FINAL EXAM ARIZONA LIFE AND HEALTH =%
=%
Study online at https://quizlet.com/_fqbz1v
1. If dividend option choices are offered on a whole life insurance policy, the
policy
MUST: contain a statement that dividends are NOT guaranteed
2. An insured files for an accident and health insurance policy claim eight days
after the premium due date. The benefit payable is $500 and the overdue
premium is $200.
Assuming that the policy pays on a first-dollar basis and contains the unpaid
premium provision, how much will the insurer pay?: $300
3. A licensee or applicant who is ordered into active military service may request
that the license or application be placed on inactive status by sending the
department a:: Written statement
4. An insurer will typically assess a back-end load on a deferred annuity that is
cancelled during the early contract years. What is this back-end load referred
to as?: Surrender charge
5. Which statement regarding the certificate of insurance is accurate?: It indicates
evidence of an emplovee's insurance coverage
6. What could be the potential result of taking out a cash value loan under a life
insurance policy?: Reduces the amount receivable upon surrender of the
contract
7. Home health care benefits typically do
NOT include coverage for: Prescription medication
8. When issuing disability income coverage to a substandard risk, an insurance
company may: shorten the benefit period
9. In what situation could an insurance policy's coverage be modified?: Applicant is
a substandard risk
10. Which type of deductible must be satisfied again for each illness or accident
in a major medical plan?: Per-cause
11. The law of large numbers enables an insurer to: Predict losses
12. How long must a producer maintain customer records for an insurance
transaction?: 3 years
13. An annuity contract may be returned for a full refund during the: Free-look period
, FINAL EXAM ARIZONA LIFE AND HEALTH =%
=%
Study online at https://quizlet.com/_fqbz1v
14. A group-owned insurance company that is formed to assume and spread the
liability risks of its members is known as a: Risk Retention Group- A group-owned insurer whose
primary activity consists of assuming and spreading the liability risks of its members is called a risk retention group.
15. The ________ is responsible for determining the
appropriateness of a Medicare Supplement policy for an applicant.: producer
16. Accident and health policies exclude loss as result of: war
17. Who normally pays the premiums for group credit life insurance?: . The borrower
typically pays the premiums on any credit life insurance policy.
18. When would evidence of insurability be required for a person already cov-
ered with a variable universal life policy?: When the death benefit is increased
19. Which of these situations would NOT potentially involve a prison sentence
under Federal law?: Selling insurance with a nonresident license
20. Under which circumstance is the interest rate guaranteed within a market
value adjusted annuity?: When the contract has been held for the period specified in the policy
21. When a producer submits an application that discloses personal information
regarding the applicant, who supplies the privacy notice?: The producer
The producer is responsible for providing the insurance applicant with privacy notices.
22. An individual is seeking coverage for nursing home (custodial) care that
does NOT require any previous period of hospitalization. Which program offers
these specifications?: AHCCCS
23. Which of these is NOT used as selection criteria in the underwriting process
of a life insurance application?: national origin
24. A group health certificate for coverage issued in
Arizona MUST contain a(n): A summary of policy features and benefits
25. A life annuity feature which provides benefit payments for a minimum num-
ber of years, no matter when the annuitant dies, is called: period certain
26. Under a deferred annuity, which contract feature initially charges a 5-10%
fee that eventually reduces to $0 after a stated amount of time?: surrender charge
27. A hold-harmless clause is an example of risk: to transfer
28. A preferred provider plan and an indemnity plan are similar in what way?: Both
pay on a fee-for-service basis
, FINAL EXAM ARIZONA LIFE AND HEALTH =%
=%
Study online at https://quizlet.com/_fqbz1v
29. Which action will trigger a penalty tax on premature distributions from a
modified endowment contract (MEC)?: policy loans
30. Qualified long-term care premiums are treated for tax purposes as: tax-de-
ductible to the extent they exceed 7 1/2% AGI
Qualified long-term care premiums are treated for tax purposes as tax-deductible to the extent they exceed 7 1/2% of
an individual's AGI (Adjusted Gross Income).
31. Which of these would NOT be a valid reason to add the waiver of premium
rider to a life insurance policy?: It allows a policy loan to cover premium payments if the policyowner
becomes totally disabled
32. Which statement concerning an adjustable life insurance policy is FALSE?: -
Evidence of insurability is required when there is a change in premium
33. Mike recently lost sight in both eyes. He has a policy that pays a lump sum
benefit for this injury. What type of insurance does Mike have?: Accidental Death and
Dismemberment
34. A health insurance applicant is notified that a physical examination is re-
quired. Which of the following statements is correct?: Physical examinations are performed
at the expense of the insurer
35. Julie is in need of assistance with one or two activities of daily living. She may
be eligible for a(n): assisted living facility
36. An employee welfare plan exempt from ERISA regulations would be: Church
plans
37. Which of these actions is considered to be an Unfair Claims Settlement
Practice?: Misrepresenting pertinent policy provisions relating to coverage after a loss
38. A nonparticipating whole life insurance policy was surrendered for its
$20,000 cash value. The total premiums paid had totaled $16,000. What were
the federal income tax consequences to the policyowner on receipt of the cash
value?: $16,000 was received tax-free and $4,000 as ordinary income
39. A life insurance policy's waiver of premium rider has the ability to: relieve the
insured of premium payments following an initial waiting period after the insured becomes totally disabled
40. The purpose of the 'No-loss No-gain' provision is to avoid duplication of
and
, FINAL EXAM ARIZONA LIFE AND HEALTH =%
=%
Study online at https://quizlet.com/_fqbz1v
when an individual is covered under multiple group health insurance plans:: -
benefit payments and overinsurance
41. After the extended term life nonforfeiture option is chosen, the available
insurance will be: level term for a stated period of time
42. A Medicare Supplement policy is required to do which of the following?: Provide
a 30 day free-look period
43. A loss of minimum essential coverage usually counts as a qualifying event
that triggers what?: Special Enrollment Period
44. Which of the following statements is NOT true concerning the relationship
between group health insurance plans and Medicare? (assuming the business
has more than 20 employees): Group health coverage is NOT available for workers over the age of 65
45. A life insurance policy that includes a return of premium rider will pay the
beneficiary how much upon the insured's death?: Total premiums paid plus the policy face
amount
46. Which statement is NOT true regarding health insurance policies that pro-
vide limited benefits?: Only persons under the age of 65 are eligible
47. Emergency health care coverage for Medicare enrollees traveling abroad is: A
Medicare Supplement additional benefit
48. Which of the following best describes the presumptive disability provision?-
: Waives the typical total disability requirements
49. Which statement concerning a deferred annuity contract is correct?: The owner
can be the beneficiary, annuitant, or neither
50. Which of the following entities does NOT establish regulations for variable
insurance products?: State Attorney General
51. The ACA (Affordable Care Act) must ensure a sufficient choice of ________ in
the marketplace:: providers
52. A policyowner pays the first annual premium for a $50,000 life insurance
policy and dies one month after the policy effective date. Which of these
statements is normally true?: Beneficiary receives $50,000 income tax-free
53. What effect does interest income have upon insurance premiums?: Decreases
premium
=%
Study online at https://quizlet.com/_fqbz1v
1. If dividend option choices are offered on a whole life insurance policy, the
policy
MUST: contain a statement that dividends are NOT guaranteed
2. An insured files for an accident and health insurance policy claim eight days
after the premium due date. The benefit payable is $500 and the overdue
premium is $200.
Assuming that the policy pays on a first-dollar basis and contains the unpaid
premium provision, how much will the insurer pay?: $300
3. A licensee or applicant who is ordered into active military service may request
that the license or application be placed on inactive status by sending the
department a:: Written statement
4. An insurer will typically assess a back-end load on a deferred annuity that is
cancelled during the early contract years. What is this back-end load referred
to as?: Surrender charge
5. Which statement regarding the certificate of insurance is accurate?: It indicates
evidence of an emplovee's insurance coverage
6. What could be the potential result of taking out a cash value loan under a life
insurance policy?: Reduces the amount receivable upon surrender of the
contract
7. Home health care benefits typically do
NOT include coverage for: Prescription medication
8. When issuing disability income coverage to a substandard risk, an insurance
company may: shorten the benefit period
9. In what situation could an insurance policy's coverage be modified?: Applicant is
a substandard risk
10. Which type of deductible must be satisfied again for each illness or accident
in a major medical plan?: Per-cause
11. The law of large numbers enables an insurer to: Predict losses
12. How long must a producer maintain customer records for an insurance
transaction?: 3 years
13. An annuity contract may be returned for a full refund during the: Free-look period
, FINAL EXAM ARIZONA LIFE AND HEALTH =%
=%
Study online at https://quizlet.com/_fqbz1v
14. A group-owned insurance company that is formed to assume and spread the
liability risks of its members is known as a: Risk Retention Group- A group-owned insurer whose
primary activity consists of assuming and spreading the liability risks of its members is called a risk retention group.
15. The ________ is responsible for determining the
appropriateness of a Medicare Supplement policy for an applicant.: producer
16. Accident and health policies exclude loss as result of: war
17. Who normally pays the premiums for group credit life insurance?: . The borrower
typically pays the premiums on any credit life insurance policy.
18. When would evidence of insurability be required for a person already cov-
ered with a variable universal life policy?: When the death benefit is increased
19. Which of these situations would NOT potentially involve a prison sentence
under Federal law?: Selling insurance with a nonresident license
20. Under which circumstance is the interest rate guaranteed within a market
value adjusted annuity?: When the contract has been held for the period specified in the policy
21. When a producer submits an application that discloses personal information
regarding the applicant, who supplies the privacy notice?: The producer
The producer is responsible for providing the insurance applicant with privacy notices.
22. An individual is seeking coverage for nursing home (custodial) care that
does NOT require any previous period of hospitalization. Which program offers
these specifications?: AHCCCS
23. Which of these is NOT used as selection criteria in the underwriting process
of a life insurance application?: national origin
24. A group health certificate for coverage issued in
Arizona MUST contain a(n): A summary of policy features and benefits
25. A life annuity feature which provides benefit payments for a minimum num-
ber of years, no matter when the annuitant dies, is called: period certain
26. Under a deferred annuity, which contract feature initially charges a 5-10%
fee that eventually reduces to $0 after a stated amount of time?: surrender charge
27. A hold-harmless clause is an example of risk: to transfer
28. A preferred provider plan and an indemnity plan are similar in what way?: Both
pay on a fee-for-service basis
, FINAL EXAM ARIZONA LIFE AND HEALTH =%
=%
Study online at https://quizlet.com/_fqbz1v
29. Which action will trigger a penalty tax on premature distributions from a
modified endowment contract (MEC)?: policy loans
30. Qualified long-term care premiums are treated for tax purposes as: tax-de-
ductible to the extent they exceed 7 1/2% AGI
Qualified long-term care premiums are treated for tax purposes as tax-deductible to the extent they exceed 7 1/2% of
an individual's AGI (Adjusted Gross Income).
31. Which of these would NOT be a valid reason to add the waiver of premium
rider to a life insurance policy?: It allows a policy loan to cover premium payments if the policyowner
becomes totally disabled
32. Which statement concerning an adjustable life insurance policy is FALSE?: -
Evidence of insurability is required when there is a change in premium
33. Mike recently lost sight in both eyes. He has a policy that pays a lump sum
benefit for this injury. What type of insurance does Mike have?: Accidental Death and
Dismemberment
34. A health insurance applicant is notified that a physical examination is re-
quired. Which of the following statements is correct?: Physical examinations are performed
at the expense of the insurer
35. Julie is in need of assistance with one or two activities of daily living. She may
be eligible for a(n): assisted living facility
36. An employee welfare plan exempt from ERISA regulations would be: Church
plans
37. Which of these actions is considered to be an Unfair Claims Settlement
Practice?: Misrepresenting pertinent policy provisions relating to coverage after a loss
38. A nonparticipating whole life insurance policy was surrendered for its
$20,000 cash value. The total premiums paid had totaled $16,000. What were
the federal income tax consequences to the policyowner on receipt of the cash
value?: $16,000 was received tax-free and $4,000 as ordinary income
39. A life insurance policy's waiver of premium rider has the ability to: relieve the
insured of premium payments following an initial waiting period after the insured becomes totally disabled
40. The purpose of the 'No-loss No-gain' provision is to avoid duplication of
and
, FINAL EXAM ARIZONA LIFE AND HEALTH =%
=%
Study online at https://quizlet.com/_fqbz1v
when an individual is covered under multiple group health insurance plans:: -
benefit payments and overinsurance
41. After the extended term life nonforfeiture option is chosen, the available
insurance will be: level term for a stated period of time
42. A Medicare Supplement policy is required to do which of the following?: Provide
a 30 day free-look period
43. A loss of minimum essential coverage usually counts as a qualifying event
that triggers what?: Special Enrollment Period
44. Which of the following statements is NOT true concerning the relationship
between group health insurance plans and Medicare? (assuming the business
has more than 20 employees): Group health coverage is NOT available for workers over the age of 65
45. A life insurance policy that includes a return of premium rider will pay the
beneficiary how much upon the insured's death?: Total premiums paid plus the policy face
amount
46. Which statement is NOT true regarding health insurance policies that pro-
vide limited benefits?: Only persons under the age of 65 are eligible
47. Emergency health care coverage for Medicare enrollees traveling abroad is: A
Medicare Supplement additional benefit
48. Which of the following best describes the presumptive disability provision?-
: Waives the typical total disability requirements
49. Which statement concerning a deferred annuity contract is correct?: The owner
can be the beneficiary, annuitant, or neither
50. Which of the following entities does NOT establish regulations for variable
insurance products?: State Attorney General
51. The ACA (Affordable Care Act) must ensure a sufficient choice of ________ in
the marketplace:: providers
52. A policyowner pays the first annual premium for a $50,000 life insurance
policy and dies one month after the policy effective date. Which of these
statements is normally true?: Beneficiary receives $50,000 income tax-free
53. What effect does interest income have upon insurance premiums?: Decreases
premium
