Insurance and Financial Planning Concepts, Exams of Nursing

Download Insurance and Financial Planning Concepts and more Exams Nursing in PDF only on Docsity! Texas State Exam Simulator - Life and Health Insurance (200 Questions Practice Exam) Questions and Answers 2024 An annuity promises that, if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an amount equal to the contract value has been paid. This type of annuity is called An installment Refund annuity A Straight Life annuity A Cash Refund annuity A Joint Life annuity Correct Answer is An installment Refund annuity One becomes eligible for Social Security disability benefits after having been disabled for 3 months 5 months 6 months 12 months Correct Answer is 5 months A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct? Straight life accumulates faster than Limited-pay Life 20-Pay Life accumulates cash value faster than Straight Life Cash value accumulation of both 20-Pay Life and Straight Life depend on the insurer's financial rating 20-Pay Life and Straight Life accumulate cash value at the same rate Correct Answer is 20-Pay Life accumulates cash value faster than Straight Life Who makes the legally enforceable promises in a unilateral insurance policy? Beneficiary Insurance company Insured Applicant Correct Answer is Insurance company The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and the initial premium agreeing to a physical examination delivery of policy disclosure of any medical conditions Correct Answer is the initial premium Which parts of a life insurance policy are guaranteed to be true? Rating Representation Statement Warranty Correct Answer is Warranty A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered EXCEPT for hospital charges physician fees experimental and investigative services nursing services Correct Answer is experimental and investigative services If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses? Long-term care Indemnity Medicare Supplement Medicaid Correct Answer is Medicare Supplement S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits? No benefits are payable under the Master contract Full benefits are payable under the Master contract Full benefits are payable under the converted policy Benefits less required premium are payable under the converted policy Correct Answer is Full benefits are payable under the Master contract All of the following are limited benefit plans EXCEPT What is the MINIMUM number of Activities of Daily Living (ADL) an insured must be unable to perform to qualify for Long Term Care benefits? 1 2 3 4 Correct Answer is 2 An agent who tells a client that dividends are guaranteed may be guilty of fraud rebating misrepresentation slander Correct Answer is misrepresentation Which statement regarding a Key Employee Life policy is NOT true? The application must be signed by the key employee Its purpose is to prevent the financial loss that may ensue if a key employee dies The beneficiary is named by the key employee The company purchases, owns, pays the premiums and is the beneficiary Correct Answer is The beneficiary is named by the key employee A policyowner's rights are limited under which beneficiary designation? Revocable Tertiary Contingent Irrevocable Correct Answer is Irrevocable Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take? Deposit the applicant's check into his account and make a personal check out to the insurance company from his personal account Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company Cross off his name on the "pay to" portion of the check, write the name of the insurance company, and send the check back to the insurance company Deposit the check in to his personal account, use the funds to purchase a cashiers check, and send the new cashiers check back to the insurance company Correct Answer is Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company Variable Whole Life Insurance can be described as both an insurance and securities product an insurance product only a securities product only the insurance company assumes the investment risk Correct Answer is both an insurance and securities product A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary? Medicaid Long-term care Medicare Her group health plan Correct Answer is Her group health plan Medicare is a disability program is a hospital and medical expense insurance program offers assistance in making health insurance premiums Part D provides payment for surgeon expenses Correct Answer is is a hospital and medical expense insurance program T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take? Allow her to take a tax deduction on unearned premiums Increase her policy's coverage amount Decrease her policy's coverage amount Nothing Correct Answer is Increase her policy's coverage amount All of the following statements about health coverage for newborns are correct EXCEPT coverage begins and benefits are payable from the moment of birth coverage includes necessary care and treatment of congenital defects coverage during the first year is limited to congenital defects continued coverage after the first 31 days is dependent on notification Correct Answer is coverage during the first year is limited to congenital defects Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself? Policy Exclusion Incontestable Entire Contract Provision Assignment Correct Answer is Entire Contract Provision An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a $125,000 individual whole life policy $25,000 modified whole life policy $25,000 individual term life policy $25,000 individual whole life policy Correct Answer is $25,000 individual whole life policy M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year for the first 5 years. At the beginning of the sixth year, the premium will increase to $800 per year but will remain level thereafter. The face amount will remain at $70,000 throughout the life of the policy. The type of policy that M has purchased is Adjustable Life Indeterminate Premium Life Grader Premium Life Modified Premium Life Correct Answer is Modified Premium Life S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT type of life insurance S's attained age dividend amount used toward purchase beneficiary's age Correct Answer is beneficiary's age Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy? Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deducitble? Deferral provision Carryover provision Stop Loss provision Corridor provision Correct Answer is Carryover provision T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this? Fixed Certain Joint and Full Survivor Life Annuity with Period Certain Installment Refund Correct Answer is Life Annuity with Period Certain On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take? Collect initial premium Collect initial premium along with a signed health statement Explain to the applicant the policy is no longer in effect due to change in health condition Collect initial premium and leave a binding receipt Correct Answer is Collect initial premium along with a signed health statement Which of the following costs would a Basic Hospital/Surgical policy likely cover? Surgically removing a facial birthmark Care given at a nursing home Treating a wound from a soldier injured at war Lost income caused by a hospital stay Correct Answer is Surgically removing a facial birthmark Which of these statements concerning an Individual Straight Life annuity is accurate? Life expectancy of the annuitant is not a factor The payments are received tax-free Only available to employees of nonprofit charitable, educational, and religious organizations Payments are made to an annuitant for life Correct Answer is Payments are made to an annuitant for life J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions? Payor clause Automatic Premium Loan provision Reinstatement provision Waiver of Premium Correct Answer is Reinstatement provision P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA laws, which of the following statements is TRUE? She DOES need to provide evidence of insurability She does NOT need to provide evidence of insurability She will have up to 6 months to convert to an individual policy She will be paying exactly the same premium for the individual plan as she did the group plan Correct Answer is She does NOT need to provide evidence of insurability A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value? Cash surrender Life settlement contract Buy-sell arrangement 1031 Exchange Correct Answer is Life settlement contract Who can purchase a plan through the Marketplace? Anyone Any legal resident except those incarcerated Only those who do not have access to employer-sponsored coverage Only those who might be eligible for tax credits Correct Answer is Any legal resident except those incarcerated What is Old Age and Survivors Health Insurance (OASDHI) also known as? Medicare Social Security Medicaid FICA Correct Answer is Social Security Which of these require an offer, acceptance, and consideration? Warranty Estoppel Contract Representation Correct Answer is Contract How does a typical Variable Life Policy investment account grow? Tied to price of gold Through mutual funds, stocks, bonds Based on returns from insurer's general account Tied to Treasury Bills Correct Answer is Through mutual funds, stocks, bonds An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the agent applicant's spouse National Association of Insurance Commissioners (NAIC) applicant's physician Correct Answer is applicant's physician 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? 15 31 45 90 Correct Answer is 31 Which of the following is NOT included in the policy face? Free Look provision Name of the insured Name of the insurer Exclusions Correct Answer is Exclusions Person designated by the insurance comapany to receive policy proceeds in the event that the primary beneficiary dies Correct Answer is Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured A Business Disability Buyout plan policy is designed as an incurred expense plan with a very short Elimination period to pay benefits to the Corporation or other shareholders to pay benefits to the insured's spouse Correct Answer is to pay benefits to the Corporation or other shareholders Term insurance has which of the following characteristics? Expires at the end of the policy period Builds cash value Has nonforfeiture options Endows at the end of the policy period Correct Answer is Expires at the end of the policy period An agent MUST do which of the following during a sales presentation for a participating life insurance policy? Include a statement that dividends are NOT guaranteed Include a statement that dividends ARE guaranteed Explain the applicable Nonforfeiture values Explain the surrender cost indexes for 5 and 10 years Correct Answer is Include a statement that dividends are NOT guaranteed In regards to representations or warranties, which of these statements is TRUE? Warranties are statements considered to be true to the best of the applicant's belief If material to the risk, false representations will void a policy Representations are statements guaranteed to be true in every respect If material to the risk, false representations will NOT void a policy Correct Answer is If material to the risk, false representations will void a policy The Commissioner of Insurance may issue a temporary agent's license for a maximum of how many days? 180 90 60 30 Correct Answer is 90 A stock insurance company is owned by it's directors stockholders agents insureds Correct Answer is stockholders 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 basis Correct Answer is The gross premium is higher on a monthly payment mode as compared to being paid annually What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies? Family Maintenance Policy Family Income Policy Survivor Policy Family Survivor Policy Correct Answer is Family Maintenance Policy Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan? Revocable assignment Beneficiary change Irrevocable assignment Collateral assignment Correct Answer is Collateral assignment Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured? HMO PPO EPO PLHSO Correct Answer is PPO Basic Hospital and Surgical policy benefits are lower than the actual expenses incurred higher than the actual expenses incurred normally subject to deductibles normally subject to coinsurance Correct Answer is lower than the actual expenses incurred An employer that offers a qualified retirement plan to its employees is eligible to avoid ERISA regulations make tax-deductible contributions to the plan make tax deductible contributions to key employees only make partial tax-deductible contributions to the plan Correct Answer is make tax-deductible contributions to the plan What action can a policyowner take if an application for a bank loan requires collateral? Utilize accelerated benefits provision Borrow against policy cash value and use as a down payment Assign policy ownership to the bank Name bank as beneficiary Correct Answer is Assign policy ownership to the bank Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due? Grace Period Consideration Waiver of Premium Reinstatement Correct Answer is Grace Period The Consideration clause in a life insurance contract contains what pertinent information? Summary of benefits Offer and acceptance Entire Contract Amount of premium payments and when they are due Correct Answer is Amount of premium payments and when they are due A 42-year-old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his/her needs change. Which of the following policies will best meet this need? Endowment at Age 75 Universal Life Graded Benefit Whole Life Modified Whole Life Correct Answer is Universal Life When a life insurance policy exceeds certain IRS table values, the result would create which of the following? 1035 Exchange An investment Modified Endowment Contract (MEC) Endowment Correct Answer is Modified Endowment Contract (MEC) Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges? The maximum premium an insurer can charge for their health insurance based on geography The maximum amount an employer can contribute to a contributory health plan The maximum deductible an insured can be charged The maximum amount considered eligible for reimbursement by an insurance company under a health plan Correct Answer is The maximum amount considered eligible for reimbursement by an insurance company under a health plan K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? Return of premiums paid Cash value plus interest $20,000 death benefit Face amount plus interest Correct Answer is $20,000 death benefit Which of the following are NOT managed care organizations? Point-of-Service plan (POS) Preferred Provider Organization (PPO) Medical Information Bureau (MIB) Health Maintenance Organization (HMO) Correct Answer is Medical Information Bureau (MIB) K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered optionally renewable conditionally renewable guaranteed renewable noncancellable Correct Answer is guaranteed renewable What type of life insurance incorporates flexible premiums and an adjustable death benefit? Endowment Policy Modified Whole Life Decreasing Term Universal Life Correct Answer is Universal Life P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy? A straight life deffered annuity A straight life annuity An immediate annuity A deferred annuity Correct Answer is An immediate annuity Quarterly premium payments increase the annual cost of insurance because insurer risk exposure is greater interest to the insurer is increased while administrative costs are decreased mortality costs are greater interest to the insurer is decreased while the administrative costs are increased Correct Answer is interest to the insurer is decreased while the administrative costs are increased N purchases an annuity by making payments in an amount no less than $100 quarterly. This describes which of the following annuities? Installment Immediate Fixed Installment Deferred Flexible Installment Deferred Flexible Premium Immediate Correct Answer is Flexible Installment Deferred If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of? Insurer Beneficiary Reinsurer Insured Correct Answer is Insured What kind of life insurance product covers children under their parent's policy? Family Maintenance rider Term rider Family Income rider Payor benefit Correct Answer is Term rider When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n) elimination exclusion limitation exception Correct Answer is exclusion What is the purpose of the U.S.A. Patriot Act? detect and deter fraud detect and deter alien insurance companies detect and deter terrorism detect and deter misrepresentations Correct Answer is detect and deter terrorism The health insurance program which is administered by each state and funded by both the federal and state governments is called Long-term care Medicaid Medicare Supplemental Program Medicare Correct Answer is Medicaid A foreign insurance company is one that is incorporated under Texas law under the laws of another state is a territory of the United States outside the United States Correct Answer is under the laws of another state A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a treaty insurer risk retention group risk assumption group captive insurer Correct Answer is risk retention group What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision? File a lawsuit Submit the claim in any form Wait for the claim form to arrive Resubmit the request for a claim form Correct Answer is Submit the claim in any form Which of these is considered a mandatory provision? Payment of Claims Insurance with Other Insurers Misstatement of Age Change of Occupation Correct Answer is Payment of Claims N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as Assignment of Benefits Coinsurance Indemnity Co-deductible Correct Answer is Coinsurance A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision? Payor provision Accelerated Benefits provision Assignment provision Waiver of Premium provision Correct Answer is Payor provision The sections of an insurance contract which limit coverage are called waivers riders exclusions limitations Correct Answer is exclusions Which of the following is NOT a limited benefit plan? cancer policies life insurance policies dental policies critical illness policies Correct Answer is life insurance policies All of the following provisions must be included in life insurance policies EXCEPT Incontestability Entire Contract Extended Term Misstatement of Age Correct Answer is Extended Term In a life insurance policy, which feature states that the policy will not cover certain risks? Exception Exclusion Ejection Expulsion Correct Answer is Exclusion What type of life policy covers two people and pays upon the death of the last insured? Shared Survivorship Adjustable Joint Correct Answer is Survivorship J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a predetermined price. What type of plan does J belong to? Multiple Employer Welfare Arrangement Multiple Employer Trust Health Maintenance Organization Co-op Arrangement Correct Answer is Health Maintenance Organization Which of the following actions is NOT possible with a Universal Life policy? Policy's cash value may be used to pay premiums Premium payments may be made at unscheduled times Premiums may be applied as a credit against income tax Face amount may be adjusted Correct Answer is Premiums may be applied as a credit against income tax If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act? Primary beneficiary's estate Primary beneficiary's next of kin Insured's estate Insured's contingent beneficiary Correct Answer is Insured's contingent beneficiary Which of these is NOT considered to be a cost connected with an individual's death? Funeral expense Tax liability Business expenses Probate costs Correct Answer is Business expenses Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated 1970 - Fair Credit Reporting Act 1959 - Intervention by (SEC) The Securities and Exchange Commission 1999 - Financial Services Modernization Act 1945 - The McCarran-Ferguson Act Correct Answer is 1970 - Fair Credit Reporting Act forfeited an amount that the premiums paid would have purchased at the current age or ages an amount consists of the premiums paid for the policy if the policy was issued for over three years reduced by a specified percentage of the face amount Correct Answer is an amount that the premiums paid would have purchased at the current age or ages T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary? Request will be accepted only if in writing by the insured Change will be made only if premiums are paid current Change will be made immediately Request of the change will be refused Correct Answer is Request of the change will be refused Which of the following health insurance coverages is BEST suited for meeting the expenses of catastrophic illness? Major Medical Hospital Expense Surgical Expense Hospital Income Correct Answer is Major Medical An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n) delayed effective date exclusion for the medical condition extended Contestable period Concealment clause Correct Answer is exclusion for the medical condition What provision in a life insurance policy states that the application is considered part of the contract? Application provision Policy Exclusions provision Entire Contract provision Incontestability provision Correct Answer is Entire Contract provision When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans? Joint Noncontributory Contributory Participating Correct Answer is Contributory In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and a Medical Information Report the initial premium forward it immediately to the insurer Attending Physician Statement Correct Answer is the initial premium A newly licensed General Lines agent must complete a MINIMUM of how many hours of continuing education within 24 months after initial license? 10 15 20 24 Correct Answer is 24 A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as a fraternal benefit society a stock insurer a mutual insurer the Life and Health Insurance Guaranty Association Correct Answer is a fraternal benefit society An enrollee of a Health Maintenance Organization (HMO) may be cancelled or nonrenewed for which of the following reasons? Failure to pay for coverage Marriage to a person with a pre-existing condition Excessive use of health care benefits Refusing HMO advice to quit smoking Correct Answer is Failure to pay for coverage Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? Consideration Competent Parties Offer/Acceptance Legal Purpose (Insurable Interest) Correct Answer is Legal Purpose (Insurable Interest) Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the marital deduction death benefits Section 1035 exchange capital gains tax rate Correct Answer is marital deduction An organization that solicits insurance only among its members is known as a specific order specialized company limited insurance company fraternal benefit society Correct Answer is fraternal benefit society K purchased a $10,000 Life Policy that will pay the face amount to her if she lives to age 65, or to her beneficiary if she dies before age 65. K purchased which of the following types of policies? Limited-Pay Life Term to Age 65 Whole Life Paid-Up at Age 65 Endowment at Age 65 Correct Answer is Endowment at Age 65 T was treated for an ailment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterwards.How will the insurer likely consider this condition? Insurer will require a higher deductible for any claims resulting from this condition Insurer is required to initially cover this pre-existing condition Insurer will permanently exclude the condition from the policy Insurer will likely treat as a pre-existing condition which may not be covered for one year Correct Answer is Insurer will likely treat as a pre-existing condition which may not be covered for one year Collateral assignment Concealment Correct Answer is Exclusion N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase? 30 Pay Life Term to Age 70 Universal Life Adjustable Life Correct Answer is 30 Pay Life Which statement is TRUE in regards to a policy loan? Past-due interest payments not paid after 3 months will void the policy Past-due interest on a policy loan is added to the total debt Insurance companies can send delinquent interest accounts to a collection agency Insurance companies can charge an interest rate based on the policyowner's credit report Correct Answer is Past-due interest on a policy loan is added to the total debt P is self-employed and owns an Individual Disability Income policy. He becomes totally disabled on June 1 and receives $2,000 a month for the next 10 months. How much of this income is subject to federal income tax? $20,000 $14,000 $6,000 $0 Correct Answer is $0 What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability? Entire contract Owner's rights Nonforfeiture options Conversion Correct Answer is Conversion Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy? Discourages overutilization of the insurance coverage Minimizes the need for deductibles Discourages adverse selection Minimizes the waiting period Correct Answer is Discourages overutilization of the insurance coverage At the age of 45, an individual withdraws $50,000 from his Qualified Profit-Sharing Plan and then deposits this amount into a personal savings account. This action would result in Only income tax on the amount withdrawn Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan Continued tax-free accumulations in the bank savings account Only a 10% penalty on the withdrawal of funds Correct Answer is Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan Before holding a hearing regarding an agent's unfair or deceptive practice, the Insurance Commissioner MUST give how many days notice? 3 5 10 30 Correct Answer is 30 Which of the following is an important underwriting principle of group life insurance? Physical examinations are required Everyone must be covered in the group Employer must pay for the entire premium The group must be formed for the purpose of getting affordable insurance Correct Answer is Everyone must be covered in the group The Consideration clause of an insurance contract includes the buyer's guide a summary of the coverage provided the named beneficiaries the schedule and amount of premium payments Correct Answer is the schedule and amount of premium payments 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? Daughter Husband's estate K's estate Trust fund Correct Answer is Daughter The Commissioner of insurance may suspend, revoke, or refuse to renew the license of an agent who is convicted of a misdemeanor is found guilty of misrepresentation or fraud in obtaining the license files for bankruptcy fails to write any business for six consecutive months Correct Answer is M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for? Claim payment is equal to physician's actual charges Claim payment is negotiated between physician and patient Determined by the schedule of benefits from the hospital Determined by the terms of the policy Correct Answer is Determined by the terms of the policy If X wants to buy $50,000 worth of permanent protection on his/her spouse and $25,000 worth of 10-year Term coverage on X under the same policy, the applicant should purchase An Estate Builder Policy A Whole Life Policy with Extended Term A Whole Life Policy with an Other Insured Rider A Whole Life Policy with a Payor benefit Correct Answer is A Whole Life Policy with an Other Insured Rider The insuring clause Specifies the additional time given to pay past due premiums States the scope and limits of the coverage States the amount of premium to be collected Prohibits the insured from suing the insurer for at least 60 days after filing a written proof of loss Correct Answer is States the scope and limits of the coverage How does group insurance differ from individual insurance? Evidence of insurability is required Premiums are higher