WebCE Insurance Practice Exam

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• Twisting is the unethical practice of making a misleading statement about an insurance policy to induce a person to buy a policy with another insurer. Which term describes this practice?
• Which statement best describes the NAIC?
• Which statement best defines misrepresentation in insurance?
• Which statement best describes a fidelity bond?
• Indemnity in insurance aims to restore the insured to their pre-loss financial position.
• Direct premium refers to which portion of the premium?
• Which statement about renewable term is true?
• What is subrogation and why is it used?
• Why are privacy and data security requirements important in insurance?
• A hospital indemnity policy typically pays a fixed daily cash benefit during hospitalization.
• Under COBRA, what is the maximum continuation period after a spouse dies?
• Which factors do underwriters typically consider when underwriting life insurance?
• Which statement best differentiates a representation from a warranty?
• If Laura receives disability benefits from both her employer and a personal policy, which statement about taxation is true?
• As defined by the DRA, an insured participating in a state partnership program may be eligible for an exemption to Medicaid's asset spend-down rule equal to:
• The Affordable Care Act's changes to preventive services for Medicare beneficiaries can be described as:
• Which plan uses the use-it-or-lose-it rule for unspent funds at year-end?
• Which statement about adhesion contracts is correct?
• What does suitability mean when recommending insurance or annuity products to clients?
• The Affordable Care Act expanded Medicare's list of preventive services and eliminated cost sharing for these services.
• Which of the following describes how an earthquake endorsement is typically obtained?
• A Businessowners Policy (BOP) is designed primarily for which type of customers?
• What is the primary distinction between the insuring agreement and the policy conditions?
• Which statement accurately reflects the five elements required for a legally binding contract?
• What is premium loading and what are its typical components?
• What is concurrent causation and how does it affect coverage when multiple perils cause a loss?
• Under incontestability, which statement is true about misstatements in a life policy?
• Under the DRA state partnership LTC, the asset spend-down exemption equals what?
• What does uberrimae fidei require in insurance contracts?
• All of the following costs are covered by a Medicare supplement policy EXCEPT:
• In disability income insurance, what is an elimination period?
• In a homeowners policy, what does 'additional living expenses' coverage pay for?
• Which statement is true regarding life insurance illustrations content?
• Which item is required to be included in a life insurance illustration?
• Which is an example of a life insurance rider that provides early access to the death benefit under certain conditions?
• In health insurance, which term describes the amount paid before benefits begin?
• What is reinsurance and why do insurers use it?
• Which statement accurately distinguishes endorsements from exclusions?
• What advertising requirement helps insurers avoid misrepresentation of policies?
• What is a resource-based relative value system?
• Why are ethics important in insurance practice, particularly regarding replacement and misrepresentation?
• Which of the following has NOT been cited as a cause of rising health care costs?
• What must a GLBA privacy notice describe?
• In disability income insurance, what is the difference between 'own occupation' and 'any occupation' definitions?
• Which statement best describes long-term care coverage?
• Which of the following is not an example of an unfair claims practice?
• Which statement best describes a Flexible Spending Account (FSA) in relation to its funds at year-end?
• A claims-made policy is typically triggered by claims made during the policy period; tail coverage is usually required; common in which lines?
• Which of the following is the most severe step a state insurance department can take in disciplining an insurer?
• Which optional policy provision does not address the problem of over-insurance?
• What is long-term care insurance designed to cover?
• Which provision of the UPPL gives the insured 90 days to submit evidence of loss?
• Under third-party indemnity insurance, do insurers pay providers directly?
• What is the purpose of continuing education (CE) requirements for licensees?
• Which statement best describes insurable interest for life insurance?
• What is the consequence of misrepresentation or concealment under uberrimae fidei?
• What is the primary purpose of workers' compensation benefits?
• Which of the following has primary responsibility for regulating the insurance industry?
• Which statement about claims-made policies is accurate?
• Name the major sections of the Personal Auto Policy (PAP) and their general purpose.
• During the contestability period in life insurance, the insurer can contest a claim for misstatements or fraud.
• Which benefit is likely to be provided by workers' compensation?
• How does an occurrence policy differ from a claims-made policy?
• Short-term disability plans typically pay benefits for up to how long?
• Do funds in an HSA roll over from year to year?
• Which element in a legally binding contract refers to the promise or exchange of value?
• What is an Errors and Omissions (E&O) policy?
• What is the purpose of liability coverage in auto insurance?
• Which statement about class actions membership is true?
• Why are premium audits conducted?
• What is the 'suitability standard' and why is it important for selling investment-linked insurance products?
• Sam was involved in a car accident. The other driver asks to settle now; what should Sam do?
• Which of the following is a nonforfeiture option besides cash surrender value?
• What is the reinstatement provision?
• In loss settlement, what is the difference between replacement cost and depreciation?
• Which benefit is commonly provided by workers' compensation?
• Which statement accurately compares term life and whole life insurance?
• Why is underwriting considered a key function for insurers?
• With replacement cost coverage, what typically determines the amount paid?
• How does the Do Not Call registry affect insurance sales practices?
• Implied authority describes a situation where authority exists because a reasonable person would infer the agent has authority to act on behalf of the principal. Which option best represents this concept?
• In life insurance, what is a rider?
• Which clause in a property policy protects the lender's financial interest and ensures payment to the mortgagee when required?
• If an employee is injured on the job, can they sue the employer for negligence in addition to workers' compensation benefits?
• What is a Businessowners Policy (BOP) and what does it typically include?
• How does a representation differ from a warranty in insurance contracts?
• Which of the following exempted insurance companies from federal antitrust legislation?
• Defamation is best described as disparaging statements about a competitor's reputation. Which option best matches this definition?
• In a major medical policy, a 20 percent coinsurance on the first $10,000 represents which cost-sharing concept?
• Which statement differentiates adhesion contracts from unilateral contracts in insurance?
• Under Medicare, which part generally covers outpatient physician services, including surgeon fees?
• Which of the following is the Gramm-Leach-Bliley Act primarily aimed at regulating?
• Which coverage type provides protection for all perils unless a specific exclusion applies?
• Why might a policyholder select a higher deductible on their homeowners policy?
• What is the role of the mortgagee clause in a property policy?
• Which statement about the arbitration submission agreement is true?
• Which act exempted certain insurance activities from federal antitrust laws?
• Liquidation is the most severe step a state insurance department can take to discipline an insurer. Which option correctly names this action?
• What is an earthquake endorsement and how is it typically obtained?
• Which statement is true regarding a POS plan?
• Which deductible applies to all expenses in a health insurance policy during a specified period?
• What is the difference between a hazard and a risk?
• How do underwriters manage adverse selection in life and health insurance?
• In a unilateral insurance contract, who promises to pay benefits?
• In a loss settlement, how does depreciation affect the value used to determine actual cash value?
• Which of the following must be considered in making a suitable fixed annuity recommendation to a customer?
• Direct premium refers to which portion of the premium?
• Felicia's policy defines disability as which definition?
• Which of the following is a common life insurance rider?
• In most property policies, which duty is the insured required to perform after a loss?
• Which statement about out-of-pocket maximum is true?
• Which statement about opt-out options under GLBA is true?
• What does the principle of utmost good faith require in an insurance contract?
• Which statement about the NAIC is correct?
• The resource-based relative value system is used to determine payments in which Medicare part?
• In the appraisal process, who may be involved in determining the loss amount?
• Which part of the PAP provides coverage when the other driver is at fault but has no or insufficient insurance?
• During a premium audit, which data is commonly examined to determine exposure?
• What is a grace period in life and health insurance policies?
• What is the purpose of the Producer Database?
• What is underwriting?
• Disability income benefits may be provided through all of the following EXCEPT:
• Which statement about policy exclusions is correct?
• What is advertising injury in liability coverage?
• Which of the following is not a prohibited practice?
• Which element ensures the contract is enforceable at law?
• Which statement about life insurance illustrations is correct?
• Which statement about arbitration is true?
• Which statement about own occupation versus any occupation is accurate?
• Under the Affordable Care Act, what is the minimum percentage of premiums that must be spent on actual medical expenses and health care claims for an individual health plan?
• Which statement best describes indemnity in relation to life insurance?
• Which item would not typically be considered by underwriters when evaluating life insurance risk?
• Which term refers to the unethical and illegal practice of making a misleading statement about an insurance policy to induce a person to buy a policy with another insurer?
• Which statement correctly describes class rating and merit rating in underwriting?
• What is the function of coinsurance in property insurance, and how does it affect settlement?
• What is an endorsement in an insurance policy?
• What is a fidelity bond and where is it commonly used?
• Which term describes a fixed amount paid at the time of service, regardless of the total bill?
• When an agent makes disparaging comments about a competitor to dissuade a prospect from purchasing its policies, which unfair trade practice has been committed?
• The NAIC's primary role is to provide model laws and regulations to be adopted and enforced by the individual states.
• What is facultative reinsurance and how does it differ from treaty reinsurance?
• Distributions from an HSA used for qualified medical expenses are typically:
• What is the principle of indemnity in property and casualty insurance?
• What does the period of restoration mean in business interruption insurance?
• What disclosures are typically required when replacing an existing life or health policy?
• Which is a nonforfeiture option in a whole life policy?
• Explain the difference between per occurrence and aggregate liability limits.
• Which statement about the NAIC's role is correct?
• What is the difference between a first-year commission and renewal commission in the context of insurance agents?
• What is a grace period in life or health insurance?
• Jamie has a liability policy with ABC insurance. He is being sued for damages by Margie, who is also an ABC policyholder. Which statement best describes ABC's duties?
• Which statement describes renewable term life insurance?
• Name two important auto liability coverages and briefly state what they cover.
• An HSA is a combination of which two components?
• Who hires a public adjuster to assist with a claim?
• Kim is 72 and covered under original Medicare. If she falls and breaks her hip, which component of original Medicare will pay for her surgeon's and anesthetist's fees?
• Which statement about workers' compensation coverage is true?
• Which item is NOT typically cited as a cause of rising health care costs?
• Which statement best describes concurrent causation when a loss involves more than one peril?
• What is a suicide clause in life insurance?
• What type of authority exists when a reasonable consumer would infer from the circumstances that the agent has authority to act on behalf of the principal?
• What is workers' compensation and its exclusive remedy?
• What is the difference between assignment and collateral assignment in life insurance?
• What is an exclusion in an insurance policy? Provide an example.
• Which type of reinsurance covers a portfolio of risks under a standing agreement?
• What is the difference between comprehensive and collision auto coverage?
• What is the difference between preexisting condition exclusion and guaranteed issue?
• What is the main difference between HMO and PPO plans regarding networks and referrals?
• If a disability policy is paid with after-tax dollars by the employee, what is the typical tax treatment of the benefits?
• Eileen submits a claim for clinical depression under her employer-sponsored health plan. Benefits for this condition are:
• If a hospital stay is in-network but the on-call cardiologist is out-of-network, and you owe no copayment or deductible, will you be responsible for the out-of-network charges?
• What is a premium audit?
• A POS plan’s flexibility includes which capability?
• Which statement correctly describes fixed premium vs flexible premium policies?
• In a staff-based HMO, which statement is true?
• Which statement correctly describes coverage under HO-3 as compared to HO-2?
• When must insurable interest exist to be enforceable in most property losses?
• Which of the following provides general information about life insurance policies to potential buyers?
• How do endorsements modify a standard policy?
• Direct premium refers to which portion of the premium?
• Which statement about disability benefits is true when comparing employer-provided benefits to a personal disability policy?
• Which statement best describes the suitability standard for investment-linked insurance products?
• What is the purpose of a nonrenewal notice?
• Which of the following is a duty of the insured after a loss?
• In a staff-based HMO, which statement best describes how physicians are compensated?
• Which person would be least likely to be eligible for workers' compensation benefits?
• What is concurrent causation in property claims?
• How many ADLs must a person typically be unable to perform to qualify for LTC benefits?
• In arbitration, the decision is typically final and binding, with limited grounds for appeal.
• What is the contestability period in life insurance?
• Medicare supplement policies typically exclude coverage for custodial long-term care beyond a certain period.
• Which statement best describes the Gramm-Leach-Bliley Act's focus?
• Which statement is true about the Blues?
• What is the purpose of the declarations page in an insurance policy?
• The NAIC issued a model law on long-term care insurance. Which statement about the model law's effectiveness is correct?
• What is the insurer's right of subrogation?
• Which of the following is a common reason insurers may cancel a policy mid-term?
• Connie was hospitalized for four days and her insurer paid $75 per day, totaling $300. What type of policy does this most likely illustrate?
• Define appraisal in property insurance and when it applies.
• Which statement about a claims-made liability policy is accurate?
• What is the function of medical payments (Med Pay) coverage?
• Under HO-3, personal property coverage is on what basis?
• In standard homeowners policies, how is flood damage generally treated?
• How will a court interpret ambiguous provisions in an insurance policy?
• If a licensee fails to complete required CE, what is a likely consequence?
• In a claims-made policy, tail coverage refers to the coverage for claims reported after the policy period.
• Contributions to an HSA are generally what tax treatment?
• What does the Gramm-Leach-Bliley Act require of financial institutions regarding customer information?
• What is COBRA and what coverage does it provide?
• For how long must an organization maintain a record of a person's request to be placed on a do-not-call list?
• A Health Savings Account (HSA) is paired with what type of health plan?
• What are the core expectations described in fair claims practices?
• What is the purpose of a premium audit?
• What is the purpose of an incontestability clause in life insurance?
• Which of the following is NOT one of the five elements required for a legally binding contract?
• The nonrenewal notice informs the insured of what?
• What is the purpose of guaranty associations?
• Under HO-3, dwelling and other structures are covered on what basis?
• Norman is involved in filing a claim for a loss that is large and very complex. He should hire which professional to help him with the claim?
• What is the primary role of underwriters in life and health insurance?
• Under the Affordable Care Act, which statement is accurate?
• Under the Affordable Care Act, which item is NOT required as part of an essential benefits package?
• What does the term adhesion mean in the context of insurance policies?
• What information is typically required in a proof of loss?
• Why are continuing education requirements important for license renewal?
• In a case where the insurer's unreasonable refusal to settle leads to an extra damages award, what type of damages is this likely to be?
• What is a deductible and how does it affect premiums and claim payments?
• Which employee scenario is most clearly covered by workers' compensation benefits?
• Which statement about class actions is not true?
• What is the free-look period and why is it important?
• What does ACV stand for and how does it relate to RC in property claims?
• Differentiate first-party and third-party claims.
• What is a binder and why is it issued?
• What is a claim settlement option and provide one example in property claims?
• A minitrial is similar to arbitration in that the findings of the third party are always binding. True or False?
• Which part of the PAP covers damage to your own auto due to a covered loss?
• How do actual cash value and replacement cost affect claim settlements in property insurance?
• Which statement defines consideration in an insurance contract?
• What is an insuring clause in a life insurance policy?
• Which document binds the parties to arbitration?