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Nebraska Life and Health License Exam
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Before delivering a health insurance policy to a client, the producer alters the insuring clause in a way that he believes will benefit the insurance company. Which of the following statements is true about this alteration? ✔✔It is prohibited by the entire contract provision
Which organization offers health insurance to Nebraska residents who are denied health insurance and unable to obtain coverage from private companies due to pre-existing medical conditions? ✔✔Nebraska Comprehensive Health Insurance Pool
Newborn children are automatically covered under an insured's individual health insurance policy for how long? ✔✔from birth to 31 days
As beneficiary of her husband's life insurance, Beth chooses to receive payments for life. However, she is guaranteed that the payments will be made for ten years. Beth has chosen which of the following? ✔✔life income with period certain
Which method of determining the benefit amount is most common in individual disability income policies? ✔✔flat amount
Which statement describes the "pool of money" approach to benefits under a long-term care insurance policy? ✔✔Benefits are defined as a total sum of money from which money can be drawn in any amount for as long as the money lasts.
Which statement best describes the restrictions an insurer must operate under when using information from the MIB? ✔✔Insurers cannot rate or decline a life insurance applicant based solely on MIB information.
Which of the following must HMO members use to receive covered care? ✔✔HMO's network of providers and caregivers
Which statement is correct about a buy-up option in a disability income insurance policy for professionals? ✔✔It lets the insured buy more coverage in the future without evidence of insurability.
Bill believes he has a cause of action against his health insurer for its refusal to pay benefits on a claim. He filed written proof of loss on April 1. Not having received a response by May 1, he decides to take legal action. What will his attorney probably do? ✔✔advise him to wait
When can the owner of a deferred annuity select a settlement option? ✔✔any time prior to annuitization
When completing an application for life insurance, Andrew states that he is 39 years old, though he is actually 45. When the insurer discovers this, what will it probably do? ✔✔adjusted the benefits
When underwriting a group life insurance policy, which of the following does the underwriter look at? ✔✔the group as a whole
Alana let her life insurance policy lapse two years ago and now wants to reinstate the policy. Which action is she NOT required to take to reinstate the policy? ✔✔pay the next year's premium in advance
A long-term care insurance policy issued in Nebraska cannot exclude coverage or limit benefits for which of the following? ✔✔Alzheimer's disease
What happens if the provisions of an insurer's health insurance policies contradict state law? ✔✔The provisions are changed automatically to comply with the law.
Whether a variable annuity's monthly income rises, falls, or stays level depends largely on which of the following? ✔✔the assumed interest rate (AIR) selected by the contract owner
Producers and insurers selling Medicare supplement insurance policies are prohibited from engaging in all of the following acts EXCEPT: ✔✔replacement
Jessica, age 48, owns a traditional IRA that she funded with tax-deducted contributions and which is now worth $300,000. Which of the following correctly describes the tax consequences of converting her IRA to a Roth IRA? ✔✔She would have to pay income taxes on the entire $300,000.
What kind of insurance policy pays benefits to the business owner if an essential manager were to become disabled? ✔✔key person disability income insurance
If Jack takes a new job that is less hazardous than the job he had when he obtained health coverage, what may the insurer do? ✔✔reduce the premium
Which of the following statements about a Medicare supplement policy is NOT correct? ✔✔It can indemnify against loss from illness on a different basis than loss from accident.
Which statement is true under a split-dollar life insurance plan? ✔✔The employer and employee split the premiums.
Laura was injured in an accident. She incurred $1,000 in medical bills. Even though she was not disabled or lost any income, her disability income policy paid for these expenses because it has: ✔✔a nondisabling injury provision
What do covered employees receive to show they have coverage under a group life insurance policy? ✔✔certificate of insurance
Under the payor benefit rider of a juvenile life insurance policy, which of the following happens if the payor becomes disabled before the maximum age specified in the rider? ✔✔Premiums are waived until the payor recovers or the insured child reaches a certain age (e.g., 21 or 25), whichever occurs first.
What does the employer own under a group insurance plan? ✔✔the master policy
In which of the following areas may a life insurance underwriter discriminate in determining policy eligibility and coverage limits? ✔✔personal health history
Which of the following statements regarding the life insurance needs analysis is correct? ✔✔Determining the ongoing income needs of surviving dependents is a critical part of the needs approach to life insurance needs analysis.
All of the following statements regarding the career agency distribution system are correct EXCEPT: ✔✔Personal producing general agents (PPGAs) are commonly hired to manage career agencies
Which of the following is NOT an unfair claims settlement practice if committed by an insurance company in Nebraska? ✔✔failing to promptly settle a claim for which liability is uncertain
An insurer can nonrenew an individual health insurance policy for all of the following reasons EXCEPT: ✔✔deterioration of the insured's health
The purpose of the insuring clause is to: ✔✔describe the type and scope of coverage
An insurer would use which of the following to limit or exclude coverage for an applicant's health condition? ✔✔impairment rider
A group disability income plan with a maximum benefit period of less than two years is what type of plan? ✔✔Short-term disability plan
Dave receives Social Security retirement benefits. His wife Cathy is still working. Which statement about Cathy's Social Security spousal benefit is CORRECT? ✔✔Cathy can choose either the spousal benefit or the worker's benefit.
What type of life insurance policy distributes its divisible surplus to policyowners in the form of policy dividends? ✔✔participating policy
A claimant on a health insurance policy must give written notice of the claim to the insurer within how many days following a loss? ✔✔ 20
Cal bought a $100,000 universal life policy ten years ago. He has paid $8,000 in premiums into the policy. He now decides to surrender the policy for its full $15,000 cash value. What amount is taxable? ✔✔$7,
Jennifer purchases an individual health insurance policy on June 1. One week later, she loses her job and decides she can no longer afford the policy. What are her options? ✔✔return the policy for a full refund of premiums
Under the proof of loss provision of a health insurance policy, how long does the insured have to give written proof of loss to the insurer? ✔✔90 days
Producers and insurers must maintain records of their insurance transactions for at least how long? ✔✔five years
Which insurance company function calculates company mortality and morbidity rates as well as the dividends on participating life insurance policies? ✔✔actuarial division
Which one of the following would a state NOT permit as a life insurance policy exclusion? ✔✔death resulting from a plane crash in which the insured was a fare-paying passenger
Which rider is NOT commonly found in a disability income policy? ✔✔long-term care rider
A worker's eligibility for Social Security disability benefits and benefit amount does NOT depend on: ✔✔the worker's family status
What is the only restriction on naming an annuitant? ✔✔The annuitant must be a natural person.
Ethel is at full retirement age with Part B coverage. She incurs $1,000 in Medicare-approved health care charges. What must she pay? ✔✔the deductible plus 20 percent of the expenses
Which of the following statements about the renewability of small group plans is NOT true? ✔✔Plans can be canceled only after the insurer provides 180 days' prior notice.
Which of the following will happen if the outstanding balance of a whole life insurance policy loan, including accrued interest, ever exceeds the policy's cash value? ✔✔The insurer will cancel the policy.
Frank intends to use his life insurance to make the down payment on a vacation home. In so doing, Frank is using which of the following? ✔✔the policy's cash value
Sandy and Cindy are healthy, are both 45 years old, and have similar life expectancies. Though they are insured by the same company, Sandy's life insurance premiums are considerably lower than Cindy's. What may this indicate a case of? ✔✔unfair discrimination
When Terry applied for his life insurance policy four years ago, he omitted any information in the application related to treatment he had received several years earlier for a serious chronic illness. Which of the following actions can the insurance company take when it learns of the omission? ✔✔nothing
Which disability would most likely qualify for a full benefit under the presumption of disability provision? ✔✔loss of eyesight
How does a family income policy differ from a family maintenance policy? ✔✔A family income policy combines whole life insurance with decreasing term insurance, while a family maintenance policy combines whole life and level term insurance.
Brent fails to pay his premium when due, and his life insurance policy lapses. Two years later, he pays the premium. The insurer accepts the payment, and the policy continues in force. Which provision allows this to happen? ✔✔reinstatement
Sasha, Kendall, Adam, and Julio are licensed producers in Nebraska. The Director would NOT be able to suspend or revoke which producer's license for engaging in the following acts? ✔✔Sasha, who sold insurance policies to family members and friends this year
Which of the following statements about health insurance advertisements is NOT correct? ✔✔Advertisements must disclose that policyholders are protected by the Nebraska Life and Health Insurance Guaranty Association.
Dental plans commonly group covered treatment and benefits into how many classes? ✔✔three
Which of the following best describes insurable interest? ✔✔It refers to the financial relationship between the policyowner and the insured person or property.
When meeting with a prospect to discuss life insurance, Agent Tyler makes disparaging comments about the financial stability and reputation of a competitor to dissuade the prospect from purchasing its policies. Which unfair trade practice has Agent Tyler committed? ✔✔A. defamation
Tom is employed by Acme Industries and covered by its group long-term disability income policy. Acme pays 80 percent of the premium. Tom pays 20 percent of the premium. He
becomes disabled and receives a monthly benefit payment. How much of this benefit is subject to federal income tax? ✔✔80%
Which type of long-term care is provided outside a person's home for groups of adults who are physically or mentally disabled, on less than a 24-hour basis? ✔✔adult day care
All the following statements regarding split-dollar life insurance plans are correct EXCEPT: ✔✔The employer pays the entire premium and the employee receives the policy benefits.
Darlene failed to pay the premium on her individual health insurance policy, which was due on October 1. She can avoid lapsing the policy if she pays the premium before what date? ✔✔October 31
All of the following statements about life insurance policy long-term care riders are correct, EXCEPT: ✔✔An insured must first be hospitalized before qualifying for LTC benefit payments
Which of the following best typifies the use of a structured settlement annuity? ✔✔Shirley was paralyzed in a car accident, and a jury awarded her $2 million, which must be paid to her over a 20-year period
The life insurance Buyer's Guide helps prospective buyers determine all of the following EXCEPT: ✔✔most qualified insurer
Policyholders who buy a health insurance policy issued in Nebraska are entitled to review the policy without obligation for at least how many days after it is delivered? ✔✔ 10
Jeff is a licensed insurance producer in both New York and Nebraska. He is charged with embezzlement in New York, and his first pretrial hearing is set for March 1. He must notify the Nebraska Director of Insurance of this charge within how many days of the hearing? ✔✔ 30
The Smiths set up a Section 529 prepaid tuition plan for their daughter, Jenna. They invested a total of $15,000, which covers the current cost of two semesters of college at their in-state public university. However, by the time Jenna goes to college, it will cost $30,000 for two semesters. What will happen in this case? ✔✔The Smiths' prepaid tuition plan will cover two semesters of college.
Persons who commit crimes of dishonesty while engaged in interstate insurance transactions can be sentenced to all of the following EXCEPT: ✔✔imprisonment for up to 25 years
From an insurance perspective, underwriting is best defined as: ✔✔the process of determining if an applicant is an insurable risk
An employer with five employees applies for a group health insurance plan. What may the insurer do when underwriting the policy? ✔✔require the employees to provide evidence of insurability or undergo a medical examination
What is another name for the annuitization phase of an annuity contract? ✔✔the payout stage
Which one of the following most accurately describes the income tax treatment of life insurance death benefits received by a terminally ill insured under the accelerated benefits rider? ✔✔They are generally income tax free.
What is the purpose of the fiduciary in a group health insurance plan? ✔✔to administer the plan in a financially responsible manner
This year, Agent Todd earned 20 percent of his total commissions from life and health insurance written for his relatives and friends. Which statement is correct? ✔✔Agent Todd has engaged in controlled business.
