accurate? - CORRECT the premium to purchase the
coverage comes from the policy's cash value
Which of the following is not a reason for a business to buy key person life
insurance? - CORRECT an increased pension liability if the key employee dies
Qualified long-term care premiums are treated for tax purposes as - CORRECT
...
Individuals covered with employer-paid group health plans will normally
receive tax-free benefits under all of these plans EXCEPT - CORRECT
disability income
A life insurance policy's contingent beneficiary is the - CORRECT person who
receives the death benefits if the primary beneficiary dies before the insured
Ken is age 65 and has 2 years until he receives Social Security retirement
benefits. At his current age, which is true about Medicare Part A Hospital
Insurance coverage? - CORRECT It is available through application to Social
Security
When does the insured stop making payments under a thirty-payment whole life
policy? - CORRECT At the time of death or 30 years after the policy's
inception, whichever comes first
,The powers directly given to a producer in an agency contract are called -
CORRECT express
Which of the following relationships demonstrates insurable interest in the
absence of economic interest? - CORRECT marriage partners
An accident and health insurance policy's premium requirements are set forth in
which of the following provisions? - CORRECT Consideration clause
Sarah, age 88, is a life annuitant who has lived beyond her life expectancy. The
funds for additional benefit payments will be derived primarily from funds that
were - CORRECT not distributed to life annuitants who died before life
expectancy
Under HIPAA requirements, eligibility for the pre-existing conditions exclusion
waiver under new coverage is lost if - CORRECT there is a break in coverage of
more than 63 days
The health insurance premiums paid for by each partner in a partnership is
considered to be - CORRECT 100% tax deductible
An annuity which starts paying monthly benefits within a month after issuance
is called a(n) - CORRECT immediate annuity
Which of the following best describes the tax treatment of medical expense
policies for the self-employed? - CORRECT 100% of medical expense plan
premiums are tax deductible
What is the insurer responsible for when a producer is acting within the scope of
authority granted in the agency contract? - CORRECT responsible for acts by
the producer that are authority only
,What does a fixed life annuity offer protect against? - CORRECT savings
depletion due to longevity
Which of the following types of insurers limits the exposures it writes to those
of its owners? - CORRECT captive insurer
An agent whose actions exceed the authority granted by contract is - CORRECT
not backed by the insurer
Use of XYZ Insurance Company brochures, business cards, and rating guides is
an example of - CORRECT apparent authority
What kind of arrangement gives the policyowner the right to change the
beneficiary? - CORRECT Revocable designation
Which of these procedures is NOT designed for ambulatory care centers? -
CORRECT inpatient surgery
What is the guaranteed cash value of a whole life insurance policy when the
insured turns 65 years old? - CORRECT less than the policy's face amount
Alan is an enrollee of a health maintenance organization (HMO) which uses a
gatekeeper system. If there ever comes a time when he needs emergency health
services, what should he do? - CORRECT proceed to the nearest emergency
room
Which statement is INCORRECT about the interest-only settlement option in a
life insurance policy? - CORRECT interest on proceeds must be paid by the
beneficiary
, What happens to a life insurance policy when the policy loan balance exceeds
the cash value? - CORRECT policy will no longer be in force
When using the needs approach for life insurance planning, a lump sum may be
created to provide for all of the following EXCEPT - CORRECT employee
benefits
Which of the following would permit an insurer to delay a covered disability
policy claim? - CORRECT elimination period
Emily is disabled. In order to become eligible for Social Security disability
income benefits, she must be - CORRECT Fully insured, according to Social
Security
An agent gives a conditional receipt to a client for an insurance policy after
collecting the initial premium. When will the policy become effective? -
CORRECT When the conditions of the receipt are met.(A conditional receipt
indicates that certain conditions must be met in order for the insurance coverage
to go into effect)
Short-term group disability income benefits are - CORRECT a percentage of
weekly earnings up to a stated maximum
Medicare supplement insurance that provides a preventative medical care
benefit will often cover - CORRECT Yearly Physical Examinations
Typically, states will permit the grouping of two or more small employers in the
same industry for obtaining group health insurance at a favorable rate. This
grouping of employers is known as a multiple employer - CORRECT trust
What effect can a long-term care benefit rider have on a life insurance policy? -
CORRECT reduced death benefit
