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General Practice Exam-MD Accident,
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What is the main reason for the target premium of a Universal Life policy? A. To cover the policy's expenses B. To accumulate cash value C. To keep the policy in force D. To pay up the policy at a faster rate
- ANSWER To keep the policy in force The cash values of a policy belong to which of the following? A. Policyowner B. Insured C. Insurer D. Beneficary - ANSWER Policyowner The cash value of a Universal Life policy can be used in many ways without the policy lapsing. Which of the following is not allowed? A. It is used for a loan B. It is used to pay a debt C. Allow the cash value to go to a negative amount D. Pay for a Term policy - ANSWER Allow the cash value to go to a negative amount Which of the following would be considered the purest form of Term insurance? A. Annually Renewable Term B. Increasing Term C. Decreasing Term D. Level Term - ANSWER Annually Renewable Term
Which of the following is a factor M&B insurer would consider when determining whether to accept a group life plan? A. Average age B. Free Look period C. Dependents of employee D. Beneficiaries
- ANSWER Average age Coleman, Inc. has 243 employees that are covered under their group plan. Which of the following would describe their group? A. Contributory B. Noncontributory C. Professional D. Sponsored - ANSWER Noncontributory Policy Prov Options and Riders (wrong) What is a living benefit option in a life policy? A. Payor benefit B. Reinstatement C. Indemnity D. Accelerated Death Benefit - ANSWER Accelerated Death Benefit Which clause states that the proceeds of a life insurance policy will be clear from an attachment or seizure by a beneficiary's creditors? A. Spendthrift B. Insuring C. Collateral D. Assignment - ANSWER Spendthrift Rick is an insured on a participating Life policy that presently has his premiums waived due to his disability. In regard to his situation, what can Rick do or not do? A. He cannot borrow against the cash value while disabled B. He cannot assign his policy while his premiums are waived C. He can still receive his dividends D. He will pay income taxes on the waived premiums - ANSWER He can still receive his dividends Oliver has a Life policy with a provision that states he can be paid an amount that does not exceed its guaranteed cash value. What provision does this describe?
- ANSWER Level Bob was covered by his Whole Life policy and he recently died. His named primary beneficiary died before he did and the contingent beneficiary. What will happen to the benefits of the policy? A. Benefits will go to Bob's estate B. Benefits will go to the contingent beneficiary C. Benefits will go to be decided by the state D. Benefits will go to the primary beneficiary's estate - ANSWER Benefits will go to the contingent beneficiary Lynn wanted to buy a cupcake shop so she took out a loan. Unfortunately, her bank needed more in trade to make her purchase. Since she has a $200,000 Life policy, Lynn decided to use it to secure her loan. What assignment made this possible? A. Absolute B. Collateral C. Partial D. Modified - ANSWER Collateral In a Life Income Option, what determines the amount of each installment? A. Life expectancy and the principal amount B. Income C. Health and Life expectancy D. Life expectancy and occupation - ANSWER Life expectancy and the principal amount When will Single Premium Deferred Annuity benefits be paid? A. When the owner is 65 B. When the owner is in a LTC facility C. After a year D. When the owner dies - ANSWER After a year Will is a Fixed Annuity owner that pays his insurance company a monthly premium. Where is Will's money placed? A. In a general account B. In a separate account C. In an investor's account D. In an installment account - ANSWER In a general accountIn a general account What investments are associated with a general account?
A. Aggressive B. Conservative C. Standard D. Regular
- ANSWER Conservative Mr. Potter owns a Market Value Adjusted Annuity. He has accumulated a large gambling debt, and some unanticipated Medical expenses, so he made the decision to surrender his annuity. Unfortunately, his annuity is premature. Which of the following will affect the penalty he will have to pay? A. Current interest rates B. Nothing will affect his penalty because he will not be required to pay one C. Minimum interest rate D. The age of Mr. Potter at the time he surrenders his annuity - ANSWER Current interest rates All of the following are differences between Fixed and Variable annuities except: A. Interest rates B. Investment C. Mortality D. License - ANSWER Mortality What is a terminally ill person that sells their insurance policy for a percentage called? A. Investor B. Subscriber C. Beneficiary D. Viator - ANSWER Viator Which of the following is the number base for a Labor Union? A. 10 B. 15 C. 25 D. 50 - ANSWER 25 Which policy is considered to be affordable and temporary? A. Term B. Variable C. Whole D. Adjustable - ANSWER Term
A. 5%
B. 7%
C. 10%
D. 15% -
ANSWER 10%
How much tax is on a direct rollover from one IRA to another IRA is withheld? A. 100% B. 50% C. None D. 50% if the amount is over $50,
- ANSWER None What kind of income qualifies an individual to contribute to an IRA? A. Earned income B. Annual income C. Any income D. Annuity income - ANSWER Earned income If a qualified plan begins to make payments to its recipient, what part of the distributions are taxable? A. Gains B. Principle C. Employee contributions D. Employer contributions - ANSWER Gains An insurer hires a representative to advertise its company at a local convention. The representative lies about the details of some of the policies, in an attempt to secure more business for the company. Who is responsible for the representative's actions? A. The representative B. The underwriters C. The agent D. The insurer - ANSWER The insurer An underwriter may reject an application for Health insurance if the rejection was based upon which of the following? A. Sexual preference B. Prescription usage C. Blindness D. Genetic characteristics (such as sickle cell) - ANSWER Prescription usage Sam lost his right arm in an accident covered under his Accidental Death & Dismemberment policy. What will Sam receive from his policy?
A. Nothing B. The principal amount in a lump sum C. The capital amount in 6 monthly installments D. The capital amount in a lump sum - ANSWER The capital amount in a lump sum An underwriter's attitude toward group risks can be ____ restrictive than with individual policies, because the group policies are subject to annual reevaluations. A. More B. Less C. Liberally D. Conservatively - ANSWER Less Which of the following is an exclusion under a Health insurance policy? A. Dental B. Vision C. Hospital D. Death - ANSWER Death Which of the following is a source that releases coded information to insurers for underwriting purposes? A. NAIC B. MIB C. CIA D. Protection Guild - ANSWER MIB Which of the following is not a characteristic of advertising? A. Precise B. Clear C. AM Best D. Understandable - ANSWER AM Best An agent cannot disclose any personal information without: A. Verbal permission from an insured B. A phone call from an insured C. Representation from an executive officer of the company D. Written authorization from an insured - ANSWER Written authorization from an insured What kind of characteristic refers to an inherited gene that will most likely develop a disorder in an individual? A. Genetic B. Medical C. Chromosome
B. 12 day waiting period/ 10 year benefit period C. 30 day waiting period/ 5 year benefit period D. 30 day waiting period /10 year benefit period - ANSWER 12 day waiting period/ 10 year benefit period There is a correlation between an insured's disability and the amount of the disability premium. Which of the following would pay the lowest disability insurance premium? A. Fireman B. Construction worker C. Personal Trainer D. Pilot - ANSWER Personal Trainer Marty is 56 years old and he just made a withdrawal from his IRA. What would Marty pay for his withdrawal from his account? A. Nothing B. 10% penalty C. 15% penalty D. 20% penalty - ANSWER 10% penalty Which life insurance policy issued by a mutual insurer provides a return of divisible surplus? A. Nonparticipating B. Participating C. Divisible D. Earned income - ANSWER Participating If a producer makes untrue statements on an application, it is considered to be a(n): A. Omission B. Warranty breach C. Negligence D. Misrepresentation - ANSWER Misrepresentation Henry's is an insurance applicant. His statements regarding his job, hobbies and history background is best related to which of the following? A. Warranty B. Representation C. Insurable interest D. Collateral - ANSWER Representation What type of employee Welfare plan is exempt from Erisa's regulations? A. Church plans B. Prepaid legal services
C. Day Care benefits D. Disability and Life insurance - ANSWER Church plans Joan wants to put some of her money aside from her savings account to take care of her family's financial needs when she dies. Her risk is treated in which manner? A. Indemnity B. Retention C. Exposure D. Speculative - ANSWER Retention George, the owner of an art shop, is very concerned that his employees may help themselves to his art supplies from his inventory without paying for them. What hazard does this represent? A. Physical B. Morale C. Moral D. Community - ANSWER Moral What term refers to accepting a risk and confronting it as it occurs called? A. Retention B. Indemnity C. Consideration D. Self- insuring - ANSWER Retention An authorized but non-admitted insurer can be represented in this state only by which of the following? A. Domestic insurer B. Surplus Lines Broker C. Licensed producer D. Mutual Insurer - ANSWER Surplus Lines Broker An insurance company that is owned by its policyholders and can pay annual dividends to them is considered : A. Reciprocal Exchange B. Mutual Company C. Risk Retention Group D. Stock Company - ANSWER Mutual Company Partner A and Partner B are in business together. Partner A bought a Life insurance policy on Partner B to protect herself against a financial loss if her partner should die. Two years after their partnership was dissolved Partner B dies. Who will receive the death benefit? A. The beneficiary will be determined by state probate court if Partner B did not have a will
The special significance of a conditional receipt is that it: A. Is given only to applicants who fully prepay all scheduled premiums in advance of their issued policy B. Is intended to provide coverage on a date earlier than the date of the issuance of the policy C. Guarantees an applicant that a policy will be issued in the amount applied for in their application D. Serves as proof that an agent has determined an applicant to be fully insurable for coverage by the insurance company - ANSWER Is intended to provide coverage on a date earlier than the date of the issuance of the policy John was just delivered his Life insurance policy. How many days can he review it and decide if it is best for him to keep? A. 5 days B. 7 days C. 10 days D. 15 days - ANSWER 10 days What approach helps with the prediction of an individual's earning potential and how much of it would be devoted to their dependents? A. Needs B. Human Life C. Retirement D. Social Security - ANSWER Human Life When a replacement is involved, a replacing insurance company is responsible for all of the following EXCEPT: A. Obtain from the producer a list of the applicant's contracts to be replaced B. Include a policy summary on the proposed Life Insurance in the communication with the existing company C. Provide a copy of the Notice Regarding Replacement of Life Insurance to an applicant D. Send the existing insurance company a written notice of replacement - ANSWER Provide a copy of the Notice Regarding Replacement of Life Insurance to an applicant Which risk would pay the highest premium? A. Substandard B. Preferred C. Declined D. Average - ANSWER Substandard
What legal agreement dictates who may buy a deceased business partner's share of their business? A. Key Person B. Buy Sell C. Business Overhead D. Pure Salary - ANSWER Buy Sell Which of the following is usually true of a participating Life Insurance Policy? A. An attorney in fact manages the company B. It may be converted to a Term Life policy C. It pays dividends to its stockholders D. It pays dividends to its policy owners - ANSWER It pays dividends to its policy owners Members of the Armed Forces can obtain _________, also called SGLI. A. PPO Individual Life Insurance B. Group Universal Life Insurance C. Term Group Life Insurance D. Tax Deferred Life Insurance - ANSWER Term Group Life Insurance What is level in a Level Term Insurance policy? A. Premium B. Interest C. Cash D. Death Benefit - ANSWER Death Benefit Which of the following is incorrect about Term insurance? A. It provides temporary protection B. Level, Increasing and Decreasing are types of Term policies C. It is protection for a certain period of time D. It builds cash value - ANSWER It builds cash value Schmitt, Inc. employs 249 people. They offer group Life insurance coverage to their employees. Who is the policyholder of the Life policies they offer? A. Schmitt, Inc. B. Schmitt employees C. Schmitt's insurer D. Beneficiaries of the Schmitt's policies - ANSWER Schmitt, Inc. What kind of Life policies are generally used for key employee indemnification? A. Term, Whole and Universal B. Variable and Equity C. Modified and Term D. Variable and Fixed - ANSWER Term, Whole and Universal
D. Nonqualified Exchange - ANSWER Group insurance Policy Prov Options and Riders (wrong) Which is correct about a One Year Dividend Option? A. The dividend is used to buy an additional policy B. The dividend is guaranteed for one year C. The dividend's interest is used to buy a 1 year Term policy D. The dividend is given to the beneficiary within 1 year - ANSWER The dividend is used to buy an additional policy The death benefit will not increase with which rider? A. Payor Benefit B. Adjustment C. Inflation D. Guaranteed Benefit - ANSWER Payor Benefit When can John change his revocable beneficiary? A. After 30 days of purchasing his policy B. John can do it at anytime C. John must get written permission D. After the initial Free Look Period - ANSWER John can do it at anytime What makes a policy loan possible? A. By the loan clause B. By the consideration clause C. By the assignment provision D. By the cash value provision - ANSWER By the cash value provision Policy Prov Options and Riders (wrong) Which of the following is not a beneficiary? A. Primary B. Standard C. Tertiary D. Contingent - ANSWER Standard Which of the following is correct regarding an irrevocable beneficiary? A. It can be changed any time during the policy B. It is permanent C. It can only be changed after 1 year D. It can be changed only with the written permission of that beneficiary - ANSWER It can be changed only with the written permission of that beneficiary Policy Prov Options and Riders (wrong)
Chris is still within his Grace Period, but he didn't pay his premium. Within that time Chris died. What will Chris's named beneficiary receive? A. Nothing B. All paid in premiums plus the cash value C. Full face amount minus any past due premiums D. Full face amount of benefits - ANSWER Full face amount minus any past due premiums Jill wants a Life policy that will cover her two daughters under her policy. What will provide this coverage for Jill? A. Family Income Rider B. Term Rider C. Payor Benefit Rider D. Spouse - ANSWER Term Rider Gail bought a $20,000 Whole Life policy in 2008 and her annual premium is $300. Gail died three years later and her insurer paid her beneficiary $20,900. What kind of rider did Gail include in her policy? A. Family Maintenance B. Return of Premium C. Waiver of Premium D. Substitute Maintenance - ANSWER Return of Premium Ned has a desire to fly a plan, so he is taking flying lessons. Which of the following would limit his insurer's obligation of his life insurance policy of $300,000 in the event Ned would die as a student pilot? A. Revocation B. Estoppel C. Exclusion D. Stop loss - ANSWER Exclusion Wat kind of annuity pays the largest monthly amount for as long as an annuitant lives? A. Straight B. Joint C. Installment D. Survivor - ANSWER Straight What type of account is associated with a Variable Annuity? A. General B. Separate C. Standard D. Indexed - ANSWER Separate
Being tax free is associated with which of the following? A. Lump sum death benefit settlement B. Interest amount C. Fixed amount D. Period amount - ANSWER Lump sum death benefit settlement Earned income is all of the following except: A. Commissions B. Salary C. Part time wages D. Unemployment benefits - ANSWER Unemployment benefits Joe is a beneficiary that just received the principal and interest. What is taxable as income? A. Nothing is taxable income B. The interest C. The principal D. It depends on the amount - ANSWER The interest What penalty is applied to a premature annuity distribution? A. 5% B. 7% C. 10% D. 15% - ANSWER 10% Funds from a 401(k) are used for many purposes. What is the main use of a 401(k) plan? A. Education B. Vacation C. Retirement D. Liquidation - ANSWER Retirement Which is true regarding Immediate Annuity contributions made with before tax dollars? A. Distributions are taxable B. Distributions cannot be before age 70 1/ C. Distributions cannot be taxed D. Distributions cannot be taken - ANSWER Distributions are taxable Will surrendered his Whole Life policy for $20,000 cash value. At that time he had paid his premiums that totaled $18,000. What would be the Federal income taxable part? A. $20, B. $18, C. $2, D. $0 - ANSWER $2,
Which of the following is the best way to correct a mistake on an application? A. Get a new application B. Use white out C. Draw a line through the mistake D. Insert the correct answer - ANSWER Get a new application What kind of policy is very specific and covers only certain conditions like Cancer? A. Dread Disease B. Specialized C. Provisional D. Terminal - ANSWER Dread Disease Bob is a heavy chain smoker. Which risk does Bob most likely represent? A. Average B. Standard C. Substandard D. Preferred - ANSWER Substandard Which of the following will NOT be covered by a Health Insurance policy? A. Financial loss after an insured dies B. Loss resulting from an accident C. Loss resulting from sickness D. Both accident and sickness loss - ANSWER Financial loss after an insured dies When a client is considering replacing an existing Health insurance policy, all of the following should be areas of concern EXCEPT: A. Duration of time on the existing Health Insurance policy B. Time limit on certain defenses C. Limitations D. Waivers for impairments - ANSWER Duration of time on the existing Health Insurance policy When are lenders allowed to suggest a source for Credit Insurance? A. The lenders are never allowed to suggest a source for Credit Insurance. B. After an individual's loan has been approved C. During an individual's loan procedure D. If an individual is approved for a loan over $100,000 - ANSWER The lenders are never allowed to suggest a source for Credit Insurance. Which of the following signatures are required on an application? A. Insured B. Broker
