Insurance Questions

small business owner is the insured under a disability policy that funds a buy - sell agreement . If the owner dies or becomes disabled , the policy would provide which of the following ? a ) The business manager's salary b ) Disability insurance for the owner c ) Cash to the owner's business partner to accomplish a buyout d ) The rent money for the building

A corporation is the owner and beneficiary of the key person life policy . If the corporation collects the policy benefit , then a ) The benefit is subject to the exclusionary rule . b ) IRS has no jurisdiction . c ) The benefit is received as taxable income . d ) The benefit is received tax free

In a disability policy , the probationary period refers to the time a ) Between the 10th day of an illness - related disability and the first payment . b ) Between the first day of disability and the actual receipt of payment for the disability incurred . c ) During which illness - related disabilities are excluded from coverage . d) Between the first day of disability and the day the disability must continue before the insured receives any benefits .

All of the following are true of key person insurance EXCEPT a ) The plan is funded by permanent insurance only . b ) There is no limitation on the number of key employee plans in force at any one time . c ) The employer is the owner , payor and beneficiary of the policy . d ) The key employee is the insured

An insured pays a $ 100 premium every month for his insurance coverage , yet the insurer promises to pay $ 10,000 for a covered loss . What characteristic of an insurance contract does this describe ? a ) Aleatory b ) Good health c ) Adhesion d ) Conditional

An annuity owner is funding an annuity that will supplement her retirement . Because she does not know what effect inflation may have on her retirement dollars , she would like a return that will equal the performance of the Standard and Poor's 500 Index . She would likely purchase ani a ) Equity Indexed Annuity b ) Variable Annuity c ) Flexible Annuity . d ) Immediate Annuity .

The type of policy that can be changed from one that does not accumulate cash value to the one that does is a a ) Whole Life Policy . bi Convertible Term Policy ) Renewable Term Policy d ) Decreasing Term Policy .

All of the following statements concerning dividends are true EXCEPT a ) Dividend amounts are guaranteed in the policy . b ) Lower insurance company costs generate higher dividends . c ) They stem from favorable underwriting experience . d ) Favorable investment results generate higher dividends

Ifa policyholder declines the nonforfeiture benefit , what must the insurer provide to the client upon the lapse of the policy ? a ) An aleatory benefit b ) A full refund of premiums c ) Pro Rata premiums d ) A contingent benefit

How long must an insurer maintain advertisements used in the sale of life insurance ? a ) 2 years . b ) 3 years c ) 5 years d ) 6 years Insurers must All health insurance policies issued in this state must provide coverage for maternity services . How many hours of inpatient care must be provided to a mother after a delivery by caesarian section ? a ) At least 48 b ) At least 96 c ) At least 24 d ) At least 36

When can a Long - Term Care policy deny a claim for losses incurred because of a pre - existing condition ? a ) At any time b ) At no time c ) Within 6 months of the effective date of coverage d ) Within 12 months of the effective date of coverage

What must a health carrier do within 72 hours of receiving a request for an expedited review ? al Provide written confirmation of the carrier's decision b ) Acknowledge receipt of the request c ) Notify the requesting enrollee of the carrier's established written procedures for an expedited review d ) Notify the requesting enrolice of the carrier's determination

The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower - echelon employees . This plan would be funded with before - tax corporate dollars , and it does not meet government approval standards . This annuity plan is a ) An executive annuity plan . b ) Subject to government standards . c ) Illegal . d ) Anonqualified annuity plan

Which of the following is TRUE regarding the insurance amount in a credit life policy ? a ) The creditor may insure the debtor for an unlimited amount of coverage . b ) Allowable amount of coverage is determined by the State Insurance Commissioner . c ) The amount of coverage can be greater than the amount owed . d ) The creditor can only insure the debtor for the amount owed

Which types of insurance companies marketing long - term care insurance coverage must establish procedures to assure that any comparison of policies by its agents will be fair and accurate ? a ) Every company is required to establish marketing procedures b ) Any company that uses any form of media to market policies that yield no less than 20 % of its business . c ) Mutual and stock.companies . d ) No companies are required to establish marketing procedures

A producer has submitted a new application to his insurer ; however , 30 days later there was still no coverage available for the applicant . What must the producer do ? a ) Nothing producer has no further obligations once the application is submitted to the insurer . b ) Submit a complaint to the Department of Insurance c ) Submit a request for coverage to the insurer d ) Inform the applicant in writing

Which of the following is NOT required on an application for a variable life insurance policy ? a ) Questions designed to assist the insurer in determining suitability of the insurance b ) A statement explaining the use of separate accounts in variable insurance c ) A statement that the death benefit may be variable or fixed d ) A statement that cash values may increase or decrease based on the separate account

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. What is the company guilty of?

The sole beneficiary of a life insurance policy dies before the insured . If the policyowner fails to change the beneficiary before the insured's death , the proceeds of the policy will go to a ) The insured's estate b ) Probate c The state d . The beneficiary's estate .

Under which of the following employer - provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer ? al Dental Expense b ) Basic Medical Expense c ) Disability Income dy Major Medical