30 questions and these are the exact types of questions that you will see on your state exam modeled using AI to mimic real insurance exam simulations. I've helped tens of thousands of people with this model. Now, let's jump in and see if you're ready. Treat this like your real exam. Try to hold yourself to an 80% standard. If you get uh seven or more wrong, you actually fail this quiz. Pause before answering each question. If I'm going and you want to take some more time to think, every time I answer a question, there's going to be an explanation saying why it's right or wrong. And if you need to pause for that, then go ahead. First question. In group health insurance, the employer typically A owns the policy and and can cancel employee coverage at any time. B has no financial responsibility for premiums in any circumstances. C own owns the master policy and makes decisions about plan design and coverage or D is prohibited from contributing to employee premium cost by federal law. What's next? Okay, the answer is C. In group health insurance, the employer as the group policy holder owns the master policy, the master contract. Okay, and makes decisions about plan design, coverage levels, and employee eligibility. contribute contribution amounts as well. I kind of didn't stop there. And whether to continue or modify coverage. Okay. So, there's a master policy and employees get certificates of insurance. Okay. Okay. A simple IRA is available to businesses with A more than a th000 employees, B 100 or fewer employees earning $5,000 or more, C any number of employees, or D only self-employed individuals with no employees. The answer is B. Simple, which stands for savings incentive match plan for employee IAS are business are for businesses with 100 or fewer employees who earned $5,000 or more in the prior year. They are not for large companies with a th000 or more employees. They are not they're not for any number. The 100 or fewer limit is firm. So a simple IRA is only available to companies with 100 or fewer employees earning $5,000 or more. Okay. K owns a universal life policy with a $150,000 death benefit and $40,000 cash value. K withdraws $10,000 from the cash value. The policy's death benefit now is now approximately A. $150,000 unchanged, B $140,000 reduced by the withdrawal. C $40,000 equal to the remaining cash value. or D, $160,000 increased by the $160,000, sorry, increased by the withdrawal. All right, the answer is B. The death benefit reduces to approximately $140,000. Universal life policies typically reduce the death benefit dollar for dollar with partial surreners. K's remaining cash value is $30,000 which is $40,000 minus the $10,000 uh withdrawal and the death benefit dropped from $150,000 to 140,000. So the death benefit is not unchanged. Withdrawals permanently reduce it. Okay. Which of the following is true regarding implied authority of insurance agents? It must specifically be written in the agency contract to exist. It includes powers reasonably necessary to carry out express duties. C, it allows agents to exceed any limitation set by the company. Or D, it exists only when the agent explicitly requests additional powers. B, implied authority includes powers that are reasonably necessary to carry out the express duties assigned to the agent, even if not specifically mentioned in the contract. This authority arises from custom and practice in the insurance industry. Implied authority need not be written. It's inferred from circumstances. Okay. All of the following are consistent with the principle of indemnity except A paying the actual cash value of damaged property to the insured. B limiting recovery to the amount of financial loss sustained, C allowing the insured to profit from an insurance claim payment. Or D using a deductible to share loss costs with the insured. See, so allowing the insured to profit from insurance claims violates the principle of indemnity. Indemnity is just restoring them to what the condition they were in before they u they lost the money. Paying actual cash value limits recovery to real financial loss. So the principle of indemnity is just to get people back to the position they were were or they were in before the loss. Okay. All the following are true about HIPPA eligibility requirements except A employers cannot establish different eligibility criteria for employees based on health status. B waiting periods for coverage must be applied uniformly to all similarly situated employees. C employers can excludes exclude specific individuals from coverage based on expensive medical conditions. or D plans can require minimum work hours for eligibility if applied consistently to all employees. All right, it is C. So employee employers cannot exclude individuals based on medical conditions or health status. So this is d this directly violates HIPPA's non-discrimination provision. Can't discriminate. No discriminating over here. HIPPA specifically prevents health-based eligibility discrimination. Employers cannot establish different health-based eligibility criteria. Uniform standards must apply regardless of health factors. There's some of y'all that hate that I take a drink while I'm doing these, but this is for you. Water. For you those of you who don't like me drinking water, I wonder what what what are you drinking when? Actually, don't answer that. If these are helping you, drop a question or drop a comment in theuh description of the video if this is helping out. Um, that's the whole point. I've helped literally thousands of people pass their exams. I own a pre-licicensed education course company. We have the best practice exams, best videos, live sessions 5 days a week. We really, really hook people up. So, if you're interested in our courses or practice exams, check in the description of the video. Um, they're there. All this stuff that I'm going through here, we have tons of questions like these in the actual practice exams, including state law questions, which aren't going to be in here. So, if you need state law questions, check that out. Okay. So, T purchases a 20 pay whole life policy at age 40 with $2,000 annual premium. So, 20 pay whole life, 40 years old, $2,000 premiums. At 60, T's premium payment will be >> >> zero. The policy is paid up $2,000 the same annual premium. $4,000 doubled due to age or $1,000 reduced by half. So you're going to want to know this. The big thing with these is um just getting down the brain part here, the definitions of what they are. So it's zero because at age 60 that would be actually after 20 years of payments. the premium will be zero because the policyy's fully paid up. So pre 20 pay means premiums are paid for 20 years after which no additional premiums are due. So t paid 2 grand a year for 20 years age 40 to 59 40 41 42 43 44 45 46 47 48 49 50 1 2 3 4 5 6 7 8 9. So um I did that off but yeah oh yeah know that was right. So yeah 20 so yeah it's 40 grand I already paid. When can an insurance company contest a policy based on an application's misrepresentations? Anytime during the insurance lifetime only during the contestable period, typically two years or C never. Policies can't be contested or D only within the first 30 days. Okay. So, we have B only during the contestable period. So, I'm going to let you read that if you want and I'm also going to explain it. The contestability period is the first two years of an insurance policy. Some states it's one years, but most states it's 2 years, which means that if the insured dies in that time, the insurance company can contest the claim, meaning they challenge it. And the reason why they do that is because a life insurance company would not insure somebody if they thought they were going to die in the next two years. So they just think it's kind of fishy like hey that's very soon for someone to die after getting this policy. Most people who get life insurance die a long time after. So that's why they do it. Why do many group disability policies provide and also prevents fraud and like just lying on applications. Why do many group disability policies provide only nonoccupational coverage? So you got to know what nonoccupational coverage is. Because work-related disabilities are covered by workers comp. B because employees cannot become disabled while performing their regular jobs. That would be nice. C because occupational coverage is illegal in group insurance plans under federal law. Or D because employers prefer employees not to file claims for work-related disabilities. Answer is A because work-related disabilities are usually covered under under workers comp. All right. Um so including occupational coverage would create duplicate benefits and higher costs. Workers comp is statemandated that they have employers have to have in a lot of companies for on the job injuries. So if they had disability and workers comp together for on the job stuff, they would it would be a double. Which of the following is true regarding rebating in insurance transactions? Is it A, it is permitted when all prospective customers receive the same rebate? Is it B, it is prohibited when giving special inducements not available to all? C, it is allowed when the agent pays the rebate from personal funds. Or D, it is acceptable when disclosed to the insurance company in writing. What do y'all think about some rebates? B. Rebating is prohibited when agents or companies provide special inducements, commission rebates, or valuable considerations not specified in the policy that are not available to all similarly situated applicants. Universal rebates to all customers do not cure the violation if not properly filed. The source of funds is irrelevant to the violation. So, u and every state's different. Like I lived in Florida when I was selling insurance and I think it was like $20. like the most you could give someone as a gift is like 20 bucks or something like that. Um and and there there are certain rules in each state with rebating limits. Okay. What is the purpose of laws prohibiting rebating in insurance? Is it A to allow agents unlimited flexibility in negotiating premium rates? Is it B to enable companies to charge different rates for identical risks? Z C to ensure fair and equitable treatment of all insurance applicants. Zit D to permit secret discounts for preferred customers and clients. It is C. So the purpose of prohibiting rebating is to ensure all similarly situated insurance applicants are treated fair fairly and equitably without secret inducements or side deals that favor some buyers over others. So rebating creates unfair discrimination where some receive better value than others for identical coverage. Agents can't negotiate individual rates outside approved structures. Okay. A 25-year-old applicant purchased an annually renewable term life insurance policy with a $250,000 death benefit and an additional premium of $150 $150. 10 years later at age 35 the premium has increased to $225. The primary reason for the premium increase is you got to know what these types of policies are. Okay. the insurance company's investment performance has declined over time or is it B the death benefits automatically increase with inflation adjustments? Is it C the policy's cash value accumulations requires additional premium funding or D the mortality risk increased with advancing age meaning they're bigger risk because they're older. It's D. So the premium has increased primarily because the insured got older. So the mortality re incre risk increased. Okay. From age 25 to 35. Now annually renewable terms are calculated each year. The premiums recalculated each year based on the insurance current age. So every time they renew every year it is based on a new attained age. Which of the following is true under the law of agency and insurance? Is it A agents owe fidiciary duties to the insurance company they represent? B insurance companies have no liability for agent actions with a with an authority. To see agents can never bind the principal to contracts with third parties. Or D the principal has no responsibility for agent errors and emissions. A agents owe fiduciary fiduciary duties to the insurance company they represent. Okay. So under the law of agency agents of fiduciary duties to the principal including loyalty, good faith, full disclosure and accounting for funds. So insurance companies are liable for agent actions. So agents also have a fiduciary duty to the pe the uh the people they represent. Meaning fiduciary duty just means they have to ethically handle the the money that they get from them. Okay. In a non-contributori group insurance plan, premiums are paid by a is it a employees. Oh, well, employees only through this is non-contributo. So, non-contributo. You have to know what that means. All right. They're paid by A employees only through payroll deduction. To b the employer covering 100% of the cost, C employees and employers splitting 50/50 or D each employee based on their salary level. It is B. So non-contributo plans have the employer paying 100% of the premium. Okay. Employees contribute nothing. So non-contributori means the employees do not contribute. All right, I hope these are helping. We're halfway through. How many you got right or wrong? Let's see. And if you're just listening to me talk about them, that's cool, too. So which of the following is true? regarding credit disability insurance. A benefits are paid as a lump sum equal to the outstanding balance at the time of disability. B coverage is typically sold in connection with a specific loan or line of credit. Benefits continue indefinitely for the lifetime of the debt regardless of disability duration. Or D, the insured receives cash payments to use for any purpose, including loan payments. Okay. So, credit disability insurance is creditor place or voluntary coverage tied to a particular debt obligation. All right. So, it's usually offered when you're getting car loans, mortgages, personal loans, or credit cards. The coverage amount usually corresponds to the required monthly payment on that debt and benefits are paid directly to the creditor. So, it's usually some sort of group policy offered when someone gets a loan or some sort of credit to make sure that if that person becomes disabled, their monthly premiums can still be covered for for that debt or the monthly payments, not premiums, the monthly payment on that debt can still be covered. So, it's like if you got a car loan, you ever go to a credit union and you get a car loan and then they're like, "Oh, you can get this like insurance." It's kind of like that. Okay. All of the following are common sources for single premium annuities except A pension plan distributions at a at retirement. So you have to know what single premium annuities are. B inheritance or life insurance proceeds to see small monthly savings from paychecks. There's a D lawsuit settlements or lottery winnings. Okay. So small monthly savings from paychecks would not fund a single premium annuity. So what we're thinking of single premium we're thinking of a big amount of money once single premium you just pay it once. So a small monthly savings from paychecks would go into something more like a deferred annuity or a very a flexible annuity sorry. So that would be a flexible well I mean a flexible annuity is kind flexible premium annuities are inherently deferred usually. Common single premium sources are pension distributions, 401ks, inheritance, life insurance benefits, lawsuit settlements, lottery winning, stuff like that. All right. So, a single premium annuity, you get a bunch of money, you put it into an annuity, so you can't outlive that money, and you keep getting payments. What rights does the policy owner have? Is it A to change beneficiaries and borrow against cash value? Is it B to determine the cause of the insured's death? C to consent the insured's underwriting decisions or D to require the insured to undergo medical exams. It is a the policy owner has extensive rights including naming and changing the beneficiaries. The policy owner can also borrow against cash value, assign the policy to someone else, so change ownership, change settlement options and surrender the policy. So the owner cannot determine the cause of death or contest underwriting decisions. Those are insurance company functions. Okay, question 18. Let's go. Final stretch kind of. So which of the following types of life insurance combines investment flexibility with adjustable premiums and death benefits? Is it a traditional whole life insurance with fixed premiums? Is it B variable whole life insurance with separate accounts? So, we're thinking of flexibility and adjustable premiums. So, investment and adjustable, these are two key terms that are going to tell you what you should be looking for on that exam. Variable whole life with separate accounts, variable universal life insurance with multiple features or universal life insurance with flexible premium payments. It would be variable universal life insurance combines investment flexibility. A variable life which allows policy owner directed investments and flexible. So universal life is flexible, variable is investment. That's what you want to do. So a Vell is the most flexible permanent life insurance product available since we're VUL. Variable universal life. Okay. Which of the following is typically required for an insured to continue receiving disability income benefits? So, do they have to remain hospitalized in the in a facility or B is it providing ongoing proof of continued disability and their inability to work? C accepting any job offer regardless of pay or obligation, occupation, sorry. or is it exhausting all sick and leave vacation time before benefits begin? It is B to continue receiving benefits. Insureds typically must provide ongoing proof that they remain disabled according to the policy definition. So usually um they it could they maybe need doctor's statements or medical records or some sort of evaluation and this could do with the any occupation or own occupation definitions of disability which you're going to want to know. Any occupation means are they unable to do any job. Own occupation means are they unable to do the job they were in before the disability occurred or when the disability occurred. When are life insurance proceeds subject to income taxation? Okay. is A when paid to a beneficiary other than the spouse. B when the policy is surrendered for cash value. C when interest is earned on proceeds held by the insurance company. There's a D never under any circumstances. Okay. Interest earned on death benefits held by proceeds on on death benefit proceeds held by the insurance. So basically um if the this is called the intereston settlement option or installments where basically if someone passes and leaves the death benefit and they do the interest only or the installments option in interest only the life insurance company keeps the money it earns interest and they pay that interest to the insure the beneficiary in installments it's like turning life insurance into an annuity so the life insurance company keeps the money and they make payments. In both of those situations, the life insurance is holding the benefit. So that is earning interest over time and they disperse those in that interest to the beneficiary and the interest has to be paid. Okay. T needs a $10,000 loan and uses a life insurance company as collateral through collateral assignment. So we're thinking about credit life here. Credit life insurance. T dies with $2,000 still owed. The policy death benefit is $100,000. How much will the lender receive? So, we're going to we got to figure this out here. So, T needs a $10,000 loan. He uses his life insurance as collateral. So, he has a a $100,000 policy. He assigns$10,000 of that to the credit the the creditor. He pays back 8,000 of it. $2,000 is still owed. So, if we look at how much will the lender receive, the lender is only going to receive what he owes, right? So, the lender receives $2,000, only the outstanding balance. The lender isn't going to make extra cash. The the remainder of the money goes to his beneficiary. This is called collateral assignment, and they can only have rights to the extent of the loan itself. Okay? So the medical necessity is typically determined by a the insured personal opinion about what treatment is needed. This has to do with medical expense insurance, the insurance company's financial department based on cost analysis. C accepted standards of medical practice and professional judgment or D federal regulations that covered procedures uh that specify covered procedures for all insurance policies. So this is medical necessity. Okay. So medical necessity is determined by uh based on accepted standards of medical practice. All right. So it's like hey does this person medically actually need to get treatment. So it's like if someone has wrinkles did they need Botox? Probably not medically necessary unless someone argues their mental health is failing because of it or something. But if someone has some sort of brain injury and they're getting spasms from the nerve damage, then maybe Botox would be medical medically necessary necessary to help paralyze that muscle and relax it a little bit. Which of the following represents a contract with an illegal purpose? So we're thinking of legal purpose. This is important concept. Is it a policy ensuring a business against fire damage losses? B a policy purchased to protect against accidental death. C a policy purchased with intent to profit from an insured's murder. D a policy providing coverage for disability income replacement. So a contract purchased with intent to profit from murder has an illegal purpose and is void from inception. So, you can't buy a life insurance company with the purpose of murdering or doing anything illegal. Like, I'm going to go commit a crime and profit on it. No. All of the following are characteristics of credit disability insurance except A. Benefits are paid directly to the creditor to satisfy the monthly premium payment. We we had a question on this earlier. B. Coverage amounts correspond to the required monthly payment. C. benefits provide cash directly to the insured for any personal financial needs during disability. So deep policies typically have relatively short elimination periods in maximum benefit periods. Oh it is see so uh credit disability insurance pays benefits directly to the creditor lender not to the insured. The purpose is to keep the uh debt current during disability so that someone doesn't default on their loan. So it protects the creditor and also the person who took out the loan. All right. The insured does not receive cash to spend at their own discretion. Okay. So H purchases an annuity names H's spouse S as annuitant and names their children as beneficiaries. During the accumulation period, who can make withdrawals from the contract? Is it H as the owner, S is the annuitant, the children as the beneficiaries, or any of the parties? H as the owner. So H the owner can make withdrawals during the accumulation period because the owner has all control rights. The annuitant and beneficiaries cannot make withdrawals. The annuitant receives the money during the annuization period and the beneficiary receives money if H or S dies before the annuization or guaranteed uh or if there are guaranteed repayments remaining after S's death. Which of the following is true about the annuity period? A premiums continue to be paid to into the contract. B, the contract value continues accumulating tax deferred. Does it see regular benefit payments are made to the annuitant or is it D the owner can withdraw funds without restrictions? C. So during the annuity the annuity period regular benefit payments are made to the annuitant according to the selected payout option monthly, quarterly or annually. Premiums do not continue during the annuity period. Okay. So, they don't keep paying in. That's the accumulation period. The contract value does not continue accumulating. It's being liquidated to fund payments. Okay. Almost done here. What role does physician care play in qualifying for disability income benefits? Is it A. Physician care is completely optional and has no effect on benefit qualification? B. Most policies require the insured to be under the regular care of a physician. C. only care from specialists listed by the insurer qualifies for benefits. So D, physician care is required for only for claims exceeding 6 months duration. It's B. So most disability income policies um you have to be under the care of a licensed physician because they they want to make sure like are you taking care of yourself and are you actually disabled? An insured is diagnosed with diabetes 3 years after purchasing a health insurance policy. During the claims process, the insurer discovers the applicant failed to disclose a pre diabetes diagnosis that existed at the time of the application. Under the time limit on certain defenses provision, the insurer will it void the policy and refund premiums, deny all future claims related to diabetes diagnosis, continue to cover the claim because two-year contestable period passed, or reduce the benefits by the amount of the additional premiums owed. it is C. So, um once the 2-year contested bill period passed, the insurance company generally can't deny claims or void the policy based on misrepresentations. Um they can only do it if if there's fraud. If they if they um if they if there was, you know, they if they prove there was fraud. Okay. What is consideration in an insurance contract? A the insurance company's promise to investigate all claims. B the exchange of value between the insurance company and the insured. Is it D the legal competence required of both contracting parties? I mean that was C or D the written application submitted by the prospective insurer. It is B. So consideration is the exchange of value that makes a legally contract uh makes a contract legally binding. So in insurance contracts it's the premium payment in statements in the application. The insurers's consideration is the promise to pay covered PL claims. So in an insurance contract the consideration there's exchange of value on each end. This the last one. To qualify for most disability income benefits, the insured must typically A meet the policy's definition of disability, satisfy elimination period, and provide proof of loss. B undergo a major surgery requiring at least 7 days of hospitalization. C be unable to perform any work whatsoever, including simple clerical tasks, or D resign from employment permanently with no intention of ever returning to work. Okay. Under disability uh qualifying for disability benefits. Yeah, sorry, my bad. Requires meeting the you have to meet the definition of disability, satisfy the elimination period, and provide proof of loss, saying that, hey, you actually are losing income because of this disability. So, the elimination period is the waiting period. It says it right there. So, I hope that these questions have helped you. If you got 24 or more right, go pass your exam. under 24. Watch this again. Review this. Watch part one of these questions. You're gonna want to watch the next video coming up because that's more practice exam questions. Come back, run it again. Check the description of the video if you want to take advantage of our courses. But definitely watch the next video coming up and it's it's really going to help you. So, keep watching these. We've helped thousands of people pass their exams and we know we can help you pass, too.