LA Life, Health & Accident Insurance Series 103 Practice Exam Questions and Answers Already Passed

LA Life, Health & Accident Insurance Series 103 Practice Exam Questions and Answers Already Passed Under which situation must insurable interest exist between the applicant and insured at the time of application? When a third-party applicant names themselves beneficiary. Which of the following is true about a decreasing term life policy? The face amount reaches zero at policy expiration. Which of the following occurs immediately after the application is submitted and the initial premium paid? The underwriting process begins For an individual long-term care policy there is an annual dollar limit for tax deductions that is based on which of the following? Age All of the following are TRUE regarding incomplete applications EXCEPT The incomplete application can be accepted with the missing information added later. Which of the following is exempted from the incontestability provision in insurance policies? Fraudulent misstatements All of the following statements define preexisting conditions EXCEPT Any chronic health condition that presents symptoms and which was unknown at the time of application. At which point are contractual death benefit settlement options determined and by whom? At the time the policy is purchased by the owner of the policy All of the following are tax qualified retirement plans EXCEPT Section 529 plan In which of the following does a covered employee agree to a reduction in compensation so the amount can be used to cover medical expenses? Flexible Spending Account (FSA) A consumer report used to determine eligibility for insurance may include all of the following EXCEPT Medical underwriting exam. Which policy provision permits the policyowner to take a specified number of days to examine the contract, and allows for cancellation and a full refund if the policyowner rejects the terms or costs? Free look All of the following are required signatures on a life insurance application EXCEPT The minor in a juvenile policy. Why is rehabilitation considered worthy of federal help under workers' compensation? It reduces insurance losses and helps regain the worker's dignity All of the following are characteristics of variable whole life EXCEPT There is no guaranteed minimum death benefit. Why is the accidental death benefit referred to as double indemnity? It provides twice the face value in the policy for death due to accident What is a MIB report? Medical information on an applicant for assessing life or health insurance risk In noncontributory plans, which percentage of eligible members must participate? 100% When should a buy-sell agreement include a provision for the buy-out of an owner's business interest in the event of a disability? When there is a buy-sell agreement funded with life insurance to buyout the interest of a deceased owner or partner. Why is relying solely on employer group life insurance generally considered inadequate for most individual's needs? It is financially insufficient to cover end of life expenses. Managed care plans increase efficiency by all of the following means EXCEPT Transferring the management of costs to the insureds. Which of the following is covered by a dread disease policy? Illnesses that do not occur frequently but incur significant costs when they do occur In a home healthcare benefit, all of the following are eligible expenses EXCEPT Blood transfusions When does insurable interest come into play in a life insurance policy? When the applicant for the policy is not the insured Which of the following must be given to the insurer within 20 days after occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible? Notice of claim Which of the following is TRUE for a flexible premium annuity? The purchaser has the option to vary the amount of each premium payment falling between a minimum and maximum amount. 1. What type of insurance should a company purchase if it wants to insure the life of its CEO? Key person insurance Which is a disadvantage to a flexible premium annuity? The actual amount of the annuity benefit cannot be determined in advance During which period of a Disability Income Policy is coverage effective but during which no benefits will be paid under the policy? Probationary period Short term disability insurance generally only covers injuries due to which of the following? Non-occupational injuries How are term riders used? To purchase insurance on a family member of the originally insured Current assumption whole life policies are sensitive to which of the following? Interest rates Compared to basic hospital, medical and surgical policies, which type of insurance provides broader coverage, fewer gaps, higher individual benefits, and higher policy maximums? Major medical insurance Which of the following is TRUE regarding assignment rights for irrevocable beneficiaries? They are MORE likely to receive a loan based on the expectations of the proceeds. Which of the following amends the Social Security Act to make Medicare secondary to group health plans? TEFRA All of the following are requirements to qualify for Social Security disability benefits EXCEPT when Unable to work in occupation in which the worker was trained or educated. What is the purpose of Stranger-originated life insurance (STOLI)? The policy is originated primarily or solely for the purpose of resale In order for an insurer to increase the premium on a noncancelable policy, which of the following MUST be true? The premium increase must be in the contract at the time it is issued. Which of the following is TRUE of a point of service plan? A patient's care is coordinated by an in-network primary care physician. If the insurer wishes to share an applicant's HIV status, the applicant must be given full notice of all of the following EXCEPT The treatment procedures that are covered by the policy. Which type of receipt makes the insurer liable for the risk from the date of application, regardless of the applicant's insurability? Binding receipt How long after being entitled to disability benefits will an individual be eligible to receive Medicare benefits? 2 years What specific new procedures does the USA Patriot Act require of insurance companies? Establish an anti-money laundering program Which problem was universal life insurance designed to address? Low interest rates during periods of high inflation All of the following are characteristics of COBRA EXCEPT Change in medical privacy procedures. Which one of the following represents an advantage of obtaining a policy loan vesus a withdrawal? The loan is not taxed while a withdrawal is taxed for amounts above the contract cost basis In a case where an individual's health is insured by both their own policy and their spouse's policy, which policy pays in the event of an illness? The individual's policy pays first, the spouse's policy pays the remaining up to coverage amount. Which of the following policy types is considered double indemnity? Accidental death Which of the following is defined as the dollar amount beyond which the insured no longer participates in payment of medical expenses? Stop Loss Limit All of the following are nonforfeiture options EXCEPT Cash dividend option Which of the following is a characteristic of Preferred Provider Organizations (PPOs)? Prearranged costs for services rendered Which type of annuity covers two or more annuitants and provides monthly income only until the first annuitant dies? Joint life annuity Which is the major reason why long term care insurance is becoming increasingly important? As life expectancy increases, the chances of needing long term care also increase What is the primary advantage for obtaining a reinstatement of a policy rather than obtaining a new one? Insured original issue age is used How do warranties differ from representations? A warranty is guaranteed to be true, a representation is believed to be true to the best of one's knowledge. Which of the following coverage types pays a monthly cash benefit following the elimination period for total disability due to accident or sickness? Disability income insurance Which of the following is TRUE of the limited pay whole life policy? Coverage continues after the policy is paid-up A basic vision care package includes all of the following EXCEPT Safety glasses. Which of the following was specifically designed to address STOLI and IOLI practices? NCOIL Act Under normal conditions which of the following is TRUE for proof of loss when a single loss is claimed? The insured has 90 days from the date of loss to provide proof of loss. What procedure is used by an insurer to protect itself in the event a dispute arises and the applicant and the agent do not recall the changes that were made in a completed application? The applicant and possibly the agent initial any changes made When can the premiums of an individually owned health insurance policy be deducted from the individual's income tax? When the taxpayer's medical expenses exceed 7.5% of adjusted gross income during a taxable year Which of the following refers to how often a premium is paid? Mode Which insurance plans are commonly offered through the worksite (employer sponsored) EXCEPT? Medicare When the suicide clause is inserted in a life insurance contract, death by suicide is not covered during the policy's initial: 2 year period All of the following are classifications of risk EXCEPT Non-nicotine. Which of the following is characteristic of a nonqualified plan? Plan does not meet federal guidelines for tax benefits What is an impairment rider? It lists specific conditions in the contract that are excluded from the contract States generally define a true "group" for insurance as requiring a minimum of how many participants? 10 How does the per capita rule apply to proceeds from a life insurance policy? The proceeds are divided equally among living primary beneficiaries. When a policy or certificate containing an accelerated benefit provision is applied for or delivered, the producer is responsible for providing the applicant a summary of coverage that includes all of the following EXCEPT A detailed and comprehensive summary of the accelerated benefit The group conversion option is allowed for all of the following EXCEPT During the annual benefits enrollment period. Which of the following is the most common method to supplement Medicare coverage? Coverage offered by private insurers Which of the following is TRUE of an equity-indexed annuity? It has a guaranteed minimum interest rate. Obtaining consumer information reports under false pretenses is prosecutable by which of the following? Fair Credit Reporting Act Which is the primary purpose of Health Reimbursement Accounts (HRAs)? To assist covered employees with the payment of medical expenses on a high deductible plan funded through pre-tax contributions. Which of the following lists the three common types of permanent individual life insurance? Variable Life, Whole Life, Universal Life How does a noncancelable policy differ from a guaranteed renewable policy? With the noncancelable policy the insurer may increase premiums only based on the terms of the policy. A group conversion option may be used in all the following instances EXCEPT A life-changing event, such as marriage, divorce, or childbirth. What is the return of premium rider? An increasing amount of term insurance that always equals the total of premiums paid up to the current point Which type of life policy can be continued year after year without a required medical examination but rates are dependent on the insured's current age? Renewable term All of the following are common exclusions from loss found in disability income policies EXCEPT for that incurred while Committing a misdemeanor What does it mean if a health policy is conditionally renewable? Insurer may elect NOT to renew only under conditions specified in the policy. All of the following are features of the spendthrift clause EXCEPT The beneficiary may encumber the proceeds. Why are insurance policies considered conditional contracts? Certain conditions need to be met to make the contract legally enforceable. Upon the issuance of a conditional receipt for a renewal when the premium is paid AFTER the time granted by the insurer, what is the maximum amount of time for reinstatement of the policy? 45 days When the courts look at a contract to determine the intent of the parties which of the following is considered? The entire contract Whose responsibility is it to make sure that the company is notified of a death claim at the earliest possible opportunity (in most cases)? The producer According to the time of payment of claims provision, the insurer must make the payment immediately after receiving proof of loss EXCEPT For claims involving periodic payments.