ARIZONA LIFE AND HEALTH FINAL
EXAM QUESTIONS AND ANSWERS18
Terry suffers an injury at his workplace which is covered by workers compensation. Terry also
has a medical expense insurance policy. Under medical expense insurance policies, losses that
are covered by workers compensation are typically - ANSWERS -excluded from coverage
Kelly purchases a health insurance policy issued on a conditionally renewable basis.
The insurance company has a right to refuse renewal of the policy for - ANSWERS -Specific
reasons stated in the contract
The inability to perform SOME of the duties of one's own occupation is known as a - ANSWERS -
Residual disability
When is it acceptable to charge or receive a fee or service charge in addition to the premium in
connection with the transaction of insurance? - ANSWERS -If the amount of the fee or service
charge is reasonably related to the cost of the service
A life insurance beneficiary died after receiving only six payments under the policy's life income
settlement option. What happens with the remaining balance of the death proceeds? -
ANSWERS -Kept by the insurance company
Taxable income may be the result from all of these modified endowment contract (MEC)
transactions
EXCEPT for - ANSWERS -The policy is surrendered for less than what was paid into it
A(n) ______ insurer restricts the exposures it writes to those of its owners - ANSWERS -captive
,Insurance is NOT characterized as which of the following? - ANSWERS -As the number of
insureds increase the number of losses decrease
Which of the following is NOT an objective of the National Association of Insurance
Commissioners? - ANSWERS -Regulate state insurance commissioners
If dividend option choices are offered on a whole life insurance policy, the policy
MUST - ANSWERS -contain a statement that dividends are NOT guaranteed
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? - ANSWERS -$300
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: - ANSWERS -Written
statement
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? - ANSWERS -Surrender
charge
Which statement regarding the certificate of insurance is accurate? - ANSWERS -It indicates
evidence of an emplovee's insurance coverage
What could be the potential result of taking out a cash value loan under a life insurance policy?
- ANSWERS -Reduces the amount receivable upon surrender of the
contract
, Home health care benefits typically do
NOT include coverage for - ANSWERS -Prescription medication
When issuing disability income coverage to a substandard risk, an insurance company may -
ANSWERS -shorten the benefit period
In what situation could an insurance policy's coverage be modified? - ANSWERS -Applicant is a
substandard risk
Which type of deductible must be satisfied again for each illness or accident in a major medical
plan? - ANSWERS -Per-cause
The law of large numbers enables an insurer to - ANSWERS -Predict losses
How long must a producer maintain customer records for an insurance transaction? - ANSWERS
-3 years
An annuity contract may be returned for a full refund during the - ANSWERS -Free-look period
A group-owned insurance company that is formed to assume and spread the liability risks of its
members is known as a - ANSWERS -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.
The ________ is responsible for determining the
appropriateness of a Medicare Supplement policy for an applicant. - ANSWERS -producer
Accident and health policies exclude loss as result of - ANSWERS -war
EXAM QUESTIONS AND ANSWERS18
Terry suffers an injury at his workplace which is covered by workers compensation. Terry also
has a medical expense insurance policy. Under medical expense insurance policies, losses that
are covered by workers compensation are typically - ANSWERS -excluded from coverage
Kelly purchases a health insurance policy issued on a conditionally renewable basis.
The insurance company has a right to refuse renewal of the policy for - ANSWERS -Specific
reasons stated in the contract
The inability to perform SOME of the duties of one's own occupation is known as a - ANSWERS -
Residual disability
When is it acceptable to charge or receive a fee or service charge in addition to the premium in
connection with the transaction of insurance? - ANSWERS -If the amount of the fee or service
charge is reasonably related to the cost of the service
A life insurance beneficiary died after receiving only six payments under the policy's life income
settlement option. What happens with the remaining balance of the death proceeds? -
ANSWERS -Kept by the insurance company
Taxable income may be the result from all of these modified endowment contract (MEC)
transactions
EXCEPT for - ANSWERS -The policy is surrendered for less than what was paid into it
A(n) ______ insurer restricts the exposures it writes to those of its owners - ANSWERS -captive
,Insurance is NOT characterized as which of the following? - ANSWERS -As the number of
insureds increase the number of losses decrease
Which of the following is NOT an objective of the National Association of Insurance
Commissioners? - ANSWERS -Regulate state insurance commissioners
If dividend option choices are offered on a whole life insurance policy, the policy
MUST - ANSWERS -contain a statement that dividends are NOT guaranteed
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? - ANSWERS -$300
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: - ANSWERS -Written
statement
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? - ANSWERS -Surrender
charge
Which statement regarding the certificate of insurance is accurate? - ANSWERS -It indicates
evidence of an emplovee's insurance coverage
What could be the potential result of taking out a cash value loan under a life insurance policy?
- ANSWERS -Reduces the amount receivable upon surrender of the
contract
, Home health care benefits typically do
NOT include coverage for - ANSWERS -Prescription medication
When issuing disability income coverage to a substandard risk, an insurance company may -
ANSWERS -shorten the benefit period
In what situation could an insurance policy's coverage be modified? - ANSWERS -Applicant is a
substandard risk
Which type of deductible must be satisfied again for each illness or accident in a major medical
plan? - ANSWERS -Per-cause
The law of large numbers enables an insurer to - ANSWERS -Predict losses
How long must a producer maintain customer records for an insurance transaction? - ANSWERS
-3 years
An annuity contract may be returned for a full refund during the - ANSWERS -Free-look period
A group-owned insurance company that is formed to assume and spread the liability risks of its
members is known as a - ANSWERS -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.
The ________ is responsible for determining the
appropriateness of a Medicare Supplement policy for an applicant. - ANSWERS -producer
Accident and health policies exclude loss as result of - ANSWERS -war
