Docsity
Docsity

Prepare for your exams
Prepare for your exams

Study with the several resources on Docsity


Earn points to download
Earn points to download

Earn points by helping other students or get them with a premium plan


Guidelines and tips
Guidelines and tips

MN Life and Health Insurance Exam Questions and Answers, Exams of Insurance Economics

A series of multiple-choice questions and answers related to life and health insurance in minnesota. it covers various aspects of insurance policies, tax implications, beneficiary designations, and regulatory compliance. The questions test knowledge of insurance products, regulations, and legal aspects relevant to insurance professionals or students studying insurance.

Typology: Exams

2024/2025

Available from 05/08/2025

Shantelle
Shantelle ๐Ÿ‡บ๐Ÿ‡ธ

5

(2)

3K documents

1 / 39

Toggle sidebar

This page cannot be seen from the preview

Don't miss anything!

bg1
MN Life and Health Insurance Exam
With 104
The Notice of Replacement provides all of the following pieces of
information to the life insurance applicant EXCEPT:
a. ) a list of any life insurance policies that will be replaced
b.) whether an existing policy will fund the new policy
c.) the insurer's identity
d.) the role of the Department of Insurance in regulating replacement
transactions -Correct Answer โœ” โœ” d.) the role of the Department
of Insurance in regulating replacement transactions
If an employer sets up a profit-sharing plan, which one of the
following statements is most correct?
a.) It must contribute the same amount to the plan each year.
pf3
pf4
pf5
pf8
pf9
pfa
pfd
pfe
pff
pf12
pf13
pf14
pf15
pf16
pf17
pf18
pf19
pf1a
pf1b
pf1c
pf1d
pf1e
pf1f
pf20
pf21
pf22
pf23
pf24
pf25
pf26
pf27

Partial preview of the text

Download MN Life and Health Insurance Exam Questions and Answers and more Exams Insurance Economics in PDF only on Docsity!

MN Life and Health Insurance Exam

With 104

The Notice of Replacement provides all of the following pieces of information to the life insurance applicant EXCEPT:

a. ) a list of any life insurance policies that will be replaced

b.) whether an existing policy will fund the new policy

c.) the insurer's identity

d.) the role of the Department of Insurance in regulating replacement transactions -Correct Answer โœ” โœ” d.) the role of the Department

of Insurance in regulating replacement transactions

If an employer sets up a profit-sharing plan, which one of the following statements is most correct?

a.) It must contribute the same amount to the plan each year.

b.) It must allow employees to contribute up to $15,000 to the plan each year.

c.) It must allow employees to make elective deferrals to plan accounts and to adjust their contribution levels at any time.

d.) It must establish individual accounts for each participant. -Correct Answer โœ” โœ” d.) It must establish individual accounts for each

participant.

From a life insurance regulatory perspective, the primary problem with stranger-originated life insurance (STOLI) is that it is: -Correct Answer โœ” โœ” essentially wagering on a stranger's life

Who is the contingent beneficiary in the following beneficiary designation: "Sally Grant, wife of the insured, if she survives the insured; otherwise to Frank Grant, brother of the insured; otherwise to the ASPCA." -Correct Answer โœ” โœ” Frank Grant

Alex owns a "home service" life insurance policy, which means he most likely pays his premiums in which way? -Correct Answer โœ” โœ”

weekly or monthly by mail, automatic deduction from a bank account, or personally to the agent

Cathy took out a $100,000 decreasing 20-year term life insurance policy. In the middle of year ten, when the death benefit on her policy equals $50,000, Cathy dies. What will Cathy's beneficiary get? -Correct Answer โœ” โœ” $50,

U.S. tax law requires that retirees begin taking distributions from their qualified plans no later than April 1 of the year following the year the participant turns -Correct Answer โœ” โœ” age 70

Natasha is insured under a $500,000 universal life insurance policy. Her son, Todd, is the beneficiary. On October 1, Natasha took a $15,000 loan from the policy and died six months later without paying it back. What amount will Todd receive? -Correct Answer โœ” โœ”

$485,000 less any interest owed on the loan

To qualify for Social Security disability benefits, a worker must satisfy a waiting period of how many months? -Correct Answer โœ” โœ” five

months

A financial product that lets consumers save money in a tax-deferred manner and may eventually be used to provide income that is guaranteed for life best describes a(n): -Correct Answer โœ” โœ” deferred annuity

To be considered permanently insured for OASDI purposes, a worker must have how many quarters of coverage? -Correct Answer โœ” โœ”

40

As distribution vehicles, annuities are useful for all the following reasons EXCEPT:

a.) be structured to fit almost any payout period or term

b.) ensure that income continues for the lives of two people

c.) protect against the financial impact of dying too soon

Correct Answer โœ” โœ” using life insurance for wagering or betting

purposes

Derek buys an individual life insurance policy after he loses his job and is no longer covered by his former employer's group plan. However, he dies during the conversion period and before the policy takes effect. Which of the following statements is true?

a.) A death benefit will not be paid.

b.) A death benefit will be paid under the group plan.

c.) A death benefit will be paid under the individual plan.

d.) A death benefit will be paid by both the group and individual plans. -Correct Answer โœ” โœ” b.) A death benefit will be paid under

the group plan.

Protection from damages resulting from a lawsuit brought by an insurance customer against an insurance producer for breach of

fiduciary duties would be covered under what kind of policy? -Correct Answer โœ” โœ” errors and omissions insurance

Nadir Insurance instructs its producers to omit certain information from their records of insurance transactions for the previous year. This information would give the Department of Insurance reason to expand any routine examination of Nadir if the Department knew about it. Nadir's instructions are -Correct Answer โœ” โœ” prohibited

How long must insurers keep files of advertisements used to sell insurance policies in Minnesota? -Correct Answer โœ” โœ” 3 years

The interest rate that is credited to an indexed universal life policy is based on: -Correct Answer โœ” โœ” changes in an equity index like the

S&P 500

Policyowners who buy a life insurance policy issued in Minnesota are entitled to review the policy without obligation for at least how many days after it is delivered? -Correct Answer โœ” โœ” 10 days

Actuaries calculate net single premiums based on which of the following? -Correct Answer โœ” โœ” mortality and interest

assumptions

At age 49, Caleb took a $20,000 distribution from his deferred annuity, of which $9,000 represents interest earnings. In addition to paying income tax, what else will Caleb probably have to pay? - Correct Answer โœ” โœ” a penalty tax of $

Tandy Enterprises pays $25,000 in premiums each year for its group term life insurance plan, which covers all of its rank-and-file employees. When filing its income tax return, what can (or cannot) Tandy Enterprises do? -Correct Answer โœ” โœ” It can take a deduction for the entire premium paid

Which of the following is NOT considered a standard life insurance nonforfeiture option?

a.) policy loan

b.) cash surrender

c.) extended term insurance

d.) reduced paid-up insurance -Correct Answer โœ” โœ” a.) policy loan

Which of the following do variable life insurance premiums generally include to cover the cost of collecting and processing premiums?

a.) maintenance fee

b.) compensation fee

c.) premium surcharge

d.) quarterly administrative fee -Correct Answer โœ” โœ” a.)

maintenance fee

When an insured dies, what are the two main categories of needs that arise? -Correct Answer โœ” โœ” lump-sum needs and ongoing income needs

d.) The interest rate paid by the insurer is the lesser of the current rate or guaranteed rate -Correct Answer โœ” โœ” d.) The interest rate

paid by the insurer is the lesser of the current rate or guaranteed rate

James owns a variable annuity. Where will his premiums and contract values be maintained? -Correct Answer โœ” โœ” in subaccounts selected by the policyowner that are managed within the insurer's separate account

George's wife, Ellen, will receive income payments from George's annuity when he dies. Under the annuity contract, what is Ellen? - Correct Answer โœ” โœ” The beneficiary

What is the type of insurance used most often in group life insurance plans? -Correct Answer โœ” โœ” annually renewable term

All of the following statements about aviation and hazardous occupation and hobbies exclusions in life insurance are correct EXCEPT:

a.) Insurance companies always exclude aviation and hazardous occupations and hobbies.

b.) If the aviation exclusion is included, then the insurer will not pay a death claim if the insured was serving as an aircraft crew member.

c.) The hazardous occupations or hobbies exclusions exclude a death benefit if the insured dies as a result of his or her occupation or hobby.

d.) Some policies allow coverage of these risks, but they would likely charge an additional premium if the insured engages in these activities. -Correct Answer โœ” โœ” a.) Insurance companies always exclude aviation and hazardous occupations and hobbies

In most states, if a new life insurance policy is replacing an existing policy, the 'free look' period for the replacement policy is: -Correct Answer โœ” โœ” 30 days

a.) Prepaid tuition plans allow parents to lock in the cost of today's tuition, even if inflation or tuition increases.

b.) Prepaid tuition plans are typically open to both state residents and non-residents.

c.) Prepaid tuition plans typically limit a child's choice of colleges to in- state schools.

d.) Amounts contributed to prepaid tuition plans are available tax free when used to pay for qualified tuition costs. -Correct Answer โœ” โœ” b.) prepaid tuition plans are typically open to both state residents and non-residents

Brian's required minimum distribution from his traditional IRA was $6,000 this year. However, he only took a $2,000 distribution. What tax penalty will Brian have to pay? -Correct Answer โœ” โœ” $2,

(Failure to take the required minimum distribution results in a 50 percent penalty tax, which is applied to the difference between the

amount taken and what should have been taken. As a result, Brian will have to pay a $2,000 penalty tax.)

An employer establishes flexible spending accounts for its employees. Which expenses will the accounts NOT cover? -Correct Answer โœ” โœ”

insurance policy premiums

Benefits under a long-term care policy can be triggered by all of the following, EXCEPT:

a.) the insured becoming hospitalized

b.) the insured's loss of cognitive ability that limits his or her ability to care for himself or herself without help or supervision

c.) medical necessity

d.) the insured's inability to perform two or more activities of daily living (ADLs), such as bathing, eating, dressing, transferring (i.e., mobility), toileting, and continence -Correct Answer โœ” โœ” a.) the

insured becoming hospitalized

submitted to it by one insurer is available for review by other insurers.

How does a health insurance policy's illegal occupation provision protect the insurer? -Correct Answer โœ” โœ” It lets the insurer deny

liability when the insured's claim arises from an illegal activity in which he or she participated

An insured reports a claim for a covered loss more than three weeks after the loss occurred. What should the agent do when reporting the claim to the insurer? -Correct Answer โœ” โœ” Determine the reason

for the delay and report it to the insurer

Who is the primary care physician (PCP) in a managed care plan? - Correct Answer โœ” โœ” insured's physician who controls access to specialists

Why does an individual health insurance policy include a probationary period? -Correct Answer โœ” โœ” It helps the insurer avoid adverse

selection

Why would a basic medical expense policy not be a good form of coverage for a person who visits his doctor very often? -Correct Answer โœ” โœ” It primarily covers hospital-related expenses.

Gene is injured while on vacation. His employer's group disability plan pays benefits for over two years but reduces the amount paid by the benefits he receives under an individual disability policy. What kind of group coverage does Gene have? -Correct Answer โœ” โœ” group long-

term disability plan

Anne lives in State A and buys a health insurance policy issued by an insurer domiciled in State B. How does the conformity with state statutes provision resolve provisions in the policy that conflict with the laws of State A? -Correct Answer โœ” โœ” The policy will