EXAM FX INSURANCE (LIFE AND HEALTH/GENERAL) TETS COMPILATION BUNDLE

if an applicant does not receive his or her insurance policy who is at fault correct answer: the agent what do limited health policies cover correct answer: a specified accident of disease which type of insurance is based on mutual agreements among subscribers correct answer: reciprocal ins...

Attained Age correct answer: the insured age at the time the policy is issues or renewed cash value correct answer: a policy's savings element or living benefit face amount correct answer: the amount of benefit stated in the life insurance policy fixed life insurance correct answer: co...

Ray has an individual major medical policy that requires a coinsurance payment. Ray rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arranngement would be best for Ray? correct answer: 50/50 Which two terms are associated directly with the way an...

Exam FX LIFE INSURANCE QUESTIONS WITH COMPLETE SOLUTIONS

survivor protection - provides necessary funds for survivors to maintain their current lifestyle estate creation - is created by the purchase of life insurance cash accumulation - whole life policies liqudity - policies cash values can be borrowed against at any time estate conversion - ...

An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term? correct answer: The insured may renew the policy for another 10 years, but at a higher premium rate. Which of the following statements is TRUE concerni...

What is insurance correct answer: the legal agreement ,or contract, whereby the two parties involved agree to the limits of the indemnification, the circumstances under which it will occur and what things of value( consideration) will be exchanged by the parties to the contract. What is the defi...

What type of health insurance would pay for hiring a replacement for an important employee who becomes disabled? correct answer: Key-person disability insurance What are the three types of basic medical expense insurance? correct answer: Hospital, surgical and medical What are the two types ...

All of the following are optional endorsements that may be added to the standard equipment breakdown coverage form EXCEPT correct answer: Debris removal An insured was judged at fault in an automobile accident. He has the 100/300 bodily injury liability coverage. Three other individuals were inj...

which of the following would NOT be considered limited coverage policy? a. accident-only insurance b. travel policy c. major medical expense insurance d. special risk policy correct answer: c. major medical exoense insurance limited policies cover only expense incurred from specific diseases...

A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid? correct answer: The benefits will be coordinated Which of the fo...

insurance correct answer: transfers risk of loss from an individual or business to entity to an insurance company, spreads cause of unexpected losses to many individuals Insurance transactions correct answer: -solicitation -negotiations -sale (effectuation of a contract of insurance) -Advis...

Regarding a PPO, which of the following is correct when selecting a primary care physician? A The insured may choose medical providers not found on the preferred list and still retain coverage. B The insured is allowed to receive care from any provider, but if the insured selects a PPO provider, t...

Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement? term permanent...

What law protects consumers from the circulation of inaccurate or obsolete information? correct answer: The Fair Credit Reporting Act What do individuals use to transfer their risk of loss to a larger group? correct answer: Insurance What term describes the fee a person pays an insurance com...

A portfolio manager purchases a bond on a yield-to-call basis. The bond was trading at correct answer: a premium What activity can an investment company perform without shareholder vote correct answer: appointment of officers of the investment company Which of the following ar issued with a ...

Which of the following is NOT true regarding the annuitant? a)The annuitant receives the annuity benefits. b)The annuitant must be a natural person. c)The annuitant cannot be the same person as the annuity owner. d)The annuitant's life expectancy is taken into consideration for the annuity. cor...

Insurance correct answer: protects from loss; transfer of risk Risk correct answer: uncertainty or chance of loss occurring Pure risk correct answer: can only result in loss and no gain; what insurance companies are willing to accept Speculative risk correct answer: opportunity for eith...

A brain surgeon has an accident and develops tremors in her right arm. Which disability income policy definition of total disability will cover her for all losses? A.) "Own occupation" - less restrictive than other definitions B.) "Any occupation" - less restrictive than other definitions C...

A brain surgeon has an accident and develops tremors in her right arm. Which disability income policy definition of total disability will cover her for all losses? A.) "Own occupation" - less restrictive than other definitions B.) "Any occupation" - less restrictive than other definitions C...

Which of the following best describes what the annuity period is? correct answer: The period of time during which accumulated money is converted into income payments The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had an income for life aft...

What type of life insurance policy provides permanent protection? correct answer: Whole life What type of annuity requires an agent to have a securities license? correct answer: Variable annuity Whole life insurance policies mature when the insured reaches the age of 100. If the owner of a w...

What are the four elements of an insurance contract? correct answer: Agreement (offer and acceptance), consideration, competent parties, and legal purpose If an applicant for a life insurance policy and the potential insured are two different people, what would be the underwriter's main concern...

the transfer of an insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses? correct answer: Subrogation the purpose of managed care health insurance is to correct answer: control health insurance claims expenses a man works for compan...

What are the three main instances when insurable interes exists in life insurance? correct answer: -Insuring your own life -the life of a family member -or the life of a business partner or someone who has a financial obligation to the policyowner What document describes the specific authority...

An IRA uses immediate annuity to pay out benefits; the IRA Owner is nearly 75 years old when he decides to collect distributions. What kind of penalty with the IRA owner pay? correct answer: 50% tax on the amount not distributed as required. (When immediate annuity's are used to pay IRA benefits,...

medical expense insurance correct answer: provide benefits for the cost of medical care that results from 3 basic coverages (hosp, surg, medical). hosp, surg, and medical insurance is refered to as what? correct answer: first dollar coverage because they usually do not require the insured to pa...

The reduction of premium option uses dividend to reduce -this years premium -the previous years premium -the premium of any other policy owned by the policy owner -next years premium correct answer: next years premium reduction of premium option always reduces the next years premium An em...

Basic Hospital Expense Coverage correct answer: Surgeon's fees are NOT covered under... Hospital expense policies correct answer: ... cover hospital room and board, and miscellaneous hospital expenses, such as lab and x-ray charges, medicines, use of operating room and supplies, while the insu...

All of the following describe indirect losses EXCEPT: a. The cost of a rental car while a covered auto is in the body shop b.The cost of eating at restaurants while a fire damaged kitchen is repaired c. Replacing shingles on a roof destroyed by a covered loss d. Hotel bills while a smoke damaged...

build up correct answer: accumulate the insured's age at the time the policy is renewed or replaced correct answer: attained age a policy's savings element or living benefit correct answer: cash value witheld or postponed until a specified time or event in the future correct answer: d...

A business owner was trying to obtain a bank loan to fund the purchase of a new business facility, but the bank required proof of additional assets to secure the loan. The business owner then decided to use her $250,000 life insurance policy to secure the loan. Which provision makes this possible? c...

What is the term for how frequent a policyowner is required to pay the policy premium? correct answer: Mode Which of the following statements is true about a policy assignment? correct answer: It transfers rights of ownership from owner to another person During partial withdrawal from a univ...

The entire contract includes all of the following EXCEPT... correct answer: A buyer's guide All of the following statements about indexed whole life insurance EXCEPT... correct answer: The death benefit is not increased What guarantees that the information explained in the insurance contrac...

What nonforfeiture option is automatically selected by the company if not chosen by the policyowner? correct answer: Extended term Is the beneficiary required to have insurable interest in the insured? correct answer: No. beneficiaries do not have insurable interest in the insured What divid...

Government sponsored programs for social insurance correct answer: medicare, medicaid, and social security Medicare correct answer: is a federal medical expense insurance program for people age 65 and older (even while still employed). who is available to receive medicare correct answer: an...

Can a group that is formed the sole purpose of obtaining group insurance qualify for group coverage? correct answer: No, the group must be formed for a purpose other than obtaining group insurance As it pertains to group health insurance, COBRA stipulates that correct answer: Group coverage mus...

Insurance correct answer: A social device for transferring risks and funds known as the premium. The insured becomes part of a group. The funds from all the insured's are accumulated for future losses. Insurer = ? correct answer: Principal Pure Risk correct answer: Only chance of loss - in...

An insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy, stock performance declined and the cash value fell to $10,000. If the insured dies, how much will be paid out? correct answer: $50,000 Which of the following documents must be provid...

The main difference between an HO-4 and HO-6 is? A: HO-6 does not cover additional living expenses B: HO-4 provides limited dwelling coverage as well as contents coverage C: HO-6 provides limited dwelling coverage as well as contents coverage D: HO-4 does not cover additional living expenses c...

What kind of policy issues certificates of insurance to insureds? correct answer: Group insurance (Individuals covered by group life insurance do not receive a policy, but receive a certificate of insurance from the master policy.) An applicant wants to buy a life insurance policy in which he...

What is the maximum amount of SIPC coverage available to each separate customer? correct answer: $500,000 including up to $250,000 in cash If a customer purchases securities and does not settle the account 4 business days, what should the brokerage firm do first? correct answer: Ask for an exte...

The Louisiana insurance Guaranty Association Board of Directors are placed in office by correct answer: election and appointment States with monopolistic state workers compensation funds correct answer: Do not allow private insurers to be licensed to write workers compensation coverage This ...

Which is NOT true regarding the needs approach method of determining the value of an individuals life? correct answer: Need is predicted using the number of years until the insured's retirement Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examine...

A specified period of time that a person joining a group has to wait before becoming eligible for coverage. correct answer: Probationary Period Employees that are covered under a MET have no correct answer: conversion rights when they leave a trust Pregnancy is ________ a pre-existing condit...

Who is entitled to the cash values in a life insurance policy? correct answer: the policyowner What type of whole life insurance policy generates immediate cash value? correct answer: single premium whole life What are the death benefit options in Universal Life policies? correct answer: Op...

Build up correct answer: Accumulate The insured's age at the time the policy is renewed or replaced correct answer: Attained age A policy's savings element or living benefit correct answer: Cash Value Withheld or Postponed until a specified time or event in the future correct answer: ...

What is the main purpose of the Seven-pay Test? A. It guarantees the minimum interest B. It determines if the insurance policy is a MEC C. It requires level premium payments for 7 years. D. It ensures that the policy benefits are paid out in 7 years correct answer: C. It requires level premium ...

a life insurance policy that provides coverage to every family member in a single policy, with permanent insurance on the breadwinner and convertible term on other family members is called correct answer: family policy a whole life policy is surrendered for a reduced-paid up policy. the cash va...

Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated? a) Those who have worked in the company for at least 3 years b) Those who have dependents c) Those who have no history of claims ...

A return of premium life policy is written as what type of term coverage? correct answer: Increasing What are the two types of Flexible Spending Accounts? correct answer: Health Care and Dependent Care Taxation of LTC insurance... correct answer: excessive benefits may be taxable Nonforf...

Beneficiary correct answer: The person who receives the benefits from the policy of insurance. Insurance correct answer: Transfers risk of loss from an individual or business entity to an insurance company. Which in turn spreads the costs of unexpected losses to many individuals. Agent/Produ...

If an individual willfully violates provisions of the Fair Credit Reporting Act, what is the max civil penalty correct answer: 2500 An insurer must notify in writing that an investigative consumer report has been requested, within how many days of the initial request? correct answer: 3 days ...

In the last 72 hours, there were 3 instances of volcanic eruptions that damaged a property covered by a dwelling policy. How many deductibles will the insured have to pay before the policy covers the damages caused by the eruptions? 1. Zero 2. One 3. Two 4. Three correct answer: one In a per...

Dividends received on participating life insurance policies are correct answer: ? Which statement below is INCORRECT regarding the type of term insurance that fits best with the applicant's needs? correct answer: Applicants who may require a larger death benefit in the future should buy conver...

COBRA applies to employers with at least correct answer: 20 employees a licensee violates an insurance regulation. A hearing is held, and the person is found guilty. If this is the person's first offense, the penalty is no more than: correct answer: $5,000 which of the following policies is...

Insurance policies ensures that after a loss proceeds will go to the correct answer: Beneficiary What do individuals use to transfer their risk of loss to a larger group? correct answer: insurance An individual applies for a life policy. Two years ago he suffered from a head injury from an a...

Definition of Wellness Definition of Health correct answer: The process of getting to a healthy state. The state of being. What best demonstrates an ecological model of health and wellness? correct answer: If you know your heredity health risk. What is main purpose of creating a family hea...

In insurance transactions, what does fiduciary responsibility mean? correct answer: Handling insurer funds in a trust capacity. What type of agent authority is also called "perceived authority"? correct answer: Apparent After issuing a policy, an insurance company discovers that the policy...

An out-of-state producer wants to start selling insurance in this state. What type of license should the producer obtain? correct answer: nonresident Within what time period after completing prelicensing education must an applicant file a certificate of education completion with the Commissioner...