1.P is a forty-year-old woman and would like to purchase an annuity that will provide a lifetime income 

stream beginning at age sixty. Which of the following did she NOT buy?

A straight life deferred annuity

A straight life annuity

An immediate annuity

A deferred annuity

An immediate annuity

2.Quarterly premium payments increase the annual cost of insurance because

insurer risk exposure is greater

interest to the insurer is increased while administrative costs are decreased

mortality costs are greater

interest to the insurer is decreased while the administrative costs are increased

interest to the insurer is decreased while the administrative costs are increased

3. N purchases an annuity by making payments in an amount no less than $100 quarterly. This describes 

which of the following annuities?

Installment Immediate

Fixed Installment Deferred

Flexible Installment Deferred

Flexible Premium Immediate

Flexible Installment Deferred

If a contract of adhesion contains complicated language, to whom would the interpretation be in favor 

of?

Insurer

Beneficiary

Reinsurer

Insured

Insured

What kind of life insurance product covers children under their parent's policy?

Family Maintenance rider

Term rider

Family Income rider

Payor benefit

Term rider

When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n)

elimination

exclusion

limitation

exception

exclusion

What is the purpose of the U.S.A. Patriot Act?

detect and deter fraud

detect and deter alien insurance companies

detect and deter terrorism

detect and deter misrepresentations

detect and deter terrorism

The health insurance program which is administered by each state and funded by both the federal and 

state governments is called

Long-term care

Medicaid

Medicare Supplemental Program

Medicare

Medicaid

R had received full disability income benefits for 6 months. When he returns to work, he is only able to 

resume half his normal daily workload. Which provision pays reduced benefits to R while he is not 

working at full capacity?

Residual Disability

Recurrent Disability

Presumptive Disability

Occupational Disability

Residual Disability

A group life insurance policy may NOT insure groups consisting exclusively of persons who are

salaried, clerical, or administrative employees

hourly paid laborers or their supervisors

administrative, managerial, or sales personnel

related by marriage, blood or legal adoption

related by marriage, blood or legal adoption

Credit Life insurance is

issued in any amount at the discretion of the applicant

used in the event of loss of income

issued in an amount not to exceed the amount of the loan

coverage that waives the premiums on a loan payment in the event of total disability

issued in an amount not to exceed the amount of the loan

If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot 

increase premiums, the type of renewability that best desribes this policy is called

noncancellable

conditionally renewable

cancellable

guaranteed renewable

Noncancellable

All of the following may charge fees for insurance advice EXCEPT

Legal reserve agents

Financial planners

Life and Health insurance counselors

Managing general agents

Legal reserve agents

An agent MUST give a prospective insured an Outline of Coverage when taking an application for a

Whole life policy

Variable Annuity

Medicare Supplement policy

Term Life policy

Medicare Supplement policy

A creditor who requires a debtor to obtain insurance from a particular company or agent as a condition 

for a loan is

guilty of

coercion

fraud

rebating

boycotting

Coercion

Which of the following circumstances would cause a Medicare Supplement policy to be cancelled?

A claim greatly exceeds the benefits payable

The insured fails to pay the premium

The attending physician dies before the claim is settled

The insured is no longer in good health

The insured fails to pay the premium

Benefits for drug and alcohol treatment under a group health policy must include all of the following 

services EXCEPT

treatment in a certified facility

transportation to and from an outpatient facility

outpatient treatment through a public hospital or clinic

group therapy prescribed by a physician

transportation to and from an outpatient facility

V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is 

involved in an accident and temporarily disabled. He returns to work on December 1. How many months 

of benefit are payable?

6 months

5 months

4 1/2 months

4 months

4 months

A foreign insurance company is one that is incorporated

under Texas law

under the laws of another state

is a territory of the United States

outside the United States

under the laws of another state

A group-owned insurance company that is formed to assume and spread the liability risks of its 

members is known as a

treaty insurer

risk retention group

risk assumption group

captive insurer

risk retention group