Life and Health Insurance Exam Questions and Answers, Exams of Life Sciences

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Questions And Answers

Concealment - correct answer ✅The intentional failure to disclose known facts on an insurance application is called $94,800 - correct answer ✅Betty owns a universal life insurance policy that was issued with a $100,000 face amount and now has total death benefit protection of $110,000. Several months ago she borrowed $15,000 from the policy. The outstanding loan balance (Including Interest) is $15,200. If Betty dies today, what will be the amount of the death benefit? 6 Months - correct answer ✅Life insurance policies sold or delivered in Michigan must not contain the provision that back dates the effective date of a policy any more than how many months? Nonforfeiture Provision - correct answer ✅The privilege of accessing the cash value of an insurance policy if it is surrendered is known as the Mortality - correct answer ✅Which of the following premium factors has the greatest effect on life insurance premium calculations? Who Issues Them - correct answer ✅Annuities are classified by all of the following EXCEPT

Questions And Answers

Decreasing Term - correct answer ✅Joe buys his first home after obtaining a 30 year mortgage from his bank. He is considering the purchase of life insurance to ensure that the mortgage will be paid in the event of his death, in which case he will leave the house to his spouse and children. What would be the best life insurance protection for Joe? To provide for annuities to be payable in fixed or variable amounts or for variable life insurance - correct answer ✅For which of the following reasons would a domestic insurer set up separate accounts? Must have the application signed by the policyowner - correct answer ✅Which of the following statements regarding the delivery of a life insurance policy is NOT correct? $3.00 - correct answer ✅A producer must pay a fee of how much with each change of address? 1 to 12 months - correct answer ✅Group life insurance policies include a probationary period requiring new employees to wait a certain time before they can enroll in the plan. How long is the typical range for these probationary periods? $12,040 - correct answer ✅James died after receiving $180 per month for 6 years from a $25,000 life with refund annuity. His spouse, Lucy, as

Questions And Answers

his beneficiary, will now receive t he same monthly income until her payments total 25% of the employee's income up to a specified maximum amount - correct answer ✅Contributions to a simplified employee pension are not included in the employee's taxable income for the year as long as the contribution does not exceed Apparent Authority - correct answer ✅Susan is the receptionist at an insurance agency. She is currently studying for her life insurance license. One day at lunchtime, Carla comes in the office to pay her auto insurance premium. Susan talks to her about the importance of life insurance, and Carla immediately completes an application and gives Susan a check for the premium. Carla leaves the agency believing she is covered by life insurance. Susan has acted with The proceed are payable to the insured's estate or the insured had any incidence of ownership in the policy at time of death or transferred ownership within 3 years of death. - correct answer ✅Life insurance proceeds are included in t he gross estate if to replace an individual's economic value - correct answer ✅According to the principle of human life value, the purpose of life insurance is

Questions And Answers

24 hours with a minimum of 3 hours in ethics - correct answer ✅How many hours of continuing education credit does an agent need to complete every two years? Verify the applicant's military records, if any - correct answer ✅During the underwriting process, an insurer may do all of the following EXCEPT The projected future earnings of the breadwinner and the number of years she expects to work - correct answer ✅Which of the following is NOT taken into account when using the needs approach to determine the proper amount of insurance protection? A mutual insurance company - correct answer ✅An insurance company that is owned by its policyowners, who share the insurer's divisible surplus in the form of participating policy dividends, is known as The death benefit of $50,000 is not guaranteed. - correct answer ✅Michelle, age 31, just purchased a $50,000 variable life insurance policy. Which of the following statements is NOT correct? loss must be intentional - correct answer ✅All of the following are characteristics of an insurable risk EXCEPT

Questions And Answers

Life insurance that is owned by the insured will avoid estate tax inclusion as long as ownership is transferred to another party at least 1 year before the insured's death. - correct answer ✅Which of the following statements regarding the estate tax treatment of life insurance owned by the insured at the insured's death is NOT correct? Variable Life insurance cannot be proposed in sales situation unless the proposal is preceded or accompanied by a prespectus. - correct answer ✅Which of the following statements pertaining to variable life insurance is CORRECT? Accumulation Units - correct answer ✅Premiums paid into a variable annuity are used regularly to purchase Concealment - correct answer ✅When important and material facts are hidden by an insured on an application, this is known as The policyowner - correct answer ✅The party to whom the life insurance policy cash values belong is The same for both individual and group life insurance policies - correct answer ✅The incontestability period is usually

Questions And Answers

The overall purpose of the USA patriot act is to - correct answer ✅deter terrorist activity Employees' contributions to retirement plans are included in ordinary income. - correct answer ✅Which of the following statements about the tax advantages of a qualified retirement plan is NOT true? Use dividends to buy paid up additions - correct answer ✅Wendy has a $100,000 whole life participating policy. She recently married and is planning to have a family. She wants to increase her life insurance coverage but at minimal additional costs. Which of the following dividend options would be most suitable for her needs? Provides both pure insurance protection and cash value - correct answer ✅In contrast to traditional whole life insurance policies, term life insurance is still required to fulfill its obligation - correct answer ✅If an agent fails to perform an act required by a policy, the insurer An insurable risk must involve loss that is within the insured's control. - correct answer ✅With regard to insurable risks, which of the following statements is NOT correct?

Questions And Answers

Premiums generally may be increased or decreased at the policyowner's option. - correct answer ✅Which of the following statements applies to universal life insurance? continue to increase - correct answer ✅Leland elects to surrender his whole life policy for a reduced paid-up policy. The cash value of his new policy will Fines, actual damages suffered by the customer, punitive damages, and reasonable attorney's fees - correct answer ✅Penalties for violating the Fair Credit Reporting Act include Notify the existing insurer of the replacement transaction within 3 business days following receipt of the application. - correct answer ✅Which of the following is the responsibility of the replacing insurer when replacing a life insurance policy in Michigan? 10-year renewable and convertible level term - correct answer ✅Which of the following life insurance policies with the same face value would have the highest premium if issued to the same person? The primary beneficiary - correct answer ✅When the insured dies, who stands first to receive the life policy's death benefit?

Questions And Answers

The older person - correct answer ✅If both an older and a younger person had annuity funds of the same amount and simultaneously began to receive monthly life payments, which individual would receive the larger payments? The accumulation or pay in phase - correct answer ✅An annuity has 2 phases: the annuitization phase and The accumulation period - correct answer ✅The time during which funds are being paid into the annuity is called Benefits wil be calculated according to how much coverage the premium paid would have purchased for the correct age. - correct answer ✅What happens if the insurer discovers that the insured's age was accidentally misstated on an application for an individual life insurance policy? They are regarded as advertisements and must be truthful. - correct answer ✅Which of the following statements CORRECTLY describes sales aids used by insurance producers? An illegal inducement. - correct answer ✅Promising a return or profit NOT disclosed in t he insurance policy is an example of:

Questions And Answers

Reduced paid - correct answer ✅John, age 55, owns a whole life policy with a face amount of $100,00 for which the annual premium is $1,000. John explains to his agent that he lost his job and cannot afford his $1,000 annual premium but still desires to have life insurance to age

100. What nonforfeiture option could John's agent recommend to him? An insurance License can be revoked by the producer's company for violation of insurance laws. - correct answer ✅Which of the following statements is NOT correct regarding maintenance of an insurance license? The person who pays the premium dies or becomes disabled before the insured child reaches a certain age - correct answer ✅The payor benefit typically waives premiums on a juvenile policy if When the initial premium is paid - correct answer ✅When is a conditional receipt normally given to an applicant? $25,000 - correct answer ✅Josie has been totally disabled for 2 years. During that time, the insurance company has paid all premiums (a total of $1,200) on her $25,000 life policy, which has a waiver of premium clause. If Josie dies now, the insurance company will pay a death benefit of

Questions And Answers

An insurer assigns a premium rating to an applicant because of studies that suggest members of the applicant's race have a shorter than average life expectancy. - correct answer ✅Which of the following situations is the best example of unfair discrimination? net premium plus expense - correct answer ✅The annual gross premium of a life insurance policy is defined as real estate - correct answer ✅An example of an illiquid asset is It removes the producer's authority to represent a specific insurer. - correct answer ✅Which of the following statements is CORRECT concerning a terminated appointment? $50,000 - correct answer ✅Jay has a $50,000 life insurance policy with an accidental death benefit that pays triple the face amount. IF Jay commits suicide 3 years after purchasing the policy, how much will his beneficiary receive? Limited-pay policies mature more quickly than do continuous premium whole life policies. - correct answer ✅Which of the following statements regarding limited-pay life insurance is NOT correct?

Questions And Answers

Conversion will be contingent upon her evidence of insurability - correct answer ✅Madge took out a $100,000 10-year convertible term policy at age 30. At age 36 she decides to convert the policy to permanent insurance of the same amount of an original-age basis. Which of the following statements is NOT correct? number of agents - correct answer ✅Indepedent rating agencies evaluate all of the following factors of an insurer to assess their financial strength EXCEPT Universal Life - correct answer ✅While a policy loan is generally an available option with any form of permanent life insurance, a partial withdrawal of cash value from the policy is available only with which of the following types of life insurance? The investment risk is borne by the annuitant/contract owner. - correct answer ✅Which of the following statements regarding a variable annuity is TRUE? The death benefit will be increased according to how much coverage the premium John paid would have purchased had he reported his correct age. - correct answer ✅John purchased a life insurance policy with a $250,000 death benefit at age 32. When John died the insurer discovered that he was really 25 years old at the time of application. How much will the beneficiary receive?

Questions And Answers

The ownership rights provision - correct answer ✅The provision that allows a person to select the premium payment mode, settlement options, borrow cash values that have accumulated or cancel the policy is known as Insurer. - correct answer ✅In Michigan, who is ultimately responsible for making sure the content of an insurance advertisement meets state law requirements? $5,000 per violation. - correct answer ✅If a producer is found guilty of knowingly violating Michigan licensing insurance laws or regulations, the Commissioner can impose a maximum penalty of: Twisting. - correct answer ✅Implying that policy dividends are guaranteed as an inducement for an insured to drop existing insurance and purchase new insurance is: The premium for the renewal period will be higher than the initial period. - correct answer ✅Willa purchases a 5-year $50,000 level term policy with an option to renew. Which of the following statements about the policy's renewability is correct?

Questions And Answers

Accelerated death benefit payments are always 100% of the death benefit. - correct answer ✅Which of the following statements regarding accelerated death benefits is NOT correct? Binding - correct answer ✅Anna applied for a $2 million life insurance policy and paid the first premium but was later found to uninsurable. The agent gave her a receipt that guarantees coverage until the insurer formally rejects her application. Which type of receipt did Anna receive? A person licensed as an insurance counselor. - correct answer ✅Which of the following is considered an insurance counselor? The commissioner for license fees - correct answer ✅A producer owes a fiduciary responsibility to all the following EXCEPT protect the persons against failure in the performance of contractual obligations of certain insurance policies. - correct answer ✅The purpose of the Michigan Life and Health Insurance Guaranty Association is to: cancer - correct answer ✅Jerry has just purchased a life insurance policy and is taking time to review the policy's provisions. He will find that his policy excludes death by all of the following means EXCEPT

Questions And Answers

at any time - correct answer ✅The commissioner can examine the books, records, documents, and papers of foreign insurance companies The premium for modified whole life increases each year after the first few years of policy issue. - correct answer ✅Which of the following statements pertaining to modified whole life and graded premium whole life policies is NOT correct? The proceeds must be spent on the insured's medical expenses. - correct answer ✅Which of the following statements about accelerated living benefits is NOT correct? Joint Life - correct answer ✅Carlos and Jenna both work to support their family. To provide the same amount of life insurance protection in the event either dies, they should consider purchasing which of the following plans? $150 - correct answer ✅Last year Wendell, age 57 withdrew $1, from is IRA, which consists entirely of pretax contributions. In addition to including that amount in his taxable income, he has to pay a penalty of Rajesh, who has a $100,000 20-pay life policy - correct answer ✅Assume 4 individuals, all age 30, purchase the following life insurance policies. If

Questions And Answers

all policies are still in force 10 years later, who will have the largest cash value in his policy? A producer may share commissions with another licensed producer. - correct answer ✅Which of the following statements regarding the payment of commissions is CORRECT? 20-pay life policy - correct answer ✅Which of the following $50, limited pay life policies will have the highest premium for an applicant why is age 30? 30 - correct answer ✅If a producer undergoes criminal prosecution, he must notify the Director within how many days? The death benefit on the base life insurance policy - correct answer ✅An accidental death and dismemberment policy rider's principal sum is equal to She may convert to the permanent policy for up to 12 months following the term policy's expiration. - correct answer ✅Sophia has $250,000 10 year convertible term policy and would like to convert it to a permanent policy. Her agent provides her with the following information. Which statement is NOT correct?

Questions And Answers

Expensive - correct answer ✅Which of the following is NOT a characteristic of an insurable risk? Neil will receive income checks in the same amount as his father for 4 years. - correct answer ✅Norris is the primary beneficiary of a life insurance policy. He dies after receiving $275 per month for 6 years, under a 10 year period certain income option. His son, Neil, is the secondary beneficiary. Which of the following statements pertaining to this situation is CORRECT? take and pass the license examination - correct answer ✅When applying for a producer's license, a business entity must do all of the following, EXCEPT notify the existing insurer of the replacement transaction. - correct answer ✅It is the responsibility of the producer to do all of the following when replacing a life insurance policy EXCEPT: Level term life insurance - correct answer ✅A policy loan is generally available with all of the following types of life insurance policies EXCEPT Employees of banks and credit unions - correct answer ✅Which of the following employees would NOT be eligible for a 403(b) plan

Questions And Answers

Lump-Sum payments - correct answer ✅Jeremy did not designate a specific settlement option to be paid upon his death. How will the death benefit proceeds be distributed? once every five years - correct answer ✅The commissioner must examine the books, records, documents, and papers of domestic insurance companies at least The average number of deaths that will occur during a given year for a given age group of individuals - correct answer ✅A mortality table reflects a financial rating of the insurer. - correct answer ✅An advertisement for a life insurance policy must include all of the following except: An immediate annuity has a long accumulation period. - correct answer ✅Which of the following statements regarding an immediate annuity is NOT correct? a replacement provision - correct answer ✅All of the following are required provision in life insurance policies EXCEPT the original death benefit is not taxable; however, interest earned is taxable as ordinary income to Silvia - correct answer ✅Juan names his

Questions And Answers

sister, Silvia, as the beneficiary of his $250,000 life insurance policy. At Juan's death if Silvia chooses to have the proceeds paid over time, rather than in a lump sum, The face amount may be paid as a lump sum at the policyowner's selected retirement age. - correct answer ✅Which of the following statements pertaining to a whole life policy is NOT correct? Maria is charged a higher premium based on her poor health. - correct answer ✅Which of the following would NOT constitute unfair discrimination in insurance underwriting? While the children are in elementary school - correct answer ✅Herb and Felicia have been married for several years and are interested in increasing their life insurance protection as their family grows. Herb is a lawyer with a midsized firm. Felicia is a freelance writer of Children books. In planning for the future, when might they expect that their family will have its greatest need for income should one of them die? be totally and permanently disabled for at least 5 months - correct answer ✅To be eligible for Social Security disability benefits, one of the requirements is that the person

Questions And Answers

To supplement existing major medical coverage - correct answer ✅Which of the following is the best reason to purchase a vision care policy? the 61st through the 90th day in any Medicare benefit period - correct answer ✅All Medicare supplement policies must cover 100% of the Part A hospital coinsurance amount for each day used from The elimination Period - correct answer ✅What is one of the primary considerations of a disability buyout policy? 10 days - correct answer ✅When the commissioner orders an administrative hearing, the agent charged with violating the insurance laws must be given how much notice before the hearing takes place? $400 - correct answer ✅Lee has a Social Security PIA of $800 at the time of his death. How much is payable to his surviving spouse, who is caring for an unmarried child under the age of 16? depositing the initial premium in her own account - correct answer ✅Nancy is an agent for Assured Life a Health Insurance Company and convinces Sook, a young newlywed, to buy a policy. Sook and her spouse have recently moved to the city and found new jobs. Nancy wants to help them get settled. She may help them in all of the following ways EXCEPT

Questions And Answers

Blue Cross and Blue Shield coverage - correct answer ✅All of the following are examples of government insurance EXCEPT $5,000 - correct answer ✅The insured has a $2,500 individual deductible and a $7,500 family deductible. The insured has an injury in February resulting in $6,000 of medical expenses. Later in the same year, her spouse incurs $4,000 of medical expenses. How much will of these expenses will not be paid by the insurer? persistency - correct answer ✅When an employer renews the group coverage with the same insurer year to year, this is known as the Buyer's Guide - correct answer ✅The entire contract in health insurance includes all of the following EXCEPT her care was diagnostic - correct answer ✅Lisa's private dental expense plan might deny a portion of her claim for all of the following reasons EXCEPT once ever 5 years - correct answer ✅The Commissioner must examine the books, records, documents, and paper of domestic insurance companies at least

Questions And Answers

marital status - correct answer ✅All of the following can directly affect the amount of premium an individual insured pays EXCEPT The provide information obtained principally from law enforcement officials. - correct answer ✅Which of the following statements pertaining to inspection reports on life insurance applicants is NOT correct? It will pay a specified per-day benefit - correct answer ✅Debbie is concerned that her health insurance coverage is inadequate. Which of the following is the best reason for her to purchase an indemnity type medical expense policy? limit the risk with any 1 individual insured by the insurance company - correct answer ✅The optional other insurance in this insurer provision is specifically designed to concealment - correct answer ✅When important and material facts are hidden by an insured on an application, this is known as Social Security Reports - correct answer ✅All of the following are sources of insurability information about life insurance applicants EXCEPT

Questions And Answers

the insurance company is conditionally assuming the risk - correct answer ✅Upon issuance of a conditional receipt to an insurance applicant who has paid the insurer an initial premium, room and board - correct answer ✅Related costs associated with a surgical expense policy do NOT include A recurrent disability policy provision would have no effect on the payment of benefits - correct answer ✅Which of the following statements pertaining to recurrent disabilities and disability income insurance is NOT correct? eliminating pre-existing conditions for all individuals - correct answer ✅All of the following are requirements which were enacted as a result of HIPAA EXCEPT A POS plan allows a subscriber to access care both in-network and out- of-network. - correct answer ✅Which of the following statements about point-of-service (POS) plans is TRUE? exclusive or captive agents - correct answer ✅Agents that work on behalf of 1 specific insurance carrier are known as

Questions And Answers

80% of the cost of durable medical equipment - correct answer ✅Medicare Part A covers It spreads financial risk over a large group so as to minimize the loss to any one individual. - correct answer ✅Which of the following statements best summarizes the function of insurance? Excessive dieting - correct answer ✅Which of the following would be considered a moral hazard in underwriting a health insurance risk? loss must be intentional - correct answer ✅All of the following are characteristics of an insurable risk EXCEPT Limited-pay health - correct answer ✅Which of the following is NOT a basic form of health insurance coverage? imprisonment for up to four years and/or a fine of up to $50,000 - correct answer ✅In regards to health care benefits, anyone insured who commits a fraudulent insurance act is guilty of a felony and subject to debt was incurred. - correct answer ✅The effective date of credit insurance coverage is the date the:

Questions And Answers

Surgeon's Fees - correct answer ✅Which of the following items is NOT typically covered under a medical expense policy's miscellaneous expense benefit? averaging total risks pending - correct answer ✅Underwriting techniques commonly used by insurers in issuing policies to applicants who do not measure up to a standard rating include all of the following EXCEPT Reinstatement Provision - correct answer ✅With what provision of a standard health insurance policy would the following clause be associated: "the insured and the insurer shall have the same rights thereunder as they had under the policy immediately before the due date of the defaulted premium"? Stop-Loss - correct answer ✅Major medical policies that pay 100% of covered expenses above a specified amount and after the insured's deductible contain what kind of a provision? Hospital indemnity - correct answer ✅Which of the following policies pays a fixed hospital benefit directly to the insured, regardless of the actual hospital expenses incurred? policyholders - correct answer ✅A mutual insurer is owned by its

Questions And Answers

Sophie would be able to continue coverage for up to 3 years by paying up to 102% of the premium required for the group coverage. - correct answer ✅Eric works for J&G corporation and is recently divorced. His 56- years-old ex-spouse, Sophie, wants to know if she can maintain coverage under Eric's group medical insurance plan. Which of the following statements best describes how this situation might be treated? 60 days - correct answer ✅When an employee's coverage terminates under a group health policy, the employee has the option to elect continuation within nursing care in a hospital - correct answer ✅All of the following medical expenses are generally excluded from coverage under individual medical expense policies EXCEPT a deductible - correct answer ✅A basic medical expense policy is usually written with first-dollar coverage, which means it does not have Charlotte is injured on January 5th. later, she wishes to file a policy claim for expenses incurred in connection with the injury. Generally, she would be required to submit a notice of claim to the company by February 5th. - correct answer ✅Which of the following statements pertaining to notice of claim and claim forms provisions in health insurance policies is NOT correct?