1 - State Exam Simulator - 150 Practice Exam Questions With accurate answers. 100% approved. Rated A

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1 - State Exam Simulator - 150 Practice Exam Questions With accurate answers. 100% approved. Rated A T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment po... licy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? - ✔✔$0 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, which of these statements is true? - ✔✔Proceeds will be paid to K's estate if P dies within a specified time A level premium indicates - ✔✔the premium is fixed for the entire duration of the contract Which premium schedule results in the lowest cost to the policyowner? - ✔✔Annual A policyowner is allowed to pay premiums more than once a year under which provision? - ✔✔Mode of Premium A life insurance application must be signed by all of these EXCEPT - ✔✔beneficiary Any changes made on an insurance application requires the initials of whom? - ✔✔Applicant All of these are considered sources of underwriting information about an applicant EXCEPT - ✔✔Rating Services P is a producer who notices 5 questions on a life application were not answered. What actions should P take? - ✔✔Set up a meeting with the applicant to answer the remaining questions Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation? - ✔✔Policy was returned within the free-look period, premium will be fully refunded Why is an applicant's signature required on a life insurance application? - ✔✔To attest that the statements on the application are accurate to the best of the applicant's knowledge T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later, provided that T is an acceptable risk. What item is given to T? - ✔✔Conditional receipt When an insurance application is taken by a producer, which of these statements is true? - ✔✔Any changes made on the application require the applicant's initials A CEO's personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant? - ✔✔Disability Income P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim? - ✔✔Claim will be denied A Disability Income policyowner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a five-month period. The insurer may cover the second disability without a new elimination period under the - ✔✔Recurrent Disability provision Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance? - ✔✔Entire cash surrender value is taxable Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan? - ✔✔Collateral assignment What does the insuring agreement in a Life insurance contract establish? - ✔✔An insurer's basic promise F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed? - ✔✔Decreasing term policy What action should a producer take if the initial premium is NOT submitted with the application? - ✔✔Forward the application to the insurer without the initial premium 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 along with a signed health statement What is being delivered during a policy delivery? - ✔✔Insurance contract to the proposed insured Which of these actions should a producer take when submitting an insurance application to an insurer? - ✔✔Inform insurer of relevant information not included on the application What type of group plan involves employees sharing the cost? - ✔✔Contributory plan When an employee is terminated, which statement about a group term life conversion is true? - ✔✔Policy proceeds will be paid if the employee dies during the conversion period A noncontributory group term life plan is characterized by - ✔✔the entire cost of the plan is paid for by the employer Under a trustee group life policy, who would be eligible for a certificate of coverage? - ✔✔Employee An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a - ✔✔$25,000 individual whole life policy Which provision is NOT a requirement in a group life policy? - ✔✔Accidental The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is - ✔✔the cost S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation? - ✔✔Single Premium The annuity that represents the largest possible monthly payment to an individual annuitant is a(n) - ✔✔Straight Life annuity Which of these statements concerning an Individual Straight Life annuity is accurate? - ✔✔Payments are made to an annuitant for life What is considered to be a characteristic of an immediate annuity? - ✔✔Benefit payments start within one payment period of purchase What is Old Age and Survivors Health Insurance (OASDHI) also known as? - ✔✔Social Security Which of these retirement plans can be started by an employee, even if another plan is in existence? - ✔✔Individual Retirement Account (IRA) Which plan is intended to be used by a sole proprietor and the employees of that business? - ✔✔Keogh Plan Which of these is NOT a type of agent authority? - ✔✔Principal An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT - ✔✔spouse's occupation M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate? - ✔✔earned, but unpaid benefits Disability policies do NOT normally pay for disabilities arising from which of the following? - ✔✔War The provision in a health insurance policy that interrupts premiums being paid to the insurer while the insured is disabled is called the - ✔✔Waiver of Premium When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is - ✔✔income Which type of contract liquidates an estate through recurrent payments? - ✔✔Annuity Which of these do NOT constitute policy delivery? - ✔✔Policy issued with a rating P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to - ✔✔P only What type of renewability guarantees premium rates and renewability? - ✔✔Guaranteed renewable If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best desribes this policy is called - ✔✔noncancellable A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim? - ✔✔Claim will be paid and coverage will remain in force T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the period during which the company may dispute a claim's validity is called - ✔✔Time Limit on Certain Defenses Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy? - ✔✔Issue the policy with an altered Time of Payment of Claims provision Which of the following are NOT managed care organizations? - ✔✔Medical Information Bureau (MIB) Which of the following statements about the classification of applicants is INCORRECT? - ✔✔Substandard applicants are never declined by underwriters A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take? - ✔✔Send a notice to the MIB that the applicant was declined Which Accident and Health policy provision addresses preexisting conditions? - ✔✔Time Limit on Certain Defenses According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options? - ✔✔Monthly 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? - ✔✔Submit the claim in any form Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract? - ✔✔Entire Contract The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is - ✔✔Time Limit on Certain Defenses The provision that defines to whom the insurer will pay benefits to is called - ✔✔Payment of Claims When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the - ✔✔Entire Contract provision An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age? - ✔✔59 1/2 Which statement regarding third-party ownership of a life insurance policy is true? - ✔✔It is used extensively in estate-planning as well as business circumstances Which statement regarding a Key Employee Life policy is NOT true? - ✔✔The beneficiary [Show More]

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