MORTALITY is to LIFE INSURANCE as MORBIDITY is to:CASUALTY INSURANCE.HEALTH INSURANCE.PROPERTY INSURANCE.ANNUITIES.Question 2Premiums are invested to earn interest. __________interest rates allow insurers to charge ________ premiums.lower; lowerhigher; higherhigher; lowerFixed; monthlyQuestion 3Genevieve works three jobs: she is a full-time bank teller, part-time brick-layer and part-time dog walker. After recently going through a divorce, having her home completely destroyed by a tornado, and five school-age children and her disabled adult brother to support, she needs every penny of her earnings to keep her proverbial boat afloat. Genevieve is very concerned about the risk of getting sick or injured and being unable to work, which could severely jeopardize her income and ability to support her family. Which of the following best describes Genevieves risk?Pure and financial.Static and nonfinancial.Dynamic and fundamental.Particular and speculative.Question 4Chuck buys a health insurance policy that covers the cost of physician outpatient office visits. Which of the following health policies best describes Chucks policy?Hospital incomeLong-term careSocial SecurityMedical expenseQuestion 5Which term best describes a type of medical plan in which medical providers are paid a dollar amount based on the services they provide?Comprehensive careManaged careManaged careFee-for-serviceQuestion 6Of the following health coverages, which pays periodic benefits to an insured?AD&DDisability incomeAll of the AboveMedical expenseQuestion 7Edith buys a health policy that will reimburse her when she is disabled and cannot work. Which of the following health policies does she have?Long-term careAD&DDisability incomeMedical expenseQuestion 8All of the following are false regarding federal taxation of qualified plans EXCEPT:Interest is tax-deferred; employer and employee contributions are not tax-deductibleContributions made by both the employer and the employee are tax-deductible; interest is tax-deferredInterest is taxable in the year earnedEmployer contributions are tax-free and employee contributions are made with taxed dollarsQuestion 9How much withholding tax is assessed when funds from one qualified plan are not deposited into another qualified plan within 60 days?30%.1%.20%.10%.Question 10Which of the following is true regarding the taxation of traditional IRAs?Contributions are made with pre-tax dollars, but interest is taxable in the year it is earnedContributions are made with after-tax dollars and interest earned is tax-deferredContributions are made with pre-tax dollars and interest earned is tax-deferredContributions are made with after-tax dollars, but interest is taxable in the year it is earnedQuestion 11A local insurance company has worked closely with an area real estate firm in writing mortgage insurance as well as other insurances such as health and accident policies to newcomers in a small university town. Recently one of the towns oldest and most reliable banks has become cautious about making mortgage loans, and both the realtors and the insurance company have lost business as a result. They agree to change their own accounts to a newer bank with a more liberal lending policy and to encourage their clients to follow their course. Since it is a small town with a sizable number of newcomers who visit the real estate firm for rentals or home purchases, their combined action is likely to affect the older, more conservative lender. The practice in which they are engaging is:DefamationBoycottDerogationUnfair DiscriminationQuestion 12Regarding insurance fraud, the Commissioner may:Conduct investigationsOrder the production of documents and recordsInvolve or assist federal, state, and local law enforcementAll of the AboveQuestion 13Insurers must report _________of a producer and update the producer register with the Commissioner within 30 days of the effective date.ResignationTerminationAppointmentHiringQuestion 14Insurers must report _________of a producer and update the producer register with the Commissioner within 30 days of the effective date.HiringAppointmentResignationTerminationQuestion 15How old must a person be to obtain a license as insurance producer in ?21 years of age18 years of age20 years of age19 years of ageQuestion 16Individuals with the belief that an act of insurance fraud has or will occur are required to provide such information to the _____. The _____ may involve or assist federal, state, and local law enforcement in the prosecution of any individual or entity suspected of insurance fraud.Lieutenant GovernorState ComptrollerCommissionerAttorney GeneralQuestion 17An insurer or producer may not cancel, refuse to underwrite, or renew a particular insured risk or class of risks based wholly or partly on race, color, religion, gender, blindness, or any other arbitrary reason. The previous text defines what?Taxation of PremiumsNotice of ClaimComplaint SystemsUnfair DiscriminationQuestion 18The Insurance Commissioner also establishes the minimum capital and excess surplus amounts for _____ insurers, as well as deposit requirements for:Automobilewellness plan trustsTax-free bondperiodontal health cooperativesStock and mutual fund dental plan organizationsWatercraftoptometry wellness alliancesQuestion 19Dental plan organizations must establish and maintain a complaint system to provide a process for the resolution of _____, subject to examination by the Commissioner.Periodontal complaintsVerbal complaintsOral complaintsWritten complaintsQuestion 20In attempting to sell a policy to a prospective client, a young agent told the client an HMO was a form of insurance and implied that the policy he was offering included shares of stock. How would his actions be characterized?MisrepresentationTwistingDefamationCoercionQuestion 21In 2012 a person who is not eligible for premium-free Part A coverage (who has 30-39 quarters of Medicare-covered employment) must pay:a monthly premium of $283a monthly premium of $248a monthly premium of $141.50a monthly premium of $115.40Question 22Under Medicare Part A, how many lifetime days are allotted for psychiatric hospital care? 23All parties to a contract must be of a legal age, mentally capable of understanding the terms of the contract, and not influence by drugs or alcohol. Which of the following elements of a legal contract is described?Competent parties.Legal purpose.Consideration.Agreement.Question 24All of the following are types of deductibles in major medical policies EXCEPT:Maximum annual deductible.Per cause deductible.Flat dollar deductible.Integrated deductible.Question 25The stop-loss feature in a major medical policy:occurs before the out-of-pocket limit is reached.pays the coinsurance.pays the deductible.applies in after coinsurance is paid.Question 26A deductible in major medical policies where the insured must pay for each medical service he receives is called a(n):flat dollar deductible.all cause deductible.per cause deductible.Question 27Insurer XYZ has written an agency contract for Yuri to act as an agent. What type of authority is described here?Implied.Lingering implied.Apparent.Express.Question 28All of the following are characteristics of whole life policies EXCEPT:Level premiumsGuaranteed cash valueOpportunity to change components of the policyLevel face amountQuestion 29This life insurance policy provides death protection for the insured’s entire life, but premiums are not paid for the insured’s entire life.Modified whole lifeEconomatic lifeIndeterminate premium20-pay lifeQuestion 30After looking at his options, Randy decided on a single premium whole life policy. What is the main advantage of this type of policy?There is no medical examPolicyholder is covered immediatelyThe total premium is lower.Only one payment is dueQuestion 31The ___________ approach calculates the amount of money a person is expected to earn over his lifetime to determine the face amount of life insurance needed, thereby placing a dollar value on the life of an individual.needssocial security blackouthuman life valuesalaryQuestion 32When must insurable interest be shown for a life insurance policy?When submitting the claim.When the policy is delivered.Upon policy application.When death benefits are paid.Question 33What are the two types of vesting?Level vesting; gradual vesting.Cliff vesting; graded vesting.Graded vesting; stair vesting.Mountain vesting; step vesting.Question 34Of the following health insurance provisions, which states that an insurance agent may not waive any provision or make any change in an insurance contract?Illegal occupation.Entire contract.Grace period.Legal actions.Question 35All of the following are characteristics of the reinstatement provision for individual health insurance EXCEPT:Accidents are covered once a policy is reinstated.A policy will be reinstated on the 45th day after the conditional receipt unless denied.Sicknesses are covered once a policy is reinstated.The insurer may require 60 days of back due premium and proof of insurability.Question 36For individual health insurance policies, how soon must the insured submit proof of loss to the insurer?20 days120 days15 days90 daysQuestion 37What is the full Social Security retirement age for a person born after 1960? 38Which life insurance settlement option guarantees that the minimum benefit will be paid out?Life income certain.Joint and survivor.Refund life.Straight life.Question 39A settlement option that would leave the proceeds of the insurance policy with the insurer and the insurer would pay interest to the beneficiary on an installment basis is called:Withdrawal provisionLife income optionInterest only optionFixed period optionQuestion 40All of the following are life insurance settlement options EXCEPT:Life income.Automatic premium loan.Fixed-period installments.Interest only.Question 41_______________ allow the policy proceeds to be retained by the insurer and paid out gradually.Settlement optionsPolicy exclusionsPremium payment modesPolicy loan provisionsQuestion 42Which of the following is false regarding life insurance policy illustrations?Illustrations are part of the insurance contract.The insurance agent cannot make any changes to policy illustrations.Life insurance illustrations must differentiate between guaranteed amounts and nonguaranteed amounts.The insurer must approve policy illustrations.Question 43The purpose of a state life and health guaranty association is to:To protect the MIB from fraud.To make sure policyholders claims are paid when an insurer becomes insolvent.To provide standardized continuing education for life and health insurance producers.All of the AboveQuestion 44All of the following are exemptions under the Privacy Act of 1974 upon which an individuals written consent is not required in order to release personally identifiable information EXCEPT:A request made by law enforcement.If used strictly for statistical research or reporting record.To the National Association of Insurance Commissioners.For the Bureau of the Census to perform a census or survey.Question 45It is the responsibility of the _____ to determine if the applicant has an existing policy.FamilyInsuredCommissionerAgentQuestion 46For group life insurance, the term dependent children includes a members children:Under the age of 18Over age 18 who attend an educational institutionOver age 18 who are financially supported by the memberAll of the AboveQuestion 47The Life & Health Insurance Guaranty Association provides insurers with the financial means to pay their policyholders claims in the event that insurers ________.RelocateEnjoy high profitsBecome insolventChange their nameQuestion 48All of the following are not reasons an investigative consumer report is performed EXCEPT:To obtain information about the applicants employment performance.To obtain information about the applicants medical history.To obtain the applicants credit score.To obtain information about the applicants character and lifestyle.Question 49Which of the following information sources contains the best underwriting information?Credit reportsThe applicationInvestigative consumer reportsBlood testsQuestion 50Which of the following statements is false regarding Medigap policies?Sold by the government.Cover the basic costs of Medicare Parts A and B.Fill in the gaps of Medicare.Also referred to as Medicare supplement policies.Question 51Which of the following does not describe funding provided for Medicaid?Monthly premiumsFederal taxesState taxesLocal taxesQuestion 52A person buys a $300,000 whole life policy when he was employed as a bank teller. Four years later, he changes jobs and begins working in a coal mine. If he is killed while working in the mine, what will the insurer do?Void the policyPay the claimVoid the policy and return all premiums with interest to the insured’s beneficiaryDeny the claim because the insured’s occupation listed in the application did not match the insured’s actual occupation.Question 53Which of the following best describes the withdrawals or partial surrenders provision of a life insurance policy?Withdrawals or partial surrenders of policy cash value can be made; the policy specifies how much can be withdrawn and at what frequency.Modifications to the policy must be made by an authorized officer of the insurer and attached to the policy.A policy loan in an amount up to the current cash value, less any existing indebtedness may be made.The insurer will automatically use the policy cash value to pay an overdue premium.Question 54What will the insurance company do if an insured commits suicide during the suicide clause period?Keep the entire death benefitCancel and void the policyPay only the death benefitReturn all premiums to the beneficiaryQuestion 55What is the purpose of the hazardous occupation clause?To exclude losses if the insured dies as a result of a hazardous occupation or hobby.To exclude losses if the insured dies as a results of war.To exclude losses while the insured is fulfilling military service.To exclude losses if the insured commits suicide during the first two years the policy is in force.Question 56All of the followings statements regarding group health insurance are true EXCEPT:Enrollees typically do not need to undergo a medical exam.Maternity does not need to be covered.The policyholder is the employer, union, or other association, not the insured members.Each member is issued a certificate of coverage.Question 57Which group health insurance rating system bases premiums on the actual or projected costs of insureds in a particular geographic location with reference to insureds age, gender, occupation and health?Experience rating.Community rating.Individual rating.None of the AboveQuestion 58Which of the following would be considered unfair advertising for group health insurance?Using insurance jargon.Contrived testimonials.Incomplete comparisons of other insurers group health insurance products.All of the AboveQuestion 59All of the following statements are true regarding the taxation of personal life insurance used for charity EXCEPT:A charity may be made a beneficiary of a personal life insurance policy, in which case ownership need not be relinquished.In order for tax deductions to be valid, the charity must retain full ownership rights of the policy.When a charity is made a beneficiary of a personal life insurance policy, the policyowner retains the right to change the beneficiary.When a charity is made a beneficiary of a personal life insurance policy, premiums are tax-deductible.Question 60What is the general rule for taxation of personal life insurance?Premiums are paid with pre-tax dollars; proceeds received in a lump-sum are taxed; proceeds received in installments are not taxed.Premiums are paid with after-tax dollars; proceeds are taxed.Premiums are paid with after-tax dollars; proceeds received in a lump-sum are received tax-free; proceeds received in installments are taxable only to the extent of interest earned.Premiums are paid with pre-tax dollars; proceeds are taxable only if received in a lump-sum.

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