NEW
Font size
WorksheetsWashington state license 1
Total questions: 54
Worksheet time: 27mins
An individual who removes the risk of losing money in the stock market by never purchasing stocks is said to be engaging in
Risk reduction
Risk retention
Risk avoidance
Risk transference
Which of these factors is NOT taken into consideration when determining the cost of a long-term care policy?
Health of applicant
Personal income
Amount of benefits provided
Age of applicant
When does a life insurance policy typically become effective?
When the policy is issued
When the completed application is signed and initial premium is collected
When initial premium is collected and policy is issued
When the application is completed and signed
Which of the following pertains to the analysis of an applicant's personal information and determining whether insurance should be issued or declined?
Adverse calculation
Underwriting
Risk classification
Actuarial determination
A closed network plan offers a primary physician copay of $25. If a subscriber chooses a primary care physician outside of the network, the subscriber will likely pay
100% of the allowed amount
$0
$25
100% of the billed amount
What is the elimination period of an individual disability policy?
Time period an insured must wait before coverage begins
Time period a disabled person must wait before benefits are paid
Time period after the policy issue date in which the provisions are still contestable
The point in time when benefits are no longer payable
An indemnity plan limitation that will pay the dental bills after a small amount is paid by the insured is called
a managed plan
stop loss
coinsurance
a deductible
No legal action can be initiated after years from the initial time written proof of loss has been provided.
3
5
4
2
The waiver of premium does NOT include which provision?
All future premiums are waived if the insured recovers from the disability
If the insured qualifies, the premiums are waived retroactively to the beginning of the disability
The waiver of premium generally does not extend past the insured's age 60 or 65
The insured must be disabled for a set period of time before benefits begin
Which of these is considered to be a document that describes the critical segments of a life insurance policy?
Buyer's guide
Policy summary
Consumer report
Buyer's summary
When a decreasing term policy is purchased, it contains a decreasing death benefit and
increasing premiums
level premiums
decreasing premiums
variable premiums
The focus of major medical insurance is providing coverage for
critical illnesses only
preventative care
medical and hospitalization expenses
doctor's visits
An insurance applicant with a below-average likelihood of loss is typically considered to be a
preferred risk
subpar risk
declined risk
standard risk
A policyholder has a major medical plan with a 80%/20% coinsurance and a deductible of $75. If the insured has previously met her deductible and receives a bill for $175, how much will the insurer pay?
$75
$140
$100
$35
Which of the following is CORRECT regarding disclosure regulation?
It only applies to individual annuities
It requires the delivery of a buyer's guide and a disclosure document to applicants
It establishes maximum standards for disclosure to annuitants
It is intended to protect insurers
What happens to the coverage under a children's term rider when that child reaches a certain specified age?
Coverage decreases automatically
Coverage increases automatically
Coverage remains as long as proof of insurability is provided
Coverage is eliminated
Which of the following would be considered an underwriting duty of an agent?
Requesting medical information from the Medical
Information Bureau (MIB)
Completing all applications and collecting initial premiums
Accepting or declining an application
Assigning a risk classification
What percentage of a participant's income are group long-term disability benefit amounts typically limited to?
30%
40%
50%
60%
Which contract element is insurable interest a component of?
Competent parties
Offer and acceptance
Consideration
Legal purpose
A tax-free Section 1035 Exchange of a life insurance policy to a different policy is permitted if it occurs
in the same state as the original transaction
within a 12 month period
from insurer to insurer and no cash is received by the policyowner
from agent to agent as long as the agents are licensed in the same line
Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this?
Increasing Term Life policy
Nonparticipating policy
Modified Whole Life policy
Universal Life policy
Suitability is best described as
converting a term policy to a whole life policy
obtaining information from the applicant to determine whether an insurance or annuity product is appropriate
properly applying the insurer's underwriting guidelines to an applicant
delivering the Buyer's Guide and Policy
Summary to the applicant
An endorsement found in an insurance plan which modifies the provisions of the policy is called a(n)
attachment
add-on
rider
supplement
An interest-sensitive life insurance policyowner may be able to withdraw the policy's cash value interest free.
The provision that allows this is called
Partial Surrender
Subrogation
Automatic Premium Loan
Accelerated Death Benefit
Jonas has disability insurance through his employer. The employer pays 75% of the premium, and Jonas pays the other 25%. What is Jonas's tax liability for any benefits paid from the disability plan?
Taxes must be paid on all benefits received
No taxes are payable on any benefits received
Taxes must be paid on 25% of the benefits received
Taxes must be paid on 75% of the benefits received
Statements made by an insurance applicant on an application are considered to be
irrevocable
warranties
representations
guarantees
Who is required to notify the producer in the event of appointment termination?
insurer
Commissioner
Governor
Attorney General
Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive?
Adjustable life policy
Modified life policy
Endowment policy
Universal life policy
Which of these riders will pay a death benefit if the insured's spouse dies?
Guaranteed Insurability rider
Family term insurance rider
Family whole insurance rider
Payor benefit rider
Premiums paid that exceed 7 1/2% of an insured's Adjusted Gross Income
(AGI) are tax-deductible when paid for which of the following plans?
Accidental Death and Dismemberment
Personal Disability Income plan
Qualified Long-Term Care plan
Group disability income plan
A non-contributory health insurance plan helps the insurer avoid
adverse selection
state compliance
the underwriting process
tax deductions
Which type of policy combines the flexibility of a universal life policy with investment choices?
Adjustable universal life policy
Flexible universal life policy
Variable universal life policy
Modified universal life policy
An insured has a stop-loss limit of $5,000, a deductible of $500, and an 80/20 coinsurance. The insured incurs $25,000 of covered losses. How much will the insured have to pay?
$500
$5,000
$5,400
$5,600
If an accident and health (disability) policy is reinstated after it had lapsed for nonpayment, there is a waiting period of days before a claim covering sickness will be covered.
5
10
15
20
An employee under a group insurance policy has the right to name a beneficiary and the right to
remain on the group plan in the event of employment termination
cash surrender the existing policy
change the policy provisions
convert to an individual policy in the event of employment termination
This MANDATORY health policy provision states that the policy, including endorsements and attached papers, constitutes
the partial insurance contract between the parties
the entire insurance contract between the parties
the conformity of state statutes
the legal purpose of the contract
A policyowner can receive an immediate payment before the insured dies by using a(n)
viatical settlement contract
buy-sell arrangement
adhesion agreement
spendthrift plan
A policyowner may change two policy features on what type of life insurance?
Modified Whole Life
Decreasing Term Life
Adjustable Life
Whole Life
An attending physician's statement would be appropriate for which life insurance purpose?
Attending physician's statements are mandatory during the application process
At the request of the applicant to assist in the underwriting decision
At the request of the producer to assist in the underwriting decision
At the request of the insurer to assist in the underwriting decision
Kristi purchases an annuity that will pay her husband an income for 15 years. If he dies, this income will become payable to their children for the remainder of the period. Kristi has what kind of annuity?
Joint life with period certain
Life annuity with survivorship
Survivorship annuity
Temporary annuity certain
In an insurance contract, the element that shows each party is giving something of value is called
offer
acceptance
consideration
purpose
Which type of life insurance is normally associated with a Payor Benefit rider?
Juvenile insurance
Family income insurance
Spouse insurance
Term rider
Which of the following is considered to be an event or condition that increases the probability of an insured's loss?
Risk
Hazard
Indemnity
Peril
Which of the following does Coordination of Benefits allow?
Allows the secondary payor to reduce their benefit payments so no more than 100% of the claim is paid
Allows both a group health plan and individual health plan to coordinate their benefit payments
Allows the deductible to be spread out between all the health providers
Allows each health provider to pay 100% of the claim
What is a corridor in relation to a Universal Life insurance policy?
The gap between the total death benefit and the policy's cash value
The gap between when a claim is filed and when the death benefit is received
The amount of interest that has accumulated in the policy's cash value
The point in time when the policy's cash value reaches $O
Which of these is NOT a qualifying event for Medicare?
On Social Security disability for over 2 years
Falling below the federal poverty level
Kidney failure
Age 65 or older
In contrast to a guaranteed renewable policy, a noncancellable policy
may cancel the policy only at renewal
may raise premiums at policy renewal
may raise premiums at anytime
may never raise premiums
An Outline of
is required for
long-term care policies and provides a brief description of the important features of the policy.
Policy
Coverage
Benefits
Summary
Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. Which of these statements is true?
The policy automatically converts to whole life after the 10-year period
The face amount will remain constant and the premium will increase over the 10-year period
The premium will remain constant and the face amount will increase over the 10-year period
The face amount and premium will remain constant over the 10-year period
A type of insurer that is owned by its policyowners is called
domestic
Mutual
Stock
In-house
Which of the following is NOT an example of utilization review?
monitoring length of hospital stay
ongoing inspection of accident prone individuals
monitoring the appropriateness of care
setting a hospital release date for a patient
Maria is a Preferred Provider
Organization (PPO) subscriber and received care from an out-of-network provider. Which of the following is the likely result?
Care is covered
Care is not covered
Care is only covered in a government facility
Care is only covered if primary care physician gives a referral
In regards to a life insurance contract, which of the following statements is NOT true regarding the concept of insurable interest?
Individuals are assumed to have insurable interest in themselves
Insurable interest is established by a court of law
Insurable interest can be established sufficiently by sentimental attachment alone
Insurable interest must exist at the time of the application
Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits. Which of these benefit options would he choose?
Accelerated lifetime benefit
Guaranteed lifetime withdrawal benefit
Right of income rider
Guaranteed minimum accumulation benefit
