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151 Cards in this Set
- Front
- Back
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Long-term care policies may require all of the following before paying benefits EXCEPT:
A.A prior hospitalization B.A physician's certification of need C.A functional assessment D.An elimination period |
A.A prior hospitalization
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A mandatory second surgical opinion provision typically would encourage all of the following EXCEPT:
A.Fewer elective surgeries B.Higher total health plan costs for an employer C.Independent review of recommendations for surgery D.Better management of the health care plan |
B.Higher total health plan costs for an employer
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Which statement about group health insurance is true?
A.The insurer's contract is with the organization sponsoring the group plan. B.The insurer issues a policy to each insured member in the group. C.A medical questionnaire is required of each individual to be covered by the contract. D.Group policies are more expensive than individual policies because they provide broader benefits. |
A.The insurer's contract is with the organization sponsoring the group plan.
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One objective of a concurrent review provision in group health insurance is to:
A.Reduce emergency admissions to the hospital B.Reduce the number of second surgical opinions C.Monitor length of stay in the hospital once the patient is admitted D.Enforce the coordination of benefits provision |
C.Monitor length of stay in the hospital once the patient is admitted
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All of the following are true about dental insurance EXCEPT:
A.Preventive services are seldom covered. B.Orthodontic coverage is sometimes included. C.Dental x-rays are usually covered. D.A deductible may have to be satisfied. |
A.Preventive services are seldom covered.
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Which type of health insurance should be purchased by a person who wants coverage for hospital bills in the event of accidental injury?
A.Disability income B.Medical expense C.Accidental dismemberment D.Workers compensation |
B.Medical expense
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How does the Medicare Supplement at-home recovery services benefit differ from the Medicare home health care benefit?
A.The Medicare Supplement benefit covers assistance with daily living B.The Medicare Supplement benefit covers durable medical equipment C.The Medicare Supplement benefit is unlimited D.The Medicare Supplement benefit covers only skilled care |
A.The Medicare Supplement benefit covers assistance with daily living
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Who is the insured under a credit disability policy?
A.The creditor B.The debtor C.The debtor's beneficiary D.A third-party trustee |
B.The debtor
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Medical expense insurance providing benefits on a reimbursement basis reimburses:
A.Insureds on an actual cash value basis B.Insureds for their medical expenses C.Hospitals on a capitation basis D.Insureds on a capitation basis |
B.Insureds for their medical expenses
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A producer or agent who negligently replaces health insurance for a client creates potential liability for:
A.Breach of good faith B.Errors and omissions C.Personal injury D.The former insurer |
B.Errors and omissions
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Which is required for Medicare coverage of skilled nursing facility care?
A.The care must be medically necessary for at least one year. B.The insured must elect it as a benefit in lieu of regular Medicare benefits. C.The facility must agree to continue care after Medicare benefits end. D.The facility must be approved by Medicare. |
D.The facility must be approved by Medicare.
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In health insurance, initial notice about a potential claim:
A.May be required within a short time period B.Usually results in rejection of the claim C.Is sent to the attending physician's office D.Must be submitted by the provider of services |
A.May be required within a short time period
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Why would an insurer limit the combined amount of disability income benefits under multiple policies purchased by an insured from the same or another company?
A.To make it unnecessary for the insured to complete more than one proof of loss form per illness B.To make it unnecessary for the physician to submit multiple proofs of disability for the same person C.To prevent the insured from receiving a benefit amount which might make becoming disabled financially attractive D.To prevent the insured from purchasing additional medical coverage immediately before a scheduled surgery |
C.To prevent the insured from receiving a benefit amount which might make becoming disabled financially attractive
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All of the following are typical benefit periods for long-term disability income insurance EXCEPT:
A.One year B.Five years C.Ten years D.To age 65 |
A.One year
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In group health insurance, a group with a high average age usually has:
A.Above average maternity claims B.Above average total health claims C.Little or no exposure to disability claims D.Below average rates |
B.Above average total health claims
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When a disability caused by an accident or illness is related to a person's employment, the employee is usually eligible for benefit payments from:
A.Blue Cross/Blue Shield B.Group major medical expense coverage C.Short-term disability income coverage only D.Workers compensation coverage through the employer |
D.Workers compensation coverage through the employer
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Which of these is required for an injury to be covered under health insurance policies with an "accidental bodily injury" definition of injury?
A.The injury must be accidental, but the cause need not be. B.The insured must prove reasonable care. C.The insured must be treated in an emergency room. D.External signs of the injury must be visible upon examination. |
A.The injury must be accidental, but the cause need not be.
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Employer-sponsored group long-term care insurance generally has all of the following characteristics EXCEPT:
A.Noncancelable B.Renewable C.Convertible upon leaving employment D.More economical than individual plans |
A.Noncancelable
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As evidence of group health insurance coverage, participants receive:
A.A membership agreement B.A certificate of insurance C.A copy of the policy's insuring clause D.A copy of the complete policy |
B.A certificate of insurance
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To minimize adverse selection, a group dental contract may include any of the following provisions for employees who enroll after the date they were initially eligible to participate EXCEPT:
A.Reduction of benefits by 50% for one year B.Reduction of maximum benefits for one year C.Exclusion of certain benefits for a certain period D.Requirement of a complete physical examination |
D.Requirement of a complete physical examination
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An employer has a group health plan covering 60 employees, including one employee covered by Medicare because of disability. This employee must:
A.Accept Medicare as the primary payer B.Accept continued coverage under the employer group health plan C.Have access to the same health benefits offered to other employees D.Have access to employer group Medicare Supplement coverage |
C.Have access to the same health benefits offered to other employees
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All of the following statements about HMOs are true EXCEPT:
A.HMOs combine the financing and provision of health care in one organization. B.Subscribers are encouraged to have regular medical checkups. C.Preventive care is encouraged by HMOs . D.Employees of nonprofit organizations are prohibited from enrolling in HMOs . |
D.Employees of nonprofit organizations are prohibited from enrolling in HMOs .
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In long-term care insurance, a person who is unable to independently perform the activities essential to daily living because of physical or cognitive impairment is said to be:
A.Medically dependent B.Conditionally impaired C.Functionally impaired D.Health dependent |
C.Functionally impaired
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In a guaranteed renewable disability income contract, the insurance company reserves the right to change premiums after the policy is issued if:
A.The Consumer Price Index has increased by the same percentage B.The premium for all insureds is changed by the same percentage C.The insured's occupation has changed D.The premium change applies to all insureds in a specific class or classes |
D.The premium change applies to all insureds in a specific class or classes
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When taking an individual health insurance application, it is the producer or agent's obligation to disclose all of the following EXCEPT:
A.The effect of submitting the premium with the application B.All aspects of the coverage applied for by the applicant C.The Federal Fair Credit Reporting Act D.The establishment of insurance company reserves |
D.The establishment of insurance company reserves
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Concurrent review is a form of utilization review that is performed:
A.After the patient has recovered B.After hospital bills have been paid C.Before pre-certification of hospital admission D.During the course of the patient's treatment |
D.During the course of the patient's treatment
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Under which disability income policy provision might an insured be considered totally disabled, even if working, following the loss of sight in both eyes?
A.Recurrent disability B.Residual disability C.Presumptive total disability D.Regular occupation total disability |
C.Presumptive total disability
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A health maintenance organization (HMO) usually provides all of the following inpatient hospital services EXCEPT:
A.Preadmission certification B.Concurrent utilization review C.Discharge planning D.Payment for convenience items |
D.Payment for convenience items
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Periodontics includes all of the following EXCEPT:
A.Bone surgery B.Guided tissue regeneration C.Gum disease treatment D.Dentures |
D.Dentures
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One type of disability coverage, which can help reduce certain business expenses, is called:
A.Owner's credit coverage B.Permanent proprietor's coverage C.Executive option coverage D.Key employee coverage |
D.Key employee coverage
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Health insurer's are prohibited from discrimination based on an individual's:
A.Medical history B.Genetic makeup C.Geographical location D.Pre-existing conditions |
B.Genetic makeup
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Medicaid is funded by state governments and by:
A.Commercial insurers B.The federal government C.Blue Cross/Blue Shield organizations D.Various charitable organizations |
B.The federal government
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When several members of a family insured under the same major medical policy are involved in an accident, the coverage usually requires that:
A.The coinsurance payments be increased. B.All family members satisfy their individual deductibles. C.Only the amount needed to satisfy the family deductible may be deducted from benefit payments. D.Only one individual deductible needs to be satisfied for all injuries the family received in the accident. |
D.Only one individual deductible needs to be satisfied for all injuries the family received in the accident.
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When a group health insurance contract covers employees in more than one state, the criteria for determining in which state the contract may be delivered includes any of the following EXCEPT:
A.Where the policyholder is incorporated B.Where the policyholder's principal office is located C.Where the majority of insured individuals are employed D.Where the insurance company is incorporated |
D.Where the insurance company is incorporated
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A group health insurer's acquisition costs are usually highest:
A.In the first plan year B.In the second plan year C.After the first renewal D.After the second renewal |
A.In the first plan year
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For groups with high prior claims experience, an insurer would be likely to:
A.Charge a reduced first year premium B.Seek higher benefit levels C.Expect high future claims experience D.Reduce the required participation percentage |
C.Expect high future claims experience
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Which statement is correct in regard to a disability income policy with a 60-day elimination period?
A.The premium will be less than that of a policy with a 90-day elimination period. B.The premium is waived for the first 60 days after policy issue. C.The insured will be eligible to receive benefits beginning on the 61st day of disability. D.The first benefit payment will arrive on the 61st day of disability. |
C.The insured will be eligible to receive benefits beginning on the 61st day of disability.
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Under the waiver of premium provision of a disability income policy, when does the insured resume paying premiums?
A.At the end of the grace period B.At the end of the stated period in the policy, normally 90 days C.When the insured returns to work and is no longer disabled D.When the elimination period ends |
C.When the insured returns to work and is no longer disabled
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Health care plans using a preferred provider network usually discourage the use of non-network providers by:
A.Restricting the range of covered services B.Requiring greater cost sharing for the use of non-network services C.Applying a relative value scale to benefits D.Prohibiting referrals to non-network doctors |
B.Requiring greater cost sharing for the use of non-network services
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Which factor affects the underwriting of disability income insurance?
A.Hobbies of the insured B.Amount of life insurance coverage C.Number of dependents D.Marital status |
A.Hobbies of the insured
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In health insurance, an insuring clause might include any of the following EXCEPT:
A.The identity of the insurer B.The identity of the insured C.A change of beneficiary provision D.A statement of the kind of loss that is covered |
C.A change of beneficiary provision
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An insured currently has group coverage issued by different health insurance companies. How will payment for medical expenses typically be handled when both group policies provide coverage?
A.The policy under which the individual was first insured will pay for the expenses. B.Payment will be made in accordance with the policies' coordination of benefits provisions. C.The insured will collect the full amount of expenses from each of the two insurers. D.Payment of expenses will be made in accordance with the policies' uniform provisions. |
B.Payment will be made in accordance with the policies' coordination of benefits provisions.
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The Medicare home health care benefit includes coverage for:
A.Meal delivery B.House cleaning services C.Nurse visits D.Prescription drugs |
C.Nurse visits
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If an individual filed a claim under two individual health insurance policies issued by the same insurer, the insurer might return:
A.50% of the lower of the two premiums, but pay all benefits under both policies B.Any annual premium amount in excess of $1,000 combined for both policies C.The premium amount paid for coverage, which would cause combined benefits to exceed a maximum benefit amount D.All premiums and cancel all existing policies purchased by the insured |
C.The premium amount paid for coverage, which would cause combined benefits to exceed a maximum benefit amount
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What does Medicare Supplement insurance cover?
A.Part of the cost of certain hospital and medical services B.Losses from accidental death and dismemberment C.Loss of income at disability D.Some costs of dental care services |
A.Part of the cost of certain hospital and medical services
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The main intent of the cosmetic surgery exclusion is to bar coverage for:
A.Elective surgery B.Accidental injuries C.Birth defects D.Surgery not supported by a second opinion |
A.Elective surgery
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Group health insurance usually is written to cover:
A.People working for the same employer B.At least 100 people C.A minimum of 75 people D.People who have no dependents |
A.People working for the same employer
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An employee, spouse, and two children are covered under a group health policy. How many certificates of insurance are issued to the family?
A.One B.Two C.Three D.Four |
A.One
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Medical expense insurance typically EXCLUDES coverage for:
A.Prosthetic devices such as artificial limbs B.Cosmetic surgery C.Injuries resulting from auto accidents D.Treatment for terminal illnesses |
B.Cosmetic surgery
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Ambulatory services under case management provisions try to monitor:
A.Length of stay in a hospital B.Response time by the ambulance service C.The cost-effectiveness of outpatient services D.The driving distance to the nearest hospital |
C.The cost-effectiveness of outpatient services
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Medical expense insurance typically EXCLUDES coverage for:
A.Prosthetic devices such as artificial limbs B.Cosmetic surgery C.Injuries resulting from auto accidents D.Treatment for terminal illnesses |
B
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Life insurance helps meet estate planning objectives because it is:
A.Subject to probate proceedings B.A capital gain C.A liquid asset at death D.Subject to federal income tax |
C. A liquid asset at death
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All of the following are reasons for purchasing life insurance on a spouse who does not work for pay outside the home EXCEPT:
A.To compensate the family for the lost services of the spouse B.To pay funeral expenses when the spouse dies C.To guarantee that newborn children will be eligible for life insurance D.To pay any applicable taxes arising from the spouse's death |
C.To guarantee that newborn children will be eligible for life insurance
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The lowest total annual premium expenditure usually results when premiums are paid:
A.Monthly B.Quarterly C.Semi-annually D.Annually |
D.Annually
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Compared to a joint life insurance policy, separate whole life insurance policies on each of the insureds typically result in:
A.Lower combined premiums B.Higher combined premiums C.Lower face amounts D.Higher face amounts |
B.Higher combined premiums
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The insured died two years after discontinuing annual premium payments of $200 on a $20,000 whole life insurance policy with a $2,000 cash value and an automatic premium loan provision. How much will the insurer pay to the insured's beneficiary?
A.Nothing B.The $2,000 cash value C.The $20,000 face amount less any policy loans D.The $20,000 face amount |
C.The $20,000 face amount less any policy loans
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An immediate annuity contract provides for:
A.Cost of living increases in benefit payments B.The accumulation of education funds C.The systematic liquidation of the principal and interest D.A level death benefit |
C.The systematic liquidation of the principal and interest
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Which financial element related to a fixed annuity contract tends to remain in the 3%-5% range?
A.The annual contract fee B.The guaranteed minimum interest rate C.The premium tax D.The surrender charge |
B.The guaranteed minimum interest rate
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A rated life insurance policy is issued at:
A.Average risk rates B.Standard risk rates C.Preferred risk rates D.Substandard risk rates |
D.Substandard risk rates
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Education funds created by life insurance death benefits are designed to cover the cost of all of the following EXCEPT:
A.Tuition and books B.Transportation to classes C.Medical care D.Room and board |
C.Medical care
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Which rider is included in a policy with whole life insurance on the principal insured and term insurance on the insured's spouse and children?
A.Joint life rider B.Family rider C.Survivorship rider D.Blanket rider |
B.Family rider
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When life insurance is being used to conserve a large estate that consists primarily of non-liquid assets, the primary use of the policy proceeds will be to:
A.Make a charitable donation B.Pay estate taxes C.Provide an income to the heirs D.Set up a trust for the heirs |
B.Pay estate taxes
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The beneficiary of a life insurance policy originally is indicated:
A.On the life insurance application B.In the client's last will and testament C.On a change of beneficiary form D.When the policy is issued |
A.On the life insurance application
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The gross annual premium for a whole life insurance policy is the net premium:
A.Plus expenses B.Minus expenses C.Plus interest D.Minus interest |
A.Plus expenses
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Group term life insurance can be provided at low rates for all of the following reasons EXCEPT:
A.It accumulates cash values in an efficient manner. B.It provides savings to the insurer through mass distribution. C.Many individual underwriting expenses are avoided. D.One policy covers several insureds at the same time. |
A.It accumulates cash values in an efficient manner.
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All of the following statements about the ownership provision in a life insurance policy are true EXCEPT:
A.It indicates who is the owner of the policy. B.It describes ownership rights and privileges in the policy. C.It states the insurer will pay the proceeds to the beneficiary upon receiving proof of the insured's death. D.It allows for the policyowner to elect dividend options, if any. |
C.It states the insurer will pay the proceeds to the beneficiary upon receiving proof of the insured's death
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The authority to select a settlement option under an individual annuity contract resides with:
A.The annuitant B.The beneficiary C.The insurer D.The owner |
D.The owner
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Which statement explains why an annuitant would seek a tax-free exchange of one contract for another within the same company?
A.The new contract offers more attractive interest rates B.The interest rates offered by the original contract have increased C.The annuitant prefers a life insurance policy instead of an annuity contract D.The new contract will designate a different annuitant |
A.The new contract offers more attractive interest rates
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To minimize adverse selection in group life insurance an insurer may require:
A.Evidence of insurability for participants who join after the eligibility period B.A higher premium rate for employee groups with lower mortality C.Access to the personnel record of eligible employees D.Employee determination of the amount of coverage |
A.Evidence of insurability for participants who join after the eligibility period
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Which one of the following factors is considered in determining the amount payable under the interest ONLY settlement option in life insurance policies?
A.The length of time interest payments will be made B.The amount of the policy proceeds C.The age of the beneficiary D.The occupation of the beneficiary |
B.The amount of the policy proceeds
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An immediate annuity:
A.Provides interest-only benefit payments B.Is purchased with a single premium C.Pays a single lump sum benefit D.Must be set up as a straight life annuity |
B.Is purchased with a single premium
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Which statement is true about life annuities?
A.The insurer uses the law of large numbers to predict life expectancy. B.The same mortality table applies to both life annuities and life insurance. C.They generally are purchased for the same reasons as life insurance. D.The annuitant must be in reasonably good health when the contract is issued. |
A.The insurer uses the law of large numbers to predict life expectancy.
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Which one of the following statements about the application for life insurance is true?
A.It has little significance after its initial use. B.It becomes a permanent part of the insurance contract. C.It usually does not ask questions of a personal nature. D.It is used only if the prospective insured is in poor health. |
B.It becomes a permanent part of the insurance contract.
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Which life insurance policy provides ONLY pure protection?
A.Universal life B.Adjustable life C.Whole life D.Term life |
D.Term life
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Which provision can provide for the payment of life insurance benefits to the insured while living?
A.A hospital confinement provision B.A life reduction provision C.A vanishing benefit provision D.An accelerated benefit provision |
D.An accelerated benefit provision
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Current interest rates provide a reasonable basis for projecting cash values in a fixed annuity when:
A.The annuitant is able to accept additional risk B.The current interest rate exceeds industry standards C.The current interest rate is close to historical standards D.The insurer is highly rated by independent sources |
C.The current interest rate is close to historical standards
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All of the following statements about the provisions in a typical modification clause in a life insurance policy are true EXCEPT:
A.The producer or agent is granted the authority to waive policy provisions. B.Policy changes or modifications must be attached to or endorsed on the policy. C.Policy changes or modifications require the signature of a specified officer of the insurance company. D.The authority to bind the insurance company to policy changes or modifications is limited to specified persons. |
A.The producer or agent is granted the authority to waive policy provisions.
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A surviving spouse without dependent children is eligible for Social Security survivor benefits at age:
A.50 B.55 C.59 D.60 |
D.60
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Which one of the following statements about a life insurance policy rider regarding waiver of premiums and disability income is true?
A.Life insurance premiums are waived only if the insured has a separate disability income policy with the same insurer. B.It applies only to a policyowner who is not the insured. C.In addition to waiving premiums during periods of disability, it provides a monthly income. D.The disability benefit is a lump sum payment equal to the face amount of the policy. |
C.In addition to waiving premiums during periods of disability, it provides a monthly income.
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Death benefits under a survivorship life insurance policy covering two insureds are paid:
A.In full at the first insured's death B.In full at the second insured's death C.Half at the first insured's death and half at the second insured's death D.Half at the first beneficiary's death and half at the second beneficiary's death |
B.In full at the second insured's death
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If an insured with an ordinary whole life insurance policy is still living at policy maturity, the insurance company will:
A.Refund all premiums paid B.Pay the face amount of the policy C.Waive all future premiums D.Convert the policy to paid-up term insurance |
B.Pay the face amount of the policy
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A preferred risk classification for a whole life insurance policy means that:
A.The insured receives higher cash values by paying a flat premium rate B.The surrender charges are waived when the insured turns in the policy C.The premium rate is lower than the standard rate for the identical policy D.The insurer has absorbed a greater risk than in a standard risk classification |
C.The premium rate is lower than the standard rate for the identical policy
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When a terminated employee elects the conversion option under a group life insurance plan, the new policy premium is based on the:
A.Group plan rate B.Insurer's surcharged conversion rate C.Insurer's current rate for other individual applicants D.Insured's age at the time group benefits began |
C.Insurer's current rate for other individual applicants
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All of the following factors influence the benefit payment amount under a life income annuity EXCEPT:
A.The purchase or accumulation amount B.The type of annuity option elected C.The annuitant's age on each contract anniversary D.The guaranteed mortality and administrative costs |
C.The annuitant's age on each contract anniversary
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All of the following statements about a life insurance policy loan are true EXCEPT:
A.The policyowner is charged interest on the loan. B.Failure to repay the loan when due terminates the policy. C.The amount of the loan cannot exceed the policy cash value. D.The death benefit is reduced as a result of any outstanding loan. |
B.Failure to repay the loan when due terminates the policy.
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When replacement is involved, the life insurance producer or agent is required to give the applicant:
A.A copy of each sales proposal used in the presentation B.An illustration of the future values of the existing policy C.A binding receipt for the existing policy D.A temporary coverage certificate effective on the anniversary of the existing policy |
A.A copy of each sales proposal used in the presentation
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When an annuitant under a life-only annuity dies, what is the amount of the property interest in the contract that will be includable in the annuitant's gross estate?
A.The total of benefit payments received prior to death B.The total of benefit payments less the total of premiums paid C.The total of premiums paid for the contract D.Zero |
D.Zero
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Group life insurance plans generally require participation by:
A.75% of eligible employees, under a contributory plan B.50% of eligible employees, under a noncontributory plan C.25% of all eligible employees D.75% of all employee dependents |
A.75% of eligible employees, under a contributory plan
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The trustees of a qualified retirement plan received notice of several claims against the accrued benefits of a key employee, age 52. The trustees must refuse to pay all of the following EXCEPT:
A.The Internal Revenue Service presenting an order for collection B.The employer presenting a certified statement of amounts owed by the employee C.A creditor presenting a court order for payment of a debt D.A bankruptcy trustee presenting a bankruptcy court order for release of funds |
A.The Internal Revenue Service presenting an order for collection
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All of the following statements about universal life insurance are true EXCEPT:
A.It can be used to provide coverage over the entire lifetime of the insured. B.A mortality charge is subtracted from the cash value accumulations each month. C.Policy loans affect the amount of interest that applies to cash value accumulations. D. Premiums must be paid on a monthly basis. |
D. Premiums must be paid on a monthly basis.
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If a life insurance policy is transferred to another person in exchange for valuable consideration, then the death proceeds may:
A.Lose their income tax exempt status B.Be reduced by the amount of the consideration C.Be taxed as capital gains D.Become subject to probate |
A.Lose their income tax exempt status
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A withdrawal from a deferred annuity must be authorized by:
A.The annuitant B.The beneficiary C.The co-annuitant D.The owner |
D.The owner
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Which qualified plan may be established by a business corporation?
A.A simplified employee pension (SEP) B.An individual retirement account (IRA) C.A tax-sheltered annuity (TSA) D.A Keogh plan |
A.A simplified employee pension (SEP)
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A misleading life insurance policy illustration may result from any of the following EXCEPT:
A.Assuming unreasonable interest rates B.Excluding a guaranteed values column C.Reflecting the time value of money D.Showing dividends that fail to reflect past performance |
C.Reflecting the time value of money
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Deferred annuities are normally purchased by individuals who:
A.Feel they cannot afford life insurance B.Can make deductible IRA contributions in excess of $2,000 C.Want tax-deferred growth for retirement funds D.Want to maximize their current income and reduce taxes |
C.Want tax-deferred growth for retirement funds
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Once a contract is deemed to be a modified endowment contract (MEC), how long does it remain so?
A.Four years B.Seven years C.Ten years D.Forever |
D.Forever
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All of the following types of life insurance policies allow the policyowner to make changes in coverage without replacing the policy EXCEPT:
A.Universal life insurance B.Modified premium whole life insurance C.Variable universal life insurance D.Adjustable life insurance |
B.Modified premium whole life insurance
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One parent purchases and is the owner of a juvenile life insurance policy on a child, with the other parent named as beneficiary. If the policy contains a payor benefit, who must become disabled before premiums will be waived?
A.Only the parent who purchased the policy B.Only the child C.Either parent D.Both the parent who purchased the policy and the child |
A.Only the parent who purchased the policy
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All of the following statements about an accidental death benefit in a life insurance policy are true EXCEPT:
A.It is an optional provision or rider. B.It is used only in term life insurance policies. C.It is payable in addition to the face amount of the base policy. D.It applies if the death of an insured is caused by an accident. |
B.It is used only in term life insurance policies.
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Which one of the following statements is true if an insured purchases a limited payment whole life insurance policy?
A.The insured has lifetime protection. B.The insured must pay premiums until the earlier of death or age 100. C.The insured has a policy that does not develop any cash value. D.The insured has a policy that has a premium equal to its cash value. |
A.The insured has lifetime protection.
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All of the following are associated with the interest-adjusted net cost method of life insurance policy comparison EXCEPT:
A.Surrender cost index B.Net payment cost index C.Separate investment account D.Time value of money |
C.Separate investment account
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A Basic Form Dwelling Policy provides:
A.Coverage on a named peril basis B.Liability coverage for damage caused by the insured C.Additional living expenses D.Recovery on a replacement cost basis |
A.Coverage on a named peril basis
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All of the following are included in the Liability Section of the Businessowners Policy EXCEPT:
A.Declarations B.Common policy conditions C.Applicable endorsements D.Causes of loss forms |
D.Causes of loss forms
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A driver of a vehicle failed to stop for a red light and hit a light pole but did not hit a nearby vehicle. Which element of negligence is missing for legal action to be taken by the driver of the nearby vehicle?
A.Legal duty B.Failure to meet the standard of care C.Proximate cause D.Actual damage |
D.Actual damage
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Damages reduced in proportion to the amount of negligence that the injured party contributed to the injury is called:
A.Comparative negligence B.Contributory negligence C.Absolute negligence D.General negligence |
A.Comparative negligence
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A social organization which is licensed to issue insurance ONLY to its members is an example of which type of insurer?
A.Fraternal B.Mutual C.Reciprocal D.Stock |
A.Fraternal
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All of the following are common law defenses for negligent liability EXCEPT:
A.Contributory negligence B.Intervening cause C.Strict liability D.Assumption of risk |
C.Strict liability
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A licensed producer or agent may receive commission compensation for all of the following services EXCEPT:
A.Negotiation of any insurance contract B.Procurement of any insurance contract C.Acting as a consultant to provide insurance advice D.Adjustment of claims arising from insurance contracts |
C.Acting as a consultant to provide insurance advice
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The risk of financial loss that an individual faces illustrates the principle of:
A.Indemnity B.Limit of recovery C.Subrogation D.Insurable interest |
D.Insurable interest
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Which one of the following is a major section of a liability insurance policy?
A.Property covered B.Perils C.Loss payment D.Conditions |
D.Conditions
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All of the following may be covered by basic builders risk insurance EXCEPT:
A.An occupied building B.Foundation of a building under construction C.A building under construction D.Building materials not yet part of the building |
A.An occupied building
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Which one of the following is eligible property for a Dwelling Policy?
A.A four-family dwelling B.A six-family dwelling C.A single family dwelling with the third floor rented to five boarders D.A two-family dwelling with the ground floor rented for a beauty parlor |
A.A four-family dwelling
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The policy period of a property policy is based on:
A.Eastern time B.Standard time C.Pacific time D.Atlantic time |
B.Standard time
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To recover for a loss under the Standard Fire Policy, when must an insurable interest exist?
A.Only at the inception of the policy B.At the time of loss C.For at least six months before the loss D.An insurable interest need not exist |
B.At the time of loss
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The National Flood Insurance Program is an example of a form of insurance regulated by the:
A.State government B.Federal government C.Property insurance carriers D.State Corporation Commission |
B.Federal government
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If Policy A states that it will pay after payment by other applicable policies, Policy A is:
A.Excess B.Primary C.Pro rata D.Reinsurance |
A.Excess
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The Business Auto Coverage Form covers losses from all of the following under comprehensive coverage EXCEPT:
A.Fire B.Vandalism C.Theft D.Freezing |
D.Freezing
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Which of the following is NOT used in determining the amount an insured can receive under the Personal Property Replacement Coverage Endorsement to a Homeowners Policy?
A.Full cost of repair at the time of loss B.Depreciated market value C.The Coverage C amount D.Special limits stated in the policy |
B.Depreciated market value
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Monetary damages awarded to an injured party must be based on all of the following elements EXCEPT:
A.Damages as the proximate result B.Negligence C.Available insurance D.A legal duty owed |
C.Available insurance
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Insurance is an appropriate device to:
A.Eliminate hazards B.Transfer risk C.Avoid liability D.Prevent losses |
B.Transfer risk
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Theft is the taking of another's property:
A.While threatening bodily harm B.While inflicting injury upon the owner C.After forcible entry into the premises D.Without the owner's consent |
D.Without the owner's consent
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Under the other structures coverage of the Broad Form Dwelling Policy, all of the following are true EXCEPT:
A.It provides a 10% extension of coverage. B.It provides coverage for a tool shed. C.It does not provide an additional amount of insurance. D.It covers a private garage rented for storage of a car. |
C.It does not provide an additional amount of insurance.
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The Employers Liability Insurance coverage which accompanies a Workers Compensation policy covers:
A.Punitive damages B.Damages arising out of discrimination in hiring C.Damages under the doctrine of dual capacity D.Expenses of medical treatments for occupational diseases |
C.Damages under the doctrine of dual capacity
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If an insured with a Dwelling Policy has other coverage, which is true?
A.The proceeds are divided between the mortgagee and mortgagor according to their interest in the property. B.The proceeds are divided among all those who have an insurable interest at the time of loss. C.Losses are payable in the same proportion that this insurance bears to the total amount of fire insurance. D.The amount of premium earned is prorated to the length of time the policy has been in force. |
C.Losses are payable in the same proportion that this insurance bears to the total amount of fire insurance.
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Which one of the following is usually true about Commercial Umbrella Liability Policies?
A.They limit protection to no more than $1,000,000 in coverage. B.They are endorsements to general liability policies. C.They are considered primary policies. D.They are NOT standardized within the industry. |
D.They are NOT standardized within the industry.
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Which is an exclusion under Part Two of the Workers Compensation and Employers Liability Policy?
A.Care and loss of service B.Consequential injury to a spouse of the insured worker C.Actions brought against the insured in a capacity other than as an employer D.Injury occurring to an employee who is permanently assigned to work outside of the State |
D.Injury occurring to an employee who is permanently assigned to work outside of the State
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All of the following are true about the limit of insurance in an unendorsed property insurance policy EXCEPT:
A.It can be increased by attaching an endorsement. B.The insured can expect additional limits automatically upon purchasing a second property. C.The insurer will normally not pay more than the stated limit. D.There are special limits of insurance on some types of property. |
B.The insured can expect additional limits automatically upon purchasing a second property.
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When an insurer unknowingly accepts two large cash payments from an illegal drug dealer to insure the drug operation and its employees, there is generally:
A.No contract B.A quasi-contract C.A contract of adhesion D.An unenforceable contract |
D.An unenforceable contract
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The liability section of the Garage Coverage Form includes all of the following EXCEPT:
A.Premises and operations liability B.Products and completed operations liability C.Automobile liability D.Contractual liability |
D.Contractual liability
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The Homeowners Policy covers:
A.A detached garage used for a bicycle repair shop B.Lumber on the insured premises to be used to build a porch onto the dwelling C.Summer home owned by the insured but NOT listed in the declarations D.Lawnmowers used off premises in the insured's landscaping business |
B.Lumber on the insured premises to be used to build a porch onto the dwelling
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Medical Payments to Others under the Homeowners Policy will cover an accident that injures a:
A.Residence employee during the course of employment B.Child living at home C.Trespasser D.Dependent child at college |
A.Residence employee during the course of employment
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Changing conditions for an insurance policy currently in force requires:
A.Authorization by a court B.A mutual agreement of producer or agent and insurer C.An endorsement or rider attached to the policy D.A notarized authorization by the Department of Insurance |
C.An endorsement or rider attached to the policy
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Actual cash value is generally accepted to mean:
A.Original purchase price of the property B.Market value at the time of the loss C.Cost to replace at the time of loss, plus appreciation D.Cost to replace at the time of loss, less depreciation |
D.Cost to replace at the time of loss, less depreciation
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Endorsements to change the terms of a Businessowners Policy must be approved by the:
A.Insured B.Insurer C.Producer or agent D.Claim adjuster |
B.Insurer
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A group-owned insurer whose primary activity consists of assuming and spreading the liability risks of its members is the definition of:
A.Reinsurer B.Risk retention group C.Insurance purchasing group D.Pure off-shore captive |
B.Risk retention group
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Under the Farm Policy, losses which qualify for payment on a replacement cost basis is limited to the actual cash value until:
A.The final loss report is submitted to the insurance company B.A loss statement has been signed by the insured C.The total damages exceed 80% of the limit of insurance D.The actual repairs or replacement are completed |
D.The actual repairs or replacement are completed
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Under the Homeowners HO-2 Policy, all of the following are covered EXCEPT:
A.Dwelling B.Contents C.Personal liability D.Farm outbuildings |
D.Farm outbuildings
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An unendorsed liability insurance policy provides coverage for:
A.Criminal actions B.Unintentional torts C.Intentional torts D.Moral obligations |
B.Unintentional torts
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Under the Commercial Package Policy (CPP), the Commercial Inland Marine Declarations Form contains information about which one of the following:
A.Loss payment B.Conditions C.Policy period D.Other insurance |
C.Policy period
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Who would be covered under the medical payments section of the Commercial General Liability Policy, if injured on the insured's premises?
A.A tenant of the named insured B.The named insured C.A customer of the named insured D.An individual hired by the named insured |
C.A customer of the named insured
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An insurance contract drafted by the company and offered to the prospective insured for acceptance or rejection without negotiation is called a:
A.Personal contract B.Unilateral contract C.Contract of subrogation D.Contract of adhesion |
D.Contract of adhesion
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The Businessowners Policy covers loss of income:
A.Up to 10% of the policy limits B.Up to 25% of the policy limits C.Within 12 months following direct physical loss D.Within 3 months following direct physical loss |
C.Within 12 months following direct physical loss
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Which one of the following is covered under the Liability Coverage of the Business Auto Coverage Form?
A.Workers compensation B.Expected injury C.Pollution D.Explosion |
D.Explosion
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Under a Homeowners Policy, the insured location includes all of the following EXCEPT:
A.A cemetery plot B.A secondary location used by the insured for a business C.Vacant land on which the insured plans to build a house D.A motel room in which the insured is residing temporarily |
B.A secondary location used by the insured for a business
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Under a Businessowners Coverage Form, if an insured violates a policy condition, the insurer may:
A.Deny coverage for loss at the involved locations B.Discontinue coverage without notice at all insured locations C.Provide coverage at the involved location, subject to an additional premium D.Provide coverage at the involved location for 10 days and then cancel the policy |
A.Deny coverage for loss at the involved locations
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The Coverage A limit for a dwelling under construction is the:
A.Actual cash value on the date of completion B.Actual cash value at specified periods during construction C.Average value during the period of construction D.Replacement cost on the date of completion |
A.Actual cash value on the date of completion
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Under a Homeowners Policy, the definition of an insured includes which one of the following?
A.An uncle who resides with the insured B.A guest of the insured C.A relative of the insured, visiting for the day D.The insured's neighbor who comes to borrow an appliance |
A.An uncle who resides with the insured
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A store employee discovers a large shortage while taking product inventory. Under an unendorsed Businessowners Policy, the loss:
A.Could be covered by an off-premises endorsement B.Is covered if the store takes reasonable security precautions C.Is covered under the additional coverages section of the policy D.Is excluded under the limitations section of the policy |
D.Is excluded under the limitations section of the policy
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An insurer typically will grant its producers or agents the authority to:
A.Waive policy exclusions B.Reject insurance risks C.Modify policy conditions D.Select applicants |
D.Select applicants
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A Federal Flood Insurance Policy covers which of the following?
A.Power tools stored in an attached garage B.Furniture in a basement family room C.Patio furniture on an open deck D.Recreational vehicles parked in the driveway |
A.Power tools stored in an attached garage
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In the Causes of Loss -- Basic Form of the Commercial Property Policy, the explosion coverage includes damage from:
A.Rupture of a pressure relief device B.Sonic boom of an aircraft C.Bursting of a building due to water expansion of its contents D.Airborne volcanic blast |
B.Sonic boom of an aircraft
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