Insurance Exam AZ #1333: Questions and Answers, Exams of Insurance law

Download Insurance Exam AZ #1333: Questions and Answers and more Exams Insurance law in PDF only on Docsity! QUESTIONS AND ANSWERS Exam Insurance Exam AZ #1333 Latest Update Rated A+ TESTED AND CONFIRMED A+ ANSWERS What type of reinsurance contract involves two companies automatically sharing their risk exposure? - Answer ✓✓Treaty The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called - Answer ✓✓reserves When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have - Answer ✓✓insurable interest Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called - Answer ✓✓representations The part of a life insurance policy guaranteed to be true is called a(n) - Answer ✓✓warranty Which of these is NOT a type of agent authority? If you need a professional to complete your college homework at a small fee, then reach out to amazingclasshelp.com Which of the following actions require a policy owner to provide proof of insurability in an Adjustable Life policy? - Answer ✓✓increase face amount When a policy owner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply? - Answer ✓✓Conversion provision What type of life insurance are credit policies issued as? - Answer ✓✓Term How long does the coverage normally remain on a limited-pay life policy? - Answer ✓✓age 100 All of these statements about Equity Indexed Life Insurance are correct EXCEPT - Cash value has a minimum rate of accumulation - If the gain on the index goes beyond the policy's minimum rate of return, the cash value will mirror that of the index -The premiums can be lowered or raised, based on investment performance -Tied to an equity index such as the S&P 500 - Answer ✓✓The premiums can be lowered or raised, based on investment performance What type of life insurance incorporates flexible premiums and an adjustable death benefit? - Answer ✓✓Universal Life What type of life policy covers 2 lives and pays the face amount after the first one dies? - Answer ✓✓Joint Life Policy Life insurance that covers an insured's whole life with level premiums paid over a limited time is called - Answer ✓✓Limited-Pay Life What kind of life insurance product covers children under their parent's policy? - Answer ✓✓Term rider P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase? - Answer ✓✓Family Maintenance policy Which of the following statements about a Variable Whole Life policy is CORRECT? -It provides a minimum guaranteed Death benefit If you need a professional to complete your college homework at a small fee, then reach out to Datedhomeworks.com - It is a combination of a Limited Period Endowment and a Decreasing Term policy - Its premiums and benefits are variable - It has a guaranteed rate of return - Answer ✓✓It provides a minimum guaranteed Death benefit Credit Life insurance is - Answer ✓✓issued in an amount not to exceed the amount of the loan When does Term Life expire? - Answer ✓✓At the end of the policy period What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death? - Answer ✓✓Face amount plus the policy's cash value A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as - Answer ✓✓Variable Life What type of life policy covers two people and pays upon the death of the last insured? - Answer ✓✓Survivorship contains a War Exclusion clause. How much will D's beneficiary's receive? - Answer ✓✓$100,000 Which of these statements about a Guaranteed Insurability Option rider is NOT TRUE? -Coverage can be added at specific events such as marriage or having a child -Evidence of insurability is not required when the option is exercised -Evidence of insurability is required when the option is exercised -Coverage can be added at specific ages - Answer ✓✓Evidence of insurability is required when the option is exercised An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period? - Answer ✓✓Full face amount minus any past due premiums Which of these are NOT an example of a Nonforfeiture option? -Extended Term -Reduced Paid-up -Cash Surrender -Life Income - Answer ✓✓life income When can a policyowner change a revocable beneficiary? - Answer ✓✓anytime K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? - Answer ✓✓daughter M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son? - Answer ✓✓revocable K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, where will the money go? - Answer ✓✓To P's estate If you need a professional to complete your college homework at a small fee, then reach out to Homeworks4u.org A policyowner's rights are limited under which beneficiary designation? - Answer ✓✓Irrevocable A level premium indicates - Answer ✓✓the premium is fixed for the entire duration of the contract On a life insurance policy, who is qualified to change the beneficiary designation? - Answer ✓✓Policyowner J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct? -The gross premium is higher on a monthly payment mode as compared to being paid annually -The gross premium is lower on a monthly payment mode as compared to being paid annually -The cash value from a life policy paid on a monthly basis builds quicker than one paid on an annual basis -The face amount of a life policy paid on a monthly basis is higher than one paid on an annual b - Answer ✓✓The gross premium is higher on a monthly payment mode as compared to being paid annually The annuity that represents the largest possible monthly payment to an individual annuitant is a(n) - Answer ✓✓Straight Life annuity Which of these statements concerning an Individual Straight Life annuity is accurate? - Answer ✓✓Payments are made to an annuitant for life Which type of contract liquidates an estate through recurrent payments? - Answer ✓✓Annuity P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase? - Answer ✓✓Deferred One becomes eligible for Social Security disability benefits after having been disabled for - Answer ✓✓5 months What is Old Age and Survivors Health Insurance (OASDHI) also known as? - Answer ✓✓Social Security Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits? - Answer ✓✓5 Which product would best serve a retired individual looking to invest a lump-sum of money through an insurance company? - Answer ✓✓Annuity An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age? - Answer ✓✓59 1/2 A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed? - Answer ✓✓Company X All students attending a large university could be covered by - Answer ✓✓a blanket policy The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for - Answer ✓✓health information Which type of provider is known for stressing preventative medical care? - Answer ✓✓Health Maintenance Organizations (HMO's) If you need a professional to complete your college homework at a small fee, then reach out to amazingclasshelp.com The individual who provides general medical care for a patient as well as the referral for specialized care is known as a - Answer ✓✓Primary Care Physician The health insurance program which is administered by each state and funded by both the federal and state governments is called - Answer ✓✓Medicaid Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures? - Answer ✓✓Commercial insurer What does Medicare Parts A and B cover? - Answer ✓✓Part A covers hospitalization; Part B covers doctor's services Medicare - Answer ✓✓is a hospital and medical expense insurance program Medicaid was designed to assist individuals who are - Answer ✓✓below a specific income limit Which of the following does Social Security NOT provide benefits for? -Survivorship An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the - Answer ✓✓insurer dates the policy What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled? - Answer ✓✓Waiver of Premium rider Which of the following are NOT managed care organizations? - Answer ✓✓Medical Information Bureau (MIB) In general, what percent of personal health insurance premiums is deductible for federal income tax purposes? - Answer ✓✓100% A life insurance illustration is NOT required to include the - Answer ✓✓company's mortality table An insurance company must do which of the following to terminate an agent's appointment? - Answer ✓✓Send notice of the termination to the Texas Department of Insurance An organization that solicits insurance only among its members is known as a - Answer ✓✓fraternal benefit society If you need a professional to complete your college homework at a small fee, then reach out to Homeworks4u.org Before holding a hearing regarding an agent's unfair or deceptive practice, the Insurance Commissioner MUST give how many days notice? - Answer ✓✓30 days A newly licensed General Lines agent must complete a MINIMUM of how many hours of continuing education within 24 months after initial license? - Answer ✓✓24 hours Insurance agent licenses normally must be renewed every - Answer ✓✓2 years An insurance agent does NOT have fiduciary responsibilities to - Answer ✓✓other agents If an insurance company is organized under the laws of New Jersey and licensed to do business here, it is considered which of the following in Texas? - Answer ✓✓a foreign company In Texas, a domestic insurance company is defined as a company that - Answer ✓✓is incorporated and formed in Texas Under the Texas insurance code, an insurance company must pay death benefits for suicide if the policy has been in force for a MINIMUM of - Answer ✓✓2 years A certificate of authority does which of the following? - Answer ✓✓Permits an insurance company to transact business in Texas After the initial enrollment period, an HMO must hold an open enrollment period of how many days at LEAST once in every 12-month period? - Answer ✓✓31 A Health Maintenance Organization (HMO) may issue an Evidence of Coverage form after it has been approved by the - Answer ✓✓Commissioner of Insurance A Long-Term Care policy must offer a MINIMUM benefit period of how many months? - Answer ✓✓12 A foreign insurance company is one that is incorporated - Answer ✓✓under the laws of another state If you need a professional to complete your college homework at a small fee, then reach out to Datedhomeworks.com