Fundamentals Of Insurance Planning

Front 1

A loss exposure is defined as

Back 1

A loss that might occur

Front 2

Which of the following statements concerning the beneficiary provisions in a life insurance policy is correct?

Back 2

The contingent beneficiary will receive policy precedes only if the primary beneficiary predeceases the insured

Front 3

which of the following types of insurance is often sold by mortgage lenders to provide the funds necessary to pay off a 10-year mortgage loan if the insured dies?

Back 3

Decreasing term

Front 4

Which of the following is the most likely to be a condition that will result in the payment of unemployment compensation benefits?

Back 4

Unemployment that results from adverse economic conditions

Front 5

Which of the following statements concerning inpatient hospital care under part A of Medicare is correct?

Back 5

There is a lifetime limit on the number of days of treatment in a psychiatric hospital

Front 6

The law of large numbers briefly states that as the

Back 6

Number of independent events increases, the likelihood increases, the actual results will be closer to the expected results

Front 7

Ensure policies that give a policyowner the right to renew coverage but do not guarantee future rates are referred to as

Back 7

Guaranteed renewable

Front 8

The workers compensation benefits provided by a Workers Compensation and Employer Liability Insurance Policy are

Back 8

Specified by state law

Front 9

The standard amount of insurance for loss of use (Coverage D) under a endorse HO-3 policy is what percentage of the amount of insurance for the dwelling (Coverage A)?

Back 9

30%

Front 10

Can has a personal auto policy (PAP) with coverage limits of $500,000 for liability (Part A), $15,000 for medical payments (Part B), $50,000 for uninsured motorist (Part C), and no underinsured motorist endorsement. It can receives $100,000 in bodily injuries as a result of an auto accident with another driver who has only the minimum State requirement of $35,000 of a liability coverage, how would the two policies cover cans injuries if the other driver was at fault?

Back 10

The other driver's policy would pay its limit of $35,000 while pap would pay $15,000 under (Part B) with the remaining $50,000 not covered by either policy

Front 11

King purchased an insurance policy that will pay $200 each day he is hospitalized, regardless of the amount billed by the hospital. This insurance policy is considered which of the following?

Back 11

A valued contract

Front 12

William is covered under his employers major medical expense plan with a $1 Million lifetime limit. The plan has a calendar year deductible of $1,000, a 75% coinsurance provision that applies to the next $8,000 of coverage expenses, and full coverage for any remaining covered expenses. if William incurs covered medical expenses of $15,000 during the year, how much will be paid by his employers plan?

Back 12

$12,000

Front 13

which of the following statements describes factors that should be considered an argument whether it is better to buy term life insurance or to buy permanent insurance and invest the premium difference?

Back 13

The cash value of a life insurance policy can readily be liquidated

Front 14

Susan has a personal auto policy pap with a liability limit of $500,000. She also has a personal umbrella policy with a limit of $1 million in a self-insured retention (SIR) of $1,000. How much will each policy pay if an injured person obtains a judgement of $800,000 again Susan as a result of an auto accident?

Back 14

The PAP will pay $500,000 and the umbrella policy will pay $300,000

Front 15

Insurance service office (ISO) is which of the following

Back 15

An advisory organization that develops standard policies for homeowners insurance in other lines

Front 16

Jane a restaurant critic on the staff of the local newspaper, got a bad case of food poisoning while eating a tropical fruit salad at The hungry tiger restaurant she was reviewing. Because she was injured during the course of her employment, the insurance company providing local news papers Workers Compensation Insurance paid Jane's hospital expenses. that insurance companies in suit hungry tiger, there by exercising his legal rights of recovering under which of the following legal basis?

Back 16

Doctrine of subrogation

Front 17

Sam and Janet Evening wish to purchase an annuity that provides and income as long as at least one of them is alive. They have no children and no interest in passing their assets to heirs. Which of the following annuities is best suited for their purposes?

Back 17

Joint in last survivor annuity

Front 18

the expansion of benefits provision under a group of medical expense policy applies to which of the following persons when coverage terminates?

Back 18

Anyone who is totally disabled as a result of an illness or injury that occurred while the person was covered under the contract

Front 19

As of this year, Brad aged 35, has 36 credits of covered employment under the social security program. These credits were all in earned in the last 40 calendar quarters. What is Brad's insured status under the program?

Back 19

He is currently, fully, and disability insured

Front 20

Which of the following statements concerning business uses of disability income insurance is correct?

Back 20

when the policy is used to find a buy-sell agreement, the definition of disability and the policy should be the same as the definition used in the buy-sell argument.

Front 21

which of the following statements is correct if life income settlement option and a cash value life insurance policy is exercise?

Back 21

The policy's death proceeds will be used to purchase a single premium annuity for the beneficiary

Front 22

Which of the following statements concerning the federal income tax treatment of insured group medical expense plans is correct?

Back 22

Contributions by the employer for an employee's coverage are generally tax deductible today employer

Front 23

Which of the following is standard inflation provision in most long-term care insurance policies?

Back 23

A 5% compound annual benefit increase option

Front 24

Which of the following statements concerning prescription drug plans is correct?

Back 24

Most plans have a co-payment for each prescription

Front 25

Ohm Insurance company, Incorporated in Springfield, Illinois, was formed in 1952 by a group of investors who owns shares in the company. Ohm just currently license to sell life insurance in the states of Illinois, Pennsylvania, and Maryland. When Ohm is doing business in Pennsylvania which of the following would be a correct classification of Ohm?

Back 25

Foreign insurer

Front 26

Which of the following statements concerning the elimination period in a long-term care insurance policy is correct?

Back 26

The applicant typically selects the length of the elimination period from 3 to 5 available options

Front 27

Daisy does not own a car but occasionally borrows one from Friends. The friends have little money, and if they have insurance at all, it is only for a minimum limits. Daisy, on the other hand, is well-to-do. To protect himself against a liability claim while she is driving a friend's car, Daisy can purchase a personal auto (PAP) policy with an

Back 27

Named non-owner coverage endorsement

Front 28

Phantom insurance company employees claims Representatives based in 5 Midwestern States but has no claims employees in California, where one of its policyowners is involved in a serious auto accident. Phantom will most likely use which of the following to adjust the claim?

Back 28

Independent adjuster

Front 29

which of the following definitions of disability used in a group disability income plan is the most restrictive or harshest for the insured employee?

Back 29

The inability of the employee to engage in any occupation for compensation

Front 30

Lynn owns the commercial building that house is her business. The property insurance policy covering the building has an 80% co-insurance clause. If the placement cost of the building is $500,000 and Len has it insured for $300,000 on a replacement cost basis, how much would the insurance company pay (ignoring any deductible) if the building were to suffer fire damage with a replacement cost of $100,000?

Back 30

$75,000

Front 31

a state requires prior approval of proposed rate changes only if they extend 5% of existing rates. No prior approval is needed for proposed rate changes at 5% or less. This is an example of

Back 31

A flex rating law

Front 32

An insurance company that has not gained approval to place Insurance business from a department of insurance and the jurisdiction where it or a producer has to sell insurance is known as

Back 32

Unauthorized entity

Front 33

Insurance as a technique for treating risk is most suitable when used for risk that involve

Back 33

A low lost frequency and a high loss severity

Front 34

Which of the following homeowners forms is designed for owners of condominium units?

Back 34

HO-6

Front 35

which of the following types of life insurance allows the policyowner to increase or decrease premium payments to virtually any amount desired as long as there is sufficient cash value to cover mortality cost and expenses?

Back 35

Universal life insurance

Front 36

Robert sued Heather for injuries received in a auto accident. Based on the facts presented the jury determine that Robert was 20% at fault and Heather was 80% at fault under a comparative neglectance law, the jury award to Robert would be

Back 36

80% of his actual damages

Front 37

Sarah lives with her mother and stepfather. She is an eligible dependent for medical expense coverage under both of their medical expense plans as well as under the plan of her father. There is no court decree that establishes responsibility for Sarah's medical expenses. Which of the following statements describes the priority of benefits if all three plants contain the usual coordination of benefits (COB)provision?

Back 37

The mother's plan is primary, the stepfather's plan is secondary, and the father's plan pays last

Front 38

In which of the following situations would life insurance policy proceeds be included in an insured gross estate for federal tax purposes?

Back 38

(both I and II)

I. The policy beneficiary is the insured's estate

II. The insured dies 25 months after transferring all incidents in ownership in the policy to his sister

Front 39

Which of the following statements concerning State high-risk pools for individual medical expense coverage is (are) correct?

Back 39

II. Benefits for pre-existing conditions are often subject to a waiting period.

Front 40

Which of the following statements concerning the life insurance grace period is (are) correct?

Back 40

I. It grants the policyowner an additional period of time to pay a premium after it's due

Front 41

Which of the following statements concerning partial disability benefits is (are) correct?

Back 41

Neither one or two

Front 42

Which of the following statements concerning premiums for individual medical expense insurance policies is (are) correct?

Back 42

(I only)

The total premiums for a year will be higher if paid and installations rather than a single annual premium

Front 43

Which of the following statements concerning group Insurance is (are) correct?

Back 43

Both I and II

I. The group insurance contract provides coverage to a number of persons

II. Individual members of the group are usually not required to show any evidence of insurability when initially eligible for coverage

Front 44

Methods of risk financing include which of the following

Back 44

(I only)

Risk retention

Front 45

which of the following statements concerning the legal requirement of offer and acceptance in a life insurance contract is (are) correct?

Back 45

(neither I or II)

Front 46

which of the following statements concerning the federal income tax treatment of premiums paid for property and liability insurance is (are) correct?

Back 46

(II Only)

Premiums for policies on business property are deductible business expenses for a corporation

Front 47

Which of the following types of managed-care plans permit those covered by the plan to elect, at the time medical treatment is needed, whether to receive treatment from practitioners associated with the plan or those outside the plans Network?

Back 47

(Both I and II)

I. Preferred provider organizations (PPOs)

II. Point-of-service plans (POS)

Front 48

Phil, age 62 owns an individual flexible premium deferred annuity that currently has an accumulated value of $460,000. If Phil has paid $240,000 in premiums over the years, which of the following statements concerning tax treatment of benefits received from the annuity is (are) correct?

Back 48

Both I and II

I. if Phil currently withdrawals a hundred fifty thousand from the immunity while it is still in its accumulation . To begin construction of a lakeside cabin for his requirement years, the $150,000 is treated as taxable income.

II. If Phil begins receiving monthly payments for life from the annunity, the portion of each monthly income payment will be treated as taxable income

Front 49

which of the following statements concerning the federal income tax treatment of tax-qualified long-term care insurance policies is (are) correct?

Back 49

Neither I nor II

Front 50

The Financial Services Modernization Act, also known as the Gramm-Leach-Bliley Act, address some issues involving the regulation of Banks and insurance. Which of the following statements concerning this act is (are) correct?

Back 50

(I only)

State Insurance regulators have primary regulatory authority for insurance activities of banks

Front 51

Which of the following statements concerning damage is involved in liability claims is (are) correct?

Back 51

(I only)

I. Compensatory damages are designed to financially compensate a claimant who has suffered a loss

Front 52

Which of the following statements concerning health savings accounts (HSAs) is (are) correct?

Back 52

(II only)

The high-deductible health plans used with HSAs are permitted to waive the deductible requirement for preventive care

Front 53

many long-term care insurance policies provide the services of a care coordinator. Functions of such a person may include which of the following?

Back 53

(Both I and II)

I. Assessing and insurers condition

II. Periodically elevating ongoing plans of care

Front 54

Which of the following statements concerning insurable interest is (are) correct?

Back 54

(II only)

II. A bank or other mortgage holder that finances the purchase of real estate has an insurable interest in the mortgage property.

Front 55

Which of the following statements concerning NAIC model legislation for long-term care insurance that pertains to marketing is (are) correct?

Back 55

(II only)

II. Insurance must establish procedures to prohibit excessive insurance from being sold

Front 56

Which of the following statements concerning insurance company investments is (are) correct?

Back 56

Neither I nor II

Front 57

Which of the following statements concerning property design buy-sell agreement is correct?

Back 57

Neither I nor II

Front 58

Which of the following statements concerning Medicare advantage plans is (are) correct?

Back 58

Neither I nor II

Front 59

Which of the following statements concerning reinsurance agreements is (are) correct?

Back 59

Neither I nor II

Front 60

Which of the following statements concerning the operation of a variable annuity is (are) correct?

Back 60

Neither I nor II

Front 61

which of the following statements concerning the independent agency system and property and liability insurance is (are) correct?

Back 61

(II only)

The agent owns the business and is able to place it with any one of several companies at renewal time

Front 62

which of the following statements concerning managed Care permissions and traditional medical expense plan is (are) correct?

Back 62

Neither I nor II

Front 63

Which of the following statements concerning the capital needs analysis approach to determining how much life insurance the family had should carry is (are) correct?

Back 63

(II only)

The lower the after-tax investment return rate, the higher the capital fund needed to produce the income objective

Front 64

Which of the following statements concerning a annuitants options at the maturity date of a deferred annuity is (are) correct?

Back 64

(Both I and II)

I. The annuitant can elect to have the accumulation applied under an annuity form the company offers

II. The annuitant can usually elect to take a lump-sum payment and lieu of an annuity

Front 65

Astronomical insurance company accidentally it should have life insurance policy that had not been approved by Texas to a Texas man who wish to insure his life. Which of the following statements concerning this policy is (are) correct?

Back 65

(I only)

I. The policy is voidable at the option of the policy owner.

Front 66

Which of the following statements concerning the findings of behavioral psychologist on the subject of risk tolerance is (are) correct?

Back 66

Neither I nor II

Front 67

Which of the following statements concerning financing the social security and Medicare programs is (are) correct?

Back 67

(I only)

I.The tax rate for self employed persons is equal to the combined tax rate for employees and employers

Front 68

Which of the following statements concerning the appropriate use of life insurance and estate planning is (are) correct?

Back 68

(Both I and II)

I.Life insurance may be used to provide a larger State for the insurance heirs.

II. Life insurance may be used to pay death taxes

Front 69

Which of the following statements concerning the definitions of terms used in an insurance policy is (are) correct?

Back 69

(Both I and II)

I. Words or phrases define in the policy typically appear in both boldface type or quotation marks when they are used elsewhere in the policy

II. Words not defined and the policy are given their ordinary or normal meaning.

Front 70

All of the following statements concerning insurance underwriting are correct except

Back 70

Underwriting is independent of insurance pricing

Front 71

All of the following statements concerning a nonforfeiture options and life insurance are correct except

Back 71

the reduced paid-up option generally provides the same amount of death protection as the original policy but for a reduce period of time

Front 72

Depending on the option and his or her area, a hard to insure driver may be able to find auto insurance coverage from any of the following except

Back 72

The federal insurance Management association (FIMA)

Front 73

All of the following are reasons for demutualization of an insurance company except

Back 73

To better protect the insurer from a hostile takeover

Front 74

All of the following statements concerning life insurance dividend options are correct except

Back 74

With the paid-up additions option, dividends will be used to pay up the policy prior to age 65

Front 75

All of the following statements concerning directions and officers (D&O) liability insurance are correct except

Back 75

Coverage applies to claims for bodily injury and property damage

Front 76

All of the following statements concerning sources of financing for long-term care are correct except

Back 76

Medicaid is available to anyone age 65 or older regardless of financial resources.

Front 77

Basic benefits that must be included in all Medicare supplement (medigap) policies include all of the following except

Back 77

The hospital inpatient deductible under part a of Medicare

Front 78

The steps in the risk management process include all of the following except

Back 78

Regulation

Front 79

The cash value in a life insurance policy has all of the following characteristics except

Back 79

It increases the insurers net amount at risk

Front 80

All of the following statements concerning group disability income contracts are correct except

Back 80

the insurance company usually offers a conversation policy to any terminating employee who was covered under the contract for at least 2 years

Front 81

All of the following statements concerning title insurance are correct except

Back 81

The policy guarantees that the owner will keep possession of the property if a defect in the title is discovered

Front 82

all of the following statements concerning monthly social security benefits or family members of a deceased or retired worker are correct except

Back 82

The 65 year old spouse of a deceased worker is eligible to receive 75% of the workers PIA

Front 83

In order for a risk to be considered insurable, it must substantially mean all of the following requirements except

Back 83

The amount of potential losses should be relatively unimportant to insured's

Front 84

All of the following are insured persons under the medical payments coverage of the personal Auto policy (PAP)except

Back 84

A pedestrian who is stuck and injured by the named Insured's covered auto

Front 85

HO-3 special form homeowners policy provides coverage that is broader in some respects than the coverage of an HO-2 board form. All of the following statements concerning the HO-3 are correct except

Back 85

Personal property is covered on a replacement cost bassist in an HO-3, but it is covered for actual cash value in an HO-2

Front 86

all of the following statements concerning the portable provisions of the health insurance portability and accountability act (HIPAA) are correct except

Back 86

The apply only to insured plans

Front 87

compared with a lump sum settlement, the advantages of a structured settlement for the injured party include all of the following except

Back 87

A settlement paid in a lump sum is taxable income, wearas a structured settlement paid as a periodic income is tax-free

Front 88

All of the following statements regarding surety bonds are correct except

Back 88

Judicial bonds are required under statutory law

Front 89

Managed care plans are characterized by all of the following except

Back 89

Unrestricted access to physicians and hospitals

Front 90

Mr. Smith has health problems that reduce his life expectancy. All of the following are methods life insurance used to provide coverage to person's like Mr. Smith except

Back 90

Limit the policy's protection.

Front 91

All of the following statements concerning joint life insurance are correct except

Back 91

A second-to-die policy must be term insurance contract

Front 92

All of the following are ways in which Medicare prescription drug plans may differ from standard benefit structure specified by federal law except

Back 92

Fewer benefits in the coverage gap

Front 93

All of the following statements concerning individual disability income insurance policies are correct except

Back 93

Premiums generally increase at each annual renewal as and insured ages

Front 94

All of the following statements concerning life insurance policy loans are correct except

Back 94

the policy owner is required to repay a policy long before being permitted to surrender a policy for its cash value, make a withdrawal from a cash value, or take another policy loan

Front 95

All of the following are covered autos under the liability part (Part A) of the personal Auto policy (pap) except

Back 95

A non owned van driven by the insured on a regular basis

Front 96

All of the following statements concerning variable life insurance are correct except

Back 96

Variable Life policies provide guarantees of both the interest rate and the minimum cash value

Front 97

All of the following are qualifying events under Cobra except

Back 97

The employee is fired for gross misconduct

Front 98

Coverage e liability of a homeowners policy provides motor vehicle liability coverage for all of the following motor vehicle exposures except

Back 98

A licensed Harley Davis motorcycle while it is being written on the driveway at the insured location

Front 99

When using the net payment cost index to determine the cost of a life insurance policy yeah, it is necessary to consider all of the following factors except

Back 99

Cash value

Front 100

what a life insurance agent submits an application for a life insurance policy that replaces a client's existing policy, all of the following must be done except

Back 100

The agent must accept a reduced first-year commission to remove the financial and incentive for twisting