WebCE Test 1
Abby lives in Ohio, where she is licensed as an insurance producer. She wants to apply
for a nonresident license in Pennsylvania. Which of the following conditions must she
satisfy?
She must move to Pennsylvania.
She must surrender her Ohio license.
She must be sponsored by a producer licensed in Pennsylvania.
She must show her Ohio license is in good standing. - ANS-she must show her Ohio
license is in good standing
An annuity settlement option with a life contingency is one that:
pays annuity benefits for a specified period of time whether the annuitant lives or dies
during that period.
terminates annuity benefit payments if the annuitant is alive upon reaching his or her
life expectancy
continues annuity benefit payments for as long as the annuitant lives, even if it
surpasses the annuitant's life expectancy
requires there to be two or more annuitants who will receive annuity benefit payments
before annuitization is permitted - ANS-continues annuity benefit payments for as long
as the annuitant lives, even if it surpasses the annuitants life expectancy
Which group health plan gives employers the most flexibility in designing and arranging
the plan's benefits?
experience-rated plans
community-rated plans
government issue plans
participating plans - ANS-experience-rated plans
An insurer typically considers all of the following during the underwriting process
EXCEPT:
medical history
educational background
medical exams
,lab tests - ANS-educational background
Before delivering a health insurance policy to a client, the producer alters the insuring
clause in a way that he believes will benefit the insurance company. Which of the
following statements is correct regarding this alteration?
It is required of a diligent producer.
It is prohibited by the entire contract provision.
It is permitted only when it is in the insurer's best interests.
It is prohibited unless the insured agrees to it in writing. - ANS-it is prohibited by the
entire contract provision
Terry, Bella, Raul, and Paulina each own a whole life insurance policy. Which person
would not be able to accelerate the benefits under their policy?
Terry, who has cancer and a six-month life expectancy
Bella, who has multiple sclerosis
Raul, who became permanently disabled following a work accident Paulina, who was
injured in a car accident but is expected to return to work in a month - ANS-Paulina, who
was injured in a car accident but is expected to return to work in a month
Horace buys a Medicare supplement insurance policy but decides not to keep it. How
many days does he have to return it for a full refund of the premium?
10
14
21
30 - ANS-30
Medicare has a free-look period of 30 days
All of the following statements about annuities are generally correct, EXCEPT:
Annuities are not life insurance.
Annuities are sold by life insurance agents and are issued by life insurance companies.
The historic purpose of annuities is to create estates over a certain period. An annuity
converts a sum of money into a series of income payments. - ANS-the historic purpose
of annuities is to create estates over a certain period
If a retired worker's total combined income, including one-half of his or her Social
,Security benefit, exceeds a threshold amount, then up to what percentage of benefits
exceeding the threshold are taxable?
0 percent
50 percent
85 percent
100 percent - ANS-85%
Gene is injured while on vacation. His employer's group disability plan pays benefits for
over two years but reduces the amount paid by the benefits he receives under an
individual disability policy. What kind of group coverage does Gene have?
group short-term disability plan
group occupational plan
group long-term disability plan
group partial disability plan - ANS-group long-term disability plan
these are occupational or non-occupational
Nick's policy has been canceled and Nick has paid a premium that was not due. Under
the cancellation provision, what must the insurer do?
The insurer can apply the premium to other coverage owned by the insured.
The insurer must return it to Nick.
The insurer can keep it.
Nothing unless the insured files a claim for the amount owed. - ANS-the insurer must
return it to Nick
All of the following are prohibited insurer practices EXCEPT:
accessing the MIB records on an applicant without the applicant's approval declining
an application for life insurance based on genetic testing information obtained on the
proposed insured.
failing to notify a life insurance applicant that her application was declined because of
information obtained in a credit report.
investigating insurance applicants - ANS-investigating insurance applicants
The four shareholders of ABC Corporation each own a $1,000,000 interest in the
company and enter into a stock redemption agreement. One of the shareholders dies
six months later. All the following statements regarding this scenario are correct
, EXCEPT:
The three remaining shareholders must negotiate the purchase of the deceased
owner's interest from his estate.
ABC Corporation will use the death benefit to buy the deceased owner's interest from
his estate.
Each of the surviving shareholders will then own a one-third share of ABC Corporation.
The insurer will pay the $1,000,000 death benefit from the deceased owner's policy to
ABC Corporation. - ANS-the three remaining shareholders must negotiate the purchase
of the deceased owner's interest from his estate
An insured reports a claim for a covered loss more than three weeks after the loss
occurred. What should the agent do when reporting the claim to the insurer?
Send a notarized copy of the loss notice by registered mail to the insurer.
Determine the reason for the delay and report it to the insurer.
Advise the insured that the claim can no longer be paid.
Backdate the report to the date of the loss. - ANS-determine the reason for the delay
and report it to the insurer
normally, a covered loss must be reported in 20 days
John's child must have his teeth straightened. His group dental policy covers 60 percent
of orthodontic care, 100 percent of endodontic care, and 75 percent of periodontal care.
What percentage of costs will the insurer pay for the child's care?
50 percent
60 percent
75 percent
100 percent - ANS-60%
A return of premium rider is generally available only with:
term life insurance policies
whole life insurance policies
adjustable life insurance policies
variable life insurance policies - ANS-term life insurance
return of premium rider pays the policyowner a sum equal to all or a portion of the
premiums paid if the insured is still alive at the end of the policy period
Abby lives in Ohio, where she is licensed as an insurance producer. She wants to apply
for a nonresident license in Pennsylvania. Which of the following conditions must she
satisfy?
She must move to Pennsylvania.
She must surrender her Ohio license.
She must be sponsored by a producer licensed in Pennsylvania.
She must show her Ohio license is in good standing. - ANS-she must show her Ohio
license is in good standing
An annuity settlement option with a life contingency is one that:
pays annuity benefits for a specified period of time whether the annuitant lives or dies
during that period.
terminates annuity benefit payments if the annuitant is alive upon reaching his or her
life expectancy
continues annuity benefit payments for as long as the annuitant lives, even if it
surpasses the annuitant's life expectancy
requires there to be two or more annuitants who will receive annuity benefit payments
before annuitization is permitted - ANS-continues annuity benefit payments for as long
as the annuitant lives, even if it surpasses the annuitants life expectancy
Which group health plan gives employers the most flexibility in designing and arranging
the plan's benefits?
experience-rated plans
community-rated plans
government issue plans
participating plans - ANS-experience-rated plans
An insurer typically considers all of the following during the underwriting process
EXCEPT:
medical history
educational background
medical exams
,lab tests - ANS-educational background
Before delivering a health insurance policy to a client, the producer alters the insuring
clause in a way that he believes will benefit the insurance company. Which of the
following statements is correct regarding this alteration?
It is required of a diligent producer.
It is prohibited by the entire contract provision.
It is permitted only when it is in the insurer's best interests.
It is prohibited unless the insured agrees to it in writing. - ANS-it is prohibited by the
entire contract provision
Terry, Bella, Raul, and Paulina each own a whole life insurance policy. Which person
would not be able to accelerate the benefits under their policy?
Terry, who has cancer and a six-month life expectancy
Bella, who has multiple sclerosis
Raul, who became permanently disabled following a work accident Paulina, who was
injured in a car accident but is expected to return to work in a month - ANS-Paulina, who
was injured in a car accident but is expected to return to work in a month
Horace buys a Medicare supplement insurance policy but decides not to keep it. How
many days does he have to return it for a full refund of the premium?
10
14
21
30 - ANS-30
Medicare has a free-look period of 30 days
All of the following statements about annuities are generally correct, EXCEPT:
Annuities are not life insurance.
Annuities are sold by life insurance agents and are issued by life insurance companies.
The historic purpose of annuities is to create estates over a certain period. An annuity
converts a sum of money into a series of income payments. - ANS-the historic purpose
of annuities is to create estates over a certain period
If a retired worker's total combined income, including one-half of his or her Social
,Security benefit, exceeds a threshold amount, then up to what percentage of benefits
exceeding the threshold are taxable?
0 percent
50 percent
85 percent
100 percent - ANS-85%
Gene is injured while on vacation. His employer's group disability plan pays benefits for
over two years but reduces the amount paid by the benefits he receives under an
individual disability policy. What kind of group coverage does Gene have?
group short-term disability plan
group occupational plan
group long-term disability plan
group partial disability plan - ANS-group long-term disability plan
these are occupational or non-occupational
Nick's policy has been canceled and Nick has paid a premium that was not due. Under
the cancellation provision, what must the insurer do?
The insurer can apply the premium to other coverage owned by the insured.
The insurer must return it to Nick.
The insurer can keep it.
Nothing unless the insured files a claim for the amount owed. - ANS-the insurer must
return it to Nick
All of the following are prohibited insurer practices EXCEPT:
accessing the MIB records on an applicant without the applicant's approval declining
an application for life insurance based on genetic testing information obtained on the
proposed insured.
failing to notify a life insurance applicant that her application was declined because of
information obtained in a credit report.
investigating insurance applicants - ANS-investigating insurance applicants
The four shareholders of ABC Corporation each own a $1,000,000 interest in the
company and enter into a stock redemption agreement. One of the shareholders dies
six months later. All the following statements regarding this scenario are correct
, EXCEPT:
The three remaining shareholders must negotiate the purchase of the deceased
owner's interest from his estate.
ABC Corporation will use the death benefit to buy the deceased owner's interest from
his estate.
Each of the surviving shareholders will then own a one-third share of ABC Corporation.
The insurer will pay the $1,000,000 death benefit from the deceased owner's policy to
ABC Corporation. - ANS-the three remaining shareholders must negotiate the purchase
of the deceased owner's interest from his estate
An insured reports a claim for a covered loss more than three weeks after the loss
occurred. What should the agent do when reporting the claim to the insurer?
Send a notarized copy of the loss notice by registered mail to the insurer.
Determine the reason for the delay and report it to the insurer.
Advise the insured that the claim can no longer be paid.
Backdate the report to the date of the loss. - ANS-determine the reason for the delay
and report it to the insurer
normally, a covered loss must be reported in 20 days
John's child must have his teeth straightened. His group dental policy covers 60 percent
of orthodontic care, 100 percent of endodontic care, and 75 percent of periodontal care.
What percentage of costs will the insurer pay for the child's care?
50 percent
60 percent
75 percent
100 percent - ANS-60%
A return of premium rider is generally available only with:
term life insurance policies
whole life insurance policies
adjustable life insurance policies
variable life insurance policies - ANS-term life insurance
return of premium rider pays the policyowner a sum equal to all or a portion of the
premiums paid if the insured is still alive at the end of the policy period
