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NY STATE INSURANCE LICENSE PRACTICE EXAM QUESTIONS
WITH VERIFIED CORRECT ANSWERS
"Which of the following accurately describes the "time limit on certain defenses"?
- After a stated period of time, claims cannot be denied due to material misrepresentation on the application
- All claims can be disputed after two years
- An insured cannot file a lawsuit within 90 days of the claim being filed
4. The right to return an accident and health policy must be within 10 days of policy delivery -
CORRECT ANSWER 1. After a stated period of time, claims cannot be denied due to material
misrepresentation on the application" "Which of the following describes coverage for the Medicare Part B coinsurance?
- Only a Long-term care policy will cover Medicare Part B coinsurance
- A Medicare Supplement optional benefit
- A Medicare Supplement core benefit
4. Medicare Part B does not require a coinsurance so no additional coverage is needed -
CORRECT ANSWER 3. A Medicare Supplement core benefit"
"Which of the following types of insurers limits the exposures it writes to those of its owners?
- Restricted insurer
- Limited insurer
- Confined insurer
4. Captive insurer - CORRECT ANSWER 4. Captive insurer"
"What is the elimination period of an individual disability policy?
- Time period an insured must wait before coverage begins
- Time period a disabled person must wait before benefits are paid
- Time period after the policy issue date in which the provisions are still contestable
4. The point in time when benefits are no longer payable - CORRECT ANSWER 2. Time period a
disabled person must wait before benefits are paid" "An individual long-term policy must be renewable
- To age 65
- To age 75
- To age 85
4. For life - CORRECT ANSWER 4. For life"
"Medicare supplement insurance that provides a preventative medical care benefit will often cover
- respite care
- hospitalization
- custodial care
4. yearly physical examinations - CORRECT ANSWER 4. yearly physical examinations"
"When long-term care insurance is replaced, the insurer issuing the new policy cannot
- impose a new pre-existing conditions exclusion
- Charge higher premiums than applied under the replaced policy
- Grandfathered plan
- Accident plan
- Individual plan
4. Group plan - CORRECT ANSWER 1. Grandfathered plan"
"Tim had an on-the-job accident and collects benefits from his individual disability income policy. What factor could possibly reduce these benefits?
- State and federal income taxes
- Benefits he receives from workers compensation
- Total household income
4. Assistance he receives from friends and family - CORRECT ANSWER 2. Benefits he receives
from workers compensation" "The agreement in which hospitals and physician groups in a specific area contract with an insurance company to provide medical care at predetermined costs is
- Preferred Provider Organization (PPO)
- Health Maintenance Organization (HMO)
- Designated Provider Organization (DPO)
4. Professional Service Organization (PSO) - CORRECT ANSWER 1. Preferred Provider
Organization (PPO)" "Under the Fair Credit Reporting Act, which statement is true?
- The consumer who was investigated must be advised that credit, insurance, or employment was denied because of the unfavorable report
- Disclosure of the name of the reporting agency is prohibited
- The consumer must initiate legal action to remove unfavorable information from the report
- A reporting agency must furnish an investigative report to any person who requests the
information - CORRECT ANSWER 1. The consumer who was investigated must be advised that
credit, insurance, or employment was denied because of the unfavorable report" "Medicare Part A coinsurance payments are covered by
- Part B Medicare
- Part D Medicare
- Medicare Supplement Plan A
4. Never covered - CORRECT ANSWER 3. Medicare Supplement Plan A"
"Which term describes the elimination of a hazard?
- Risk avoidance
- Risk retention
- Risk transference
4. Risk pooling - CORRECT ANSWER 1. Risk avoidance"
"A policyowner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision?
- Partial disability
- Nondisabling injury
- Presumptive disability
- Nonpayment of premium by the due date constitutes irrevocable cancellation by insured
4. The time for payment of claims may be waived by the insured - CORRECT ANSWER 1. The
policy, endorsements, and attached papers constitute the entire contract" "Where is the difference between a standard risk and a substandard risk reflected?
- backdating
- coverage is not offered
- premium charges
4. back-end charges - CORRECT ANSWER 3. premium charges"
"What type of reinsurance contract between two insurers involves an automatic sharing of the risks assumed?
- Arbitrage reinsurance
- Facultative reinsurance
- Excess reinsurance
4. Treaty reinsurance - CORRECT ANSWER 4. Treaty reinsurance"
"Which of the following best describes the tax treatment of medical expense policies for the self- employed?
- 100% of medical expense plan premiums are tax deductible
- 50% of medical expense plan premiums are tax deductible
- 7.5% of medical expense plan premiums are tax deductible
4. 0% of medical expense plan premiums are tax deductible - CORRECT ANSWER 1. 100% of
medical expense plan premiums are tax deductible"
"What is the length of the free look period when a Medicare Supplement insurance policy is replaced?
- 10 days
- 20 days
- 30 days
4. 40 days - CORRECT ANSWER 3. 30 days"
"In New York, an insurer providing small employer group medical plans may discontinue an employer's coverage if
- The insurer no longer offers the plan to any employer
- The employer has poor claims experience
- The employer declares bankruptcy
4. The insurer's service area has too few providers - CORRECT ANSWER 1. The insurer no
longer offers the plan to any employer" "When a Medicare Supplement insurance policy is being replaced, who must sign the notice of replacement?
- The home office underwriter
- An officer of the insurance company
- A notary public
4. The agent and the applicant - CORRECT ANSWER 4. The agent and the applicant"
"Under what circumstances must an agent's insurance business records be provided to the New York Superintendent of Insurance?
- Only by an order of a state court 2.By authorization of the National Association of Insurance
4. Superintendent does not need to be notified - CORRECT ANSWER 1. Before using the
assumed name" "First-year commissions on Medicare supplements may not exceed
- 75% of the compensation paid in the second year
- 100% of the compensation paid in the second year
- 150% of the compensation paid in the second year
4. 200% of the compensation paid in the second year - CORRECT ANSWER 4. 200% of the
compensation paid in the second year" "The following are all elements of a valid contract EXCEPT
- consideration
- offer and acceptance
- competent parties
4. written evidence - CORRECT ANSWER 4. written evidence"
"Which factor determines the maximum disability income benefit that can be purchased by an applicant?
- The applicant's income
- The applicant's age
- The applicant's health
4. The applicant's credit score - CORRECT ANSWER 1. The applicant's income"
"Medicare supplement policies may not include renewal provisions less favorable to the insured than
- conditionally renewable
- nonrenewable
- noncancellable
4. guaranteed renewable - CORRECT ANSWER 4. guaranteed renewable"
"In New York, who is primarily responsible for determining the appropriateness of a Medicare Supplement policy for a proposed insured?
- The agent who solicits the application
- The applicant, who may also be the proposed insured
- The proposed insured,who may also be the applicant
4. Both the applicant and the proposed insured - CORRECT ANSWER 1. The agent who solicits
the application" "Two agents are licensed in the same line of insurance. One agent provides the other with a referral that results in a sale. How will the commissions on this sale likely be paid?
- Agents will likely share the commission
- Only one agent may legally receive the commission
- The client receives the commission
4. Neither agents may receive the commission - CORRECT ANSWER 1. Agents will likely share
the commission" "In New York, a group accident and health certificate of insurance must contain
- A copy of the group contract
- A list of all participating physicians
- The insurer's financial statement
4. A summary of policy features and benefits - CORRECT ANSWER 4. A summary of policy
features and benefits"
- Conditionally renewable
- Non-cancelable with a health condition exclusion rider
4. Guaranteed renewable with an inflation rider - CORRECT ANSWER 3. Non-cancelable with a
health condition exclusion rider" "Which of the following describes the act of insuring a risk against possible loss?
- Risk avoidance
- Risk transfer
- Hazard reduction
4. Loss management - CORRECT ANSWER 2. Risk transfer"
"The PRIMARY purpose of the replacement rule is to:
- protect the renewal commission of the original agent
- protect policyowners from misrepresentations and loss of benefits
- protect company home offices from loss of in-force business
4. inform consumers of the availability of additional coverages - CORRECT ANSWER 2. protect
policyowners from misrepresentations and loss of benefits" "An admitted company is one that is:
- found guilty of breaking the law
- qualified and licensed to do business in New York
- organized in another country, but approved for doing business in the United States
4. on probation for admitting to an insurance violation - CORRECT ANSWER 2. qualified and
licensed to do business in New York"
"Insurance crimes which affect interstate commerce are prosecuted by the
- US Attorney General
- Governor
- FBI
4. Department of Homeland Security - CORRECT ANSWER 1. US Attorney General"
"Which of the following is NOT included as a hospice benefit under a major medical plan?
- Home-based services
- Counseling
- Rehabilitation
4. Pain management - CORRECT ANSWER 3. Rehabilitation"
"Where does the primary funding for Medicare Part A come from?
- Private funding
- Insurance company funding
- State funding
4. Federal payroll and self-employment taxes - CORRECT ANSWER 4. Federal payroll and self-
employment taxes" "Starting in 2016, businesses with up to ___ employees will be defined by the ACA as a "small business".
- 40
- 60
- 80
- excluded from coverage
- partially covered
- covered, but requiring a higher deductible and copay
4. subject to age restrictions - CORRECT ANSWER 1. excluded from coverage"
"In New York, reducing benefits for a newborn child under an accident and health plan is
- Allowed with the policyowner's consent
- Allowed for prescription drug benefits only
- Prohibited in any form
4. Permitted for the first 10 days following birth - CORRECT ANSWER 3. Prohibited in any
form" "Which of the following statements BEST describes a double indemnity provision in travel accident insurance?
- Benefits are doubled under certain circumstances stated in the policy
- If the claim is disputed in court and the insurer loses, the face amount will be doubled
- Benefits cover two people when travelling
4. Accidents and illnesses are covered while the insured is travelling - CORRECT ANSWER 1.
Benefits are doubled under certain circumstances stated in the policy" "In a speech to a local association, an agent incorrectly stated that XYZ Insurance Company is in financial difficulty and not paying claims. The agent may be guilty of
- False advertising
- Defamation
- Commingling
4. Alienation - CORRECT ANSWER 2. Defamation"
"Providing false information on an insurance application is known as
- Misrepresentation
- Fraudulent advertising
- Illegal inducement
4. Illegal procurement - CORRECT ANSWER 1. Misrepresentation"
"An insurable risk requires
- that the chance for both a loss or gain exists
- the loss must be catastrophic
- that the chance of loss be calculable
4. that the loss must be incalculable - CORRECT ANSWER 3. that the chance of loss be
calculable" "How does an underwriter take into account an applicant's marital status?
- When determining if a policy will be issued
- When determining if an applicant is insurable
- When determining who is eligible for dependent coverage
4. When determining if a rating will be placed on a policy - CORRECT ANSWER 3. When
determining who is eligible for dependent coverage" "According to the Affordable Care Act, new Health Insurance Marketplaces are established by the
- ICIICO
"Which of the following statements accurately describes the financial impact of total disability?
- The financial impact may be worse than that of death
- With the right insurance coverage, the potential exists to make more money than while working
- The financial impact is usually minimal
4. No negative impact because of programs like Social Security and Workers Compensation -
CORRECT ANSWER 1. The financial impact may be worse than that of death"
"An individual accident and health insurance policy with premiums paid monthly has a minimum grace period of
- 7 days
- 10 days
- 20 days
4. 31 days - CORRECT ANSWER 2. 10 days"
"Replacing a policy when it is NOT in the best interest of the client is known as
- Discrimination
- Defamation
- Twisting
4. Rebating - CORRECT ANSWER 3. Twisting"
"An insurer operating in the U.S. but headquartered outside the U.S. is
- a foreign insurer
- an alien insurer
- unauthorized
4. authorized - CORRECT ANSWER 2. an alien insurer"
"A health insurer MUST provide a proof of loss form
- within 10 days of the actual loss
- within 10 days of receipt of the notice of loss
- within 15 days of receipt of the notice of loss
4. within 15 days of the actual loss - CORRECT ANSWER 3. within 15 days of receipt of the
notice of loss" "Under a key person disability income policy, benefits will be received as
- taxable income to the key employee
- tax-free to the key employee
- tax-free income to the business
4. taxable income to the business - CORRECT ANSWER 3. tax-free income to the business"
"Elimination periods normally apply to
- major medical policies
- interim policies
- disability policies
4. blanket policies - CORRECT ANSWER 3. disability policies"
"According to the Affordable Care Act (ACA), dependent children may remain on their parent's plan until what age?
- Age 25
