ACCIDENT, LIFE, AND HEALTH INSURANCE EXAM 2024. ACTUAL EXAM QUESTIONS AND CORRECT DETAILED ANSWERS /A+ GRADE

ACCIDENT, LIFE, AND HEALTH INSURANCE EXAM 2024. ACTUAL EXAM QUESTIONS AND CORRECT DETAILED ANSWERS /A+ GRADE Premiums paid by self -employed sole proprietors or partners for medical expense insurance are – answer a) Not tax deductible b) Partially tax deductible c) Totally tax deductible d) Taxable c) Totally tax deductible - answerc) What is the purpose of a conditional receipt - answera) It is given by the agent only to applicants who fully prepay all scheduled premiums in advance of policy issue b) It is intended to provide coverage on a date earlier than the date of the issuance of the policy c) It guarantees the applicant that the policy will be issued in the amount applied for in the application d) It serves as proof that the agent has determined the applicant to be fully insurable for coverage by the insurance company b) - answerb) What method is used to determine the taxable portion of each annuity payment? - answera) The excise ratio b) The annuity ratio c) The marginal tax formula d) The exclusion ratio d) - answerd) An insurance producer is also the instructor of a 3 -hour ethics course held once a year. To maintain certification, the producer - answera) Must take 24 hours of continuing education courses b) Is not required to take any continuing education courses c) May apply for a continuing education waiver from the Insurance Commissioner d) Must take 18 hours of continuing education courses d) - answerd) What is the tax consequence of amounts received from a Traditional IRA after the money was left in the tax -deferred accounts by the beneficiary? - answera) Capital gains tax on distributions and no penalty b) Capital gains tax on distributions plus 10% penalty c) Income tax on distributions and no penalty d) Income tax on distributions plus 10% penalty c) - answerc) Which of the following is true regarding health insurance underwriting for a person with HIV? – answer a) The person may not be declined for medical coverage solely based on HIV status b) A person may be declined for HIV but not AIDS c) The person may be declined d) The person may only be declined if he/she has symptoms a) - answera) Guarantee of insurability option in long -term care policies allows the insured to - answera) Replace the existing LTC policy based on the original underwriting b) Secure the policy's non-forfeiture values regardless of the insured's age or health status c) Increase benefit levels without providing proof of insurability d) Add dependents to the plan without providing proof of their insurability c) - answerc) A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will - answera) Pay the policy proceeds up to an established limit b) Not pay the policy proceeds under any circumstances c) Automatically pay the policy proceeds d) Pay the policy proceeds only if it would have issued the policy d) - answerd) What provision can reduce the disability benefit based upon the insureds current income? - answera) Pro rata provision b) Rehabilitation benefit c) Relation of earnings to insurance d) Waiver of monthly premium c) - answerc) An applicant is considered to be high -risk but not so much that the insurer wants to deny coverage. Which of the following is NOT true? a) The insurer will issue conditional coverage b) The insurer can increase the premium c) The insurer can add exclusions to the policy d) The insurer can rate-up the policy a) - answera) As it pertains to group health insurance, COBRA stipulates that - answera) Retiring employees must be allowed to convert their group coverage to individual policies b) Terminated employees must be allowed to convert their group coverage to individual policies c) Group coverage must be extended for terminated employees up to a certain period of time at the employers expense d) Group coverage must be extended for terminated employees up to a certain period of time at the former employees expense d) - answerd) In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? - answera) The customer has no knowledge of this action b) The customer's associates, friends, and neighbors provide the reports data c) They provide additional information from an outside source about a particular risk d) They provide information about a customer's character and reputation b) - answerb) Premium payments for personally -owned disability income policies are – answer a) Not tax deductible b) Eligible for tax credits c) Tax deductible d) Tax deductible to the extent that they exceed 10% of the adjusted gross income of those itemizing deductions