New York Life Accident and Health Insurance Agent Broker Examination Series 17 to 55 Version 1
Practice exam for Life Insurance Producer under Insurance Exams (Licensing Exams). 5 sample questions.
Sample Questions
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Question 1
Prior to annuitization, what is the nonforfeiture value of an annuity?
Correct Answer: D
Rationale: The nonforfeiture value of an annuity before annuitization is defined as the net amount the contract owner is entitled to receive upon surrender, which consists of all premiums paid, plus any credited interest or investment gains, minus prior withdrawals and applicable surrender charges. This value protects the owner from total forfeiture of funds in the event of early termination. It reflects the account's accumulated value after accounting for fees and penalties, ensuring fairness and compliance with insurance regulations that prevent insurers from retaining all funds upon cancellation.
Rationale: The nonforfeiture value of an annuity before annuitization is defined as the net amount the contract owner is entitled to receive upon surrender, which consists of all premiums paid, plus any credited interest or investment gains, minus prior withdrawals and applicable surrender charges. This value protects the owner from total forfeiture of funds in the event of early termination. It reflects the account's accumulated value after accounting for fees and penalties, ensuring fairness and compliance with insurance regulations that prevent insurers from retaining all funds upon cancellation.
Question 2
What type of authority is given by an insurer to an agent but NOT formally communicated?
Correct Answer: B
Rationale: Implied authority is not explicitly stated in the agency agreement but is inferred from the agent's role and the customary actions necessary to fulfill express duties granted by the insurer. For example, an agent authorized to sell policies has the implied authority to explain coverage and collect initial premiums. This authority arises from the principal-agent relationship and is legally binding, distinguishing it from apparent authority, which relies on the perception of a third party rather than the actual relationship between insurer and agent.
Rationale: Implied authority is not explicitly stated in the agency agreement but is inferred from the agent's role and the customary actions necessary to fulfill express duties granted by the insurer. For example, an agent authorized to sell policies has the implied authority to explain coverage and collect initial premiums. This authority arises from the principal-agent relationship and is legally binding, distinguishing it from apparent authority, which relies on the perception of a third party rather than the actual relationship between insurer and agent.
Question 3
Under the Affordable Care Act, insurer may refuse to accept an internal appeal on a denied claim if
Correct Answer: C
Rationale: The Affordable Care Act mandates that health insurers must accept and process internal appeals filed within 180 days of the claim denial notice. This time limit ensures that appeals are handled in a timely manner while still providing a reasonable window for policyholders to respond. Refusals based on claim amount, inability to pay fees, or frequency of appeals are prohibited, as they would violate consumer protections and access to fair review processes under federal law.
Rationale: The Affordable Care Act mandates that health insurers must accept and process internal appeals filed within 180 days of the claim denial notice. This time limit ensures that appeals are handled in a timely manner while still providing a reasonable window for policyholders to respond. Refusals based on claim amount, inability to pay fees, or frequency of appeals are prohibited, as they would violate consumer protections and access to fair review processes under federal law.
Question 4
A health insurance policy has $1,000 deductible and 80%/20% coinsurance of the next $3,000. The insured receives a medical bill of $5,000. How much would the insured be responsible to pay?
Correct Answer: B
Rationale: The cost-sharing structure works in layers: first, the insured pays the full $1,000 deductible. After that, the policy covers 80% of the next $3,000 in expenses, meaning the insurer pays $2,400 and the insured pays 20% or $600. The remaining $1,000 of the $5,000 bill is fully covered by the insurer since it falls outside the coinsurance tier. Thus, total insured responsibility is $1,000 (deductible) + $600 (coinsurance) = $1,800. This layered approach controls costs and encourages appropriate use of services.
Rationale: The cost-sharing structure works in layers: first, the insured pays the full $1,000 deductible. After that, the policy covers 80% of the next $3,000 in expenses, meaning the insurer pays $2,400 and the insured pays 20% or $600. The remaining $1,000 of the $5,000 bill is fully covered by the insurer since it falls outside the coinsurance tier. Thus, total insured responsibility is $1,000 (deductible) + $600 (coinsurance) = $1,800. This layered approach controls costs and encourages appropriate use of services.
Question 5
Which type of life insurance policy is written under a single contract for both spouses in which it is payable upon the first death?
Correct Answer: C
Rationale: A joint life insurance policy insures two individuals (typically spouses) under one contract and pays the death benefit upon the first insured's death. This structure is cost-effective and commonly used for estate planning or to cover joint financial obligations like mortgages. In contrast, survivorship (or second-to-die) life insurance pays only after both insureds have died, often used for estate tax liquidity. No standard policies are called 'dual capacity' or 'spousal' in this context.
Rationale: A joint life insurance policy insures two individuals (typically spouses) under one contract and pays the death benefit upon the first insured's death. This structure is cost-effective and commonly used for estate planning or to cover joint financial obligations like mortgages. In contrast, survivorship (or second-to-die) life insurance pays only after both insureds have died, often used for estate tax liquidity. No standard policies are called 'dual capacity' or 'spousal' in this context.